Hampton Park Central Pty Ltd v Australian Safeway Stores Pty Ltd [2000] VSC 422

20. The principal point at issue on the application was whether Woolworths had discharged the onus which it bore of establishing that there was a viable cause of action in Hampton Park against the proposed defendants in the sense that this expression is used in these applications.[2] I will adopt this approach in each case.

24. The cause of action of Hampton Park against Uniscan was that it was in breach of a duty of care owed to Hampton Park to exercise reasonable care and skill when carrying out work the subject matter of its agreement with Woolworths, or in connection with the project, or in both respects. Its breach is said to be a failure properly to supervise the paving contractor in the performance of its work. Counsel for Uniscan argued that no such duty of care had been shown to exist.

27. As I mentioned in the second Wimmera-Mallee case[3] the applicant must show that the question which it would have the court try with respect to the added party is a question which "may exist". As on that occasion, I do not approach this matter on the basis that the burden on the applicant is a heavy one. I am conscious of the fact that the applicant may be seeking to establish a cause of action about which it may have little knowledge and which may often be inconsistent with its own denial of liability to the plaintiff. Nevertheless, there must be, at the end of the day, sufficient for me to be satisfied that the factual basis is more than speculation and that the legal basis is not unarguable.

30. In his affidavits, sworn 8 and 22 September 2000 respectively, Mr Buxton sets out what he knows of Uniscan's engagement by Woolworths. This is surprisingly little. It is known that Uniscan prepared a specification for the building work dated May 1992 and that it is named as the "Superintending Architect and/or Engineer" in the application for building approval dated 1 July 1992. Notwithstanding this date, work, including work in the car park, was already under way in June 1992. Mr Buxton says in his affidavit of 8 September 2000 that Uniscan was appointed by Woolworths as the project manager for the construction of the centre but the contract of engagement cannot be found. From his affidavit of 22 September 2000 it appears that its involvement in the project dates back to 1991. He says this in his affidavit of 8 September:

"10. Uniscan's responsibilities as the Project Manager and as the agent for a disclosed principal, Woolworths, were to undertake the coordination and supervision of the development, building and construction services with the construction of the Centre. Uniscan effectively functioned as a Construction Manager for the construction of the Centre. Uniscan was responsible for the selection and engagement of subcontractors and consultants and the analysis of tenders submitted by prospective subcontractors and consultants for work constructing and/or designing the Centre..."

He mentions the supervisory responsibilities of Uniscan in later paragraphs of this affidavit and exhibits a number of documents relating to the project. At the time, 1992 and 1993, Mr Buxton was the National Construction Manager for Woolworths' supermarket division. The material which he produces suggests that the role of Uniscan in the project was, indeed, that of a typical project manager. Its supervisory functions appear to have concerned the letting and administration of trade contracts, budgeting, the rate of progress, convening and chairing meetings and similar administrative activities. There is no mention of its performing or being engaged to perform the work of supervising the trade contractors in the performance of their work as might be done by an architect or an engineer or a superintendent.

35. There is, in short, no basis for me to conclude or to infer that there may be a question to be tried that it was any part of Uniscan's functions to supervise the defective paving work of the paving contractor. On this basis the application must fail.

39. More is known of the contractual involvement of this company in the project. It was engaged by commission dated 13 May 1992 which is in evidence. The scope of work of this commission is expressed to include, but not to be limited to, a list of specified activities with respect to civil and other engineering aspects of the project. These activities are essentially those of engineering design for the project, the preparation of working drawings and such modifications as may be necessary to obtain full building approval, and to lodge and follow through documents required for this approval. Nothing is mentioned of supervision of trades, inspection of the works, certification of works or, indeed, of any involvement in the execution of the design. It is to attend design development meetings until they become actual site meetings but, from then, its attendance is to be on request only. For this it was to be paid a fixed fee. In Section Nineteen of the specification and in the car parking architectural drawings the contractor is directed to conform to the engineer's design. There is no requirement that it carry out the work as directed by or to the satisfaction of the engineer. The letter of engagement dated 15 June 1992 of the site works and stormwater contractor, which includes the car parking work, does not suggest that the engineer has a supervisory role. The undated list of drawings produced in evidence includes a number of engineering drawings attributed to Gamble & Cosentino including four civil engineering drawings. These drawings are not in evidence.

42. In the minutes of site meeting of 3 December 1992, at which Gamble & Cosentino is not shown as present, there is a concern expressed about the progress of the paving work given the wet conditions. It is noted that engineering advice is being sought. This is possibly a reference to Gamble & Cosentino.

45. In the proposed statement of claim the allegation is, again, that Gamble & Cosentino owed to Hampton Park a duty of care to exercise reasonable care and skill when carrying out the work the subject of its agreement with Woolworths, or in connection with the project, or in both respects. The agreement with Woolworths is alleged to be one "to undertake structural, civil and hydraulic engineering services with the design of external pavement and stormwater drainage system for the construction of the Centre". The breaches of duty alleged against this proposed defendant all relate to defective design and there is in the technical reports some mention of design deficiency. There is, in all of this, sufficient to support an affirmative answer to the question whether there may be, as a matter of fact, a question as to the liability of Gamble & Cosentino to Hampton Park.

48. This leaves the difficult question whether Gamble & Cosentino owes to Hampton Park, as the present owner of the property, a duty of care to perform its design functions so as to avoid causing Hampton Park economic loss. On behalf of Woolworths I was urged to find that such a duty existed on the authority of Bryan v Maloney.[4]

51. Counsel for Gamble & Cosentino impressed me with an argument that there was no evidence that there existed a relationship of sufficient proximity between his client and the ultimate owner in order to found such a duty. He reminded me of a suggested limitation of the Bryan v Maloney principle to residential buildings unless there be evidence of reliance or an assumption of responsibility.[5] It was said that the contrary case of CAI Fences Pty Ltd v A Ravi (Builder) Pty Ltd[6] predated the High Court decision. I was pressed, too, with a number of considerations which I listed in the second Wimmera-Mallee case.[7] It is not my function on an application such as this to enter upon these matters in any detail. The existence of the duty will very often depend upon the facts as they emerge. Given my conclusion that the factual component of the suggested claim has been sufficiently made out, I will not refuse the application unless I am satisfied that the duty of care was not arguable. I am not so satisfied.

55. I will, therefore, make orders for Gamble & Cosentino to be joined as a defendant to the proceeding. With respect to Uniscan, it was accepted that it should be joined as a third party if the primary relief were refused, and I will make orders to this effect also. The draft statement of claim and third party notice exhibited to the affidavit of Nicole Chryse Bigby will require some re-working. I propose, therefore, the following orders:

1. That Gamble & Cosentino be added as a third defendant to the proceeding and the title amended accordingly.

2. That Woolworths file and serve a statement of claim against the third defendant.

3. That the third defendant file and serve its defence.

4. That Woolworths have leave to file and serve a third party notice on Uniscan.

62. I will hear counsel further as to these orders, the timetable, costs and any further directions which may be required.

[1] [1999] VSCA 66; [1999] 2 VR 507

[2] Wimmera-Mallee Rural Water Authority v FCH Consulting Pty Ltd [2000] VSC 102 at [8], per Byrne J

[3] [2000] VSC 193 at [11]

[5] Tod Group Holdings Pty Ltd v Fangrove Pty Ltd [1998] QCA 404; [1999] 2 Qd R 236 at [7], per de Jersey CJ. See, too, Smith, "The Application of Bryan v Maloney to Commercial Buildings" (1999) 15 BCL 221

[6] Unreported, SC (WA), Malcolm CJ, 27 December 1990

[7] [2000] VSC 193 at [8]