CJD Equipment v A&C Constructions [2009] NSWSC 1362 | Case summary

CJD Equipment v A&C Constructions [2009] NSWSC 1362 | Case summary | Zoe

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55065/08 CJD EQUIPMENT PTY LIMITED v A & C CONSTRUCTIONS PTY LIMITED & 4 ORS JUDGMENT 1 HIS HONOUR: The plaintiff (CJD) imports, sells and services heavy earthmoving and construction machinery. It carries on that business throughout Australia, including (since about March 2003) from premises at Smeaton Grange in New South Wales (the Smeaton Grange premises). The Smeaton Grange premises were constructed for CJD by the first defendant (A & C). CJD says that the premises are defective, and unfit for its purposes. It seeks damages from A & C and from those (including the second defendant, Mr Jeffree, the principal of A & C) who were involved in the design of the premises. Factual background 2 The principals of CJD - at least, at times relevant to these proceedings - were Messrs Ron Rafferty and Rob Jowett. CJD has its headquarters in Western Australia. Messrs Rafferty and Jowett were based there. In 2001 and 2002, CJD's state manager for New South Wales was Mr Rob Perrin. Mr Perrin had immediate responsibility for the design and construction of the Smeaton Grange premises. He reported to Messrs Rafferty and Jowett. Although Messrs Rafferty and Jowett had some direct dealings with A&C, the great majority of the dealings between the two companies were conducted by Mr Perrin (for CJD) and Mr Jeffree (for A&C). 3 Before March 2003 (which is when CJD took over, and commenced to carry on business from, the Smeaton Grange premises) CJD carried on business from leased premises at Minto. Towards the end of 2001, CJD learned that the lease of those premises would not be renewed. It looked for other premises in the vicinity (i.e., in the area to the southwest of Sydney) to lease. There was nothing suitable available. CJD decided to buy land and have premises constructed to its requirements. It acquired the land at Smeaton Grange. (There is a dispute as to the precise circumstances in which CJD acquired the land at Smeaton Grange. I will return to this.) 4 The site comprises a rectangular parcel of land, orientated (on its longer side) to the northwest. The parties adopted the convention that the longer boundaries ran from west to east, and the shorter boundaries from north to south. It is convenient to adopt that convention. Doing so, the site can be described as bounded by Smeaton Grange Road to the south and Anzac Avenue to the west, and to slope from a high point at its south-east corner diagonally across the site to a low point at its north-west corner. The proposed works included not only a large building, suitable for CJD's uses (and a smaller adjacent building as well), but also a substantial external pavement. Accordingly, because of the topography of the site, it was necessary to undertake cut and fill works to obtain a sufficient level area on which to construct the pavement and erect the buildings. 5 CJD procured investigations of the land at Smeaton Grange. In particular, it commissioned Jeffrey and Katauskas Pty Limited (J&K), a firm of geotechnical and environmental engineers, to investigate the geotechnical conditions of the land. J&K produced a report dated 19 November 2001 (the J&K 2001 report). It will be necessary to return to some of the features of that report. 6 Before J&K was retained, CJD retained a firm of architects, Williams and Hassall Pty Ltd (Williams and Hassall), to prepare preliminary sketches and elevations for the works that CJD required. Williams and Hassall produced what might be called a concept design in about January 2001. That design was updated in November 2001. 7 In December 2001 (after the J&K 2001 report had been produced), CJD approached A&C and other builders. It provided A&C with a copy of the J&K 2001 report and the updated Williams and Hassall drawings. It is CJD's case that the builders who were approached were asked to undertake the design (perhaps, more accurately, to develop the detailed design) and construction of premises generally following the concept expressed in the updated Williams and Hassall drawings. Those premises were intended to be used for the sale and servicing of the heavy earthmoving and construction equipment imported and sold by CJD. 8 Mr Jeffree visited A&C's premises at Minto from time to time, to discuss the project with Mr Perrin. He became aware of the kinds of machinery sold and serviced by CJD: including heavy vehicles running on tyres, and heavy tracked machines. Mr Jeffree observed that the concrete driveways and slabs at Minto "were cracked and sunken everywhere". He "had not seen any concrete slabs in such poor condition". (See para 21 of Mr Jeffree's statement dated 1 September 2008.) 9 Mr Jeffree commented on this to Mr Perrin, and Mr Perrin replied "[w]e are very hard on our concrete" (see para 22 of Mr Jeffree's statement). 10 In late 2001, Mr Jeffree approached the fourth defendant (Telford) to quote on the design and supply of a steel framed building conforming to the concept plan prepared by Williams and Hassall. Telford designs, manufactures and supplies prefabricated kit buildings for industrial, commercial and other uses. Its principle, Mr Andrew Telford, is a licensed builder. Telford provided a number of preliminary designs and quotations. At some stage, and certainly before preliminary design plans were prepared and given to A&C, Telford was given the J&K 2001 report. 11 In January 2002, Mr Jeffree contacted the third defendant (Murphy). Murphy is a firm carrying on the practice of a structural engineer. Its principal is Mr Gary Murphy. Mr Murphy had worked with Mr Jeffree on a number of occasions prior to 2002. Mr Jeffree asked Mr Murphy to carry out the design of drainage and regrading works for the site. He gave Mr Murphy a copy of the J&K 2001 report, and some hand-drawn concept sketches. Those concept sketches may have been based on the Williams and Hassall concept. Although the evidence is not clear on this point, it is likely that they were prepared by A&C. 12 In early February 2002, Mr Murphy produced drawings detailing the drainage and site regrading works. They were amended in April 2002. 13 In early March 2002, Mr Jeffree asked Mr Murphy to design the external pavement areas. That work required Mr Murphy to design not only the concrete slabs but also the subbase, or base course, on which they rested, and the underlying subgrade. Mr Murphy said that he would need to engage a geotechnical engineer, and recommended Geotechnique Pty Ltd (Geotechnique). Mr Jeffree agreed that Geotechnique should be retained. Shortly thereafter, Mr Murphy asked Geotechnique to propose a suitable pavement design. Not surprisingly, Geotechnique required information as to the loadings to which the pavement would be subject. Mr Murphy sought this from A&C. In turn, A&C sought relevant information from CJD. On 15 March 2002, CJD provided a letter (the loadings letter) to A&C. That letter gave information as to machine weights and ground pressures, and enclosed brochures for the various kinds of machines that would be sold from or serviced at the Smeaton Grange premises. It will be necessary to return to the terms of that letter. 14 A&C provided the loadings letter and its enclosures to Mr Murphy, who in turn passed them on to Geotechnique. Geotechnique gave Mr Muprhy a report dated 4 April 2002. The job reference for that report included the identifying letters "AA" and it is convenient to refer to it by those letters. The AA report recommended, among other things, reinforced concrete slabs laid over a "sub-base course", of specified material, 100mm thick. Geotechnique suggested that the slabs should be generally 310mm thick, but with thickened edges 450mm deep. Geotechnique specified particular compaction ratios for the "sub-base course" and the subgrade. The compaction specified for subgrade was consistent with the J&K 2001 report, in that J&K had recommended compaction to between 98% and 102% of standard maximum dry density (SMDD) and Geotechnique specified compaction to 100% SMDD. 15 Mr Murphy provided the AA report to Mr Jeffree. Mr Jeffree discussed it with Mr Perrin. It will be necessary to return to the detail of the discussions between Mr Jeffree and Mr Perrin, but for present purposes it is sufficient to note that Mr Perrin was not prepared to pay for slabs as thick as those recommended by Geotechnique, and insisted on a redesign incorporating thinner slabs. The underlying rationale for Mr Perrin's position (which was supported by Mr Rafferty) appears to have been that CJD's experience, in other premises elsewhere in Australia, suggested that reinforced concrete slabs about 150mm thick were sufficient to withstand the loads imposed by the machinery that CJD sold and serviced. 16 Mr Murphy asked Geotechnique to redesign the slab to take into account CJD's concerns. Geotechnique provided a further report, with a reference incorporating the letters "AB". It is convenient to refer to that as the AB report. The AB report suggested two "options". One provided for slabs subjected to vehicle weights of no more than 3 tonnes. Geotechnique suggested that those slabs could be constructed as 150mm reinforced concrete slabs over 150mm subbase. The other option, for slabs trafficked by the heavy vehicles, was for slabs generally 180mm thick over 150mm of subbase, with thickened edges comprising 280mm of reinforced concrete. 17 After Mr Murphy received the AB report, he prepared a design for the external pavement. His design provided for a reinforced concrete slab 180mm thick generally, with thickened edges; but for a 310mm thick slab (again, with thickened edges) where heavy equipment was to be unloaded and moved. Mr Murphy assumed (as Geotechnique had assumed in its AB report) that heavy equipment would be moved onto and from the site on low loaders, which because of their multiple axles would reduce the pressure exerted on the pavement by the heavy equipment. Mr Murphy's design also provided for the compaction of the subgrade, and other matters. It will be necessary to return to the detail. 18 CJD remained unhappy with the amount of concrete required. It put pressure on Mr Jeffree to procure a design for even thinner slabs. Mr Murphy was not prepared to depart from his design. Accordingly, Mr Jeffree approached the fifth defendant (Marcus), another firm carrying on practice as a structural engineer. He spoke to Mr Peter Marcus, the principal of Marcus, and requested Mr Marcus to design internal and external pavements with a uniform thickness of 180mm. Mr Marcus agreed. There are some questions both as to the terms of the retainer and as to precisely what Mr Marcus designed. 19 Meanwhile, on 6 June 2002, A&C provided a quotation to CJD for the construction of the premises. The quotation was prepared on the basis of, among other things, Murphy's pavement drawings. The amount quoted, exclusive of GST, was $3,145,500.00. That quotation was accepted by purchase order dated 26 June 2002. 20 One of the more unusual features of this case is that there is no written contract relating to the preliminary work carried out by A&C prior to 26 June 2002. There is no doubt that some sort of contract or arrangement existed between CJD and A&C. For about six months prior to 26 June 2002, A&C retained consultants to develop the design of the premises and CJD paid A&C for that work, and reimbursed the costs incurred by it. But the only evidence of the terms on which A&C undertook that work is to be found in the evidence given by Messrs Perrin and Jeffree. 21 Another unusual feature is that the only formal documentation of the contract for the construction of the premises is that comprised by the quotation of 6 June 2002 and the purchase order accepting it of 26 June 2002. The terms of the contract are those emerging from the documents in question (supplemented, in a fairly exiguous way, by some other correspondence), or emerging from disputed accounts of the discussions between Messrs Perrin and Jeffree, and those implied by law. 22 In the same vein - although somewhat out of sequence - yet another unusual feature of this case is that there is no formal "as built" record of what was constructed. 23 One of the major issues in contention between CJD and A&C relates to the circumstances in which (as appears to have happened) the design for the external pavements was changed, and as to whether any change resulted in a significant cost saving to CJD. The extraordinary paucity of the documentation, to which I have referred in the preceding paragraphs, does not assist in resolving that issue. 24 Construction of the premises proceeded. The site was cut and filled to provide a level platform, and compaction works were performed. The slabs were then laid. A steel framed building, generally in accordance with Telford's design, was constructed. On the Anzac Avenue (or, conventionally, western) frontage, a glass curtain wall was constructed. The design and construction of that curtain wall was undertaken by Campbelltown Glass Services Pty Ltd (the glazier). The glazier is not a party to these proceedings, although A&C and Mr Jeffree made a belated attempt to join it, shortly before the scheduled commencement of the hearing. The design prepared by the glazier provided for the curtain wall to be supported by the internal slab, and for the framing components of the curtain wall to be attached to the steel frame designed and supplied by Telford. The design of the curtain wall did not provide for the possibility of relative movement between the curtain wall framing members and the steel structural members. 25 CJD moved into the Smeaton Grange premises in March 2003. After about two years, CJD's employees noticed signs of movement - "heave" - in the internal slab. To jump ahead: it is now common ground that the heave occurred because water penetrated underneath the slab and caused the compacted fill, which included reactive clay material, to swell. Since the curtain wall was constructed on the slab, the heaving of the slab transmitted forces to the curtain wall; and because the curtain wall could not move relative to the steel frame (which was not constructed on the slab, but separately founded on piers to rock), the curtain wall became distressed and the glass within it cracked. Outline of CJD's case 26 CJD claims that:

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(5) the non-compliances with the BCA should be rectified. 29 CJD alleges that, for reasons that are probably apparent from what I have said, each of the defendants has contributed to the harm that it has suffered. The defendants deny that they are liable, but say that, if they are, CJD's claim is an "apportionable claim" for the purposes of Part 4 of the Civil Liability Act 2002, and that they are entitled to limit their liability in accordance with s 35 of that Act. The issues 30 The parties agreed on what they said were the real issues in dispute that emerge from the facts as I have outlined them and the contentions that I have briefly sketched. Unfortunately, because some of the parties - in particular, CJD - appeared to treat the Court's orders (included in the usual order for hearing) as discretionary rather than mandatory, many of the issues were stated at a level of generality that does little to assist in defining and resolving the real issues in dispute. With that caveat, the issues agreed by the parties are as follows: 1. The terms of the agreement or agreements ("the Building Contract") between the Plaintiff (" CJD ") and the First Defendant ("A&C") relating to the design and construction of CJD's premises at 10 Anzac Avenue, Smeaton Grange ("the Premises"). 2. Whether the Building Contract was varied to absolve A&C from any responsibility consequent on a redesign of the pavement slabs to a thickness of 180mm. 3. The nature of the arrangements made between A&C and: (a) Murphy; (b) Telford; (c) Marcus; for the preparation of any design pertaining to the Premises, the supervision of the construction works, and the use of any design prepared for the construction of the Premises. 4. What use, if any, did A&C make of the elements of the design of the Premises provided by: (a) Murphy; (b) Telford (c) Marcus 5. The responsibility of A&C and Telford, if any, for ensuring the design and construction of the building complied with BCA Requirements. 6. To the extent that the building contains any departures from the BCA requirements, whether the acceptance by the Council of the design and the construction of the premises or the issue by Council of a Development Consent or Construction Certificate was an acceptance of those departures. 7. Did: (a) A&C owe CJD the duty alleged in paragraph 23 of the Further Amended List Statement? (b) the Second Defendant ( "Jeffree" ) owe CJD the duty alleged in paragraph 23 of the Further Amended List Statement? (c) the Third Defendant ( "Murphy" ) owe CJD the duty alleged in paragraph 12A of the Further Amended List Statement? (d) the fourth Defendant ( "Telford") owe CJD the duty alleged in paragraph 12A of the Further Amended List Statement? (e) the Fifth Defendant ( "Marcus") owe CJD the duty alleged in paragraph 25 of the Further Amended List Statement? 8. Did A&C, Telford or Murphy represent that the design of, or their respective designs relating to, the Premises were adequate and suitable for CJD? 9. If so: (a) was any representation made by one of those defendants aided and abetted by either A&C or Jeffree? (b) Did CJD rely on any representation made by any one of the defendants? 10. The nature and extent of any defective: (a) design or (b) construction of the Premises and the responsibility of each defendant for those defects and deficiencies. 11. If question 7 is answered affirmatively, the respective liability, if any, of A&C, Jeffree, Murphy and Telford pursuant to the Trade Practices Act 1974 (Cth) for those representations? 12. Having regard to the nature of any deficiency in the design of the Premises prepared by any of the defendants, did Telford have a duty to detect and warn CJD of those deficiencies, and if so, whether they breached that duty. 13. Whether any deficiency in the design or construction of the Premises caused any loss or damage to CJD and the quantification of that loss, and in particular whether the design of the pavement prepared by Marcus operates to break the chain of causation in respect of any design errors in the designs by Telford or Murphy. 14. Did A&C on its own initiative or in conjunction with CJD elect to delete the sealing of joints and / or change the specification of joints as designed by Murphy and /or Marcus? 15. Whether CJD's own acts and omissions, including by instructing the builder to delete the sealants to joints that were designed by Murphy, and / or to change the specification of joints as designed by Murphy and / or Marcus, if so found, and in operating heavy tracked vehicles across the pavements, caused or contributed to any loss suffered by it. 16. What is the scope and cost of any rectification work required to address the defects, if any, for which the defendant, or any of them are liable? 17. Did CJD fail to mitigate its loss and if so, to what extent?

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31 The problem to which I have referred at [30] above was exacerbated because the various expert witnesses whom the parties intended to call did not confer as required by para 1 of the usual order for hearing (modified, in a now immaterial respect, to extend the time by which the experts were to confer and provide their joint report). Again, that appeared to reflect a view, at least on the part of CJD, that compliance with the Court's orders was discretionary rather than mandatory. The expert evidence covered three broad disciplines - geotechnical engineering, structural engineering and costing. The reports were many, and the issues upon them numerous. Because the experts did not confer as required, the issues between them were not narrowed until after the commencement of the hearing. Indeed, in the case of the costing experts, the issues between them were not narrowed until the evidence was all but finished. Thus, the real issues in dispute did not reflect what ultimately became the experts' views as to the matters in issue between them and the reasons for those matters being in issue. Credibility 32 Some of the issues involve significant factual disputes, and conflicts between the evidence of various witnesses. Accordingly, before turning to the issues, I shall set out my views on the credibility of the witnesses. Mr Rafferty 33 Mr Rafferty gave evidence by a statement dated 8 August 2008. Many of the paragraphs in that statement were inadmissible, and were not pressed. Mr Rafferty was cross-examined. No real attempt was made to impeach his credibility: no doubt, because his evidence, as qualified in cross-examination, did not really touch on the disputed issues of fact. That is because, although Mr Rafferty gave evidence in his statement (paras 27 to 29) of discussions with Mr Jeffree at CJD's premises at Minto in about May 2002, it became apparent from Mr Rafferty's cross-examination that it was Mr Perrin who had had the relevant discussions with Mr Jeffree. Mr Rafferty said that Mr Perrin reported the results of those (and other) conversations to him. He accepted that he himself did not speak to Mr Jeffree as suggested in those paragraphs. (See, generally, T29.29-30.25.) 34 Accordingly, to the extent that Mr Rafferty suggested in his statement (paras 25 and 27-29) that he himself was involved in meetings with Mr Jeffree, I do not accept that evidence. Further, because in substance Mr Rafferty's evidence appears to reflect what he says he was told by Mr Perrin, I do not think that it can be accepted as providing anything significant by way of corroboration of Mr Perrin's evidence. 35 I do not think that Mr Rafferty intended to deceive the Court. On the contrary, I thought that he sought to tell the truth as best his memory permitted. The real difficulty seems to me to be that insufficient care was taken in the drafting of his statement, and his memory was not fully tested. That having been said, it is to Mr Rafferty's credit that he did not seek to maintain the truth of the paragraphs in question, and was frank to concede, in effect, that those paragraphs were mistaken. Mr Perrin 36 Mr Perrin gave evidence by way of statement in chief and statement in reply, dated respectively 25 August 2008 and 7 September 2009. He was cross-examined extensively. Because there is a significant conflict between his evidence and that of Mr Jeffree, a sustained attack was made on his credibility in cross-examination. That attack was repeated in closing submissions. 37 I found it difficult to assess the reliability of Mr Perrin's evidence. That is because one of the stranger features of CJD's case was that it sought to adduce the greater part of its evidence as to the making and performance of the contract or contracts in question through Mr Rafferty (who had no direct involvement) rather than through Mr Perrin (who did). Thus, Mr Perrin's evidence in chief (through his statement) was relatively brief; and most of the detail that emerged came through cross-examination. 38 There were aspects of Mr Perrin's evidence that caused me concern. For example: there was an issue between CJD and A&C as to the removal of bracing at the eastern end of the building (using, as always unless otherwise indicated, the convention referred to at [4] above). It was put to Mr Perrin that the bracing was removed whilst he was employed by CJD. He denied that "absolutely" (T109.44-.48). He was reminded of a conversation with Mr Jeffree, which he accepted "most likely would have" happened, to the effect that Mr Jeffree advised most strongly against removal of the bracing, saying that it was required "for structural purposes" (T109.50-110.3). Having been so reminded, Mr Perrin adhered to his evidence that the bracing was still in place when he left the employ of CJD at the end of October 2002 (T110.5-.10). Then, shown an email dated 21 October 2002 from him to a Mr Greg Clark, Mr Perrin accepted that by that email he had instructed Mr Clark to remove the bracing (T110.12-.43). 39 I accept that someone might not remember, after seven years, having given an instruction for removal of bracing. But Mr Perrin went further than saying that he did not remember. He denied, emphatically and more than once, that the bracing had been removed during the course of his employment. Although this might seem to be a small matter in itself, it is symptomatic of a general tendency that I perceived in Mr Perrin's evidence: namely that his memory appeared to be clear in matters that might be thought to favour CJD, and less than clear in matters that might be thought not to favour CJD, or to favour A&C. 40 Another, and troubling, issue relates to Mr Perrin's diaries. He retired from the employ of CJD in late 2002. He had kept diaries during his employment. There is reason to think that at least some part of those diaries remained available to Mr Perrin in July 2006. Mr Rafferty had asked Mr Perrin to write setting out his recollection of relevant events. Mr Perrin replied by letter dated 17 July 2006. That letter commenced:

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contract or negligence. Mr O'Hea, before 17 July 2006, had expressed the view that CJD had valid claims against A&C and others. In his view the matter by then had "progressed from discussion to litigation" (T306.24). 42 The only "diaries" of Mr Perrin's that were discovered were covers, with absolutely nothing inside of any relevance. There was nothing in what had been discovered that, had it been reviewed, could have assisted in any way in refreshing Mr Perrin's recollection of relevant events. 43 Mr Perrin said in cross-examination that his diaries were shredded after he retired (T84.35). Further, he said, that by 2006 the diaries "didn't exist" (T85.14) and that they "just weren't - they'd gone" (T85.17). He was unable to give any, let alone credible, explanation of what he had meant when he told Mr Rafferty, in the letter of 17 July 2006, that he had "reviewed what was left of [the] diaries" (T85.19-.22). 44 Two obvious possibilities suggest themselves. One is that Mr Perrin was telling Mr Rafferty the truth in the letter, and that he had reviewed his diaries before writing. If that is so then Mr Perrin was not telling the truth in his cross-examination. The other is that Mr Perrin was telling the truth in his cross-examination. In that case, this aspect of his letter to Mr Rafferty was, at the very least, misleading. There may be a third possibility: namely, that both now and in July 2006 Mr Perrin had no real recollection of events. 45 The first and second alternative are adverse to Mr Perrin's credit, and the credibility of his evidence. The third, whilst it might not have a direct bearing on credit, certainly affects the credibility of his evidence. 46 Having observed Mr Perrin in the witness box during a lengthy cross-examination, and considering his evidence in total, I have formed the strong impression that his recollection of events has become strongly coloured by a desire - perhaps subconscious - to do his best for his former employer. 47 For those reasons, I do not regard Mr Perrin as a witness whose evidence, to the extent that it relates to matters in dispute, can be accepted as reliable.

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Mr Jowett 48 Mr Jowett gave evidence only in reply: directed to rebutting an assertion that he attended a meeting with, among others, Mr Jeffree on 21 June 2002. Mr Jowett was not required for cross-examination (although notice for him to attend for cross-examination had been given, and he had travelled from his residence at Port Headland in Western Australia for the purpose of giving evidence). 49 So far as Mr Jowett's evidence goes - and the point to which it goes is no longer in dispute - I accept it. Mr Jeffree 50 Mr Jeffree gave evidence by a statement dated 1 September 2008. He is the other witness whose evidence, in critical areas, is the subject of dispute. A sustained attack was made on his credibility both in cross-examination and in closing submissions. Mr Corsaro of Senior Counsel, who appeared with Mr D C Price of counsel for CJD, did not shrink from putting to Mr Jeffree, and submitting, that Mr Jeffree had falsified what were said to be contemporaneous records that, if accepted, provided powerful support for some vital aspects of A&C's case. 51 There were aspects of Mr Jeffree's evidence that gave me cause for concern. I start with the meeting of 21 June 2002. According to Mr Jeffree's statement, he had a meeting on site on 21 June 2002 with, among others, Mr Jowett and Mr Perrin. That meeting is highly significant because Mr Jeffree said that, during it, he warned CJD that a slab less than 310mm thick would not be adequate for its purposes, and said that he would "have to give you a letter saying that we're not going to be responsible for that design, namely having the slabs at less than 310mm". Mr Jeffree said that he wrote such a letter on 25 June 2002, and gave it to Mr Perrin that day. 52 Mr Jeffree referred to what he said was his site diary note for Friday 21 June 2006. So far as it is relevant, that diary note reads as follows: "Rob Perrin + Rob Jarrett [sic] onsite 9.00am A.J. checked out DCL Jobs Discussed slabs - redesign - P Marcus, - G Murphy not happy to redesign slabs (to reduce thickness) A&C to issue letter to CJD re Slab thickness reduction - can't warrant structural adequacy, against [the next word is unclear] and any possible structural defects resulting 53 "DCL" was the concrete subcontractor. 54 Mr Jeffree said in his statement (para 93) that the meeting was with Mr Jowett, and that Mr Perrin arrived a bit later. The words in question were said, in the statement, to have been uttered to Mr Jowett. 55 Mr Jeffree was taken to that paragraph in his evidence in chief. He acknowledged that he had read Mr Jowett's statement of 8 September 2009 (which denied that Mr Jowett had attended the meeting in question, and attached documents which corroborated, or purported to corroborate, that Mr Jowett had been at his residence at Port Headland on 21 June 2002). Mr Jeffree was then asked whether he wished to correct para 93 of his statement. He said (T132.3-.15): "Q. What is it that you wish to correct.

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Q. Can you explain how it is that you have a diary entry with a name similar to Jowett in it? A. The only thing I can say is that I hadn't met Mr Jowett on any occasion before this. I had heard the names of Ron and Rod and Rob from Mr Perrin on a number of occasions. We considered that, you know, it was obviously quite difficult, when he was referring to Ron or whatever and Ron or Rob or whoever and I believe that that's who I had come across on site. There had been a number of visitors to the site from CJD, particularly the local branch, and I must have been wrong. 56 In cross-examination, Mr Jeffree accepted that, when he signed his statement, he could "put a face to Mr Jowett's name" and that he "knew who Mr Jowett was" (T151.11-.35). He believed that the conversation in question "was a significant one" (T152.46). 57 The explanation given by Mr Jeffree was in substance that he had not met Mr Jowett prior to 21 June 2002, and did not then know him. He said that he met a number of people from CJD, at Minto and elsewhere. Quite often, he could not pick up their names when he met them. In those circumstances, he said, it was his practice to put a series of dots in his diary. He said that in this case he had not picked up the name of the person whom he described as "Rob Jarrett": thus he put a series of dots in his diary; and he came back later and filled in the name, intending to refer to Mr Jowett (T152.35-.37, 153.35-.43). Although that explanation was challenged, I accept it. There is no doubt, when one examines the original of Mr Jeffree's diary for 21 June 2002, that there is a series of dots overwritten by the words "Rob Jarrett". There are other instances in that diary where the same practice has been followed. It is not surprising that, in the context of a busy meeting with several people, Mr Jeffree might not pick up the name of someone whom he had not previously met. 58 Thus, whilst the diary note is obviously incorrect insofar as it refers to "Rob Jarrett", and equally is incorrect insofar as it suggests that Mr Jowett was at the meeting in question, it does not follow that it is inaccurate insofar as it purports to record the substance of what was discussed at that meeting. Being mistaken as to the name of a person attending a meeting is one thing. Being mistaken as to, or more accurately being prepared to falsify a note as to, the substance of what was discussed at that meeting is something altogether different. 59 Further, although there was some confusion as to precisely when Mr Perrin attended the meeting and to whom (if not Mr Jowett or Mr Perrin) Mr Jeffree spoke, I do not find this surprising having regard to the passage of time. No doubt, when Mr Jeffree came to prepare his statement, he had regard to his diary (and to other contemporaneous documents). After all, one of the reasons for keeping a site diary is to record significant events relating to a construction project. Presumably, when he read the diary, he took the reference to "Rob Jarrett" not quite at face value, but as referring to Mr Jowett; and took it from that reference that Mr Jowett had been present at the meeting. 60 I do not regard the matters to which Mr Corsaro drew attention, in relation to the diary note or Mr Jeffree's evidence based upon it, as indicating dishonesty. On the contrary, in my view, the substance of the diary note ought be accepted as accurate. In brief, that is because it is quite clear that CJD through Mr Perrin was putting pressure on A&C through Mr Jeffree to reduce the thickness of the slabs; and that Mr Jeffree was concerned that slabs as thin as CJD wanted them would be inadequate for their duty. It is thus inherently likely that Mr Jeffree would have protested, as he said he did. 61 There were other areas of Mr Jeffree's evidence that were, to put it mildly, confusing. For example: he said that the thickness of the slab was reduced, to effect a substantial saving (of the order of $100,000.00 to $200,000.00). But when cross-examined on the documents prepared by him for the purpose of pricing up the works, he was unable to show where the saving had been achieved. Ms Olsson of Senior Counsel, who appeared with Mr Tanevski of counsel for A&C and Mr Jeffree, submitted that the saving was reflected in the quotation, because the quotation was based on the design prepared by Mr Murphy. That was in substance a design for slabs 180mm thick but with thickened edges, save for a small portion where heavy vehicles were to be unloaded, which was 310mm thick. Mr Corsaro disputed this explanation. However, the matter had not been pursued with Mr Jeffree in cross-examination (or, for that matter, in re-examination). Accordingly, I am not prepared to conclude that the confusion betrays unreliability; it is quite possible that, if asked to give an explanation (or if cross-examined on the explanation advanced in submissions), Mr Jeffree could have given satisfactory evidence. 62 Again, Mr Jeffree was cross-examined as to his evidence that the sealing of the joints between slabs was omitted at the express instruction of Mr Perrin, so as to achieve a further cost saving. However, when Mr Jeffree was taken to the documents prepared by him in pricing up the works, it was unclear that in fact any saving had been passed on to CJD. Indeed, so far as the evidence goes, the better explanation appears to be that no saving was passed on. 63 The effect of Mr Jeffree's evidence was that there were numerous changes made to the design, which had to be reflected in attempts to reprice the works. Whilst this is not of itself a satisfactory explanation for the apparent discrepancy between his oral evidence and the documents, I do not regard it as a matter reflecting so adversely on his credibility that it calls into question the totality of his evidence to the extent that it is in dispute. 64 Again, Mr Jeffree gave somewhat confused evidence as to whether there was or was not an edge beam spanning the piers beneath the steel structural members, and by which those structural members were supported. However, on analysis, the confusion in this aspect of Mr Jeffree's evidence seems to be more a misunderstanding, or confusion of terminology, between him and Mr Corsaro, rather than something indicating unreliability or worse. (See, generally, T165.44-169.13, 180.5-.12 and 183.30-184.41). 65 Another major issue in relation to Mr Jeffree's evidence related to the letter dated 25 June 2002 that, he said, he wrote and gave to Mr Perrin. In substance, Mr Corsaro submitted that the letter was not prepared on the date it bears; was not given to Mr Perrin; and, on the contrary, was fabricated after the event to give credence to Mr Jeffree's evidence. For the reasons that I give below, in dealing with that issue of fact, I reject those criticisms of this aspect of Mr Jeffree's evidence. 66 In my view, Mr Jeffree did not give false evidence, and did not seek to mislead the Court. On the contrary, I thought that he sought to give accurate evidence as best his memory would permit. I have no doubt that there are defects in his memory. However, in general, I prefer Mr Jeffree's evidence to that of Mr Perrin. In particular, to the extent that Mr Jeffree's evidence is supported by contemporaneous records, or seems to me to accord with the probabilities objectively ascertained, I accept it. Mr Murphy 67 Mr Murphy gave evidence by statement dated 29 September 2008. He was cross-examined. No attack was made on his credit. I accept Mr Murphy as a witness who sought to tell the truth to the best of his ability. Indeed, his honesty was reflected in answers that he gave that, as he must have appreciated, were adverse to his interest. Mr Telford 68 Mr Telford gave evidence by statement dated 22 September 2008. He was not cross-examined. I accept his evidence, so far as it goes. Mr Marcus 69 Mr Marcus gave evidence by way of an unsworn draft affidavit, prepared following a conference on 7 March 2008, admitted pursuant to s 67 of the Evidence Act 1995 (NSW). There was unchallenged medical evidence to the effect that Mr Marcus was, and at all material times from 13 August 2008 had been, physically and mentally incapable of attending to the litigation. For most if not all of that time his mental state was such that, to quote one of his treating medical practitioners, he was "not a suitable candidate for witness testimony… due to his cognitive decline". 70 Mr Marcus' draft affidavit was admitted with a reservation as to the weight (if any) to be given to it. There were some respects in which the draft affidavit is consistent with other evidence that, in my view, is reliable; and to the extent that there is such consistency, then I accept what Mr Marcus said. However, to the extent that what was said in the draft affidavit is not so corroborated, and does not otherwise correspond with the probabilities objectively ascertained, I conclude that it cannot be afforded substantial weight. Indeed, as can be seen, there are some apparent inconsistencies between what Mr Marcus said in the draft affidavit and other aspects of the evidence. Of course, I accept that if Mr Marcus had remained well, and able to focus on the litigation, it is at least possible that those apparent inconsistencies might have been reconciled. Mr O'Hea 71 Ms Olsson submitted that Mr O'Hea's evidence should be rejected, on the basis that he was not an independent expert. His evidence (which comprised a number of statements, and was supplemented by a joint expert report to which he had contributed, some evidence in chief and extensive cross-examination) was admitted on the voir dire. In final submissions, I indicated that I proposed to admit the evidence, again with a reservation as to the weight to be accorded to it. 72 In essence, Ms Olsson's submission was that Mr O'Hea had become closely identified with CJD's case; that he had undertaken a substantial role, of an adversarial nature, in the preparation of the case; and that many of his opinions were expressed in the language of advocacy. 73 Mr O'Hea was first retained to advise CJD in 2005. The retainer was made directly with CJD (T303.28,304.25). He met CJD's solicitor, Dr David Doyle, at about that time. 74 Mr O'Hea carried out a number of tasks, and from time to time reported to Dr Doyle. In a memorandum dated 7 June 2006, Mr O'Hea reported on what he considered were defects that were evident in the Smeaton Grange premises and the responsibility that various entities (including the defendants in these proceedings and others) might have for those defects. One of the points raised by Mr O'Hea in that memorandum related to A&C's letter of 25 June 2002. He said that, by that letter, A&C was attempting "to globally disclaim all design responsibility…" and recommended that the letter "should be given further consideration". He stated that "[w]e need to be confident that this document is not damaging to our arguments". A little later in the same memorandum, he referred to "our own records", "us", and to what "we would need… for us to be successful". He explained the use of the first person plural pronouns as "[p]robably due to my ignorance" (T309.19). 75 At some later time, Mr O'Hea directed an undated document headed "Preliminary Thoughts" to Dr Doyle. That document discusses possible causes of differences in level over the floor of the Smeaton Grange premises. Again, it uses the first person plural pronouns "us", "our" and "we": for example, "[w]e will then probably need a geotechnical expert to help us". 76 In about February 2006, Mr O'Hea prepared some sort of report for Dr Doyle (its approximate date may be identified from a facsimile transmission note dated "03/02/2006"). It does not appear that, in preparing that report, Mr O'Hea considered that he was acting as an independent expert bound by UCPR r 31.23 and Schedule 7. It is however interesting that, in that report, Mr O'Hea effectively discounted moisture penetration through unsealed joints and openings between the exterior slab panels as a cause of moisture penetration through to the subgrade. On the contrary, he thought, "the most likely scenario" was that moisture was drawn up from a water table underneath the slab. 77 It became apparent that Mr O'Hea had been involved in the preparation of the "Statement of Claim". On 1 September 2006, he sent Dr Doyle "the log of hours worked on which" he had based an invoice for fees. That document included two meetings concerning the statement of claim and an attendance of an hour to "Review final Statement of Claim". Mr O'Hea was cross-examined on that document. In my view, he equivocated over it (T322.34-.53): Q. And that not only have you assisted in making a case for A&C Constructions but you have been paid for assisting with the statement of claim? A. I am note quite sure how I was paid to assist with the statement of claim.

[34]

(2) T322.16-.20: "Q. And in fact you don't refer to the Code of Conduct at any point until the supplementary or revised report of November 2008, which is the whole of this document with annexures, is that right? A. Yes, that's correct." 81 There is nothing at all wrong with a party retaining an expert to assist it in the preparation of its case. Indeed, where the case involves technical issues, it is desirable that a party should do so: to ensure that the real issues are identified, and false issues are discarded. But it is quite another thing to say that an expert retained for that purpose should thereafter be used as an independent expert witness for the purpose of giving evidence. 82 Looking at the whole of Mr O'Hea's evidence, and the documents to which I have referred, I am not satisfied that Mr O'Hea should be regarded as an independent and objective expert witness. In reaching this conclusion, I take into account also the way in which he answered a number of the questions put to him. I accept the submission that, on occasions, he used the language of advocacy. 83 To the extent that there is any remaining discrepancy between Mr O'Hea's evidence and the evidence of the defendants' engineering experts, I prefer the evidence of the latter gentlemen. There is no doubt that their only involvement was as independent experts; and indeed, no attempt was made to show otherwise. Mr Hoare 84 Mr Timothy Hoare is another engineering expert called by CJD to give expert evidence. His evidence included a report dated 16 November 2008 and a report in reply dated 15 September 2009. 85 Ms Olsson at one stage suggested that Mr Hoare too may have been overly identified with CJD's cause. She cross-examined him on an email of 27 April 2007 to Dr Doyle. That email concerned damage caused to the slabs by "crawler tracked vehicles". In the course of it, Mr Hoare observed: I am sure that smart defence councel [sic] would then say that the client has not followed their original brief, and therefore the case of the as observed damage is not their problem. More so the client [CJD] has not done anything to mitigate the further damage and subsequent loss… [in original] Hopefully you can see my point.. [in original] I would appreciate your thoughts on this. 86 I am not sure that it is part of the duty of an independent expert, who subscribes or who is to be asked to subscribe to UCPR r 31.23 and Schedule 7, to comment on what "smart defence councel" might say. However, the significance of this point is limited, because Mr Hoare's evidence diverged from that of the defendants' experts in only two ways. 87 One of those divergences concerned a view held by Mr Hoare and Mr O'Hea that there were "some other locations [i.e., other than as agreed by the defendants' experts] where there is structurally significant slab cracking (other than normal shrinkage cracks) in the general vicinity of the Wash Bay" (see joint report of the engineering experts dated 25 September 2009, dealing with what the experts called "Question B1"). For the reasons that I have given, I do not regard Mr O'Hea's evidence on this point as having any great weight. Thus, I do not regard it as supporting Mr Hoare's opinion. In circumstances where the slabs in question are not precisely identified, I prefer the evidence of the defendants' experts, to the effect that there were no damaged external slabs requiring rectification, other than those agreed by all experts as set out in the joint report. 88 The second area in which Mr Hoare's evidence diverges from the view presented in the joint report relates to the adequacy of the slabs to withstand the loads advised by CJD in the loadings letter. Mr Hoare said he had carried out calculations, the effect of which was to show that the slabs were not serviceable, and would be unlikely to last for a reasonable design life which he quantified at 40 to 60 years in accordance with an applicable Australian Standard. The defendants' experts did not controvert this evidence. Indeed, one of them, Mr Robert Herbertson, said that he had checked Mr Hoare's calculations and agreed with them. It follows that I accept this aspect of Mr Hoare's evidence. The remaining experts 89 There was no challenge to the credibility of the remaining experts. Not all of them were required for cross-examination. Accordingly, to the extent that it is relevant, I accept their evidence. First and second issues: the terms of the contract between CJD and A&C, and whether there was any variation to that contract

[37]

(2) A "Design and Construct Contract" made in June 2002 when CJD gave A&C a purchase order dated 26 June 2002 accepting A&C's quotation of 6 June 2002. 94 The Initial Design Agreement was said to include (among others) the following terms (taken from para 9 of the contentions in the further amended list statement): 9. The Initial Building Design was defective, and contrary to the Initial Design Representation. Telford's conceptual design did not meet CJD's requirements for a building which would be suitable for a showroom, workshop and office for CJD's heavy vehicle business. The deficiencies in the Initial Building Design were: (a) the design did not identify and specify an adequate internal slab thickness for the ground floor slab; (b) the design did not specify a superstructure support system for the Curtain Wall to isolate the Curtain Wall from movements in the internal slab and the remainder of the Building; (c) the design did not specify the requirement for support structure under the walls of the Building that would provide support which was independent of the ground floor slab to isolate movements in the ground floor slab from having any effect on the walls of the Building; (d) the design did not specify adequate drainage falls to the undercover carpark ground slab; (e) the design did not specify the ground slabs as floating slabs independent of the Building footings and walls, to isolate any movement in the ground slab from the other structure; (f) the design did not specify void formers under the Curtain Wall support structure to isolate the Curtain Wall from ground movements; (g) the design did not properly account for the stress and deflection limits of Span/250 (for commercial building) as defined in AS 2047-1999 section 2.3.3 in connection with the mullion arrangement; (h) the design did not specify mid-span support in some of the Curtain Wall mullions; (i) the design did not specify the appropriate grade of safety glass for the Curtain Wall; and (j) elements of the Building which were designed did not comply with the requirements of the Building Code of Australia. 95 The Design and Construct Agreement was said to include (among others) the following terms (taken from para 21 of the contentions in the further amended list statement): Claims against Jeffree 21. CJD claims damages or compensation against Jeffree for: (a) Jeffree's negligence in failing to detect the errors in the Initial Building Design and the Initial Pavement Design; (b) aiding and abetting of A&C's, Murphy and Telford's misleading and deceptive conduct in making the Initial Design Representation; (c) the negligent preparation of the Detailed Design and failure to ensure the Detailed Design and the Marcus Design were sufficient for CJD's purposes; and [sic] 96 By their further amended list response A&C and Mr Jeffree denied the making of any Initial Design Agreement (para 15):

[38]

The First and Second Defendants deny that A&C entered into any initial design agreement. The First and Second Defendants say the designs for the building were provided by the Plaintiff and deny any pleaded agreement referred to as having occurred in January 2002. 97 No doubt because of that denial, A&C and Mr Jeffree did not respond specifically to the terms alleged by CJD to form part of the Initial Design Agreement. 98 Further, A&C denies that it entered into any agreement of the kind characterised as the Design and Construct Contract. It says that the only agreement made was a "lump sum construction agreement". Further, it denies any terms relating to design. See paras 19 and 20 of its further amended list response: 19. The First named Defendant denies that on 6 June 2002 it entered into a design, develop and construct agreement for the premises with CJD however the Firstnamed Defendant agrees that on 6 June 2002 it entered into a lump sum construction agreement for the premises with CJD. 20. The First named Defendant denies the construction contract included terms such as those contained in 21(a), (b) and (c) or that it developed the initial building design and initial pavement design referred to in paragraph 22 or that it had any implied contractual or other Common Law duties to review and check matters such as the engineering designs prepared by others which were clearly outside its expertise. Claim against A&C 20. CJD claims damages or compensation against A&C for: (a) breach of the Initial Design Agreement for failing to ensure the Initial Building Design and the Initial Pavement Design met CJD's requirements and were sufficient for the construction of a building which was suitable for CJD to use in its heavy machinery business as a showroom, workshop and office; (b) A&C's negligence in failing to detect the errors in the Initial Building Design and in the Initial Pavement Design while undertaking work under the Initial Design Agreement or in the preparation of the Detailed Design under the Design and Construct Contract;

[42]

(3) council issued the development approval on about 15 May 2002. 101 Mr Perrin's statement says no more than that, before construction commenced, he had a number of meetings with Mr Jeffree and gave Mr Jeffree information concerning the use that CJD proposed to make of the Smeaton Grange premises. That information relating to the size and weight of vehicles, the types of equipment that would be installed in the service area, and what was needed in the office and workshop areas. 102 Mr Jeffree said in his statement that he was first approached to give a "budget price" for what he described as "a very basic building" - a "basic "ball park" figure". 103 Thereafter, Mr Jeffree said, he had a meeting with Mr Perrin in which Mr Perrin provided the Williams and Hassall drawings and said, in effect, that CJD wanted premises in accordance with those drawings and "more upmarket than the budget price building" the subject of Mr Jeffree's earlier quotation. 104 After a number of presently irrelevantly meetings, Mr Jeffree said that he had another meeting with Mr Perrin (the date is not given but I infer that it was probably in late 2001) in the course of which Mr Perrin asked Mr Jeffree to organise some quotes for the designs, and Mr Jeffree said: I can organise for the preparation of a set of working drawings to be completed on your behalf to submit to Council. 105 Thereafter, Mr Jeffree said, he asked Telford to prepare a design and price for a steel framed building in accordance with CJD's requirements. At a later time, Mr Jeffrey said, he approached Mr Murphy, a landscape designer, a noise consultant and an air-conditioning designer. The effect of Mr Jeffree's evidence in cross-examination is that he accepted that A&C was retained to develop the design, or prepare a detailed design, so that a development approval and construction certificate could be obtained. It is clear that the reason why he would not accept responsibility for the design is not that the initial contract or arrangement did not concern design but, rather, that CJD overrode at least some aspects of the design process. See for example T158.1-38: "Q. Do I take it that you would say to his Honour that you were the person who needed to be satisfied that all the works being undertaken ultimately complied with whatever design intent came from drawings provided to you by others? A. That's correct.

[49]

Q. And for that purpose I take it that you had to have a design for the simmer works, the ground preparation; true? A. Yes." 106 In this context, it may be noted that, from time to time, A&C rendered tax invoices to CJD in which elements of the claims were described as "design progress claim". In my view, those tax invoices are, and in particular the description of the claim is, consistent with the proposition that there was an "Initial Design Agreement" generally of the kind alleged by CJD. 107 It may also be noted that Ms Olsson put it to Mr Rafferty that he was "aware… that CJD paid A&C to further the design from the Mills and Hassall plans": a proposition to which Mr Rafferty, perhaps not surprisingly, assented (T26.14-.16). 108 There is no doubt that A&C, through Mr Jeffree, knew the detail of CJD's proposed usage of the Smeaton Grange premises. The evidence: Design and Construct Contract 109 Mr Corsaro characterised the June contract as one "for finalisation of the design and construction of the premises". I do not accept that characterisation. As I have said, the pleaded agreement is one in writing, comprised of the quotation of 6 June 2002 and the purchase order of 26 June 2002 accepting the quotation. There is nothing in those documents to suggest A&C undertook any, or any further, design obligation. In terms, the quotation is a "revised "Lump Sum Quotation" for the construction of your new development…". The extent of work is specified by reference to identified drawings issued by Telford and by Murphy. 110 The purchase order of 26 June 2002 is said to be "as per quotation dated 6 June 2002". That quotation is described as "proposed (new) facility to house" CJD at the Smeaton Grange premises. There is nothing in the acceptance to suggest that CJD sought, or sought to impose, any obligation in relation to design, or further design. 111 In short, the written agreement that is pleaded and proved is one for construction only. Conclusions on the pleaded agreements 112 I conclude that CJD and A&C did make an Initial Design Agreement of the kind alleged by CJD. 113 The parties did not address in detail on the terms of the Initial Design Agreement. However, in my view, that agreement did include terms (for the most part, implied) of the kind alleged by CJD. In so far as those terms relate to the standard of care to be used, fitness for purpose and the like, they are self evident. The last obligation - relating to coordination - was in substance accepted by Mr Jeffree in the passage from his cross-examination that I have set out at [105] above. 114 However, I conclude, the June contract was one for construction only, and contained no element of design. That is hardly surprising, given the history (as to CJD's "involvement", to use for the moment a neutral term, in the design process) in the period leading up to the making of the June contract. 115 Again, the parties did not address in detail on the terms of the June contract. For the reasons that I have given, I do not accept that it included the term, as to development of the design, alleged in para 21(a) of CJD's contentions. Nor do I accept that the June contract contained a term requiring A&C to construct the premises to a detailed design that would be suitable for CJD's purposes. The question of design, and the suitability of the design, fall to be considered under the Initial Design Agreement. For essentially similar reasons, I do not accept that the June contract contained an implied term of the kind alleged in para 21(c) of CJD's contentions. 116 I do however accept that the June contract did include a term, as to reasonable care, of the kind alleged in para 21(b) of the contentions. 117 Those conclusions do not dispel the real controversy, which is as to the extent and effect of CJD's involvement in the design process: a question raised by the second issue. It is to that question that I now turn. The evidence as to CJD's involvement in the design process 118 The statements of Messrs Rafferty and Perrin are essentially silent on the topic of CJD's involvement in the design process. It is hard to avoid the conclusion that Mr Perrin, in particular, sought to minimise the extent of his involvement. 119 Mr Jeffree was not so reticent. He said, in substance, that after Mr Murphy had forwarded Geotechnique's AA report (which proposed a 310mm reinforced concrete slab with thickened edges for the individual panels) he discussed it with Mr Perrin, and Mr Perrin asked how much it would cost. According to Mr Jeffree, he gave Mr Perrin some information and Mr Perrin said that CJD would not pay for that thickness of concrete. Mr Jeffree said that he told Mr Perrin that the slabs were required to meet the loads that would be imposed on them, but that Mr Perrin insisted that CJD would not pay for so much concrete. According to Mr Jeffree, Mr Perrin said that the slabs would have to be redesigned. 120 In his statement in reply, Mr Perrin denied that he used words to the effect of those last referred to. According to him, he said words to the effect: That is a huge amount of money. Is there anyway to reduce it by having someone have a look at it? 121 Partly for the reasons that I have given, and partly for reasons that I shall shortly give in analysing this aspect of the evidence, I prefer the substance of Mr Jeffree's account. 122 After that discussion took place, Mr Jeffree met Mr Murphy and asked him to consider whether the slab could be redesigned. Mr Murphy asked Geotechnique to comment, and it provided him with the AB report. Mr Murphy prepared a design for the external pavement based substantially on one of the alternatives - "Option B" - set out in that report. The design was for slabs generally 180mm thick, but with substantially thickened edges, and for an unloading area with a slab 310mm thick. To move away from the present issue for a moment: Mr Murphy's design provided for the joints between slab panels to be filled with an impervious polysulphide sealant; and it noted: "INTERNAL PAVEMENT (By Others)". 123 According to Mr Jeffree, he then had a further discussion with Mr Perrin in which they looked at the AB report. He said that Mr Perrin said that it would still cost too much, and proposed other options (including pavers on top of road base). Again according to Mr Jeffree, Mr Perrin also said that most of the machines would be "33 tonners" and asked if the slabs could be designed for that load. Mr Jeffree says that he replied: Well you can, but I'm not going to be held responsible for any damage caused by the use of the heavier machines. 124 Mr Perrin's statement in reply did not challenge this aspect of Mr Jeffree's evidence, and I accept it. 125 Mr Jeffree said that he then discussed the matter again with Mr Murphy, who said that even if the slabs in general were designed on the basis that they would be used by machines weighing no more than 33 tonnes, there would still need to be in effect a "parking area", with a slab 310mm thick, for the heavier vehicles. 126 Mr Murphy procured a further report, known as the "AC report", from Geotechnique. The AC report recommended, among other things, a pavement comprising a 260mm reinforced concrete slab on a 150mm base course, with the slabs to have thickened edges 370mm deep. 127 According to Mr Jeffree, he discussed the AC report with Mr Perrin and Mr Perrin said words to the effect that he just wanted 150mm of concrete over the whole site. Mr Jeffree pointed out that the engineer would not agree with that. He said that, after "a reasonably heated discussion", Mr Perrin said words to the effect: You'll just have to find another engineer that will do it. 128 Mr Perrin's statement in reply did not dispute this aspect of Mr Jeffree's evidence, and I accept it. 129 Mr Jeffree said that he then spoke to Mr Murphy once more, and that Mr Murphy said, not surprisingly, that he was not prepared to put his name to a pavement design of the kind required by Mr Perrin. After that discussion, Mr Jeffree said that he spoke to Mr Perrin and they had a conversation to the following effect (para 80 of Mr Jeffree's statement): 80. I went back to Rob Perrin and said: "Murphy won't have anything to do with it." He said: "Well, you'll just have to find an engineer who will." I said: "That will be very hard. What engineer is going to put his name on something that will be under designed?" I said: "The only way would be to cover myself and the engineer. We'll have to give you a letter advising we'll take no responsibility for any inadequacies of the slabs if anything goes wrong." 130 Of this paragraph, Mr Perrin said, in his statement in reply (para 7): I do not recall a conversation with Mr Jeffree in words to the effect set out in paragraph 80 of Mr Jeffree's statement. 131 That response may be contrasted with other paragraphs of Mr Perrin's statement in reply, in which he denied saying words attributed to him in other paragraphs of Mr Jeffree's statement, or denied having a conversation with Mr Jeffree as alleged by Mr Jeffree. I accept this aspect of Mr Jeffree's evidence. 132 At this stage, it is convenient to break the narrative for the purpose of noting the following points:

[57]

(4) Mr Jeffree had "probably" informed CJD that a thicker slab would be better than a slab of 180mm (T60.50-61.7). 134 For the reasons given at [33] and [34] above, I conclude that Mr Rafferty's understanding, as revealed in the second, third and fourth of those answers, was based on what he had been told from time to time by Mr Perrin. 135 In assessing the evidence, I take into account not only those concessions made by Mr Rafferty, but what appear to me to be the probabilities, objectively ascertained, in so far as they can be understood at the time. In assessing the probabilities, I take into account CJD's understanding that, elsewhere in Australia, reinforced concrete slabs 150mm thick had proved sufficient to withstand the loadings imposed on them; CJD's understandable desire to save money in the construction of the Smeaton Grange premises; and (a matter particularly relevant to an understanding of A&C's position) the likely reaction of a builder whose customer was in effect rejecting the advice of the builder and a specialist engineer as to an essential element of the proposed design. 136 Returning to the narrative: after the discussions to which I have referred at [127] and [129] above, Mr Jeffree approached Mr Marcus. He gave Mr Marcus a history of what had happened, and said in substance that the slabs should be generally 180mm thick (apparently without thickened edges to the individual panels), but with an area of slab 310mm thick where heavy vehicles were to be unloaded and parked. According to Mr Jeffree, Mr Marcus agreed with this "because of the Geotechnique reports" (Mr Jeffree's evidence was that he discussed the Geotechnqiue reports with Mr Marcus at this meeting). 137 Mr Jeffree said that, after his meeting with Mr Marcus, he had a further discussion with Mr Perrin, in which words to the following effect were said (see paras 85 to 87 of Mr Jeffree's statement): I then went back to Perrin and said: "I've got an engineer. The engineer won't come at 150 millimetres, but will design the slabs at 180 provided there is an area of 310 millimetres set aside for heavy vehicles to be unloaded and parked." However, I said: "These vehicles must never move off the 310 millimetres area." Rob Perrin said to me words or words to the effect: "No, I don't agree to have any area of 310 millimetres - they must be all 180 millimetres." 138 Mr Perrin denied that he said words to the effect of those attributed to him in para 87; he did not deny, or otherwise cavil, with paras 85 and 86. 139 Mr Perrin was cross-examined at some length as to the conversations with Mr Jeffree, and his attitude to the designs that were proposed. It is clear from what he said that there was "a bit of a stalemate" between him and Mr Jeffree: he saying that CJD would not pay for the slabs required by the engineer, and Mr Jeffree saying that the engineer's advice should be followed (T93.12-.15). However, when asked why it was that he was insisting on reduction of the cost of the slab, Mr Perrin was somewhat coy. He would not accept that it was over-designed, or that CJD was "being ripped off", and said that it was his not "personal opinion" that the slab was over-designed (T93.28-.43): Q. Was that because Mr Rafferty was saying to you at the other end of the country, "Look, this is over-designed" or "We are being charged too much"? A. Well, to some degree, but it's logical. It was an enormous amount of money and a very substantial part of the building and not only Mr Rafferty, but I also was having trouble in accepting this huge amount of money for sealing a yard.

[62]

Q. Didn't you tell Mr Jeffree that you considered that experience to be proof, that 150 mils would do, words to that effect? A. Well, I guess I would have said; "Look, we have got 150 mil in Western Australia. It seems to work all right". 142 Against that background, I think it more likely than not that Mr Jeffree would have had a discussion with representatives of CJD (but not Mr Jowett) on 21 June 2002, generally as set out in the diary note of that date (see at [52] above). I accept the substance of Mr Jeffree's evidence as to that meeting: namely, that he did warn CJD that its preferred slab of 180mm would be insufficient for the design loads, and that he would give CJD a letter seeking to absolve himself for a design involving slabs less than 310mm thick. 143 As to this aspect of Mr Jeffree's evidence, Mr Perrin said, in his statement in reply, that he could not recall attending the meeting in question or having a discussion with Mr Jeffree as alleged. Mr Perrin did not in terms deny that there had been such a meeting, or that there had been a conversation to the effect alleged. Indeed, when the terms of the note were put to Mr Perrin, and he was asked whether he could remember it, he said no more than "[n]ot specifically, no" (T105.44-106.4). 144 Four days after that meeting, according to Mr Jeffree, he did write a letter to CJD. Omitting formal parts, that letter reads as follows: As requested by you, Peter Marcus - Structural Eng., was employed to redraw the floor slabs and details reducing the thickness of the internal slabs to 180mm, following the design by our engineer Mr G. Murphy being rejected on a cost basis. ie slab thickness of 260mm. Please find attached Drawing no e39-1 which superceded [sic] drawing - G Murphy - no 02-002 PAV. The design of P Marcus is against the recommendations of Mr G Murphy (Eng) as it falls short of criteria given by you to us for the design of these slabs. As a result Mr G. Murphy of A&C Constructions P/L cannot take responsibility for the structural adequacy of the slabs as now designed, the thickened edges, joints or details or any other resulting problems, faults or failures resulting or associated with this design. 145 Mr Jeffree's evidence was to the effect that, on 25 June 2002, he gave Mr Perrin a copy of the slab design prepared by Marcus, and at the same time gave him the letter of 25 June 2002. Mr Perrin appeared to accept that he might have been given the Marcus slab design around that time. However, as to the letter, he said "I have never seen that letter up until it was given to me by the managing director, or posted to me, or whatever it was" (T106.25). He was pressed on this and asked whether it was possible that the letter was given to him, together with the Marcus slab design, on about 25 June 2002. He replied "I have no idea… I have no idea whether it was handed to me or not". (T106.35, .40). It is however apparent that this aspect of Mr Perrin's evidence is based on some exercise of reconstruction (T106.44-.49): Q. But it's possible, isn't it, that Mr Jeffree when he handed you the Peter Marcus plan that the letter was with it? A. Well, he, I would imagine that a letter of that nature he would have given to me separately to anything because it is a fairly important letter having read it several years later and it seems very strange that didn't occur. 146 Mr Perrin accepted that, to his understanding, Mr Jeffree "was probably uncomfortable" with a slab 180mm thick (T107.15-.24). When asked whether, in those circumstances, Mr Jeffree might have said that he would not be responsible for the design, Mr Perrin said no more than that "I have no memory of it" (T107.32). 147 In my view, the unsatisfactory and unclear nature of Mr Perrin's evidence on this point, coupled with what I regard as the objective probability as to the action that a builder would take if forced to construct something that he believed to be inadequate, facilitate a conclusion that the letter of 25 June 2002 was written and given to Mr Perrin about that date. That conclusion accords also with my finding that a conversation to the effect recorded in the diary note of 21 June 2002 did take place. If, as I think happened, Mr Jeffree had then said in effect that he would give a warning letter to CJD, it is likely that such a letter would have been written and delivered thereafter. 148 Mr Corsaro submitted that there were elements of the letter of 25 June 2002 which suggested that it had been composed at some later date. He referred, in particular, to the reference to a design by Mr Murphy of a slab 260mm thick. According to Mr Corsaro, there was no such design. However, a design in those terms was proposed by Geotechniques's AC report, and as I have found at [127] and [128] above, Mr Jeffree did discuss that report with Mr Perrin. 149 Mr Corsaro also criticised the letter for stating that Mr Murphy and A&C would not take responsibility, in circumstances where:

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(2) Mr Jeffree, on his evidence, had informed Mr Marcus that he would "write a letter to CJD that we will not be held responsible for a slab design at 180mm" (para 84 of Mr Jeffree's statement; my emphasis); however, as Mr Corsaro pointed out, the exculpatory language did not include Marcus. 150 I do not regard that as a substantial criticism in circumstances where the letter referred to the original design by Murphy and to the subsequent - current - design by Marcus. No doubt, it could have been better expressed, to make it clear that Marcus took no responsibility for the adequacy of the later design. But the fact that Mr Jeffree - a builder, not a lawyer - did not word his letter as well as he could does not seem to me to detract from its authenticity. It is quite obvious, in context, that the disclaimer was being given in relation to the design prepared by Marcus. 151 There is another piece of evidence that provides powerful support for the proposition that the letter of 25 June 2002 was written and delivered about the date it bears. When defects in the slab became apparent in 2005, CJD took the matter up with Mr Jeffree. Mr Jeffree wrote to CJD on 12 October 2005, following a meeting on site 6 days earlier. He set out in detail A&C's position. In that letter he dealt, among other things, with the redesign of the slab, saying in effect that earlier proposals for the slab had been rejected, as had the original design element requiring all joints between slabs to be filled. After referring to the filling of the joints, the letter said: "This procedure was rejected by CJD along with the redesign of the slab thicknesses reduced from 370mm and 260mm as designed by Geotechnique as a cost cutting exercise. The slab design was reduced 3 times to what you have today i.e. 180mm with one layer of F82 mesh, our original design had two layers of F82 mesh. It was CJD's wish to reduce costs however A&C Construction P/L is on record of advising CJD that we could not warrant the slab at anything less than what the original engineers" [sic] designed for your loadings." (Emphasis supplied) 152 The only thing that could correspond to a "record" of the advice in the passage that I have emphasised is the letter of 25 June 2002. 153 CJD did not reply to that letter. It did not deny what was asserted. It did not deny receipt of any "record" of the advice. It did not ask for identification of the "record" of the advice. It is open to infer, from the terms of the letter of 12 October 2005 and the total absence of denial of anything asserted in it (indeed, of any response at all) that CJD was not surprised by the assertion that there had been some record of the kind to which Mr Jeffree referred in his letter. 154 The choice is stark. If the letter of 25 June 2002 is not to be accepted as a contemporaneous document prepared and delivered by Mr Jeffree about that date, then (on the evidence) it can only be something concocted at a later date in an attempt to bolster A&C's case. Likewise, if the diary note of 21 June 2002 is not to be accepted as a contemporaneous record of a meeting that took place (leaving aside the obvious problem as to "Rob Jarrett") then it, too, must be something concocted at a later date in an attempt to bolster A&C's case. I am not prepared to find that Mr Jeffree engaged in such dishonesty, nor that (he having sworn to the substantial truth of the documents) he compounded his dishonesty with perjury. Nothing in my observation of Mr Jeffree, during his extensive cross-examination, gave me any reason to think that he was seeking to do other than tell the truth as best he could recall events. Certainly, nothing in his cross-examination gave me any reason to think that he was a fraudster and a perjurer. Once that alternative is rejected, the documents stand in substance as what they purport to be. Conclusion on the second issue 155 Having recounted the most important (but by no means all) aspects of the relevant evidence at length, and having indicated along the way my preference for the evidence of Mr Jeffree where it conflicts with that of Mr Perrin, I can state my conclusion relatively briefly. In doing so, I take into account the following matters:

[68]

(4) what were effectively concessions by each of Mr Rafferty and Mr Perrin that the only way that the impasse, or "stalemate" could be resolved would be by the production of an engineering drawing specifying a slab no more than 180mm thick. 156 I take into account also that Mr Jeffree was concerned that anything less than the pavement design prepared by Mr Murphy, or the proposal set out in Geotechnique's AC report, would be inadequate for the loads that had been communicated to him through the loadings letter. In those circumstances, although it might be wondered why he would have proceeded with the project at all, the probabilities overwhelmingly favour the view that, having decided to proceed (a decision no doubt influenced by the substantial investment of time and effort) he would have given the oral and written warnings to which I have referred. 157 In those circumstances, I conclude that CJD did take over the design of the slab, by directing that it would not accept anything thicker than 180mm. I conclude that in substance it did do as Mr Jeffree said: namely, require A&C to find an engineer who was prepared to sign off on a slab no more than 180mm thick. I accept that Mr Marcus did so (with a limited exception for an off-loading area for heavy vehicles), on the basis (as set out in Mr Jeffree's statement at para 82) that the heaviest vehicles (in context - see the unchallenged evidence at para 69 of Mr Jeffree's statement to the effect that Mr Perrin suggested designing "the usage for a 33 tonne machine") would be transported on low loaders, and would only be loaded and unloaded on a slab 310mm thick. I accept that Mr Jeffree made it clear to CJD that he would only proceed on the basis required by CJD "under protest" (my words, not his; I am referring to the meeting of 21 June 2002). I accept that Mr Jeffree followed up on this by delivering, together with the Marcus drawings, the letter of 25 June 2002. 158 In those circumstances, I accept in substance that responsibility for the chosen slab thickness rests with CJD, not with A&C. Third issue: the arrangements between A&C and Murphy, Telford and Marcus Murphy 159 Murphy was initially retained to prepare drawings detailing drainage and site regrading works. That was done early in February 2002. The drawings were amended, at the request of Mr Jeffree, in April 2002. I mention those matters for completeness, since nothing further turns on them. 160 According to Mr Murphy's statement, Murphy was retained early in March 2002. The retainer was oral: Mr Jeffree asked Mr Murphy to provide pavement details for the external payment area at the Smeaton Grange premises. Mr Murphy said that he would need to engage a geotechnical engineer, and recommended Geotechnique. There is no disagreement of any substance between the evidence of Mr Murphy on this point, and that of Mr Jeffree. 161 A&C submits that, as part of the March 2002 retainer, Murphy was required to specify the way in which the site should be prepared for the slabs. Mr Murphy's evidence does not deal with this in terms. However, it may be noted that the drawings prepared by Murphy did make reference to the compaction of the fill that was to be placed as part of the process of levelling out the area where the buildings and the external pavement slabs were to be constructed. 162 It is common ground that Murphy was provided with the J&K 2001 report, and (on or shortly after 15 March 2002) the loadings letter and its enclosed brochures. Telford 163 It is common ground that:

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(5) Telford was provided with the J&K 2001 report for the purposes of undertaking its design; and (6) Telford was not retained to construct the building. 164 Diverting for a moment from the present issue: Mr Corsaro spent some time in submissions criticising Telford for preparing a slab detail for this purpose, and for issuing a structural certificate in respect of it. In circumstances where neither the slab design nor the certificate goes anywhere (even if, as Mr Corsaro submitted, the certificate was one given to "all the world"), and where neither of those documents was ever intended to be relied upon for construction purposes, it is unnecessary to consider, or reach a conclusion on, those criticisms. 165 A&C submits further that, as part of Telford's retainer to design the structure, it was required to ensure compliance with the BCA. Telford does not in terms accept that this formed part of its retainer. However, in circumstances where compliance with the BCA was required, it seems to me to be inevitable that a retainer to design a building (or elements of a building) that attracted the requirements of the BCA necessarily involved, as an implied term, that the building or elements would comply with any applicable provisions of the BCA. 166 It follows from this implied term that responsibility for BCA compliance, at the level of design, rested with Telford, to the extent that there were BCA requirements applicable to what it designed. 167 Telford was not retained to design the glass curtain wall. Nor did its retainer extend to ensuring the sufficiency of the structure to support the glass curtain wall. It could not have done so, because the design of the curtain wall had not been prepared at the time Telford completed its design. Accordingly, Telford would not know, and could not make allowance for, the loadings that the curtain wall would impose on the steel structure. In case it is not clear from what I have said already as to Mr O'Hea, I do not accept his evidence to the extent that he sought to impose some duty on Telford to seek details as to, and cooperate with, the designer of the curtain wall (and see, on this point, [368] and [369] below). Marcus 168 A&C submits that Marcus' retainer comprised:

[83]

173 On balance, I think, that submission is correct. I say "on balance" because it is necessary to pay close attention to this aspect of Mr Marcus' draft affidavit to the extent that it deals with the question of sealing between slabs. Mr Marcus said that his "drawing does not provide for sealing the slabs against water flooding", and that he "was not requested to… provide for sealing against water flooding or protection against rainwater run-off…". He did not suggest, however, that he thought there should be no sealing. On the contrary, his draft affidavit said that "[w]here my drawing provides for the sealing of sawcut or construction joints that is intended by design to act as a dust barrier only". That evidence suggests that Mr Fagan's submission should be accepted and I do accept it. 174 Mr Corsaro attacked Mr Marcus' reasoning process. However, in circumstances where no one submitted that the sealing specified by the Marcus design would not have been adequate to prevent water penetration as well as dust penetration, the fact (if it be a fact) that the reasoning was erroneous seems to me to go nowhere. 175 It should be noted in any event that it is A&C's case that CJD (through Mr Perrin), in an attempt to reduce the cost of the project, directed that the gaps between slab panels not be sealed. Indeed, Mr Jeffree said that he recorded this on the Marcus drawing by crossing out the references to sealing and noting "deleted C.J.D."; and that a similar change was made to his pricing documents. On that basis, it is no part of A&C's case against Marcus that Marcus is responsible for the absence of sealed joints. 176 The documents given to Marcus included the J&K 2001 report, Murphy's pavement drawings and some (unspecified) "compaction results". Marcus was not given the loadings letter, as Mr Jeffree acknowledged (see for example T143.20-.24; T148.32-.35). Nor did Mr Jeffree give Marcus the Geotechnique reports (T143.25-.27). Mr Jeffree suggested that he discussed the Geotechnique results in some detail with Mr Marcus, and thereby informed Mr Marcus of the loadings (which were accurately described in the Geotechnique reports). It is unnecessary to deal with that issue because, as I have said, it is apparent from Mr Jeffree's statement (para 83) that "heavier machines" (which, for the reasons given at [157] above, I think refers to machines heavier than 33 tonnes) were not to be driven across the slab except on low loaders, and were only to be unloaded and stood on a special section of pavement 310mm thick. 177 Further, on Mr Jeffree's evidence, it was a term of A&C's retainer of Marcus that A&C would write to CJD stating "that we will not be held responsible for a slab designed at 180mm" (see para 84 of Mr Jeffree's statement). Fourth issue: what if any use did A&C make of the designs provided by Murphy, Telford and Marcus Murphy 178 A&C submitted that Murphy's pavement design was used only for the earthworks: the preparation of the subbase and the subgrade. A&C accepted that it had engaged its own geotechnical engineer to advise it on compaction, but the geotechnical engineer had done so by reference to matters specified in Murphy's drawings. 179 Mr I G B Roberts of Counsel, for Murphy, submitted that there was no evidence that A&C had made any use of those parts of the Murphy drawings that dealt with preparation of the subbase and subgrade. The evidence 180 Mr Jeffree acknowledged in cross-examination that "whatever criteria [he] adopted on-site for compaction, [he] took as a minimum number which had to be achieved and as long as it was exceeded was satisfactory" the range of 98 to 102% SMDD specified in the J&K 2001 report (T163.8-.29). He was then asked, whether in the light of that answer, it was correct to say that he was likely to have followed the Murphy earthworks specification on-site in compacting the material. There was an objection to that question; it was allowed; but it was repeated and rephrased as follows (T164.6-.11): "Q. Having regard to what I have just shown you and you taking the view that, as long as you achieved a minimum compaction and as long as that number was exceeded, it is likely that you adopted the earthworks specification which Murphy had set out on his drawings as being a minimum compaction by reference a particular compaction ratio?" 181 There was a further objection, on the basis that this was a different question to the one allowed. The previous questions were read and I allowed the subsequent questions (i.e., the one just set out). The answer given was "[y]es" (T164.24). 182 If the evidence stopped there, it might be proper to infer that Mr Jeffree, and through him A&C, did rely on Murphy's specification for compaction. However, the evidence revealed that the earthmoving subcontractor on site was a company known as Ray Lee Earthmoving, and that there was also "a full time geotechnical engineer on site for the duration of the cut fill to supervise the earth mover" (T160.10-13). The geotechnical engineer was Mr Laurie Ihnatiev of SMEC. 183 Against that background, Mr Jeffree gave the following evidence (T 16.13-.38): CORSARO: I think Mr Jeffree's evidence is that he wrote the word deleted, "CJD"; I don't think there is any issue about it. While I am still with the drawing, could I invite your Honour to go to the notes? This drawing superseded G F Murphy Consulting drawings, the PAB series drawings, to which I referred earlier, sheets 1 and 2; it says "To the extent shown and should be read in conjunction therewith". So it appears that Mr Murphy wasn't intending to amend in any way the preparation--

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Q. Well, is there any reason why you wouldn't have given the Murphy drawing that has the earthworks specification on it-- A. They would have had a copy." 185 At T163.6, Mr Jeffree agreed with the proposition "that having engaged Murphy for the purposes of, not only designing the exterior pavements, but providing you with an earthworks specification, it is likely you have provided these drawings to SMEC for that purpose". 186 Neither Mr Ihnativ nor anyone else from SMEC was called to say what criteria or specifications had been used by SMEC in testing and certifying compaction. Nor was anyone called from Ray Lee Earthmoving to give evidence of the compaction ratios that were required, or specified, to be achieved. 187 The position is confused because there were several different compaction criteria specified or incorporated in Murphy's drawing; and as all relevant actors (including SMEC but probably excluding Ray Lee Earthmoving) were aware, there was the J&K 2001 report. That report said that soil taken from the site and used as fill should be compacted to between 98% and 102% SMDD. Note 1 on sheet 2 of Murphy's drawings stated: "[a]ll works to be carried out in accordance with specifications of Campbelltown City and/or directed by the superintendent" (there was no superintendent). Note 13 of the same notes stated that "[f]illing over the building [sic] shall be compacted to not less than 100% standard for insitu dry density determined by" a specified test. 188 Specifications issued by Campbelltown City Council stated, in an addendum dealing with "control of earthworks/filling in subdivisions", that "[a]ll fill shall be compacted to have a Standard Maximum Dry Density Ratio in the range ninety eight percent (98%) minimum to one hundred and two percent (102%) maximum…". 189 Another addendum to the same document, dealing with compaction control for roads in subdivisions, specified other ratios; but it appears to be clear that the relevant specification is the one from which I have quoted. 190 Thus, if SMEC (or Ray Lee Earthmoving) used Murphy's drawing, it would have been faced with a conflict: between the range specified through incorporation of Campbelltown Council's specification and the minimum specified in note 13. Further, SMEC at least would have been aware that note 13 conflicted with the advice given by J&K in the J&K 2001 report. 191 The confusion in the evidence is not assisted by a note in Mr Jeffree's site diary. In a note dated 18 June 2002, Mr Jeffree recorded: SMEC test - range results 100 to 108 (98 to 100 required) good compaction! 192 The figures "98 to 100" have been altered. Inspection of the page in the original diary suggests that the figure "100" may have been written originally as "102". If that is so, then SMEC understood, and Mr Jeffree was informed, that compaction was to fall within the ratio recommended by J&K. But even if the upper limit figure originally written was not "102", it is nonetheless clear that Mr Jeffree was informed that there was a "required" range. It is trite to observe that compaction to between 98% and 100% SMDD would comply with both the recommendation of J&K and the relevant portion of the Campbelltown Council specification; and for that matter, it would also comply with note 13 on Murphy's drawing. 193 Finally, in this context, I note that Mr Garry Mostyn, a structural engineer retained for Murphy to give expert evidence, gave unchallenged evidence on the question "whether, and if so to what extent, the as built earthworks conform with the requirements set out in" Murphy's drawings, the J&K 2001 report and Telford's drawings. Mr Mostyn gave detailed reasons for concluding (at para 63) that the earthworks were not constructed on the basis of Murphy's pavement details drawing - the drawing containing notes 1 and 13 referred to above. (Mr Mostyn refers, I think incorrectly, to sheet one of the two drawings rather than sheet two; but it is clear, from what he says as to the notes, that he intended to refer to sheet two.) 194 Mr Mostyn's overall conclusion, which I accept, in relation to drawings prepared by Murphy, was (at para 68) that "[o]ther than with respect to the geometry, I do not consider that the earthworks were constructed on the basis of the Murphy drawings". The "geometry" refers to Murphy's layout drawings prepared in February 2002 and revised in April 2002 (see at [12] above). Decision 195 No evidence in chief was led from Mr Jeffree on this point. Nor did A&C call those - the relevant personnel from SMEC and Ray Lee Earthmoving - who could have given evidence on the point. This issue - the "use" made of the specification, or in other words reliance - is at the heart of the apportionment issue between A&C and Murphy. A&C did not explain its failure to adduce the evidence to which I have referred. In those circumstances, there is an available inference that A&C did not lead the evidence in chief, and did not adduce the other evidence, because it feared to do so on the basis that such evidence would have exposed facts unfavourable to it. See Handley JA in Commercial Union Assurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418 (citing Windeyer J in Jones v Dunkel (1959) 101 CLR 298 at 320 - 321). Further, as Handley JA said at 418 and again at 419, inferences should not be drawn in favour of a party who, having called a witness who could have given direct evidence, did not ask the critical question, or who failed to ask any questions on the topic. 196 I do not regard Mr Jeffree's evidence on this point (in particular, the answer at T164.24 on which Ms Olsson relied) as justifying the inference of use, or reliance for which A&C contended. There is a number of reasons for that. First, it is clear that Mr Jeffree was not giving evidence of an actual state of mind, or position; he was expressing an opinion on the probabilities. Secondly, when the answer is considered in context (including the other passage of evidence that I have set out above) its speculative nature is confirmed, and the value of the speculation is diminished. Thirdly, it is clear that Mr Jeffree himself gave no direction to Ray Lee Earthmoving, but on the contrary relied on SMEC to instruct what was to be done. The earthmover "took his orders from the tester on site". The "tester on site" - Mr Ihnativ of SMEC - was not called to give evidence. Fourthly, it is quite clear that SMEC was given not only the Murphy drawings but also other information containing different (and to some extent inconsistent) specifications for compaction. Fifthly, one would have expected a competent geotechnical engineer to have been aware of the specifications of Campbelltown Council: particularly when those specifications themselves were called up by Murphy's note 1. Sixthly, I take into account the unchallenged conclusion drawn by Mr Mostyn from the documents, namely that the only aspect of any Murphy drawing that was relied upon was "the geometry". 197 The six matters that I have listed tend strongly against the drawing of an inference of use, or reliance. Specifically, they tend against the drawing of an inference that A&C used, or relied upon, note 13 on sheet two of Murphy's pavement drawings. In circumstances where A&C could have led, but did not lead, direct evidence on the topic, I do not propose to draw an inference, from evidence that is at best equivocal, in its favour. 198 I conclude that A&C has not proved that it used or relied on Murphy's drawings for the purpose of carrying out, or causing to be carried out, the compaction of the fill under the pavement slabs. 199 It is common ground between A&C and Murphy that A&C used Marcus' design for the external and internal slabs, and that the deletion of Murphy's requirement for sealing the joints in the slab had nothing to do with Murphy. Telford 200 It is common ground between A&C and Telford that:

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(2) At some time during the course of construction, A&C retained its own BCA consultant to advise it on compliance issues. 205 Further, there is evidence from which it can be inferred that A&C did not rely on the Telford drawings for BCA compliance. Mr Chris Michaels, an accredited building surveyor and certifier, was called by CJD to give evidence as to various ways in which the Smeaton Grange premises did not comply with relevant requirements of the BCA. He did so by reference to what had been constructed, not by reference to what was designed. He identified a number of instances of non-compliance in what had been constructed. Some of those related to aspects of the building that were the subject of Telford's drawings. When Mr Michaels was taken to the drawings, he agreed that (with two exceptions) what was shown on the drawings appeared to comply with the relevant requirements of the BCA. In other words, if what was drawn had been constructed, then in all but those two cases the non-compliances that he detected would not have occurred. 206 One of the exceptions to which I have referred related to the reach of a fire hose. Mr Michaels was unable to say whether or not what was shown on Telford's drawings, if built, would have complied. That is because the area covered by the fire hose had been partitioned, and this affected its reach. Telford did not design the partitioning. 207 The other exception related to a fire wall. I will return to this. 208 Those matters are relevant not only to the question of breach but also to the question of whether, and if so, to what extent, A&C relied on Telford in relation to BCA issues. The very fact that, in relation to most of the non-compliances, the breaches arose from what was built and not from what was designed suggests that A&C did not rely on Telford; had it relied, then presumably it would have built what was designed. That inference is supported by the fact that A&C retained its own consultant to advise it on BCA compliance issues. 209 In relation to the remaining exception - the fire wall - I note that, once again, A&C adduced no evidence to show that it had relied on Telford's drawing for the purposes of BCA compliance. In circumstances where:

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(3) in deleting the requirements shown on the Marcus drawings for sealing of the joints in the slab, A&C did not use, or rely on, any design or advice given by Marcus. 212 Each of those matters is adequately supported by the evidence. Were they not common ground, I would make findings accordingly. 213 A&C submitted that it relied on Marcus when it constructed an edge beam or a thickened edge to the internal slab. As I have noted already (at [64] and following above, when dealing with questions of credibility), Mr Jeffree's evidence on that topic is confused, and difficult to follow. That is partly because it appears that he and Mr Corsaro were somewhat at odds as to the connotation of the expression "edge beam". I think that what Mr Jeffree intended to say was that, at Mr Marcus' direction, A&C constructed the internal slab as a floating slab (T168.25) but with thickened edges as directed by Mr Marcus (T169.8-.12). I am prepared to accept that A&C relied on an instruction given by Mr Marcus (not on his drawing) for the purpose of constructing a thickened edge to the internal floating slab. But if (as from time to time Mr Jeffree asserted) the slab remained a floating slab - independent of the steel columns, the edge beam on which they were supported and the piers on which that edge beam rested - then nothing relevant comes of this. Alternatively, if (as Mr Jeffree also accepted at one point - T185.49-186.4) the slab is not a floating slab, because in some way it is connected to other elements of the building, then that is not (or would not be) a result of adhering to any instruction given by Mr Marcus to construct a thickened edge to the slab. 214 I do not think that it is possible to reconcile, in any satisfactory way, the inconsistencies in this section of Mr Jeffree's cross-examination. In circumstances where Mr Jeffree did not deal with the matter in chief (either in his statement or, by leave, orally), and where no drawing, site instruction or diary note was identified that might shed light on the topic, I am not prepared to go further than saying that it is likely that Mr Marcus did give an instruction to construct a thickened edge to the internal floating slab, and that A&C followed that instruction. Fifth issue: responsibility for BCA requirements 215 I have effectively dealt with this issue as between A&C and Telford. I accept that it was an implied term of the contract between them that Telford's design should be, so far as it was necessary, BCA compliant. I do not accept that A&C relied on that. Further, given that:

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217 Although the evidence is less than clear, it seems to be the case that Camden Council did not issue an Occupation Certificate following completion of the building works. There was some dispute as to the reason for this (see for example Mr Jeffree's evidence from T138.11 to 140.4). For present purposes, however, the important point is not who was responsible for procuring an Occupation Certificate (or whose oversights or omissions may have held up the issue of such a certificate) but, simply, the fact that there is no certificate. It is therefore unnecessary to consider whether the issue of such a certificate would have amounted in law to some waiver of compliance, or acceptance of non-compliance, with relevant requirements of the BCA. Seventh issue ((a) and (b)): the duty owed by A&C to CJD 218 The issue refers to para 23 of CJD's contentions. That paragraph reads as follows: 23. In carrying out that detailed design, A&C and Jeffree, as the person responsible for the work done by A&C, had either an implied contractual obligation, or alternatively a common law duty to review and to check: (a) the Initial Building Design; and (b) the Initial Pavement Design for errors and to take all necessary steps to correct any deficiencies in those designs in the detailed and final design for the construction of the Premises. 219 A&C submits that it was not retained to design the premises. It says that its retainer was limited to the engagement of design professionals to carry out the design in accordance with CJD's instructions. It says that it relied on those design professionals. 220 For the reasons that I have given, I think that A&C did undertake a design obligation. It follows almost inevitably that A&C would have owed, either as an implied contractual obligation or as a common law duty of care, a duty of the kind alleged in para 23 of the list statement. 221 Mr Jeffree was not acting in any personal capacity. All that he did was done as a director of A&C. CJD chose to contract with A&C. In those circumstances, I see no reason to impose a common law duty of care, equivalent to the duty borne by A&C, on Mr Jeffree. Seventh issue ((c) - (e)): duties of care alleged to have been owed by Murphy, Telford and Marcus 222 It is convenient to deal with these three issues together. Each of Telford, Murphy and Marcus was retained by A&C to undertake design work for aspects of the premises. Each of them knew, before completing its retainer, that the premises were to be occupied and used by CJD for the purpose of its business: selling and servicing heavy earthmoving and construction machinery. Telford and Murphy at least knew, because they were given the loadings letter, of the types of vehicles and equipment that would use the premises and the loads that would be imposed. It is likely that Marcus too knew this. If it did not, one would have expected Mr Marcus to ask: it is difficult to understand how an engineer could design a slab without knowing the loads that would be imposed on the slab. 223 There are some points of distinction between the three consultants. I refer to some salient distinctions at [270] to [280] below. The pleaded duties 224 The list statement is uninformative as to the characterisation of the duties. Paragraph 10 of the contentions refers to A&C's retainers of Murphy and Telford to carry out their respective tasks. Paragraph 11 refers (among other things) to Murphy's performance of its task, and alleges that it knew that A&C would provide its initial pavement design to CJD. Paragraph 12 makes an equivalent allegation against Telford. The duties owed by Telford and Murphy are alleged in paragraph 12A as follows: 12A. By reason of the matters pleaded in paragraphs 10 to 12 above: (a) Telford owed CJD a duty of care in preparing the Initial Building Design; and (b) Murphy owed CJD a duty of care in preparing the Initial Pavement design. 225 Paragraph 25 of the contentions refers among other things to the retainer of Marcus to prepare its pavement design. It alleges a duty of care as follows: 25. A&C and Jeffree prepared the Detailed Design and A&C engaged Marcus to prepare the Marcus Design as part of that process. In those circumstances Marcus owed a duty of care to CJD to check: (a) the Initial Building Design; (b) the Initial Pavement Design and to take such steps as were necessary to correct any defects in the Initial Building Design and in the Initial Pavement Design in preparing the Marcus Design. Particulars Marcus' duty care [sic] arises from its position as a consulting structural engineering firm that had been retained by A&C to prepare the Marcus Design.

[112]

By reason of: (a) A&C's (i) breach of the Initial Design Agreement for failing to ensure the Initial Building Design and the Initial Pavement Design met CJD's requirements and were sufficient for the construction of a building which was suitable for CJD to use in its heavy machinery business as a showroom, workshop and office; (ii) negligence in failing to detect the errors in the Initial Building Design and in the Initial Pavement Design while undertaking work under the Initial Design Agreement or in the preparation of the Detailed Design under the Design and Construct Contract: (iii) misleading and deceptive conduct in making the Initial Design Representation; and (iv) negligence and deceptive conduct in making the Initial Design Representation; and (b) Jeffree's: (i) negligence in failing to detect the errors in the Initial Building Design and the Initial Pavement Design; (ii) aiding and abetting of A&C's, Murphy and Telford's misleading and deceptive conduct in making the Initial Design Representation; and (iii) negligent preparation of he Detailed Design and failure to ensure the Detailed Design and the Marcus Design were sufficient for CJD's purposes. (c) Murphy's: (i) negligent preparation of the Initial Pavement Design; and (ii) misleading and deceptive conduct in making the Initial Design Representation . (d) Telford's : (i) negligent preparation of the Initial Building Design; and (ii) failure to warn CJD that the Initial Building Design would result in the Premises not being suitable for use as a showroom, workshop and office by CJD in its heavy vehicle business; and (iii) misleading and deceptive conduct in making the Initial Design Representation. (e) Marcus' negligent preparation of the Marcus Design. The Plaintiff has suffered and continues to suffer loss and damage. Particulars Interim loss The differential movement between the concrete piers and ground floor slabs caused by the reactive clays below the structural slab has resulted in the condition of the Curtain Wall, in its current status, posing a threat to public safety. Temporary remedial action is required to minimise possible risk to members of the public and all employees within the building until replacement can be carried out. Temporary rectification measures to minimise the immediate risk include the following: (i) Installation of 3M Safety Window films with Ultraflex Sealant System to all façade glazing. This is applied to the external face of the façade. (ii) Temporary restraints to distorted transoms (iii) Stiffening to under-sized mullions and transoms (iv) Installation of handrails to areas deemed as unimpeded paths of travel (v) Missing mid-span restraint of mullions to the horizontal steel beam be rectified. Rectification The major cause of defects in the insufficient pavement thickness in combination of the swelling of the over-compacted clayey filling resulting from substandard subgrade preparation. The rectification would require the removal and replacement of the defective subgrade and concrete pavement (both external and internal) and effectively entail a re-construction of the Premises. The cost of the recertification are estimated as follows: Replacing internal and external pavements $4,720,782.60 Replacing curtain wall $429,811.20 BCA compliance rectified $147, 648.00 Relocation costs $1,177,000.00 Total $6,382,116.60 Full particulars of rectification works (including a measured takeoff of the quantities of work, rates and prices etc) are contained in the report of Ralph Beattie Bosworth (NSW) Pty Limited dated 18 November 2008 ("the RBB Report") . Duty of care to avoid pure economic loss 227 Mr Corsaro initially accepted that his client's claim was one for pure economic loss, and that the duties of care alleged against Telford, Murphy and Marcus were duties of care to avoid pure economic loss. However, in final submissions, Mr Corsaro sought to qualify his acceptance of that proposition. He relied on the decision of Ambrose J in Ralf Dutton v Jalapen Pty Ltd (1994) 10 BCL 338. 228 Mr Cheney of Counsel, who appeared for Murphy, Mr Roberts and Mr Fagan each submitted that the claim was one for pure economic loss, and that the existence of the duty should be assessed accordingly. They relied, in particular, on the decision of the High Court of Australia in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515. 229 The plurality judgment in Woolcock Street at 529 [19], [20], makes it clear that a claim for damages sustained by buying a building that is defective is a claim for economic loss. At [19], their Honours (Gleeson CJ, Gummow, Hayne and Heydon JJ) said that "[c]ircumstances can be imagined in which, had the defects not been discovered, some damage to personal property might have resulted from those defects. But that is not what has happened. The defects have been identified. Steps can be taken to prevent damage to person or property". That is the case here. The defects have been identified. CJD has taken steps - specifically, to prevent glass falling out of the curtain wall - to prevent damage to person or property. 230 At [20], their Honours referred to a view "that, because there was physical damage to the building, a claim of the kind made by the appellant was not solely for economic loss" (their Honours' emphasis). They said that the view had been questioned in Sutherland Shire Council v Heyman (1985) 157 CLR 424 and rejected in Bryan v Maloney (1995) 182 CLR 609. That view had also been rejected, their Honours said, by the House of Lords in Murphy v Brentwood District Council [1991] 1 AC 398. 231 Thus, their Honours said, "[t]here is no reason now to reopen that debate". 232 McHugh J, who agreed with the plurality that the appeal should be dismissed, said at 542 [56] that loss resulting from faulty construction which does not cause injury to person or property "is economic loss, not physical damage", notwithstanding that it may manifest itself in, for example, cracking or other problems. 233 Of course, their Honours were talking of a claim brought by a subsequent owner: the appellant had bought the building, which was in a defective condition. However, the underlying rationale is that the relevant loss is loss of value. The building was worth less than the purchaser paid for it because of the defects. In this case, the Smeaton Grange premises are worth less than CJD paid for them because of the defects. The claim is inherent to the property, because it is a claim for the diminution in the value of the property caused by the defects. It is not a claim for damage to other property (or to persons) caused by those defects. Thus, it is not a relevant point of distinction that the claim in this case is made by the first owner, for whom the improvements were constructed, rather than by a purchaser of those improvements. 234 The plurality in Bryan (Mason CJ, Deane and Gaudron JJ) said at 617 (again, in the context of the claim by a subsequent owner), that the damage "was mere economic loss in the sense that it was distinct from, and not consequent upon, ordinary physical injury to person or property". Their Honours referred with approval to the statement of Lord Bridge of Harwich in Murphy at 479: damage to a house itself which is attributable to a defect in the structure of the house… represents purely economic loss. 235 To the same effect, Deane J said in Heyman at 504 that the claim under consideration was one for pure economic loss, not for material physical damage, because "the building never existed otherwise than with its foundations in that [defective] state". 236 Even if the decision of Ambrose J in Ralf Dutton suggested that damage of the kind presently under consideration were physical damage and not pure economic loss, it could not stand against the statements that I have set out. But his Honour did not in fact decide that question. He said at 343 that "[i]t is unnecessary to embark upon a consideration of whether the damage suffered by each of the plaintiffs is physical damage or "mere" economic loss". Having said that, his Honour expressed a tentative view as to categorisation of part of the damage. But what he said was clearly obiter. That is because, as his Honour said later on the same page, the defendants owed a duty of care regardless of the categorisation of the damage suffered by the plaintiffs. 237 Accordingly, I conclude that the loss alleged is economic loss, and that the duty of care alleged against Murphy, Telford and Marcus is a duty of care to avoid economic loss. Duty of care: the relevant principles 238 One matter can be mentioned straight away. Mr Corsaro submitted, although not with his usual vigour, that the concept of proximity remained relevant in considering whether there existed a duty of care to avoid economic loss. However, the decision in Woolcock Street confirms that proximity is not the "conceptual determinant" of the existence of a duty of care: see for example the plurality judgment at 528-529 [18]; McHugh J at 546-547 [73] (where His Honour referred to "[t]he decisive rejection of that doctrine"); and Callinan J at 587 [211]. 239 It is clear from the judgments in Woolcock Street that vulnerability (in the sense explained by the plurality at 530 [23]) is an important, although not sufficient, basis for finding the existence of a duty of care to avoid economic loss. As the plurality said at 530 [23]: Since Caltex Oil , and most notably in Perre v Apand Pty Ltd , the vulnerability of the plaintiff has emerged as an important requirement in cases where a duty of care to avoid economic loss has been held to have been owed. "Vulnerability", in this context, is not to be understood as meaning only that the plaintiff was likely to suffer damage if reasonable care was not taken. Rather, "vulnerability" is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant. 240 Other factors may include assumption of responsibility and known reliance, although as the plurality explained at 531 [24], there is an overlap between those concepts and the concept of vulnerability: In other cases of pure economic loss ( Bryan v Maloney is an example) reference has been made to notions of assumption of responsibility and known reliance. The negligent misstatement cases like Mutual Life & Citizens' Assurance Co Ltd v Evatt and Shaddock & Associates Pty Ltd v Parramatta City Council (No 1) can be seen as cases in which a central plank in the plaintiff's allegation that the defendant owed it a duty of care is the contention that the defendant knew that the plaintiff would rely on the accuracy of the information the defendant provided. And it may be, as Professor Stapleton has suggested, that these cases, too, can be explained by reference to notions of vulnerability. (The reference in Caltex Oil to economic loss being "inherently likely" can also be seen as consistent with the importance of notions of vulnerability.) It is not necessary in this case, however, to attempt to identify or articulate the breadth of any general proposition about the importance of vulnerability. This case can be decided without doing so. 241 In Perre v Apand Pty Ltd (1999) 198 CLR 180, McHugh J, at 220 [105], listed five principles that his Honour thought to be relevant to the determination whether a duty of care exists in a case of pure economic loss. Those factors were:

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(6) the causal link between that control and the damage that was suffered. 244 Mr Corsaro submitted that the Court could discount the reasoning of the majority in Woolcock Street because it was flawed. He relied on an article "An alternative view of Woolcock Street Investments v CDG Pty Ltd" by Codd, Hinchy and Nase, (2004) 12 TLJ 194. There are at least two difficulties with that submission. The first is that, if the reasoning in Woolcock Street is to be re-examined, that is a matter for the High Court, not a matter for a trial court. The second is that the authors' criticisms of the majority judgments in Woolcock Street focused not on what their Honours said as to the position between the original owner and the consultant (which was the starting point of, or as the plurality put it "the anterior step" in, the analysis), but on what their Honours said as to the position between a subsequent owner and the consultants. 245 There is however one point emerging out of the article that I do think is significant. The authors comment - in my view, correctly - that it is for a plaintiff, alleging a duty of care to avoid economic loss, to plead, particularise and prove vulnerability: specifically, why, in the circumstances of the particular case, it could not protect itself against the consequences of negligence on the part of the defendant. CJD's further amended list statement alleged the duties of care, but did not plead or particularise material facts going to vulnerability. Indeed, the relevant paragraphs of the list statement (para 12A, which alleges the duties of care, and paras 10 to 12, on which para 12A is expressly based) do not mention vulnerability. 246 Nor did CJD adduce evidence that, in terms, was directed to the question of vulnerability. Accordingly, if it is open on the pleadings to consider vulnerability (and since the defendants addressed on the topic, I assume that that they felt fully able to meet it), it is to be determined by reference to such evidence as is logically capable of bearing on that issue. CJD was not relevantly vulnerable 247 Was CJD relevantly vulnerable? Were there steps that it could have taken to protect itself from loss of the kind that it says that it has sustained? Alternatively, could CJD have taken steps to cast responsibility for that alleged loss on Murphy, Telford and Marcus? 248 CJD chose to proceed with the project by engaging A&C (as I have found) to carry out the detailed design of the Smeaton Grange premises; and, once that had been completed, by engaging A&C to construct the premises so designed. CJD either knew or, had it thought about it, must have understood that it would be necessary for A&C to retain specialist expert consultants to carry out aspects of the design. 249 Thus, for example, Mr Rafferty said that, in the early stages of the project (before Camden Council had given development consent), he "was aware that [Mr Jeffrey] would have been seeking professional advice on all of these matters" (T27.9-.19; "all these matters" refers back specifically to "designing the pavement slabs"). 250 Mr Rafferty accepted that CJD had the financial capacity to retain the consultants directly, and (if it wished) to retain a project superintendent or project manager to supervise the project on its behalf. However, he said, the project arrangements ultimately adopted had proved satisfactory in the past (T58.23-.44): "Q. There is no doubt, is there, that if CJD had chosen to, they had the resources to retain design consultants to advise it in connection with the works, the subject of these proceedings? A. That we had the - sorry, I don't quite understand your question?

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Q. But again the decisions was made to appoint the first defendant as the design construction contractor? A. This process had worked for us before quite happily." 251 It is clear from Mr Rafferty's evidence as a whole that CJD, having appointed Williams and Hassall to undertake concept design and J&K to undertake geotechnical investigation, chose to realise the project by engaging A&C for both design development (or detailed design) and construction. It chose not to enter into direct contractual relationships with those who performed the detailed design of various elements of the project. Nor did it seek the novation to it of their contracts with A&C. 252 I return to the factors listed by McHugh J in Perre (see at [241] above) and those listed by Callinan J in Woolcock Street as having been relevant in Perre (see at [243] above). There is no issue here as to reasonable foreseeability of loss, or foresight of the likelihood of harm. A design consultant in the position of Murphy, Telford or Marcus must have appreciated that, if it carried out its obligations negligently, so that the structure was inherently (but not obviously) defective, the principal for whom the structure was to be built might suffer harm. That would happen if, for example, the slab, being insufficient for its design loadings, cracked and became unserviceable; or if the structure proved to be insufficient for the loads that it should have been expected to bear. Equally, design consultants in the position of Murphy, Telford and Marcus must be taken to have had a knowledge of the risk of damage and its magnitude in the event that their designs were inadequate. 253 Nor is there any problem of indeterminacy of liability, or ascertainment of the class of vulnerable persons. This case concerns only the position of the principal for whom the structure was to be built. 254 The question of autonomy may be thought to be related to the concept of vulnerability. Murphy, Telford and Marcus undertook obligations to A&C. They were not asked to undertake, and in terms or expressly did not undertake, obligations to CJD. 255 To the extent that control is relevant, it is clear that CJD interfered to a substantial degree in the design process: specifically, in relation to the thickness of the pavements. CJD had no input into other aspects of the design (for example, in relation to compaction of the fill, or in relation to the structural members). The entity with ultimate control over those matters was A&C. As to Murphy, that is so for the following reasons:

[135]

(3) a detailed defects liability regime, and allocation of responsibility for defects discovered within a certain period of time. 263 In my view, CJD's failure to undertake the most basic precaution - the appointment of a superintendent (whether by name or de facto) to oversee the works and ensure their quality - is telling on the issue of vulnerability. That is not to say that CJD should have employed someone to redo the work that effectively it had retained A&C to do. It is a recognition of the fact that, inevitably, building contracts give rise to disputes as to (among other things) the quality of the work performed. A process of supervision and inspection will often be effective to head off or limit those disputes. 264 Equally, CJD's failure to seek a direct contractual relationship with Murphy, Telford and Marcus, so as to "cast the consequences of loss on" them, is telling. It is not to the point that they might have refused; the point is that CJD did not find out. 265 In short, I think, CJD chose to set up what might be called a project delivery model under which it looked to A&C for the performance of every aspect of the project. It did so when, as I have said, it either knew or must have understood that CJD would turn to individual consultants to design specific aspects of the project. It chose to look only to A&C, and in my view a consequence of that choice is that the law should not visit on the consultants a duty of care to CJD over and above the contractual duties that, undoubtedly, they owed to A&C. 266 In this context, it may be noted that, so far as Mr Perrin (CJD's principal representative for the project) was concerned, Mr Jeffree was "the builder and the engineer, as far as I am concerned" (T101.25). 267 On that basis, CJD did not in fact rely on the work done by Murphy, Telford or Marcus. It relied on A&C. It follows (and there is no evidence to the contrary) that Murphy, Telford and Marcus could not have known that CJD relied on them for the proper performance of their respective design obligations. This is so a fortiori in the case of Marcus, for the reasons given at [277] to [280] below. 268 For those reasons, I conclude, none of Murphy, Telford and Marcus owed CJD a duty of care of the kind alleged. 269 I said earlier that there were some specific matters affecting some of the consultants. I turn now to those matters. Murphy 270 I concluded at [198] above that A&C had not proved that it used, or relied on Murphy's specification for compaction (or any of those specifications). It follows that Murphy can have no liability to A&C for any defect in those specifications. In those circumstances, it would be anomalous to hold that, nonetheless, Murphy owed an equivalent duty of care to someone with whom it was not in a contractual relationship. 271 Mr Cheney submitted that CJD was not the owner of the land at Smeaton Grange at the time that Murphy performed its design obligations. CJD became registered proprietor pursuant to a memorandum of transfer dated 28 June 2002 and, presumably, registered sometime thereafter. There is no evidence as to the contract (or arrangement) pursuant to which the transfer was executed in favour of CJD. Mr Rafferty said at para 10 of his statement that CJD had "purchased" the site in November 2001. However, in cross-examination, he agreed that the purchase of the land had been negotiated in the names of companies controlled him and Mr Jowett: Rafferty Nominees Pty Limited and Jowett Nominees Pty Limited (T56.4-.27): "Q. Would say there is a point in time at which those two companies negotiated the purchase of the land, the subject of these proceedings? A. Yes.

[139]

Q. Sir, when you say in paragraph 10 of your statement that CJD purchased the site in November 2001, it is the case that settlement of the purchase occurred on 28 June 2002? A. I'm sorry, I can't give - I can't be sure of the date." 272 No contract or other document was proved. There was evidence to corroborate the proposition that negotiations for the purchase had been undertaken by the two nominee companies. There was no evidence to show at what time, prior to 28 June 2002, CJD became entitled to receive the transfer of the land or by what means (trust, assignment, novation, transfer by direction or whatever) that occurred. 273 There is thus no evidence to support the conclusion that CJD had any legal or equitable interest in the land at Smeaton Grange at any time relevant to the performance of Murphy's obligations under its retainer. 274 Mr Murphy accepted that, for the purpose of Murphy's performance of its retainer, it was provided with the J&K 2001 report (T258.35). That report was addressed to CJD. Its subject, in terms, was a geotechnical investigation for a proposed warehouse development at the Smeaton Grange site. The first two sentences of the report read, so far as relevant, as follows: "This report presents the results of a geotechnical investigation for a proposed warehouse development on part of Lot 106 Smeaton Grange Road, Smeaton Grange NSW. The investigation was commissioned by CJD Equipment…" 275 No doubt, when Mr Murphy read this, he would have assumed that CJD was the entity for whom the Smeaton Grange premises were to be constructed. I do not think that it was put to him that, according to his understanding at the time, CJD was the entity for whom the work would be carried out. However, even a reasonably cursory reading of the J&K 2001 report would have made that plain. 276 Since I have concluded, for other reasons, that Murphy did not owe CJD a duty of care, it is unnecessary to express a view on Mr Cheney's submission recorded at [271] above. Marcus 277 Mr Jeffree's evidence, (which as I have said on this point I accept) is that he retained Marcus on the basis, stated to Mr Perrin, that neither A&C nor the engineer would take any responsibility for a pavement design 180mm thick (see para 80 of Mr Jeffree's statement). That was reflected in the basis on which A&C retained Marcus (see para 84 of Mr Jeffree's statement). Mr Jeffree told Mr Marcus that he would "write a letter to CJD that we will not be held responsible for a slab designed at 180mm…". 278 On that basis, Marcus' design of the slab at 180mm thick could not be a breach of its contract with A&C. It would be anomalous nonetheless to hold that Marcus owed a duty of care to CJD in respect of the thickness, or structural adequacy, of a slab so designed. 279 It would also be anomalous for CJD to have the benefit of a duty of care owed by Marcus in circumstances where it had been warned of the likely inadequacy of the slab that it required, but nonetheless instructed A&C to procure the design of such a slab. 280 Further, in the case of Marcus, there is the circumstance of express disclaimer of liability comprised in the letter of 25 June 2002, which I have found was given by Mr Jeffree to Mr Perrin on or about that date. Eighth and ninth issue: representations by A&C, Telford or Murphy; reliance 281 The representation case is set out in para 13 of the contentions: 13. In these circumstances, and by providing the Initial Building Design and the Initial Pavement Design to CJD: (a) A&C, aided and abetted by Jeffree; (b) Telford, aided and abetted by A&C and Jeffree; and (c) Murphy, aided and abetted by A&C and Jeffree each made the Initial Design Representation in trade or commerce. 282 The "circumstances" referred to appear to relate back to paras 10 to 12, which I have summarised at [224] above. It is an element of each of paras 10 and 12 that, respectively, Murphy and Telford provided their designs to A&C knowing that A&C would pass them on to CJD for consideration, and that A&C did so. 283 The expression "Initial Design Representation" is defined in para 8 of the statement of the nature of the dispute in the further amended list statement: 8. By putting the Initial Building Design and the Initial Pavement Design forward to CJD: (a) A&C, aided and abetted by Jeffree; (b) Telford, aided and abetted by A&C and Jeffree; and (c) Murphy, aided and abetted by A&C and Jeffree each represented that the conceptual or initial designs met CJD's requirements and were appropriate and suitable for a building for CJD to use as a showroom, workshop and office for its heavy vehicle business ( "the Initial Design Representation ")

[147]

292 It does not follow, from an assumption that A&C passed Murphy's pavement design drawings and Telford's structural design drawings onto CJD, that A&C made a representation as to the adequacy of the respective designs comprised in those drawings. To CJD's knowledge, A&C was a builder. To CJD's knowledge, A&C contracted with specialists to perform aspects of the design obligations that (on my findings) A&C had undertaken. It follows that, by operation of law in the circumstances, A&C impliedly warranted the sufficiency, or adequacy, of the designs for the known purposes of CJD. (What I have said does not apply to the Marcus pavement design, because I have found that A&C expressly disclaimed liability for a payment designed at CJD's stipulated thickness of 180mm.) But it does not follow, from an implied warranty of fitness for purpose, that there was a positive representation of fitness of purpose. Nor does it follow that A&C made the pleaded representations. 293 I accept, as I have noted at [266] above referring to Mr Perrin's evidence at T101.25, that Mr Perrin, and through him CJD, looked to A&C as "the builder and the engineer". That would be relevant (for example) to a case based on a common law duty of care. But it does not seem to me to assist in deciding whether, by providing the relevant drawings to CJD, A&C made the representations alleged. 294 In my view, given the uncontroversial position that A&C was not an engineer or a structural designer, and had needed to subcontract out those aspects of the design of the Smeaton Grange premises, the only representation that could be spelled out from A&C's supply of the drawings to CJD was that A&C believed, on reasonable grounds, that the designs comprised in those drawings were appropriate to use for the construction of premises that would be fit for CJD's purposes as those purposes had been made known to A&C. 295 That is a representation as to a present fact - an existing state of mind, or belief. Hence, no question of reversal of onus arises under s 51A of the Trade Practices Act. 296 It was put to Mr Jeffree in cross-examination, and he agreed, that he had read the J&K 2001 report, and understood from it that J&K recommended that, among other things, fill should be compacted to between 98% and 102% SMDD. It was I think put to him further, and he agreed, that he understood that the Campbelltown Council specifications were relevantly to the same effect. It was then put to Mr Jeffree that he, having those understandings, must have realised that Murphy's specification of compaction to not less than 100% standard was incorrect. I do not accept that. It is axiomatic that compaction to 100% or 101% or 102% SMDD would meet the J&K requirements, the Campbelltown Council specifications and Mr Murphy's specification. 297 True it is that Mr Jeffree thought that the Murphy specification was a minimum, and that anything over 100% would be satisfactory. Quite how that stands with the note in his diary, as to a range, to which I have referred at [191] above I do not know. But for present purposes, the point is simply that the three specifications can all sit together. When one adds into the mix the fact that the Murphy drawings also called up the Campbelltown Council specification, it is even less apparent why Mr Jeffree should have thought, or realised, that the Murphy specification was in some way wrong, or structurally inadequate. 298 Of course, Mr Jeffree could have questioned Mr Murphy over the various specifications of compaction. His failure to do so is relevant to the breach of contract case (and would be relevant to a case based on a common law duty of care). But it does not seem to me to have anything to do with the question of whether the representation that I have found was made was, at the time that it was made, misleading or deceptive: as to the Murphy specification for compaction. 299 There is no other aspect of the Murphy pavement design that is relevant, because the as-built pavements were constructed according to a different design, and the deletion of sealing (however it happened) had nothing to do with Murphy. 300 I turn to the representation as to reasonable belief in the adequacy of the Telford design. CJD's submissions in relation to the Telford design raise a number of false issues. One relates to the pavement slab detail. As I have said already, it is common ground that neither A&C nor Telford intended that the pavement should be constructed according to that detail. A&C, at least, was well aware that J&K had specified a floating slab, independent of the walls. A&C intended to construct (and on one view of Mr Jeffree's evidence did construct) the internal slab as a floating slab. 301 Another false issue relates to Telford's certification of the adequacy of its design. That was done, together with the provision of the slab detail, to enable A&C to obtain development consent. It may have been wrong for Telford to have certified a design detail that was not intended to be built. Since it was not built, a representation as to a belief in its sufficiency goes nowhere. Nor does the certificate, even if (as Mr Corsaro submitted) it was a certificate "to all the world". Although I am presently dealing with the representation case against A&C, it is convenient to note at this point that there was not a shred of evidence to suggest that anyone from CJD had seen, or was aware of the terms of, Telford's certification; let alone that anyone from CJD in any way relied upon it. 302 Another issue, perhaps not so much false as misguided, relates to the glass curtain wall. The Telford drawings noted, of the curtain wall: [s]hopfront glazing as per manufacturers [sic] specifications designed and detailed by others. 303 The curtain wall had not been designed at the time Telford completed its design obligations. Thus, the method by which the curtain wall would be affixed to the structural steel members had not been designed. No doubt, Telford appreciated that provision for affixing the curtain wall to the structural steel would have to be made; and, no doubt, it appreciated that the structural steel members would have to be sufficiently strong to bear the loads imposed by the curtain wall. There is no evidence that the structural steel members were inadequate for that purpose. The curtain wall has failed, not because the structural steel members have failed but because they have withstood the forces imposed on them by the movement of the curtain wall. The curtain wall has been caught between an irresistible force (the upheaving slab) and an immovable object (the structural steel members) and has failed precisely because the structural steel members did not yield. 304 In any event, leaving aside the question of the slab detail (which Mr Jeffree must, or should, have appreciated was incorrect) there is no basis for concluding that Mr Jeffree had any reason to think that the Telford design was inadequate. For the reasons that I have given, any misleading or deceptive conduct in relation to the slab detail (assuming that CJD even noticed this) goes nowhere; and in fact the design was not otherwise inadequate. Murphy 305 As to Murphy: the Murphy drawings no doubt constituted a representation by Murphy of the adequacy of the design comprised in them. But that was a representation made to A&C, who had commissioned the design. The provision of the drawings to CJD (assuming, as I have said above, that this occurred) can only have amounted to a representation by Murphy if, expressly or by implication:

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(2) perhaps, if knowing or having reason to think that A&C would or might provide the drawings to CJD, Murphy stood by and did nothing. 306 There is no evidence that A&C or Mr Jeffree was, expressly or by implication, authorised to pass on the Murphy drawings to CJD; or that Murphy knew, or ought to have known, that this would or might happen. The Murphy drawings are not addressed to CJD; indeed, they do not even mention CJD (although, of course, they describe the lot that, ultimately, CJD acquired). The most that can be said is that Mr Murphy should have understood, when he read the J&K 2001 report, that the premises were to be constructed for CJD. 307 Mr Corsaro did not refer to any evidence suggesting that Mr Murphy had had independent discussions with Mr Perrin, Mr Rafferty or anyone else from CJD. Nor did he put to Mr Murphy that there were any such discussions. 308 In those circumstances, I conclude that Murphy made no representation to CJD. Telford 309 Essentially the same analysis applies in respect of Telford. Indeed, the Telford drawings describe the project as "[p]roposed building for A&C Constructions"; although, once again, they identify what became CJD's lot. 310 I conclude that Telford made no representation to CJD. Reliance 311 I turn to the question of reliance. There is no evidence that CJD relied on any representation made by the Murphy or Telford drawings. On the contrary, as I have now said twice, Mr Perrin said that he regarded A&C as "the builder and the engineer". Indirect causation 312 I think that Mr Corsaro put an alternative case based on indirect causation: namely, that CJD relied on A&C, and A&C relied on Murphy and Telford. To the extent that such a case was put (and it is not advanced in the pleadings, or reflected in the agreed issues), it should not be entertained. It is not sufficient to raise it (if it were raised) as an issue in final submissions. 313 In any event, such a case would not succeed. See Digi-Tech (Australia) Ltd v Brand (2004) 62 IPR 184 at 211 [155] - 212 [159]; Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 68 ACSR 595 at 601 [7] - 603 [13], 605 [22] (Giles JA); 700 [614]-701 [619] (Ipp JA). Tenth issue: defects in design or construction Defects in design 314 The first aspect of this issue - identification of defective design or construction - is relatively uncontroversial. 315 As to design, in so far as it involves the pavements (including subbase and subgrade) and the structure, the suggested defects are:

[161]

(2) other instances of slab degradation. 326 The second of the defects referred to at [324] - omission of sealing in the joints between the slabs - meant that water could penetrate between the slabs through the subbase to the subgrade. The subgrade included reactive clay material. Such material swells when it becomes moist. The first of those defects - over-compaction - exacerbated the swelling. The swelling of the over-compacted fill caused some of the slabs to heave. 327 The third of those defects - mounting the curtain wall on the internal slab - meant that when the internal slab heaved, pressure was applied to the curtain wall. The fourth defect - failure to affix the curtain wall to the structural steel members in a way that would have permitted one to move relative to the other - meant that, when the heave of the slab applied upward force to the curtain wall, it became distorted, and some of the glass panes in it cracked. Over-compaction 328 I have concluded that, read as a whole, Murphy's specifications for compaction were not deficient. But even if they were, it does not follow that Murphy was responsible for over-compaction and the results. That is because, as I have said, there is no acceptable evidence that CJD in fact relied on note 13 (to the exclusion of note 1) in undertaking compaction, or that Mr Ihnatev of SMEC did so: see at [195] to [198] above. 329 It follows that responsibility for over-compaction rests with A&C. 330 Mr Cheney submitted in the alternative that even if Murphy owed, and breached, a duty of care, it was not responsible for any loss that followed from the over-compaction. He relied on the fact that the design was taken out of Murphy's hands as breaking the chain of causation: a novus actus interveniens. 331 It is unnecessary to do anything more than summarise the relevant facts. Mr Murphy refused to put his name to, or to sign off on, any further reduction in the thickness of the slabs. The redesign of the slabs was undertaken by Marcus. The Marcus design did not supersede the Murphy design in so far as the Murphy design had dealt with compaction. Nor was it required to do so: Marcus' retainer was to design a slab of the thickness required by CJD. The slab design prepared by Marcus retained elements of Murphy's design, including Murphy's various specifications for compaction of the subgrade. 332 However, one consequence of the change (from Murphy to Marcus) was that Murphy had no responsibility for supervising the works during construction. That role was undertaken by Marcus. Mr Marcus said that he performed it, and that he was "satisfied at the time, based upon [his] observations that [the] external slabs had been properly constructed and were consistent with [his] drawings and site instructions". In addition, as I have noted, A&C retained SMEC in connection with the earthworks, and Mr Ihnatiev of that firm had day to day responsibility for the supervision and testing of, among other things, compaction.

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333 It is not necessary to decide whether, in the circumstances, there was a break in the chain of causation. That is not relevant to my conclusion, at [329] above that responsibility for over-compaction rests with A&C. Omission of sealing 334 The Murphy drawings specified sealing between slabs in the external pavements. As I have said above, the better view of the Marcus drawing is that it likewise specified sealing between slabs (internal and external). Although Mr Corsaro attacked Mr Marcus' stated rationale (which was to prevent the ingress of dust, not water), this does not matter. As Mr Fagan submitted, the rationale is irrelevant; and sealing would have prevented the ingress of moisture as well as of dust. 335 It was A&C's case that sealing between the joints was omitted at the direction of CJD, through Mr Perrin. I referred to this, in considering the question of credibility (see at [62] above). 336 Mr Jeffree said in his statement (para 89) that he had a conversation with Mr Perrin in which Mr Perrin directed Mr Jeffree to delete sealing between the joints: 89. When I was preparing my estimate in order to provide a price to CJD, I allowed for an amount in respect of sealing the joints between the concrete slabs. I proposed that this jointing would be used both in the saw cut joints, and the dowelled joint. I had allowed for joint sealant because I wished to minimise, if not entirely, remove the opportunity for water to gain access underneath the concrete slab - both inside and outside the building. Sometime, I believe in the second half of April 2002, in the course of one of my meetings with Mr Rob Perrin, words to the effect of the following conversation took place:- Mr Perrin: "How much have you allowed for jointing". I said: "I think it was about $11,000.00". (In fact I had allowed $13,000.00 in my estimate - see p7, document "25" annexed hereto). Mr Perrin: "Take it out". I said: "It keeps the water from entering the sub-grade via the open joints. Are you talking about inside and outside?" Mr Perrin: "Yes." I said: "I think you should at least keep it on the outside." Mr Perrin: "Just take it out."

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337 According to Mr Jeffree, he recorded this direction both on the Murphy drawing and on his worksheets in which he had priced up the works (in each case, by writing "deleted C.J.D."). 338 Mr Perrin denied that he had had a conversation as alleged in para 89, or that otherwise he instructed Mr Jeffree to "take jointing out of the concrete slabs". (It is quite clear that "jointing" was intended to refer to sealing between the slabs panels). 339 Mr Jeffree was challenged vigorously on this aspect (and others) of his evidence, as was Mr Perrin. In essence, as Mr Corsaro recognised, the challenge to this aspect of Mr Jeffree's evidence requires the conclusion that he had deliberately falsified A&C's records. 340 I have set out at [144] above A&C's letter of 25 June 2002 to CJD. It will be observed that one of the matters referred to in the last paragraph is "joints". In my view, that is to be read as a reference to the deletion of sealing. 341 I have set out at [151] above an extract from Mr Jeffree's letter to CJD dated 12 October 2005. That refers not only to reduction in the thickness of the slabs but also to deletion of joint sealing. It notes that "[t]his procedure was rejected by CJD". It is extraordinary, and in my view telling, that CJD did not reply to this letter, denying that the instruction was given. The failure to reply corroborates the conclusion that I would have reached in any event, based on my general preference for the evidence of Mr Jeffree over that of Mr Perrin where the two are in conflict. 342 In this context, I take into account what seem to me to be the probabilities, regarding the matter objectively. A&C is a builder. It makes its money by carrying out construction work. Presumably, if Mr Jeffree prices a job correctly, A&C makes some margin on the various items of work. Thus, there was no incentive for A&C to delete the sealing of the joints unless it was trying to cut costs by cutting corners. I find it very difficult to understand why an experienced builder, who understood (as Mr Jeffree did understand) the importance of sealing slab joints when the slabs are underlain by compacted reactive clay material, would delete sealing between the joints. To do so would be to invite a claim. 343 On the other hand, CJD was keen to save money. In my view, it is likely that Mr Perrin would have directed steps that might assist it to do so, even though given warnings as to the consequences of taking those steps. I do not accept his evidence to the contrary. 344 Accordingly, I find that responsibility for the absence of sealing at the joints of the slabs rests with CJD. Defects relating to the curtain wall 345 It appears to be the case that the curtain wall was designed and installed by the glazier (Campbelltown Glass Services). There is no evidence to show who was responsible for the defective elements in the design. However, A&C had contractual responsibility to CJD for the works. A&C knew (through the J&K 2001 report) that the internal slab should be a floating slab: i.e. that, among other things, the walls of the building should not rest on it. It follows that, even assuming that the glazier was responsible for this aspect of the design, A&C should have rejected it. If the curtain wall had been supported by the steel framing members or the edge beam on which they were supported, the distress and failure that has occurred would not have happened. 346 Again, there is no evidence as to who was responsible for designing the way in which the curtain wall was affixed to the structural steel members. It was not Telford. That method of affixing was defective only because the curtain wall was supported on the slab, and thus likely to move to the extent that the slab heaved. It is either an independent or concurrent cause of the damage to the curtain wall. It too falls within the ambit of A&C's contractual responsibility for the works. BCA non-compliance 347 The effect of Mr Michaels' evidence is that to the extent that there is non-compliance with the BCA, that is a result of the way that the premises were constructed or are used. It does not follow from Telford's design. 348 A&C is responsible for the construction; and I repeat that it retained its own consultant to advise it on BCA issues. 349 It follows that, to the extent that there are non-compliances with the BCA, A&C should be held responsible. Damage to the pavement joints 350 CJD originally required rails set into the concrete slab to be installed in the workshop area so that steel tracked vehicles could be manoeuvred on the rails, not directly on the concrete surface. It directed that the rails be removed. Mr Rafferty said that their purpose was not to prevent damage to the concrete, but to protect the painted service of the concrete. I do not accept that explanation. Among other things, it is inconsistent with the terms of the loadings letter. It is clear that CJD was aware that tracked vehicles had caused great damage to slabs at its other premises. The engineering evidence supports the conclusion that moving tracked vehicles on rails would prevent them from damaging the slab. 351 Mr Rafferty said also that the rails were useless, because tracked vehicles tended to slip off them. However, he did not say that he disclosed this to CJD (or anyone else). 352 It is necessary to look in some detail at the loadings letter. The brochures attached to that letter identified, among the vehicles or equipment that would utilise the Smeaton Grange premises, a tracked vehicle known as a Volvo EC 460 long crawler. Of this vehicle, the loadings letter said: Maximum vehicle weight is 46000KG however the ground pressure for this machine is .54KG/cm 3 . This machine would only be moved into our workshop on the special rail equipped workshop bays. Machines are transported into and out of the facility by Low Loader Trailer Units. 353 In my view, the clear inference from this letter is that when tracked machines (only one was identified in the letter) were being moved around the premises, they would be moved on low loaders except within the workshop; and when they were moved within the workshop, they would move on rails, not directly on the concrete. 354 There is nothing in the letter, or elsewhere in the evidence to which I was taken, to suggest that CJD made it known to A&C that steel tracked vehicles would rumble at will, or at random, around the premises generally. Although I have not set out the whole of the loadings letter, it does not suggest that the tracked vehicles would move otherwise than in the way indicated in the passage that I have extracted. By contrast, of another sort of machine, the letter said: this machine… would not enter the workshop. It would however move about the workshop yard. 355 Reading the letter as a whole, the contrast between what was said of the machine that would not enter the workshop but would move around the yard, and what was said about the tracked machine, is clear, and reinforces the view that I take of the letter. 356 It follows that, to the extent that damage has been caused to slabs in the workshop bay by the movement of tracked vehicles, responsibility rests with CJD because CJD directed removal of the rails. To the extent that damage has been caused to external slabs by the movement of tracked vehicles, responsibility rests with CJD because it did not instruct A&C to design those slabs to withstand such damage. 357 It might be added that the cost of constructing the external pavement (and for that matter the workshop slabs) to resist spalling caused by the movement of tracked vehicles would have been very substantial. Given CJD's attitude to cost, and given that, in its other premises, it was apparently prepared to put up with degradation of slabs through vehicle movement, it is unlikely in the extreme that any such direction would have been given. Other instances of slab degradation 358 The experts identified a section of slab near the wash bay that had substantially broken up. They thought that this was probably due to degrading of the subgrade through water ingress. Their joint report did not suggest that over-compaction of the subgrade (assuming, for the moment, that these slabs were constructed in an area of fill rather than cut) had anything to do with the damage. Accordingly, it is appropriate to regard this failure as something flowing from the deletion of sealing between joints, and to allocate responsibility for it to CJD.

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(3) those parts or aspects of the building that do not comply with relevant requirements of the BCA. 365 Telford had no part in the design of the internal slab. Although its drawings specified a slab detail, it was never intended that this slab detail be constructed. The slab that was constructed was designed by Marcus. The structure of the building supplied by Telford did not rest on the internal slab. It rested on an edge beam spanning concrete piers founded to rock. Thus, so far as Telford is concerned, the design that it specified reflected the J&K 2001 report, in that structural elements of the building were not supported by the internal slab. 366 Telford did not design the curtain wall. The curtain wall had not been designed at the time Telford completed its "Initial Building Design". The submissions for CJD strove valiantly to explain how Telford should have taken into account loads to be imposed by a glass curtain wall at the time it finalised its initial building design. Mr Corsaro referred (closing submissions, para 107) to evidence of Telford's principal, Mr Andrew Telford. At paras 37 to 40 of his statement, Mr Telford referred to amendments to the Telford design to accommodate changes to the mezzanine floor space and fire rated doors. He said that these changes led to "a requirement for additional footings which resulted in an amended footing plans being produced and certified". However, that work does not form part of the "Initial Building Design" which, by para 6 of part A of CJD's further amended list statement, is defined to mean Telford's "conceptual design of the Building". 367 In any event, the problems with the curtain wall arose because it was mounted on the internal slab, and affixed to the steel structural members in a way that did not permit one to move relative to the other. Thus, as I have now said several times, when the internal slab heaved, and forced the curtain wall upwards, it suffered distress and damage. Telford was not responsible for designing the method by which the curtain wall was affixed to the steel structural members; nor could it have been, in circumstances where the glass curtain wall did not form part of its design brief, and (on the evidence) had not been designed when Telford completed its Initial Building Design. 368 Mr O'Hea gave evidence that the designer of the building should have had regard to the loads that the building was required to support, including loads transmitted by the curtain wall. There are problems with that aspect of Mr O'Hea's evidence. The first is that, even with his considerable powers of advocacy, he was unable to give any rational explanation of how the designer of the structure could have accommodated loads that were not, at the time the design of the structure was completed, in existence. The second is that, as I have just indicated, this passage of Mr O'Hea's evidence is more in the nature of advocacy than expert evidence. That can be seen from the fact that, although Mr O'Hea acknowledged that the distress to the curtain wall was the result of movement to the slab, nonetheless (he said) the designer of the frame should have provided information to the designer of the curtain wall in respect of certain forces that have absolutely nothing to do with the actual problems in this case. I set out the relevant passage (T392.40-393.33): Q. Now putting the slab to one side, the structure as it exists in the Telford drawings, that is the footings and the structural steel elements were capable of being used by a facade designer to come up with a facade design that accommodated the requirement of the building including the loading likely to be imposed on the wall, correct? A. Loadings were likely to be imposed on the wall.

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(2) over -compaction of fill. 373 It is clear from the expert evidence that the second cause had no independent operation. That is to say, over-compaction of itself, absent any penetration of moisture, would not have caused the slab to heave. It was only because moisture did penetrate between the joints in the slab that the swelling occurred. Over-compaction exacerbated the degree of swelling. 374 The geotechnical experts agreed, in a joint report produced following their belated conference, that "heave of the slab-on-grade… can be explained by water penetration through the open joints", although, they said without specificity, "there might be other sources of moisture ingress" (para 4(a)). 375 There was no expert evidence to indicate the extent to which over-compaction had exacerbated the amount of heave. 376 In circumstances where the over-compaction would have had no deleterious impact on the serviceability of the Smeaton Grange premises save for the penetration of moisture, but where (because moisture did penetrate) it did have an impact on the amount of damage caused, I think that the primary responsibility for damage resulting from slab heave should be attributed to CJD. I say that because, as I have found, it was CJD that directed removal of the sealing between joints; and it did so notwithstanding a warning of the danger that might result. However, A&C, through Mr Jeffree, clearly understood that if there were no sealing between joints then water would penetrate through the slab. In those circumstances, A&C should have been particularly alert to the danger of over-compaction. However, Mr Jeffree seems to have held the view (despite the engineering information in his possession) that, the higher the compaction ratio achieved, the better. 377 In those circumstances, unaided both by expert evidence and by any submission on the point, I think that responsibility for slab heave should be apportioned 75% to CJD and 25% to A&C. I acknowledge that this is an essentially unreasoned and instinctive reaction to, or synthesis from, the facts that I have summarised. The curtain wall 378 There is no evidence to explain why, contrary to the clear implication available from the J&K 2001 report, the curtain wall was constructed on the internal slab. The evidence does not disclose whether the glazier was given a copy of the J&K 2001 report. If it were not, there was no reason for it to have considered:

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(2) (perhaps) providing for relative movement (at least, caused by slab heave) between the curtain wall and the steel structural members, where the one was affixed to the other. 379 Regardless of what the glazier might or might not have known, A&C should have understood that the curtain wall should not be affixed to the slab. 380 The distress and damage to the curtain wall have been caused by heave in the slab. However, it does not follow that responsibility for that damage should follow the apportionment of responsibility for heave in the slab. There is another factor: that just identified. A&C should have ensured that the curtain wall was independent of the slab. 381 Accordingly, I think it appropriate to apportion the major part of the responsibility, for damage to the curtain wall, to A&C and the minor part to CJD. I do so 85% to A&C and 15% to CJD. This apportionment may be described in the same terms as that set out at [377] above. Non-compliance with the BCA 382 On the conclusions to which I have come, responsibility for this must rest with A&C. Many of the instances of non-compliance would not have occurred had A&C followed Telford's drawings. A&C retained its own BCA expert to advise it on compliance issues. Other matters 383 On my findings, CJD is responsible for any inadequacy in the external slabs, flowing from their design at a thickness of 180mm. It is also responsible for damage to those slabs (in particular, spalling at the joints) caused by the movement of heavy tracked vehicles over them. Sixteenth issue: scope and cost of rectification work 384 The costing experts, Messrs Andrew Condliffe and Paul Elphick, eventually met - during the second week of the hearing - and prepared a joint report. Unfortunately, in one respect - relating to the internal slab - it is not possible to correlate the costing in their report to what was agreed between the engineering experts. In another respect - BCA compliance - they costed some scope or description of works, known (after its source) as the Mainbrace scope, procured by Mr Condliffe, but not made available to the defendants or their experts (apart from Mr Elphick) for assessment. Mr Elphick assessed the Mainbrace scope only from the point of view of costing the work. He agreed that he could not say that it was a scope of work necessary for rectification of BCA non-compliance (T402.46-.50). In those circumstances, there being no explanation for why it was that Mr Condliffe had not met earlier with Mr Elphick (when, it was common ground, Mr Elphick had been available to meet since before the commencement of the hearing) I rejected so much of the joint report as related to the Mainbrace scope. 385 To the extent that rejection of the Mainbrace scope and the costing of it causes detriment to CJD, that is a problem of its own making. Its expert evidence was required well before the hearing, not (through the back door) during the second week of the hearing. To admit the Mainbrace scope and its costing would have been prejudicial to the defendants, who should have had, but were denied, the opportunity to check the scope of work. In circumstances where the defendants were not, and CJD was, the author of the problem, it is CJD that must bear the consequences. 386 The result is that the only evidence of the cost of rectification of the works that do not comply with the BCA is a "budget only" or "order of magnitude" figure prepared by Mr Condliffe in the sum of $147,648.00. The internal slab 387 The engineering experts agreed that the appropriate rectification works for the internal slab were those proposed in a joint report of the defendants' experts following meetings held on 2 and 27 July 2009. The report of those meetings has to be read in conjunction with a marked-up plan. Unfortunately, it is not easy to discern either from the report or from the marked-up plan what precisely is the work required for rectification of the internal slab. 388 Equally, as I have said, it is impossible to tell from the joint report of the costing experts which item (or items) of their joint report relates to whatever is the scope of work identified by the engineering experts. 389 In those circumstances, it will be necessary to leave it to the parties to attempt to sort the matter out, and to reserve liberty to apply in the event that they cannot. The curtain wall 390 The engineering experts agreed on the scope of work for rectification of the curtain wall. The costing experts costed that scope of work at $380,199.00 (inclusive of design costs and GST). BCA compliance 391 For the reasons that I have given, Mr Condliffe's "budget only" / "order of magnitude" figure of $147,648.00 should be allowed. I do not know whether or not that figure includes GST. The parties should be able to agree on this. 392 There may be a question as to whether allowance should be made in this (or any other) category of rectification for GST, if it appears that CJD would be entitled to an input credit for the GST component of any cost of rectification. Seventeenth issue: mitigation 393 On my findings, the issue of mitigation is relevant only to the rectification works referred to in the previous section of these reasons. 394 A&C, who took the lead on this issue, submitted that CJD should have sealed the slab joints in 2005 when movement was first identified, and that CJD should have taken steps to ensure that any further movement in the slab did not cause further distress to the curtain wall. In substance, those measures were proposed in Mr Jeffree's letter of 12 October 2005 to CJD, to which I have referred in more than one place above. 395 Mr John Alden, an expert engineer retained by Murphy, said (report of 7 August 2009, paras 4.5.11 and following) that:

[183]

(3) it might have been necessary to carry out that process more than once, but "this is unlikely to have been a difficult task". 396 Mr Alden accepted that his solution would not have been permanent, and would not have prevented all damage - in particular, damage that had occurred before the adjustments were carried out. However, he said, "it would have avoided the severe damage now evident, causing a safety risk related to breakage or detachment of glass panels". Mr Alden was not challenged on this evidence. 397 In the same report, Mr Alden supported the proposition that CJD should have sealed the joints as soon as it became aware of the problem and was advised to do (para 4.5.23). Again, he was not challenged on this evidence. 398 There is no evidence that would enable the Court to assess to what extent the curtain wall has deteriorated since distress was first observed. However, I think, it is a reasonable inference from Mr Alden's evidence that, had the works to which he referred been performed it would not now be necessary to replace the curtain wall. 399 In this context, it may be noted that CJD had retained a consultant, Hyder Consulting Pty Ltd, to advise it when problems in the building became apparent. Hyder recommended that some remedial work be carried out. Mr O'Hea said at first that remedial work recommended by Hyder had been carried out (T321.12-26). However, when taken to the detail of the remedial work suggested by Hyder, he was forced to accept that it had not been carried out (T325.25 - 326.25). 400 Ms Olsson accepted (closing submissions, para 127) "that there is no expert evidence to opine [sic] the precise amount of damage caused or increased by CJD's failure to mitigate." She submitted that "[i]t is difficult to assess the damages flowing from the failure to mitigate, however… mere difficulty in assessing damages does not relieve a court from the responsibility of estimating them as best as it can". It would have been more accurate to omit the word "precise" and to replace the word "difficult" with "impossible". 401 Nor is there any evidence of the costs that would have been incurred in carrying out, by way of mitigation, remedial works of the kind suggested by Mr Alden (or, for that matter, by Hyder). 402 The onus, in relation to mitigation, is on the defendant alleging failure to mitigate to show that there were steps that could have been taken to mitigate the loss, and that it was reasonable for the plaintiff to have taken those steps. The concept of mitigation is closely related to the concept of reasonableness, and a plaintiff is not obliged to take unreasonable steps to mitigate its loss. However, because a plaintiff is obliged to act reasonably, if (in relation to mitigation) it does not do so, the consequences should not be borne by the defendant. 403 CJD did not offer any explanation of its failure to mitigate. CJD was given advice as to steps that should be taken in relation to the curtain wall. Since it did not give any evidence as to its failure to take those steps, the available inference is that it feared to lead such evidence. Drawing that inference, as I do, it is open to infer, on the basis of the evidence to which I have referred, that CJD acted unreasonably in failing to carry out remedial works at an earlier time. In those circumstances, it is not entitled to recover the amount claimed. That is because to award that amount by way of damages would be to visit on the relevant defendant - on my findings, A&C - the consequences of CJD's unreasonable failure to act. 404 CJD did not lead, or point to, evidence to suggest that the steps recommended by Mr Alden, or indeed the steps recommended by Hyder, were unreasonable in the relevant sense. As to Mr Alden: his evidence was that the steps recommended by him (see at [395] above) were not likely to have been difficult. It was not put to Mr Alden that the steps recommended by him were of such novelty or obscurity that someone in CJD's position, seeking to act reasonably to mitigate its loss, should not have thought to undertake them. 405 Mr O'Hea did not suggest, in his cross-examination on the steps recommended by Hyder, that they would novel, or obscure, or difficult, or that for some other reason it was not reasonable to expect a reasonable person in CJD's position at the relevant time to have undertaken them. 406 Accordingly, and drawing the inference from CJD's silence to which I have referred at [403] above, I conclude that CJD has acted unreasonably, and failed to mitigate its loss. In circumstances where the steps recommended by Mr Alden, if taken, would have rendered replacement of the curtain wall unnecessary, it follows that the only quantification of loss in respect of the curtain wall - namely, of the cost of its removal and replacement - ought not be allowed. There is no other evidence of damage that should be allowed in respect of this aspect of the claim. Conclusion and orders 407 It follows that CJD's claim succeeds in part as against A&C:

CJD Equipment v A&C Constructions

At a glance

Court

Decision date

Before

Source

Judgment (190 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (7)

Cited By (9)