THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

Torts - Occupiers liability, breach of statutory duty, and professional negligence - Trial on liability question - Conversion of factory to residences on a strata title - Balconies constructed during conversion - Timber specified in the design not used in the construction of the balcony - Design of balcony such that timber actually used is subject to rot - Central post of balcony not tied back to wall of building - Total collapse of balcony without warning - Collapse caused by rot and inadequate design - Whether tenant and owner of the residence breached duty to inspect, repair and maintain the balcony - Whether strata body corporate breached statutory duty to inspect, repair and maintain the balcony - Whether local authority's inspection adequate for issue of certificate under Strata Titles Act 1966 (WA) - Whether negligence by architects or engineers in designing balcony or in failing to detect use of non­specified timber

Occupiers Liability Act 1985 (WA), s 5, s 9

Strata Schemes Management Act 1996 (NSW), s 62

Strata Titles Act 1966 (WA), s 3, s 5, s 20(1), s 35(1)(c)

Strata Titles Act 1985 (WA), Sch 3

Judgment for plaintiffs against fourth and fifth defendants

Action against first, second, third and sixth defendants dismissed

Ahluwalia v Robinson [2003] NSWCA 175

Aslanidis v Atsidakos, unreported; CA SCt of NSW; 13 February 1989

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Australian Postal Corporation v Gallard [2000] NSWCA 316

Bailey v Redebi Pty Ltd (1999) Aust Torts Reports 81­523

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Clayton v Woodman & Son (Builders) Ltd [1962] 1 WLR 585

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337

Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59; (1999) 200 CLR 1

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Gondoline Pty Ltd v Hansford [2002] WASCA 214

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Proprietors of Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294

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1 The plaintiffs in these actions all claim to have been injured while attending a New Year's Eve party on 31 December 1996, when a first floor balcony on which they were standing, collapsed under their combined weight.

2 The party was being held by the first defendant, Richard Ash Black, at Unit 1, 51 Rule Street, North Fremantle. Mr Black has occupied those premises since 1984 as a tenant of the second defendant, Ash Investments Pty Ltd ("Ash Investments") which is the trustee of the Black family trust. Ash Investments purchased unit 1 in 1984.

3 Mr Black's unit was one of eight strata-titled units created from the conversion of a late Victorian industrial building, known as the Old Soap Factory. The body corporate is the third defendant: The Owners of the Old Soap Factory (Strata Title Plan 11175) ("the Strata Company").

4 The claims against the first, second and third defendants are based on alleged failures to inspect, maintain and repair the balcony.

5 The conversion of the Old Soap Factory was substantially completed in November 1982 by its then owner, Lavender Bay Pty Ltd ("Lavender Bay"), which carried out the works as an owner-builder. The works were supervised by a registered builder, Steven Bumstead. Soon after the works were completed and the units sold, Lavender Bay went into liquidation and was subsequently deregistered.

7 The strata plan for the Old Soap Factory was registered pursuant to the Strata Titles Act 1966 (WA). For that purpose, Lavender Bay obtained a certificate from the fourth defendant, the City of Fremantle, under s 5(6)(c) of the Act, stating that the building had been inspected and was consistent with the building plans and specifications.

8 The claims against the fourth defendant are based on an alleged failure to inspect the building for the purpose of s 5(6)(c).

9 The building plans and specifications were prepared by architects Ralph Arthur Drexel and Geoffrey London (now Professor London) who were practising in partnership together under the firm name Drexel London. That firm has been joined as the fifth defendant by all but two of the plaintiffs. They are Mr Drexel's son and daughter-in-law, Marc and Robyn Drexel. The claims against Drexel London are based on an allegedly negligent design of the balcony and a failure to inspect it during the course of construction, or on completion.

10 On the recommendation of Drexel London, Lavender Bay utilised the services of consulting engineers, Halpern Glick Pty Ltd ("Halpern Glick") to provide advice as to certain structural aspects of the conversion of the Old Soap Factory. Halpern Glick has been joined as the sixth defendant on the basis of an allegedly negligent design of certain structural elements of the balcony.

11 In addition to the claims made by the plaintiffs, there are inter-party claims the subject of third party proceedings and notices of contribution, to which I shall refer below.

12 This trial has been concerned only with the issue of liability. The trial was conducted on the basis that action 2375 of 1997, in which Sharon Lee Gove is the plaintiff, would be the lead action, although Ms Gove's counsel also represented nine other plaintiffs. Counsel for a further seven plaintiffs withdrew at the start of the trial, on the basis that the parties had agreed to be bound by my decision in relation to liability. I have therefore been concerned only with the issue of liability in the lead action. I have not been referred to the pleadings in any of the other actions and therefore assume they are to the same effect as in the lead action.

13 It will be apparent that insofar as the various claims relate to the activities of the City of Fremantle, Drexel London and Halpern Glick, it has been necessary to investigate events of over 25 years ago. Evidence was given by almost all of the persons concerned on behalf of the defendants, but very few had any recollection of important matters of detail. That is unfortunate; but in the circumstances, it is not a matter for criticism.

14 No evidence was given by anyone involved in the conversion of the Old Soap Factory on behalf of Lavender Bay. It has therefore been necessary for me to rely to a considerable extent on such documentation as has survived. This includes Drexel London's plans and specifications, some working sketches and what seems to be much, if not all, relevant correspondence. (I note however, Professor London's evidence that a lot of material was missing (TS 790).) Halpern Glick's involvement is well documented, but the City of Fremantle now has no relevant records relating to its inspection.

15 As will be seen, the progress of the work of converting the Old Soap Factory was recorded in the minutes of weekly site meetings attended by one or other (and often both) of Mr Drexel and Mr London (as he then was). These minutes appear to be complete.

16 Copies of the relevant documents were included in the trial bundle (exhibit 1) on the basis that they were true copies and that the documents were what they purported to be. This was subject to the right of any counsel to object to any document on which reliance might otherwise be placed. But in the event, there were no such objections.

17 In those circumstances, I take the view that each of the documents in the trial bundle may be regarded as reflecting the genuine opinion or state of knowledge of its author at the material time.

18 In the unusual circumstances of this case, I think it necessary to point out, and emphasise, that my findings of fact are made on the balance of probabilities, and include facts found by drawing inferences. However, I have had regard to the proposition stated by the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170 that:

"... the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove."

19 Against this background, I shall first describe the structure of the balcony and set out my findings as to why and how it collapsed. I shall then deal with the claims arising from the design and construction of the balcony, and the inspection of the Old Soap Factory by the City of Fremantle. I shall then deal with the claims arising out of ownership and occupation.

20 The Old Soap Factory comprises a number of buildings. One of those buildings, originally of three storeys, was converted into four units, each having five floors. Units 1 and 4, which are respectively on the south and north ends of this building, both had balconies constructed at the first and second floor levels of their end walls. The structure of the balconies was identical.

21 The balconies to unit 1 were approximately 8.1 metres wide and 3 metres deep. That is to say, they extended some 3 metres southward from the southern wall of the building.

22 The floor of each balcony was constructed of closely spaced wooden battens nailed to 2.9 metre long timber joists, being approximately 190 millimetres x 48 millimetres in cross-section. There were 16 joists, spaced at 530 millimetre intervals. The northern ends of the joists were supported by a timber plate of similar cross-section, but about 8 metres long, which was bolted to the southern wall of unit 1 by "trubolts". This is the proprietary name for a bolt which is inserted into a hole in the wall and expands into the hole when tightened.

23 The southern ends of the joists were supported by two lengths of timber (referred to as "plates") of similar cross-sections to the joists. These plates were each about 4 metres long, separated by a steel column and backed by a steel member (referred to as a "beam") which formed the southern edge of the balcony. The timber plates were bolted to the steel beam, by stud bolts welded to it at intervals along its length.

24 The design called for the joists to be half-housed into their supporting timber plates. This would have required slots to be cut into the plates opposite the ends of each joist. The width of the slots would be equal to the thickness of the joists. The slots would extend half-way into the plates and half-way down from the top of the plates. Thus, each slot would be approximately 48 millimetres wide, 24 millimetres deep and 95 millimetres long.

25 The ends of each joist would be cut so that the upper half formed a tongue having dimensions equal to its corresponding slot. If the required cuts had been made accurately, the ends of the joists would have fitted exactly into the plates (ie, they would have been half-housed) such that the weight of the balcony would have been supported on the 32 points of contact, each having an area of 48 millimetres x 24 millimetres.

26 In fact, the depth of housing was far less than as specified in the design. Having regard to the evidence of the expert witnesses who examined the balcony timbers following its collapse, I find that the depth of housing varied between about 9 millimetres and 14 millimetres.

27 The joists were fixed to the plates by skew nails. That is, nails driven through the joists and into the plates at an angle of about 45 degrees.

28 The design specified that the joists and supporting plates should be cut from "select grade structural jarrah". In fact, a species of pine was used. It has been identified as Douglas fir, or oregon. It will generally be convenient to use the latter name.

29 I have referred above to the steel column located in the centre of the southern side of the balcony. A similar column was located at each end of that side. The three columns were bolted to concrete footings and extended vertically so as to support the balconies at the first and second floor levels, and a pergola above the upper balcony.

30 The pergola was constructed of rafters of the same size and configuration as the joists, but was angled downwards, slightly, from the horizontal.

31 The sides of the balconies were fabricated from steel having the same cross-sectional dimensions as the southern beam. The side beams, to which the end joists were attached, tied the end columns back to the south wall of the building. The beams were let into the wall and were bolted through it.

32 The end columns were not only tied back to the wall by the side beams, but also by means of 16 millimetre diameter steel rods and turnbuckle assemblies slung under each set of joists. Each set of rods was hooked to the columns at one end, and at the other end, to a steel plate bolted through the southern wall of the building, immediately below the wall plate.

33 The balconies were surrounded on their open sides by steel balustrades, capped with a timber handrail. To the side of each set of balconies there was a steel spiral staircase which served as a fire escape (exhibit 1/1608 - 9).

34 Evidence about the causes and mechanism of the balcony collapse was given by four engineers and two scientists. All the experts provided reports. All but one gave additional evidence and were cross-examined.

35 It will be convenient to refer first to the evidence of Dr Graeme Richard Siemon, a Member of the Institute of Foresters of Australia and an Associate of the Institute of Wood Science. Dr Siemon is an expert in timber technology, a subject in which he lectures at TAFE and Edith Cowan University. He is consulted regularly in relation to timber utilisation and wood identification for forensic purposes (exhibit 14).

36 Dr Siemon's evidence is contained in three letters written by him in 1997 to representatives of the Strata Company, in his capacity as Scientific Advisor, State Forest Resources Business Unit of the Department of Conservation and Land Management. The letters (exhibits 15, 16 and 17) were admitted by consent. Dr Siemon was not required to attend for cross-examination. I accept his evidence.

37 It was Dr Siemon's evidence that he inspected the collapsed balcony on 19 January 1997 and, by microscopic examination, identified the timber used for the plates and joists as Douglas fir (Pseudotsuga menziesii), commonly known as oregon.

38 Dr Siemon was asked about shrinkage. It was his opinion that, in general, longitudinal shrinkage in timber is negligible, compared with tangential and radial shrinkage.

39 This opinion is based on an average of 0.31 per cent, reported by Rijsdijk and Laming, in their publication "Physical and related properties of 145 timbers", Kluwer Academic Publishers, 1994. It was derived from shrinkage from the fibre saturation point of about 25 per cent moisture content, and the standard equilibrium condition of 12 per cent moisture.

40 Dr Siemon said that timber in service in exposed conditions would generally be subjected to wetting and drying cycles. In his opinion "any longitudinal variation would be less than 0.3 per cent" (exhibit 15).

41 Accepting this evidence as I do, I calculate that a joist of approximately 3 metres in length might shrink less than 9 millimetres in exposed service. I infer that in the wetting and drying cycles, that is, winter rain and summer sun, the balcony joists might have expanded and contracted to this extent.

42 The significance of movement of this kind in joists which are less than half-housed into their supporting plates, has not been the subject of any expert evidence, I therefore infer that it is not a relevant consideration in this case. I assume that if shrinkage of the joists had been the cause of their dislocation from the supporting plates, the balcony would have collapsed much sooner than it did.

43 Dr Siemon gave evidence also as to the durability of Douglas fir. He said it was rated as Durability Class 4, "which means that the outer heartwood would last less than eight years in-ground service". However, the publication to which Dr Siemon referred, quoted:

"a heartwood service life for Douglas fir at Hazard Level 3 (ie above ground exposed) of five years. This is the situation with the balcony ...

It is also worth noting that sapwood of any species is not durable."

44 The last comment is significant, having regard to the evidence of Dr Davison, to which I now turn.

45 Dr Elaine Mary Davison, who is Adjunct Associate Professor at Curtin University of Technology, gave evidence for the Strata Company. Dr Davison is an expert in plant pathology (especially of woody plants), a discipline in which she has had a distinguished career. She has lectured, examined and published extensively (exhibit 24). I accept all of Dr Davison's evidence.

46 Dr Davison inspected the balcony timbers on 19 January and 13 February 1997, after they had been reconstructed to a certain extent.

47 Dr Davison observed that the southern support plate had failed, not the joists. Her examination revealed a considerable amount of brown cubical rot in the southern support plate, particularly the eastern section. The plate was incomplete when Dr Davison first inspected it. However, a neighbour gave her two pieces of wood which had apparently broken away from the lower part of the eastern end (exhibit 25, page 4).

48 As may be seen from Dr Davison's photographs (exhibit 25, pages 20 - 25), there was extensive cubical rot in the sample section from the eastern end of the eastern part of the southern support plate. It affected the whole of the sample: all the wood apart from the outer 1 centimetre was rotten and contained some white mycelium. These are the microscopic threads by which fungus spreads in moist timber (exhibit 25, page 2).

49 Dr Davison took three samples at the western end of the eastern section of the southern support plate, that is, adjacent to the central column (samples 3, 4 and 5).

50 All three samples contained extensive brown cubical rot which extended well into the timber from the face which had been in contact with the outer steel beam. Dr Davison observed that the rot appeared to have started where water had seeped between the wooden plate and the steel beam (exhibit 24, page 1). Fungal mycelium was observed in all the samples (exhibit 24, pages 4 - 6, 18 - 25).

51 The western section of the southern support plate was less affected by rot (exhibit 24, pages 7 - 8).

52 Dr Davison sampled also the western side plate: that is, the outer joist which had been bolted to the steel side beam. There was extensive brown cubical rot, along the whole length of a 180.5 centimetre sample, and underneath the locations where the decking had been attached (exhibit 24, pages 8 - 10, 26 - 35).

53 Dr Davison's visual inspection and probing of the northern wall plate and the eastern side plate did not reveal any rot: nor was any rot found in samples taken from the eastern plate (exhibit 24, page 11).

54 Dr Davison attributed the greater decay in the eastern side of the southern support plate to the fact that the timber contained pith, whereas there was none in the western section. The eastern section would therefore have been "inherently less durable" (exhibit 24, page 12). This, it will be recalled, was Dr Siemon's opinion also (I assume that pith is a component of sapwood).

55 Dr Davison noted in her report that the mechanical strength of timber is lost as it decays. She referred to the work of Winandy and Morrill (1993):

"who have shown that in Douglas fir, weight losses of 1 to 18 per cent are linearly related to bending strength losses of 5 to 70 per cent" (exhibit 24, page 2).

56 Although there is no evidence of the extent of weight loss in the present case, Dr Davison's photographs show that the degree to which the rot affected the eastern section of the southern support plate must have reduced its strength very considerably. Dr Siemon's opinion was that, "in general terms the reduction in strength would be proportional to the loss of cross-section" (exhibit 17).

57 Dr Davison was asked in cross-examination whether rotting would have occurred if the timbers had been jarrah. She said that jarrah would have decayed much more slowly, because it is a more durable timber than Douglas fir or oregon (TS 339).

58 I turn now to the evidence of three professional engineers who are broadly in agreement as to the mechanism by which the balcony failed.

• Donald Phillips, a principal of Connell Wagner Pty Ltd, who has 30 years' experience and whose specialisations include timber structures (exhibit 27): called by the Strata Company.
• Dr Dennis Patrick (Ernie) Evans, an original director and co-founder of Bruechle Gilchrist & Evans, who has 50 years' experience, particularly in relation to the construction of bridges, but also of more general structural engineering (exhibit 33): called by the Strata Company.
• John Sydney Ryan, the principal of John Ryan and Associates, who has over 30 years' experience and who specialises in the design and investigation of building structures (exhibit 5): called by the plaintiffs.

60 The opinion of Mr Phillips and Dr Evans was that the collapse was initiated by the breaking away of the lower part of the southern support plate at its eastern end. (It will be recalled that Dr Davison was given the relevant pieces by a neighbour: they had been missing initially.)

61 Both Mr Phillips and Dr Evans were of the opinion also that the breakage resulted from the weakening of the timber by progressive rot: and that the rot was caused by water which became trapped between the timber of the southern support plate and the steel beam to which it was bolted.

62 The most comprehensive explanation was given by Mr Phillips. It was illustrated by drawing S1 which he included in his report (exhibit 28). In Mr Phillips' opinion, the failure of the southern support plate allowed the four joists at the eastern end of the balcony to fall downwards. As they did so, they created a wedging effect (because the diagonal length of the joist is greater than its nominal length). The wedging effect caused the composite southern support plate and its steel beam to move outward; that is, away from the building.

63 The failure of the first four joists resulted in the transfer of the load they had been carrying to the fifth and successive adjacent joists. The transfer was effected by the decking, which connected the joists to one another.

64 It will be recalled that the joists, which were supposed to have been half-housed into their support plates were in fact housed only to an average depth of 13 or 14 millimetres, so that their load bearing faces were (say) 14 x 48 millimetres, instead of 24 x 48 millimetres.

65 The additional loads imposed on these bearing faces as a result of the failure of the first four joists, had a crushing effect on the joints. The crushing caused the step at the southern end of each joist to deform, so that instead of being horizontal, it bent or curved upwards. (There was corresponding deformation on the lower half of the joists; that is, at the bottom of the slots in the support plate.) This allowed the ends of the joists to slide down and away from the support plate, thereby adding to the wedging action and applying a further significant horizontal force to the southern composite support plates and steel beam.

66 The central column was tied back to the north wall of the building only by the skew nailed joists. The horizontal resistance provided by the skew nails was minimal. And (as Mr Ryan explained) because the eastern and western support plates were separated by the central column, the plate and beam assembly acted as a hinge. This destroyed any stiffness contributed to the assembly by the timber plates (TS 226). As a result, the horizontal force required to deflect the column outwards was small, compared with the wedging force created by the falling joists.

67 The rapid transfer of load from the unrestrained joists, successively from east to west along the balcony, caused the outward deflection of the southern support plates, the beam and the central column, and allowed the remaining joists to slip from their respective housings (because the skew nails could not hold them), and to fall.

68 The tie rods beneath the balcony may have provided some support initially, as the joists fell on to them. However, they were not designed for that service, and the eastern tie rod failed. Further, the force applied to the tie rods by the weight of the balcony and the persons standing on it, would have tended to draw the side columns inwards, and hence, to close the hinge formed by the southern support plate, the central column and the southern steel beam. This would have accentuated the outward movement at the centre of the hinge (ie, the central column) and hastened the collapse.

69 The design of the balcony was such that, once the southern support plate failed, there was nothing to prevent this collapse mechanism from operating as it did: and as rapidly as it did. The graphic technical expression used by the experts to describe this effect, is that there was an "unzipping" of the balcony.

70 I accept the evidence of Mr Phillips that all structures, whether timber, concrete or steel, should be designed with some degree of redundancy, so as to prevent progressive collapse (exhibit 28, page 7; TS 383 - 384). That is, elements should be included in the structure which will permit loads to be distributed to other elements in the event of a failure. Thus the purpose of the redundant member is to prevent what would otherwise be a catastrophic failure of the structure.

71 In the present case, a secure means of tying the central column back to the southern wall of the building would have provided the necessary element of redundancy.

72 The description of the collapse suggested by the expert witnesses is consistent with the evidence of persons who were standing on the balcony at the time, when it fell. Sharon Lee Blackman (nee Gove), the plaintiff in action 2375 of 1997, said she heard "a deafening crack", but did not recall falling (TS 101).

73 Marc Drexel, the plaintiff in action 2414 of 1997, heard "a very loud crack and then almost immediately, the floor coming towards me" (TS 106).

74 Mr Drexel wondered whether his evidence was "compounded by my review of further statements". However, his recollection was that the balcony "seemed to give way to the south-east corner ... but more towards the middle rather than the extreme eastern end": and that it happened "in split seconds" (TS 106 - 107).

75 Mr Ryan's opinion (exhibit 6) was similar to those of Mr Phillips and Dr Evans. However, Mr Ryan thought that the wedging action caused by the deformation of the joints between the joists and the southern support plate had occurred progressively before the collapse. In Mr Ryan's opinion, this was caused by the weakening of the joints due to rot, particularly at joists 2, 3 and 4, at the eastern end of the balcony.

76 Mr Phillips agreed that the rot was caused by water trapped between the southern support plate and the steel beam.

77 Mr Ryan identified a number of defects in the joists, in the form of knots and splits. He depicted the more significant defects in sketches forming part of his report (exhibit 6).

78 All the other joists had significant knots or splits. Some of the splits were new. That is, the timber split when the joists fell. Others were present in the timber for some time before the collapse. This is evident from the weathering of the timber faces inside the splits. They were "a characteristic grey colour". Of the 14 joists, ie, not including those attached to the eastern and western steel beams, only five were said to be "average" or "ok".

79 A different explanation for the collapse was advanced (at least initially) by an engineer called by the plaintiffs, William Jack Apgar. Mr Apgar is a professional engineer with over 30 years' experience, and is the immediate past chairman of the Forensic Engineering Society. Although Mr Apgar's primary focus is on industrial and motor vehicle accidents, he has the qualifications and experience necessary to enable him to give admissible evidence in this case (exhibit 2, TS 148).

80 Mr Apgar's initial view was that the collapse of the balcony was caused only by the deformation in the joints between the joists and the supporting plates over a long period of time. This resulted in the wedging effect referred to above, and slowly pulled the skew nails out of the southern support plate, allowing the joists to become free. In Mr Apgar's opinion, the collapse was precipitated by the weight of the people on the balcony on 31 December 1996, which caused joists 5 - 12 to drop downwards: that is, the joists either side of the central column.

81 In Mr Apgar's opinion as stated originally (exhibit 4) the "clear indication" was that the southern support plate was intact and was supporting joists 1 and 3 before the final failure, although the rot at the eastern end of the southern support plate "possibly left the south end of joist 2 free of the plate" (exhibit 4, par 5.2). However, Mr Apgar's analysis of the marks on the northern wall of the building led him to the conclusion that the western end of the balcony failed first, albeit with only a small delay before the progressive failure reached the eastern end.

82 Initially, Mr Apgar dismissed the suggestion that rot at the eastern end of the southern support plate caused the failure: he said it was "clearly not so" (exhibit 3, page 13). However, he later received Mr Ryan's report and he and Mr Ryan then discussed the matter.

83 As a result of those discussions, Mr Apgar revised his opinion. He said he and Mr Ryan:

"are now both of the opinion that it was a combination of wood rot and wedging which caused the south plate to move outwards and release other joists. This then led to the catastrophic failure" (exhibit 4).

84 The four experts are unanimous in their opinion that if the central column had been tied back securely to the southern wall of the building, the collapse would have either have been averted: or at least, would have happened much more slowly, so as to give the people on the balcony time to escape into the building.

85 There were about 35 people on the balcony when it collapsed. I accept Mr Phillips' evidence that if the balcony had been designed and constructed in accordance with the relevant Australian Standard in force in 1982, it should have taken the weight of about 170 people with a substantial margin of safety. That is to say, the balcony would have carried about double that number before failure (TS 353 - 354).

86 I find, on the balance of probabilities, that the balcony collapsed because the oregon timber from which the southern supporting plate had been cut, was so weakened by rot that it failed suddenly, somewhere in the region of the south-eastern corner. The cause of the rot was the moisture trapped between the southern support plate and the outer steel beam.

87 The failure of the southern support plate caused the joists in that region to fall, thereby creating a wedging effect on the composite southern supporting plate and steel beam. The wedging effect caused the outward deflection of the structure, thus reducing the bearing areas of the joists on their support plates.

88 A combination of the reduced bearing areas and increased load (transferred successively by the decking, to joists adjacent to those which had already fallen) increased the wedging effect, and caused further deflection of the supporting structure.

89 Because the central column was not tied back to the southern wall of the building there was nothing to prevent or restrict the operation of the mechanism described above. The collapse was therefore rapid and complete.

90 If the balcony had been constructed of jarrah, rather than oregon, it would not have rotted to the same extent: and the balcony would not have collapsed as or when it did.

91 If the joints connecting the joists to their supporting plates had been fully half-housed, the structure would have been stronger, but the failure would still have occurred. That is because of the magnitude of the horizontal force created by the wedging effect of falling joists. I accept the expert evidence that half-housing was considered to be an acceptable means of joining the joists to the supporting plates.

92 If the central column had been tied back securely to the southern wall of the building, the collapse would still have occurred to some extent. However, it would not have been catastrophic, so that people on the balcony at the time of the collapse would have been able to escape to the safety of the building.

93 The defects in the timber did not contribute to the collapse.

94 The primary causes of the collapse were therefore:

(1) the use of oregon for the joists and supporting plates; and

(2) the inadequate design of the southern supporting structure.

95 Having regard to those findings, I turn to consider the role of Drexel London and Halpern Glick in the design of the balcony.

96 As I have noted above, Drexel London was the name of the partnership between Ralph Arthur Drexel and Geoffrey London.

97 Mr Drexel studied architecture in the late 1950's at the Perth Technical College, then the only institution in Western Australia at which a course in architecture was available. Having graduated from the Perth Technical College in about 1960, Mr Drexel taught design there for a year. At the end of 1961, he travelled to the United Kingdom where he worked as an architect. He was involved in the design of a new town in Aden, and in overseeing its construction (TS 689).

98 Mr Drexel returned to Perth in May 1965. From then until the early 1970's, he was employed as an architect by Summerhayes and Associates. In that role, he was responsible for the winning design for the Perth City Arcade. He worked also on smaller projects, including domestic architecture, and was involved in an overseeing role (TS 689 - 690).

99 In the early to mid 1970's, Mr Drexel was appointed as a part-time lecturer in design at the University of Western Australia. He became a full-time lecturer subsequently: and was then promoted to senior lecturer. It was Mr Drexel's recollection that he was probably the only practising architect who had joined the university. In those days, his entitlement to engage in private practice was "approximately a fifth of overall time" (TS 688).

100 Mr London graduated as an architect from the University of Western Australia in 1971. From 1970 to the end of 1972, he worked in government. He then spent a period in private practice before travelling during 1973. On his return to Perth in 1974, Mr London again worked for the government for a year. Following that, he worked on a number of architectural projects independently.

101 Mr London studied for the degree of Bachelor of Fine Arts at Curtin University. He graduated in 1980. In 1981, he completed a graduate diploma in fine arts. In 1986 and 1987, he completed post-graduate studies in architecture at the Architectural Association.

102 Mr London lectured full-time at the University of Western Australia from 1984. At the end of 1992, he was appointed a professor in the School of Architecture at the University of Western Australia, a position he has held since then.

103 Professor London's area of specialisation is the history and theory of architecture. He is currently the government architect for Western Australia, having held that position since the beginning of 2004 (TS 797 and exhibit 42).

104 In 1980, Mr Drexel was a much more senior and experienced architect than Mr London. While both were at the University of Western Australia, they formed the Drexel London partnership. I accept Professor London's evidence that he and Mr Drexel worked closely together in the partnership and kept each other informed.

105 Drexel London undertook two commissions. The first was carried out for a cooperative of 13 people, each of whom wanted new units in one complex. The units were tailored individually for the members of the cooperative. The project was constructed under a building contract and proceeded smoothly to a successful conclusion (exhibit 42, par 7).

106 The second commission was the conversion of the Old Soap Factory. Mr Drexel was invited to become involved in this project for Lavender Bay by one of its directors, Barry Millett.

107 Mr Millett, Peter Hollings and a third man (who was, it seems, a passive investor) had formed Lavender Bay for the purpose of developing a large industrial site which included the Old Soap Factory.

The role of Drexel London in designing the balcony

108 The involvement of Drexel London resulted from discussions with Mr Hollings and Mr Millett. On 23 October 1980, Mr Drexel wrote to Mr Hollings confirming that it was the wish of Lavender Bay to refurbish the Old Soap Factory and its immediate environs and convert it to eight units on strata title. (This litigation is concerned with one of the four units in what was originally a three storey building forming part of the Old Soap Factory.)

109 Mr Drexel referred to the fact that his firm had contacted the Fremantle City Council about submissions for planning approval. The firm had been advised that the Council would like to discuss planning proposals before any submission was made. Mr Drexel therefore recommended that the firm work to the December meeting of the Council.

110 On 27 November 1980, Drexel London submitted an account to Lavender Bay for the preparation of measured drawings and preliminary design proposals. On the same day, these drawings and proposals were sent to the city planner at the City of Fremantle (exhibit 1/4). I accept Mr Drexel's evidence that these were probably site plans and elevations.

111 It is clear that the balconies featured in the preliminary designs. This emerges from a letter dated 1 December 1980 written by Mr London to the city planner at the City of Fremantle. He said:

"Decks of timber and steel will be constructed to the two side elevations. The decks will serve two functions; as outdoor living areas and as access to individual fire escape stairs." (exhibit 1/7)

112 On 9 and 11 December 1980, Mr London met Jeremy Dawkins, a Development Officer of the City of Fremantle. As appears from a sketch made by Mr London after the second meeting, the design concept for the balconies was then developed further. This was because Mr Dawkins was concerned to ensure that the visual impact of the balconies was in keeping with the style of the building to which they would be attached. Given that the proposed structure involved timber and steel, the sketch can be interpreted as showing the balconies supported by steel columns with the joist ends supported by steel channels (exhibit 1/82).

113 One of the features of the sketch is that the rafters above the upper balcony, which were originally horizontal, have been pitched slightly downwards. A note on the drawing records that this is "to stop edge kicking up visually and to increase sense of enclosure."

114 The Drexel London working papers which are in evidence as part of the trial bundle, contain perspective drawings of the Old Soap Factory showing the proposed balconies (exhibit 1/1171 - 3). The drawings were prepared by a draftsman (TS 771). Pages 1171 and 1172 fit together. They show the rafters above the upper balcony to be horizontal. They show also a structure involving a concept which is very similar to the final design. It includes decks supported on joists and plates: and it shows the whole structure as being supported on three vertical columns.

115 The drawings are not dated. However, because they show the upper rafters as being horizontal, I infer, on the balance of probabilities, that the drawings were prepared before Mr London met Mr Dawkins on 11 December 1980: and probably, before 9 December. Indeed it was Mr Drexel's evidence that he and Mr London "came up with a design for the balconies long before we came to Halpern Glick" (TS 609). And as will be seen, Halpern Glick was instructed on 4 December 1980.

116 Although the drawings show no constructional detail, the design concept must have been well established by then.

117 On 11 December 1980, Mr London wrote to Mr Dawkins further to their discussions on 9 and 11 December. He enclosed "preliminary recommendations" for the northern and southern balconies of the Old Soap Factory. These incorporated all items discussed. They included:

"1. A slight pitch to the top pergola rafters, with the perimeter beams remaining horizontal.

1. The top perimeter beams and the edge beams to the balcony floors are to be made up of composite steel sections, designed in such a way as to complement the two projecting horizontal bands of rendered brickwork on the main façade of the building.
2. These beams wrap around the face of the columns rather than being recessed behind the columns.
3. The balustrades to terminate at the floor levels, with every fourth baluster projecting through and to be picked up by a minor horizontal element."

Mr London concluded his letter by saying that although the changes would be subject to final confirmation by Lavender Bay, Drexel London would be recommending that the changes be accepted (exhibit 1/83 - 4).

118 It appears that the design work proceeded. Drawings were produced by Drexel London in March 1981. These included a drawing numbered 15 which showed a side elevation of the balconies drawn to a scale of 1:50.

119 Drawing 15 contained a number of structural details set out in notes. These included the following:

• all pergola rafters, plates and balcony joists were to be 'select grade structural jarrah'
• each balcony floor was to be constructed on 16 joists made from timber dressed from 175 x 50 millimetres, evenly spaced and half housed into 175 x 50 millimetre plates at each end
• the wall plates were to be bolted to the brickwork with 'TS-12-7SS steel trubolts' placed centrally between the joists, alternatively 50 millimetres from the top and bottom
• the posts supporting the outer sides of the balconies were to be constructed of square hollow section steel posts having dimensions 127 x 127 x 49 millimetres
• mild steel edge assemblies were to be fabricated at the deck and pergola levels, to consist of 200 x 12 millimetre plate with 127 x 76 x 5 millimetre mild steel section continuously fillet welded to the plate and with a 52 millimetre outside diameter tube fixed into the angle edge. These assemblies were to be 45 degree mitred at the corners
• at the underside of the rafters at the upper level and below the joists at the lower levels, 16 millimetre diameter mild steel rod and turnbuckle assemblies were to be hooked to mild steel eyes 'welded to post and central wall plate'. The dimensions of the wall plate were 300 x 200 x 10 millimetres. The plate was to be fixed to the wall with 4 TS-12-7SS stainless steel trubolts. The timber wall plate was to be 'neatly cut' over the steel wall plate
• the columns were to be bolted to 750 x 750 x 300 millimetre footings, the tops of which were to be set four courses below the new ground level, by 250 x 250 x 16 millimetre base plates. The footings were to be reinforced with F62 mesh, with 75 millimetre bottom cover: and the base plate was to be placed on 25 millimetres of grout.

There was a further note on drawing 15, positioned above the depiction of the balconies. It was as follows:

"Balconies generally as noted below and to structural engineer and architects details and specifications."

120 The details set out in the notes summarised above are engineering, rather than architectural matters. That is to say, the structural integrity of the balconies depended on the correct sizing and appropriate construction of the various elements of the balcony.

121 Although drawing 15 was produced by Drexel London, they (and the plaintiffs) contend that the structural engineering aspects of the design were provided by Halpern Glick. I therefore turn to a consideration of Halpern Glick's role.

122 Halpern Glick became involved in the conversion of the Old Soap Factory in December 1980. This was on the recommendation of Mr Drexel who had worked previously with Mr Glick (TS 554).

123 Graham Lionel Glick was then a very experienced civil and structural engineer. He had graduated from the University of Western Australia in 1952, with a first class honours degree in civil engineering.

124 In 1980, Mr Glick was a director of Halpern Glick, the company formed in the 1970's on the incorporation of the eponymous firm. He had been a partner in the firm since 1960.

125 It was the practice at Halpern Glick to complete an Initial Project Data form when a new job was received.

126 One such form was completed in this matter (exhibit 1/9). The initial job description is said to be:

"Inspect old factory buildings to be converted into residential units, for foundation sufficiency and present structural standard of building. Design new walls and floors - openings to be added."

127 The form showed that Mr Glick was the director involved. No project manager was identified, and a question mark appeared in the space reserved for the name of the design engineer. The form showed that instructions had been received by Mr Glick on 4 December 1980.

128 Mr Glick was unable to identify the writing on the form: nor could he recall instructing the then head of the structural engineering department about the job.

129 On 5 December 1980, Mr Drexel and Mr Glick met at the Old Soap Factory to discuss its proposed conversion to residential use. Mr Glick's evidence, which I accept, is that Mr Drexel said to him words to the effect that "he wanted me to do the structural work to revamp the building. The main thing was to check the soundness of the original structure and to make sure it was possible to put in lift shafts" (exhibit 43, par 9).

130 On 7 December, Mr Drexel wrote to Mr Glick referring to their recent discussions and the site meeting and confirming "on behalf of our clients Lavender Bay Pty Ltd" the appointment of Mr Glick's firm "as structural consultants" for the project. Mr Drexel said that Halpern Glick's fees were to be directed to and paid by Lavender Bay. He went on to say:

"The first stage of your consultancy will include an evaluation of the existing structure to meet the requirements of the sketch proposals. We understand that the work will include a check of the existing footings, investigations of the bearing capacity of existing ground floor slabs for new party walls, a check for the provision of pits for the passenger lifts to units 1 to 4 which must be at least 900 deep below existing entry levels, the condition of the existing timbers including roof trusses and the preliminary design for enlarging the windows on the river wall of the three storey section." (exhibits 1/11 and 11A)

131 Exhibit 11 referred to above is Drexel London's office copy of the letter to Mr Glick. Exhibit 11A is a copy of the letter he received. On it, Mr Glick wrote "received by hand 11-12-80". The letter was addressed to Mr Glick at his firm's office at 1 Ord Street, West Perth. However, Mr Glick could not recall where he received it. This is a matter which might be significant and to which I shall refer below.

132 Two points may be made about the documentary evidence:

1. neither the Initial Project Data form nor Mr Drexel's letter made mention of work relating to the proposed balconies; and
2. Mr Drexel's letter appointed Halpern Glick as consultants, rather than as the structural engineers for the project. That is to say, the inference is that Halpern Glick would be called upon as and when their services were required.

133 It is Mr Drexel's evidence that he obtained the engineering information contained on drawing 15 from Halpern Glick. He said that to the best of his recollection, he engaged in discussions with "an engineer" at Halpern Glick in order to obtain advice as to the structure and configuration of the balconies. Mr Drexel said that to the best of his recollection, that engineer was Mr Lemish (exhibit 38, par 41). That is a reference to Peter John Lemish, an engineer who was then employed by Halpern Glick. In cross-examination, Mr Drexel said he remembered clearly going to see someone in Halpern Glick's office "and sitting at a table and asking questions and noting down the responses" (TS 597).

134 In Drexel London's original defence to the plaintiffs' claim, it was pleaded that Peter Lemish gave the advice which Mr Drexel incorporated in drawing 15. Subsequently, Halpern Glick denied that Mr Lemish had given any such advice (exhibit 40). The defence was then amended to plead that the advice was given by Mr Lemish "or another representative" of Halpern Glick.

135 Mr Drexel appeared to have no recollection of the circumstances in which the pleading was amended (TS 597). However, he said he was "not excellent" at remembering names or faces, especially if he did not know people well. In the end, he said he did not know whether he spoke to Mr Lemish: he might have said he had done so, but he could not remember who it was (TS 598).

136 Mr Lemish graduated from the University of Western Australia in 1973, with a Bachelor of Engineering degree. In 1975, the degree of Master in Engineering Science was conferred on him by the University of New South Wales. Mr Lemish was employed as a design engineer with Halpern Glick from 7 February 1976 until 25 September 1981 (exhibit 44, pars 2 - 3).

137 Mr Lemish gave evidence that in 1981, he was a relatively inexperienced structural design engineer. Most of his experience was in heavy engineering, involving concrete and steel structures such as factory buildings, three and four storey office buildings, process plants and similar structures. He also had experience in concrete cantilevered balcony structures. However, he had limited experience of timber structures or renovation projects.

138 In the course of his employment with Halpern Glick, Mr Lemish was involved in aspects of the engineering design for the conversion of the Old Soap Factory. At the time, Mr Lemish worked under the supervision of Jack Swanson Scott, who was then an associate of the firm. Mr Lemish said the principal engineer directly responsible for the project was Mr Glick.

139 Mr Lemish recalled liaising with Drexel London. He said he met "Drexel London" on more than one occasion before construction began. One such meeting was at the Drexel London office at the University of Western Australia. He also met on site during the demolition and construction phases of the project (exhibit 44, pars 7 - 8).

140 It was Mr Lemish's evidence that he did not provide any input into the details shown in Drexel London drawing 15. Mr Lemish said he might have seen the drawing while involved in the project, but he was never asked to check the details or to comment on the structural adequacy of the proposed balconies. He said that if he had been asked to consider the design of the balconies, he would have completed an Initial Project Data sheet recording receipt of instructions. He said he would have performed calculations when checking the design and that he would have provided drawn design details to Drexel London (exhibit 44, pars 59 - 60).

141 Mr Lemish expanded on his position in a statement given in response to that provided by Mr Drexel. Mr Lemish said he would not have provided Mr Drexel with:

• size of the steel members;
• spacing and type of timber to be used as joists;
• method of tying the balcony back to the building;
• the type of fixing; or
• the wood connections details,

without checking those designs by calculation." (exhibit 45, pars 8 - 17)

142 Mr Lemish said it would have been necessary for him to determine the loads on the structural elements and to determine the appropriate size of the members before specifying the details. He said that while an engineer with experience in timber structures or constructions similar to the balcony might have been in a position to provide those details without first calculating the loads, he did not have that experience.

143 He would not have been able to specify the size and details of the footings, steel members, bracing and fixing details without calculating the relevant loads or forces in the members.

144 Mr Lemish did carry out calculations of the kind referred to above in relation to various other aspects of the Old Soap Factory conversion. These are set out on Halpern Glick calculation sheets (exhibit 1/12 - 49). However, there is no evidence that any such calculation sheets were produced by Mr Lemish or any other employee of Halpern Glick in relation to the balconies.

145 Although, as I have noted above, Mr Lemish said that an engineer with experience in timber structures might have been in a position to provide details to Mr Drexel without first calculating the relevant loads, I doubt whether anyone at Halpern Glick would have done so. That is because I accept the evidence of Peter Blake, an experienced structural engineer in the employ of Halpern Glick. He assumed the role of engineer when Mr Lemish left Halpern Glick in September 1981 (exhibit 46, par 8). Mr Blake said that given the size and exposed position of the Old Soap Factory, it would be necessary to undertake the relevant calculations before advising on the sizes: and this would be "a few hours' work" (TS 884). Mr Blake said there were circumstances in which an engineer might use judgment. However, he was certain that in the circumstances of this case that would not have happened (TS 885).

146 Further, I have the impression from the way in which Mr Glick gave his evidence, that he was not likely to have countenanced the giving of casual advice. A director (Mr Glick in this case) always signed drawings issued by Halpern Glick: and all calculations were recorded and kept (see exhibit 1, pages 12 - 49; 129 - 130). As I have noted above, Mr Glick was punctilious even to the point of noting on Mr Drexel's letter of 7 December 1980, that he had received it by hand on 11 December.

147 In the end, despite Mr Lemish's evidence that it was unlikely he had provided the engineering details to Mr Drexel, he could say only that he had no recollection of the meeting which was the subject of Mr Drexel's evidence. And Mr Drexel could not say positively that he had obtained the information from Mr Lemish.

148 The structural information set out in drawing 15 appears on two sketches made by Mr Drexel and said by him to have been brought back from his meeting with the Halpern Glick engineer (exhibit 1/1268 - 9).

149 The notes contained on those sketches include the following:

• "12 (dia) galv.m.s. rods" - in relation to a sketch of the bracing configuration;
• "stainless steel trubolt TS-12-7SS" - in relation to the fixing of the timber wall plate;
• a half-housed joist-wall plate joint;
• a 200 x 300 millimetre plate, apparently containing eyes which form part of the bracing assembly;
• "timber struct. grade karri" - apparently a reference to the appropriate timber for the construction of the balcony;
• "150 x 150 @ 600 max. centres" - apparently a reference to the joist size;
• a sketch showing a cross-section of the columns with the note:

• a sketch of column footings showing the size 750 x 750 x 300 millimetre incorporating "F62" mesh 75 millimetres below the footing and with 25 millimetres of grout between the base of the column and the top of the footing. At the base of the column a plate 250 x 250 x 16 is shown, this being bolted down by "4/M16 (diameter) HD bolts";
• what appears to be a steel beam 200 millimetres deep and 12 millimetres thick is shown welded by a continuous fillet weld to a 76 x 76 x 5 angle. This appears to be the exterior steel beam at the extremity of each of the balconies.

150 In fact, on drawing 15 jarrah is specified not karri: the joist sizes are shown as 175 x 50 millimetres and the angle welded to the steel beam is shown as 127 x 76 x 5 millimetres. Mr Drexel said he decided to specify jarrah in place of karri because it was a stronger timber; and that he increased the sizes of the joists and the angle in order to increase the strength of the structure. He did so because, in his experience, engineers specified minimum sizes. He said it was "not uncommon" for him to improve on the engineer's specification and that he was competent to do so (TS 545). I accept that evidence.

151 Mr Drexel said also that he had not known in 1981, and did not know now, what a trubolt was. Professor London's evidence was to the same effect. I accept their evidence relating to that matter.

152 I am satisfied on the balance of probabilities that Mr Drexel did obtain the structural information contained in drawing 15 from an engineer. I make that finding for the following reasons:

1. The detailed structural information set out on drawing 15, and in Mr Drexel's sketches, is of a kind which I would expect an engineer to provide. In particular, the very detailed code numbers for the trubolts and the bolts holding down the column base plates. I accept Professor London's evidence that the information falls outside an architect's "skill base" (TS 776).
2. I do not think even an experienced architect, such as Mr Drexel was in 1981, would have been so foolish as to design a substantial structure such as the balconies - and a structure which was to be erected in an exposed position - without advice from a structural engineer.
3. Mr Drexel did not think he was the source of the information, because although he would have been aware of the questions to ask, he would "not necessarily" know "the sizes and the specific information" (TS 672).

153 However, I am not persuaded that Mr Drexel obtained the information from anyone at Halpern Glick. I accept Mr Lemish's evidence that, for the reasons he gave as set out above, it was unlikely that he was the source. He was the engineer assigned to the project, but although there are calculation sheets of his which relate to other structural aspects of the building, there are none relating to the balconies.

154 As I have noted above, Mr Blake replaced Mr Lemish when he left the employ of Halpern Glick. Mr Blake said, and I accept, that he had no recollection of seeing any balconies on the Old Soap Factory site, nor of any involvement with structural aspects of the balcony design (exhibit 46, par 22).

155 As I have noted above, Mr Scott also worked on the project. His evidence, which I accept, was that he did not design the balconies: nor did he provide any suggestions for their design or otherwise consider those structures (exhibit 48, par 21). Mr Scott had refreshed his memory from the records he kept of the work he carried out in 1981 and 1982; and also from his diaries (although he was unable to find his 1981 diary) (exhibit 48, pars 13 - 15).

156 Halpern Glick's site inspector in 1982 was Jeffrey Welch. I shall refer to his evidence in more detail below. It is sufficient to record in this context, that Mr Welch was surprised to learn that steel he saw on site was intended for the construction of balconies. I am satisfied that if Halpern Glick had been involved in the design of the balconies, Mr Welch would have been aware of that fact before he saw the fabricated steel.

157 As I have noted above, the design of the balconies was being developed at about the time Halpern Glick were instructed, early in December 1980. That being so, if it was Mr Drexel's intention to have Halpern Glick provide a structural design for the balconies, it is likely that some mention would have been made of that in the correspondence.

158 In fact, Mr Drexel's evidence, in cross-examination was that Drexel London did not feel it was necessary to have Halpern Glick carry out the kinds of engineering calculations that were done in relation to other aspects of the work (TS 610). This further supports the view that Mr Drexel had obtained the information contained in drawing 15 before he went to Halpern Glick.

159 Mr Drexel's evidence was that he "clearly" remembered going to Halpern Glick's offices "and sitting at a table and asking questions and noting down the responses" (TS 597). He said he presumed the appointment had been arranged, because he went to a meeting (TS 599).

160 If that is what happened, then Mr Drexel must have been given advice without any calculations being carried out by the engineer. And yet this is inconsistent with Mr Drexel's evidence that he would have considered the engineer "very remiss" in providing the sizes without doing the calculations (TS 673).

161 Later in his evidence, Mr Drexel said he thought the occasion of which he spoke was the only time he had been to Halpern Glick's offices: and that he knew he had made an appointment. Later still, Mr Drexel said he might not have remembered other meetings at the offices (TS 724).

162 It will be recalled that Mr Glick had endorsed Mr Drexel's letter to him of 7 December 2000, with the words "received by hand". The letter was addressed to Mr Glick at his office. That being so, there is an inference that Mr Drexel delivered the letter to Mr Glick at the office, which, he thought, he had visited only once. And if that was so, then he must either have obtained the information recorded on drawing 15 from Mr Glick, or from some source other than Halpern Glick.

163 Mr Drexel said he doubted he had obtained the information from Mr Glick, because he knew him (TS 725). (I understood Mr Drexel to mean that if Mr Glick had been the source of the information, he would have remembered.)

164 Mr Glick was not asked whether he had given the information to Mr Drexel. However, I think it improbable, because there is no record of his having done so.

165 When these matters were raised with Mr Drexel, he said:

"Maybe I'm stupid for having said I'd only been there once, but I cannot recollect going there or delivering a letter by hand" (TS 725).

166 With the greatest respect to Mr Drexel, I think he has very little recollection of the events in question. That emerges not only from the evidence referred to above, but from his responses generally to the questions he was asked in a very lengthy cross-examination. It was my impression that when documents were put to him, very few refreshed his memory. Rather, they prompted an interpretation. This is clear enough from the transcript.

167 I have referred previously to Mr Drexel's initial assertion that he obtained the structural information from Mr Lemish, and his subsequent position that he had thought it was Mr Lemish. I shall refer later in these reasons to Mr Drexel's denial that he had ever stood on the balcony, which is in direct conflict with the instructions he gave to his solicitor some years earlier.

168 I accept that Mr Drexel believes he obtained the structural advice from Halpern Glick. The onus is on him (and the plaintiff) to prove that he did. However, in my view, the evidence is insufficiently strong to constitute proof on the balance of probabilities. I do not find that Mr Drexel did not obtain the information on drawing 15 from Halpern Glick: but I think it improbable.

169 In any event, apart from an unattributed reference in the minutes of a site meeting, the only evidence that Halpern Glick was the source is that of Mr Drexel himself. And for the reasons set out above, I place no weight on that evidence.

170 The minute is undated, although it appears in the sequentially numbered pages of the minute book between the minutes of the meetings on 31 March and 7 April 1982 (exhibit 1/1046).

171 The meeting is said to have been attended by Mr Drexel, Mr Millett, Mr Hollings and "J Bennett", who was Mr Millett's secretary or personal assistant. Under the heading "Balconies" the minute records:

"Halpern Glick to be in attendance when being installed to make sure balconies comply with their design". (my emphasis)

172 I accept Mr Drexel's evidence that the handwriting is not his. There is an inference that it was Ms Bennett's writing, but she was not called to give evidence. I therefore place no weight on this minute as evidence in support of Mr Drexel's assertion.

173 Although drawing 15 contained sufficient structural information to enable Lavender Bay to obtain a building licence, it contained insufficient detail to enable the balconies to be constructed. The following further information was required:

1. The method of joining the timber plates on each side of the central column to the steel beam forming the southern edge of the balcony.
2. The method of fixing the joists at the east and west extremities of the balcony to the steel beams which formed the sides.
3. The method of fixing the east and west joists and steel beam assemblies to the north wall of the building.
4. The method of fixing the joists to the supporting plates at the north and south sides of the balcony, that is, at the half-housed joints.
5. The configuration of the rod and turnbuckle assemblies connecting the steel columns back to the north wall of the building.
6. The method of fixing the decking to the joists.
7. The specification for the balustrades and edge trellises surrounding the balconies.

174 I accept Professor London's evidence that one of the purposes of drawing 15 was to make it clear that further structural engineering and architectural detail would be required (TS 791). Indeed, that is contemplated by the note on the drawing, to which I have referred above, that balconies were to be constructed "as noted below and to structural engineer and architects details and specifications".

175 It appears from a letter dated 19 May 1981, written by Mr London to Lavender Bay, that a set of drawings, including drawing 15, had been lodged with Halpern Glick. It is not clear when the drawings were given to Halpern Glick. However, there is no evidence that Halpern Glick was ever asked to check the balcony drawings or (with one exception, to which I shall refer below) to provide any of the missing detail. This is not surprising, given Mr Drexel's evidence that the drawings were given to Halpern Glick for information about the nature of the job (TS 677). I prefer that evidence to Professor London's evidence that the purpose of lodging the drawings with the engineer "was to have them check exactly what had been recorded" (TS 784).

176 The evidence is that the steel work for the balconies was fabricated by an organisation known as Phillips Engineering. I accept the evidence of Mr Drexel and Mr Welch (the Halpern Glick site inspector) that the steel work could not have been fabricated without the preparation of shop (or fabrication) drawings. These are drawings prepared by the fabricator which contain sufficient detail to enable the steel to be cut and welded as appropriate.

177 As I have noted above, one of the missing details from drawing 15 was the means of fixing the timber support plates to the southern steel beam. In the event, this was effected by welding a series of bolts to the steel beam. Holes were drilled in corresponding places on the wooden plates which were then placed over the bolts and secured by nuts screwed down on to the bolt ends. I infer that this detail was provided by Phillips Engineering, either alone, or in conjunction with Mr Bumstead.

178 Although drawing 15 was prepared in March 1981, the balconies were not erected until over a year later.

179 Mr Welch was employed as a site inspector by Halpern Glick from about 1979 onwards. He had worked previously as a structural design and civil draftsman. He was qualified in that field but had no engineering qualifications.

180 As a site inspector, Mr Welch's duties included visiting sites to check work in progress to ensure that it was being carried out in conformity with Halpern Glick's designs and specifications (exhibit 47, par 10).

181 Mr Welch thought he had visited the Old Soap Factory site about 10 to 15 times. Most of the work he carried out was in relation to the conversion of the interior. However, he became aware of the proposal to construct balconies when he attended the site on one occasion and saw some steel work which had been delivered to the site and was stacked to the north of the building.

182 Mr Welch asked someone on the site what the steel structure was. He was told it was for the balconies. He asked who had authorised the construction of the steel and who had designed it. Mr Welch did not remember the response exactly, but he believed he was told something to the effect that it was on the architect's drawings. The event was significant for Mr Welch because it was unusual that an apparently substantial amount of structural steel had not been included on the engineer's drawings; and it was a matter about which he had no prior knowledge.

183 Mr Welch's usual practice was to look immediately at the architects' drawings of the balconies. However, having looked in recent times at drawings including drawing 15, he was not able to recognise them as the drawings he looked at after asking about the steel structures.

184 Mr Welch had a recollection of discussing the balcony steel with someone at Halpern Glick but he did not recall who that person was, nor did he recall any details of the discussion nor what further action might have been planned, if any (exhibit 47, pars 48 - 56).

185 As I have noted above, Halpern Glick were given a set of the Drexel London drawings in about May 1981. Mr Welch said in cross-examination that it was his job to look for non-approved structures and make sure that whatever was happening on site conformed to the requirements of the engineer. Had he discovered that there was a non-approved structure "he would have been 'pushing all the alarm bells' because that was what I did" (TS 904 - 905). Although that evidence is in the nature of reconstruction, I accept it as reflecting a system of work with which Mr Welch was very familiar.

186 On 8 April 1982, Mr Welch attended the Old Soap Factory site at the request of Mr Bumstead. Mr Welch subsequently prepared a Halpern Glick site report in which he set out the detail of the matters he had been asked to address. On that occasion these matters included the construction of the balconies. Mr Welch's report noted:

"The erectors of the steel work had experienced difficulty in securing horizontal bracing to the brick wall in that the trubolts fixing the anchor plates pulled out when tension set in to braces via the turnbuckles. Alternative fixing details were discussed with Bumstead & the following agreed to: ..." (exhibit 1/376 - 7)

187 As appears from the sketch below Mr Welch's note, he proposed that the steel plate carrying the ends of the bracing rods should be secured to the southern wall of the building by bolts which passed through the wall, rather than by trubolts which penetrated only a short distance into the wall.

188 Although Mr Welch was asked to deal with that specific problem, he noted also that there was no system for attaching the returns of the steel frames forming the eastern and western sides of the balconies to the building. He said that the beam ends were simply supported and set into pockets in the brick wall (exhibit 47, par 60).

189 Mr Welch discussed that matter with Mr Bumstead. Although he did not recall the content of the conversation, it is clear that he provided the detail which was missing from drawing 15. As appears from Mr Welch's sketch, this involved welding a right angle cleat on to the beam end and securing the cleat with a bolt passing through the brick wall.

190 It is apparent also that Mr Welch noted that the central column on the southern side of the balcony was not secured to the southern wall by a tie rod as were the corner columns. On his sketch, Mr Welch noted that the central column was to be "tied back by joists". He did not, however, provide any detail as to the way in which that tying back would be achieved.

191 Mr Welch's practice was to complete his site report on his return to the office where he would discuss the advice he had given with an engineer. However, before leaving the site, Mr Welch would leave with the builder, sketches which were later reproduced in his site report.

192 Mr Welch impressed me as a careful and conscientious witness who had a genuine recollection of the events of which he spoke. I accept his evidence generally. In particular, I accept his evidence that he was careful to ensure that whatever he did was approved by a qualified engineer; and that if such approval was not given, steps would be taken to remedy the situation.

193 In the light of Mr Welch's evidence, I find that although the Drexel London drawings (including drawing 15) had been given to Halpern Glick in May 1981, Halpern Glick had not provided any of the missing detail because there had been no request to do so. I find that there were shop drawings, but that they were prepared without input either from Drexel London or Halpern Glick. Had there been any such input, then the detail such as that provided by Mr Welch for the fixing of the east and west side beams of the balcony, would have been supplied before the steel was fabricated. I accept Mr Welch's evidence that the fabrication drawings for the balconies were prepared by Phillips Engineering (TS 888). They had previously prepared such drawings for the internal lift structure (exhibit 1/1027 - 8).

194 Mr Welch's attendance at site on 8 April 1982 was the result of a decision recorded in the minutes of the site meetings on 7 April in relation to the balconies for units 1 and 4 that:

"Halpern Glick and Phillips Engineering to liaise closely on tying and bolting decks back to existing building to ensure absolutely secure and permanent security of the decks, building and fittings." (exhibit 1/1049)

195 It is not clear precisely when the balconies were completed. According to a site minute of 21 April 1982, Phillips Engineering had advised that the southern balcony would be finished on 28 April and the northern balcony on 30 April. The minute records that timber work could proceed after those dates (exhibit 1/1055 - 7).

196 The minutes of the meeting of 27 April record that Lavender Bay was to employ a team of four carpenters to complete the unit 1 and 4 balconies under the supervision of B Hardacre (exhibit 1/1059).

197 On 12 May 1982, the minutes record that the handrails for the unit 1 and 4 balconies were to be run in redwood (subject to the size being available). Mr London sketched a detail showing the profile of the handrails (exhibit 1/1064).

198 It appears that redwood was not available. On 14 May, the minutes record that handrails to the balconies for units 1 and 4 should be made from western red cedar (exhibit 1/1069). However, whether the balconies had actually been constructed at that stage is not clear.

199 Thereafter, there were meetings on 21 May, 2 June, 3 June and 9 June 1982. None of these minutes records the progress of the balcony construction. However, on 9 June, there is a note relating to unit 4 balcony rafter that:

"2nd rafter in from river side (check) has a join - replace with full length rafter." (exhibit 1/1077 - 80)

200 Unit 4 there referred to became unit 1, occupied subsequently by Mr Black.

201 The rafters are located at the top of the structure, above the upper balcony. I therefore infer that it is probable that by this stage, the balconies had been completed or were nearing completion. In either of those circumstances, the decision must have been taken to use oregon for the joists and rafters rather than the jarrah which had been specified. The site meetings contain no reference to this decision. I therefore draw the inference that it was not raised at a site meeting.

202 I accept the evidence of Mr Drexel that Mr Bumstead was a competent builder. A registered builder such as Mr Bumstead would have known that oregon was not suitable as a structural timber for exterior use. I therefore draw the inference that Mr Bumstead did not substitute oregon for jarrah on his own initiative.

203 I accept that neither Mr Drexel nor Mr London were told about the substitution and that they did not suggest or authorise it. The inference is therefore overwhelming that the substitution was carried out on the instruction of Lavender Bay.

204 The fact that the final site meeting took place on 9 June 1982 suggests that the works were almost complete by that stage. This is consistent with the fact that at the end of June 1982, Mr Drexel and Mr London were asked to prepare a list of items to be rectified and completed.

205 The list is a substantial document (exhibit 1/392 - 411). I accept Mr Drexel's evidence that it was prepared as a result of inspections carried out by him and Mr London over a lengthy number of visits (TS 546). According to the first page of the list, compilation was commenced at the end of June 1982. It is there recorded that:

"These notes cover items relating to construction and finishes only. All structural items are to be checked by Halpern and [sic] Glick."

206 The list sets out matters requiring attention unit by unit and level by level. The notes do not suggest that the list was to be confined to the interior of the building. Indeed, it is clear that numerous external aspects of the building were inspected. Despite that, Mr Drexel and Professor London both said that they had not gone on to the balconies during the course of the inspection.

207 This evidence conflicts with a statement set out in a letter dated 27 October 1998 from Minter Ellison to Phillips Fox. Minter Ellison were Drexel London's solicitors in 1998. In their letter, Minter Ellison set out their client's position, apparently in relation to a synopsis of the case prepared by Phillips Fox. Minter Ellison said:

"Your synopsis also mentioned that either or both members of [Drexel London] were on the balconies from time to time. We are instructed that the assertion is correct but that both members of [Drexel London] were on the balconies for the sole purpose of obtaining a visual perspective on the work being completed inside the building. It was not their responsibility as design consultants to check that the joists etc were jarrah." (exhibit 39)

208 In cross-examination, Mr Drexel denied that he had given such instructions to Minter Ellison (TS 530), while Professor London said he had no recollection of doing so (TS 733).

209 The reference on Minter Ellison's letter is "TEE:SFM". I take the reference to TEE to be to Mr T E Elisara, who is referred to in the body of the letter. I take the reference to SFM to be Mr S F Mullins, whose name appears on the letterhead as a partner of Minter Ellison. In cross-examination, Professor London said he had met both of those lawyers and would have discussed the facts with them. He said his recollection was that both he and Mr Drexel were present at the meetings: he was not aware of any other source of information Minter Ellison might have had, in order to make the statements contained in their letter. He assumed it was possible that Mr Drexel might have given instructions when he was not present (TS 734).

210 Although this is not a collateral issue, no application was made on behalf of Drexel London for either Mr Elisara or Mr Mullins to give evidence relating to the instructions they took from Mr Drexel or Professor London about the matters which appeared in the letter.

211 In my view, it would be surprising if, on a matter as important as this, Minter Ellison had so completely misunderstood their instructions as to interpret a denial by Mr Drexel and Professor London that they had ever been on the balconies at all, as an admission that they had stood on them "from time to time". Indeed, as I understood Mr Drexel's evidence, he accepted that it did appear as though he had given the instructions recorded in the letter and that "conceivably" he had forgotten doing so (TS 530).

212 In these circumstances, I draw the inference that in 1998, when these matters must have been fresher in the memory of Mr Drexel and Professor London, their recollection of having stood on the balconies from time to time was correct, but that this recollection has faded with the passage of time between 1998 and now.

213 For the same reason, I do not accept Professor London's evidence that he recalled a sense of disappointment in not having had the experience of standing on the balcony (TS 735). If Professor London had carried that sense of disappointment with him for the past 25 years, I have little doubt that it would have been noted in the Minter Ellison letter of October 1998. The fact that it was not, leads me to the conclusion that believing, as he does now, that he had not been on the balconies, Professor London has reconstructed a sense of disappointment rather than recollecting it.

214 Indeed, I formed the clear impression from the way in which Professor London responded to many of the questions asked of him in cross-examination, that he was reconstructing. He acknowledged, in the course of cross-examination, that his recollection was "a broad one without any detail" (TS 762). Therefore, although I accept that Professor London gave his evidence honestly, it carries little weight.

215 One of the entries on the list of items to be rectified relates to deck level 4 of "unit 1". This is the upper balcony level on the northern unit, which is now unit 4. The notes record:

"- Asbestos cement downpipe fractured at level 4.

- Point brick work at stopcock entry.

- Quoinwork damaged in parts - rectify.

- Clean rubble from deck to wall joint.

- 'Blocks' to French doors in open position - check with [Drexel London].

- Fit missing bolts to steel and timber framing.

- 'Knobs' to cap external spiral - Phillips." (exhibit 1/394)

216 In my view, the reference to cleaning rubble from "deck to wall joint" suggests that the balcony decking was in place. Indeed, if the decking was not in place at the time, that would be a major outstanding item which would have been recorded: and a fortiori if the joists had not been in place.

217 Further, the reference to fitting missing bolts to "steel and timber framing" suggests that the author of the note had looked at the timber and steel framing supporting the pergola above the balcony at level 4.

218 Mr Drexel accepted in cross-examination that he might have been on the balcony identified in the note (TS 547). However, he suggested that the reference to the missing bolts was to the fixing of door frames and jamb linings on the door leading to the balcony. He pointed to the item in the specification which provided:

"For concrete or existing walls drill jambs for and provide 9mm galvanised bolts at 300mm centres, projecting at least 50mm into concrete, with heads of bolts in concrete or brick work. Check out jamb faces neatly to take nuts and washers and dowel or pellet flush with faces." (exhibit 1/217)

219 I am unable to accept that explanation. The specification for door frames relates to the fixing of timber to brick or concrete door surrounds. The specification calls for 9 millimetre galvanised bolts to be set into the concrete or brick work. The wooden door frame would be drilled so as to fit over the bolts. Nuts would then be set into the timber so that they could be screwed down on to the protruding bolts. The resulting hole would be dowelled or pelleted flush with the faces. Had any nuts or bolts been missing, it would have been inappropriate to refer to them as missing from steel and timber framing.

220 Further, the fixing of door frames and jamb linings falls within that part of the specification relating to joinery. However, the reference against the note about missing bolts to steel and timber framing is to carpentry. Although this is, strictly, a structural matter, it was the carpenters who erected the timber components of the balconies. I infer that they would have been required to insert the relevant bolts.

221 When it was put to Mr Drexel in cross-examination that there was no steel involved in the doors leading to the balconies, he said that "conceivably", the reference could have been to a steel lintel.

222 Professor London surmised that there was steel to the head of the door. However, when pressed, he accepted that there was no steel framing in that location: and that "framing" described the steel surrounding the deck (TS 825 - 826).

223 In my view, whether it was Mr Drexel or Mr London who looked at the steel and timber framing and noticed that the bolts were missing, he must have seen that the timber was oregon and not jarrah. As Professor London accepted in cross-examination, distinguishing between oregon and jarrah "is as involved as differentiating between red wine and white". He said that freshly cut oregon was a much lighter timber than freshly cut jarrah (TS 823). Mr Drexel said that old timber would definitely not have been used in the construction. He accepted that it would have been fairly easy to differentiate or distinguish between oregon and Jarrah "if he had been looking for that" (TS 852).

224 The point is well illustrated by reference to a photograph taken by Dr Evans, of the timber and steel framing at the lower balcony level of the northern unit, where a bolt is missing (exhibit 34, photograph 10). This was obviously not one of the bolts referred to in the Drexel London list of items referred to above. However, it is clear that whoever had noted that the bolt was missing could not have failed to notice that the timber was something other than jarrah.

225 Professor London accepted that he must have seen the complete balconies, but said he "did not spend any time looking at the timber work in them". Had he done so, he said, he would "certainly have drawn it to the owner's attention as an inappropriate material to use in that setting" (TS 813). Later in his evidence he said:

"I do know that if I had've seen that oregon was used, I would've made reference to that because I would've been alerted to the fact that instead of what had been recommended as a strong, durable timber, a non-durable timber was being used. It therefore allows me to feel some confidence that this is not referring to the fixing of oregon to steel because if it had've been, I would've referred to the oregon." (TS 828)

Professor London was therefore unable to accept that he had seen oregon used in the framing. When asked specifically to account for the fact that he had not observed oregon on the four balconies, Professor London said:

"I am confident in myself that if I had've seen oregon I would've made reference to it. I would've referred it to engineers. I would've referred it to the owners. That's what gives me the confidence to say I never saw the oregon.

...

I know that if I had have seen it I would've done something about it, so it seems reasonable to say therefore that I did not see it." (TS 838)

226 Mr Drexel's evidence was to the same effect. When suggested to him in cross-examination that he could not have failed to see that oregon had been used when carrying out his inspection in June 2002 he said:

"... if I had noticed it, I would certainly have raised it, because we raised very minor issues in that long list and that certainly a major issue would have been raised with emphasis and probably not left for the list to be issued, but it would have been raised immediately as to why and what was going to be done about it, if anything, not that we had control over that, you understand." (TS 713)

227 The tenor of all this evidence is again that of reconstruction. In essence, Professor London and Mr Drexel said that if they had seen oregon in place of jarrah they would have noted it: they did not note it and therefore could not have seen it.

228 While this is no doubt a rational approach, I do not accept it as an accurate recollection of the events of 25 years ago. To the contrary, the evidence to which I have referred above, leads me to the conclusion, on the balance of probabilities, that Professor London and Mr Drexel did see that oregon had been used in the construction of the balconies but, for some reason, did not record that fact.

229 There is the hint of an explanation in the evidence of Mr Drexel that "there was a little bit of friction occasionally and towards the end" (TS 591). This is reflected in a letter dated 20 June 1984 from Lavender Bay to Drexel London's then solicitors, in response to the solicitors' pursuit of unpaid fees in an amount of $2500 (exhibit 1/459).

230 Professor London's evidence was that the balconies were constructed during a period when "the whole project had reached a state of some unpleasantries" (TS 762).

231 However, Drexel London did place on record their recommendation that Halpern Glick be commissioned "to carry out a comprehensive inspection of all structural aspects of this project, to ensure that all such work has been carried out to their satisfaction". This recommendation was made in a letter dated 22 October 1982 from Drexel London to Lavender Bay (exhibit 1/419). It was repeated in a similar letter dated 1 December 1982 in which Drexel London said they understood from Halpern Glick that to date, they had not been requested to carry out a structural inspection of the project as recommended in the letter of 22 October. Drexel London said:

"We consider this an important item and believe it is in your best interests to have such an inspection carried out." (exhibit 1/456)

The recommendation was repeated in a letter dated 4 August 1983 from Drexel London to Lavender Bay (exhibit 1/458).

232 The plaintiff pleads that in about October 1980, Lavender Bay agreed with Drexel London that they would provide services and carry out work in relation to the conversion of the Old Soap Factory into apartments (which conversion included the construction of the balcony) in consideration of the payment of a fee by Lavender Bay to Drexel London.

233 It is pleaded that the agreement was partly oral and partly written: the oral part consisting of an "as yet unknown number of conversations" and the written part contained in or inferred from one or more of a letter dated 23 October 1980 from Drexel London to Lavender Bay, a letter dated 24 October 1980 from Lavender Bay to Drexel London and a series of fee notes rendered by Drexel London to Lavender Bay between 27 November 1980 and 18 June 1981.

234 Particulars of the work are given. It is alleged that the work to be carried out by Drexel London was divided into four discrete stages whereby Drexel London would be paid the following fees in relation to the following stages:

• Preliminary design 20 per cent
• Design development 20 per cent
• Documentation 30 per cent
• Contract administration 30 per cent.

"In carrying out the Work and the Construction Work [Drexel London] was under a duty of care to act with all due professional skill, care and diligence in the performance of same so as to ensure that the Building was designed and constructed in a manner such that it would not cause injury to a person or persons such as the plaintiff who could reasonably have been expected to use the Building in the ordinary way associated with the purpose for which it was constructed, namely residential apartments ..." (Statement of Claim, pars 46 - 47)

236 The plaintiff goes on to allege that at all material times, she was a member of the class of persons to whom Drexel London owed the duty of care, being an invited guest of Mr Black (Statement of Claim, par 48).

237 In Tame v New South Wales; Annetts v Australian Stations Pty Ltd [2002] HCA 35; (2002) 211 CLR 317, Gleeson CJ, Gaudron, Gummow and Kirby JJ held that when considering whether a person has been negligent, the central question is whether, in all the circumstances, the risk of the plaintiff sustaining injury was reasonably foreseeable. As Gleeson CJ put it at [8], negligence:

"involves a failure to protect the interests of someone with whose interests a defendant ought to be concerned. A definition of the ambit of a person's proper concern for others is necessary for a decision about whether a defendant's conduct amounts to actionable negligence. The essential concept in the process of definition is reasonableness. What is the extent of concern for the interests of others which it is reasonable to require as a matter of legal obligation, breach of which will sound in damages?"

238 In my view, the answer to that question is clear in the present case. It emerges from the cross-examination of Mr Drexel. He said that had he known that the balcony was constructed of oregon:

"it would've been a concern even at that stage about workmen on them, but it was a long-term effect of the timber that would've worried us." (TS 724)

239 The claim against Drexel London has two bases. The first is said to arise from an allegedly negligent design. The plaintiff pleads that the duty of care owed by Drexel London imposed on them an obligation to:

"Properly design the Building so as to reasonably ensure it was safe and suitable for the purpose for which it was intended, namely residential apartments." (Statement of Claim, par 51(i))

240 In relation to that allegation, it is said that Drexel London breached their duty in that they:

"... designed detailing such that moisture could be trapped both in the housed joint and between the steel support beam and the Plates." (Statement of Claim, par 52(f))

241 In considering the cause of collapse of the balcony earlier in these reasons, I found that the cause of the rot in the southern support plate in which the joists were housed, was the moisture trapped between the plate and the outer steel beam. It was the Drexel London design which resulted in moisture being trapped in that way.

242 As I have noted earlier, the evidence is that if jarrah had been used in the construction of the balcony, it would have rotted eventually, but at a much slower rate than oregon. That being so, I think there is considerable force in the argument that if jarrah had been used, rot resulting from trapped moisture would not have advanced to the stage it did by 31 December 1996, with the result that the balcony would not have collapsed then and the plaintiff would not have suffered injury.

243 That being so, I consider that although Drexel London ought to have foreseen that their design would result in moisture being trapped between the steel and timber elements of the balcony, they would not have foreseen the degree of rot which gave rise to a risk of collapse.

244 In other words, I think the possibility of jarrah rotting in this environment was so small as to be discounted.

245 I am not persuaded, therefore, that Drexel London were negligent (in a legal sense) in designing the balcony in such a way that moisture was trapped between the steel and timber members.

246 The second aspect of the plaintiff's claim relating to the design of the balcony is the allegation that Drexel London "failed to provide for stabilising bracing of the central column of the Balcony" (Statement of Claim, par 52(h)). I have previously accepted the evidence of Mr Phillips that all structures should be designed with some degree of redundancy to prevent progressive collapse. That being so, I conclude that an architect is negligent if his design does not incorporate an appropriate degree of redundancy.

247 In the present case, there was no redundancy in the southern composite supporting plate and beam structure. That is to say, there was nothing to restrain the outward movement of the structure in the event of a deck collapse. It will be recalled that very little horizontal force was required to achieve that movement because the break in the southern composite plate and beam where it abutted the central column, resulted in that member acting as a hinge.

248 I have accepted the evidence of those experts whose opinion it was that a restraint on the central column would have prevented (at least) the catastrophic collapse of the balcony. Mr Drexel's argument is that:

"... If [the balcony] had been built in jarrah and the connections were correctly done, I don't think there would have been any real risk of that column moving out" (TS 717).

249 I do not accept that proposition. It was obvious to Mr Welch that the central column should be tied back. He had plans which specified jarrah: and he had no reason to suppose that the joists would be cut inaccurately. In other words, even though the risk of the column moving outwards was small, it was a risk which could easily have been eliminated: and in my view, should have been. That conclusion, I emphasise, is not reached with the benefit of hindsight: it was apparent before the balconies were constructed.

250 I therefore consider that Drexel London were negligent in failing to incorporate that stabilising element in their design of the balcony. That failure was a cause of the collapse of the balcony and the plaintiff's injury.

251 The second basis for the plaintiff's claim against Drexel London is pleaded in par 51(a) to (h) of the Statement of Claim. It is there alleged that during the carrying out of their work and in the course of the work carried out on the Old Soap Factory, Drexel London, being under the duty of care referred to above, was to exercise all due professional skill, care and diligence in the performance of its services, which duty reasonably required Drexel London to:

"(a) Monitor, inspect and supervise the progress of the Construction Work;

(b) bring details of any defective work and materials to the attention of Lavender Bay;

(c) approve the workmanship of the various tradesmen involved in the Construction Work;

(d) approve samples of materials to be used in the Construction Work;

(e) ensure that the Construction Work was carried out in accordance with the Specifications;

(f) ensure that the Construction Work was carried out in accordance with the fifth defendant's drawings and the fifth defendant's design requirements;

(g) compile lists of defects and lists of respects in which the Construction Work did not conform to the Specifications;

(h) liaise with Lavender Bay's construction manager and take such reasonable steps as were necessary to ensure that the Construction Work conformed in every respect with the Specifications;".

252 The Specifications referred to above are those referred to in par 49, being the specifications admittedly prepared by Drexel London for the building works relating to the Old Soap Factory project (Defence of the Fifth Defendant, par 28).

253 The plaintiff submits that the legal basis for the duty of care is that set out by Windeyer J (with whom Dixon CJ and Owen J agreed) in Voli v Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74 at 85:

"... neither the terms of the architect's engagement, nor the terms of the building contract, can operate to discharge the architect from a duty of care to persons who are strangers to those contracts. Nor can they directly determine what he must do to satisfy his duty to such persons. That duty is cast upon him by law, not because he made a contract, but because he entered upon the work. Nevertheless his contract with the building owner is not an irrelevant circumstance. It determines what was the task upon which he entered."

254 It follows from this statement of the law, that in order to consider the claim as set out above, it is necessary to have regard both to the contractual arrangements between Drexel London and Lavender Bay and to the nature of the work carried out in accordance with those arrangements.

255 I have referred above to Drexel London's letter of 23 October 1980, confirming that it was the wish of Lavender Bay to refurbish the Old Soap Factory. In that letter, Drexel London accepted the commission on the basis that their fees would be eight per cent of the total building costs, staged in the manner referred to above.

256 At that time, it was contemplated by both Drexel London and Lavender Bay that the conversion works would be carried out by a builder. This is clear from a letter dated 27 November 1980 from Drexel London to Lavender Bay, in which reference is made to Lavender Bay's agreement that a builder, Mr Howard Moore, was to be asked to prepare a building cost estimate. Drexel London said their understanding was that they were to proceed with contract documentation immediately after completion of the design development stage and after Lavender Bay's acceptance of the design and the builder's cost estimate (exhibit 1/5).

257 On 8 December 1980, Drexel London prepared an outline of procedures, materials and finishes for costs estimates for the conversion of the Old Soap Factory. The estimates were to be based on "Edition 5b Lump Sum Contract ..." (exhibit 1/62 - 63).

258 On 11 December, Drexel London wrote to Mr Moore requesting that he provide a detailed cost estimate for the conversion works and confirm that he would do so by 22 December. Mr Moore provided his estimate by letter dated 23 December 1980 to Drexel London. He pointed out that his estimate of $499,000 was not a firm quote because much more detail would be required (exhibit 1/88).

259 It appears that by the beginning of March 1981, Lavender Bay had not decided how it would proceed. On 4 March, Drexel London wrote to Mr Hollings of Lavender Bay referring to a meeting of the previous day in which a number of ways of contracting a builder had been discussed. They confirmed that their documentation was being prepared in such a way that an Edition 5b Lump Sum Contract could be used. They awaited Lavender Bay's instructions as to the form of contract selected for the project (exhibit 1/128).

260 On 16 March 1981, Drexel London wrote to Lavender Bay confirming that it was "interested in pursuing the possibility of employing Mr Bumstead as the building supervisor for the Old Soap Factory conversion" (exhibit 1/135).

261 On 19 March, Mr Bumstead wrote to Drexel London confirming that his costs to "supervise only" the conversion of the Old Soap Factory would be made up of various amounts totalling $433 per week (exhibit 1/137).

262 Lavender Bay proceeded to appoint Mr Bumstead "to organise and co-ordinate the conversion of the Old Soap Factory to eight residential units". This was confirmed in a letter dated 7 April 1981, which Drexel London wrote to Mr Bumstead. In the letter, Drexel London set out Mr Bumstead's responsibilities. They were to include:

"The preparation and updating of a construction programme, the ordering of materials to meet this programme, the obtaining of at least three quotations for each trade, application for and obtaining of all necessary permits and approvals including the building licence, ensuring that all work is accurately set out and is carried out in accordance with statutory regulations, providing adequate protection for the safety of personnel and protection of existing and new works, the keeping of an on-site wages book, the checking of all deliveries and taking receipt of all delivery dockets and the organising of weekly site meetings.

It is the express wish of our clients to have the conversion carried out in the most efficient way with regards to minimising unnecessary expense or delays, whilst achieving a job of high quality in all its aspects and in full conformity with documentation provided by us." (exhibit 1/144)

263 On the same day, Drexel London wrote to Lavender Bay enclosing a copy of the letter to Mr Bumstead. They noted that:

"In electing to proceed with this form of building organisation you will be accepting many of the responsibilities normally carried out by a builder in a situation where a building contract is used. Of particular concern will be the need to arrange all insurance cover, the direct payment of all labour and materials and consequent keeping of accounts. As previously discussed, this form of building allows you freedom of cost control through the addition or deletion of items and changes in materials and finishes."

The letter contained a recommendation that a formal meeting be held on site each week with a representative from Lavender Bay, the building supervisor and Drexel London:

"With such regular meetings it will be possible to ensure compliance with documents and arrange and detail changes as required." (exhibit 1/142)

264 As a result of Mr Bumstead's appointment, Lavender Bay was able to obtain a building licence. This was issued on 16 June 1981 (exhibit 1/260).

265 On 19 May 1981, Drexel London wrote to Lavender Bay confirming that nine copies of drawings numbered 1 - 16 had been handed over at a site meeting on 6 May and that further copies of the documents had been lodged with the structural engineer. Drexel London enclosed copies of the specification with their letter. They said:

"As there is no formal building contract between yourselves and a builder involved, and in order to meet your request that changes can be made during construction, this specification is a broad outline of the performance required from each trade. From time to time we will need to issue schedules describing the extent of work and choice of materials and fittings where these are not specified."

The letter went on to enclose an account for fees to date. Drexel London said:

"In the absence of a lump sum contract figure, this fee is based on the building cost estimate provided by Mr H Moore of $483,000.00 excluding the lift supply and its installation and is to the end of the period of documentation. We propose that our fee during construction be a fixed amount of $12,000.00 paid monthly and subject to there being no major changes." (exhibit 1/150)

266 I accept the evidence of Mr Drexel that the specification was prepared in anticipation of Lavender Bay entering into a contract with a builder, but was amended subsequently, to a certain extent, to reflect the fact that Lavender Bay was to become an owner-builder (exhibit 1/157 - 259; TS 709).

267 Thus, the specification contained on its front page the notation that Mr Bumstead was to be the superintendent of works. However, the section entitled "Preliminaries" appeared to contemplate that there would be a contract with a successful tenderer and that Lavender Bay's name and address would appear on the contract if the tender was accepted: par A1.04. Despite that, par A2.03 provided that "the Proprietor" was to execute the works and ensure that the work of sub-contractors was executed in a proper manner.

268 Consistently with the fact that Lavender Bay was to be an owner-builder, section A6 of the specification, under the heading "Conduct of Job", provided for the proprietor to employ a superintendent of works but that the proprietor was to direct and co-ordinate the work of all trades.

269 Under the heading "Site Meetings" in par A6.03, the specification included the following provisions:

"(a) The Proprietor shall conduct site meetings every week and shall arrange for the attendance of such other members of their staff and representatives of contractors and suppliers as may be required.

(b) The Proprietor shall chair such meetings and shall prepare records of the proceedings and shall provide copies within 3 days to the Architect and also provide copies of relevant portions to Consultants, sub-contractors and suppliers.

(c) The inclusion in the record of the proceedings of such a meeting of any instruction given by the Architect, shall, upon confirmation of such record at a subsequent meeting cause such instruction to be deemed an Architect's written instruction."

270 According to Mr Drexel, this part of the specification was applied. It is, however, inconsistent with the evidence given by Mr Drexel and Professor London that under the contractual regime which existed between themselves and Lavender Bay as an owner-builder, Drexel London had no authority to issue instructions.

271 Again, inconsistently with the actual regime, par A8.02 of the specification provided for the "Contractor" to be granted access to the works during the defects liability period. There was, of course, no contractor.

272 Section B1.03 contained provisions for inspection by the architect, who was to be given three days' notice so that he might inspect various stages of the work as specified in that clause. Mr Drexel's evidence was that this provision was not relevant to the arrangement actually put into place.

273 Mr Drexel's evidence was to the same effect in relation to other provisions of the specification relating to inspection by the architect.

274 I accept Mr Drexel's evidence that the specification was not intended to apply universally to the circumstances in which the conversion of the Old Soap Factory was actually carried out. That is to say, I accept that the specification was prepared on the basis that Lavender Bay would enter into a contract with a builder and that it was amended to a certain extent when Lavender Bay became an owner-builder.

275 I accept also, that once Lavender Bay had decided to carry out the works as an owner-builder, Drexel London had no role in contract administration because there was no contract. Neither were Drexel London involved in the supervision of the works: that was Mr Bumstead's role. For that reason, I do not consider that Drexel London can be held liable for failing to notice that the joints between the joists and their supporting plates were cut inaccurately: ie, less than half-housed.

276 The recommendation by Drexel London that there be weekly site meetings was implemented. There were over 50 such meetings. The first was on 29 April 1981 and the last was on 9 June 1982. The meetings took place in a site office (until that facility was removed towards the end of the works) and were attended by representatives of Lavender Bay, Drexel London and Mr Bumstead. Both Mr Drexel and Mr London attended some 45 of the meetings: and one or other of them attended all the meetings.

277 When Mr London was present, he took the minutes. They were written in what appears to have been paginated note books (exhibit 1/809 - 1081).

278 In the course of cross-examination, both Mr Drexel and Professor London were asked about various matters recorded in the minutes. Generally, they had no specific recollection of these matters but speculated as to what might have been said, and by whom. However, Professor London was adamant that because Drexel London were present at the meetings as a resource, for the purpose of providing advice as the work progressed, their role was not to give instructions to Mr Bumstead and that they did not do so: all instructions were given by representatives of Lavender Bay. Thus, where the minutes recorded an instruction to Mr Bumstead given at a meeting at which only Mr Bumstead, Mr Drexel and Mr London were present, Professor London was constrained to say that the instruction should be understood as advice given because "that's all we could do in our capacity" (exhibit 1/835; TS 745 - 746).

279 However, when Mr Drexel was asked whether Drexel London had ever taken it upon themselves to facilitate communications between the client and other parties, he said:

"I suppose we suggested that it might be the easiest way if we looked after something." (TS 585)

280 I accept that Drexel London had no authority to give instructions to Mr Bumstead. However, the minutes of the meetings do not suggest that they were structured in the way Professor London described.

"In the form of advice we would often suggest that the documents as prepared by Drexel London Architects should be adhered to unless there were instructions to do otherwise." (TS 747)

Professor London said also that decisions were reached as a result of discussions at the meetings and then recorded.

282 That evidence accords with the impression I have from reading the minutes. It is, I think, consistent with the working relationship which might be expected to exist between lay building owners, their professional consultants and a qualified builder who was also their employee.

283 It will be recalled that the object of the site meetings, as set out in Drexel London's letter of 7 April 1981, was "to ensure compliance with documents and arrange and detail changes as required".

284 I accept that Drexel London had no contractual obligation to Lavender Bay, in relation to contract administration or supervision. However, as Windeyer J said in Voli's case (supra), that did not discharge them from their duty of care to persons such as the plaintiff. They undertook their work as consultant professional architects. Their role was to assist their client by their participation in the site meetings, so as to ensure that the work proceeded in compliance with documents. That being so, I consider that the professional obligation of Drexel London required them to be generally aware of the works that were being carried out and to inform their client of any departure from the documentation which came to their attention. Indeed, it was Mr Drexel's evidence that Drexel London suggested the site meetings "so we know what's happening" (TS 703). I do not accept Professor London's evidence that he and Mr Drexel attended the meetings only as a "resource to be drawn on when advice was sought on any aspect of what we had drawn" (TS 755).

285 In these circumstances, although I accept that Drexel London were not subject to all the obligations pleaded in par 51 of the Statement of Claim, I consider that they were required to monitor the progress of the work as far as was reasonable in the course of the weekly site visits, and at the very least, to advise their client if they became aware of any defective workmanship: and in that way, to ensure that their client obtained the benefit of the designs they had prepared.

286 My view of the obligations of Drexel London is reflected in the evidence. I have referred previously to the evidence of Mr Drexel and Professor London that they would have drawn the attention of the client to something structurally incorrect they observed.

287 The request to Drexel London in June 1982, to provide a list of items to be rectified and completed, must have involved a detailed inspection of the works. In other words, if there were obvious structural defects to be observed, Mr Drexel and, or alternatively, Mr London, should have seen them. It follows, in my view, that because Drexel London had, at least, a professional obligation to report non-complying work to their client, they must be regarded as negligent if they either failed to report non-compliant work they had actually observed, or if they failed to observe non-compliant work, which should have been obvious to them in the course of their comprehensive inspection, during which, as I have found, they stood on the various balconies.

288 I have already found, by inference, that the instruction to use oregon in the construction of the balconies must have been given by Lavender Bay. In those circumstances, it might be argued that it would have been pointless for Drexel London to have drawn the attention of Lavender Bay to a matter about which it was well aware. However, the obligation would, I think, have extended to advice that this was a structural change which required the approval of the local authority. Indeed, Mr Drexel said that had he known of the substitution of oregon for jarrah, he would have told his client that the Fremantle Council should have been made aware of the change "and then I probably would have gone away and thought about how to take it on from there" (TS 528).

289 In all the circumstances as I have found them to be, I do not think that Drexel London discharged their professional duty, or their duty of care to the plaintiff, simply by advising Lavender Bay to have Halpern Glick carry out a structural inspection.

290 I therefore consider that the plaintiff has made out her case against Drexel London.

291 The plaintiff pleads that Halpern Glick, or one of its employees or agents, "suggested or considered" the designs of Drexel London as pleaded in par 50(b), (c) and (d) of the Statement of Claim (Statement of Claim, par 54).

292 The designs referred to in par 50(b), (c) and (d) were:

"(b) the detail of the design of the wood and steel interface between the Plates and the steel frame;

(c) the detail of the design of the half-housing interface between the joists and the face and wall Plates; and

(d) how the Balcony was to be braced, supported and attached to the wall of the building."

293 The plaintiff goes on to plead that in providing such structural advice and in suggesting or considering the designs referred to above, Halpern Glick was under a duty to act with all reasonable professional skill, care and diligence: and that duty was owed to persons such as the plaintiff, who could reasonably have been expected to use the building in the ordinary way associated with the purpose for which it was designed.

294 Those allegations are met by a general denial on the part of Halpern Glick. However, I consider that insofar as Halpern Glick did provide structural advice, it was subject to the duty of care pleaded above.

295 The plaintiff goes on to allege that the collapse of the balcony and her subsequent injuries were caused or contributed to by the negligence of Halpern Glick. Particulars are given in which the plaintiff relies on an alleged failure by Halpern Glick to identify:

"(a) that the design of the detailing was such that moisture could be trapped both in the housed joint and between the steel support beam and the timber plates;

(b) that the design of the Balcony failed to provide for stabilising bracing of the central column of the Balcony."

(Statement of Claim, par 55)

296 For reasons given above, I am not persuaded that Halpern Glick had any involvement in the aspects of the design pleaded in pars 50(b) or (c) of the Statement of Claim. Nor was Halpern Glick under any obligation to review the balcony design generally. It was a consultant, called upon to deal with specific matters, as requested. It had no general retainer. It follows, that there is no basis for the negligence alleged in particular (a) above.

297 As to particular (b): it is true that the design of the balcony depicted in drawing 15 made no express provision for bracing the central column of the balcony in such a way as to connect the column to the northern wall of the building.

298 It is clear that when Mr Welch visited the site on 8 April 1982, he appreciated the need to provide this link. On his sketch he noted that the central column was to be "tied back by joist". I accept the evidence of Mr Blake that this would have been an acceptable method of securing the central column. The note therefore served as an advice to Mr Bumstead that the column should be secured in this way.

299 When Mr Welch visited the site, the steel work was being erected. The timber elements of the balconies could not have been constructed until after the steel work had been completed. That being so, Mr Welch would not have been in a position to provide any advice to Mr Bumstead as to the precise method of linking the joist to the central column. That was a matter which, if not within Mr Bumstead's competence as a builder, would have required him to take advice either from Drexel London or Halpern Glick.

300 As I have noted above, Halpern Glick did not have a general retainer, but provided advice only when called upon to do so.

301 There is no evidence that any representative of Halpern Glick visited the Old Soap Factory to inspect the balconies after 8 April 1982, or was asked to do so. Further, I accept Mr Welch's evidence that not long after his visit on that date, he was told that Halpern Glick's site inspection services were no longer required (exhibit 47, par 64).

302 In these circumstances, I consider that Halpern Glick cannot be held responsible for the fact that the design of the balcony did not include any detail for the tying back of the central column to the north wall of the building. The claim against Halpern Glick must therefore be dismissed.

The claims based on the ownership and occupation of unit 1 and the balcony

303 As will be seen, the claims made against Mr Black, Ash Investments and the Strata Company have different legal bases. However, the common theme is an alleged failure to inspect, repair and maintain the balcony.

304 It is clear from Dr Davison's evidence that by 1996, the rot in the southern support plate of the balcony had progressed to a considerable extent. The question therefore arises whether the rot could have been detected. Perhaps more precisely, the question is what kind of expertise and what level of inspection would have been required in order to detect the rot?

305 Dr Davison's opinion was that the presence of the rot in the timber prior to the balcony collapse would not have been detected by a lay person. Dr Davison gave the following reasons:

"1. There was no visual indication of rot on the lower and outer surfaces of the decayed plates. The outer surface of the exposed structural timber was weathered but appeared sound.

On the southern plates the brown cubical rots were on the inner side of the plates, adjacent to the galvanized steel backing plate. These rots would have been detected only if the wooden plates had been removed.

On the western plate the brown cubical rot was on the inner and upper side, adjacent to the galvanized steel backing plate and under the decking. These rots would have been detected only if the decking and wooden plate had been removed.

1. There were no fungal fruiting bodies or mycelial fans on the outer surface of the wooden plates, and no indication that fungi had fruited on the plates in the past. These would indicate that decay was occurring in the structural timbers." (exhibit 26)

Dr Davison confirmed her evidence in cross-examination (TS 338).

306 Dr Davison gave evidence also that when she visited the site and inspected the reconstructed balcony, she looked at the upper balcony of unit 1. She said:

"I was obviously concerned that if one balcony had collapsed, there could be decay occurring in the other balcony above and also the balconies on the northern side of the soap factory, so I looked from my vantage points at the top of a ladder to see whether I could see any signs of fungal fruiting bodies on the timbers of the upper balcony and I could see nothing - nothing that would indicate to me whether or not decay was occurring in those timbers." (TS 338)

307 In my view, this is very significant evidence. There is no doubt that Dr Davison is highly qualified and experienced in her field. She made her inspection of the upper balcony from the top of a ladder. It was therefore a close inspection. Further, she carried out the inspection in the knowledge that rot had caused the failure of the lower balcony. Her inspection was therefore particularly focused on the possible existence of rot: and yet she saw nothing which alerted her suspicion.

308 Dr Davison was shown photographs taken by Dr Evans of the underside of the lower balcony in unit 4. These are photographs 1 - 6 in exhibit 34.

309 Dr Davison thought that the photographs disclosed white fungal mycelium and possibly some brown cubical rot. Dr Davison said she would poke the area with her knife and look at it much more closely. Dr Davison also noted splitting in the support plate shown in the photographs. She said she did not think any of the splitting she had observed in the similar plates of unit 1 was as extensive as shown in the photographs (TS 342).

310 Dr Davison said that splits would have caused her some concern because of the opportunity for water to seep into the timber. Further, a split could indicate that the timber might have rot beneath it. Splits would therefore be an indication that a much closer inspection was required. However, although splits would create areas of vulnerability to rot, knots should not do so (TS 343).

311 As I have noted above, there was no failure of the joists in the collapsed balcony: and such splits and knots as there were, did not cause the collapse.

312 I accept Dr Davison's evidence that a lay person would not have detected the rot in the timbers of the collapsed balcony. Further, the thrust of Dr Davison's evidence is, I think, that even a person with her expertise might well not have detected it.

313 Given the nature of Dr Davison's expertise, I prefer her evidence to that of Mr Ryan in relation to this issue. In par 4.12 of his report (exhibit 6), he said:

"The rotted sections, as they occurred in places such as the joins between timber and steel and between different pieces of timber, would not necessarily have been visible."

314 However, in cross-examination, Mr Ryan accepted that it would have been difficult to observe any rotting (TS 215).

315 In descending order of expertise, I note the evidence of Jack Strawbridge, a carpenter who carried out work at unit 1 for Mr Black from time to time. I will refer to Mr Strawbridge's evidence in more detail below. For present purposes, it is sufficient to note that although he replaced some of the wooden battens on the deck of the balcony, inspected it generally from above: and probably looked from time to time at the underside, he saw nothing to cause him concern.

316 I then consider the position of someone who has general expertise in repair and maintenance. A person who Mr Phillips referred to as "Odd Job Bob". Mr Phillips' opinion was:

"that the owners or even 'Odd Job Bob' would not have been alerted to the problem unless they went looking for it. A person with a trained eye, who could visually establish timber species and knew of oregon's poor performance exteriorly, may have been the only person who would have been alert enough to instigate an intrusive investigation and therefore discover the problem with the timber." (exhibit 28, page 21)

317 I take the reference to the person "with a trained eye ..." to be someone having the experience and qualification approaching that of Dr Davison.

318 I accept Mr Phillips' evidence in relation to these matters.

319 There was evidence from Edward Roy Parker, an experienced insurance assessor who is well qualified in that field.

320 In June 1995, Mr Parker was employed by WA Assessing & Adjusting Services. In that capacity, he inspected the Old Soap Factory so as to value it for insurance purposes. Mr Parker did not go on to any of the balconies. However, his observation from ground level was that:

"the timber appeared to be in a good condition and the balconies overall appeared to be in what I would regard as reasonable condition" (exhibit 13, par 18).

321 This evidence was not challenged and I accept it.

322 I then turn to the evidence of John Charles Gabbedy who has lived at unit 4 for approximately 20 years.

323 The balconies forming part of Mr Gabbedy's unit are, in effect, a mirror image of those which form part of Mr Black's unit. The evidence is that they were of identical design, constructed at the same time and (subject to any variations in workmanship) to the same standard. The joists and supporting plates were cut from oregon.

324 Mr Gabbedy is a retired wool buyer. However, he has always taken a practical interest in the maintenance of his balconies. For example, Mr Gabbedy and his brother painted the floorboard timbers and handrails on both his balconies before 31 December 1996. He also replaced approximately five of the decking battens on separate occasions because they had unsightly knots and were warped. He replaced the decking with jarrah and had to drill through the floorboard and into the joist beneath so that the floorboard did not split when the nail was driven into the joist. Mr Gabbedy recalled that the joists felt in good condition. He did not consider there was anything wrong with them. They did not feel rotten. He was not aware at the time that the joist was a softwood, not a hardwood.

325 Of more significance, is the fact that Mr Gabbedy inspected the condition of other timbers in the balcony. He climbed a ladder to inspect the underside of the balconies. In particular, he inspected and treated some rust with silver galvanising paint on the steel diagonal supports. He did this on one occasion before the collapse of the unit 1 balcony.

326 Mr Gabbedy's evidence, which I accept, is that he did not detect any damage to, deterioration of, or defect in, the supporting beams on the underside of the balconies. He said, and I accept, that if he had detected any such problems, he would have replaced the timbers.

327 Mr Gabbedy's confidence in the strength and integrity of the balconies is emphasised by the fact that he used them very often for entertaining, including lunches and dinners for family and friends. In particular, Mr Gabbedy and his wife held a cocktail party in Christmas week of 1996. Many (if not all) of those people were on the lower balcony at one time or another. Further, on Christmas Day 1996, only a week before the collapse of Mr Black's balcony, Mr Gabbedy and his wife held a sit-down Christmas luncheon for about 30 relatives on his lower balcony. Everyone was seated at one time (exhibit 23).

328 In the light of this evidence (and the evidence given previously by the other expert witnesses), I find that the rot which caused the collapse of the balcony would not have been detected, even as late as 1996, except by a most detailed inspection carried out by a person having qualifications and expertise equivalent or similar to that of Dr Davison.

329 I find that the rot would not have been detected even on a close inspection by a lay person or by a person having qualifications such as those of a builder or building surveyor.

330 Against that background, I turn to the specific claims against the remaining defendants.

331 The claim against the City of Fremantle is founded on what is said to be a false certificate issued by the City on 8 November 1982 (exhibit 1/421).

332 The certificate, over the hand of the Town Clerk, was in the following terms:

"City of Fremantle, the local authority,

HEREBY CERTIFIES THAT:-

1. The building shown on the plan has been inspected and that it is consistent with the building plans and specifications in respect thereof that have been approved by the Local Authority.
2. The building, in the opinion of the local authority, is of sufficient standard and suitable to be divided into lots pursuant to the Strata Titles Act, 1966."

333 The scheme of the Strata Titles Act 1966 (WA) is such that a strata plan lodged for registration is required to be endorsed with, or accompanied by, certain certificates. Relevantly for present purposes, is the certificate referred to in s 5(6)(c), being a certificate:

"of the appropriate local authority under the hand of the town clerk or shire clerk thereof that-

(i) the building shown on the plan has been inspected and that it is consistent with the building plans and specifications in respect thereof that have been approved by the local authority;

...

(iii) the building, in the opinion of the local authority, is of sufficient standard and suitable to be divided into lots pursuant to this Act."

334 Section 20(1) of the Act provides that in respect of any application for a certificate under par (c) above:

"... the local authority shall direct the issue of the certificate, if it is satisfied that-

(a) separate occupation of the proposed lots will not contravene the provisions of any town planning scheme prepared or adopted by the local authority under the Town Planning and Development Act, 1928;

(b) any consent or approval required under any such town planning scheme or under the provisions of the last mentioned Act relating to any interim development order, has been given in relation to the separate occupation of the proposed lots;

(c) the building and the proposed subdivision of the parcel into lots for separate occupation will not interfere with the existing or likely future amenity of the neighbourhood, having regard to the circumstances of the case, and the public interest."

335 The plaintiff contends that there was no inspection by anyone on behalf of the City of Fremantle which justified the assertion in the certificate that the Old Soap Factory was "consistent with the building plans and specifications" which had been approved by the City in relation to that project.

336 The plaintiff contends that a reasonably careful inspection of the Old Soap Factory, to see if it was consistent with the approved plans and specifications, would have revealed that the joists and plates of which the balconies were constructed were made of oregon, and not jarrah as specified. The plaintiff contends further, that a proper inspection would have revealed that the joists were housed only 14 millimetres into the plates, rather than being half-housed, as shown in the approved plans.

337 The plaintiff goes on to contend that the collapse of the balcony, and her subsequent injuries, were caused or contributed to by the negligence of the City of Fremantle, its servants or agents. The negligence is said to arise from the fact that the Town Clerk issued the certificate in circumstances where the building had not been inspected and had not been found to be consistent with the approved plans and specifications (Statement of Claim, pars 30 - 34).

338 The City of Fremantle admits that it issued the certificate on 8 November 1982, but denies that it was obliged to carry out any inspection of the Old Soap Factory for the purpose of ensuring that the building was consistent with the approved plans and specifications. The City emphasises that a certificate must be issued if the requirements of s 20(1)(a), (b) and (c) are satisfied; and it points to the fact that there is nothing in those provisions which necessitates any inspection of the building to ensure its consistency with plans and specifications.

339 I accept that the s 20 provisions appear to be directed to what might be described as broad planning considerations: they have nothing to do with the way in which the building has been constructed. However, I do not accept the City's further submission that it was obliged to issue the certificate in the prescribed form "regardless of whether the building had in fact been inspected and regardless of whether it was in fact consistent with the approved plans and specifications" (closing submissions, par 11).

340 In my view, Parliament could not have intended that a local authority should be required to issue a certificate stating that a building had been inspected and that it was consistent with approved plans and specifications, without requiring the local authority to carry out such an inspection. If the submission made by the City of Fremantle is correct, a certificate would be meaningless.

341 I therefore conclude that the construction to be placed on s 5(6) and s 20 of the Strata Titles Act, is that while a local authority is required to issue a certificate if satisfied about the general planning considerations referred to in s 20, it should not do so unless and until it has inspected the building to ensure that it is consistent with the approved plans and specifications.

342 It is important, I think, to note that the obligation imposed on a local authority is not to ensure that the building conforms with the approved plans and specifications: only that it is consistent with those documents. The City of Fremantle relies on the definition of "consistent" in the Shorter Oxford English Dictionary as meaning:

"Agreeing in substance or form; congruous, compatible."

Viewed objectively, there is likely to be a spectrum of consistency. At one extreme, a building would be consistent with the approved plans and specifications if it conformed to them in every last detail. At the other extreme, there might be so many departures from the approved plans and specifications that the building could not be said to be consistent with them.

343 Subject to any inspection condition included on a building licence, there is no obligation on a local authority to inspect a building during the course of construction. That being so, an inspection of the completed building might not reveal whether, or to what extent, aspects of the building which had been rendered invisible by the ongoing construction process complied with the plans and specifications. It must follow that the extent of the inspection and the determination of consistency between the building and the approved plans and specifications, involves a degree of discretion.

344 There is a conflict in the evidence as to the required standard of inspection. The City of Fremantle relied on the evidence of Nino Monaco, one of its former employees who has retired recently. Mr Monaco was employed by the City of Fremantle as a building surveyor and building inspector for 37 years. Mr Monaco's recollection was that he carried out the inspection for the purposes of the certificate issued under s 5(6) of the Strata Titles Act (TS 492 - 493).

345 The practice was to inspect the building when it had been completed and was ready for occupation. Mr Monaco would not generally carry out an inspection on his own: he would be accompanied by one or more employees of the City of Fremantle who were concerned with health and safety. Aspects of the building which were the prime focus of the inspection included parking, landscaping, drainage, ventilation to toilets, air conditioning, lifts, exit signs, fire extinguishes, height of ceilings, self-closing doors to ensuite bathrooms and floor wastes (exhibit 37, par 12).

346 Mr Monaco said he did not carry out inspections beyond matters of that kind in order to determine whether the building had been constructed in accordance with approved plans and specifications. He said:

"... as far as I can convey to you, that building would have been built as per the approved plans and we would accept that being built to specifications etcetera by the registered builder or whoever and we would take that as being read as being completed and we would not go and check on every nut and screw to make sure that that building is built as per the specifications and the plan.

...

I wouldn't say we assumed advice but we would know that the buildings would have been built to the standard of those plans and from there we would accept that ... the building is then completed as per those plans ..." (TS 481)

347 Mr Monaco went on to say that it would not be possible to carry with him the plans and specifications for a building as large and as complex as the Old Soap Factory. He said he was not expected to do so (TS 499). However, later in his cross-examination, Mr Monaco agreed that he could not have carried out an inspection to ensure consistency with the plans and specifications unless he had them to refer to (TS 503).

348 In essence, therefore, Mr Monaco's inspections were carried out to ensure compliance only with the relevant building regulations (TS 498) and the strata plan (TS 502).

349 Mr Monaco's evidence was supported by that of Ronald William Sherar, a qualified building surveyor and member of the Australian Institute of Building Surveyors.

350 Mr Sherar was employed by the City of Fremantle as its principal building surveyor from 1993 to 2001. Since then, he has been manager, building and customer services for the City of Belmont. Previously, he was a building surveyor in other parts of Western Australia for over 10 years.

351 Mr Sherar said that in his 23 years in Local Government, he dealt with countless applications for the issue of strata title plans. He said in that time he had never physically inspected in detail a building the subject of an application for a strata plan: nor had he ever known another qualified building surveyor to do so. Mr Sherar said that in his experience it would be physically impossible to carry out such an inspection as it would require a building surveyor to be present throughout the construction of the premises to ensure that the materials and manner of building complied strictly with the architect's plans and specifications. He said that what did, and still does occur, is that a site inspection is carried out to determine that the overall structure is consistent with the form and shape as shown on the approved Building Licence and strata plan. He said such an inspection did not and still does not involve a detailed comparison of the finished structure with the plans and specifications (exhibit 36, pars 1 - 9). Mr Sherar made the point that the Strata Tiles Act "doesn't define where I start and where I finish doing an inspection" (TS 463).

352 The essence of Mr Sherar's evidence is that on an inspection, he would have the strata plan with him which would show where the structure was located on the ground. He would then inspect to see whether the external structure looked the same as it did on the plan:

"... that it was made of brick; had a tin roof or a tiled roof. You would go into the rooms themselves to make sure that the structure had walls and it wasn't changed drastically. I'm not going in to look to see whether a two-hand basin was put in or not put in; and I'm going in there to see whether there's a wall that may separate the buildings but I'm not going in to judge what other parts were used to put that building together." (TS 464)

353 Specifically in relation to balconies, Mr Sherar said he would see the balconies: but that he would look at them "in terms of consistency to see that the balconies are there on the plan itself" (TS 467). However, if Mr Sherar had carried out an inspection for the purpose of the Strata Titles Act and noticed that oregon had been used for the balcony joists, he would have raised the matter with the engineer and architect involved in the development to see whether they considered that as an appropriate use of the product. That was because in Mr Sherar's view, oregon in the location of the Old Soap Factory would probably not be an appropriate timber (TS 468).

354 A different view of the obligations of a local authority was taken by Ian Clifford Lush, a consulting building surveyor. Mr Lush is a registered builder, a certified municipal building surveyor and a member of the Australian Institute of Building Surveyors. He was the chief building surveyor at the City of Perth from 1971 to 1994. In his evidence (exhibit 31) Mr Lush said:

"The Strata Certificate of the Local Authority states that the building has been inspected and completed in accordance with the approved plans. I am not aware of any Local Authority Certificate being issued without a comprehensive inspection of the building."

355 The Strata Titles Act 1966, does not, of course, require a certificate to be issued to the effect that the building has been completed "in accordance" with approved plans. However, Mr Lush maintained in cross-examination that an inspection directed towards the health and safety issues of which Mr Monaco spoke would be "a fairly limited description of the things that a building inspector would inspect on one of those strata certificate inspections". Mr Lush said that normally, the inspector would take the approved plans with him and would check "all aspects" for compliance with those plans (TS 400).

356 I accept the evidence of Mr Monaco and Mr Sherar. But I accept also the evidence of Mr Lush. That is to say, I accept that in the City of Fremantle and in other areas in which Mr Sherar has some experience, only limited inspections are carried out for the purposes of the Strata Titles Act. However, I consider that such inspections are inadequate. The proper procedure is as described by Mr Lush.

357 On the evidence of Mr Monaco and Mr Sherar, the City of Fremantle did not even attempt to carry out an inspection for the purpose of determining whether the Old Soap Factory had been constructed in a way which was consistent with the building plans and specifications. I emphasise that the question is whether the building is consistent with the building plans and specifications, not the strata plan.

358 As I have noted above, the plaintiff's claim against the City of Fremantle is based on alleged negligence, not a breach of a statutory duty to inspect the building. However, in Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 459, Mason J held that the breach of a statutory duty might be evidence of negligence at common law: Sibley v Kais [1967] HCA 43; (1967) 118 CLR 424 at 427.

359 Mason J went on to refer to Voli v Inglewood Shire Council (supra) which, his Honour said, demonstrates that:

"the breach of the common law duty may arise from the failure of the authority's officers to ascertain that the statutory requirements are satisfied." (at 460 - 461)

360 The circumstances in which a local authority might owe a duty of care were considered by the High Court in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540, on which both the plaintiff and the City of Fremantle rely. In that case, the High Court was required to consider (inter alia) whether a local authority owed a duty of care to persons who became ill after eating contaminated oysters when the local authority, which had power to prevent such contamination, had not exercised that power.

361 The Graham Barclay case (supra) is clearly distinguishable. The present case does not involve only a power. On the view I take of s 5(6) of the Strata Titles Act 1966, the City of Fremantle had a duty to inspect the Old Soap Factory for the purpose of determining whether the building as constructed was consistent with the approved plans and specifications.

362 Despite the difficulty encountered by the High Court in formulating a test of universal application to determine whether a duty of care exists, it is, I think, implicit in the judgments of the majority of the members of the Court, that a duty of care does arise when a local authority has an obligation to act. In those circumstances, the duty is owed to those who might suffer loss or damage as a result of a failure to discharge that duty: see Gleeson CJ at [32]; Gummow and Hayne JJ at [150] (with whom Gaudron J agreed) and Kirby J at [248] - [249].

363 Callinan J at [311] referred to the judgment of Gibbs CJ in Sutherland Shire Council v Heyman (supra) where his Honour said:

"Once it is accepted, as it must be, that the ordinary principles of the law of negligence apply to public authorities, it follows that they are liable for damage caused by a negligent failure to act when they are under a duty to act, or for a negligent failure to consider whether to exercise a power conferred on them with the intention that it should be exercised if and when the public interest requires it."

Callinan J went on to say that only Wilson J had agreed with Gibbs CJ and that the statement just quoted had not been adopted or applied in the High Court since the decision in the Sutherland case (supra). However, as I understand the judgments, it is the second limb of the proposition set out by Gibbs CJ which was controversial, not the first.

364 In the present case, the plaintiff relies on a combination of s 5(6) of the Strata Titles Act 1966 and s 661 of the Local Government Act 1960 (WA).

365 Section 661 empowers a local authority, by its members, officers, servants or agents, if authorised in writing by the clerk, to enter buildings and land at reasonable hours in the daytime, for the purpose of executing work, making an inspection or doing anything authorised to be executed by the council, without being liable to legal proceedings.

366 However, in my view, s 661 is not relevant in the present case because the City of Fremantle had no reason to exercise those powers.

367 A person wishing to register a strata plan under the 1966 Act could not do so without a s 5(6)(c) certificate from the local authority. That being so, a request to the local authority for such a certificate must be regarded as embodying a request to inspect: and on receipt of that request, the local authority has an obligation to do so. However, in the present case, there was an express request to the City to carry out an inspection. It was made in a letter dated 19 April 1982 by the surveyor who prepared the strata plans for the purposes of the Strata Titles Act (exhibit 1/379).

368 In my view, the local authority owes a duty of care to any person who might suffer harm as a result of a negligent inspection. I regard as negligent, a failure to discover a dangerous or potentially dangerous aspect of the building which ought to have been discovered on reasonable inspection by an appropriately qualified person. In this context, I consider that it is incumbent on the local authority to employ as an inspector a person who is qualified to interpret plans and specifications and to determine consistency. In other words, the inspector must be a person qualified to exercise the degree of judgment necessary to place the building appropriately on the spectrum of consistency.

369 In this case, I think, it should have been obvious to such an inspector that oregon had been used in place of the specified jarrah, and that this departure from the specification required (at least) further investigation before the certificate could properly be issued.

370 Whether Mr Monaco had sufficient expertise is not entirely clear. He was somewhat inconsistent in his evidence about his ability to distinguish between oregon and jarrah (TS 476, cf 484). However, for the reasons set out above, I think that is irrelevant.

371 The City of Fremantle denies that it owed the plaintiff any duty of care. It relies on the fact that the certificate was signed some 14 years before the collapse of the balcony and that the plaintiff had no connection with the City of Fremantle, nor any dealings with the City in relation to the signing of the certificate. There is, of course, no suggestion that the plaintiff was aware of the existence of the certificate or that she relied on it in any way.

372 These considerations do not, in my view, detract from the existence of the duty of care. I can see that in other circumstances, there might well be intervening events, between the negligent issue of a certificate and the harm suffered by a plaintiff. But in this case, I do not think that there were any such breaks in the chain of causation. That is because, for the reasons stated previously, the reduction in strength of the oregon as it slowly rotted as a result of fungal attack was, for all practical purposes, unobservable.

373 That being so, I find that the failure of the City of Fremantle to carry out a proper inspection before issuing its certificate on 8 November 1982, and thereby to fail to avert the risk inherent in the use of a non-structural timber in the balcony, was a direct cause of the subsequent collapse.

374 I therefore consider that the plaintiff has made out her case against the City of Fremantle on this ground.

375 As noted above, the plaintiff contended also that the City of Fremantle had been negligent in failing to notice that the balcony joists were housed only 14 millimetres into the end plates rather than being half-housed as specified on plan 15. However, in my view, this departure from the plans was not a matter which could reasonably have been discovered on inspection by the City of Fremantle, once the balcony decking had been constructed.

376 As I have noted earlier, much of the structure of a building becomes inaccessible as it progresses towards completion. The duty of the City of Fremantle was to inspect for consistency between the completed building and the approved plans and specifications. The City was therefore under no obligation to inspect before the decking had been constructed.

The claims against Mr Black and Ash Investments Pty Ltd

377 As appears from the certificate of title, unit 1 was purchased from Lavender Bay by Ash Investments which was registered as the proprietor on 11 July 1984 (exhibit 1/446).

378 Ash Investments is an investment company which is the trustee for the Black Family Unit Trust. Mr Black's father, Mr Black himself, his brother and his sisters are the beneficiaries of that trust (exhibit 9, pars 3 - 4).

379 Mr Black has been a director of Ash Investments since 1981. However, the company is run entirely by his father, who lives in Adelaide. Mr Black has been a footwear manufacturer's agent for some 30 years.

380 Ash Investments purchased unit 1 as a residence for Mr Black, following an inspection by Mr Black, his father and one of his sisters. Ash Investments then spent about $20,000 to finish the unit. In particular, work was required on the swimming pool and some interior matters. The balconies had been completed previously (exhibit 9, pars 9 - 14).

381 Mr Black entered into possession of unit 1 in 1984. Apart from a period in 1987 - 1988, he has remained in possession, as a tenant of Ash Investments. There has never been any formal lease or tenancy agreement: it was simply agreed between Mr Black and his father that Mr Black would pay rent of $5200 per annum, on a monthly basis. The rent was increased from time to time. It was $10,904 in 1996. Ash Investments was responsible for payment of the fees of the Strata Company, for the rates and for what Mr Black described as "improvements and capital items" (exhibit 9, par 18).

382 Mr Black attended the meetings of the Strata Company on behalf of Ash Investments. He reported to his father and brother about the meetings (exhibit 9, par 19).

383 The claim against Mr Black is based on alleged breaches of duties of care he is said to have owed to the plaintiff at common law and under the Occupiers Liability Act 1985 (WA), to inspect, repair and maintain the balcony. The plaintiff acknowledges that these are concurrent duties. That, I think, is correct, having regard to the decision of the Full Court in Westralian Caterers Pty Ltd v Eastment Ltd (1992) 8 WAR 139, at page 146.

384 The relevant provisions of the Occupiers Liability Act are s 5(1) and s 5(4). So far as relevant, they provide as follows:

"(1) ... the care which an occupier of premises is required by reason of the occupation or control of the premises to show towards a person entering on the premises in respect of dangers which are due to the state of the premises or to anything done or omitted to be done on the premises and for which the occupier is by law responsible shall ... be such care as in all the circumstances of the case is reasonable to see that that person will not suffer injury or damage by reason of any such danger."

"(4) Without restricting the generality of subsection (1), in determining whether an occupier of premises has discharged his duty of care, consideration shall be given to -

(a) the gravity and likelihood of the probable injury;

(b) the circumstances of the entry onto the premises;

(d) the knowledge which the occupier of premises has or ought to have of the likelihood of persons or property being on the premises;

(f) the ability of the person entering the premises to appreciate the danger; and

(g) the burden on the occupier of eliminating the danger or protecting the person entering the premises from the danger as compared to the risk of the danger to the person."

385 The plaintiff accepts that Mr Black had no duty to inspect the balcony for unsuspected defects. The plaintiff accepts also that inadequate joint housing and rotting might not have been observable. Indeed, I have found that these defects were not observable on reasonable inspection.

386 However, the plaintiff contends that Mr Black was in a position to see the underside of the balcony and should have been aware at least from his observation that the balcony joists were made from oregon and that there were "inferior lengths of timber which had many knots" (Statement of Claim, pars 9 and 12). The plaintiff contends, in essence, that the observable defects in the timber should have been of sufficient concern to Mr Black to require him to carry out or commission an inspection of the balcony and, presumably, to have some appropriate remedial work carried out. I say "presumably" because the plaintiff does not plead that obligation expressly. The plaintiff pleads only the duty to inspect, repair and maintain the balcony (Statement of Claim, par 13A).

387 Apparently with s 5(4) of the Occupiers Liability Act in mind, the plaintiff pleads (Statement of Claim, par 13B) that Mr Black's duty to inspect, repair and maintain the balcony was reasonable considering that:

"(a) it was likely that the condition of the Balcony ... or a defect or wear in the same would lead to a grave injury;

(b) the plaintiff was invited on to the Premises by [Mr Black];

(c) the Premises were renovated, residential premises;

(d) a person such as the plaintiff having been invited onto the Balcony at the time of its Collapse had no ability to appreciate any danger with the Balcony;

(e) the inspection, repair and maintenance of the Balcony, or preventing persons to enter onto the Balcony, would have been an insignificant burden on [Mr Black] when compared to the risk of the danger of the Balcony to the plaintiff."

388 The plaintiff submits that it is clear from Johnson v Johnson, unreported; CA SCt of NSW; 10 September 1991 and Baker v Gilbert [2003] NSWCA 113 that an occupier might have notice of a material defect at his premises, if he has been alerted to a problem, even if that problem is not the defect which causes the injury.

389 I do not accept that the authorities relied on by the plaintiff support that proposition. In Johnson v Johnson (supra), the plaintiff was injured when wooden railings on an elevated landing, and the vertical slats in between those railings, gave way when he fell against them. The trial Judge found that the occupier had been given "ample warnings" of the unstable condition of the railings and the staircase leading to the landing from which the plaintiff had fallen.

390 In Baker v Gilbert (supra), the plaintiff jumped from an unstable footplate attached to a swimming pool ladder. She did so in order to avoid falling. However, she landed awkwardly and suffered serious injuries. The defendant knew the footplate was unstable: he was also aware of the need to inspect the pool and the ladder at least before each swimming season.

391 Thus, in both of the cases relied on by the plaintiff, the defendants were (or ought to have been) aware of the very defects which caused the injuries.

392 I accept that Mr Black owed a duty to his visitors, to take reasonable care to protect them from dangers due to the state of his premises. However, the essential question in this case is whether Mr Black knew or ought to have known that the balcony was potentially dangerous.

393 In answering that question, the standard to be applied is that of a reasonable person in Mr Black's position: McPherson's Ltd v Eaton [2005] NSWCA 435; (2005) Aust Torts Reports 81-825, per Ipp JA (with whom Mason P and Hodgson JA agreed), at [96], following Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317 per Hayne and Callinan JJ at [162].

394 In considering this question, I have no hesitation in accepting the evidence of Mr Black (exhibit 9; TS 273 - 282). His evidence was that during the time he had lived at unit 1, before the collapse of the balcony, he had walked on to the balcony "thousands of times" and never had any concern about his safety. He described the balcony as looking "as solid as a rock" and said he would have had no hesitation in putting his family on to the balcony.

395 He said that before the balcony collapsed, he probably looked at the underside some 20 times when it was in his line of sight. He said that what he now knows to be the joists, always looked strong and symmetrical. He saw nothing which caused him to think any closer inspection was required. The balcony felt firm and stable to walk on: and even during the strongest wind gusts, he had no concerns about being on the balcony because it felt, and gave the appearance of being, strong and stable.

396 Nobody had ever expressed any concerns to Mr Black about the safety of the balcony and it had never crossed his mind that the balcony would collapse. He assumed that the balcony would not have been built unless it was passed as fit and well made by the relevant authority.

397 Mr Black has no knowledge or skills in relation to carpentry, timber grading or engineering. He had an aversion to ladders and did not own one at the material time. He bought a ladder subsequently: but only so that it could be used by someone else to carry out work for him (TS 273).

398 Mr Black accepted in cross-examination that when descending or ascending the spiral staircase forming the fire escape, as he had on some occasions, he would have had a better opportunity to observe the underside of the balconies. However, he said, in substance, that when using the spiral staircase, he was more concerned to ensure that he negotiated it safely (TS 281). Having seen the photographs of the spiral staircase, I can well understand his need for caution.

399 Mr Black knew there was a difference between jarrah and oregon. However, he had never identified the structural timbers of the balcony as being made from oregon. In any event, he did not appreciate the significance of the use of oregon (exhibit 9, pars 86 - 88; TS 277). He had employed Mr Strawbridge to replace a decking batten which felt "spongy" underfoot, and which was unsatisfactory. Mr Black regarded that as a cosmetic matter (TS 278 - 279).

400 Mr Black's evidence was supported by that of Michelle Marie Barboutis and Mr Strawbridge, the carpenter to whose evidence I have referred briefly above.

401 Ms Barboutis lived at unit 1 with Mr Black from 1991 until about September 1995 and again, from October 1996 to about February 1997. Ms Barboutis was also on the balcony when it collapsed.

402 Her evidence was that she had walked on the balcony "thousands of times" - often several times a day - and never had any concern about the balcony. It appeared to be structurally sound (exhibit 10, par 16). I accept all Ms Barboutis' evidence.

403 Mr Strawbridge is a carpenter who worked as such from the early 1950's until his retirement in August or October 1998. I accept all of his evidence.

404 Mr Strawbridge carried out small jobs for Mr Black at unit 1 from about 1995 onwards. This mainly involved work inside the unit. However, in early June 1995, Mr Black asked Mr Strawbridge to repair one of the battens forming the deck of the balcony which had a "spongy" feel when walked on. The batten contained a knot and Mr Black wanted it replaced. Further, Mr Black asked Mr Strawbridge to check all the other battens. He did so, and noticed that a longer batten situated towards the centre of the balcony had split along its length. Mr Strawbridge drew this to Mr Black's attention and was asked to replace the long batten as well.

405 Mr Strawbridge's evidence was that at the time he was standing on the balcony to replace the battens, there were no tell-tale signs of vibration or movement which would have indicated to him that there was any deterioration underneath the balcony, or anything of concern from a safety perspective. Mr Strawbridge recalled that he walked round the entire surface of the balcony and detected no movement in it. He recalled lifting his weight on to the balls of his feet and sinking down on to his heels to test how solid the balcony felt.

406 Mr Strawbridge said that when he was replacing the battens, he observed the joists in the area where they had been removed. He recalled seeing a short section, perhaps 90 millimetres across about five joists where the longer batten was replaced. In relation to the shorter batten, he saw a 90 millimetre section of about three joists.

407 Mr Strawbridge's observation was that the joists were in a suitable condition and were not showing any signs of deterioration or moisture penetration. There were no obvious signs of weathering and no evidence of the wood being "soft or puffy". Mr Strawbridge was able to nail the new battens into the joists. He said he would have been unable to do this if the joists had been rotten.

408 Mr Strawbridge said that from time to time, when he was working outside the unit on the ground floor, he would have casually looked up at the underside of the balcony. However, at no time did he ever see anything which alerted him to any defect in the joists which would have led him to conclude that the balcony might be unsafe, or even that it should be checked.

409 Similarly, although Mr Strawbridge had never inspected the upper balcony specifically, he was sure he had observed it casually from time to time while working on the lower balcony. He said if there was anything obviously wrong with the upper balcony it would probably have "jumped out" at him. Nothing ever did (exhibit 11, pars 9 - 32).

410 Mr Strawbridge's evidence is that Mr Black was punctilious in the way in which he looked after his unit and ensured that any items of maintenance requiring attention were carried out. I have referred earlier in these reasons to the evidence of Mr Ryan who doubted whether a lay person would be aware of the significance of the knots and splits in the joists, even if these had been observable on casual inspection. I have referred also to the evidence that the knots and splits were not of any particular significance.

411 I have already held that the rot in the structure of the balcony would not have been discoverable on inspection by a lay person, or even a carpenter such as Mr Strawbridge. On the basis of that finding, and my acceptance of Mr Black's evidence generally, I find that he neither knew nor ought to have known that there were any defects in the balcony which required attention such that he owed a duty of care to the plaintiff as alleged in the Statement of Claim.

412 For these reasons, the plaintiff's claim against Mr Black must be dismissed.

413 The plaintiff's claim against Ash Investments has two bases in the Statement of Claim: first, that Ash Investments was liable as an occupier and secondly, as Mr Black's landlord.

414 In his closing address, counsel for the plaintiff did not press the claim that Ash Investments occupied unit 1. That was the appropriate course for counsel to take. It is clear from the evidence summarised above that Mr Black occupied his unit as a tenant of Ash Investments, not as its representative.

415 The plaintiff's claim against Ash Investments as landlord is based on s 42(1) of the Residential Tenancies Act 1987 (WA). That section incorporates into every agreement between a landlord and tenant a provision that the landlord:

"Shall provide and maintain the premises in a reasonable state of repair having regard to their age, character and prospective life ..."

416 The plaintiff submits that this obligation enlivens s 9(1) of the Occupiers Liability Act which provides that:

"Where premises are occupied or used by virtue of a tenancy under which the landlord is responsible for the maintenance or repair of the premises, it shall be the duty of the landlord to show towards any persons who may from time to time be on the premises the same care in respect of dangers arising from any failure on his part in carrying out his responsibilities of maintenance and repair of the premises as is required under this Act to be shown by an occupier of premises towards persons entering on those premises."

417 The plaintiff contends that the combination of the Residential Tenancies and Occupiers Liability Acts is such that Ash Investments owed a duty to the plaintiff to inspect, repair and maintain the balcony. The plaintiff contends this to have been a reasonable duty considering that:

"(a) it was likely that the condition of the Balcony ... or a defect or wear in the same would lead to a grave injury;

(b) the plaintiff was invited on to the Premises by [Mr Black];

(c) the Premises were renovated, residential premises;

(d) a person such as the plaintiff having been invited onto the Balcony at the time of its Collapse had no ability to appreciate any danger with the Balcony;

(e) the inspection, repair and maintenance of the Balcony, or preventing persons to enter onto the Balcony, would have been an insignificant burden on [Ash Investments] when compared to the risk of the danger of the Balcony to the plaintiff."

418 It is therefore alleged against Ash Investments that it should have:

"(a) adequately inspected the Balcony through its officer, [Mr Black], or cause it to be inspected;

(b) replaced the Joists with joists constructed of a suitable timber which was not decayed or rotten and was not likely to decay or rot;

(c) replaced the Plates with plates constructed of a suitable timber which was not decayed or rotten and was not likely to decay or rot;

(d) had the splits in the Joists and Plates repaired by a suitably skilled person; and/or

(e) had the nails holding the Joists to the Plates replaced."

(Statement of Claim, pars 18 - 19)

419 The question whether a landlord owes a duty of care to persons other than his tenant who occupy or visit the demised premises, has been the subject of two recent decisions of the High Court: Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 and Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166, an appeal from this jurisdiction.

420 Before Northern Sandblasting (supra) the position at common law was that established in Cavalier v Pope [1906] UKHL 1; [1906] AC 428: a landlord owed no duty of care in respect of the state of the premises, either to his tenant, or to any other user of the premises.

421 The facts of Northern Sandblasting were most unusual. The 9-year-old daughter of the tenants of a residential property was electrocuted when turning off a garden tap. The tap had been inadvertently connected to the electricity supply as a result of the negligent work of a contractor employed by the landlord.

422 By a majority decision, four members of the High Court held that the landlord was liable for the breach of the duty of care it admitted owing to the injured child. Cavalier v Pope (supra) was not followed.

423 However, as Kirby J pointed out in Jones v Bartlett (supra) at [233] the reasoning of Brennan CJ and Gaudron J, who were both in the majority, was quite different from that of the other members of the majority, Toohey and McHugh JJ. No principle of universal application therefore emerges from Northern Sandblasting (supra).

424 In Jones v Bartlett (supra), the tenant's adult son sustained serious injury when he walked accidentally into an internal glass door. The door complied with the building standards applicable when the premises were built but not the higher standard introduced subsequently. By a majority, the High Court held that the landlord was not in breach of any common law duty of care owed to the tenant's son.

425 In considering the nature of the duty of care imposed on the landlord by s 9(1) and s 5(1) of the Occupiers Liability Act, Gleeson CJ regarded as "unconvincing" the argument that reasonable care required the landlord to have the premises expertly assessed before the commencement of the lease, to see whether, and in what respects, their construction fell short of the then current building standards; or whether, and in what respects, the premises could be made safer. His Honour said it had not been shown to be the usual practice and that the evidence indicated that it was not the usual practice. There was nothing to suggest to the landlord that the house was defective or dangerous or that, by reason of its age or condition, it was hazardous to occupy ([49]).

426 His Honour went on to hold that whether it was reasonable to require an owner of premises to have them inspected by an expert before letting, depended on the circumstances of the case: there was no answer which was of universal application. The answer to the question in any particular case involves a factual judgment "and does not provide the occasion for the imposition of a requirement of the law" ([58]).

427 Gaudron J referred to her Honour's own judgment in Northern Sandblasting (supra) where she was of the view that before the commencement of a tenancy it was reasonable both to inspect the premises and to remedy existing defects that gave rise to a foreseeable risk of injury. Her Honour considered also that it was reasonable to have an inspection carried out where there might be defects or potential defects which posed special dangers, such as electrical wiring and gas connections. In relation to those matters, it was reasonable to have an inspection carried out by persons with the relevant skills or expertise ([88]). In the present case, of course, there would have been no cause for any such concern.

"When domestic premises are the subject of a new letting, reasonable care requires that they be reasonably fit for habitation by those who will reside in the premises. That will ordinarily require an inspection by the landlord or an agent immediately before the commencement of the letting. It may also require inspection by a person with building qualifications who has the capacity to assess the safety of the premises. Whether it does will depend on the age of the premises, its general condition and the time since the last inspection by a professionally competent person." ([103])

429 As I have noted above, unit 1 was inspected by Mr Black, his father and his sister before the purchase and letting by Ash Investments. On the assumption that Mr Black Senior and his daughter were lay people (and the plaintiff has made no assertion to the contrary), there was nothing to alert them to the existence of any defect in the balcony. Further, they knew that the building works had been completed only recently and were entitled to assume (as Mr Black did assume) that the work had been passed by the relevant authority.

430 Thus, even on the standard which McHugh J considered appropriate, Ash Investments is unlikely to have been held liable.

431 Returning to the majority decision in Jones v Bartlett: Gummow and Hayne JJ held that premises would not be reasonably fit for the purposes for which they were let, where the ordinary use of the premises for that purpose would, as a matter of reasonable foreseeability, cause injury. Their Honours said:

"The duty requires a landlord not to let premises that suffer defects which the landlord knows or ought to know make the premises unsafe for the use to which they are to be put. The duty with respect to dangerous defects will be discharged if the landlord takes reasonable steps to ascertain the existence of any such defects and, once the landlord knows of any, if the landlord takes reasonable steps to remove them or to make the premises safe." ([173])

432 Their Honours went on to say that what constituted the taking of reasonable steps would depend on all the circumstances of the case ([174]).

"The diligence required to ascertain dangerous defects will not in the ordinary case require the institution of a system of regular inspection for defects during the currency of the tenancy. In Northern Sandblasting (1997) 188 CLR 313 at 394, Kirby J said of a posited requirement of inspections of domestic electricity systems:

'If correct in principle, it would require regular inspections against the risk of other perils, eg, gas supply, floorboards, balustrades, etc. In the absence of evidence about the prevalence of, and need for, any such inspections of rented accommodation, there was no foundation for imposing such a duty on landlords leasing residential premises'.

Nor is there a requirement for the engagement of experts in each of the fields, such as electrical wiring, and glass fabrication and installations, where such risks of defects could, in the nature of things, be seen as a possibility." ([183 - 184])

434 Kirby J held that a landlord might discharge his duty of care by undertaking an inspection of the premises prior to each lease or renewal of a lease and by responding reasonably to defects drawn to his notice and by ensuring that any repairs were made which such inspection or notice disclosed to be reasonably necessary. The duty could be discharged ordinarily by delegating such inspection and repair to a competent person ([237]).

435 Both Kirby and Callinan JJ (in a dissenting judgment) considered that there appeared to be no clear majority view expressed in Northern Sandblasting (supra) as to the nature and extent of any duty owed by a landlord to a tenant. In that case and in Jones v Bartlett, the landlords accepted that they owed a duty of care to the respective plaintiffs, but without specifying the precise content of that duty. This led Kirby J to observe that the conclusions he had reached (to which I have referred above) left open other questions:

"[4] whether the common law in Australia has developed sufficiently to impose on a landlord an affirmative duty to conduct, or procure the conduct of, a detailed inspection of every possible source of danger in the premises;

[5] whether such inspection must be by experts capable of detecting latent defects not reasonably apparent to an untrained eye; and,

[6] if so, whether the failure to procure such experts will impose legal liability on the landlord where a tenant or associated third party is injured by reason of a defect of which the landlord personally remains reasonably unaware." ([237])

436 Whether those questions should be answered in the affirmative is a matter for consideration by an appellate court or the legislature. For the purposes of this trial, I proceed on the basis of the law as it stands at present.

437 In dismissing the appeal in Jones v Bartlett, the majority of the High Court upheld the decision of the Full Court of this Court in Bartlett v Jones, unreported; FCt SCt of WA; Library No 990073; 22 February 1999 that the landlord was not liable in negligence or for breach of statutory duty.

438 In the Full Court, Murray J (with whom White and Scott JJ agreed) held that the relevant question was whether there was "a reasonably foreseeable risk of injury occurring in some such way as did occur". Murray J went on to hold that the risk that a person would walk into the door with sufficient force to shatter the glass was "extremely unlikely but not entirely fanciful: Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40". However, the landlord was under no obligation to have the door inspected by an expert, because "to a casual observer, the door appeared to be, as it was, in a state of good repair, and it operated quite normally" (at 25).

439 In my view, the same kind of considerations are relevant to the present case. I accept, for the purpose of the argument, that Ash Investments owed a duty of care, or a duty arising under the Occupiers Liability Act, to take reasonable care to protect persons such as the plaintiff from dangers due to the state of the premises.

440 As I have noted above, unit 1 was inspected by Mr Black, his father and his sister before it was purchased. At that stage, of course, there would have been little (if any) rot in the balcony timbers. I therefore find that not even an expert inspection would have detected the presence of rot.

441 An inspection by a building surveyor would have revealed that the balcony joists and supporting plates were made from oregon, an unsuitable timber for external use. Such a discovery would no doubt have led to further inquiry.

442 However, I am satisfied that there was no feature of the balconies which ought reasonably to have suggested to Ash Investments that it would be appropriate to commission an expert inspection. There is no evidence that it is customary to do so in these circumstances. And in this case, in my view, the risk that the balcony would collapse suddenly, and without warning, would reasonably have been regarded as fanciful, given the safeguards incorporated into the procedures for the approval of plans, and subsequent construction by, or under the supervision of, a qualified builder.

443 Nor do I consider that Ash Investments was under any obligation to carry out subsequent inspections. Although Ash Investments was the landlord, the tenancy arrangements were essentially a family matter: the parties were not at arms' length. That being so, I think it was reasonable for Ash Investments to have relied on Mr Black to report any circumstance which called for action in the nature of repair and maintenance, just as it relied on him to report any matters of interest arising from the meetings of the Strata Company. But for the reasons given above in relation to the claim against Mr Black, there was no reason for him to suspect that the balconies required attention.

444 I therefore find that Ash Investments did not breach any duty it owed to the plaintiff, either at common law or under the Occupiers Liability Act 1985. The claim against Ash Investments must therefore be dismissed.

445 The claim against the Strata Company is based on an alleged failure to repair and maintain the balcony. The plaintiff contends that this obligation is imposed on the Strata Company pursuant to s 35(1)(c) of the Strata Titles Act 1985 (WA) on the basis (which is disputed by the Strata Company) that the balcony formed part of the common property of the Old Soap Factory. It is therefore necessary to resolve this dispute so as to determine whether s 35(1)(c) has any application.

446 In s 3 of the Strata Titles Act 1966, the term "common property" is defined to mean:

"so much of the land for the time being comprised in a strata plan as is not comprised in a lot shown in the plan".

The definition of "building" is also relevant. It is defined to mean:

"a building or buildings shown in a strata plan".

447 The scheme of the Strata Titles Act 1966 is, therefore, that the land or buildings shown on the strata plan must either be part of a lot or lots or common property. There are no other options.

448 The term "strata plan" is defined to mean a plan that:

"(a) is described as such in its title or heading;

(b) shows the whole or any part of the land comprised therein as being divided into two or more lots; and

(c) complies with the requirements of section five of this Act".

449 Paragraph (b) of this definition must require "the land" comprised in a strata plan to include a multi-storey building. If that were not so, the object of the legislation would be defeated.

450 So far as relevant, s 5(1) provides that a strata plan shall:

"(a) delineate the external surface boundaries of the parcel and the location of the building in relation thereto;

(b) bear a statement containing such particulars as may be necessary to identify the title to the parcel;

(c) include a drawing illustrating the lots and distinguishing them by numbers or other symbols;

(d) define the boundaries of each lot in the building by reference to floors, walls and ceilings, without necessarily showing any bearings or dimensions of the lot;

(e) show the approximate floor area of each lot;

(f) define any portions of the parcel not within the building, that are or are intended to be separate tenements, and used in conjunction with the building or portion of the building;

(g) be endorsed in accordance with section eighteen of this Act".

451 The strata plan in the present case was prepared by Ashley Charles Hams, a licensed surveyor. Mr Hams qualified in 1970. His evidence was that he had been involved in surveys for strata title subdivisions since 1965 (TS 258). Whether or not Mr Hams had been involved in such activities since 1965 or 1966 is of no great significance. I accept that he has long experience in dealing with subdivisions under the 1966 Act and subsequent legislation.

452 Mr Hams prepared six plans for the Old Soap Factory (exhibit 1/422 - 427). The first is the plan of the parcel. That is, the plan of the lot on which the Old Soap Factory stands. It shows the outline of what might be described as the footprint of the buildings erected on that parcel.

453 In accordance with s 18 of the Act, Mr Hams endorsed on that plan the numbers of the unit entitlements of each lot and the aggregate number. Mr Hams made his own assessment for this purpose. It was based on what he considered to be an appropriate level of responsibility for maintenance of the common property or voting powers of the unit holders (TS 263).

454 On the ground floor plan, Mr Hams depicted the outline of the buildings in solid lines. He also marked in dotted lines the courtyards intended for use with each of the lots.

455 On the first floor plan, Mr Hams adopted a slightly different approach. Again, he showed the outline of each of the lots in solid lines. He then used broken lines to depict void areas within the envelope of each lot. Mr Hams said the void areas represented stairways, or lifts. He said:

"... the reason it's excluded is because it's not actually a useable space on that level, on the internal of the building." (TS 262)

456 However, Mr Hams used broken lines to depict areas external to each of the lots marked in solid lines. Thus, at the first floor level, a terrace and a deck were depicted in broken lines.

457 The plans for the second and third floors showed void areas (lifts and stairs) within the units, and the balconies at the northern and southern ends of the building, all depicted in broken lines.

458 At each level, Mr Hams noted the floor area within the solid lines. Thus, for what is now unit 1 at the second and third floor levels, Mr Hams noted that the area was 62 square metres. This was no doubt intended to ensure compliance with s 5(1)(e) of the Act, as set out above.

"That 62 square metres is the area of the lot inside the main walls of the building and from memory, the definition at that stage of the areas which we were calculating was limited by the internal face of the walls, floors and ceilings, which were the cubic space of a ... part of a lot." (TS 262)

460 This evidence was given over objection by leading counsel for the Strata Company on the basis that it reflected an interpretation of the Act which it was inappropriate for Mr Hams to give, that being a legal question in issue in the proceedings. However, I accept Mr Hams' evidence as to the way in which he prepared the strata plan.

461 This evidence raises a difficult question of construction of the 1966 Act. The difficulty arises in this way: s 5(1)(d) defines the boundaries of each lot "in the building" by reference to floors, walls and ceilings. However, it will be recalled that the term "building" is defined to mean a building or buildings shown in a strata plan. In the present case, the balconies clearly form part of the building. And they are shown on the strata plan, albeit in broken lines. On that basis, there is no reason to exclude the balconies from the lots to which they are attached. However, the balconies have floors, but neither walls nor ceilings.

462 If not included in the lots to which they are attached, then the balconies must form part of the common property: clearly, an unsatisfactory result.

463 One solution would be to construe s 5(1)(d) so as to define the lots by reference to such floors, walls and ceilings as they might have. This, I think was the argument to which Le Miere J referred in Jordan v Van Schoubroeck [2005] WASCA 120 at [20]. However, I consider that such a construction would be inconsistent with s 5(5); a view Le Miere J appears to have taken, because his Honour pointed out that:

"In any event, s 5(5) of the old Act is subject to the express qualification 'unless otherwise provided in the strata plan'. The respondent concedes that if the Strata Plan expressly and unequivocally stated that the balcony of each lot forms part of the lot then the lot includes the balcony."

464 Further, such a construction could never have resulted in a courtyard being included in a lot. That is because, a conventional courtyard could not be said to be "within the building".

465 The Strata Company contends that the balconies form part of the lots. It relies on a decision of Needham J in Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412 as being authority for the proposition that a balcony used exclusively by the occupier of a unit to which it is attached is not generally regarded as common property.

466 In my view, however, the decision does not support that proposition.

467 In Furney's case (supra), the body corporate sought directions about the extent of its powers and obligations in relation to the maintenance of the common property. The relevant legislation was the Conveyancing (Strata Titles) Act 1961 (NSW). This Act clearly provided the basis for the Strata Titles Act 1966: they have many common provisions. These include the requirement that a strata plan shall define the boundaries of each lot in the building by reference to floors, walls and ceilings: s 4(1)(d) of the NSW Act.

468 The NSW Act also includes (in s 4(2)) a provision which is almost identical to s 5(5) of the 1966 Act:

"Unless otherwise stipulated in the strata plan, the common boundary of any lot with another lot or with common property shall be the centre of the floor, wall or ceiling, as the case may be."

It can be seen that the only difference between the two provisions is that the 1966 Act uses the word "provided" in place of the word "stipulated". I do not regard this as a significant difference.

469 Referring to s 4(2) of the NSW Act, Needham J said:

"In the present strata plans there is no other stipulation, except that lots include balconies and courtyards. It would seem to follow, therefore, in the case of lots with balconies or courtyards that the boundary of that lot would extend on to that balcony or courtyard, and would be limited by the internal skin of the wall, ceiling and floor."

470 In my view, it is clear from this passage that the lots would not have included balconies and courtyards had there been no stipulation to that effect in the strata plan. Had the true construction of the NSW Act been such that lots might be defined by reference to such floors, walls and ceilings as they had, it would not have been necessary to stipulate that balconies were included in the lots.

471 It follows, I think, that if a balcony or courtyard can be included in a lot only if that is stipulated, neither would fall within a lot as a result of the definition in s 5(1)(d).

472 In the present case, the strata plan prepared by Mr Hams did not contain any provision to the effect that the balconies (or courtyards) would be included in the lots, as it might have done, pursuant to s 5(5).

473 In fact, the reverse is the case. Mr Hams delineated the boundaries (and courtyards) in broken lines, thereby, it seems, evincing an intention that they should not be included in the lots. In my view, it does not matter whether Mr Hams took that course because he believed the Strata Titles Act required him to do so, or because he decided not to include the balconies in their respective lots, as he could have done pursuant to s 5(5). The fact is, the strata plan was drawn so that the balconies were not included. The approximate floor areas of each lot, shown by Mr Hams in compliance with s 5(1)(e) clearly did not include the balcony areas.

474 For these reasons, I conclude that the balconies formed part of the common property.

475 This seems to have been the view taken by the original members of the Strata Company. At its first general meeting on 21 March 1983, a resolution was passed that the proprietors of all of the units "shall have the exclusive use of the common area" (exhibit 1/510). I assume the intention was that each proprietor should have exclusive use of the common area attaching to his or her property.

476 In the report of the Law Reform Commission of Western Australia into the Strata Titles Act (project no 56, report published 29 December 1982), the Commission referred to the requirement that a lot must be within a building or buildings as "a significant drawback" (par 4.3).

477 It was as a result of the Commission's report that the 1966 Act was repealed and replaced by the Strata Titles Act 1985. However, the boundaries of a lot created under the 1966 Act were preserved by the transitional provisions contained in Sch 3 of the 1985 Act: Jordan v Van Schoubroeck (supra) at [23].

478 Evidence was given by John Gerard Barlow and his wife, Sheila Ann Barlow, who purchased unit 2 in the Old Soap Factory in January 1987 and who have lived there since that date. Mrs Barlow was a joint secretary of the Strata Company from 1989 to 2000. Mr Barlow was the chairman of the Strata Company for a period which ended in 2000. The commencement date is not clear. In addition to acting as chairman, Mr Barlow assisted Mrs Barlow with secretarial matters. In addition to chairing meetings of the Company, Mr Barlow prepared agendas for meetings, prepared the minutes of the meetings from Mrs Barlow's handwritten notes, attended to matters relating to insurance and prepared memos to proprietors and correspondence (exhibit 10).

"It never occurred to anyone that the balconies were common property. To the best of my knowledge it was never mentioned." (TS 312)

480 I accept this evidence. By the time Mr and Mrs Barlow became involved in the Strata Company, the classification of balconies and courtyards as common property had, no doubt, long been forgotten. However, that cannot affect the legal position as I have found it to be.

481 The consequence of my conclusion that the balcony formed part of the common property is that s 35(1) of the Strata Titles Act 1985 then applied.

(c) keep in good and serviceable repair, properly maintain and, where necessary, renew and replace -

(i) the common property, including the fittings, fixtures and lifts used in connection with the common property; and

and to do so whether damage or deterioration arises from fair wear and tear, inherent defect or any other cause".

483 The plaintiff alleges against the Strata Company that it "failed to adequately repair and maintain the Balcony". By way of particulars, the plaintiff contends that the Strata Company should have:

"(a) frequently inspected the Balcony or cause it to be inspected;

(b) replace the Joists with joists constructed of a suitable timber which was not decayed or rotten and which was not likely to decay or rot;

(c) replace the Plates with plates constructed of a suitable timber which was not decayed or rotten and was not likely to decay or rot;

(d) had the splits in the Joists and Plates repaired by a suitably skilled person; and/or

(e) had the nails holding the Joists to the Plates replaced."

(Statement of Claim, par 25)

484 The Strata Company sought further particulars of the allegations set out above. It asked, first, whether it was alleged that the Strata Company knew or ought to have known of the defect in the balcony. The answer was:

"It is alleged that the [Strata Company] was responsible for the repair and maintenance of the balcony and that the [Strata Company] should have carried out or caused inspections of the balcony to have occurred and had it done so the defect would have been known to the [Strata Company]."

485 In answer to the question whether the Strata Company ought to have discovered the nature and extent of the defects "on ordinary inspection" the plaintiff responded:

"An inspection of the balcony by a qualified building inspector would have revealed defects including movement in the timbers, knots in the Oregon timber, splits along the grain of the timber which were long standing, discolouration caused by water penetrating the timber and the rotting of the timber at the junction with the south end wall plate." (my emphasis)

486 The plaintiff went on, in response to further requests for particulars, to contend that the inspections should have been carried out not less than once per year and that they should have been carried out by "a builder or qualified building inspector" who should have been consulted to carry out "an inspection of safety and construction aspects of the balcony" (Papers for the Judge, page 44).

487 The plaintiff contends that the alleged failure of the Strata Company to repair and maintain the balcony was a breach of the statutory duty imposed on it by s 35(1)(c) of the Strata Titles Act 1985: and that this caused or contributed to the collapse of the balcony and the plaintiff's subsequent injury.

488 The plaintiff's claim against the Strata Company is confined to an alleged breach of statutory duty. There is no allegation of negligence.

489 The Strata Company raised legal and factual defences to the plaintiff's claim. It contended as a matter of law that:

(1) a breach of the Strata Titles Act does not give rise to a civil claim for damages; and, in any event,

(2) any such remedy should be available only to the unit holders.

However, the Strata Company's primary contention is that it did not breach its statutory duty.

490 The plaintiff's claim against the Strata Company is based on the evidence of Antony Mee. Mr Mee has many qualifications in the building industry. He commenced his career in 1980. Since then, he has had experience in various roles, ranging from governmental building control, municipal building surveying and inspection, computer aided design drafting, vocational education and training and building control, technical policy development and implementation.

491 Relevantly for present purposes, Mr Mee's qualifications and accreditations include those of a building inspector and surveyor in Victoria, New South Wales and Western Australia. He is a Member of the Australian Institute of Building Surveyors, the Master Builders Association of WA, the Property Council of Australia (WA Division) and an Associate Member of the Building Designers Association of WA (exhibit 7).

492 Mr Mee gave evidence that he had been asked to comment on the frequency with which the owners of the Old Soap Factory, which he understood to be a body corporate, should have had the premises inspected. It was Mr Mee's opinion that given the supporting timber members were constructed of oregon, and given their exposed coastal location and the prevailing weather conditions, it would have been prudent to carry out maintenance inspections every six months, but no less than once each year.

493 Although Mr Mee based that opinion on the use of oregon, he recommended those frequent inspections, regardless of the materials used in the construction of the balcony (exhibit 8, par 9). However, there was no requirement to conduct inspections under the building control laws of Western Australia (TS 238).

494 Mr Mee did not inspect the balconies until about 12 months before the trial, by which time they had all been replaced with steel structures. However, having been told about the extent of the rot in the timbers of the balcony which collapsed, Mr Mee said:

"I consider that evidence of rotting timber and the consequential damage to the subject first floor balcony would most likely have been visible when conducting any maintenance inspection of the building." (exhibit 8, par 12)

Pausing there: that opinion is contrary to the findings which I have made, as set out previously in these reasons.

"Such signs of damage would include weathering, splits, cracks, rotting and decay. Deflection (flexing) of the supporting structure, when walking on the balcony, would probably have led to further investigation and examination."

496 Pausing again: I note that there is no evidence that the balcony did deflect when walked on. Indeed, Mr Black's evidence, which I have accepted, suggested that there was no such deflection. It will be recalled that he had the impression that the balcony was "as solid as a rock".

497 I therefore do not accept that part of Mr Mee's evidence. However, in fairness to him, I repeat that he did not inspect the balcony at any time before the collapse.

498 More significantly, Mr Mee expressed the following opinion:

"Had I been engaged to carry out an inspection prior to the first floor balcony collapse ... upon observing the supporting structure and noting the use of non-durable timber species, such as Oregon, I would have strongly recommended replacement, or reinforcement and whether [sic, weather] protection of the structure so as to render it safe." (exhibit 8, par 14)

Mr Mee then went on to refer to the options available for replacement or strengthening of the balcony.

499 I accept this part of Mr Mee's evidence. As I have noted above, he is a highly qualified and experienced building surveyor. I therefore think it probable that if he had inspected the balcony, he would have observed that the timber used for the joists and supporting plates were oregon: and that this was inappropriate for the purpose for which it had been used.

500 It is not in issue, and I find it to be the fact, that no inspection of the balconies was ever carried out at the instigation of the Strata Company. The question is, therefore, whether this constituted a breach by the Strata Company of its statutory duty under s 35(1)(c) of the Strata Titles Act 1985.

501 I have been referred to a number of authorities dealing with the repairing obligations of strata companies. However, I consider that the most authoritative statements of the law are those made in the Court of Appeal of New South Wales in Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449. In my view, that case is particularly relevant because it was decided after Jones v Bartlett (supra), which although a landlord and tenant case, informed the decision in Ridis' case.

502 The appellant in Ridis was the occupier of a strata-titled property. He suffered injury when he attempted to prevent the closure of a glass entrance door by extending his right arm at an angle of 90 degrees towards it. As the door came into contact with his fingers, the glass shattered causing severe lacerations to his arm as it passed through the doorframe.

503 The appellant brought proceedings against the owners corporation (ie, the strata company) for alleged breaches of its duty of care as the occupier of common property in which the door was situated, and its statutory duty under the Strata Schemes Management Act 1996 (NSW), s 62.

504 That provision is in similar terms to s 35(1)(c) except that it omits the words "where necessary" in relation to the obligation of the strata company to renew and replace common property. For present purposes, nothing turns on that distinction.

505 The primary Judge dismissed the claim on the basis that it was not reasonably foreseeable by the owners corporation that the retention of the glass, or its failure to inspect the glass, would have given rise to a risk of injury to the appellant or a class of persons including the appellant.

506 Hodgson JA held that the obligation imposed by s 62 was not merely to exercise reasonable skill and care with a view to achieving the requirements of that provision but that the obligation was absolute. His Honour said:

"In my opinion, that means that an owners corporation, acting reasonably, should have a system in place for monitoring the maintenance and state of repair of the common property; and in my opinion ... this system should be such that particular regard be had to safety issues associated with the maintenance and state of repair of the common property.

However, in my opinion, this does not mean that the owners corporation must from time to time hire specialist experts to inspect every aspect of the common property that could possibly give rise to safety issues. Certainly, if it has reason to believe that any such aspect could be dangerous, such as electrical wiring, then it should engage the appropriate expert. But in the absence of any such reason, in my opinion an owners corporation, acting reasonably, would have in place a system of periodic inspection by someone with appropriate general skills, such as an experienced managing agent or a person with general building maintenance skills, and need not in that event have a system involving regular inspection by more specialised experts." (par 6)

507 His Honour went on to note that if the owners corporation had actually been aware that the glass in the door was such that it could shatter in the circumstances as those of the accident, then the exercise of reasonable skill and care would have required precautions such as those taken after the accident in relation to the other door:

"However, it was not established that the owners corporation was aware of this, and the crucial question is whether, acting reasonably, it should have been aware of this."

508 Thus, his Honour said the question was, whether on the balance of probabilities, inspections of the kind to which his Honour had referred would have made the owners corporation aware of the problem (at par 9).

509 Hodgson JA was of the opinion that the appeal should be dismissed: as was McColl JA.

510 McColl JA derived assistance from the decision of the High Court in Jones v Bartlett (supra) because:

"the concept of maintaining and repairing premises was at the heart of the legislative regime that case considered."

511 Her Honour went on to note that the common property of a strata scheme is more analogous to private domestic premises than to premises occupied by public authorities or commercial enterprises (at pars 154 - 155).

512 McColl JA held that the provisions of s 62 of the Strata Schemes Management Act 1996 did not impose an obligation on the owners corporation to insert new glass in a door which was operating as intended (and, therefore, did not require maintenance or repair) "let alone an obligation to procure experts to assess the premises to determine whether any of the materials of which the common property was constructed could be made safer" (par 171).

513 Thus, her Honour was of the view that the statutory duty imposed by s 62 did not:

"oblige the owners corporation to have regard to a standard of care higher than that imposed by the general law of negligence in executing its functions. The duty of inspection for which the respondent contends would, ... have that effect." (par 175)

"Moreover the legislature could be expected to have recognised that the obligations imposed upon the owners corporation were imposed, in substance, upon individual property owners. There was no reason for the legislature, by the enactment of s 62, to impose upon individuals who take advantage of urban consolidation to live in properties governed by the Strata Schemes Management Act, a burden of inspection and continually updating of the common property not borne by individuals who reside in freehold properties." (par 181)

Her Honour went on to point out that the owners corporation was merely the agent for the lot proprietors insofar as its obligations to repair, renew and replace common property were concerned:

"Once that is clearly understood, it makes no sense for the legislature to have imposed upon the sum of occupiers a statutory obligation more onerous than that imposed at common law at the time the Strata Schemes Management Act was passed." (par 186)

515 Tobias JA dissented. However, his Honour was also of the view that an owners corporation should be proactive in the carrying out of inspections for the purpose of determining whether proper maintenance, repair, renewal or replacement was necessary. In relation to that matter, his Honour said:

"Such an approach would, in my opinion, impose no greater duty upon the owners corporation than exists on any other occupier under the general law." (par 53)

"It follows in my opinion, that the obligations imposed upon the [owners corporation] by s 62 ... must be taken to have informed the standard of care reasonably required of it as an owners corporation with respect to its management and control of the use of the common property ... To discharge that standard of care the [owners corporation] was required to inspect from time to time the common property including its fixtures and fittings for the purpose of, inter alia, replacing any item thereof which it was appropriate to replace in the sense referred to above." (par 55)

517 The proposition I extract from the decision in Ridis' case is that a strata company which is subject to the obligations imposed by s 35(1)(c) of the Strata Titles Act 1985, is required to conduct inspections of the common property from time to time in order to determine whether any repair, maintenance or replacement is required. However, the obligation to inspect which is inherent in s 35(1)(c), does not require inspection by anyone more highly qualified than an experienced managing agent or a person with general building maintenance skills, unless the strata company has reason to believe that inspection by a specialist is required.

518 In the present case, the founding members of the Strata Company included Mr Millett and Mr Hollings who were directors of Lavender Bay. They must be taken to have known that Drexel London had repeatedly advised that a structural inspection of the Old Soap Factory be carried out by Halpern Glick. However, it has not been suggested in this litigation that their knowledge must continue to be imputed to the Strata Company, after they had ceased any involvement with it.

519 In my view, absent any such considerations, the position of the Strata Company is no different from that of Mr Black and Ash Investments. The Strata Company had no reason to suspect that the structure of the balconies warranted inspection by a structural expert. Therefore, the Strata Company would not have been required to have anyone better qualified than (for example) Mr Strawbridge, a carpenter, to carry out a routine inspection. It will be recalled that Mr Strawbridge saw nothing of concern when he worked on the balcony for Mr Black.

520 I have already held that the presence of the rot in the timber members of the balcony would not have been detected even by a person with considerable expertise in that field. That being so, the plaintiff's case, at its highest, must be that an inspection would have revealed the use of oregon, an unsuitable timber for that service. That is Mr Mee's evidence, which I have accepted. However, I do not consider that the Strata Company was obliged to have an inspection carried out by a person whose level of expertise was such as to be able, not only to recognise that oregon had been used in the balcony, but also to appreciate the significance of that fact.

521 I therefore conclude that although (by reason of its failure to inspect) the Strata Company was in breach of its statutory obligation pursuant to s 35(1)(c) of the Strata Titles Act 1985, that breach was not the cause of the collapse of the balcony, nor of the plaintiff's injuries.

522 In these circumstances, it is not necessary to consider the questions of law raised by the Strata Company in its defence.

523 For these reasons, the plaintiff's claim against the Strata Company must be dismissed.

524 In my view, for the reasons given above, the plaintiff is entitled to judgment against the City of Fremantle and Drexel London, for damages to be assessed in due course. The plaintiff's claim against the other defendants must be dismissed.

525 In these reasons, I have not considered whether Lavender Bay, Mr Bumstead, or anyone involved in the construction of the balcony was responsible, directly or indirectly, for the collapse. It would have been inappropriate to do so. That is because, ultimately:

"it is the duty of the Court to apportion damages having regard to the parties before the Court."

Rolls Royce Industrial Power (Pacific) Ltd v James Hardie and Co Pty Ltd [2001] NSWCA 461; (2001) 53 NSWLR 626 at [86].

526 As I have noted above, there are various third party claims and notices of contribution outstanding. On the view I take, most of these will fall away. However, proceedings between the City of Fremantle and Drexel London will remain outstanding.

527 No submissions were made in relation to these matters during the trial. I think that was the appropriate course. Having regard to the multiplicity of cross-claims and notices of contribution, the range of possible findings would have made it difficult for such matters to be pursued efficiently at that stage.

528 Once the parties have had an opportunity to consider these reasons, they can apply for further directions for the resolution of such matters as remain outstanding.

CITATION : GOVE -v- BLACK & ORS [2006] WASC 298 (S)

HEARD : 6-9 & 13-21 NOVEMBER 2006, 14 FEBRUARY & 1 MARCH 2007

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

Torts - Costs - Whether Sanderson or Bullock orders - Extent to which any conduct of unsuccessful defendants shows it was reasonable to join successful defendants - Effect of alleging independent causes of action

Torts - Negligence - Plaintiff sues six defendants - Two defendants held liable - Contribution between defendants - Comparison of culpability

Costs - Whether indemnity costs flow from Calderbank offers - Effect of acceptance being an abandonment instead of a compromise - Lack of evidence on how declining an offer was unreasonable - Determining costs in quasi­representative proceedings

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : M P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Fifth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Fifth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

First Defendant : Mr P B O'Neal (14 February); no appearance (1 March)

Second Defendant : Mr S V Forbes & Mr M L Greenland (14 February); no appearance (1 March)

Third Defendant : Mr C L Hollett (14 February); no appearance (1 March)

Sixth Defendant : Mr C P Stevenson (14 February); Mr S F Popperwell (1 March)

1 TEMPLEMAN J: The plaintiffs in these actions all claim to have been injured on 31 December 1996, when a balcony on which they were standing, collapsed suddenly and without warning.

(1) the occupier of the strata-titled premises of which the balcony formed part (the first defendant);

(2) the owner of the premises (the second defendant);

(4) the City of Fremantle, being the local authority in whose area the premises were situated (the fourth defendant);

(5) the architects who had designed the balcony (the fifth defendants); and

(6) the engineering company which had been involved in certain aspects of the structural design of the balcony (the sixth defendant).

3 The two exceptions were the plaintiffs Marc Drexel in action number 2414 of 1997, who did not sue the fifth defendants and Dean David Holm Graham in action number 2398 of 1997, who sued neither the fifth nor the sixth defendants.

4 The plaintiffs commenced their actions only against the first four defendants. The third defendant then joined the fifth defendant as a third party, following which, the fifth defendant joined the sixth defendant as a fourth party.

5 The plaintiffs (other than Marc Drexel and Dean Graham) joined the fifth defendant and (other than Dean Graham), the sixth defendant. (The sixth defendant in all actions other than Marc Drexel's action became the fifth defendant in that action.)

6 There were numerous inter-defendant contribution claims, to which it is not necessary to refer further, at this stage.

7 The actions went to trial on the issue of liability, on the basis that action 2375 of 1997 would be the lead action. However, ten of the plaintiffs were represented by counsel at the trial. The remaining seven plaintiffs were not represented at trial, but agreed to be bound by the outcome.

8 At trial, the plaintiffs succeeded against the fourth defendant; and (excluding Marc Drexel and Dean Graham) against the fifth defendants. The plaintiffs' actions against the other defendants were dismissed.

9 It is now necessary to make final orders and to deal with the costs of the actions and inter-defendant proceedings thus far. The parties have all made detailed submissions in relation to costs. It has emerged that the principal issues are:

(1) whether there should be Sanderson or Bullock orders;

(2) whether orders should be made which reflect the rejection of various Calderbank offers;

(4) how the contribution claims between the fourth and fifth defendants should be resolved.

10 Counsel for those plaintiffs who were represented at trial, submitted that this case "cries out for a Sanderson order": that is, an order that the fourth and fifth defendants pay the costs of the successful defendants directly.

11 Counsel relies on the general discretion in relation to costs which is given to the Court by O 66 r 1 of the Rules of the Supreme Court 1971 (WA). Although the rule provides that "the Court will generally order that the successful party to any action or matter recover his costs", it provides also that the general discretion is not to be limited by that consideration.

12 However, in exercising the discretion, it is appropriate to have regard to the principles which have emerged over the years in relation to applications of this kind. The ultimate objective is to make orders for costs which are as fair as possible to all parties.

13 In Bullock v The London General Omnibus Company [1907] 1 KB 264, the Court of Appeal refused to interfere with the exercise of the discretion by the trial Judge, who had ordered the unsuccessful defendant to pay not only the plaintiff's costs, but also, the costs she had to pay to the successful defendants.

"The common sense underlying this order is clear, because the learned judge when he made it had before him evidence that, owing to the attitude taken up by the General Omnibus Company, it was reasonable for the plaintiff to join the other defendants." (my emphasis)

15 In other words, it was the conduct of the unsuccessful defendant which made it reasonable for the plaintiff to join the successful defendant.

16 That principle was adopted by Gibbs CJ and Brennan J in Gould v Vaggelas [1984] HCA 68; (1985) 157 CLR 215. Gibbs CJ said (at 230):

"In my respectful opinion the true position was clearly stated by Blackburn C.J. in Steppke v. National Capital Development Commission (1978) 39 LGRA 94 at p. 100; 21 ACTR 23 at pp. 30-31, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant'... " (my emphasis)

17 The judgment of Brennan J (at 260) is to the same effect.

18 Wilson J, with whom Murphy J agreed, held (at 247) that a Bullock order may be made "where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant". This approach appears to be somewhat different from that taken by Gibbs CJ and Brennan J because it makes no reference to the attitude or conduct of the unsuccessful defendant. However, it is significant, I think, that Wilson J cited as authority for the proposition he had stated, the decisions in Bullock (supra), Johnsons Tyne Foundry Pty Ltd v Maffra Corporation [1948] HCA 46; (1948) 77 CLR 544 at 572; and Altamura v Victorian Railways Commissioners [1974] VicRp 4; [1974] VR 33. In each of those cases, the question was whether the conduct of the unsuccessful defendant had made it reasonable for the plaintiff to join the successful defendant.

19 The authorities were reviewed by Steytler J in Fimiston Mining NL v Western Reefs Ltd (1996) 14 WAR 387. His Honour noted that in Fennell v Supervision & Engineering Services Holdings Pty Ltd (1988) 47 SASR 6, the members of the Full Court of South Australia had differed in their views as to whether any clear principle could be extracted from Gould v Vaggelas (supra).

20 As I understand the judgment of Steytler J, his Honour adopted the approach taken by von Doussa J at 19, when he said:

"... the principle to be discerned from Gould v Vaggelas is that a Bullock order may be made where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant; as between them those costs will be so incurred where the conduct of the unsuccessful defendant in relation to the plaintiff's claim shows that the joinder of the successful defendant was reasonable and proper to ensure recovery." (my emphasis)

21 I respectfully adopt that approach, which, I think, follows from the authorities on which reliance was placed by the four members of the High Court who considered this issue in Gould v Vaggelas (supra).

22 It is still necessary, of course, to consider what kind of conduct on the part of the unsuccessful defendant will make it reasonable for him to be held liable for the costs of the successful defendant. Examples of such conduct include the failure of a defendant to accept responsibility for the plaintiff's loss, or attempting to blame others when the plaintiff cannot tell in advance which defendant will be held liable.

23 However, it is not appropriate to attempt a rigid classification of conduct which will always justify the making of a Bullock or Sanderson order: nor of conduct which will not lead to that result. Such an exercise would tend to place a fetter on the Court's general discretion.

24 The question is, simply, whether any conduct on the part of the unsuccessful defendant makes it appropriate for him to pay the costs of the successful defendant. As Gibbs CJ said in Gould v Vaggelas (supra) at 229:

"... if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution."

25 There is another consideration. There is authority for the proposition that a Bullock or Sanderson order will not be appropriate where independent causes of action are alleged against the defendants. An example is provided by Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd [1984] HCA 59; (1984) 157 CLR 149 where one defendant was sued in negligence, and another in contract, on an insurance policy. However, causes of action may be regarded as independent where separate actions have been instituted against the defendants, even though (for example) each action is based on alleged negligence: see Atkins v Purslowe [1966] WAR 46 at 47.

26 In the present case, by writ issued on 22 December 1997, the plaintiff in the lead action claimed initially against the first to the fourth defendants. The claim against the first three defendants was based on an alleged failure to inspect, repair and maintain the balcony. The claim against the fourth defendant arose from an alleged breach of its obligation to inspect the premises in the course of dealing with the strata titles application. In each claim it was alleged that the relevant defendant owed a duty of care to the plaintiff, and that there had been a breach of duty. However, the nature of the duties said to have been owed by the first three defendants and by the fourth defendant were quite different. Although each defendant denied liability, the fourth defendant did not attempt to blame the first three defendants: nor could it reasonably have attempted to do so.

27 The fifth defendants were brought into the action on 2 September 1998, when they were joined as a third party by the third defendant. On 23 December 1998, the third party joined the sixth defendant as a fourth party. However, it was not until 3 August 1999, that the plaintiff obtained an order joining the third and fourth parties as the fifth and sixth defendants respectively.

28 The plaintiffs' claims against the fifth and sixth defendants, although based on negligence, were quite separate and distinct from their claims against the first three defendants: and separate and distinct again from their claims against the fourth defendant.

29 Further, it cannot be said that the conduct of either the fourth or fifth defendants caused the plaintiff to sue the first to the third defendants or to persist in the claims against them following joinder of the fifth and sixth defendants.

30 I therefore see no basis for making Sanderson or Bullock orders as between the plaintiffs and the fourth and fifth defendants in relation to the costs of the first, second and third defendants.

31 Different considerations apply as between the plaintiffs and the fifth defendants, in relation to the sixth defendant's costs.

32 In my view, as a result of the conduct of the fifth defendant in seeking to blame the sixth defendant for the defective design of the balcony, it was reasonable for the plaintiffs to sue the sixth defendant directly. Although it might be argued that the fifth defendants would have been liable in any event if the design they produced was defective, I think it would have been imprudent for the plaintiffs not to have joined the sixth defendant, when they could not know the precise relationship between the fifth and sixth defendants.

33 In these circumstances, I consider that it would be appropriate for the fifth defendants to bear the plaintiffs' costs of their unsuccessful claim against the sixth defendant.

34 The sixth defendant submits that it might be prejudiced in recovering its costs if a Sanderson order was made. That is because the fifth defendants are likely to be held liable for the payment of substantial damages to the plaintiffs, as well as costs, and because they are only partially insured.

35 In Mayer v Harte [1960] 1 WLR 770, the plaintiff sued three defendants but was successful against only the third defendant, who was bankrupt. The trial Judge made a Bullock order, when a Sanderson order would have protected the successful defendants from the effect of the third defendant's bankruptcy.

36 On appeal, the Court of Appeal, by a majority, refused to interfere with the exercise of the trial Judge's discretion by making a Sanderson order. Sellers LJ said:

"The first and second defendants in this case were sued and successfully resisted the claim. The plaintiff can apparently pay their costs. She seeks to avoid that and asks for an order which probably would mean that the costs would not be paid. Why the successful defendants should be the losers and not the unsuccessful plaintiff I cannot see ..."

37 The approach of the Court of Appeal in Mayer v Harte (supra) was approved in Bankamerica Finance Ltd v Nock [1988] AC 1002. Lord Brandon, with whom the other members of the House of Lords agreed, accepted that the decision whether to make a Sanderson or Bullock order, is a matter for the discretion of the trial Judge. It is clear from Lord Brandon's judgment, that in exercising the discretion, it is appropriate to consider the "hardship" likely to be suffered by the parties, depending on which form of order was made.

38 In this context "hardship" does not involve any inquiry as to the respective financial positions of the parties.

39 In the present case, there is no reason to suppose that the plaintiffs, as a group, would be unable to pay the sixth defendant's costs of the proceedings. However, there is a risk that the fifth defendants might not be able to pay those costs.

40 In these circumstances, there would be a greater potential for "hardship" to the sixth defendant if the fifth defendants were ordered to pay their costs directly, than if the plaintiffs were ordered to pay, and to recover those costs from the fifth defendants.

41 I therefore consider it appropriate to make a Bullock order in relation to the costs as between the plaintiffs and the fifth and sixth defendants. That is, an order that the fifth defendants reimburse the plaintiffs for the costs they will be required to pay to the sixth defendant.

42 There are four Calderbank offers to be considered. Before referring to them individually, I set out some general observations on the significance of such offers.

43 A letter written without prejudice except as to costs, and containing an offer to settle proceedings (a Calderbank offer) is admissible for the purpose of exercising the costs discretion. That is so, even where formal offer procedures are available under the relevant rules of court but have not been followed: Dobb v Hacket (1993) 10 WAR 532 at 539 - 540; Den Hoedt v Barwick [2006] WASCA 196 at [112].

44 Where a Calderbank offer is rejected, but proves to have been more favourable to the offeree than the result of the trial, the offeror will usually seek his costs on an indemnity (or solicitor and client) basis from the date on which the offer was made. However, an order in those terms will not necessarily follow. That is because the Court's discretion as to costs cannot be fettered by the fact that a favourable offer has been rejected.

45 Although the circumstances in which the offer was made and rejected will be relevant to the exercise of the costs discretion, the principle that costs follow the event will be applied, unless the plaintiff acted unreasonably in rejecting the offer: NMFM Property Pty Ltd v Citibank Ltd (No 11) (2001) 109 FCR 77 at 98: or perhaps, as Sheppard J put it in Sanko Steamship Company Ltd v Sumitomo Australia Ltd, unreported; Fed C of A (Sheppard J); 7 February 1996, if the plaintiff's conduct was "plainly unreasonable". This unreported decision, which is cited in Dal Pont, "Law of Costs", at [13.46], was cited with apparent approval by Einfeld J in Christofidellis v Zdrilic [2000] FCA 679. His Honour held, at [25], that:

"The effect of this case law is that the respondents are only entitled to an order for costs on an indemnity basis if the applicant's failure to accept one of their [Calderbank] offers was so unreasonable in all of the circumstances of this case that an order for costs on a party and party basis will not do them justice."

46 In my view, with respect, that is the appropriate way to approach this issue.

47 The situation is different from that which arises where an offer is made under provisions such as O 24A of the Rules of the Supreme Court. Under the rules in force until 1 March 2007, a defendant who made an offer which was not accepted by the plaintiff was presumptively entitled to tax his post-offer costs on a party and party basis if the plaintiff obtained a judgment which was "not more favourable to him than the terms of the offer". Since 1 March 2007, the defendant in those circumstances is presumptively entitled to indemnity costs.

48 Against that background, I turn to consider the various Calderbank offers.

49 On 22 September 2006, the first defendant's solicitors wrote to the plaintiffs' solicitors, "without prejudice save as to costs". They noted that the plaintiffs were no longer relying on an allegation against the first defendant that he had been made aware of a defect in the balcony prior to its collapse. In those circumstances, the solicitors said:

"... based upon the evidence and known facts of the case, it is difficult to see any proper basis on which an adverse finding on liability could be made against the first defendant."

50 The solicitors then set out the following offer:

"1 If the first defendant is released from the proceedings, then it will bear its own costs incurred to date;

1. In respect of any plaintiff that accepts this offer, the first defendant will not seek recovery from such plaintiff in respect of its entitlement under the various costs orders made against the plaintiffs in favour of the first defendant throughout the history of the proceedings.

Acceptance of this offer is conditional upon the following:

1. Any plaintiff, or combination of plaintiffs may accept this offer.
2. The terms of this agreement will be recorded in a deed, which is to be executed by or on behalf of each of the plaintiffs who accepts the offer. The deed shall contain a confidentiality clause.
3. This offer will remain open for acceptance for a period of 21 days from the date of this letter. If the offer is not accepted within that time, then it will lapse.

In considering this offer, you should be aware that the first defendants' costs incurred to date are approximately $280,000.00. We anticipate that going forward from today up to and including the four week trial due to finish on 1 December 2006, that the first defendant is likely to incur approximately a further $200,000.00 in costs."

52 In my view, in considering whether the plaintiffs' rejection of that offer was reasonable, it is important to keep in mind that the offer was made in the context of a trial on liability only.

53 Where issues of liability and quantum are to be tried together, the plaintiff will be able, from his own knowledge, to assess the value of his claim. That exercise might involve the plaintiff in discounting his money claim to reflect any perceived weakness in his case on liability.

54 In the present case, however, the plaintiffs were only able to gauge the strength of the case against the first defendant by reference to his assertion that he had no knowledge of any defect in the balcony, nor of anything which might have put him on notice of any defect. That assertion was made in an affidavit sworn by the first defendant in an application for the summary dismissal of the plaintiff's case. However, that evidence had not been tested by cross-examination: and acceptance of the Calderbank offer would have precluded that course. The offer therefore involved the abandonment of the plaintiffs' claims: not a compromise in the usual sense.

55 Further, the first defendant's offer was based on the assertion that he had incurred costs of $280,000 to date, and was likely to incur costs of a further $200,000.

56 I accept that the first defendant incurred the costs of a summary judgment application and that he had to obtain and consider expert evidence. However, given that the first defendant's case is based on a denial of knowledge, these costs seem to me to be excessive, at least without some explanation or justification.

57 If the first defendant was to obtain an order for indemnity costs, it would still be necessary for his costs to be taxed on a solicitor and client basis. However, in the absence of any breakdown, it would be difficult for the offeree to estimate the likely extent of the taxed costs. Although the plaintiffs would not pay any of those costs if they accepted the offer, they could expect to be held liable if they did not, and were then unsuccessful.

58 In my view, therefore, the principle that an offeree should be left in no reasonable doubt about the value of the offer was not followed in relation to this offer: see Duncan & Weller Pty Ltd v Mendelson [1989] VicRp 36; [1989] VR 386 at 401; Grbavac v Hart [1996] VSC 37; [1997] 1 VR 154 at 155.

59 In all the circumstances, I do not think the plaintiffs' rejection of the first defendant's Calderbank offer was so unreasonable as to displace the usual result of costs following the event.

60 On 22 December 2004, the third defendant's solicitors sent a letter containing a Calderbank offer to the solicitors for all the other parties to the litigation.

61 The third defendant's solicitors summarised their client's position: that an inspection of the balcony would not have revealed the presence of any relevant defects and that, on the authority of Jones v Bartlett (2000) 205 CLR 166, it was not reasonable for the third defendant to carry out detailed inspections or investigations to ensure the structural integrity of the balcony, when there were no apparent defects.

62 The third defendant's solicitors went on to assert that their client was not the occupier of the unit and balcony, and that the balcony was not common property.

63 In these circumstances, the solicitors asserted that the plaintiffs would not succeed against the third defendant on the basis of a breach of a duty of care, or under the Occupiers Liability Act 1985 (WA), or the Strata Titles Act 1985 (WA).

64 The Calderbank offer was in the following terms:

"Subject to the agreement of all parties to this action, we are instructed to make the following offer to resolve this claim:

1. The plaintiff's action against the third defendant be dismissed.
2. The contribution proceedings against the third defendant be dismissed.
3. The contribution proceedings issued by the third defendant be dismissed.
4. Each party agrees to bear their own costs.

This offer will remain open for acceptance until 28 February 2005. If this offer is not accepted in writing by that date, then it will automatically lapse without further notice. Should your client subsequently decide to discontinue their action against our client after that date, then our client will seek to recover their costs of defending this action.

This offer constitutes a Calderbank offer. We reserve the right to produce a copy of this letter to the court in support of any application for costs, other than party and party costs."

66 In my view, as between the plaintiffs and the third defendant, the situation is similar to that existing as between the plaintiffs and the first defendant. That is, the offer required the plaintiffs to abandon their claim against the third defendant in reliance on its assertion that it had no relevant knowledge.

67 The fact that the offer was conditional on acceptance by all parties adds a complication. It has the result, I think, that because no party accepted the offer, an order for indemnity costs could not be made against any party without considering not only the reasonableness of that party's position as against the third defendant, but also, as against each of the other parties.

68 In the absence of any submissions directed to this issue, that is not an exercise I am prepared to undertake.

69 In all the circumstances, therefore, I am not persuaded that it would be appropriate to depart from the usual result, that costs should follow the respective events.

The third defendant's offer to the other defendants

70 On 28 August 2006, the third defendant's solicitors wrote to the solicitors for each of the defendants and made the following Calderbank offer:

"The third defendant offers to pay the sum of $1,000,000 to the defendants in the above listed actions conditional upon the following:

1. Any defendant or any combination of defendants may accept this offer with the third defendant's total liability inclusive of legal costs and disbursements limited to $1,000,000.
2. Upon acceptance of this offer, any defendant accepting this offer will assume conduct of the third defendant's defence in this action including any contribution proceedings.
3. Any defendant accepting this offer and its insurer shall agree to indemnify the third defendant and its insurer against any liability that may arise as a result of a judgment or settlement of the above listed actions inclusive of legal costs and disbursements.
4. The third defendant will make available to any defendant accepting this offer its complete file with the exception of any documents containing legal advice provided to the defendant or to its insurers and will use its best endeavours to ensure that its witnesses will cooperate with such defendant or defendants in the conduct of the above actions.
5. The terms of this agreement will be recorded in a deed which is to be executed by or on behalf of each defendant accepting this offer and by the insurer of those defendants. The deed shall contain a confidentiality clause.
6. This offer will remain open for acceptance for a period of 21 days from the date of this letter. If the offer is not accepted within that time, then it will lapse without further notice to the defendants."

71 The offer was not accepted by any of the defendants. On that basis, the third defendant seeks orders that the fourth and fifth defendants pay the third defendant's costs of their respective contribution claims on a party and party basis down to 28 August 2006, and thereafter, on an indemnity basis.

72 In the course of his submissions, counsel for the third defendant relied only on the fact that the Calderbank offer had not been accepted, as the basis for costs orders in these terms.

73 However, for reasons set out above, before making the orders sought, I would need to be persuaded that the fourth and fifth defendants acted unreasonably in declining to accept the offer. In my view, it is impossible to make that judgment on the materials before me: I do not know what the implications were (if any) of accepting the conditions stipulated by the third defendant.

74 I therefore consider that costs should follow the event in relation to the contribution proceedings between the third, fourth and fifth defendants.

The sixth defendant's offer to the other defendants

75 On 14 September 2006, the sixth defendant's solicitors wrote to the solicitors for each of the defendants and made a Calderbank offer in a form similar to that made on 14 August on behalf of the third defendant.

"The sixth defendant offers to pay the sum of $800,000 to the defendants in the above listed actions (and third party in the Marc Drexel action) conditional upon the following:

1. Any insured defendant or any combination of insured defendants and Ash Investments ('Acceptors') may accept this offer with the sixth defendant's total liability inclusive of legal costs and disbursements limited to $800,000;
2. Upon acceptance of this offer, the Acceptors will assume conduct of the sixth defendant's defence, (including the defence of any contribution, third and fourth party proceedings) and the prosecution of any contribution or third party claims made by the sixth defendant. The sixth defendant is not a party to the Graham action; this offer requires Acceptors to indemnify the sixth defendant against any claim that may be made by Graham or another party seeking contribution for their liability to Graham;
3. The Acceptors (and an Acceptors insurers) shall agree to indemnify the sixth defendant and its insurer against any liability that may arise as a result of a judgment or settlement of the above listed actions inclusive of legal costs and disbursements;
4. The sixth defendant will make available to the Acceptors its complete file with the exception of any documents containing legal advice provided to the sixth defendant or to its insurers and will use its best endeavours to ensure that its witnesses co-operate in the conduct of the actions.
5. The terms of this agreement will be recorded in a deed which is to be executed by or on behalf of the Acceptors and their insurer(s) (we note Ash Investments says it is not insured for the claim. If Ash Investments and an insured defendant accept this offer, this condition does not require an insurer of Ash Investments to be a party to the compromise deed). The deed shall contain a confidentiality clause.
6. This offer will remain open for acceptance for a period of 21 days from the date of this letter. If the offer is not accepted within that time, then it will lapse."

77 The offer was not accepted by any of the defendants.

78 The sixth defendant seeks orders that the fourth and fifth defendants pay the sixth defendant's costs of their respective contribution claims on a party and party basis down to 14 September 2006, and thereafter, on an indemnity basis.

79 Again, the orders are sought simply on the basis that the Calderbank offer was not accepted: but again, I am unable to judge whether the fourth and fifth defendants acted unreasonably. I emphasise that the question cannot be answered by reference only to the amount offered.

80 Not being persuaded that the fourth and fifth defendants did act unreasonably, I conclude that costs should follow the event in the contribution proceedings between the fourth, fifth and sixth defendants.

81 Order 66 r 12 of the Rules of the Supreme Court permits the Court to make special orders for costs "by reason of the unusual complexity or importance of the case or for any other good or sufficient reason". In those circumstances, costs may be taxed (for example) without regard to the limits imposed by the relevant scales.

82 In my view, the present case was not unusually complex or important: that is, in comparison with other litigation conducted in the Supreme Court.

83 I therefore see no reason to make special costs orders on that basis. However, the case was such as to justify the involvement of Queen's Counsel. The third defendant was represented by Queen's Counsel and should therefore have the appropriate certificate.

84 In actions involving multiple parties who have a common interest, it is usual to award a single set of costs in favour or against those parties, as may be appropriate.

85 In the present case, as a result of a case management order made by consent on 17 September 2004, action 2375 of 1997 became the lead action. Before that date, the actions were separate, although they were not all run independently: various small groups of plaintiffs combined for the purpose of instructing solicitors.

86 In these circumstances, it is possible that costs may have been incurred by some plaintiffs individually which it would be proper to permit them to recover against the fourth and fifth defendants.

87 Similarly, the successful defendants may have incurred costs above the scale by reason of their having to defend up to 17 actions, at least down to 17 September 2004. I consider that the mediation falls within this category, for both the plaintiffs and the defendants. That is because the quantum of each individual claim will no doubt be different.

88 I therefore consider it appropriate to order that the fourth and fifth defendants are to be jointly and severally liable to pay the plaintiffs' costs, to be taxed as one set of costs, but to remove the scale limits in relation to the costs of the mediation and any other item which, in the opinion of the Taxing Officer, it was reasonable for a plaintiff to incur individually.

89 As between the plaintiffs, it will be necessary to apportion the costs other than those awarded individually. In my view, subject to any agreement between the parties, the fairest basis for apportionment is the proportion the claim advanced by each plaintiff in their respective schedules of damage bears to the total of the amounts claimed.

90 Order 66 r 2(f) provides that a plaintiff suing in a representative capacity shall be liable personally to pay the costs of a successful defendant.

91 Although the plaintiff in the lead action was suing in a quasi-representative capacity, it would be unfair to require her to bear the costs of the successful defendants.

92 In my view, liability for the costs of each successful defendant should be apportioned between the plaintiffs in accordance with the formula set out above. (The plaintiffs will be jointly and severally liable as between themselves and each successful defendant.)

93 Each successful defendant should have one set of costs as against the plaintiffs. However, again, I consider it appropriate to remove the scale limits in relation to the mediation and any other item which, in the opinion of the Taxing Officer, it was reasonable for the defendant to duplicate by reason of the number of plaintiffs.

The contribution claim between the fourth and fifth defendants

94 In Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529 at 532 - 533, the High Court were unanimous in holding that:

"The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man ... and of the relative importance of the acts of the parties in causing the damage ...

It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination."

95 Although that principle was stated in relation to the apportionment as between a plaintiff and a defendant, it applies equally to apportionment between defendants: see Kingswood Golf Club Ltd v Smith [2005] VSCA 224 at [25].

96 In the present case, the fourth defendant contends that it should have a complete indemnity from the fifth defendants in respect of the plaintiffs' claims. This is on the basis that, whereas the fourth defendant's involvement was confined to a single inspection for the purpose of the strata-titling of the premises incorporating the balcony, the fifth defendants were involved over an extensive period, from the preparation of the plans through to the completion of the works. The fourth defendant contends that the fifth defendants' failure to design the balcony in an adequate way and to supervise the works, suggests a greater degree of culpability on their part.

97 Against that, the fifth defendants contend that they did not depart to any great degree from the standard of care of the reasonable architect. That is because they incorporated structural advice from an engineer (albeit not the sixth defendant) into their design. Further, the fifth defendants properly specified that jarrah should be used in the construction of the balcony: and they were not responsible for the substitution of oregon. The fifth defendants were under no contractual obligation to supervise the construction of the works.

98 On the view I have taken of the nature of the fourth defendant's obligation to inspect the building for consistency with the building plans and specifications, I consider that it is far more culpable than the fifth defendants.

99 The fifth defendants acted reasonably in obtaining structural advice from an engineer. They are liable for the deficiencies in the design of the balcony because they put it forward as their own. However, they did recommend on three occasions that the sixth defendant be instructed to carry out a structural inspection of the completed building.

100 In summary, therefore, the fifth defendants did take steps to discharge their professional obligations. I have held them to be liable because, in my opinion, they did not go far enough.

101 By contrast, the fourth defendant was negligent because it did not take any steps to comply with what I have held to be its statutory obligation to inspect the building for consistency with the plans and specifications: nor did it follow what I accepted as the proper practice in relation to applications for strata titling.

102 I accept that such an inspection would not have revealed the shortcomings in the design. However, it would have revealed that the balcony had been constructed of oregon which, as any properly qualified inspector would have known, should not have been used in that service.

103 Such a discovery would have led to the refusal of the relevant certificate and the replacement of oregon by the jarrah, as specified.

104 In my view, given that the inspection by the fourth defendant should have been carried out following the completion of the building, the failure to inspect was a relatively more important omission in causing the damage.

105 I do not accept the submission made on behalf of the fourth defendant that there was no evidence that if jarrah had been used instead of oregon, the balcony would not have collapsed.

106 Counsel for the fourth defendant (who was not counsel at trial) noted that no witness was asked whether the collapse would have occurred when it did if jarrah had been used in its construction, rather than oregon.

107 However, as I noted in my reasons (at [57]), the evidence of Dr Davison was that jarrah would have decayed much more slowly than oregon because it is a more durable timber. That, no doubt, is why jarrah is recommended for exterior use whereas oregon is not.

108 It was my acceptance of Dr Davison's evidence on this point that led to the conclusion that the balcony would not have collapsed when or as it did, had it been constructed of jarrah.

109 In these circumstances, I accept the submission made on behalf of the fifth defendants that the fourth defendant should contribute 70 per cent of the damages awarded to the plaintiffs and the fifth defendants should contribute 30 per cent. Their respective liabilities for costs should be apportioned in the same way.

110 As I have mentioned above, there were numerous other inter-defendant contribution notices. It is appropriate that they should be dismissed with costs. However, it may be that the costs have been subsumed in the costs of the trial. I therefore propose to order that any costs which may have exceeded the trial costs will be recoverable.

111 The fifth defendants' fourth party proceeding against the sixth defendant should also be dismissed.

112 I do not accept the submission made on behalf of the fifth defendants that they and the plaintiffs should be held liable to contribute equally to the sixth defendant's costs of those proceedings.

113 The submission is made on the basis that the plaintiffs took independent action against the sixth defendant when they could have abided the outcome of the fourth party proceedings.

114 That is so: but, as I have noted above in relation to the plaintiffs' joinder of the fifth defendants, it would have been imprudent for them not to have joined the sixth defendant also.

115 I therefore consider that in the fourth party proceedings, the costs should follow the event.

116 I have prepared a draft order which forms an appendix to these reasons. Because of the complexity of the costs issues, I propose to give the parties an opportunity to comment on the draft. This is not to be taken as an opportunity to re-argue issues about which I have reached the conclusions set out above. It will, however, enable me to correct any errors or omissions before the order is extracted.

117 In order to save the costs of appearances, these reasons will be published electronically. I will allow any party who wishes to comment on the draft order four weeks from the date of publication in which to do so. Any comment should be set out concisely in a letter to my associate which is copied to other parties, who will have two weeks from the date of receipt in which to respond, if so advised.

118 For the avoidance of doubt, I should record that the absence from the draft of any order for the costs of the hearing on 14 February 2007 is intentional. I regard the hearing as an occasion on which all parties, while seeking to advance their own position, were nevertheless attempting to assist me in arriving at a result which is as fair as possible to all concerned.

(1) "the Group A Actions" means the actions brought by the plaintiffs and having the numbers listed below:

(2) "the Group B Actions" means the actions brought by the plaintiffs and having the numbers listed below:

(3) "the Drexel Action" means action number 2414 of 1997 brought by Marc Drexel;

(4) "the Graham Action" means action number 2398 of 1997 brought by Dean David Holm Graham.

(1) judgment is to be entered for the plaintiff against the fourth and fifth defendants, for damages to be assessed;

(2) as between the fourth and fifth defendants, the damages are to be paid as to 70 per cent by the fourth defendant and 30 per cent by the fifth defendants;

(3) the plaintiff's claims against each of the first, second, third and sixth defendants are dismissed.

(1) judgment is to be entered for the plaintiff against the fourth defendant, for damages to be assessed;

(2) the plaintiff's claims against each of the first, second, third and fifth defendants are dismissed.

(1) judgment is to be entered for the plaintiff against the fourth defendant, for damages to be assessed;

(2) the plaintiff's claims against each of the first, second and third defendants are dismissed.

The fourth and fifth defendants, jointly and severally, do pay the plaintiffs' costs of the Group A, Group B and Drexel Actions, to be taxed as one set of costs, but the scale limits are not to apply to the costs of the mediation or to any other item(s) which, in the opinion of the Taxing Officer, it was reasonable for a plaintiff to incur individually.

Subject to any agreement between the plaintiffs, the costs, other than those of the mediation and in respect of which individual allowances are made, are to be apportioned between the plaintiffs in the Group A and Group B Actions in the same proportion as their respective claims bears to the total amounts claimed ("the Formula").

Where costs are allowed on an individual basis, those costs shall be paid to the plaintiffs concerned.

The fourth and fifth defendants, jointly and severally, do pay the costs of obtaining a transcript of the trial, such costs to be apportioned between the Group A plaintiffs and Marc Drexel in accordance with the Formula.

As between the fourth and fifth defendants, the costs are to be paid as to 70 per cent by the fourth defendant and 30 per cent by the fifth defendants.

The plaintiffs in the Group A, Group B, Drexel and Graham Actions, jointly and severally, do pay:

(2) the second defendant's costs of the action; and

(3) the third defendant's costs of the action, with a certificate for Queen's Counsel and junior counsel and including as a disbursement, the cost of removal and storage of the collapsed balcony timbers.

In each case, the costs are to be taxed as one set of costs and are to be apportioned between these plaintiffs in accordance with the Formula.

The plaintiffs in the Group A, Group B and Drexel Actions, jointly and severally, do pay the sixth defendant's costs of the actions (the sixth defendant being the fifth defendants in the Drexel Action) to be taxed as one set of costs.

The fifth defendants are to pay to the plaintiffs the amount of the costs they are ordered to pay to the sixth defendant.

The costs are to be apportioned between these plaintiffs in accordance with the Formula.

The first defendant's contribution notices dated 14 October 2004 to the second, third, fourth, fifth and sixth defendants be dismissed.

The first defendant do pay the costs of each of the second, third, fourth, fifth and sixth defendants of those respective proceedings, insofar as those costs exceed the relevant defendant's costs of the trial, to be taxed.

The third defendant's third party proceedings against the fifth defendants are dismissed.

The third defendant do pay the fifth defendants' costs of the proceedings, insofar as those costs may have increased the fifth defendants' costs of the trial, to be taxed.

The third defendant's contribution notices dated 6 October 2004 against the first, second, fourth and sixth defendants be dismissed.

The third defendant do pay the first, second, fourth and sixth defendants' costs of those proceedings insofar as those costs may have increased any of those defendants' costs of the trial, to be taxed.

The fourth defendant's contribution notice dated 14 October 2004 against the first, second, third and sixth defendants be dismissed.

The fourth defendant do pay the first, second, third and sixth defendants' costs of the proceedings insofar as those costs may have increased any of those defendants' costs of the trial, to be taxed.

The fourth defendant's contribution notice dated 14 October 2004 against the fifth defendants be dismissed.

The fourth defendant do pay the fifth defendants' costs of those proceedings insofar as those costs may have increased the fifth defendants' costs of the trial and do pay the costs of the hearing on 1 March 2007, to be taxed.

The fifth defendants' contribution notices dated 23 December 1998 and 18 January 1999 against the first defendant, and their Third Party proceedings against the sixth defendant be dismissed.

The fifth defendants do pay the first and sixth defendants' costs of those proceedings insofar as those costs may have increased their costs of the action, to be taxed.

The sixth defendant's contribution notices dated 13 October 2004 against the first, second, third, fourth and fifth defendants be dismissed.

The sixth defendant do pay the costs of the first, second, third, fourth and fifth defendants of the proceedings insofar as those costs may have increased any of those defendants' costs of the trial, to be taxed.

References to costs in this order includes reserved costs.

CITATION : GOVE -v- BLACK & ORS [2006] WASC 298 (S2)

HEARD : 6-9 & 13-21 NOVEMBER 2006, 14 FEBRUARY, 1 MARCH & 7 JUNE 2007

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

THE OWNERS OF THE OLD SOAP FACTORY (STRATA TITLE PLAN 11175)

Costs - Trial of liability - Plaintiffs not consolidated before trial - Plaintiffs present common case at trial - Plaintiffs successful against some defendants - Whether several liability to successful defendants for costs specific to individual plaintiffs - Whether plaintiffs have one set of costs against unsuccessful defendants - Whether apportionment of costs between plaintiffs with one set of costs - Whether apportionment after assessment of damages

1 TEMPLEMAN J: On 23 March 2007, I published my reasons in relation to the costs of the liability issues in these actions. I appended to my reasons a draft order which I invited the parties to consider and to comment on, as they thought fit. I took this course because the costs issues are complex and I wanted to be sure that all parties had a full opportunity to state their respective positions and to correct any errors or omissions in my draft.

2 Subsequently, the solicitors for all parties other than the fourth defendant made short submissions in the form of letters to my associate.

3 I then sat again, at the request of the parties, to permit them to speak to their respective submissions. Having taken these further submissions into account, I have re-drawn the order. It forms an appendix to these reasons.

4 The final order differs from the draft in a number of respects. Some of these differences reflect the correction of errors and omissions and need no further comment. However, there are some matters of principle which require further clarification.

5 In par 84 of my reasons, I noted that in actions involving multiple parties who have a common interest, it is usual to award a single set of costs in favour or against those parties, as may be appropriate. For that reason, I included in the draft order a provision that the fourth and fifth defendants, jointly and severally, were to pay the plaintiffs' costs of the Group A, Group B and Drexel actions "to be taxed as one set of costs".

6 This proposal for joint and several liability was not the subject of any submissions at the previous hearing. However, the plaintiffs object to an order in those terms. They submit that because there were 17 separate actions, each of the successful defendants could, in theory, recover from one plaintiff an amount far greater than the costs of the action brought by that plaintiff. The plaintiffs therefore propose that where a defendant has incurred costs for work done in respect of all actions, those costs should be apportioned equally between the individual plaintiffs who would then only be liable for one-seventeenth of such costs.

7 In my view, it is appropriate for the plaintiffs to be jointly and severally liable for those costs of the successful defendants which were common to all the actions. The plaintiffs consented to the order made on 17 September 2004 by which action 2375 of 1997 became the lead action. Thus, the other plaintiffs united with the plaintiff in that action, so that the plaintiffs, in effect, sued jointly. In my view, because all the plaintiffs stood to benefit from findings of liability, they should be required to accept the risk of their respective claims being unsuccessful.

8 However, I accept that where costs have been incurred by a successful defendant in relation to a specific plaintiff (that is, costs which have not been duplicated), it would be unfair to burden the other plaintiffs with the payment of those additional costs.

9 I therefore consider that the appropriate order is for the plaintiffs to be jointly and severally liable for those costs which are common to their actions, but to be liable individually for any costs relating specifically to individual actions. Paragraphs 12 to 19 of the Order are intended to achieve that result.

10 The plaintiffs object also to the proposal that they have only one set of costs against the unsuccessful defendants. The plaintiffs contend that such an approach would be unworkable. Several reasons were advanced in support of this contention. They include the following:

(1) There have been changes in representation as between the plaintiffs during the course of the litigation.

(2) Each plaintiff has incurred different expenses in preparing his or her claim for mediation and trial. A taxation of the plaintiffs' costs as one set would not allow a proper claim by each plaintiff for the relevant costs and is likely to result in unfairness.

(3) Before the order was made on 17 September 2004, binding the plaintiffs to the outcome of the lead action, the other plaintiffs had intended not to proceed to trial until that action had been determined. After the order was made, solicitors who acted for more than one plaintiff generally charged the plaintiffs in equal shares for work which was of general application: and charged individual plaintiffs for work specific to his or her case.

(4) Only some of the Group A and Drexel action plaintiffs incurred a liability for the costs of the final stages of preparation for the trial and of the trial itself. Other plaintiffs made no commitment to contribute to those costs: and some plaintiffs incurred costs with other firms before the mediation took place.

11 In short, the plaintiffs contend that because they have been represented by a number of different solicitors at different stages of their actions, the preparation and taxation of one set of costs for 17 actions would be unworkable, because it would create practical and professional problems for the one solicitor or firm of solicitors ultimately responsible for preparing the bill.

12 Thus, it is submitted, the appropriate order would be for each plaintiff to submit a bill of costs for taxation, all bills being taxed by the Taxing Officer at the same time unless agreed otherwise, or unless directed by the Taxing Officer.

13 The principal objection to this course was articulated by counsel for the first defendant. However, I understand that his submissions were supported by all defendants. Counsel submitted, in substance, that the potential for duplication of costs inherent in the taxation of 17 bills, gave rise to a risk of injustice and would involve a burden that the plaintiffs should not be permitted to impose either on the defendants or on the Court. Counsel submitted that the plaintiffs should have cooperated for the purpose of ensuring that they avoided the kinds of difficulties summarised above.

14 In the course of argument, it emerged that the dispute may be one of form rather than substance. That is because the plaintiffs accept that they should not recover (or have to pay) for work which has been duplicated. And, as I understand it, the defendants accept that where work has been carried out justifiably for or against individual plaintiffs, the proper costs should be allowed on taxation.

15 Although the formula I proposed involved a single set of costs, it continued by providing that the scale limits were not to apply to the costs of the mediation, or to any other item(s) which, in the opinion of the Taxing Officer, it was reasonable for a plaintiff to incur individually. Ultimately, I think, the question is whether the responsibility for identifying common or duplicated costs should be left to the plaintiffs' solicitors or whether it should be for the Taxing Officer to resolve.

16 After some hesitation, I have come to the conclusion that the practical difficulties referred to above, and the potential for conflict between the solicitors, is such that it would be preferable for the matter to be left to the Taxing Officer. I say "the Taxing Officer" (singular) to emphasise that one Taxing Officer should be responsible for the taxation of all bills so that there can be uniformity in the exercise of the various discretions which will inevitably arise.

17 I therefore consider that it is appropriate for the plaintiffs to prepare individual bills of costs, to be taxed at the same time, and in any event, by the same Taxing Officer.

18 That being so, I have set out, in par 9 of the Order, the procedure to be followed in the taxations and the basis on which they are to be conducted. By way of further clarification, I note that the apportionment provision in par 9(5) is not necessarily the same as the Formula defined in par 2. That is because, under par 9(5), there may be an apportionment among (for example) a small number of plaintiffs within Groups A and B, for whom work has been duplicated: while work has been carried out for others for which individual allowances are appropriate.