Galea v Farrugia

The characteristics of Property A 7In early 2002 there was a house on Property A with another, immediately to its west, under construction. The land to the north of the houses sloped steeply down in that direction, with the slope being considerably more pronounced on the western side than on the eastern side. The fill brought on to the property during 2002 created a level platform immediately to the north of the two houses, approximately 110 metres in length and 35 metres in width. It was proposed to build the machinery shed on the north-west corner, where the fill was at its deepest, with entry to the platform from a driveway at its eastern end. The height of the fill at the north western corner of the platform was approximately 4.5 metres. When, in 2003, the fill comprising the platform was removed from the property, 7,325 tonnes of material were removed.

The sequence of events 8Mr Galea gave evidence of a conversation on 20 March 2002 with Mr Farrugia, who was an earth moving contractor: "David Farrugia: 'If you are going to build there [referring to the site of the proposed machinery shed], you will need to level out the land. Leave it to me. I can get the fill for you. I will get good fill so that it will never move. I know a fellow called Joe Cauchi, and he can get the fill for you. This is for free. We will level it out for you. You don't have to pay anything.' Paul Galea: 'That's good. As long as you do a good job David I will leave it to you.' David Farrugia: 'You don't have to worry. I'll do a good job for you.' Paul Galea: 'Whenever you want to get into the property tell me, and I will unlock the gates for you.' David Farrugia: 'I will telephone you when we are ready to commence.'" 9Mr Farrugia gave evidence that after reference was made in the conversation on this day to the location of the machinery shed, the following exchange occurred: "Farrugia: 'You are going to need plenty of fill and I can't get any fill. You know Joe Cauchi? You should speak to him, he can organise it. I'll give you his number if you need it'. Galea: 'I think I've got his number but give it to me anyway, I'll speak to him and see if he can organise me some fill. Can you spread it for me?' Farrugia: 'Yes'". 10Mr Cauchi commenced delivery of fill to Property A in late March or early April and Mr Farrugia commenced in early April to level and compact it. 11On 29 April 2002 two neighbours complained that there had been late night tipping on the property on the weekend of 27/28 April 2002. This led to the attendance at the property of Mr Rob McLaggan and Mr Robert Stone, Environmental Officers at Liverpool City Council. On 2 May 2002 a neighbour wrote a letter of complaint about late night tipping. This same neighbour made a telephone complaint on 13 May 2002 about more fill being dumped on the property on the weekend of 11/12 May 2002. This led to Mr McLaggan and Mr Stone attending the property again and to the Council issuing a written direction to Mr and Mrs Galea to cease the land fill activity, as it had not been the subject of development approval by the Council. 12On 30 May 2002 the Council gave notice to the Galeas of a proposed order under s 121B of the Environment Planning Assessment Act 1979 requiring removal of the unauthorised land fill. The reason for the proposed order was stated to be the absence of development consent to the use of fill. The order was made on 5 July 2002. 13The primary judge said that, on the Galeas' evidence, "delivery of fill commenced at the end of March and lasted 6 - 8 weeks, ie to approximately 31 May 2002 or the first week of June" and that this was consistent with the evidence of Mr Cauchi and of the Galeas' daughter, Ms Catherine Azzopardi (Judgment [87]). His Honour also said that there was evidence that: (a) Messrs McLaggan and Stone last saw trucks of the third and/or fourth respondents on Property A on 1 June 2002; (b) On 5 June 2002 Mr Galea told Mr Cauchi not to deliver any more fill to Property A; (c) Mr Cauchi believed that his company did not take any fill to Property A after the first week of June 2002 (Judgment [88]). 14His Honour also noted that the Galeas did not cross-examine Mr Cauchi to suggest that he or his company deposited any fill on Property A after 1 June 2002 (Judgment [88]). 15Having given evidence that the levelling of the fill was completed six to eight weeks following the first delivery, Mr Galea said: "When the levelling process had been completed there remained approximately two (2) or three (3) piles that had been left on top of the levelled out fill. Each mound represented approximately the quantity of six (6) truck loads" (affidavit of 21 August 2008, [44]). 16On 8 July 2002 the Galeas lodged a development application for the erection of machinery sheds on Property A (Judgment [26]). The accompanying survey plan showed the contours of the land as affected by the fill but no application was made for approval of the deposit of the fill. 17Messrs McLaggan and Stone inspected the fill on 25 July and 7 August 2002. On the latter date they took two soil samples, known as RM1 and RM2. 18On 12 August 2002 the Council gave the Galeas and the first, second and third respondents notices under s 91 of the Protection of the Environment Operations Act 1997 to remove the land fill. On 19 September 2002 Messrs McLaggan and Stone conducted a recorded interview with the Galeas, Mr Farrugia and Mr Cauchi and took samples RM3 and RM4. 19On 12 September 2002 Ms Belinda Leo, an officer of the EPA, attended Property A and took four samples of fill that did not form part of, and was not on, the subject platform. 20Between 21 and 24 September 2002 Mr Cauchi had his company remove a limited amount of the fill. 21Pursuant to a contract with the Galeas, Building Recyclers (NSW) Pty Ltd commenced on 11 March 2003 to remove the fill from Property A. When removal was completed on 20 March 2003, 7,325.66 tonnes had been removed at a cost of $725,240.34. Mr McLaggan took further samples of the fill (denoted as RM5 - 13) during the period of removal. Analysis of the samples RM1 - 13 revealed evidence of asbestos in each, apart from sample RM12. 22Mr Cauchi commenced delivery of fill to Property B in late April or early May. Mr Farrugia levelled it. On Mr Galea's evidence, he informed Mr Farrugia and Mr Cauchi in "May/June" that they would not have any further access to Property B for the purpose of depositing fill (affidavit of 21 August 2008, [43]).

The contractual arrangements 23Having referred to the evidence of conversations set out in [8] and [9] above, and to other evidence, the primary judge expressed the following conclusions concerning the contractual arrangements: "48 The first and second defendants [the Farrugias] were longstanding friends of the fourth defendant [Mr Cauchi] and his wife. They holidayed together in Malta and other places in 2002. I accept that the first defendant would, on occasions, notify the fourth defendant if he observed a prospective private tipping site which may be of interest to the fourth defendant. 49 In my opinion, the first defendant had no intention to legally bind himself to supply the fill. There was insufficient evidence he had, or represented that he had, authority to bind the third and/or the fourth defendant to supply the fill. He lacked the capacity to do so himself, possessing neither substantial quantities of fill nor the trucks with which to move it. 50 In my opinion, the first defendant's role insofar as the supply of the fill was concerned was to convey an offer on behalf of the plaintiffs to accept good, clean fill free of charge from the fourth defendant as undisclosed agent for the third defendant. The first defendant conveyed the offer on 20 March 2002 to the fourth defendant, which offer was accepted by delivery of fill to property A by the third defendant. 51 The contract was confirmed at the first meeting of the first plaintiff (on behalf of himself and the second plaintiff) and the fourth defendant, on behalf of the third defendant. Alternatively, the contract between the plaintiffs and the third and/or fourth defendant was made at that time. 52 The defendants attempted to distinguish clean fill from good fill. Reference was made to Watson v Foxman (1995) 49 NSWLR 315 at 318.9. It was submitted that asbestos contaminated fill could be good, though not clean, fill and that the first plaintiff's version of the conversation was unclear. Accordingly, it was necessary to determine whether it was fill which was 'clean' or 'good' or both that was sought. 53 In my opinion, in this matter the words 'good' and 'clean' are used interchangeably in relation to fill. Each would exclude fill containing asbestos, such fill being neither good nor clean. It was an implied term that the fill should be clear of asbestos contamination irrespective of whether the words used were good, clean or both. ... 62 In my opinion, the first defendant, on behalf of himself and the second defendant, agreed with the plaintiffs to level and compact the fill deposited by the third and fourth defendant on property A without charge to the plaintiffs. The third defendant agreed to pay the first and second defendants for such work it being the business cost of obtaining access to a valuable tip site."

The testing for asbestos 24The primary judge noted that the laboratory test on the samples taken by the Council and EPA officers "did not, and were not intended to, determine the quantity or distribution of asbestos on site" (Judgment [65]) and that the four samples taken by Ms Leo on 12 September (three of which were shown to contain asbestos) were taken "from an area where it was likely a third party, rather than the third defendant, had deposited fill" (Judgment [66]). His Honour also noted that asbestos was detected in 12 of the 13 samples taken by Mr McLaggan (Judgment [67]).

Did Mr Cauchi and/or his company deposit the whole of the fill on Property A? 25The primary judge concluded that it was not possible to deduce from any records kept by Mr Cauchi how many tonnes of fill he delivered, or to correlate that figure to the total amount of fill removed from Property A (Judgment [74]). He did not consider that estimates by Mr Cauchi were sufficiently reliable to enable a conclusion to be drawn on these issues (Judgment [76]). 26Furthermore, his Honour did not consider that in the recorded interview of 19 September 2002 Mr Cauchi had admitted that he brought all of the fill onto Property A (Judgment [77]). 27The primary judge rejected the Galeas' submission that, as access to Property A was controlled by them, the Court should infer that the whole of the fill was deposited by Mr Cauchi. His Honour accepted that "access to the property was often not secure and enabled entry to unauthorised vehicles" (Judgment [78] and [85]).

Did third parties deposit fill on Property A? 28On this topic his Honour observed: "89 Evidence was adduced which, it was submitted, established that third parties had deposited fill on property A both before and after the first week of June 2002. This was against the background that in September 2002 a large investigation of alleged dumping of asbestos contaminated fill on private semi-rural land on the fringes of Sydney's west commenced and the suggestions that unauthorised trucks would deposit asbestos contaminated material on unsecured sites." 29His Honour then appeared to accept that it was likely that third parties, and not Mr Cauchi, delivered fill at night during the weekends of 27/28 April 2002 and 11/12 May 2002 (Judgment [90(b) and (c)]). Furthermore, his Honour concluded that, more probably than not, deposits of fill were made to Property A after 25 July 2002 by unidentified third parties (Judgment [91]). The evidence upon which he relied included that of Mr Keith Farrugia, the first respondent's son, that he levelled piles of fill on Property A on five or six occasions during the period after Mr Cauchi had, on the evidence, ceased to deliver to Property A. His Honour also relied on evidence of Messrs McLaggan and Stone of the presence on 1 July, 25 July and 7 August of increasing amounts of fill.

Did Mr Cauchi and his company deposit asbestos contaminated fill on Property A? 30The primary judge described the Galeas' case as follows: "95 Senior counsel for the plaintiffs opened a case that there was a substantial amount of asbestos being removed from a demolition site at Meadowbank, some of which ended up being deposited on property A by the third and/or fourth defendant. He also submitted that irrespective of the identification of the source of the fill there was direct evidence that asbestos contaminated fill had been deposited on property A by the third defendant. Proof of either matter would result in this issue being determined in favour of the plaintiffs." 31As to the first aspect of that case, his Honour concluded that it was highly improbable that any fill was taken from Meadowbank to Property A in the period to 1 June 2002 (Judgment [117]) and that: "118 The principal source of fill for property A was Penrith, which was considerably closer to property A than the Meadowbank site. The third defendant had a validation certificate for excavated materials from that site. There is no acceptable evidence the material for excavation at that site was contaminated with asbestos." 32His Honour also rejected the Galeas' alternative case that there was direct evidence of the deposit by Mr Cauchi of asbestos contaminated fill on Property A. That case was largely reliant upon the evidence of Mr Ronald Leibeck, a former employee of Mr Cauchi, which in large measure his Honour rejected (see Judgment [119]). 33His Honour added in relation to the evidence of the supply by Mr Cauchi of fill to other properties which was relied upon by the Galeas as tendency evidence: "120 There was reference to evidence pursuant to ss 97 and 98 of the Evidence Act 1995 in respect of the properties at Garfield Road, Marsden Park and Belmore Road, Bringelly. The evidence established that there was asbestos found in samples taken from each property and that the third and/or fourth defendant had delivered fill free of charge to each site. In my opinion, this evidence is admissible without resort to ss 97 or 98. The circumstances of the arrangements for the payment for compacting differ between the two properties. Each site was unsecured and there was evidence one had contained a large heap of building material and the other had been a building site. There were allegations of third parties delivering fill to these sites and an alleged admission in this regard by one of the owners, which was denied. 121 The fourth defendant and Mrs Cauchi gave evidence that no fill was moved from Cranebrook or Londonderry to any private tip. 122 The events on 1 August 2002 and 13 August 2002 each occurred outside the period claimed by the plaintiffs, arose from delivery to sites other than property A, and probably had a different source. They provide no direct evidence to support the plaintiffs' claim. 123 The onus lies upon the plaintiffs to prove that the third and/or fourth defendant deposited asbestos contaminated fill on property A. In my opinion, the plaintiffs have not proved asbestos contaminated fill was deposited by the third and/or fourth defendant on property A." 34In relation to the relevance of the positive asbestos tests, his Honour concluded as follows: "93 The tests for the presence of asbestos were not conclusive as to the initial position of the asbestos as the use of an excavator to level and compact the fill could have caused asbestos deposited by third parties to be intermingled with the asbestos free deposits by the third and/or fourth defendant. There was evidence, which I accept, that the effect of levelling and compacting the fill, the use of heavy machinery, the mixing of contaminated and non-contaminated material when digging at depth (through surface in-fill) and the cross contamination from tools all may give rise to the danger of cross contamination. The samples taken in September 2002 from property A were taken when the platform was being destroyed.

Conclusion on liability - Property A 35The primary judge's conclusion in relation to Property A was as follows: "124 For these reasons I find that the plaintiffs have not established that the defendants deposited fill contaminated by asbestos on property A. As proof of this matter was fundamental to the plaintiffs' case, the result of that finding is that there will be judgment for the defendants against the plaintiffs."

Conclusion on liability - Property B 36The primary judge noted that Mr Cauchi conceded that he delivered fill to Property B and found that Mr Farrugia did work levelling the fill. His Honour then said: "157 Little attention was paid to this claim during the hearing, it being, it seems, tacitly assumed the result in respect of Property A would be determinative of the result in respect of Property B". 37His Honour then noted that Lepipi's farm manager, who was present on Property B at all relevant times, was not called to give evidence and concluded, without further reasoning, that the Galeas' claim failed upon the basis that they had not established that the defendants deposited contaminated fill on Property B. His Honour found that in any event Lepipi had not suffered any loss because it had not removed, and apparently had no intention and was under no requirement to remove, the fill from the property.

Damages 38The respondents also contended that the Galeas' claim failed because, for two reasons, they failed to prove any loss. 39First, the respondents relied upon the fact that the expense of removal of the fill from Property A had been borne by Lepipi Pty Ltd, the Galeas' family company, and not by the Galeas themselves. Lepipi's accountant gave evidence that this was an error and relevant accounting records had since been corrected. 40The primary judge rejected the respondents' argument: "132 The plaintiffs are and were the owners of property A. The obligation to remove the fill was upon the plaintiffs as the owners of property A. The contract for the removal of the fill was between the plaintiffs and Recyclers. The cost of removing the contaminated fill was not an expense of a business conducted by Lepipi. In my opinion, the action is properly brought by the plaintiffs who are entitled to make a claim in respect of the alleged losses." 41Secondly, the respondents submitted that: "[I]f the [Galeas] had complied within a reasonable time with the Council's order for removal the removal would have taken place before the presence of contamination had been recognised and the higher tipping fees for contaminated fill incurred" (Judgment [135]). 42The primary judge noted that the reason why the Galeas had to remove the fill from Property A was that they caused it to be deposited without development consent, not because of asbestos contamination, but concluded: "137 In my opinion, the deposit of asbestos contaminated fill by the third defendant, if such occurred, caused damage to the plaintiffs in that it impacted upon the prospect of obtaining a consent to the development application without removing the whole of the fill. The plaintiffs would be entitled to maintain their claim."

The cross-claims 43There were various cross-claims between the parties but none arises for consideration on the appeal.

ISSUES ON APPEAL 44First, the Galeas contended that the primary judge's finding that Mr Cauchi and his company did not deliver asbestos contaminated fill to Property A was glaringly improbable. To support this contention they did not attack his Honour's rejection of the principal cases put at trial (see [30] above). Instead, they pressed a further alternative case that was put to his Honour briefly in reply submissions and with which his Honour did not deal in his judgment. This case is to the effect that some at least of the samples containing asbestos contamination were taken from fill that must have been delivered by Mr Cauchi because they were taken from that part of the land fill platform that was completed before the date (27 April 2002) upon which it is suggested that there may first have been deliveries of fill by unauthorised third parties. 45Secondly, the Galeas asserted that the primary judge failed to give proper consideration to their tendency evidence case that concerned deliveries by Mr Cauchi of allegedly contaminated fill to properties at Bringelly and Marsden Park. The Galeas submitted that what they said Mr Cauchi was proved to have done in relation to those properties is strikingly similar to what he is alleged to have done in relation to Properties A and B, and that the primary judge's neglect of this compelling evidence justifies this Court ordering a new trial. 46Thirdly, the Galeas challenged the primary judge's findings in relation to Property B. 47Fourthly, the Galeas contended that the primary judge erroneously placed an onus on them to establish that third parties did not deposit asbestos contaminated fill on Property A. 48Fifthly, the Galeas contended that the primary judge should have held that their contract was with Mr Cauchi, and not with both Mr Cauchi and his company. 49Sixthly, the Galeas contended that the primary judge should have held that Mr Farrugia warranted and represented that the fill to be supplied by Mr Cauchi would be "good clean fill" and that Mr Farrugia is liable for breach of warranty and misrepresentation. 50Seventhly, the Galeas contended that the primary judge should have found that in the recorded interview of 19 September 2002, Mr Cauchi admitted that he had delivered all of the fill which was deposited on Property A. 51Eighthly, the Galeas contended that the primary judge erred in failing to find that Property A was adequately secured at night, with the result that the primary judge should have held that Mr Cauchi, and not unauthorised third parties, delivered fill to Property A at night on the weekends of 27/28 April and 11/12 May 2002. 52Ninthly, the Galeas contend that in addition to damages reflecting the cost, or quoted cost, of removal of the fill from Properties A and B, they should be awarded exemplary damages and damages for trespass. 53By Amended Notice of Contention, the Farrugias contended that: (a) Mr Farrugia was at all times acting, not on behalf of himself or Mrs Farrugia, but on behalf of Farrugia Excavating Pty Ltd. (b) That the primary judge erred in finding that the payment by Lepipi Pty Ltd of the cost of removal of the fill from Property A did not result in the Galeas not suffering any loss. (c) The Galeas arranged for the delivery of fill by persons other than Mr Cauchi and his company. (d) The spreading and compaction of the fill by Mr Farrugia, as distinct from its delivery by Mr Cauchi and third parties, was not causative of any loss to the Galeas.

WHETHER MR CAUCHI DELIVERED CONTAMINATED FILL TO PROPERTY A 54Apart from the more specific issues raised by the Galeas (see [44] to [52] above), the sole way in which their case on this topic was put on appeal was as follows: "18. It is the appellants' case on uncontradicted evidence that the method of building up the platform was by compacting and levelling from the west towards the east it being the only practicable way to conduct the works. At the western end the platform reached a height of about 4.5 metres. The height above the previous ground level diminished until about the centre. The respondents identified no alleged third party deliveries prior to the weekend of 27/28 April. Photographs taken on 22 April and 30 April show that by that time the western end of the platform had been virtually completed. 19. Samples taken when the platform was demolished in March 2003 included samples positive to asbestos. It is the appellants' case that the samples taken from the western end could only have come from fill delivered by Mr Cauchi in the early stages and levelled and compacted in the early stages" (Amended Submissions of appellants dated 22 March 2013). 55This case required the Galeas to demonstrate that samples were taken from fill that had been levelled and compacted prior to the first date on which third party deliveries of fill may have occurred and required the Galeas to negative, on the balance of probabilities, the possibility that cross-contamination had occurred by parts of the later compacted fill forming part of the relevant samples. 56It is convenient to first consider the question of sampling and in so doing to assume at this stage the correctness of the Galeas' contentions concerning the time at which the platform was levelled and compacted.

The samples relied upon 57The Galeas did not submit that they could show that Ms Leo took her samples from fill that must have been delivered by Mr Cauchi. Nor did they submit that to be the case in relation to samples RM1 - 4 taken by Mr McLaggan on 7 August and 19 September 2002. Their submissions were confined to the following: "28. Mr McLaggan took samples during the period of demolition from 13 to 20 March which proved positive. It is submitted that the fill at the bottom of the platform (sample RM10) had to have been originally in place prior to the week of 27 April. It tested positive. This fill was delivered prior to the first time of alleged third party intervention. It therefore must have been delivered by Mr Cauchi. Indeed, it is submitted, that as most of the platform was completed prior to 27 April the same conclusion is to be drawn in respect of samples RM5, RM6, RM7, RM8 and probably RM9". 58The Galeas thus rely first on sample RM10. 59Mr McLaggan said that he took sample RM10, by means of a shovel, "from the western boundary of the area where the platform had been removed" and that the sample "had been taken 10 centimetres below the natural ground level" (affidavit of 25 August 2008, [73]). The photographs he annexed to show the location from which the sample was taken appear to confirm his statement that it was an area "where the platform had been removed". 60The record that he apparently made at the time of taking the sample (annexure "KK") does not suggest anything different, as it refers to "S10 [presumably sample RM10] - edge of stockpile removed opposite original house", although the reference to "original house" casts doubt as to whether the sample was taken from the western boundary, as the existing house, as distinct from the house under construction, was at the eastern end of the platform area. 61Mr McLaggan's evidence thus indicates that he took a sample of the natural soil after removal of fill, rather than taking a sample of fill as such. It is difficult to have any confidence that the presence of asbestos in that sample indicated that there was asbestos in the fill that had been at the point where the sample was taken, particularly when account is taken of the possibility of cross-contamination to which I refer below at [75]. 62Also relevant in this context is that whilst the testing detected asbestos in this (and the remainder of samples 5 to 13, other than 12), it did not indicate that any particular quantity of asbestos was present. Even one or two microscopic fibres of asbestos in a sample would have been sufficient to generate the positive results that were obtained (Transcript dated 10 April 2013, p 58). 63I turn then to the remainder of the sampling upon which the Galeas rely to establish their case on appeal. 64Mr McLaggan said that he took sample RM5 "from the west portion of the stockpile remaining on the platform of the Property" (affidavit [61]). The Galeas submitted: "33. ... Sample RM5 was taken from the centre of three stockpiles located towards the south western corner of the platform. Those stockpiles from which sample RM5 were taken had not been in existence on 12 September 2002 (Ex M) nor when Mr R Stone visited Property A (No 81) shortly following the partial removal of fill. As no activity took place in respect to the platform from early October 2002 until the Contractor arrived in March 2003 the three stockpiles from which Sample RM5 was collected were either created by the Contractor or came from the partial removal by the third respondent in September 2002. In either case the stockpiles had been part of the platform prior to their removal" (Orange 74). 65Exhibit M, relied upon by the Galeas to support the proposition that these stockpiles were not in existence on 12 September 2002, comprises two photographs taken by Ms Leo or her assistant. It is not obvious from the photographs that the relevant stockpiles were not there. Indeed, there appear to be three stockpiles in the general vicinity of that to which Mr McLaggan referred. Whilst these may be stockpiles shown on a sketch drawn by Mr McLaggan prior to the hearing at first instance which are different from that from which Mr McLaggan took his sample (Exhibit CC), the Court is in no position to reach a conclusion from the photographs alone, unassisted by any descriptive evidence from an expert or other witness. As Mr Cauchi submitted, one of the two photographs appears clearly not to be relevant, and the other "is taken from the low ground well north of the platform, which prevents seeing the relevant piles which would be near the new house (only the roof can be seen)" (Amended Submissions dated 28 March 2013, [41(b)]). 66The need for a judge to exercise caution in interpreting photographic evidence, particularly in the absence of expert or other evidentiary assistance, has been repeatedly emphasised in this Court (see Asim v Penrose [2010] NSWCA 366 at [57] and the cases to which reference is there made). Coloured copy photographs, though not the original photographs, were before the Court both at first instance and on appeal (see Lujans v Yarrabee Coal Co Pty Ltd [2008] HCA 51; 83 ALJR 34). 67Mr McLaggan said that he took sample RM6 "from the middle of the area where the fill had been removed" (affidavit [62]). In oral evidence he said that "[i]t was taken from the material to either side of where the trucks had been provided with a platform for loading purposes" (Transcript p 375). As shown on Mr McLaggan's sketch (Exhibit CC), this was an area about halfway west to east along the platform. The sample thus appears to have been taken from material at or near the top of the platform. Sample RM8 appears to have been taken in a similar area on the following day. 68Mr McLaggan said he took sample RM7 "from the edge of the area removed" (affidavit [64]). This does not give a clear indication of the sample's origin, but it can at least be said that Mr McLaggan's evidence does not support the proposition at least inferentially put by the Galeas that sample RM7 came from the fill "at the bottom of the platform" (see [57] above). 69The remaining sample relied upon by the Galeas (see [57] above) was RM9. Mr McLaggan said that he took the sample "from the edge of the section removed" (affidavit [68]) and "at a mid-level within the accumulated dumped material" (affidavit [9(i)]). There is no basis for concluding that this "accumulated dumped material" comprised only material originally delivered by Mr Cauchi rather than third parties. Furthermore, the Galeas are not assisted by the indication on Mr McLaggan's sketch (Exhibit CC) that sample RM9 was taken near to the eastern end of the platform. 70The prospect of cross-contamination of the samples also adds to the difficulties for the Galeas' case that are apparent from this description of the origin of the samples. I now turn to address this prospect.

The risk of cross-contamination 71As indicated in [34] above, the primary judge found that the locations from which the samples were taken could not be regarded as conclusive as to the initial position of the material sampled because fill supplied by Mr Cauchi and by others may have been intermingled in the course of the processes of levelling and compacting the fill and the subsequent excavation and removal of it. In addition, cross-contamination may have occurred through the use of the same tools to take different samples. The existence of these risks was supported by the evidence of Mr De Silva, an EPA officer of considerable experience. 72In response, the Galeas submitted that the possibility of cross-contamination was no more than speculation because Mr McLaggan was experienced and had been careful in taking samples. However Mr McLaggan's task was not to allocate responsibility for contaminated fill between Mr Cauchi and any third parties who delivered fill. His interest was in establishing whether there was asbestos in the fill, irrespective of who may have delivered particular parts of it. As a result, whilst he was undoubtedly careful to establish a chain of custody of the samples, there was no evidence that he cleaned his shovel in the course of his sampling activities to ensure that the asbestos fibres in one part of the land fill would not find their way into samples taken from another part. 73Furthermore, the Galeas provided no effective response to the proposition that the heavy machinery may have transferred at least minute fibres of asbestos from one level of the land fill to another. The following evidence of Mr McLaggan in cross-examination was not of assistance to the Galeas in this respect: "Q. So, for instance, if you on a particular day went to the site and found a fragment of fibro at the bottom near the original ground level, you wouldn't know whether the fibro had started there or started at the surface and been disturbed as a part of the process of excavation? A. That's really stretching it. When the material is removed [by] a good, competent excavator operator, the flat bar on a bucket scrapes back there and at best loses nothing but at worst a very minor amount may spill over. As they are working back they are scraping back as well and they are scraping back to natural ground level. So to suggest that there would be some residual bonded matrix asbestos here and there as a result of overfill, I disagree with that" (Black 463). 74First, Mr McLaggan's answer related to fragments of fibro rather than minute fibres of asbestos. Secondly, the evidence did not establish that each of the operators concerned in the removal operations was "a good, competent excavator operator". Thirdly, he contemplated that "a very minor amount may spill over" from the bucket. When one is concerned, as here, with minute fibres of asbestos, this amount is not insignificant. 75For the reasons that I have given, the evidence as to the source of Mr McLaggan's samples upon which the Galeas rely, and the risk of cross-contamination of those samples precludes the finding that the Galeas seek that the samples must have come from fill delivered by Mr Cauchi. I am fortified in this conclusion by my consideration below of the evidence relied upon by the Galeas to support the further proposition, essential to their case, that "most of the platform was completed prior to 27 April" (see [57] above).

When was the platform complete 76It was not in dispute that Mr Cauchi ceased deliveries to Property A by or at the beginning of June 2002. However it was clear on the evidence of Messrs McLaggan and Stone that the fill on the property continued to increase after that time. Whilst it is apparent that the general approach to construction of the land fill platform was to work from the north-west corner where the most fill was required, there was no evidence that established that the platform in that area was built to its full height by the beginning of June, with deliveries after that time building up the remainder of the platform. The following evidence of Mr McLaggan in fact suggested the contrary: "Q. And in paragraph 41 [of your affidavit] you say, 'On Thursday 25 July 2002 I again attended the property and observed the platform. I noticed there was more material on the site than I had observed since my last attendance on 1 July 2002.' Where you used the expression 'more' material', do you mean essentially the same thing? A. Yeah, more material had come on to the site, because over the duration of several months the platform per se to term it what the fill is, the platform was gradually being built up. Initially it was only a couple of metres. After a couple of months it was up, I would estimate, five or six metres in height in that corner where RM10 was. There's a photograph to depict that as well" (Transcript pp 388 - 9). 77The Galeas submitted that the Court should conclude from photographs taken at or towards the end of April 2002 that the land fill platform had been completed by 30 April "up to a point approximately equal to the eastern end of the loading bay" (Amended Submissions, [24]). As senior counsel for the Galeas put it in oral address, "by 30 April something like 45 or more metres of this platform had been constructed, levelled and compacted, albeit there are four piles standing on it" (Transcript dated 10 April 2013, p 16). Without expert or other evidence to interpret the photographs, the Court is quite unable to reach that conclusion from the photographs relied upon. The comments made in [66] above about the use of photographs are again relevant. Whilst it appears from the photographs taken at or towards the end of April that there was then a generally level platform, whether it was in fact level or, if level, then at its full height cannot be discerned. The evidence of Mr McLaggan quoted in [76] above is consistent with the level of the platform being raised throughout the whole, or a considerable part, of its length by deliveries after the end of April.

Conclusion 78For the reasons I have given, the evidence as to the origin of the samples and the risk of cross-contamination precludes any finding in favour of the Galeas that, on the balance of probabilities, the asbestos detected in the samples must have come from fill delivered by Mr Cauchi. This conclusion is fortified by the inability of the Galeas to establish the proposition that they put at the heart of their case that the western part of the platform had been completed by 30 April 2002. 79These conclusions render it unnecessary to deal with the Galeas challenge to the primary judge's finding that third parties delivered material to Property A at night on the weekends of 27/28 April and 10/12 May 2002. Even if they did not, and third party deliveries did not commence until after the beginning of June 2002, the conclusions I have expressed as to the consequences of the evidence concerning the origin of the samples and the risk of cross-contamination remain applicable.

DELIVERIES OF FILL TO BRINGELLY AND MARSDEN PARK PROPERTIES 80Prior to the hearing at first instance, the Galeas gave notice in the following terms of an intention to adduce "tendency" evidence pursuant to s 97(1)(a) of the Evidence Act 1995: "1. The plaintiff [the Galeas] intends to adduce evidence to prove that the defendants and each of them, by their character and/or reputation and/or conduct, had a tendency to act in a particular way namely to transport, deposit or cause to be deposited fill contaminated with asbestos to properties in the western areas of Sydney including but not limited to the properties listed below during 2002. 2. Further, or in the alternative, the plaintiff intends to adduce evidence to prove that the defendants and each of them, by their character and/or reputation and/or conduct, had a particular state of mind, namely to transport, deposit or cause to be deposited fill contaminated with asbestos to properties located in the western areas of Sydney in order to and for the purposes of avoiding the cost of depositing the contaminated fill at suitably licensed facilities. 3. The substance of the tendency evidence the plaintiff intends to adduce is contained in the following affidavits and/or statements served previously in these proceedings". [There then followed references to the contents of affidavits or statements of 13 proposed witnesses]. 81The proposed evidence was said to relate to the properties at Bringelly and Marsden Park referred to above, as well as to properties at Londonderry and Cranebrook. The appeal is not pressed in relation to the latter two properties. 82As noted in [33] above, the primary judge treated this evidence as admissible without resort to ss 97 and 98, but did not regard it as persuasive. 83The Galeas submit on appeal: "57. Once the evidence is admitted the tribunal of fact still has to evaluate that evidence and determine whether or not two or more events are substantially and relevantly similar and whether the circumstances in which they occurred are substantially similar. The Court must then further determine whether the similarities are merely coincidences or whether it is so improbable that they are pure coincidental [sic] that the only conclusion could be that they are not ... 58. In determining whether the evidence has significant probative value a trial judge may take into account the time, context and essential critical content of the evidence: see Twynam Pastoral Co Pty Limited v AWB (Australia) Ltd (BC 2008 11118) [2008] FCA 1922 per Jagot J at [13]; whether the evidence establishes a pattern of behaviour or even a modus operandi per Simpson J in Fletcher at [67]; whether the person was, at or about the time in question, engaged in a special kind of business, line of conduct or manner of living per Evatt in Martin v Osborne (1936) 55 CLR 367 at 402. See also R v Smith [2008] NSWCCA 247 (BC 2008 09609). 59. His Honour did not conduct the evaluative enquiry nor undertake the relevant determinations either at the stage of ruling on admissibility nor in his use of the evidence as a tribunal of fact. 60. The trial judge simply failed to analyse the evidence and make the relevant comparison. Had he done so the appropriate finding or inference to be drawn was that the third and fourth respondents had transported contaminated fill to No. 108 and No. 197" (Amended Orange 78). 84Whether Mr Cauchi delivered contaminated fill to the Bringelly and Marsden Park properties was much in dispute. The primary judge appears to have been of the view that it was not proved that he did, on the basis that the sites were unsecured and the contaminated fill may have been delivered by third parties. The Galeas challenged that view on appeal. It is convenient to consider their contentions under this heading upon the assumption that Mr Cauchi did in fact deliver contaminated fill to those sites. 85Even if that assumption were to be made in favour of the Galeas, in my view their contentions fail because the evidence of Mr Cauchi having done so was not probative in any significant way of the allegation that he delivered contaminated fill to Properties A and B. The manner in which the relevance of the evidence is described in the Galeas' s 97(1)(a) notice (see [80] above) indicates the weakness of their argument. In that Notice they alleged, in effect, that the evidence indicated a tendency of Mr Cauchi to deliver asbestos contaminated fill to properties in western Sydney. However, the fact that Mr Cauchi delivered contaminated fill to two properties cannot in my view rationally provide any significant support to the view that he delivered asbestos contaminated fill to Properties A and B. His assumed conduct in relation to the Bringelly and Marsden Park properties may have indicated that he was the type of person who was prepared to deliver contaminated fill if the occasion arose (assuming, which was not proved, that he knew that the fill was contaminated). However significantly greater similarities would be required to render this evidence of Mr Cauchi's conduct of assistance in proving the present case. The Galeas relied upon the similarity of payment arrangements between the Bringelly and Marsden Park properties on the one hand and Properties A and B on the other. However I cannot see how similarity, or even identity, of those arrangements rendered it more likely that Mr Cauchi delivered contaminated fill to Properties A and B. 86What might have been of real significance would have been evidence of identity of the source of the fill delivered to the four properties. Proof that fill from a particular source delivered to the Bringelly and Marsden Park properties was contaminated and that the fill delivered to Properties A and B was from the same source, would have been of some assistance in reaching a conclusion on the balance of probabilities that the material delivered to Properties A and B was contaminated. However, although the Galeas attempted at first instance to show identity of the sources of the fill, they eschewed any attempt to persuade this Court of that identity; no doubt because the evidentiary foundation for such a submission was not present. 87The evidence showed, for example, that in the period 20 March 2002 to 30 April 2002 Mr Cauchi's company delivered many hundreds of truck loads of fill from a wide variety of sources. The locations to which deliveries were made were not revealed by the company's records, but undoubtedly there were a large number. So far as source sites were concerned, the records indicated, by way of example, that in the relevant period 392 truck loads were obtained from a source described as "Baker's Transport", 373 loads from a site at Jamisontown and 220 loads from a site referred to as RNT Civil. 88Proof of deliveries of contaminated material to two sites without proof of the source of the material in my view says nothing about whether contaminated deliveries were made to two other sites (such as Property A and B). The evidence did not, for example, establish a pattern of behaviour or modus operandi (see R v Fletcher [2005] NSWCCA 338; 156 A Crim R 308 at [67]) or any special kind of business, line of conduct or manner of living where the proved acts would ordinarily be accompanied by the further act (Martin v Osborne [1936] HCA 23; 55 CLR 367 at 392). 89The present circumstances are far from satisfying the test postulated by Dixon J in Martin v Osborne at 375: "[A]ccording to the common course of human affairs, the degree of probability that the occurrence of the facts approved would be accompanied by the occurrence of the fact to be proved is so high that the contrary cannot reasonably be supposed".

WHETHER MR CAUCHI DELIVERED CONTAMINATED FILL TO PROPERTY B 90Aside from contesting the primary judge's alternative finding that Lepipi suffered no damage, the Galeas' written submissions in relation to Property B were confined to the following: "64. Property B was owned by Lepipi Pty Limited. A claim was made by that company. The evidence included uncontradicted evidence by Mr Galea, upon which he was not cross examined, that Mr Cauchi had delivered piles of fill to that property. At a later time Mr Galea nominated the same piles of fill to Mr McLaggan (EPA?) and samples were taken from the material. The samples proved positive. 65. It is submitted that on this uncontradicted and simple evidence alone Lepipi ought to have succeeded in respect of Property B". 91In oral address the Galeas only referred in this respect to two affidavits of Mr Galea. The first, an affidavit deposing to delivery by Mr Cauchi of fill to Property B (Blue Appeal Book p 3608) and the second describing the taking of samples by EPA officers on 11 September 2002. 92In the latter affidavit Mr Galea said that when he arrived at the property on that day he observed EPA officers inspecting "the fill located on the northern side of [an old workshop] shed and extending a distance of approximately 100 yards to the east". One of the officers asked him who delivered the fill which was to the north of the shed. Mr Galea replied that it was Mr Cauchi and that "it has been levelled by David Farrugia or his son". He then observed the officers taking samples "from the fill located to the north and east of the old work shed". He said that he could not "recall precisely the location from which each sample was taken". 93For the following reasons this evidence referred to by the Galeas did not establish that the 10 EPA samples (six of which were shown on analysis to contain evidence of asbestos) were taken from fill delivered by Mr Cauchi, much less fill delivered by him which had not been moved by third parties such as Mr Farrugia, with the concomitant risk of cross-contamination. 94First, Mr Galea's evidence of deliveries by Mr Cauchi only related to the fill "to the north of the shed" whereas he described samples being taken by the EPA from both the north and east of the shed. For all that evidence indicated, the contaminated samples may have been taken from fill to the east of the shed. Secondly, Mr Galea said that the fill had been levelled by Mr Farrugia or his son. Mr Cauchi would not have been responsible for any contamination of the fill as a result of Mr Farrugia's movement of it with his machines. As the amounts of asbestos required to give a positive result on analysis of a sample can be very small, the possibility of cross-contamination of the type referred to at [75] above cannot be disregarded. Thirdly, Mr Galea was not, by any means, in constant attendance at the site and, as the primary judge pointed out, the Galeas did not call Lepipi's farm manager who was present on Property B at all relevant times to give evidence. Without his evidence, it could not be found, even on the balance of probabilities, that the parts of the fill which the EPA sampled were delivered by Mr Cauchi, as distinct from being dumped by third parties. Such dumping was not an unrealistic possibility in light of evidence of apparently unauthorised deliveries to this property (Transcript pp 91 - 2), as well as to Property A. 95For these reasons, in my view the Galeas' submissions on appeal did not demonstrate that the primary judge erred in concluding that the Galeas failed to establish that the defendants deposited contaminated fill on Property B. I add that the affidavit of the principal EPA officer, Mr David Gathercole, to which the Court was not taken, does not appear to assist the Galeas' case. He stated that he had caused 10 samples to be taken "from areas of fill deposited at" Property B but did not in terms identify the locations from which the samples were taken. A plan prepared by the EPA (Exhibit V) provided some, but insufficient, information. The Court's attention was not directed to any presently relevant explanation of the plan in the evidence.

THE ONUS OF PROOF 96Contrary to the Galeas' submissions, the primary judge did not in my view misstate the onus of proof. At the conclusion of his reasoning his Honour stated expressly that the onus lay upon the Galeas to prove that Mr Cauchi or his company deposited contaminated fill on Property A (Judgment [123] - [124]). An earlier reference by his Honour to the Galeas bearing an onus of establishing that third parties did not deposit contaminated fill on the property was, when read in context, a reference to an evidentiary onus on the Galeas in the circumstances of the case. As the evidence indicated that third parties deposited fill on Property A, it was an acceptable way of describing the practical reality of the Galeas' case to say that they had an onus of establishing that the fill from which samples were taken was not delivered by third parties.

WHETHER THE GALEAS CONTRACTED WITH MR CAUCHI'S COMPANY 97This issue does not arise as the Galeas did not establish that either Mr Cauchi or his company delivered contaminated fill.

MR FARRUGIA'S POSITION 98On appeal the Galeas did not contend that there was a contract between them and Mr Farrugia for the supply of fill. Rather, they alleged that by warranty or representation Mr Farrugia had assumed a responsibility to the Galeas to ensure that the fill that Mr Cauchi was to deliver would be uncontaminated. 99Again, this issue does not arise as the Galeas did not establish that the fill delivered by Mr Cauchi was contaminated.

ALLEGED ADMISSION BY MR CAUCHI 100The primary judge rejected the Galeas' submission that in the interview with council officers referred to in [18] above, Mr Cauchi agreed that he had delivered all of the fill to Property A. I am not persuaded that there is any error in the primary judge's interpretation of the record of the interview. Mr Cauchi referred to delivery by him to the property of the fill used to make the platform but because of his transient visits to the site he was in no position to know whether third parties had also deposited fill on the property. Indeed, the evidence showed that that had in fact occurred.

DELIVERIES ON THE WEEKENDS OF 27/28 APRIL AND 11/12 MAY 2002 101As indicated above (see [79]), even if it be assumed that his Honour erred in finding that there were no deliveries by unauthorised third parties on these weekends, the Galeas' case in relation to Property A failed. As a result, it is unnecessary to consider their challenge to the findings concerning these weekends.

DAMAGES AND NOTICE OF CONTENTION 102As the Galeas did not establish that Mr Cauchi delivered contaminated fill to either Property A or Property B, neither the issue of damages nor the issues raised by the Notice of Contention arise.

ORDERS 103For the reasons that I have given the Galeas' appeal should be dismissed and they should be ordered to pay the respondents' costs of the appeal. 104WARD JA: I agree with Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2013