GORDON MARTIN PTY LIMITED v STATE RAIL AUTHORITY OF NEW SOUTH WALES & ANOR [2008] NSWSC 343 | Case summary

GORDON MARTIN PTY LIMITED v STATE RAIL AUTHORITY OF NEW SOUTH WALES & ANOR [2008] NSWSC 343 | Case summary | Zoe

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(b) The cross-claim 7 The first and second defendants denied negligence as alleged against each of them or at all. 8 The first defendant (State Rail) instituted proceedings against the plaintiff by way of a cross-claim filed on 28 January 2003. State Rail alleged in the cross-claim that the rail crossing collision occurred as a consequence of the negligence of the driver of the plaintiff's prime mover, Mr Andrew Stackman. Mr Stackman then aged 62 years, had been driving for 33 years. The prime mover had a trailer attached and which was loaded with 26 tonnes of urea fertiliser. 9 The cross-claimant alleged that Mr Stackman failed to stop his truck before entering the south-western side of the level crossing, did not give way to the cross-claimant's Xplorer train and, contrary to Rule 123(d) of the Australian Road Rules, entered the level crossing at a time the Xplorer train was approaching the crossing when it could or should have been seen by him. 10 The cross-claimant also alleged that the plaintiff's truck was travelling too quickly on its approach to the level crossing, and that Mr Stackman failed to make appropriate observations and respond to the approaching train so as to avoid the collision. 11 A statement of Agreed Facts and Issues on Quantum (Exhibit 13) recorded an admission by the defendants that the sum of $136,484.21 exclusive of GST was a fair and reasonable amount in respect of the plaintiff's claim and that expenditure in that amount had been incurred by the plaintiff. The claim was principally made up of the repair costs, other associated expenses and the write-off value of the trailer. If the plaintiff was fully successful on liability, then the defendants agreed that they would be liable to pay that amount. 12 In relation to the cross-claim, the plaintiff/cross-defendant admitted that an amount of $25,437.21 exclusive of GST was a fair and reasonable amount for the cross-claimant's "bussing" claim and that $949,974.08 exclusive of GST was an amount which the cross-claimant incurred by way of repair costs to restore the lead car of the Xplorer train. It, however, did not admit that that amount was fair and reasonable. In this respect, the plaintiff/cross-defendant relied on the assessment made by Booz Allen Hamilton, whereby the costs for the repair of the Xplorer train were estimated at $602,315. Accordingly, there is a dispute or discrepancy in the amount claimed by the cross-claimant for repair costs of $347,659.

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(3) UNCONTROVERSIAL FACTS 13 The relevant railway track was the north-western rail line being a single track linking Gunnedah with Sydney via Werris Creek. The line passes through the township of Breeza in a generally north-westerly direction, as depicted in Exhibit 1. 14 Trains travelling along the north-western rail line from Sydney are described as travelling in the "down" direction. Trains travelling towards Sydney are described as travelling in the "up" direction. The train involved in the subject accident was travelling in the "down" direction before the collision. 15 The Kamilaroi Highway, which passes through the township of Breeza. is aligned approximately parallel with the railway as also depicted in Exhibit 1. Several hundred metres to the south-east of Breeza, there is an intersection to the right with Carroll Road. That road leads to the level crossing where the collision occurred and is identified on the plan as being at track location 433.416 kilometres, that point representing the track distance from Sydney to the level crossing. According to expert evidence, the level crossing is constructed on an 800 metres radius left-hand curve in the down direction. At a distance of approximately 500 to 600 metres from the level crossing, the rail line passes through a cutting. Mr Neil QC, who appeared with Mr I J McGillicuddy on behalf of the plaintiff, made a number of submissions concerning the significance of the cutting and the effect it had on a train driver's visibility looking towards the crossing. The Kamilaroi Highway curves to the left on the approach to Carroll Road and into Breeza. 16 The evidence describing the viewpoint of a driver sitting in a semi trailer similar to that driven by Mr Stackman, consisted, in part, of a diagram showing the specification of a Mack truck (Exhibit 11) and Mr Stackman's evidence that he is 1.87 metres tall. The viewpoint from the Mack truck accordingly was approximately 2.6 metres from the road surface. 17 Carroll Road, after the turn-off at the Kamilaroi Highway, has a gradient of approximately 12 degrees in a downhill direction leading to the level crossing. The gradient is then followed with a transition to a six degrees uphill gradient over the tracks and for a short distance in the direction of the township Carroll. Exhibit 9 depicts the topography from Carroll Road towards the highway. 18 As at the date of the accident, the road surface over the level crossing was uneven and its condition is revealed in photographs, Exhibit K (numbers 4, 5 and 6). 19 On 19 March 2001 at the approach to the crossing and on the left side of Carroll Road, there were signs erected which read "RAILWAY CROSSING", "STOP" and "LOOK FOR TRAINS". 20 The evidence to which I will refer later indicates, and I accept, that there was no stop-line on Carroll Road evident at or near the level crossing on 19 March 2001. Photograph 4 in Exhibit A and photographs 2 and 4 in Exhibit K illustrate the relevant roadway without any sign of a stop-line. 21 Survey evidence established that the stop sign was located approximately 59 metres from the middle of the intersection of the Kamilaroi Highway and Carroll Road. It was located 3.2 metres forward of the present position of the stop-line. The stop sign was approximately 3 metres from the nearest rail. The nearest rail was measured at approximately 62 metres from the middle of the intersection of the highway and Carroll Road. 22 Other structures in place on the day of the accident included two control/signal boxes and a home signal (being a white post) adjacent to the rail line approximately 50 to 60 metres from the level crossing looking in the "up" direction. These structures, their size and position are depicted in Exhibit A, photo 7. 23 The recorded time of the accident on 19 March 2001 was established in evidence as 3.29 pm. On the day of the accident, the train comprised two carriages, being car numbers 2501 and 2507. Each carriage was 25.25 metres in length, giving a total train length of 50.50 metres. The train was 4.1 metres high and 2.9 metres in width. 24 On the day and time in question, the Xplorer train was driven by Mr Bruce Mathews. Mr Mathews had been a train driver for 23 years. 25 The rail track, as earlier noted, runs in a generally north-westerly direction and is east of, but roughly parallel, to the Kamilaroi Highway. The crossing is located at the point where the rail track crosses the Breeze - Carroll Road at an angle of slightly less than 90 degrees. 26 In June 1994, a new crossing was built at kilometrage 433.416 replacing the old crossing at 433.424. Dr Eric C Wigglesworth, for the plaintiff, in his supplementary report (Exhibit U) based on an introductory statement appearing in standard TS 3901, criticised the location of the crossing on a curve. 27 The evidence revealed that high speed Xplorer trains had used the railway line in question, travelling through the township of Breeza, since 1994 providing a daily rail service for passengers travelling to and from Sydney to the north-west parts of the State. There was no evidence of any previous collision between a train and a motor vehicle at the crossing. 28 The maximum permissible speed for Xplorer trains on the approach to Breeza from Werris Creek, including the line over the level crossing over Breeza, was 125 kilometres per hour. Breeza was a scheduled stop for the Xplorer trains and was a scheduled stop for the train in question on the date of the accident. 29 The Xplorer train was fitted with a data logger designed and manufactured by Fisher Industries Pty Limited. A data logger collects information from certain digital and analogue inputs and transfers the data. A record known as a data logger print out, records the information. This includes the speed of the train at the time the train horn is sounded along with other information detailed in the statement of Mr Fisher made on 9 November 2006 (Exhibit 17). 30 There were, in fact, two data loggers, one for each carriage, but, for the purposes of the present proceedings, the relevant data was that obtained from the first carriage. The data logger instrument is capable of producing information output that involves fairly precise measurements and recordings. 31 The data logger recorded the speed of the Xplorer train in question when it came out of the cutting on the approach to Breeza at speeds of between 88 and 90 kilometres per hour. 32 The experts retained by the plaintiff and the defendants agreed on appropriate adjustments (adjusting for any difference between the pre-set and actual level of wheel wear) to arrive at the speed that the train was travelling at the point of collision. On that basis, calculations established that two seconds before the collision, the train was travelling between 90 and 92 kilometres per hour, well within the permitted maximum range of 125 kilometres per hour. The slightly increased speed of the train after it had left the cutting was due to the fact that the train was proceeding on a slowly inclining downward run. 33 The joint report of the experts (Exhibit X, paragraphs 2.1, 2.2, 3.1 and 3.2) established the following sequence in the actions of the train driver prior to and leading up to the point of collision:-

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(4) CONFLICTING VERSIONS OF PRE-ACCIDENT EVENTS 36 The plaintiff relied upon the evidence given by the truck driver as to his actions and observations prior to the collision. There was a major conflict between his evidence and that of the train driver. The defendants relied upon the evidence of a passenger travelling on the train, Mr Shane Ryall and a resident, Mrs Lawlor as corroborating the train driver. 37 Mr Stackman, who was an employee of the plaintiff company, stated that he had picked up the load from Kooragang Island in Newcastle earlier in the day. He was due to deliver it to a farm at Carroll which was located approximately five kilometres past the Breeza railway crossing. The gross weight of the plaintiff's truck at the time of the accident was 42.3 tonne. 38 In essence, Mr Stackman stated that after turning into Carroll Road from the Kamilaroi Highway, he stopped the truck at the stop line. He said that he changed into low second gear in doing so. In evidence in chief he said after stopping he looked to his right and to his left. He stated that nothing was coming and that he then started to proceed across the crossing. 39 Mr Stackman said that he then looked again, he heard the horn of the train blowing and "… I looked to my right and here is the train coming up the line". He said that the only thing he could do was to go forward, which he did, planting his foot on the accelerator to clear the line. He said the next thing that happened was that he heard and felt the impact of the collision which caused the truck to start "rocking and rolling" and soon after the truck laid over on its left-hand side. 40 Mr Mathews stated that when he saw the truck turning into Carroll Road, or just after it had completed its turn, he commenced and continued to sound the train horn "… until shortly before impact with the truck". 41 Mr Mathews said in evidence that he observed the truck coming down the grade towards the crossing "and I also observed that he did not stop at the stop sign there but continued through the crossing". 42 On the timing of events, Mr Mathews stated that "the truck would have entered the crossing at the time I first applied the brakes …". He stated that shortly after applying the brakes, the train collided with the rear of the semi-trailer in the vicinity of its rear wheels. 43 Both parties accepted that the liability issues arising on the amended statement of claim and on the cross-claim fall to be determined to a significant extent upon whether the version of events as recounted by Mr Stackman or that given by Mr Mathews is accepted. The objective evidence recorded in the data logger was said to provide guidance insofar as the events recorded reflected or assisted in determining the likely events as given by the various witnesses, in particular, the drivers of the two vehicles.

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(7) THE BREEZA LEVEL CROSSING 57 A 1994 level crossing survey report (Exhibit F, tab 3), include references to "observability of trains by motorists". The report contained a table of "Distances of Trains from Crossing when observable by motorists …". At a point five metres distance from a crossing in respect of "Down Trains" an observability distance in respect of "down side from Sydney" of 400 metres was specified. The survey report contained a note in the following terms:- "Observability distances for motorists are measured at (3) locations on each approach to trains travelling in the two directions … The observability distance is the maximum distance of a train from the crossing so that at any point between there and the crossing a train would be visible from the stated location of the motorist; for the purpose of making measurements, the motorist's eye is 1.2 m above the road surface and the train is 2.3 m above the rail level …" 58 On 11 February 1994, the Breeza crossing was noted as "register for flashing lights" (Exhibit F, tab 12). 59 On 22 February 1994, Mr Alvarez, Division Engineer, wrote observing that a 10 kilometre track speed restriction over the crossing should be imposed due to the acute angle of the road crossing. The issue of angles of rail crossings was the subject of a standard for crossing design in T.S 3901. 60 On 3 March 1994, Mr Alvarez wrote to Gunnedah Shire Council in relation to the crossing and recommended that there be a re-alignment of the southern (downside) road approach of Carroll Street, Breeza "… to provide a road approach to the crossing at 90 degrees to the rail alignment" (Exhibit F, tab 6). 61 On 29 March 1994, a memorandum confirmed that funds had been approved for the 1993/1994 financial year for the purposes of carrying out design and construction work on the Carroll Street level crossing. The memorandum also recorded that in spite of the speed restriction, the redesigned work was considered necessary in the interests of safety (Exhibit F, tab 8). 62 Departmental records from time to time noted issues concerning the adequacy of sighting distances at many level crossings and the speed and the nature of vehicles using rail crossings. In a memorandum dated 27 April 1994 on the question of speed restrictions at railway level crossings, it was observed:- "… the available sighting distance at many of the level crossings was based on a lower maximum train speed than the Xplorers operate at. Hence, when individual level crossings were assessed for compliance with guidelines issued by the Roads and Traffic Authority, based on the higher train speeds, they did not comply." (Exhibit F, Tab 14) 63 The memorandum recorded that where the sighting distance did not meet the recommended distance shown in the guidelines, a speed restriction would be applied to reduce the train speed pending implementation of civil engineering programmes (eg the removal of trees and shrubs and the provision of flashing lights/warning bell systems). 64 On 2 May 1994, Gunnedah Shire Council confirmed that the Council would construct the new approach roads to the level crossing at chainage approximately 433.4 kilometres (Exhibit F, Tab 16). 65 On 10 May 1994, Freight Rail wrote to the Roads and Traffic Authority on the question of standards applicable at railway level crossings stating that railway engineers were not prepared to adopt the Roads and Traffic Authority standards at that stage (Exhibit F, Tab 19). 66 As noted above, in June 1994, the crossing was reconstructed. 67 In August 1994, a Sight Distance Assessment in relation to Breeza Crossing was conducted. In relation to the four quadrants referred to in the assessment, the "Sight Distances" were indicated as "okay" (Exhibit F, Tab 21). 68 In relation to the relevant quadrant (a1), the "measured available train sight distance for comparison, S3 was indicated as 481 metres". 69 Internal departmental records reflect discussion in 1999 concerning the development of level crossing standards. At that time, the level crossing standard was TS 3901 which was based on sighting distance requirements in the 1987 guidelines of the then Department of Main Roads. 70 In an overview report of proposed changes, it was stated that existing standards were based on "one road motor vehicle type". Changes introduced by the Roads and Traffic Authority (RTA) brought into account an additional five second safety margin and the use of crossings by particular types of vehicles, in particular, trucks such as semi-trailers, road trains and B-doubles were brought into account. 71 The overview report stated that the new approach was to adopt a modified version of 1994 RTA guidelines for existing level crossings (Exhibit F, tab 30). 72 In a further "impact statement" which appears to have come into existence in about 1999, it was stated that the 1994 RTA guidelines provided for the assessment of five vehicle types - car, rigid truck, semi-trailer, B-double and road train. It recorded that in "current standards" the design vehicle for assessment of position signs was a car and for stop signs the design vehicle was a large loaded truck. 73 The plaintiff's case was that the more appropriate standards concerning safe sight distances were included in the manual entitled "Traffic Engineering Manual, s.6, Railway Level Crossing (Draft)" produced by the Roads and Traffic Authority. A copy was included in Exhibit E at Tab 6. 74 The plaintiff also relied upon Appendix 6C of the RTA traffic engineering manual. Appendix 6C entitled "Assessment for the Adequacy of Stop Signs" is cross-referenced to paragraph 6.4.2 of the manual. This was concerned with the subject of "warrants for position signs and stop signs", both of which are described as "signs used for passive control at level crossings in NSW …" (pp. 6 to 7). 75 The plaintiff referred to the statement within Appendix 6C as follows:- "The driver of a vehicle stopped at the stop line needs a clear view for a distance (S3) along the rail sufficient to see there is no approaching train travelling at the permissible track speed before the driver starts to drive across the crossing. The distance, S3, is the distance along the track that the fastest train travels in the minimum sighting time. The minimum sighting time is the time it takes a road vehicle to clear the crossing plus a five second safety margin." 76 In reliance upon Appendix 6C, the plaintiff referred to the "values of Measured Vehicle Clearance Times for Sealed Level Surfaces (single track)" and based thereon the minimum sighting time for semi-trailer vehicles was stated as being a measured value of 12.6 seconds which, together with a five second safety margin, resulted in a specified minimum sighting time of 17.6 seconds (the clearance for a B-double vehicle was specified as 18.6 seconds). 77 It was contended in the Outline of plaintiff's submissions on system, paragraph 7, that the evidence revealed that the sight distance at the crossing on 19 March 2001 was, at best, approximately 400 metres relying on the evidence given by Mr Hazel and Constable Wheelhouse. 78 Having regard to obstructions to vision claimed to have existed, in particular, a pepper tree, the curve of the track, the height of the grass and undulating ground, it was submitted that the effective sight line along the rails was only 200 to 300 metres. Reliance, in this respect, was placed on the evidence of Mr Stackman and Mr Love. The defendants disputed the contention. The evidence on the matter will be examined below.

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(b) The evidence of the truck driver: Mr Stackman 81 Mr Stackman in his work as a truck driver over 33 years, had driven a variety of vehicles including semi-trailer trucks. 82 He lived at Scone as at the date of the accident and, as earlier stated, he had taken the truck in question to Newcastle to be loaded. He was then to drive the truck with its load of fertiliser to a property near the township of Carroll. 83 He left Newcastle at midday, the accident, as noted earlier, occurring at approximately 3.29 pm on 19 March 2001. 84 Mr Stackman said that when he drove from the Highway into Carroll Road he used the Jacob brake as he went down that road. The brake cut the power off the engine and "worked as a second brake". He said it made a quiet rumbling sound, but the sound was not a loud one. He said the Jacob brake was activated when he took his foot off the accelerator. 85 He stated that he went down to the crossing in fourth gear. The turn made by the truck into Carroll Road, he said, was a shallow turn as indicated by a line drawn on Exhibit 1. 86 The angle of the turn into Carroll Road was 65 degrees. He said that was a natural turning circle. He drove at an estimated speed of 20 kilometres per hour in making the turn. 87 Having made the turn, Mr Stackman said in cross-examination that he did not look to his right but was looking to traffic "coming towards me". However, he said that there was, in fact, no oncoming traffic. He said he did not look for a train until he got to the stop sign. The pepper tree to which reference will be made below, was located at a point further up and parallel to Carroll Road. It, accordingly, would not obstruct the line of sight at the point of the stop line or at the stop sign. 88 He said he changed down into low second gear and stopped at the stop line. He then drove forward and, after the vehicle entered onto the crossing, Mr Stackman said he heard the loud horn of a train. He had previously looked right and left or left and right and did not see the train. He thought the former because he said one naturally first looks to the right. When he heard the horn he decided to keep going. He said he had reached five kilometres per hour when he heard the horn. He then accelerated to nine or 10 kilometres per hour, the most one could achieve in second gear. His evidence was that he had a view of 200 to 300 metres down the railway line from the crossing. 89 Mr Stackman stated that the truck was only partly on the line when he heard the train horn about 300 metres away although he then qualified that and said it could have been closer than that. 90 He said that "the steer wheels would have been between the two lines of the crossing" when he heard the horn. 91 In cross-examination he said that he had his window partly open and the radio was not on. He said he would, accordingly, have been able to hear the train horn if it was sounding as he turned into Carroll Road. He insisted that he only heard the horn when "I was on the crossing itself". 92 The control box, to which reference has been made above, was located to his right. He said the grass/vegetation to his right was six to eight feet high. The pepper tree, as noted above, was located in the general area to his right further up Carroll Road. 93 Mr Stackman received minor injury to his arm in the accident. He was interviewed by police at the accident site. 94 He said he returned to the collision site the day after the accident with a bobcat and front-end loader to recover the fertiliser. That morning, he noticed the prime mover diesel tanks and steps on the left hand side were "dented and screwed around". The sleeper cab was "split down the side". The left hand mirror was damaged as was the left hand front of the bumper bar. 95 Whilst there that day, he said he noticed the vegetation to his right, "the vegetation was probably higher than me, and I'm six foot and a half". He estimated it was "somewhere between six and eight feet high". He said photo 7 in Exhibit A depicted the signal box. He said there was grass growing right up to the signal box a height of six to eight feet. He made these observations, having walked back up the line about 150 metres in the direction from which the train had come from. He said, sitting in his cabin, his "actual view" down the line to the south "would probably be 200 to 300 metres, that's all I had, a view from sitting in the cab". 96 When asked what prevented him from viewing further than that, he replied, "possibly only the vegetation that was on the line, along the edge of the line". 97 In cross-examination, he said as he approached the corner of Carroll Road he got a better view to Breeza village. Approaching, turning right into Carroll Road, he could see 100 metres ahead along the road. 98 Mr Stackman said the crossing was "rough", adding "… you cannot just drive across, you have got to take your time to get across it, it is too rough". He said after he put the vehicle in second gear, he stayed in second gear until the collision. He said his only action was to put his foot on the accelerator whilst in second gear, hoping to clear the line. 99 Mr Stackman said that since the accident the vegetation had been "mowed back down" and "the old tree has been taken, it is gone". The "old tree", he said, was there at the time of the accident. 100 He said that when he stopped at the stop line, his view was obstructed partly by a tree, since removed, and some long grass. At the stop line, it was difficult to see very far down the line. He said although his view was obstructed by vegetation and a tree, he did not move forward because he said he would have been on the line. As discussed below, the evidence established that there had not been a tree as Mr Stackman asserted (apart from the pepper tree further up the hill). 101 Mr Stackman estimated there was a distance of between three to four metres between the stop line and the stop sign. 102 He admitted to having crossed the Breeza crossing many times before the accident. He said he always stopped at the stop line. He said he always stopped both sides of the crossing going both ways. He said that he had never failed to stop at this crossing. 103 He said he was travelling nine to 10 kilometres per hour when he was hit. He said it would be wrong to say the speed of the truck was 15 kilometres per hour when it entered the crossing. He re-affirmed that he stopped and his maximum speed thereafter would have been 10 kilometres per hour. 104 Mr Stackman agreed that after he was charged by police with failure to stop, he again attended the crossing on 17 December 2001 with an expert, Mr Hazel to reconstruct the events of the accident. The repaired vehicle that he was driving when the collision occurred with a similar trailer attached was used on 17 December 2001. The truck was loaded with a similar load to that being carried on the date of the accident (42.3 ton). He agreed that he told Mr Hazel he had stopped on the stop line. He told police he had stopped at the stop sign. He said he did not stop at the stop sign, but at the stop line when re-enacting the circumstances of his driving of the vehicle on the day of the collision. He did two "runs" in the same direction as on the date of the accident during the re-enactment on 17 December 2001. 105 On the day of the accident, the trailer had a frame and a tarpaulin in place. Photo 9 (second series) in Exhibit A taken on 12 March 2002 depicted a vehicle which Mr Stackman agreed appeared to be a photograph of a similar vehicle to the one he drove on 19 March 2001. 106 Mr Stackman said that on 12 March 2002, he drove the vehicle once by way of re-enactment making, in all, four re-enactments on the two occasions he went there with Mr Hazel. 107 The issue as to whether the vegetation was at a level that interfered with or obstructed the truck driver's line of sight requires consideration even if it were to be found that the truck driver failed to stop before the crossing. 108 Mr Stackman was shown Exhibit G, a copy of his statement to police. Paragraph 3 of the statement referred to him stopping at the stop sign, not the stop line. He said that he had made a mistake in that respect when giving his version of the accident to Constable Wheelhouse. He maintained the position that he had actually stopped at the stop line. 109 It was put to Mr Stackman that he told Mr Hazel that he looked to the south in the direction of the train as he turned off the highway. He said he could not now recall whether he did say that. He said he could not recall if Mr Hazel had been told by him that he stopped at the stop sign. He would not agree that when re-enacting the accident with Mr Hazel he started at the stop sign from the stationary position. He said he started from the stop line. It was put to him from the transcript of the Local Court proceedings (p.68, line 45) that he stopped at the stop sign. 110 He said he had intended to tell the magistrate he had stopped at the stop line, not the stop sign, as recorded in the transcript of the police proceedings. He said he must have made a mistake in saying he had stopped at the stop sign. 111 He told the police the vehicle went over on its side and then "skid" forward (paragraph 4 of Exhibit G). He had said in evidence in chief it had not moved forward. He said he may have made a mistake in telling Constable Wheelhouse that after the vehicle laid over on its side it skidded forwarded. He maintained the truck did not skid forward after going over onto its side. 112 He was shown Exhibit 2, a motor vehicle claim form. His evidence in the present proceedings that the truck was not travelling at 15 kilometres per hour at the time of the accident was contradicted by an entry in the claim form, which recorded (at p.2) that the speed of the vehicle as at the time of the accident was 15 kilometres per hour. He agreed he had given his supervisor that speed as recorded in the signed claim form. He also agreed that entry was inconsistent with his evidence in these proceedings. 113 In the present proceedings, he said that whilst going down Carroll Road he did not look left and right. It was put to him that he had given inconsistent evidence in that respect in these proceedings. It was put to him, in fact, he had seen the train at a distance and decided he could beat the train and went straight through the crossing without stopping. He denied that that had been the case. 114 As noted above, his estimate in evidence was that the train was 300 metres away when he heard the horn. In the Local Court proceedings (transcript, p.67), he said he was not able to say for sure how far away the train was and did not provide any estimate of that distance. It was put to him in the present proceedings that the train was 100 metres away, not 300 metres, when he first saw it. He denied that. It was put that his evidence with regard to the 300 metres was untrue. He also denied that proposition. 115 It was put to him that evidence in these proceedings as to the tree and vegetation being present and obstructing his view was false. It was also put to him that he approached Carroll Road from the highway following a line approximately by the red line on Exhibit 1 and that, as he came around the corner, he travelled at a speed in excess of 15 kilometres per hour, that he could hear a horn as he travelled down Carroll Road, that he did not use the Jacob brake, did not stop at all and drove straight through the crossing and his evidence to the contrary in these proceedings was untrue. He denied all of those matters. 116 In summary, the matters relevant to an assessment of Mr Stackman's reliability include:-

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130 Mr Bruce Mathews has been a train driver since 1978. He has driven Xplorer trains since 1988. 131 On 19 March 2001, he drove the Xplorer from Werris Creek to Moree. The train proceeded off Mooki Bridge to the site over a rise. He stated that "…you're letting the rise as you are approaching Breeza run some of the speed out of your train so you might only be in idle or one-third throttle, just to keep it sort of running up over the rise. Depending whether you're running on time you either let it run … into Breeza or, if you're running late, you might give it another little bit more throttle just to keep the speed up a bit." 132 He said Breeza was a scheduled stop. In 2001, he did the run about twice a fortnight. He said had been involved in a level crossing accident six weeks before the subject accident at Kelly's Plains. 133 There was no suggestion in the evidence that the train in question was running behind time. As it approached Breeza Creek, Mr Mathews said he noticed a truck turning off the highway, approaching the crossing. He started to sound the horn after he saw the truck turn until just shortly before impact. "Sounding the whistle" is activated by a lever for the "country whistle" which he said is louder than the city whistle. It also activates a strobe light on top of the train. 134 He observed the truck either when it turned off the highway or just after it had turned and he saw it proceeding down Carroll Road. He said that it did not stop at the crossing. He said that the truck entered the crossing at the time he first applied the brakes. He said he was "watching the truck the whole time". 135 In cross-examination, he said he was travelling at approximately 80 kilometres per hour when he first sounded the horn. However, he accepted that the data logger recorded his speed at that point as having been between 90 and 93 kilometres per hour. 136 He said that the truck was actually on the crossing when he applied the brakes but that he did not see how much of it was on the crossing. 137 He said he had previously given an estimate of 400 metres from the crossing and when the horn was activated. He had also previously given an estimate of 200 metres and an estimate to police of "200 yards" away when he blew the horn. He said he could not provide a better estimate of how far away he was when he first applied the brakes. He accepted he may have told the police he was 20 to 30 metres away when he applied the brakes. 138 He said the truck was not speeding. It "wasn't going fast" in going through the crossing. In the Local Court proceedings, he was asked whether the truck passed slowly through the crossing. He replied that it did. Exhibit O in these proceedings is the transcript of evidence given by Mr Mathews to the Local Court on 18 January 2002. 139 He was asked whether there was a speed board prior to the crossing. He was shown the photographs in Exhibit A (second series, No. 6). That showed two signs with numbers. The lower sign was 125 kilometres per hour. He thought it was there on the day of the accident and such signs appeared at locations on the track. 140 He stated that when he first saw the truck turn off the highway, he was "probably just coming out of the cutting." He could not give an estimate of the distance from the cutting to the crossing. 141 There is a home signal near the crossing. It is a tall object with a signal light on the top. If the light is red, the train must stop at the signal. If the light is amber, the train may proceed. 142 Mr Mathews stated that as he emerged from the cutting he would have seen the home signal at some point, but he could not say how far away it was when he first saw it. He said he was watching to see what colour the signal was. He saw it was amber, but he disputed that at that time he saw the truck for the first time it was just getting onto the track. 143 Mr Mathews acknowledged that he had previously given varying accounts of the distance from the crossing when he sounded the horn (400 metres, 500 metres and 200 metres). He said he was not good at judging distances. However, he said he was very sure about other matters. 144 In summary, Mr Mathews' evidence was:-

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147 Mrs Beverley Faith Lawlor said that she has been a resident of the township of Breeza for many years. Her home at that time was almost directly in line with the Breeza railway crossing about 200 metres south west of the crossing. 148 On the afternoon of 19 March 2001, she had visited her daughter-in-law, who lived two houses to the west of her home. She said in her statement made on 25 January 2003, that she and her daughter-in-law went onto the verandah of her sister in law's home. They were waiting for her grandson to arrive home by bus, due at 3.35 pm. 149 Exhibit 3, a photograph taken in 2005, was tendered solely for the purpose of identifying her house. 150 Mrs Lawlor said she had a clear view down Carroll Road to the crossing from the corner. However, she said she could only see east of the line as far as the signal boxes. 151 On the day in question, she said she heard the horn of the train sound. She later said it was a longer sounding train horn than the usual train horn. She went to the railing to see what was going on. She saw Mr Stackman's truck (red in colour) come around the corner into Carroll Road. She recognised it was "Martin's truck". Her husband had done business with the plaintiff company before that day. 152 She said she did not hear the Jacobs brakes or the air brakes. She said, notwithstanding the train horn sound, she still would have been able to hear the brakes if they had activated. In cross-examination, she said she could hear it change gears. She could still hear the horn when the truck got to the crossing. The train horn was still blowing and then stopped. In relation to the truck, she stated:- "It never pulled up and went straight across the crossing. I heard a bang and all the super go into the air" . 153 She said the train pushed the truck forward. The train stopped opposite her house. 154 In cross-examination, she was shown a photograph (Exhibit L). She said her home was located slightly to the west of the intersection of Kamilaroi Highway and Carroll Road. She said the train stopped or finished up opposite her home. It was put to her that the train finished 266 metres past the crossing, that is, in a line in front of her daughter in law's house. She said she was not good on distances and did not know whether that distance was correct. 155 Mrs Lawlor said she had at first been seated on the verandah before standing up. She had been looking in the direction from where the bus was coming (the Gunnedah direction). 156 She was used to hearing and seeing the train. She said she often went down to her daughter-in-law's home. The horn always blew as it approached the crossing. She said one could always see the train when the horn blew but she could not on this occasion as the train was out of view when she first heard it. She agreed, however, that it came into view when it approached the signal box. 157 She heard the horn go off once only. She repeated that it was longer than the usual signal. It "blew down the line further" on this occasion. The length of the horn on this occasion she said was "unusual". The fact is consistent with Mr Mathews' evidence that he gave an early warning in sounding the horn when he caught sight of the truck after it turned off the highway. 158 There was a tree outside her house at that time. She said there were trees outside her daughter in law's house. However, she said she could see "straight through" to the crossing. 159 She was shown a photograph (Exhibit M) looking west from her daughter-in-law's house taken in 2005. The tree in front of the middle house shown in the photograph was only "small" in 2001. The photo was taken from the verandah. It was put to Mrs Lawlor that Carroll Road was partly obscured by a dip in the road. Mrs Lawlor said, however, that it did not obscure the crossing. 160 She was shown two photographs (Exhibit N). The top photo showed her daughter-in-law's house. The bottom photograph was taken from the verandah of that house She said the tree in the lower photograph was the tree that was there in 2001. She rejected the suggestion that it would have obstructed her view. The plaintiff did not call any witnesses to contradict her evidence as to her ability to see to the crossing from where she said she witnessed the progress of the truck as it proceeded down Carroll Road. 161 She said she was first asked about the accident two days after it happened. However, she did not give a statement to police and was not called to give evidence in the Local Court proceedings. 162 In cross-examination, she said that when she heard the horn of the train, she walked and looked east in the direction of the intersection and crossing. Her daughter-in-law was present at that time. 163 She said the truck was moving "fast" as it travelled along Carroll Road. The truck passed by some trees partly obscuring it. She was asked whether the truck passed the two trees in Exhibit N and she said it did (and circled them in red on the photograph). 164 To the right of those two trees, there were further trees but she said she could see through them. She said that the trees to the right of the circled trees were small and they appeared to be similar to the way they were in 2001. 165 The sunset in relation to her daughter in law's house set to the right of her home and set in the line of sight of the crossing. She did not recall whether the sun was out that afternoon. As the vehicle went down, she repeated it did not stop. She said she could not be wrong about that and repeated that she could see the railway crossing. She said she had seen vehicles cross the crossing on other occasions without stopping. The truck was going "too fast to pull up". It was not "fast fast" but "going faster than it should have been to pull up". 166 Mrs Lawlor was shown a photocopy of a photo (MFI 4) taken in 2001 from the verandah of her daughter in law's home looking towards her home. She said she saw the train hit the truck towards the rear end of the truck. She repeated that she was not good in judging distances and, accordingly, could not agree she was then 300 metres away from the crossing. 167 She said she could see the crossing in the lower photo in Exhibit N. She was asked to mark it with a cross, which she did. She agreed the crossing was a little obstructed by a tree. She denied she first saw the truck at the crossing and denied it was moving slowly. 168 In re-examination, Mrs Lawlor said that a man had come to her front door, claiming that he was from an insurance company. He asked her whether she would give a statement and she said she would. He asked her questions and he wrote things down. He showed her what he had written and she signed it. 169 From the verandah of her daughter-in-law's house, Mrs Lawlor repeated that she had a clear view of the railway crossing and Carroll Road. Whilst I accept that in March 2001 there were some shrubs as the plaintiff contended, it was not shown that these were at a height or density or both to have prevented her from seeing through and sighting the moving truck of the dimensions in question. 170 The cross-examination of Mrs Lawlor was directed to establishing the reliability of her evidence having regard, in particular, to whether her line of sight was impaired by vegetation and what was described as a dip in Carroll Road. 171 Mrs Lawlor said the tree in the direction of the view from the verandah was not "bushy as what it is now". Exhibit M was a photograph taken from her daughter-in-law's house. 172 The cross-examination revealed that Mrs Lawlor had been interviewed some days after the accident by an investigator, who she said "… was … from the insurance company of Martin's trucking business". The inference is that those acting for the plaintiff had instructed the investigator in its interests. 173 Mr M Orlov of counsel, who appeared on behalf of the defendants, called for the statement. It was produced. Mr M Neil QC, on behalf of the plaintiff, objected to access being given to it. The question of a claim for privilege and a ruling on privilege was raised by Mr Neil at transcript pp.179 and 197. Mr Orlov foreshadowed an argument as to waiver of privilege. The statement was marked as MFI 5. At transcript p.248, Mr Orlov stated that he did not press the challenge to the privilege claim. 174 The witness said that, whilst she supplied a statement to the investigator, her daughter-in-law did not give a statement. It was not put to her that she had not in fact supplied a statement and she was not cross-examined on the basis of the statement. Additionally, no evidence was called from the investigator or any other person to contradict Mrs Lawlor's firmly stated position that she could see the plaintiff's truck as it proceeded down Carroll Road and over the crossing. 175 The witness marked with an "X" on the lower photograph, Exhibit N, the portion of the crossing as viewed from the verandah of the home on which she said she was standing when she witnessed the accident. She rejected the proposition that she first saw the truck when it was on the crossing. 176 Mrs Lawlor appeared to give her evidence in a reasonably direct and forthright manner. Whilst she acknowledged the presence of bushes as marked on Exhibit N, she remained adamant that they did not prevent her from seeing the truck as it passed behind them and continued onto the crossing. The photographs, in particular, Exhibit N, called for close examination as did the whole of Mrs Lawlor's evidence. There was no contradiction of her evidence that there was a direct line of sight to the crossing itself (depicted by an "X" on the lower photograph in Exhibit N) from where she stood on the verandah. The focus of cross-examination was the extent to which the identified bushes may have obstructed the witness' line of sight when the truck was travelling down Carroll Road. There was no suggestion made that she had previously given an inconsistent account of her observations. No evidence was called by the defendant to establish that Mrs Lawlor's lines of vision from the verandah to the crossing or from the verandah to points higher up Carroll Road were obstructed in a manner that would have prevented her from seeing the truck travel down the road and over the crossing. 177 I have concluded that Mrs Lawlor was essentially a reliable witness. The accuracy and reliability of her evidence, of course, is to be evaluated in the context of the whole of the evidence in the proceedings. In that evaluation, consideration has been given to all aspects of her evidence and by other witnesses, including the speed of the truck, whether the Jacob brakes were or were not applied, the unusually long sounding of the train horn and line of sight issues to which reference has been made above. (g) The evidence of resident: Ms Gorton

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185 Shane Stephen Paul Ryall resides in Scottish Borders in Scotland. He travelled from Scotland to give evidence in these proceedings. He impressed as a reliable and completely straight-forward and impartial witness. Mr Ryall was a passenger on the train involved in the collision. He gave a statement to police on 27 March 2001 (Exhibit 5). His statement to police contained the following:- "1. This statement made by me accurately sets out the evidence which I would be prepared, if necessary, to give in court as a witness. The statement is true to the best of my knowledge and belief and I make it knowing that, if it is tendered in evidence, I shall be liable for prosecution if I have wilfully stated in it anything which I know to be false, or do not believe to be true. 2. I am 23 years of age. 3. Last Monday the 19th March 2001, at about 1600 hours I was a passenger near the front on the left hand side in the last carriage of the Explorer train travelling from Sydney to Moree. 4. I had just returned to my seat from the shop on the train I started to eat a sandwich and I heard the driver sounding the horn on the train. I looked up to see what was going on and I saw a truck heading for the crossing. The truck was red with a silver trailer. The truck disappeared out of sight in front of the train. After a couple of seconds there was a bang and the train hit the trailer on the truck. I looked out the right hand side window and saw a big cloud of dust. The train proceeded approximately five or six seconds before it stopped. 5. After the train stopped one of the staff came in and checked that everyone was OK. 6. After five minutes or so another member came in and let us get off the train." 186 In cross-examination, Mr Ryall said that as the train went through the crossing, he looked to his right. 187 He said that from the time he heard the horn blow it would have been less than 11 or 12 seconds to the crash. His evidence in that respect is very accurate. 188 He was shown photo number 6 in the second series of Exhibit A which depicted the track going north/northwest and the foliage. He was shown photos numbered 7, 8 and 9 and asked if any depicted the point at which he looked up when he heard the horn, in terms of distance from the crossing. He indicated photo numbered 9 and "possibly" closer to the crossing. 189 Mr Ryall was a completely impartial witness who conveyed a strong impression of reliability. Significant aspects of his evidence were recorded in his statement given to police on 27 March 2001, including:-

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192 Mr John Southam, with whom I was also impressed as a witness, is a retired SRA manager. He said he formerly was a State Rail employee for 41 years. He was formerly Passenger Service Supervisor (PSS) on the Xplorer train. The north west line travelled through Breeza and in the 10 years prior to 2001 he travelled that line frequently. He commenced working the line in 1966, and would typically work on it twice per week. 193 On 19 March 2001, he was the PSS from Werris Creek. As the train approached, he was in his work station checking his manifest in the driver's cabin in the back of the train located on the right hand side. He stated that he was travelling facing backwards in the train. As it approached the crossing, he heard the whistle blow for an excessively long period, "eight or nine, 10 seconds". Because it was blowing so long he looked out the window. He said he swivelled to his right, looked out the window and saw the backend of a semi-trailer. He closed the window, put his feet up and hung on as he was anticipating a crash because the driver was still blowing the whistle. 194 The back of the truck seen by him was about 15 to 20 metres from the intersection from the midline of the highway and Carroll Road. Only the back of the truck was seen because he did not look further out of the window. After bracing himself, it was two to three seconds later that he felt the impact. 195 In cross-examination, he agreed his was a fleeting glimpse of the vehicle. Photograph number 17 in Exhibit K was shown to him. Photo 17 showed the rear of the train where his work station was located. 196 When he saw the truck he could not say whether it was moving or not. It was sufficiently close to cause him to brace in expectation of a collision. He said he could not estimate how far the truck was from the crossing when he saw it. 197 Mr Southam repeated that his attention was attracted by what he described as "… the train whistle blowing excessively long", which he estimated as lasting for some 8, 9 or 10 seconds. (9) ISSUES FOR CONSIDERATION 198 The issues in these proceedings do not raise any novel point of law. They are issues of fact to be determined on the evidence of the truck driver, Mr Stackman, of the train driver, Mr Mathews, and of the abovementioned lay witnesses, the information recorded by the data logger, other documentary materials and expert evidence called on behalf of the plaintiff and the defendant/cross-claimant. 199 The plaintiff's case in negligence raised issues both as to the design construction of the crossing and, so far as the operation of the train, issues as to speed and claimed obstruction of sight lines at the crossing from vegetation. The matters pleaded in the amended statement of claim included:-

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The plaintiff's submissions 203 In the plaintiff's written submissions, it was contended that the defendants had breached their respective duties of care by constructing the crossing on a curve. The point of that submission being was that the location of the Breeza crossing would, to the extent that the curvature restricted a motorist's line of sight at some point beyond 400 metres, constitute a breach of duty. 204 It was further submitted that the evidence established that, in all the circumstances, the speed of the train was excessive. In this respect, reliance was placed upon calculations which it was contended established that a speed should have been set for trains travelling on the line approaching the crossing at 75 kilometres per hour for the largest trucks and B-doubles. Alternatively, it was put that, even allowing for semi-trailer vehicles only, the speed limit should have been set at 82 kilometres per hour. The plaintiff submitted that, had such speed limits been adopted, then the collision would not have occurred. 205 On the issue of vegetation control, it was submitted that, even if the defendants had an adequate system, there was a failure of the system established on the evidence in this case. It was further contended on behalf of the plaintiff (written submissions, paragraph 11):- "… it should have been obvious that the vegetation was excessive and it should have been cleared. The inspection on 14 March was only to satisfy a sight distance requirement of 312 metres which is inadequate. There has been no explanation by the Defendants of the failure to clear the vegetation before the accident. There has been clearance since the accident." 206 The plaintiff developed its submissions on the question of construction and design by stating that once built additional funds should have been allocated for the installation of flashing lights or boom gates. 207 The plaintiff submitted that the crossing must be safe for all users and that this level crossing, it contended, was unsafe in 1994 (when it was reconstructed) and that it remained unsafe in 2001 and continues to remain unsafe, it being observed that the train speed remains at 125 kilometres per hour. 208 In relation to allegations made against the first and second defendants as to the claimed inadequacies in the design and location of the crossing, I observe at this point that the evidence revealed that Xplorer trains have utilised the rail line that passes through the township of Breeza since late 1994 and they have since that time provided a daily rail service for passengers travelling to and from Sydney to the north western parts of the State. The evidence does not establish, prior to the subject accident, any history of accidents at the crossing. 209 The following matters were raised in the plaintiff's written submissions:-

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(10) LEGAL PRINCIPLES 211 In the defendants' written submissions, it was accepted that:- "1. SRA (as the owner and operator of the Xplorer train) owed a duty of care to take all reasonable precautions to ensure that the train was operated in a manner so as not to endanger members of the public, acting with due care for their own safety, when passing through the level crossing in their vehicles. 2. RIC (as the owner of the railway infrastructure comprising the rail track and level crossing at Breeza) owed a duty of care to take all reasonable precautions to ensure that the level crossing at Breeza would be safe for members of the public, acting with due care for their own safety, when passing through the level crossing in their vehicles." 212 The defendants in relation to their respective duties of care, accepted the principles as stated in the following cases: South Australian Railways Commissioner v Thomas (1951) 84 CLR 84 at 89; Commissioner for Railways v Dowle (1958) 99 CLR 353 at 358; Commissioner for Railways v Murphy (1967) 41 ALJR 77 at 77(2), 78(2); Wade v Australian Railway Historical Society (South Australian Division) (t/as Steamranger) (2000) 77 SASR 221, [75] at 233. 213 Mr Orlov of counsel, accordingly, accepted that his clients were not required to protect against the carelessness of members of the public who proceeded through a level crossing without any regard for their own safety: Murphy (supra) per Kitto J at 78: defendants' written submissions, paragraph 5. He contended that the starting point of any analysis of breach of duty by the first or second defendant was that persons using the level crossing would, however, exercise due care for their own safety and for the safety of their vehicle: Brodie v Singleton Shire Council (2001) 206 CLR 512 at [151], [160], [163]. 214 In the plaintiff's submissions, reference was made to the statement in the case Thomas (supra) to the effect that the duty of the defendants "… is to do everything which in the circumstances is reasonably necessary to secure the safety of persons using the crossing". 215 The plaintiff also relied upon the following dicta in that case:- "This must include a duty to give reasonable warning of the approach of a train where the commissioner does not provide gates which are closed when a train is approaching. That duty is not fulfilled by providing means which would enable persons of acute vision and hearing exercising the most anxious care to avoid injury. The fact that all sorts and conditions of people use the highway must be taken into account, and, whilst the commissioner is not required to protect against their own carelessness people who proceed without any regard for their own safety, it is his duty to take every reasonable precaution to ensure that the level crossing will be safe for the members of the public generally who act with due care while exercising their rights of passing over it. … In considering whether adequate warning was provided at a level crossing over a public road, all the circumstances of the locality and of the traffic passing over it and the conditions prevailing at the relevant time must be taken into consideration." 216 The plaintiff's submissions noted that Thomas (supra) was cited with approval in Dowle (supra) at 358. 217 The plaintiff also relied upon the following observations of Doyle CJ in Wade (supra) at [80]:- "It would not be reasonable to require a train to be operated at a speed such that, should an emergency arise, it could always stop or slow sufficiently to avoid a collision." 218 Reliance was also placed upon the following additional observation of Doyle CJ:- "The plaintiff had to show that in all the circumstances the exercise of reasonable care on the part of Steamranger required that the train approach the level crossing as a matter of normal practice at a lesser speed than the speed at which it was travelling, and that had that happened, the collision probably would not have occurred. Another way of putting it is that the plaintiff had to show that by reference to some established and identified standard, the speed of the train was excessive."

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(11) OPINION EVIDENCE ON THE PERCEPTION OF THE TRAIN DRIVER AND PASSENGERS 219 The plaintiff tendered a report of Dr Stephen J Dain (Exhibit AB) directed to the reliability or otherwise of eye witness evidence given by the train driver and the passengers as to what each said they saw in relation to the movement of the plaintiff's truck. Professor Dain is a professor at the School of Optometry and Vision Science, University of New South Wales. 220 Professor Dain set out the matters upon which his opinion was sought. They were as follows:- "1. Please provide an opinion as to what our client's truck may have appeared to be doing relative to passengers sitting in the second carriage near the front on the left hand side when the truck was either:- (a) stationary at the stop line; or (b) moving slowly from the stop line towards the level crossing at a speed of up to 6.17 kilometres per hour or less (noting that the train was travelling at 93 kilometres per hour). * In other words, how would the truck have been perceived by the train driver and passengers and why? 2. What difference, if any, would it have made to the passengers' visibility and perception if the grass height was 1.8 to 2.2 metres high as referred to in Bath Stewart's report? 3. What factors are apparent to you from the diagram and photographs that are relevant to an observer on the train attempting to judge where the truck was in Carroll Road relative to the crossing and whether the truck was moving and at what speed? 4. Assuming the truck stopped at the stop sign, can you provide an explanation as to why an observer on the train may have thought that the truck did not stop?" 221 Professor Dain related some of his observations to drawings produced by Bath Stewart, surveyors, of what is referred to as Scenario 3. Having regard to these and other information provided to him identified on pages 2 to 3 of his report, Professor Dain then set out factors which could affect perception and judgment on the perceived movement of the truck. 222 Although Professor Dain undertook the analysis requested of him by reference to the Bath Stewart diagrams and photographs and other material, he did not attend at the site nor did he travel along the relevant track in order to assess the question of visibility from the train. In his report he stated (p.9):- "… since I have not inspected or travelled on the Xplorer train in question and have not got detailed information where the passenger's were sitting, I cannot comment on the limitation of the view of the passengers close to the dead ahead position." 223 That statement was made in the course of his discussion concerning the third of the matters set out above upon which his opinion was sought. 224 Professor Dain referred to the phenomenon of parallax or motion parallax (pp.4-5) and discussed what he referred to as the "main features" in the field of view that would influence judgments of position and movement of the truck. In that respect, he referred in particular to the position of the tree (referred to as the Australian pepper tree) and the vegetation closer to the train. Professor Dain emphasised that he did not have any precise information concerning heights of vegetation at relevant points addressed in his report. He, nonetheless, referred to factors which could impede the ability of people on the train to judge actual movements of the truck in the situation that he addressed in his report (in particular, p.6). 225 Professor Dain also discussed factors or "clues" that might assist an observer on the train attempting to judge where the truck was in Carroll Road relative to the crossing and, in that respect, he referred to photograph "K" from Dr Dwight's report, figure 4, p.8. He did not specifically address the extent of visibility of a truck proceeding down Carroll Road as depicted in paragraph 9 (in the second series of photographs (taken on 12 March 2002) in Exhibit A). That photograph depicts a truck in the position approximately 300 metres from the crossing. It was shown to Mr Ryall (transcript, p.202), wherein he stated that that photograph, from his memory, was the distance of the truck from the crossing when he looked up and saw it. Dr Dain did not specifically refer to the statements of either the train driver or Mr Ryall for the purposes of his analysis. The attachments to his two letters of instruction do not include reference to the statements. 226 A careful examination of all relevant material is clearly essential before a conclusion could be reached that an eye witness' vision or perception was distorted and so much so that their observation did not accord with what each separately said they saw. It is not, of course, to be overlooked that Mr Mathews and Mr Ryall occupied different positions within the train at the time they said they made their individual observations. Professor Dain said he did not have detailed information as to where the passengers were sitting. If he did not have that information, the question arises as to how then he could say whether their vision of events was or was not as reported. 227 Mr Ryall's observations, if accepted as reliable, are consistent with those related by the train driver. It was not put to Mr Ryall that he could have mistaken a stationary truck for a moving truck. I do not consider Professor Dain's report in any way diminishes Mr Ryall's evidence or that of Mr Mathews.

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(c) The location of the crossing and requirements as to sight distances required a speed restriction that limited train speed to about 75 kilometres per hour (the train, as noted above, was, in fact, travelling at a speed of between 83 to 85 kilometres per hour at the moment of impact). Had the train been travelling at 75 kilometres per hour, the truck would have just cleared the crossing in time and a collision would therefore have been avoided. 232 The plaintiff contended that the expert evidence was based on "objective material". It was further contended that the calculations made by the plaintiff's experts were so "incontestable" "… that this accident could not have occurred on the train driver's version. The accident could only have occurred on the truck driver's version" (Plaintiff's written submissions, guide card 1, paragraph 20). 233 However, as observed earlier, the analyses of the experts called in the plaintiff's case proceeded upon an assumption or acceptance of Mr Stackman when he said he stopped before the crossing at the stop line, that he looked both ways and that he proceeded onto the rail crossing in circumstances in which there was no oncoming train to be seen. However, the question as to whether Mr Stackman or Mr Mathews is to be accepted is fundamental in assessing the conclusions reached by the plaintiff's expert witnesses. 234 It is, of course, essential in relation to the plaintiff's allegations of faulty design and construction for it to prove a beach of duty causally related to the accident. If it be established, that the truck driver failed to observe the "stop" road sign before the crossing and entered it without stopping, a design fault, even if established, may have no association with the collision. Taking this point to its extreme, if the truck did not stop and entered the crossing when the train was only 25 metres away, any assumed requirement for a sight distance of greater than 400 metres would have no causal significance. 235 The disparity in the accounts given by the truck driver and the train driver relate to events occurring in the period of approximately 12 seconds before the collision. Mr Stackman said the train was "probably 300 metres" away when he first saw it. If, as he said, at that point his vehicle had moved to a point just over the first rail, expert analysis is not required to determine that the train would have had to have been travelling at an impossibly fast speed to make up the distance to the point of collision (calculations below reveal Mr Stackman's account of "probably 300 metres" was incorrect).

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(b) A truck departing the stop sign and travelling in second low gear and travelling as per the Mack data sheets would, at that point in time, be 12.77 seconds from the point of collision and the train would, at the same point in time, have been between 324 to 330 metres from the point of impact. 240 On the basis of accepting either (a) or (b), the train would be within a sighting distance of 400 metres, that is, on the basis of accepting the truck driver's disputed account of having stopped the vehicle before entering the crossing. 241 Scenario (b) above based on the truck stopping at the stop sign (three metres from the rail) with the train 324 to 330 metres away would apply to the truck driver's account as given by him in the Local Court proceedings (that he stopped at the stop sign), assuming that to be an accurate account. Taking the recorded timing of the sounding of the train horn with the data in (b) above also permits a determination to be made as to the likely sequence of the truck commencing its move forward from the stop sign and the train horn. 242 If it is assumed that the truck stopped before the crossing, the recorded data would also indicate on that "scenario" that the truck moved off from the stationary position before the horn commenced. The experts agreed that the horn came on between 11.25 to 12 seconds before the collision, which, based on scenario (b) above (travel from departure to point of collision of 12.77 seconds) would be about 1 second after the truck commenced to move. That would be inconsistent with the truck driver's account of the horn not sounding before his truck entered onto the crossing. 243 The experts also agreed a reaction time for the train driver to activate the horn of at least 1 second should be added. In 4.2 of the Joint Report, it is stated that the actual perception reaction time depends on the visibility of the truck to the train driver. Based on the relevant scientific literature, that time is said to be at least a second. 244 The assumed facts in paragraph [242], together with the above stated perception/reaction time indicates that the truck would not have moved to a point of having its front steer wheels between the rails as the truck driver said when the horn commenced to sound. The recorded data as to the horn beginning to sound is consistent with the train driver's evidence that he activated the horn before the truck moved onto the crossing. 245 It is also consistent with the position that the truck driver and the train driver, were within 400 metres sighting distance of one another. This assumes, of course, that the 400 metres line of sight was not obstructed by a combination of topographical features and vegetation, a matter which is separately discussed below. This is so, even allowing for an interval of 2.5 to 3 seconds for the truck driver to look right, left and right again (see Mr Booth's Consolidated Report, Exhibit W, paragraph 10.8). 246 The calculation allowing an interval of 3 seconds (based on the truck driver looking in the sequence left, right and left again) was set out in paragraph 75 of the final written submissions for the defendants (the "scenario" involving the truck driver looking in that sequence is described as Scenario 3) which is based on the assumption of the truck stopping at the stop sign and the driver looking in that sequence. Similarly a calculation was made based on a sequence of the driver looking left first and then right (described in the submissions as Scenario 1). The calculations are straight-forward in that they are based on relevant data as to speed of the train and times:- "75. Assuming a reaction time of 3 seconds for scenario 3, at a speed of 93 kph the train would have been approximately 78 metres [3 x 25.8 m/s = 77.4] further away than the distances established in paragraph 71 - ie 324 - 330 metres - when the truck driver took his first look towards the left (ie away from the train). From this it may be inferred that:- (a) the train would have been approximately 402 - 408 metres from the level crossing when the truck driver first looked towards the left [330 + 78 = 408]; (b) the train would have been approximately 376 - 382 metres from the level crossing 1 second later when the truck driver then looked to his right before looking left again. 76. If one assumes scenario 1 applied (which involved the truck driver looking in the sequence left then right (in the direction of the train) …), then the train would have been approximately 350 - 356 metres from the level crossing, allowing 1 second (based on Mr Booth's evidence) for the truck driver to look to his right in the direction of the train [330 + 25.8 = 355.8]." 247 It is noted that the truck driver in the Local Court proceedings said he looked "to the left and back to the right". In the present proceedings, he said "I looked to my right and to my left, nothing coming and I started to go across the crossing" (transcript, p.50). If the account given to the Local Court is taken as being more accurate, being closer in time to the date of the accident, then after looking to the left and then to the right, on the above approach, the train would have been approximately 350 to 356 metres before the level crossing. Subject to the issue of vegetation (discussed below), the train was visible from the crossing at that range of distances. 248 In summary, on Scenario 3, the approximate distance of the train is between 376 to 382 metres and on Scenario 1, between 350 to 356 metres from the level crossing. Subject to the issue of obstruction by vegetation and other "train visibility" issues which are discussed below, neither "scenario" is consistent with the truck driver's version of looking before moving towards the crossing and the train not being visible at that point in time.

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• That the train horn was sounded/heard at the moment the front wheels of the truck reached a point between the rail tracks. 257 Each of the matters referred to in the preceding paragraph, however, were very much at the centre of dispute between the parties. 258 I turn to the matters in Mr Booth's consolidated report that precede his above stated conclusion/opinion. In 6.1 and 6.2, he referred and commented on the statements of the train driver and noted the variation in the train driver's account of when he sounded the train horn (200 metres and 500 metres respectively), that, of course, being a matter recorded by the data logger. 259 In 6.3, Mr Booth provided the basis for a conclusion that the 500 metre reference by the train driver could not be right as there would not have been a collision. There was no issue on that point. The plaintiff relied upon the train driver's incorrect estimates as to 200 metres and 500 to challenge the reliability of his evidence overall. 260 In 6.4, Mr Booth addressed the opinion that the highest speed the truck would have turned off the highway was 12 to 15 kilometres per hour. 261 In 6.5, he turned to the truck driver's statement of 22 March 2001 and his evidence given on 18 January 2002. Adopting the truth of the statement that the truck driver stopped the truck, looked and saw no train, Mr Booth took 400 metres (based on Senior Constable Wheelhouse's evidence) as the maximum available sight distance. He recorded the fact that minimum sighting time equates to a distance relative to the train speed. A speed of 90 kilometres per hour equated to a distance of 440 metres, giving a total clearance time for the truck to pass over the rail crossing of 17.6 seconds based on the draft 1994 RTA Standard. He concluded "a more appropriate speed" for the train would have been in the order of 82 kilometres per hour with a 400 metre line of sight. The train was in fact travelling at between 93 to 94 kilometres per hour up to 14 seconds before the collision. 262 Mr Booth performed an alternative analysis in 6.6 on the basis of 12.39 seconds crossing time. He concluded (in 6.7) that a train speed of 90 kilometres per hour would be too fast, given a 400 metre line of sight. 263 These analyses are, as noted earlier, premised upon an acceptance of the truck driver's account as to the matters referred to in [256] above and a 400 metres line of sight. 264 In 6.8, Mr Booth again on the basis of accepting the truck driver's account of events leading up to the collision, expressed the opinion that it is possible that the train was just out of sight or just coming into the sight of the truck driver when he commenced to move off from the stop sign. 265 In paragraphs 6.11 to 6.22, Mr Booth assessed the likely events based on estimated speeds that the truck would have been likely to have reached after turning into Carroll Road. The analysis is premised upon the basis of acceleration rates down Carroll Road to the point of stopping at the stop line. Mr Booth proceeded to examine assumed scenarios reaching a maximum of 30 kilometres and that the spill pattern of the load indicated "a slow speed". 266 In paragraph 6.23, he addressed "rated speed". He did not examine this issue on the basis of recorded actual speed of the train (93 to 94 kilometres per hour) but upon rated speeds of 105 kilometres per hour and 125 kilometres per hour. On the basis of a 400 metres sighting distance, he considered the "rated speed" to which he referred to be "excessive". 267 Whilst "rated speed" as discussed by Mr Booth on the above bases may say something about the general design and construction of the crossing, it did not relate to the actual speed on the date of accident (19 March 2001). The analysis of "rated speed", accordingly was not examined in terms of the possible causative significance of the actual train speed to the events preceding the collision. 268 In paragraphs 7.1 to 7.3, he dealt with the issue of "train visibility". This related to the extent to which a train should be visible to a person at the crossing. Mr Booth referred to Standard TS3901 which prescribed that the train should be sighted at a level projecting 2.3 metres above the running rails. He stated that the train must be able to be sighted as to the upper 1.908 portion, the Xplorer train being 4.208 metres high. 269 The following matters are noted here. Mr Booth does not say what portion of the train would have been or was visible at a particular distance. He instead stated that the train would have blended into the blue sky and white of the clouds and be difficult to sight. 270 This part of Mr Booth's opinion, again, is premised upon the proposition that the truck driver would have had an inadequate line of sight from the crossing at the time the truck driver said he stopped the vehicle, looked both ways and did not see any train (or any part of any train) approaching. 271 The defendants challenged the evidence of Mr Booth on "train visibility" on two bases. First, that having regard to the actual level of the truck driver's line of sight (given the height of the seating in a Mack truck and Mr Stackman's height) the Standards requirements were exceeded. Secondly, photographic evidence revealed that it would be possible to see a train against the mountain range - not a background of cloud and sky as depicted in photographs on sheets 4 to 6, pp.41 to 43 of Exhibit W. 272 I will deal in some detail with the first of these two matters:-

[102]

The line of sight issue or "train visibility" - sighting distances 273 Two standards were the subject of evidence. RTA Standard TS 3901, 1999 was the current standard for establishing the suitability and detailed configuration "for new level crossings and the reconstruction of existing level crossings". An alternate set of draft guidelines for required sighting distances were contained in the Roads and Traffic Authority, Traffic Engineering Manual, Section 6 (Draft), Draft Issue 1.0 August 1994, Exhibit 8, Tab 35. The specification in relation to each standard was referred to in Dr Dwight's report dated 10 November 2006, Exhibit 14 at 7.1 and 7.2. 274 The RTA Draft Standard was not established by the evidence as having the status of a formally adopted final standard. However, on the evidence, expert evidence put it forward as some sort of guide and it was utilised in the expert analysis in this case by witnesses called for the plaintiff and the defendants. Standard TS 3901 was established as applicable to motor cars but it was not based upon the speed capacity of semi-trailer or B-Double vehicles. The RTA Draft Standard, on the other hand, was based on measured times for typical road motor vehicles. 275 Paragraph 6.4.2 of the Draft Standard, Warrants for Position Signs and Stop Signs, addresses the requirements for Position signs, which are stated to comprise the basic level of signing control at railway level crossings. That paragraph stated that they should be provided for all intersections of road and railway tracks where the warrants for other devices are not met. The signs require drivers to give way to trains. 276 In paragraph 6.4.2, it is stated:- "The driver of a vehicle stopped at the stop line needs a clear view for a distance (S3) along the railway line, which is sufficient to see that there is not an approaching train travelling at the maximum speed before starting to drive across the crossing. The term S3 refers to the distance along the track that the fastest train travels in the minimum sighting time. The minimum sighting time is the time it takes a road vehicle (starting from a stopped position) to clear the crossing with a five second safety margin. S3 varies with the type of vehicle using the crossing (see Appendix 6C for details). For State and regional roads, S3 should be assessed for cars, rigid trucks and semi-trailers …" 277 In Appendix 6C, it is stated that a track length of S3 and an approach road distance of 5 metres are used in measuring the adequacy of a stop-signed crossing. Appendix 6C contains a table (Table 6C.1, Values of Measured Vehicle Clearance Times for Sealed Level Surfaces (Single Track)). The measured clearance times for different types of fully laden vehicles are shown in that Table. In respect of semi-trailer vehicles, the clearance distance stated is 28.9 metres and the time measured as 12.6 metres which, with a five second safety margin, provides for a minimum sighting time in seconds of 17.6 seconds for semi-trailer vehicles. The notes to the Table include reference to the fact that the approach side is five metres clearance plus single track width of 1.5 metres plus a departure side distance of five metres clearance plus the length of the vehicle (in the case of a semi trailer, this is specified as 17.5 metres). 278 The RTA Draft Standard, accordingly, provided in Appendix 6C, Assessment for the adequacy of stop signs, for semi-trailer vehicles a time to clear a single line level crossing of 12.6 seconds. To that it added a 5 second safety margin providing in all for a minimum sighting time of 17.6 seconds. The distance over which this was measured for a semi-trailer vehicle was 28.9 metres. 279 According to Dr Dwight's report (Exhibit 14), applying the Draft RTA Standard at a train speed of 93 kilometres per hour, the required sighting distance for a semi-trailer is/was 455 metres. As a sighting distance of 400 metres, the required train time would be 82 kilometres per hour. This again assumes a 17.6 second clearance time for the truck (12.6 seconds and a 5 second safety margin). 280 The evidence in the present case established a sighting distance of approximately 400 metres. That would fall short of the above suggested sighting distance based on the 1994 Draft Standard for a train travelling at 93 kilometres per hour. That, however, does not necessarily mean that a 400 kilometre per hour sighting distance would result in a collision at a speed of 93 kilometres per hour given that the clearance time has a 5 second safety martin (12.6 seconds and a 5 second safety margin). 281 Dr Wigglesworth, in his report dated 19 March 2001 (Exhibit T), explained that "minimum sighting time" quantifies the minimum approach time for trains to reach the crossing after first sighting (p.13). In order to ensure safety, the train approach time must exceed the minimum sighting time which is actually the clearance time for the road vehicle to traverse the crossing. 282 Dr Wigglesworth also noted that, where sighting distances cannot be achieved, one strategy adopted by State Rail involved the reduction of train speeds which he considered to be an "entirely appropriate" treatment of the issue (p.22 of his report). He noted that suggestions recorded in a file document to slow trains on the relevant section of track to 93 kilometres per hour in the "down" direction had not been implemented with the maximum permissible train speed being fixed at 125 kilometres per hour. However, whilst that appears to have been the case, as noted earlier, the train in question was driven, prior to braking, at 92 to 93 kilometres per hour (see paragraph [48]). 283 Clearly, if, as the train driver was ultimately accepted when he said in evidence that the truck driver did not stop as required by the stop sign, then the above sight distance requirements would have no causal relevance to the particular facts of the case. Those requirements are based upon the assumption that a driver of a vehicle complies with the "stop" sign. If it were found that the truck driver in fact stopped before crossing, then they would potentially become relevant to the issue of a causative breach of duty. As noted above, Mr Booth's analysis was premised upon the assumption that the truck driver did as he claimed, stop at the crossing, looked to his right and left and right again, and did not and could not see the train at that point.

[103]

(a) The truck driver's line of sight 284 The defendant has challenged the analysis and conclusions in Mr Booth's report principally upon the basis that the criteria used was not correct. In particular, it was contended that the relevant data as to the specifications or dimensions in Exhibit 11 concerning the Fleetliner model Mack truck and the evidence as to Mr Stackman's height meant that the viewpoint of Mr Stackman was 2.6 metres above the road surface, not a viewpoint of 1.8 metres above the road surface specified in s.6 of the draft 1994 RTA Standard (2.6 metres is derived on the basis of a seat base height of 1.76 metres and Mr Stackman's height of 1.87 metres). In the seated position, the viewpoint was, accordingly, approximately 2.6 metres. 285 The report of Bath Stewart, surveyors dated 6 February 2006 (Exhibit AF) was directed to establishing sight lines and measurements at the site "from both the perspective of the truck driver, as well as the train driver" (p.1). 286 In paragraph 1, Lines of Sight, of the Bath Stewart report based on Dr Dwight's report, it is stated:- "We have undertaken an examination of the lines of sight between the eye of the truck driver located 1.8 metres above the road surface, and the eye of the train driver located at 3.0 metres above the running face for three different scenarios, namely:- Scenario 1 - with the prime mover located at the middle of the intersection of the Kamilaroi Highway with the Carroll Road, 56 metres to the south & uphill from the 'stop line' at the Breeza Rail Crossing, and with the train driver approaching the crossing at locations of 375m, 400m, 425m, 450m, 475m, 500m, 530m, 550m & 600m from the crossing; Scenario 2 - with the prime mover located on the Carroll Road halfway between its intersection with the Kamilaroi Highway and the 'stop line' at the Breeza Rail Crossing (28 metres to the south & uphill) and with the train driver approaching the crossing at locations of 375m, 400m, 425m, 450m, 475m, 500m, 530m, 550m, & 600m from the crossing; and Scenario 3 - with the prime mover located on the Carroll Road stopped with its nose on the 'stop line' at the Breeza Rail Crossing, such 'stop line' being 6.0 metres to 6.4 metres from the nearest running face and with the train driver approaching the crossing at locations of 375m, 400m, 425m, 450m, 475m, 500m, 530m, 550m, & 600m from the crossing." 287 As to the visibility of the train to the truck driver, the Bath Stewart report stated that, on Scenarios 3 and 4, the truck driver may have been able to see the top 2.3 metres and the top 2.4 metres respectively. However, those estimates being, in part, based on a viewpoint for the truck driver at 1.8 metres above the road surface, could not be correct, given, as indicated above, the seat base alone, according to Exhibit 11, was 1.760 metres above ground. Accepting, as I do, that Mr Stackman's eye level was, in fact, at about 2.6 metres above the road surface the difference of approximately 1.1 metres would mean or indicate that Mr Stackman's line of sight of an oncoming train up to 400 metres from the crossing would, in consequence be increased beyond the top 2.3 or 2.4 metres of the train on the above "scenarios" as stated in the Bath Stewart report. 288 I accept that on each of these "scenarios", the truck driver's line of sight was greater than that based on the eye of the truck driver at 1.8 metres. To that extent, the analysis is based on incorrect data.

[104]

(b) The visibility of the truck 289 The defendants' criticism of the Bath Stewart report (Exhibit AF) was based on a further matter, namely, the assumed height of the truck, a matter relevant to its visibility. The "assumed prime mover height above road surface - 2.85 metres" referred to in the report was said to be incorrect as the evidence established the actual height of the prime mover and trailer was 3 to 3.3 metres, not 2.85 metres. This additional height was relevant in determining whether the 1994 (draft) RTA Standard was met on the facts of this case. 290 In the Bath Stewart report, "Scenario 4" was described in the following terms:- "The prime mover located on Carroll Road stopped with its nose located one metre over the 'stop line' at the south approach to the Breeza Rail Crossing, such nose then being 5 metres from the nearest running face (rather than 6 metres as in Scenario 3), and with the train driver approaching the crossing at locations of 425m, & 375m from the crossing. Please note the following - • all sight distances stated to the nearest metre • all sighting angles stated to the nearest half degree • current general grass canopy - assumed height over the complete length of the line of sight - 1.5 metres • assumed train height above running face - 4.0 metres • assumed prime mover height above road surface - 2.85 metres • position of truck driver's eye assumed to be 3.0 metres back from nose of prime mover • assumption of nil heat shimmer Train Driver 425 m from Crossing:- • Distance from truck driver to train driver - 419 metres; • Line of Sight (eye to eye) measures about 2.1 metres above the ground surface at a distance of around 150 metres from the truck driver which is 0.6 metres above the level of the current general grass canopy; • Line of sight from truck driver to train driver clears the northern extremity of the foliage of the aforementioned Australian Pepper Tree by about 1.3 metres; • Truck driver may have been able to see only the top 2.4 metres of the train at the train driver's cabin Train Driver 375m from Crossing:- • Distance from truck driver to train driver - 371 metres; • Line of Sight (eye to eye) measures about 2.6 metres above the ground surface at a distance of around 140 metres from the truck driver which is 1.1 metres above the level of the current general grass canopy; • Line of sight from truck driver to train driver clears the northern extremity of the foliage of the aforementioned Australian Pepper Tree by about 2.8 metres; • Truck driver may have been able to see only the top 2.9 metres of the train at the train driver's cabin." 291 Again, in this scenario, Scenario 4, if the height of the truck and trailer was approximately 3.3 metres high and not 2.85 metres as assumed by Bath Stewart then the vehicle would have been more visible to the train driver than was assumed and stated by Bath Stewart (Exhibit 11) (see photo 9 of Exhibit A, showing a similar truck on Carroll Road). The difference between 3.3 and 2.85 metres was as submitted by Mr Orlov for the defendants a significant variation in height and sight line and constituted a material error in the Bath Stewart analysis. 292 These asserted errors in the analysis were said to undermine the plaintiff's contention as to inadequate sight lines. The established actual height of the truck and trailer at 3 to 3.3 metres was relied upon as evidence that corroborated the train driver who said he could see the truck when it was at a point near the intersection of Kamilaroi Highway and Carroll Road. 293 The evidence (in particular, Exhibit 11), I accept, does establish that the height of the prime mover was between 3.0 metres and 3.290 metres above road surface. 294 The evidence, in my opinion, establishes that the truck was more visible at a distance than that stated in the Bath Stewart report, Exhibit AF, and establishes that the truck would have been visible immediately after it turned into Carroll (and probably even before that point) consistent with the train driver's evidence. 295 The Bath Stewart report also makes an assumption as to the grass canopy height. I will deal with that as a separate issue below. 296 It is necessary to refer to some detailed matters bearing upon the criticism of "Scenario 4" in the Bath Stewart report. That scenario was based on the truck as located one metre past the "stop line", ie, the nose of the truck being approximately five metres from the nearest running rail (rather than six in Scenario 3). The position of the truck driver's eye was assumed to be 3.0 metres back from the nose of the prime mover. That means (allowing for the fact that the truck was one metre past the stop line), the driver was a total of eight metres from the nearest rail. Mr Orlov's submission was that, if the RTA 1994 Draft Standard was applied for design purposes in determining the requirements for visibility, then the point in that Draft Standard from which a driver's visibility was to be evaluated was not as far back from the rail as 8 metres. Whilst the 1994 draft plan had never been adopted, Mr Orlov contended it was said to be of utility here in revealing that the 8 metres viewpoint was out of range. 297 The Draft 1994 Standard specified only a 5 metre clearance in respect of the approach side to a crossing with a single track width of 1.4 metres: Exhibit 8, Tab 35, Appendix 6C, p.2 Note 1. Further, the "Level Crossing Survey", Exhibit 8, Tab 35, Appendix 6C, p.8 in the Draft 1994 Standard specified "for the purpose of making measurements the motorist's eye height above the road surface is 1.15 metres for cars and 1.8 metres for other longer vehicles". Mr Stackman's eye level height as discussed above was approximately at 2.6 metres. 298 Additionally, on the Draft Standard, the train was required to be observable 3.0 metres above the rail track. See, in this respect, Note 1 to "Level Crossing Survey" in Exhibit 8, Tab 35, 6D-8. In the case of a train of 4.1 metres height (as in the present case), the top 1.1 metres of the train was to be observable from the motorist. Mr Orlov contended the design criteria in the Draft Standard was exceeded as the top 2.5 metres of the train (based on scenario 4 in the Bath Stewart report) would be visible at 425 metres from the crossing. 299 The effect of these submissions was that the plaintiff had not discharged its onus of establishing that the "observability" requirements pertaining to train visibility in accordance with the Draft Standard had not been met. 300 The Bath Stewart analysis in Exhibit AF, accordingly, did not address the design criteria as to the "visibility" of trains on the 1994 RTA Draft Standard even though the plaintiff relied upon that Draft Standard as a basis for evaluating safe clearances of crossing requirements (which the Draft Standard specified to be 17.6 seconds). 301 I, accordingly, for reasons indicated above, do not consider the analysis in Exhibit AF provides a reliable guide for evaluating the issue of train visibility. It was not based upon accurate data relevant to the truck driver's eye height in determining the observability of the train and it was based upon scenarios calculated by reference to distances from the stop line not the stop sign. 302 The Bath Stewart report's conclusions as to scenarios 3 and 4, accordingly, are affected by the above deficiencies.

[105]

The issue of vegetation control 303 Mr Sheehan's evidence related in part to the system in place to monitor and control vegetation prior to the collision. 304 He worked for the second defendant between 1992 and 2001 as a track supervisor. Part of his duties made him responsible for inspecting the section of track between Gunnedah to the Breeza crossing. The system required the local Track Supervisor and an offsider to undertake a track patrol every 72 hours. One object of the patrol was to check on vegetation growth. 305 He prepared a report (Exhibit 6) in respect of his "Track Examination System" inspection of the Breeza crossing which he undertook some five days before the collision on 14 March 2001. A copy was annexed to his statement. In it Mr Sheehan stated:- "9. I don't remember the inspection of the Breeza crossing that I carried out on 14 March 2001 but the way that I always checked the sighting distance at Breeza for train travelling on the down (that is, trains coming from the direction of Werris Creek) was to stand at the stop line on the up (north) and down(south) side of the level crossing and look for the kilometre peg in the up direction (that is, towards Werris Creek). The pegs are about 5 foot high and are located at the toe of the ballast about 2.5 metres from the nearest running rail. They are white with black lettering. The nearest kilometre peg to the Breeza crossing on the down side as at 433.000 kilometres, which is about 416 metres to the east of the level crossing. If I could see the kilometre peg from the stop line on the down side of the level crossing I would write 'OK' or place a tick on the firm, in the box under 'Grass and Scrub'. On the upside, I would look in both directions to make sure there was nothing blocking the sighting distance. On the upside the lay of the land meant that grass and scrub were not an issue because the track was a lot higher because of the grade. 10. Because I was responsible for the Breeza crossing under the TES inspection system I kept an eye on the vegetation on both sides of the crossing when I was carrying out the 72 hour inspections, to make sure that it did not create a sighting hazard. 11. I did the 72 hour inspections every Monday and Friday of a long week and every Monday and Thursday of a short week. I didn't work every second Friday which was a flexi-day. That's what I mean by a short week. 12. RIC owned a tractor which was based at Gunnedah and another one at Werris Creek. Both tractors were used for slashing grass in the railway corridor between Werris Creek and Gunnedah. Slashing was done virtually continuously except for a couple of months during winter when the rate of growth slowed down. 13. … 14. Depending on the urgency, usually it would take about 7 to 10 days to get the slashing done from when a work order number was generated. 15. My practice was to fill in a defect report if the grass inside the railway corridor (ie between the track and the fence) was getting to a height of about half way between my ankle and my knee. 16. As well as the slashing program, in 2000-2001 RIC's Land Management Group had two spraying programs to eradicate noxious weeds like Johnson Grass in the railway corridor between Gunnedah and Werris Creek. This included mass hand spraying using 3 tonne trucks carrying 1000 litre tanks of herbicide. Twice a year RIC retained contractors using trucks with 3 metre boom sprays to spray herbicide on both sides of the railway corridor. 17. From my observations and experience during the time I worked as Track Supervisor, I know that Johnson Grass can grow very quickly if there has been a lot of rain." 306 In oral evidence, he described the 72 hour patrols:- "Q. And what did you observe? A. We used to patrol the track every 72 hours and part of those things that we do would be to monitor the grass and scrub at level crossings and in the corridor itself.

[116]

Q. And can you tell his Honour how much of his time typically was occupied in slashing? A. He used, probably fairly, most of the year around slashing the track. The only time it would sort of get a quieter time was probably in the winter months or with the drought, the way it's been. That was sort of a telling factor. You know, you just didn't get the growth, you know." 307 Mr Sheehan confirmed in cross-examination that he would have been able to see the five foot high peg at the 433.000 kilometre point from the stop sign on the basis of the entry that appears in his inspection report. 308 He also confirmed that slashing of the grass was carried out throughout the year. In cross-examination, he stated that he had no knowledge of any slashing or spraying work being carried out on the Werris Creek side and the Kamilaroi Highway side of the crossing immediately after the accident. 309 Senior Constable Wheelhouse said that when he attended at the site of the collision on 19 March 2001, he made observations and took measurements. He was asked if he saw "any vegetation down in the line of sight". He replied, "I certainly recall grass along that route but I can't be more definitive". He knew it to be "plains grass or Johnsons grass". 310 He said he paced out a distance of 400 metres. His evidence was:- "I paced out from the centre of the level crossing, the roadway centre of the level crossing along, east along the railway line. I kept looking back toward the stop sign and I paced out a distance until I could no longer see the stop sign." 311 He said the stop sign was taller than he was. He estimated that it was about a foot and a half taller. He was 6 foot 4 inches tall. He put the sign at "between six and half to seven foot tall". He said the top of the sign "would be roughly level with the sight of the driver of the heavy vehicle in the seating position". 312 He said that he did not recall "anything great about the vegetation so I can only say that it was - at the time that I walked there it didn't - it wasn't significant to me …". 313 Mr Peterson, a resident, had lived in Breeza for some 16 or 17 years. He was a truck driver by occupation. He said he was familiar with the vegetation "prior to March 2001". He described the area of grass running from the crossing east towards Werris Creek as very tall and said "it could be two metres plus". 314 He said the grass can grow quickly after rain. He said he had occasionally observed workmen using slashers to cut the vegetation in the corridors on either side of the crossing near the tracking. He put the frequency at two or three times a year. He said the grass had been kept down more often since the accident. 315 Mr Peterson's evidence on the state of the vegetation lacked specificity. He was asked whether he was familiar with vegetation "prior to March 2001" (transcript, p.124) and was not asked about its condition as at 19 March 2001 or thereabouts. 316 He did not say that the vegetation had interfered with his line of sight whenever he himself had used the crossing. He initially said that in the area of the crossing looking east towards Werris Creek, he had a line of sight of 400 to 500 metres before losing sight of the track. He was asked in chief if box thorn bushes grew along the track. He said they grew "everywhere". He had seen them "before March" at the edge of the track in the area but did not say when or precisely where he had seen them. 317 Mr Petersen was later asked to assume that "in March 2001", either 19 March 2001 or just before then, if he was stopped at the crossing two to three metres short of the stop sign in a Mack truck. He was asked whether at that position, if he looked towards Werris Creek, he would see vegetation, that is, whether he would have seen "either Johnsons grass, ox thorn or both?". He replied in the affirmative. There was a lack of detail as to the height of the vegetation at any particular point along the track. When asked for an estimate as to how far he would be able to see, he replied "probably 300 metres". 318 On the whole of the evidence, I am satisfied that vegetation growing in the area of the track and crossing had, as a matter of practice, been subject to a vegetation control system and that as a consequence it had been maintained at a level that, as at 19 March 2001, did not present as an obstruction to the line of sight of the plaintiff's driver up to 400 metres from the crossing or beyond that point. 319 Mr Hazel, as earlier noted, visited the accident site initially on 28 March 2001 and took the first series of photographs in Exhibit A. photo 7, he said, was taken that day from the vicinity of the stop sign. He confirmed, contrary to Mr Stackman's evidence, that there was no stop line present. 320 The only evidence given by Mr Hazel on his observations as to vegetation related to seeing the plaintiff's solicitor, Mr Clancy, walk through some grass from the highway down to the track. He said he almost disappeared in the grass. 321 In cross-examination, he stated he could not specifically say where Mr Clancy had walked through grass. He was also unable to say or agree that that the land on which Mr Clancy walked was undulating. 322 There was no attempt in evidence in chief to otherwise adduce evidence from Mr Hazel on the issue of vegetation along the railway corridor or on the specific question of any possible obstruction to the truck driver's line of sight resulting from vegetation. Given that Mr Hazel attended the accident site days after the accident in his capacity as a road safety consultant, it might be expected that he would have been asked in evidence about that matter had there been a basis for doing so: Ferrcom Pty Limited v Commercial Union Assurance Co of Australia (1991) 22 NSWLR 389. 323 I have earlier referred to the fact that Mr Stackman did not suggest in his police statement (Exhibit G) or in the motor vehicle claim form (Exhibit 2) that vegetation had obstructed his line of vision. That is further evidence tending to suggest that the vegetation had not been considered an obstruction and was not, in fact, at a height to interfere with the relevant sight line. 324 Mr Stackman's evidence that his line of sight was limited to 200 to 300 metres down the line to the south was, as earlier noted, clearly incorrect. The evidence of Senior Constable Wheelhouse and that of Mr Hazel indicates that the line of sight extended to 400 metres from the crossing. Mr Stackman's tentative suggestion that vegetation "possibly" obstructed his line of sight is contrary to the evidence. 325 Although Mr Peterson was a frequent user of the Breeza crossing and regular train services passed through the area, he did not suggest that, in his 16 or 17 years of residency, he had either difficulty or concern with his ability to safely use the crossing or that the vegetation had grown to a height to interfere with his use of the crossing. 326 There have been other cases of rail crossing accidents in which vegetation has been a live issue and in some of those cases the respective responsibilities of local government and railway authorities to maintain visibility has fallen for consideration. 327 In the present case, the question of vegetation along the relevant section of track raised two separate issues:-

[119]

Contributory Negligence 328 On the basis that the Court accepted the train driver's version, the plaintiff submitted that the first defendant was also negligent based on failures attributed to the train driver and on what it contended was a negligent "system". 329 In relation to the "contributory negligence of the train driver", the plaintiff contended that the train driver's negligence was "in the range of at least 40%". The matters relied upon as supporting such an assessment were as follows:- "1. The train driver had a clear view of the truck as it travelled down Carroll Road towards the crossing. 2. The truck did not vary its speed as it travelled down Carroll Road towards the crossing … 3. The truck must have travelled at an increasing speed down Carroll Road if it turned the corner at 10-15 kmph in order to reach the point of impact 11.25 - 12 seconds … 4. There is no reasonable basis for the train driver to believe that the truck would stop at the stop line if it was travelling at a speed of 15 kmph (or greater) by the time it reached the stop line. 5. In any event, the train driver did not brake until the truck was on the crossing … which was 4 seconds prior to impact (see Joint Expert Report Ex X page 3, paragraph 3.1). 6. The train driver contributed to the accident by failing to keep a proper look out and failing to brake no later than when the truck was at the stop line by which time it would have been obvious that the truck was not going to stop. 7. By reference to the Joint Expert Report dated 4 April 2007 (Exhibit X) the train driver had to brake 0.30 seconds before impact if the truck was travelling at 15 kmph at impact (sheets 4 and 5 on pages 24 and 25) and 0.74 seconds before impact if the truck was travelling at 6.17 kmph at impact (sheet 3, page 22) in order to avoid an impact." 330 The fact that the truck travelled down Carroll Road at 15 kilometres per hour or a little more over approximately 63 metres before the nearest rail would not necessarily indicate to the train driver that the truck driver could not bring his vehicle to a stationary position as required by the stop sign. Indeed, it is at least equally, if not more, consistent with the position that at that speed one would have expected the truck to be brought to a stop as the sign at the crossing required. The considerable body of expert evidence called by the plaintiff in these proceedings did not provide a basis for a conclusion that the train driver must have appreciated that the truck would not be able to stop in time. 331 The time of braking of the train (four seconds prior to collision) is to be seen in the context of preceding events. The train driver sounded the horn 11.25 to 12 seconds before impact by way of warning. It was not suggested that he should have done so earlier. Once the truck driver's version that the horn was not sounded until the truck had actually entered the crossing is rejected (as I do reject it), then it follows that the truck had been a distance from the crossing when the horn sounded, as the train driver said was in fact the sequence. It was reasonable for the train driver to act upon the basis that the truck driver would heed the warning (the horn) and would and could respond both to the stop sign and the horn and not enter the crossing with a train approaching. 332 On findings made, I am satisfied the train driver maintained a proper lookout and it was by reason of his vigilance that he saw the truck turn off the highway. I am also satisfied that he applied the brakes immediately it became apparent that the truck driver had not obeyed the stop sign and was proceeding onto the crossing. He cannot, in my opinion, be said to have acted in breach of duty by not activating the train braking system earlier than he did. 333 The argument based on "system" was essentially based upon a claimed failure by State Rail to reduce train speeds to 75 to 80 kilometres per hour and that it that had that been done, the truck would have passed in front of the train without a collision occurring. 334 This submission is, in effect, premised upon the proposition that the line of sight to the east of the crossing was inadequate for safe operation. Findings have been made above that the available line of sight of 400 metres was adequate if the truck had stopped at the stop sign and the driver had made the necessary observations. The causal factor that gave rise to the collision as found above was the truck driver's failure to stop the vehicle before attempting to cross. Had he done so and looked to the east, he would have been able to see the train on its approach within 400 metres from the crossing. The otherwise safe history of the crossing in almost eight years from 1993 to 2001 lends some support for that conclusion. I do not consider the plaintiff has established negligence by the first or second defendant. 335 The issue of vegetation/pepper tree obstruction has been dealt with above. It does not support the contributory negligence submission made on behalf of the plaintiff.

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Cross-defendant's submissions: repair costs 354 A preliminary issue was raised by the cross-defendant concerning the cross-claimant's criticisms of Mr Olsen's analysis. It submitted that, should the Court be willing to receive the cross-claimant's submissions, then the detail and complexity of the issues were such that a referee should be appointed to deal with them (cross-claimant's submissions on quantum, paragraph 6). 355 The cross-defendant, in its submissions ("Cross-defendant's submissions on practice and procedure re quantum") contended that the cross-claimant's submissions involved criticisms of Mr Olsen's analysis of "the reasonable cost of repairs" without having put to him the basis of the criticisms. It was also contended that the cross-claimant's submissions involve "an attempt to interpret Mr Olsen's evidence without having put to Mr Olsen the interpretation contended by the cross-claimant" (paragraph 2). 356 The cross-defendant submitted that the Court, therefore, ought not to receive the cross-claimant's submissions criticising Mr Olsen's "analysis of the reasonable costs of repairs". The "detail" and "complexity" of the issues raised were, it contended, more for an expert to determine and a referee should be appointed "to deal with the reasonable costs of repairs". 357 The cross-defendant referred in its submissions to the discretion of the Court under Part 20 Rule 20.14 of the Uniform Civil Procedure Rules 2005. That provision confers a general discretion to refer matters to a referee whenever the Court is satisfied that doing so will best achieve the overriding purpose of the Rules - the just, quick and cheap resolution of the real issues in the proceedings. The discretion to refer requires that proper regard be given, amongst other matters, to the nature of the issues in dispute and the appropriateness of resolving them by ordinary trial procedures: Ritchie's Uniform Civil Procedure NSW at 20.14.5. 358 It is important that the real issue in these proceedings on damages be identified. Before doing so, I, should record that I do not agree with the contention made on behalf of the cross-defendant that that issue involves a determination of what were the reasonable costs of repairs to the rail car. 359 The evidence, which the cross-defendant relies upon to challenge as reasonable the actual repair costs (namely, the analysis undertaken by Mr Olsen), does not seek to establish that it was open to the cross-claimant to have had the work performed by another repairer at a particular cost. Nor did the evidence seek to establish what would be the range of reasonable costs for the repairs in question. Mr Olsen's approach was to establish by his estimates and calculations what he refers to as a "notional" price contract. 360 In Stocovaz v Fung [2007] NSWCA 199, the Court of Appeal was asked to deal with what was contended to be an important point of principle in relation to the quantum of damages recoverable for damage to a prestige vehicle caused by the negligence of another driver. The primary judge made an order that certain questions be decided separately and these were set out in the judgment. 361 In the course of his judgment, Basten JA referred, at [15], to the difficulty that arose in the case in being sure at what point a distinction was drawn in the court below between an amount which was fair and reasonable and an amount which was extravagant. Importantly, his Honour observed that what was "reasonable" in terms of repair costs may fall within a range and further that the evidence a defendant adduced as to available lower costs and the reasonableness or otherwise of the plaintiff's conduct are important matters in making any determination. In this respect, his Honour observed:- "17. Once it is understood that reasonable costs may lie within a range, which may not be narrow, it seems likely that the liability of a defendant to pay something less than the actual costs of repair will turn on evidence that the repairs could have been done at a lower cost and that the plaintiff acted unreasonably in not obtaining an alternative quotation or further quotations, or in not accepting a lower quotation. This may mean that such cases will be resolved by reference to principles of mitigation of loss, but it also suggests that the kind of issue sought to be isolated for separation determination in the present case is one which can be isolated only on a somewhat artificial basis." 362 Similarly, in that case, Handley JA at [37] and [38] observed:- "37. In my judgment, the answer to question 2 can be reconciled when one bears in mind that there may not be a single fair and reasonable cost for repairing a damaged motor vehicle, especially a Mercedes costing $95,563 new. There is likely to be a range of costs all of which are fair and reasonable. In such a case, acceptable evidence that a lower cost would be fair and reasonable cannot, of itself, establish that a higher cost was outside the range and not fair and reasonable. 38. The true question would be whether the cost incurred was outside the range. In my judgment, this is only another way of asking whether the cost incurred was extravagant or unreasonable." 363 In Lodge Holes Colliery Company Limited v Wednesbury Corporation [1908] AC 323, a case involving a dispute as to the amount of damages to restore a damaged roadway, Lord Loreburn LC stated at 325:- "… in judging whether they have acted reasonably, I think a Court should be very indulgent and always bear in mind who was to blame. Accordingly, if the case of the plaintiffs had been that they had acted on the advice of competent advisers in the work of reparation and had chosen the course they were advised was necessary, it would go a very long way with me; it would go the whole, unless it became clear that some quite unreasonable course had been adopted." 364 In the present matter, the issue for determination on the cost of repairs does not involve, on the evidence relied upon by the parties, an assessment of competing evidence raising technical matters as to the nature of the damage, the necessary repairs and specific alternative costings on repair items such as might be both suitable and appropriate for a reference order to be made under Part 20 Rule 20.14 of the Uniform Civil Procedure Rules. Having regard to the nature of the issue that has been raised based upon Mr Olsen's analysis, I consider it is an issue to be resolved by ordinary trial procedures and is an issue for this Court to determine in these proceedings. 365 I have additionally concluded, as discussed further below, that the fact that the cross-claimant has, in some detail, criticised Mr Olsen's report, does not mean that it was incumbent upon the cross-claimant to cross-examine him as to the assumptions he made as to the primary source documents used in his analysis or as to the approach or method that he has employed to devise his "notional" contract price. The report was challenged on the basis of the matters referred to and disclosed in it and no personal attack was made upon Mr Olsen. 366 In Stocovaz v Fung (supra), Handley JA at [39] observed that, in a claim based on the reasonable costs for repairing a damaged motor vehicle, there are two caps on a plaintiff's recovery:- "… he is not entitled to recover more than his actual cost, and he is not entitled to recover the cost to the extent that it was extravagant or unreasonable." 367 In that case, the Court below (Patten AJ) set out relevant principles: Fung v Stocovaz [2006] NSWSC 1345. These included:-

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(e) The evidence that the assessment of reasonable costs of repair based upon a "notional price" assessed by Mr Olsen was sufficient for the cross-defendant to discharge the evidential onus upon it to question the reasonableness of the cost of repairs. 370 The Xplorer rail car EA2504 owned and operated by the cross-claimant was manufactured by ABB Transportation Pty Limited (subsequently known as Adtranz, Daimler Chrysler Rail Systems and Bombardier Transportation at Dandenong, Victoria). The manufacture was part of a contract for 21 intercity Xplorer cars said to have been valued at $53 million. The Xplorer cars were completed in the period 1993 to 1994. 371 Mr Clarke, in his statement dated 7 July 2005 (Exhibit 19), stated that the damage was to the lead car that had been manufactured by Adtranz Pty Limited. It had been put into service on 27 November 1993. Its purchase price was $3,206,419. The design life of the car is 25 years. 372 The EA rail car contained a buffet car configuration and included a driving cab and 42 seats and a kitchen/servery. It was constructed of stainless steel with a fibreglass nose cone at the driver's end. 373 As a consequence of the collision on 19 March 2001, the front right hand corner of the rail car impacted with the right rear hand side of the plaintiff's truck. 374 The damaged vehicle was inspected at Eveleigh on 29 March 2001 by Mr William Mair, engineer, employed by the cross-claimant. Mr Mair has approximately 30 years' experience as an engineer and has for many years been responsible for the maintenance and repair of railway rolling stock. He accompanied Mr Gregory Clarke on the inspection. Mr Clarke was the Project Manager for the repair project. The purpose of the inspection was to assess the damage and the scope of repairs before tenders were called. 375 Independent consultants were invited by SRA to provide quotations for the preparation of a specification for the repairs and a Preliminary Damage Assessment of the rail car was undertaken on the last-mentioned date. The cross-defendants' expert (Mr Olsen) acknowledged in his report (paragraph 3.2) that the assessment indicated an appropriate level of detail had been applied to understanding the extent of the damage and the content of it closely matched the SRA Specification. 376 Mr Olsen noted in his first report that there had been a previous repair to a similar vehicle, Endeavour car LE2861, in 1997. The repair was considered by the cross-claimant's personnel to be a reliable benchmark against which to proceed with the repair of rail car EA2504. There was no suggestion that it did not provide such a benchmark. 377 Further assessments were taken following the awarding of the contract with inspections by SRA and Bombardier (the repairer) personnel. 378 The Specification in question, Specification 2001/0108, was described by Mr Olson as typical of many SRA specifications in terms of its technical and commercial requirements. It called for the repair contractor to satisfy itself as to the completeness of the scope of works. A joint inspection took place shortly after the contract was awarded to ensure agreement on the initial condition of the car. 379 Mr Olsen accepted that, although the cross-claimant invoked a sole tender process, that process was, in the circumstances of the matter, appropriate given prevailing market conditions. Additionally the Xplorer cars had been produced to a proprietary design by Bombardier entities, a specialist manufacturer. Mr Olsen also acknowledged that only Bombardier would have been in possession of the detailed drawings and design information relevant to Xplorer trains and that, at the manufacturing level, it was likely that that company possessed jigs and tooling specific to the design that would be of use during the repairs to the Xplorer car (report, Exhibit AC, paragraph 3.3.1.1). 380 Mr Olsen further acknowledged that Bombardier were in the process of undertaking retrofit work on the Xplorer fleet. It, accordingly, had the advantage of detailed current familiarity with the cars at a shop floor level as well as having the benefit of supervisory experience from the manufacturing stage. 381 The organisation invited to submit an offer was Adtranz. It was noted in the Evaluation Report (Exhibit, Tab 6, p.4) that the offer received was from Daimler Chrysler Rail Systems (Customer Support) Pty Limited which had been acquired by Bombardier Inc. At the time of the offer, the organisation was known as Bombardier Transportation GmbH. The report noted that the tender was from Daimler Chrysler Rail Systems (Customer Support) Pty Limited trading as Bombardier Transportation Australia (Bombardier). 382 A single tender was received from Bombardier dated 16 May 2001. Mr Olsen acknowledged that the submission was suitably detailed and was responsive to the Specification in most respects. Bombardier provided a detailed Tender of Works Programme as required by the Specification. 383 Mr Olsen referred in his report under the sub-heading Estimating strategy (paragraph 3.3.2.1 of his report) to the fact that there were indications in correspondence by Bombardier that the estimates and pricing applied to the tender were considered favourable to Bombardier. However, the correspondence referred to does not identify by what margin or in what respects or to what extent it was said to be favourable. Mr Olsen referred to correspondence (August and September 2001) that variously referred to "the extra … built in", "the actual numbers are way less than the estimated numbers" and the use of "a very thick pencil for the estimate". Mr Olsen suggested that the latter reference was understood to be the opposite of "sharpening of the pencil" when he asserted one is striving for a low price. 384 Mr Olsen provided, by way of example, an instance of what is termed the "thick pencil". This was the cost of some floor panels for the rail car which was said to involve a mark up of 50% along with other items. 385 In relation to the contract type utilised with Bombardier, Mr Olsen referred to a change that had occurred after tenders were called in the contracting approach being a change from a Fixed Lump Sum contract to a schedule of rates and prices approach. He observed in that respect:- "The effect of this was to change the contract type and to effectively reduce the level of risk transferred to the Contractor, negating some of the advantage sought by SRA via a Fixed Lump Sum contract." 386 As part of the tender and contracting process, an Evaluation Committee was established. The Committee included an independent rail engineer, Mr Shane Donohoo, of Worley Engineering Pty Limited. The Evaluation Report of the Committee recorded that the "schedule of rates has been reviewed and assessed as being well within market range of acceptability for such services" and an analysis was provided of cash flow projections. 387 In the written submissions of the cross-defendant, it is stated in paragraph 24 that there was no evidence that Mr Donohoo performed any services. In paragraph 25 of those submissions, it is asserted that only three members of the Evaluation Committee (who were employed or associated with the cross-claimant) signed the Evaluation Report but that Mr Donohoo's did not sign the document. 388 Both statements in the preceding paragraph are incorrect. The three members of the Evaluation Committee, Messrs Mair, Fitton and Clarke signed the Evaluation Report on p.4 on 13 June 2001. However, in Exhibit 19, tab 6, there is a second copy of page 4 of the Evaluation Report bearing what is apparently Mr Donohoo's signature. That page appears to have been sent as a facsimile on 13 June 2001. Mr Worley, being an external consultant, may well have sent a copy of the signature page bearing his signature by facsimile transmission. 389 Accepting, as I do, that the Evaluation Report was signed off by each member of the Committee, the report itself provides evidence of them having each participated and considered the matters for evaluation on the basis and by the methodology referred to in the report. The document records their recommendation to accept the Bombardier offer of $934,175 (inclusive of $84,925 GST). 390 In relation to the integrity and competency of the procurement process, Mr Kucia stated that the process for the repair of the damaged rail car was made upon the basis of the Code of Tendering for the Construction Industry dated July 1996 and the Code of Practice for the Construction Industry also dated July 1996. 391 He also identified the relevant guide for the procurement process as the SRA publication entitled State Rail Authority Procurement Policies and Procedures Manual, Volume 6, Policy and Procedures for Major Procurement. 392 Mr Kucia stated that one of the important principles referred to in the Code is that referred to as the "value for money" requirement. He added:- "12. The schedule of rates basis for Contract no. C01110 was determined by the Contracts and Procurement Group to be the appropriate contract type in order to comply with the value for money requirement for the following reasons …" 393 He stated that the schedule of rates basis for the contract was determined by the Contracts and Procurement Group to be appropriate. 394 He further stated that a fixed lump sum contract would not have achieved the best value for money for the particular repair project. Such a contract transferred risk from the principal to the contractor in proportion to the degree of uncertainty associated with the scope of repairs and a tenderer would be expected to factor a premium into the price to reflect the risk. 395 Mr Kucia, whose evidence I accept, also stated that before making a final decision on calling for tenders on a fixed price or a schedule of rates basis, the cross-claimant took the precaution on 29 March 2001 of investigating the likely extent of repairs to the damaged rail car before commencing the tender process. He said it was this that precipitated the amendment of the draft version as specified above. He added (paragraph 12.2):- "… in undertaking that assessment, the SRA had the benefit of experience from the repair project for car LE2861 …, which was utilised in the pre-tender estimate dated 29 March 2001. This pre-tender work assisted with the evaluation of Bombardier's tender for repairs … and was considered to minimise the degree of risk to the SRA arising from contracting on a schedule of rates basis." 396 Mr Clarke prepared a document dated 19 March 2001 which set out the preliminary assessment of damage indicating the areas and nature of damage to the rail car (Exhibit 19, Tab 2). The report noted that the nature and composition of repairs required involved similar complexity to the repair to the Endeavour car LE2861 that was damaged in 1997. The repair work in that case was contracted out to Adtranz. The approved cost was $1.2 million. Mr Clarke participated in the preparation of the Specification no. 2001/0108, a copy of which is included in Exhibit 19, Tab 4. He was also involved in the preparation of the evaluation criteria for the Specification. 397 On 16 May 2001, Bombardier submitted its "offer for the carrying out of collision repairs … in response to the tender". The offer noted that the company was unable to identify all components necessary for the repair until the rail car was stripped for final assessment. It stated that any other components required for the repair would be charged at cost plus 20% administration and handling charge. 398 The contract for the repairs became known as SRA Contract No C01110 dated 4 July 2001 for the amount of $934,175 including GST (a base contract value of $849,250 and GST of $84,925). 399 The Evaluation Report dated 13 June 2001 noted the following:-

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(b) The form of contract 404 Mr Olsen raised the question in his first report of the use of alternate contracting approaches in lieu of a Fixed Lump Sum tender approach as required by the specification. He stated (Exhibit AC, at p10):- "Especially in the case of a Fixed Lump Sum Tender, higher prices are likely to have resulted if the tenderer was aware that a single tender was being sought, given the lack of competition." 405 In his initial report (Exhibit AC), he directed some criticism at the contract model adopted for the repair project of EA2504 and contrasted the two contract models, the Fixed Lump Sum Contract and the Schedule or Rates Contract. He addressed the expected relationship between profit and risk accepted by the contractor with the acceptance of higher risk profiles being reflected in higher prices and possibly profits (paragraph 3.4.1.1). 406 Mr Olson stated, in the Executive Summary to his report, that the use of a fixed price contract with a sole tenderer was likely to result in higher prices reflecting risk transferred to and accepted by the repairer than may otherwise be associated with the actual cost to repair the damage. 407 Mr Kucia is a civil engineer who, for many years, acted in the SRA's Contracts and Procurement Group. In his statement dated 25 January 2006 (Exhibit 21), he said that he acted as a Senior Contracts Officer in relation to the award of the contract for the repair of the collision damage to EA2504 and he participated in the preparation of the contract and specification (paragraph 3). 408 In response to Mr Olsen's report, in particular to his observation as to a change in contract type, Mr Kucia stated (at paragraph 6):- "… in fact, there was no change in contract types. It appears that the version of Specification No 2001/0108 referred to in the Booz Allen report was an earlier draft version and not the final version issued to the sole tenderer. So far as I am aware, the final version of Specification No 2001/0108 was the only version of the specification that was sent to … 'Bombardier'." 409 Mr Kucia annexed a copy of the final version of the contract to his statement. 410 He referred to two distinguishing points between the draft and final versions of the contract. The first related to clause B2.1 of the draft which referred to a "Fixed Lump Sum" whereas the equivalent clause in the final version referred to a "Schedule of Rates". 411 The second related to clause B5.1 of the draft and final versions. In the draft, there was a reference to a Fixed Lump Sum and in the final version it referred to a Schedule of Rates. 412 Mr Kucia observed that Bombardier tendered on a schedule of rates basis in compliance with the final version of the specification. 413 The statement of Mr Kucia (Exhibit 21), accordingly, explains the circumstances in which Bombardier tendered on a schedule of rates basis in accordance with the final version of the Specification and confirms that the contract entered into was a Schedule of Rates Contract based on that Specification (paragraph 6 to 8). 414 On this basis, any criticism made by Mr Olson as to the nature of the contract model appears to be misplaced. In his later report, Exhibit AD (March 2006), Mr Olson noted the actual basis upon which the contract was entered into was a schedule of rates basis. He, however, adhered to the value suggested against Item 1 of Table 7 in his report as valid. 415 The evidence on this matter, accordingly, removes Mr Olson's previous contention that the nature of the contract model could explain a higher contract price than achievable on a schedule of rates basis. 416 Bombardier had also been required by the cross-claimant to provide a manpower/resource allocation as part of the Tender Works Programme. The initial analysis was for 82 weeks of labour at day work rates. On a basis discussed below, Mr Olsen made a calculation that the cost of such labour was an amount of $171,442.30 or 20.2% of the Tendered Fixed Lump Sum. This amount he described as "… a sufficiently low proportion of the price given the scope requirements … to have reasonably raised questions as to the price structure within the evaluation committee" (report, paragraph 3.3.3.2). I will proceed in the paragraph that follow to consider Mr Oslen's approach on this question of costing labour costs for the project.

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(a) Project Manager $90.75 (b) Design Engineer $95.59 (c) Electrician $55.02 (d) Supervisor/Foreman $78.65 (e) Trades Assistant $49.78 (f) Car Builder $55.02 (g) Boilermaker $55.02 (h) Fitter $55.02 (i) Electrician $55.02 420 The document also provided cumulative costs over a 20 week period between 31 August and 11 January. The Total Cumulative Cost (including parts) is stated at $934,175.95 of which Total Cumulative Cost (Labour) is recorded as $430,470.25. The calculation of labour costs is estimated on a 35 hour week basis. 421 The document Appendix D3 appears to be part of the materials utilised and considered by the Evaluation Committee. It is based on a time line that reflects the timing in Production Schedule Part B Attachment 2 in the Bombardier offer: Exhibit 19, tab 5, included details of "direct human resources" in the above classifications. 422 Mr Olsen described his analysis as "a first analysis" based on "82 weeks of direct labour at daywork rates". It is based on 82 weeks as indicated in Schedule B7. His calculation, however, is based on 38 hours per week at a single rate of $55.02 giving a total of $171,442.30. 423 As noted in paragraph [418], Mr Olsen used this latter figure as the basis for his observations that labour costs of that order could have been expected to have raised questions by the Evaluation Committee. However, he did not refer to the "Labour Costs v Time" analysis referred to in paragraph [419] which presents a very different (higher) direct labour costs analysis. Appendix D3, for example, includes the weekly costs of the project manager, the design engineer and the supervisor/foreman who were remunerated at rates of $90.75, $95.59 and $78.65 respectively, which Mr Olsen's analysis (apparently indicated by the single rate used in his calculation of $55.02) does not. He did, however, calculate and add an amount of $33,768 for the cost of "supervision". That amount was added to his "labour" cost of $164,224 to make a total labour and overhead subtotal of $197,993 as set out in Appendix 5 to his report at pp.40 to 41. 424 Mr Olsen, in his Appendix 5 - Price Calculation for Alternate Contract Model - for the purposes of his notional estimate based his calculation of labour costs at the single rate of $55.02 per hour x 2,985 hours to derive his abovementioned estimated (notional) labour cost figure of $164,224 (pp.40 to 41 of Exhibit AC). 425 However, the estimated costs of the project manager, design engineer and supervisor/foreman (all of whom were on higher rates than $55.02 per hour) are taken into account, then the total notional cost of labour on Mr Olsen's approach would be in the order of $300,000 as indicated in the next paragraph. 426 Based on the monthly cost of the project manager over 20 weeks at $3,178.25 per week x 19 weeks, the total cost for the project manager would be $60,382. The design engineer at $3,345.55 per week over a specified period of six weeks would total $20,075. The supervisor/foreman at $2,752.75 per week x 19 weeks amounts to $52,302. The total for these three classifications is $132,759. Added to Mr Olsen's figure of $164,224 would increase his notional figure to $296,983. 427 The above discussion on labour costs is not directed to establishing any particular error in labour costs estimation or calculation. It does emphasise that Mr Olsen's "notional" price is, in part, built upon his own approach to estimating the cost of labour for the contract and not upon a cost that another repairer could or would have undertaken the work or on Bombardier's actual labour costs. 428 I have earlier set out the facts concerning the process by which the damage was assessed, the basis upon which the tender was submitted and the specifications for the contract determined. Those facts demonstrate that although the tender was on a sole tender basis, it was conducted on a structured basis in accordance with relevant procurement standards and procedures and that the repairer's schedule of rates had been reviewed and assessed. 429 The evidence established that there was a regime or process that operated for the purposes of determining post-contract assessments and for review of the actual repair work. Additionally, the change to a Schedule of Rates contract was on the evidence, an appropriate form of contracting for the project. The evidence did not establish that the cross-claimant ought to have adopted a different contract strategy.

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The contention as to extravagant or unreasonable repair costs 430 The cross-defendant relied solely upon the evidence of Mr Olsen in its contention that damages should not be awarded on the basis of the actual costs of repair. In order to succeed in its challenge, the cross-defendant had the evidentiary onus of establishing that the cross-claimant acted unreasonably in relation to the repair contract with Bombardier and that a different approach would have resulted in a reduced repair costs. 431 In accordance with principles referred to earlier, the amount paid by the cross-claimant to repair the damaged rail car provides, at least, prima facie evidence of the reasonable cost of repairing it. In evaluating whether or not the cross-claimant acted reasonably and so withstand any challenge that the amount paid was extravagant or unreasonable, the relevant facts of the case concerning its conduct in the pre-contractual phase are, of course, relevant. 432 Further, in evaluating the reasonableness of the amount paid by way of repair, it is appropriate, in my opinion, to have some regard to the specialist nature of the work and the unique position that Bombardier occupied in terms of its prior experience, its capacity to undertake specialist work of the kind in question and the performance of past work by its related entities to the satisfaction of the cross-claimant. 433 In general terms where repair costs have been challenged as being "extravagant", it will often be contended that rates or charges exceeded "… the ordinary and accustomed rate": The Pactolus (1856) Swab 173. In the case of specialised services for a particular repair project, there may not be an "ordinary and accustomed rate". In the present case, as discussed earlier, Mr Olsen undertook what he termed a "notional pricing estimate". He made no reference to costings or gross and net profit margins of repairers that could be considered to be industry competitors to Bombardier. In those circumstances, the cross-defendant's contention made as to excessive or exorbitant charges was founded on Mr Olsen's notional pricing and not by evidence as to actual commercial or specialist charges that may have been available from specific rolling stock repairers. The basis for Mr Olsen's "notional" pricing approach is analysed below.

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(c) Documentary material on Bombardier "estimates" and "actual costs" 439 In relation to the Project Full Cost Summary, Mr Olsen stated that this document was used in his analysis as "… the primary source for estimating information …" (paragraph 3.5.1). He also added that that Summary was used in his analysis "… as the reference point for corporate allocations, margins and indications of financial targets acceptable for rolling stock work" (paragraph 3.5.1). 440 In relation to the Financial Appraisal as at 3 January 2002, he stated that the document was sourced as "… the final appraisal for the project and is used in this analysis as the primary source for costs and profits on completion of the repairs". 441 As noted in the written submissions for the cross-claimant (paragraph 18), the principal challenge to the quantum of its claim is based on Mr Olsen's notional pricing estimate. If that notional estimate were to ultimately be accepted in these proceedings as indicating what were reasonable costs, then, as the submissions observe, it would result in the repair cost component of the claim being reduced from the amount of $949,974.08 actually paid by the cross-claimant down to $590,860.77, a difference of $359,113.31. 442 Mr Olsen set out his approach, methodology and conclusions in paragraphs 3.5.1 to 3.5.4 of his report (Exhibit AC). In Table 2 on p.20 of his report entitled Analysis of Estimated vs Actual Costs, he set out total production costs of $687,446 which he derived from Bombardier's "Project Full Cost Summary" being document 19 in the Appendix to his report (and which is reproduced as p.81 in the cross-claimant's written submissions). On the basis of the same document, he derived 10.3% as being the net margin recorded for the project. 443 In Table 2 of his report, Mr Olsen provided a contrasting calculation under the heading "Actuals". In that column, the "Full Cost" is stated to be $460,095 (in contrast to the abovementioned amount of $762,180) and set out a net margin of 46.1%. For the purpose of his estimation of "Actual Costs" in Table 2, as contrasted to "Estimated Costs", Mr Olsen drew upon the "Financial Appraisal" as at 31 January 2002. 444 The cross-claimant, in its written submissions, challenge Mr Olsen's analysis set out in Table 2 of his report, Exhibit AC, on the basis of assumptions he made as to the status of the two documents to which I have referred, the "Project Full Cost Summary" and the "Financial Appraisal as at 31 January 2002" (paragraph 52 of the cross-claimant's written submissions). 445 The cross-claimant raised a number of matters in challenging the proposition that the Project Full Cost Summary reflected costs of works as at the time of entering the contract. Those matters are set out in paragraph 56 of the written submissions. In short, the challenge was directed at the status of the document. 446 The Project Full Cost Summary utilised by Mr Olsen is undated. That, of itself, is not determinative, but it is one aspect to be taken into account. The document contains two columns in respect of project costs. The first is headed "Adtranz" underneath which the word "Total" appears. The second and last column in the Project Full Cost Summary is entitled "Project" under which the word "TOTAL" appears. 447 There is no explanation as to what the column "Adtranz Total" represents nor for the reasons in respect of variations between certain items under that column as against comparable items in the "Project TOTAL" column. 448 The net margin referred to above of 10.3% incorporated into Mr Olsen's analysis in Table 2: Analysis of Estimated vs Actual Costs was the net margin figure in the "Adtranz Total" column. However, the equivalent "project total" item in the same document records a net margin of 18.2%. Mr Olsen did not advert to nor explain the difference between the two figures for net margin of 10.3% and 18.2%. He simply chose the former. The difference between the two net margin figures of approximately 8% is a significant difference but it was not one to which Mr Olsen gave any attention in his report. 449 The analysis in Exhibit AC was also challenged upon the basis of Mr Olsen's further assumption as to the Financial Appraisal as at 31 January 2002. The assumption that it accurately reflected the actual costs on completion of Bombardier was disputed. The cross-defendant referred to footnote 68 in Mr Olsen's report, Exhibit AC, as indicating that the most reliable internal record of Bombardier to establish actual costs was in fact the General Ledger. The footnote (appearing at p.18 of Exhibit AC) is in the following terms:- "68. At this stage of a project, the General Ledger is typically more accurate than at earlier stages when in the Financial Appraisal or a similar tool is also commonly relied upon for reporting of work in progress and costs accrued." 450 The criticism of Mr Olsen was that he did not refer or rely at all on the General Ledger. No explanation had been provided as to why he had not used it given that he himself described it as "the typically more accurate" record. Further, it was contended that there was no evidence that proved the status of the Financial Analysis as at 31 January 2002. 451 In determining the validity of Mr Olsen's analysis, it is, accordingly, necessary to determine whether or not the Project Full Cost Summary and the Financial Appraisal as at 31 January 2002 documents constitute primary evidence that establish the actual final pre-repair estimates of Bombardier and actual costs on completion. 452 The only evidence said to prove actual pre-contract estimates of Bombardier are the documents referred to in footnote 65 on p.17 of Exhibit AC. That footnote forms part of paragraph 3.5 of the report to which objection was taken in the Defendants' Notice of Grounds of Objection to the Plaintiff's Lay and Expert Evidence document, p.6. 453 The Project Full Cost Summary does not, on its face, evidence that the costs set out in the document in fact formed the final actual historical basis for the contract. However, it is not to be overlooked that the Financial Appraisal as at 31 January 2002 document which, like the Project Full Cost Summary contains a total production cost figure of $687,446 may be considered as some evidence tending to support the proposition that the Project Full Cost Summary document does reflect the final cost estimates for the project. However, as against that, the amount of $687,446 in the Financial Appraisal as at 31 January 2002 was constituted by different sub-total costs to those set out in the Project Full Cost Summary. That fact suggests that some of the constituent elements in the Project Full Cost Summary had been reviewed and changed at some later point or points in time. 454 It is, of course, a fundamental principle that an expert called to give evidence must identify the assumptions made or the facts, to be established by evidence, that are said to support his or her conclusions or opinions. 455 I have adverted above to the fact that the Project Full Cost Summary contains two columns providing total expenses in different amounts as well as different gross and net results and different gross and net margins. In the absence of any explanation as to the differences, it is not possible to say from the document what net margin figure was adopted by Bombardier for the purposes of the project. Whilst the figure may well have been a net margin of 10.3% (being the figure adopted by Mr Olsen for his analysis) without evidence and an explanation as to the difference between "Adtranz total" and "Project total", a conclusion as to the net margin adopted at the time of contract cannot be validated. Whilst it may have been 10.3% as Mr Olsen stated it may also have been 18.2% as the last column in the Project Full Cost Summary states, or it may have been some other margin. 456 The cross-claimant, accordingly, contended that Mr Olsen's margin of 10.3% which he employed in his Analysis of estimated versus actual costs (Table 2 in his report) is based upon an unproven assumption and, to that extent, validation of his analysis is lacking. 457 For reasons stated below, there is substance in these criticisms. Similarly, for reasons also discussed below, I do not consider that the Financial Appraisal as at 31 January 2002 can be taken as primary evidence establishing the actual costs of the project on completion. 458 Whether or not the title "Financial Estimate as at 31 January 2002" suggests that the document may be a historical record of what has transpired up to that date, closer examination raises questions as to the date the document was created and the point in time at which events had progressed as at the time the document was produced. 459 The Financial Appraisal as at 31 January 2002, on its face, does not purport to be a document that relates only to the historical cost of the project as at a particular date. The document, as it states, involves forecasting costs as at 31 January 2002. In that way, it is a document that is both retrospective and prospective in its expression. These are indicated by the sub-titles to the columns "incurred", "committed", "yet to commit" and "forecast total". 460 The Financial Appraisal as at 31 January 2002, insofar as it lends itself to an interpretation as an analysis of costs that had already been incurred and costs forecast to be incurred by 31 January 2002, there is an issue and concern as to the reliability and accuracy of Mr Olsen's assumption that it is to be construed as a record of costs actually incurred as at completion of the project. 461 The written submissions for the cross-claimant set out the detail of the arguments on these matters at paragraphs 61 and 62. 462 The cross-claimant, as noted above, also relied upon the absence of primary evidence (in particular, the General Ledger) to establish what were the actual costs of the project on completion. 463 Both the estimated and actual costs of the project in question are matters of historical record and such estimates and costs would be expected to be readily proved by Bombardier's internal project documents. Whilst the Project Full Cost Summary and the Financial Appraisal as at 31 January 2002 provide some information on estimates and actual costs, they do not, in my opinion, in themselves validate the primary facts essential to Mr Olsen's analysis. His analysis to that extent lacks a necessary primary evidentiary foundation. 464 Reference to the Financial Appraisal as at 31 October 2001 (referenced document no. 24 in Appendix 1 to Mr Olsen's report) provides further material suggesting that Bombardier's financial appraisal documents were, at least, in part, forecasting instruments or records. Like the Financial Appraisal as at 31 January 2002 so document 24 in the Appendix to Mr Olsen's report refers to the previous month's appraisal as "Previous Appraisal Forecast 30/09/01" (emphasis added). The total of costs incurred are shown as $195,492. Reference to Mr Clarke's statement (Exhibit 19, paragraph 50) together with associated invoices and payment authorisations (Exhibit 19, volume 2, tab 21) indicates that by 31 October 2001, actual "incurred" expenditure was at least $358,996. The incurred costs of $195,492 is more in line with invoices and payments made on 6 September 2001 and 28 September 2001. 465 Additionally, the evidence suggests the possibility that the Financial Appraisal as at 31 October 2001 may have been reviewed and altered after it was created. In this respect, the Financial Appraisal as at 31 October 2001 "forecast total" was at a later time reproduced in "Financial Forecast as at 31 January 2002" under the heading "Previous Appraisal Forecast 31/10/01". Some of the amounts as originally stated, changed. Thus, the amounts shown for "labour & overhead subtotal" ($137,802) is not the figure recorded in the appraisal as at 31 October 2001 ($249,252) and similarly the "materials total" of $147,939 had previously been shown as $202,832 in the Financial Appraisal as at 31 October 2001. The remaining sub-totals correlate with the Financial Appraisal as at 31 October 2001. These variations in sub-totals had a significant bearing on the total gross profit figures shown in the two document (23.19% versus 42.78%). 466 The documents are also consistent with the proposition that at some point after 31 October 2001, original forecasts for 30/09/01 and for 31/10/01 were revised due to a reduction in labour and overhead and materials sub-totals, generating a higher level of profitability. The reason for the ability to save or reduce costs on previous forecasted figures during the course of the repair project was not explored in evidence. 467 The adjusted Gross Profit of 44.28% of revenue shown in the Financial Assessment as at 31 October 2001 was expressed to be based on the revised costs to which I have referred above, on a "Forecast" basis. Even if it be assumed that Bombardier received a net return well in excess of 20%, the question remains whether, in relation to the repair project undertaken by Bombardier as specialist contractor, such a net return would render the contract costs "extravagant" or exorbitant. 468 The cross-defendants' submissions employ the term "extravagant". On his assessment, Mr Olsen does not express an opinion in those terms. Nor does he state that there was a reasonable range of repair costs or that Bombardier's contract price was outside any range. In paragraph 3.5.4 he stated:- "Notwithstanding consideration of the commercial advantage associated with a sole tender situation, it is still arguable that the data reported in the repairer's internal documentation indicate profits in excess of typical commercial margins. A net margin of 46.1% would be considered an indication of a particularly profitable project." 469 Mr Olsen does not assert that what he terms "typical commercial margins" would necessarily be appropriate or applicable to the specialist work undertaken by Bombardier. 470 Accordingly, even accepting on its face Mr Olsen's conclusions, that the gross net margin received by Bombardier was a "particularly profitable" one that, does not in itself establish that it involved extravagant or exorbitant pricing. 471 As noted above, the cross-defendant submitted (paragraph 31) that the Court should not receive the cross-claimant's submissions on the notional price contract because Mr Olsen was not cross-examined or otherwise challenged in the same way in which the cross-claimant challenges it in its written submissions. Not to have cross-examined or challenged him is said to result in unfairness. I do not accept the submission. The cross-claimant's criticism of the materials used by Mr Olsen and his analysis were directed to the factual substratum used or assumed by Mr Olsen. The criticisms were not directed at questioning Mr Olsen's integrity and they did not involve a personal attack. There was no suggestion of him having, in any way, acted improperly or having misrepresented any information. The evidentiary basis for an expert's analysis is fundamental to the admissibility or weight to be accorded to it. An expert witness is required to expose the basis for his or her analysis or opinion: Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705, 729 to 737. 472 The cross-defendant, in my opinion, did not establish by way of primary evidence the necessary sub-stratum for the two assumptions made by Mr Olsen in relation to the two documents, Project Full Cost Summary and Appraisal as at January 2002. Mr Olsen did not, in terms, state in his report, by way of confirmation, that those documents had in fact been cross-checked against the internal records of Bombardier in order to support the accuracy of the assumptions that he had made. He simply stated in his report, as earlier noted, that he proceeded upon the basis that the documents were as he assumed them to be. 473 I have indicated earlier that, in relation to the Financial Appraisal as at 31 January 2002, the document is open to interpretation as reporting upon a position that existed and also on the project foreseen as at 31 October 2002. Whatever be the correct interpretation of the document in that respect, the primary evidence was not introduced by the cross-defendant (in particular, the General Ledger and any other relevant internal records of Bombardier) to establish what were the actual costs as at the date of completion of the project, that is, after the whole contract had been completed. 474 Even if the Financial Appraisal as at 31 January 2002 document may be taken as indicating a revision of forecasts and the reduction of costs to Bombardier as the project proceeded below what had been estimated, that does not lead to the conclusion that the costings, as at the date of the contract, were excessive or unreasonable. There may, for example, have been techniques or methodologies employed that enabled Bombardier to reduce costs as the project proceeded. The position remains, as earlier stated, that the tendering and associated procurement processes were established as having been conducted on a proper basis in accordance with appropriate standards and with independent verification. The cross-defendant did not establish that the cross-claimant acted unreasonably in entering into the contract with its specialist sub-contractor.

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Deferred expenditure 486 The issue of deferred expenditure was considered by Mr Olsen in his report in paragraph 3.1.1. He there outlined that rail cars are generally considered as having an economic life of the order of 30 to 35 years during which period a number of major overhauls are required in addition to routine maintenance. 487 He stated that "in general", major mechanical items such as traction engines are overhauled at about the quarter-life stage (sometimes specified by distance travelled or other proxy for engine condition). The cab and passenger areas, he stated, would be expected to undergo a "half-life refurbishment". He stated that this provided an opportunity to upgrade any technological developments in addition to the replacement of various parts and components. 488 Such refurbishment, Mr Olsen stated, is typically a major undertaking performed on a contractual basis. He stated that each car would be taken out of service for a considerable period for such major works to be performed. He stated:- "… the half-life refurbishment has sometimes been referred to as a 'half-life, half-cost' alternative to procurement of new or replaced vehicles and for an Xplorer car could reasonably be expected to cost of the order of $1,500,000 per car on a fleet wide basis." 489 In footnote 20 to his report, Mr Olsen stated, in relation to the amount of $1,500,000, "ie., new car cost (at time of refurbishment) or approximately $3 million. Fifty percent equals $1,500,000". 490 Mr Olsen, in his March 2006 report (Exhibit AD), referred to further material including, in particular, the statements of Mr Clarke and Mr Mair. Exhibit AD incorporates Table 7: Analysis Summary. Item 13 relates to the "Deferred Expenditure Benefit". Mr Olsen discounted what he termed the $150,000 benefit to the amount of $29,300 in 2001 dollars. Mr Olsen stated in Exhibit AD:- "The reasoning behind EA2504's planned half-life refurbishment being scheduled near the commencement of the refurbishment programme in 2006 rather than towards the end (2008) is not stated. The plausibility of deferring EA2504's half-life refurbishment, given the relatively recent engine and bogie works, and the general attention to specific items during the repair works, remains a valid consideration, offering potential commercial advantages. No argument against such considerations have been sighted. The information provided regarding the half-life refurbishment programme as planned, enables the deferred benefit calculation to be revised as follows:- Assumptions:- • Cost of half-life refurbishment: $1,500,000 (half-cost as per original report). • Plausible deferral of 18 months (assumed deferral from late 2006 to early 2008). • Interest rate: five percent. • Benefit: $1,500,000, 1.5 years, 5% equals $112,500 (in 2006 $)." 491 The result of the final analysis undertaken by Mr Olsen is that he originally estimated the off-set claimed by the cross-defendant at $150,000 based on two years' deferral and subsequently reduced it to $112,500 based upon a one and a half year deferral in the light of the statements of Mr Clarke and Mr Mair as to the actual refurbishment programme. 492 Mr Olsen then went on to state in his report (p.7) "the repairs to EA2504 included a number of aspects (but not all) which would be expected in a half-life refurbishment programme, such as cab fixture renewal, major re-wiring, etc. It is plausible that this work may enable half-life refurbishment of EA2504 to be somewhat deferred (perhaps to be the last of the fleet refurbished) with the accrual of financial benefits to SRA". 493 He then went on to calculate the value of the deferred expenditure. In this respect, he stated (at pp.7 to 8):- "Assuming an interest rate of 5% and a mid-life refurbishment programme completed in two years, commencing and ending one month later than would otherwise be the case, the deferred expenditure would result in approximately $150,000 ($1,500,000 @ 5% for 2 years) benefit of the time of the overhaul programme (notionally due in 2008). To adjust this future saving to 2001 dollars, consistent with the amounts discussed throughout this report, assuming a discount rate of 6%, an amount of approximately $29,300 is indicated as the benefit to SRA." 494 In footnote 21 to his report, Mr Olsen stated that two years "is assumed for the purposes of this calculation to be a reasonable minimum estimate of the period by which expenditure on mid-life overhaul of EA2504 could plausibly be deferred with a fleet of 21 Xplorers. A mid-life refurbishment programme could reasonably be expected to be undertaken with one or two cars out of service at any one time, due to operational demands on the fleet, each car being out of service for a minimum of several weeks, reasonably up to 16 weeks or so, depending upon the exact scope of works, resulting in at least 24 months for programme duration". 495 Mr Olsen also acknowledged (footnote 22) that the discount rate chosen of six percent was "somewhat arbitrary". However, he stated it was intended to include any necessary allowance for inflation. He provided an example of the "sensitivity" of the calculation. 496 The cross-claimant challenged the analysis of deferred expenditure. In this respect, reliance was placed upon the absence of evidence as to the following:-

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(c) Mr Olsen proceeded upon an assumption that the half-life refurbishment of an Xplorer car "could reasonably be expected" to be of the order of $1,500,000 per car based upon an assumed cost of $3 million. 497 In relation to the above matters, the cross-claimant referred to Mr Clarke's evidence (Exhibit 19, paragraph 7) as establishing that car EA2504 cost approximately $3.2 million to purchase new in 1993 and that in 2001 it had a depreciated value of approximately $2 million. It was contended that there was no evidence of the current new cost of an Xplorer rail car or the likely new cost in 2008. 498 It was further contended that there was no evidence upon which any assessment could be made of the reliability of the estimate of $1.5 million for the cost of the half-life refurbishment. 499 The cross-defendant relied upon the evidence of Mr Clarke (Exhibit 20, paragraph 13) and the evidence of Mr Mair (Exhibit 22) which was said to be "unchallenged". A matter of importance raised by Mr Mair in his statement was that a very large percentage of the work involved in the planned half-life refurbishment programme for the Xplorer fleet (as detailed in his statement) was not, in fact, the subject of work carried out by way of repairs in 2001. In a limited number of aspects, there was some overlap, but that some of the work he said would be the subject of routine maintenance or repair when damage or defects were the result of normal wear and tear. Accordingly, it was said there would be no necessity for such items to be the subject of a half-life refurbishment. Thus, it was contended that there was no savings to the cross-claimant in those respects. 500 In his statement dated 13 February 2006 (Exhibit 22), Mr Mair discussed in some detail the refurbishment programme for the Xplorer fleet. He stated that there are 23 Xplorer rail cars and 28 Endeavour cars and that the refurbishment for the two fleets would be expected to take place between July 2006 and June 2008. 501 In response to paragraph 3.1.5 of Mr Olsen's report, Mr Mair stated that a scope of works for the refurbishment programme in 2006 had been prepared. A copy of it was exhibited to his statement (TAB 1). 502 By reference to TAB 1 (the scope of work having reached the stage of being substantially settled but not yet finalised) Mr Mair compared each item of work with Bombardier's pre-repair report (TAB 2) and Bombardier's post-repair works log (TAB 3). 503 Mr Mair, in paragraph 16 of his statement, set out his comparison of what he termed "Bombardier's repair work in 2001" against each of the items proposed for the 2006 refurbishment programme set out in TAB 1. It is unnecessary here to set out the full detail of Mr Mair's analysis in respect of items no. 1 to 42. It is sufficient to state that paragraph 16 of his statement provides the factual substratum for his conclusion in paragraph 17 which is in the following terms:- "17. For these reasons, there will not be any savings to SRA/RailCorp arising from the repairs to EA2504 in 2001 when the car undergoes its half-life refurbishment during the programme to commence in 2006." 504 In paragraph 18 of his statement, Mr Mair stated that there would not be a deferral of any aspect of car EA2504's half-life refurbishment as a consequence of the repair work done in 2001. He added that there were no technological developments incorporated into the rail car during the 2001 repairs. 505 There was no evidence in reply to Mr Mair's statement and his detailed account remains uncontradicted. There is no reason why I ought not to accept Mr Mair as having presented an accurate and detailed account and I do so. On that basis, the foundation for Mr Olsen's deferred expenditure analysis was not established and, accordingly, his conclusion as to deferred expenditure cannot be accepted. On that basis, I do not consider that the cross-defendant has established the deferred expenditure contended for.

GORDON MARTIN PTY LIMITED v STATE RAIL AUTHORITY OF NEW SOUTH WALES & ANOR

At a glance

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Before

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Judgment (185 paragraphs)

Parties

Cases Cited (9)

Cited By (4)