Malec v J.C. Hutton Pty Ltd

[1] In October 1993 the building of a still-standing, three-storey timber-framed pole house began on steeply-sloping land owned by the plaintiffs at 13 Rosewood Rise, Flaxton, near Mapleton, in the Maroochy shire: lot 6 on registered plan no. 838739 in the County of March, Parish of Kenilworth. On 28 April 1994 the house had reached the stage of practical completion and the plaintiffs moved in (and have lived there ever since). All went well until 9 February 1999 when, after 1,180 mm of rain had fallen at the plaintiffs' property in a little over a week, a loud noise was heard and it was found that a number of footings on the south-eastern, downslope, side of the house had subsided causing substantial damage to the house. Eleven footings had failed: those of poles numbered 2 to 8 inclusive and of steel posts immediately inside poles numbered 2, 3, 4 and 6 on a drawing (no. 2000-066-5) dated 10 January 2001 prepared by Hughes, Beal & Wright Pty Ltd, consulting engineers: exhibit 4, p. 251. Photographs of the house, which I viewed in the presence of counsel on

15 February 2005, can be seen in exhibits 12 and 13. It is at the end of

Rosewood Rise. A steep driveway leads down to it. Below the house there is a State forest. The Flaxton area is on the crest of a line of steep ridges and is subject to

[2] Mr Kirkby, a retired mapping surveyor, and his wife Ms Lang, intend living at

[3] Landslips are not uncommon in the steep natural and cut slopes of the area, particularly when there is heavy rain. A certified extract from the official records of the Commonwealth Bureau of Meteorology (exhibit 15) shows that 398 mm of rain fell at the Mapleton Post Office on 9 February 1999 and that the total for February 1999 was 1,111.2 mm. The highest daily rainfall at the Mapleton Post Office since 1903 was 513 mm on 22 February 1992. The second highest was 399.3 mm on

26 December 1909, and the third highest was the 398 mm on 9 February 1999. The highest monthly total since February 1999 has been 747.6 mm in February 2003.

[4] The person named as the first defendant is the builder who erected the house. He was, however, never served with the plaintiffs' claim. The second defendant is a registered professional engineer who was employed by D.J. Brown & Partners Pty Ltd, consulting engineers, between 15 June 1987 and 13 August 1993 and by the third defendant, consulting engineers, in or about September 1993 to in or about July 1994. The former company was placed into liquidation on 27 January 1994 and was deregistered on 9 November 1995.

[5] The plaintiffs claim damages for negligence from the second defendant, who designed the house footings, and from the third defendant, the second defendant's employer for some of the relevant time. The plaintiffs claim the third defendant is vicariously liable for the negligence of the second defendant in providing a certificate to which I shall refer later. The second defendant did not give evidence at the trial, nor - perhaps needless to say - did the builder. The second defendant has admitted certain particulars of negligence alleged against him to which I shall refer later, but other allegations of negligence are in issue, as are the questions whether any breach of duty by the second defendant caused any damage to the plaintiffs' house, and, if any breach did cause damage, the measure of the damages to which the plaintiffs are entitled. The defendants have abandoned limitation defences, and issues of contribution between the second and third defendants have been resolved.

[6] The plaintiffs signed a contract to purchase the land on which the house is built in late 1991, subject inter alia to their obtaining a satisfactory geotechnical report. They engaged Murdoch Geosciences of Maroochydore to undertake a geological site investigation, and a preliminary report dated December 1991 by Mr Robert Murdoch, geologist, was the result: exhibit 4, p. 1. Mr Murdoch had then investigated two to three thousand sites in areas prone to landslip. Mr Murdoch described the land in this way:

The upper part of the block closest to the road slopes fairly uniformly to the south at about 15 degrees. Downslope it bifuricates into a flatter spur to the west and a hollow/depression and then to a gully to the east. The spur slope is about 10 degrees.

The aim of the investigation recorded in that report was to determine the stability of the site. Mr Murdoch concluded that the site was suitable for pole, post, or column foundations for a house built upslope from a position as close as possible to the road, but incorporating the upper two of four terraces on the land. The spur downslope was suitable for a more conventional pier and beam footing with a concrete slab,

[7] A second report by Mr Murdoch, dated May 1993, was commissioned by the plaintiffs: exhibit 4, p. 11. By then they had completed the purchase of the land and had decided to construct a pole house on the natural slope near the road using the existing terraces. The aim of the second investigation was to determine the stability of that site and to make recommendations as to the type of building most suitable and the depth of footings. Two backhoe test holes to assist in the assessment were dug, one above and one below the site.

[8] In the second report Mr Murdoch recorded in paragraph 3.1 in his section 3 headed 'STABILITY' his finding that the proposed building site occurred above deeply weathered basaltic soils with slight to moderate reactivity and high soils permeability. Groundwater tended to be absent within the section, but would be concentrated at the base of the basalts below the house site. The proposed building site was considered to be stable, Mr Murdoch reported in paragraph 3.4, provided all load-bearing footings were placed into rock. He added that the stability of the site could be significantly altered by allowing concentrated runoff to discharge onto the site and by uncontrolled excavation and filling. As a result effective planning of draining and earth-moving would be needed. In paragraph 3.7 Mr Murdoch returned to the subject of footings:

3.7 Footings need to be placed into dense weathered rock or onto interlocking boulders at depths in the order of 2-2.5 metres below natural. The footing holes need to be inspected by a geologist prior to pouring.

In section 4 of the report Mr Murdoch set out his building recommendations:

4.1 Construction Design - The proposed building site is suitable for a pole, steel post or concrete column type house design.

4.2 Footing Depth - Recommended footing depth is 2000-3000 mm below natural, into dense basalt or onto interlocking boulders, ideally to maximum penetration of backhoe digging the footings. The holes should be inspected prior to pouring.

4.3 Footing Width - Minimum recommended footing diameter is 450 mm.

4.4 Bearing Capacity - At 2000 mm : 170 kpa

At 3000 mm : 350 kpa

[9] It is not in issue between the plaintiffs and the second defendant that the plaintiffs engaged the second defendant's then employer to provide a footing-beam layout, foundation detail, pier details, and the engineering design for the footings of the house. Nor is it in issue between the plaintiffs and the second defendant that the plaintiffs provided Mr Murdoch's second report to D.J. Brown & Partners Pty Ltd and that the second defendant came into possession of it in his capacity as manager of the

North Coast office of that company, or that it provided to the plaintiffs a footing-beam layout for the carport of the house, pole foundation detail, and pier details drawn by the second defendant in his capacity as its employee.

[10] The second defendant's drawing of typical pole-foundation detail, which I note is dated 22 May 1992, shows a treated post standing on a 200 mm compacted gravel plug 'OR FOUND ON ROCK'. It was to be surrounded by compacted lean-mix concrete to a minimum depth of 2 m: exhibit 4, p. 19. His drawing of a standard-timber-post-to-concrete-pier detail shows a footing diameter of 350 mm: exhibit 4, p. 20. His drawing of the typical concrete pier detail, which is dated June 1993, shows a concrete pier 2 m deep and 350 mm wide reinforced with a Nuemann NS4 cage or equivalent placed centrally: exhibit 4, p. 21. There is no reference on any drawing of a requirement that the footings be inspected before pouring by a geologist, or anyone else.

[11] On 17 June 1993 the second defendant signed a Maroochy Shire Council structural design certificate in which he certified that the plaintiffs' proposed house had been designed 'in accordance with the principles of structural mechanics' and if constructed reasonably in accordance with specified drawings should be capable of sustaining 'the most adverse combinations of loads to which it will be subjected in accordance with the relevant provisions of the Standard Building By-laws'. The second defendant further certified that the method of foundation assessment for the design of footings was: 'SITE INVESTIGATION & REPORT by MURDOCH GEOSCIENCES': exhibit 4, p. 24.

[12] Soon after building work began the plaintiffs and the builder agreed on a number of variations to the building contract, including an extra payment of $1,325 by the plaintiffs to the builder for machine hire and labour to excavate 'in rocky ground'. The builder had told the plaintiffs that it would be necessary for him to hire such equipment because he was having difficulty auguring the holes for the footings. That and other variations were set out in a document under the letterhead 'JW & PJ Coote' dated

[13] In a final inspection checklist dated 24 March 1994 the Shire Council building surveyor notified a requirement that the engineer was to certify the footings of the plaintiffs' house: exhibit 5. (The same requirement had been noted on an inspector's footing-inspection record sheet dated 25 October 1993: exhibit 4, p. 78.) On

29 March 1994 the third defendant, by then the second defendant's employer, issued an inspection certificate signed by the defendant to Mr Kirkby as follows:

RE: NEW RESIDENCE LOT 6 ROSEWOOD RISE FLAXTON QLD

We certify that the excavations for the timber poles for the above residence and garage footings have been inspected and supervised in accordance with the A.C.E.A. Terms of Engagement and that they have been constructed generally in accordance with the approved drawings.

The inspections was carried out on 18th October & 30th November 1993.

(The third defendant had been engaged to inspect footings by the builder.)

[14] There are ten wooden poles and forty steel posts supporting the house. It was conceded on behalf of the defendants that if the footings that subsided on

9 February 1999 had been founded in rock they would not have failed.

[15] Various engineers and other experts have visited the site since 9 February 1999 and five footings (three poles and two posts) have been exposed. A number of reports from engineers were tendered: two from Mr David Bowler, geotechnical engineer of Bowler Geotechnical Pty Ltd; six from Mr Peter Wright, geotechnical engineer of Hughes, Beal & Wright Pty Ltd; three from Mr Christopher Thorley, geotechnical engineer of Coffey Geosciences Pty Ltd; and four from Mr Eric Fox of

Eric Fox Consulting Pty Ltd: see exhibit 4. In addition, all four engineers gave oral evidence.

[16] Mr Wright visited the site on 18 August 2000 and arranged for test pits to be dug beside three posts down to the underside of each. Pits nos. 1 and 2 were on the uphill side of the house. Pit no. 3 was in the south-eastern section. Pit no. 1 revealed a steel post founded at a depth of 1.4 m below ground level. The post footing consisted of a steel rectangular hollow section post bedded in a formed square pier on top of a

300 mm thick pad cast in an excavated trench. It was founded in stiff and moist yellow and white clay silt. Pit no. 2 revealed a steel post also founded at 1.4 m below ground level. It was similar to the post at pit no. 1 but included a formed circular pier between the pad and the formed square pier above. That post was founded in hard, dry red and white clay silt. Pit no. 3 was beside a timber pole in the slip area. It was revealed to have been founded at between 1.9 m and 2.2 m below ground level, depending on which side of the pole the ground level is taken. The pole was founded on a bed of sand with an estimated thickness of 100 mm, below which was what Mr Wright thought was probably a thin layer of wet and soft clay. The latter material was not excavated as further excavation might have resulted in further settlement of the pole, which was, Mr Wright noted, not encased in lean-mix concrete. Mr Wright's description of those excavations may be found in his report dated 31 August 2000 to the Building Services Authority: exhibit 4, p. 230.

[17] On 17 April 2002 a principal geotechnical engineer and an associate engineering geologist employed by Coffey Geosciences Pty Ltd dug test pits near two footings: a timber pole footing adjacent to a sullage pit and a steel post footing underneath the studio in the house, labelled TP 1 and TP 2 respectively. The positions of those pits and of the pits dug on Mr Wright's instructions can be seen in figure 1 dated

3 May 2002 attached to a report dated 14 May 2002 by Mr Thorley to the

Building Services Authority: exhibit 4, p. 291; figure 1 at p. 306.

[18] TP 1 was excavated to a depth of 2.1 m exposing the timber pole to its base at 1.8 m below ground level. The excavation revealed no indication of lean-cement backfill around the exposed faces of the pole. The pole itself rested on 100 mm of loose to medium dense gravelly sand, beneath which the founding soil was stiff red-brown clay (colluvium/residual soil) with pocket penetrometer readings of 100 to 180 kPa equating to a shear strength of 50-90 kPa. TP 2 was also excavated to 2.1 m exposing the steel post footing which was founded at 1.6 m - 1.8 m below ground: at TP 2 there was a drop of 0.2 m in ground level from the front to the rear of the concrete pier. The footing exposed at TP 2 consisted of an approximately 350 mm square concrete pier supported on an approximately 300-350 mm diameter pile. The pier extended to

0.4 - 0.6 m below ground and the pile from the base of the pier to 1.6 m - 1.8 m below ground level. The pile was about five degrees off vertical in the plane of the pit and a 30 - 40 mm break was observed in the pile 0.2 m above its base. The break was filled with clay. Below the break the pile reduced the diameter to form a roughly conical end to the pile, probably caused by the presence of a boulder on one side of the pile alignment. Mr Thorley's description of those excavations may be found in the report dated 14 May 2002.

[19] It is not in issue between the plaintiffs and the second defendant that the latter owed to the former a duty to take reasonable care, and to act in the manner of a reasonably competent engineer with expertise in the design of footings and in giving certificates of design, or that the second defendant breached that duty by failing to provide the footing design in accordance with Mr Murdoch's second report, and in particular in failing to require in the design that the footing excavations be inspected prior to pouring: see the plaintiffs' statement of claim paras 17(b) and 20(a) and the second defendant's solicitors' letter dated 9 February 2005 to the plaintiffs' solicitors (exhibit 17).

[20] The second defendant failed to provide the footing design in accordance with

Mr Murdoch's second report in three obvious ways: first, he did not provide that the footings should be placed into dense weathered rock or onto interlocking boulders; secondly, he did not provide that the footing holes should be inspected by a geologist prior to pouring; and thirdly, he did not require a footing diameter of 450 mm. The reasons for the first and third of those requirements can be easily understood by anyone viewing the sloping site. The second requirement is also easily understood: the likelihood of a variation in the depth at which rock or boulders would be encountered precluded the adoption of a standard depth suitable for all footings, and furthermore the expertise of a geologist would be required to identify dense weathered rock or interlocking boulders.

[21] Mr Murdoch explained the importance of his recommendations in a letter dated

20 February 1999 to Mr Graham Smith of Geoinvestigations Pty Ltd, following a visit to the house on 16 February 1999:

I refer to our visit to the above property on 16/2/99. A timber framed, pole house built on the property has suffered settlement of several poles on the downslope, southern side of the house.

The settlement appears to be associated with rotational failure of soils, in particular a failure plane is exposed in this area on an unretained bank. There are a number of similar failure planes downslope on the property, they appear associated with movement in the gully head and hollow area. The movement has been in basaltic soils overlying plastic reactive clays developed on top of older Jurassic sediments. The movement has no doubt resulted from groundwater moving down the contact, even though no springs or surface expression of the groundwater is evident.

The property was the subject of two geological investigation reports prior to building. The first report was prepared in December 1991 (our report 1964) and the second in April 1993 (our report 2285). The first report was a preliminary one. In this report we described the geology and the stability of the property. In paragraph 3.5 we point out that the hollow and depression area at the head of the gully would be unstable. In paragraph 3.9 we see vertical settlement as not being a problem, provided that the footings are all in solid rock and provided soil creep is not allowed to occur downslope. It is the later [sic] that has been allowed to occur and we have no proof the footings are in solid rock. It was recommended that the house be built as far upslope as possible (the upper two terraces). In clause 6.3 we recommend battering or retaining the top 1-1.5 metres of soil, otherwise there was a risk of soils movement, particularly in the area of the hollow.

The second report was to test a specific house site was tested. In an area of some general instability, the specific house site was found stable provided all footings went down into rock. As a result of the general instability in the surrounding area and because the test holes only evaluate limited areas, we recommended that the footings be inspected prior to pouring. This to our knowledge was not done. Further in paragraph 3.5 we recommend all exposed banks be battered to 1:1.5 and vegetated or retained. Neither of these two recommended options were followed in the case of the bank that has failed. We also asked for the building to be placed as far upslope on the site as possible. I question whether this recommendation has been considered in the design. The reason for this was the expected instability downslope around the hollow.

We have no knowledge of the depth of the footings under the poles that have settled. The reason they have failed is obviously they are not on solid rock or interlocking boulders. Further I question if the width of footing are a minimum of 450 mm.

The geological inspection of the footings prior to pouring was particularly important to ensure that all footings were down on rock. If that had been done then the damage could have been avoided. If you or Mr Kirby [sic] need further assistance in this matter please let me know. (exhibit 4, p. 102)

[22] Mr Murdoch gave oral evidence that had his recommendations been followed the risk of damage of the kind suffered in 1999 occurring would have been negligible: the next best thing to no chance. Mr Murdoch's opinion, as that of the geologist familiar with the site and many other sites in areas prone to landslip is, in my opinion, entitled to great weight; and the necessity for the foundations to have been taken down to rock was noted by other experts, who also referred to the likely cause of the event of

9 February 1999, proposals for remedying the defects in the foundations, and the adequacy of the second defendant's design.

[23] In Mr Bowler's first report to the Building Services Authority dated 24 May 1999 (exhibit 4, p. 104), the following conclusions and recommendations were set out, at

1. The site has a potential for circular landslip failure and the subsurface strata has low bearing capacity. These two issues are considered the probable causes of damage to the residence and would produce similar symptoms.

2. It is considered that the most likely cause of damage is a partial rotational slip failure. This scenario is considered the most likely due to the presence of a large tension crack in the soil underneath the house and also because of the loud 'bang' heard by the owners a [sic] the time of the damage occurring.

3. For a house built in a region with potential for landslip it is necessary to continue all foundations into rock and also ensure that the structural integrity of the supports is sufficient to withstand lateral loads imparted to them by moving soil. It appears that the foundations may not have been carried to rock and it is also questionable as to whether the foundations were designed to resist lateral loads; however these possibilities have not been verified at this stage of the investigation.

It is envisaged that remedial measures would involve jacking the poles, construction of footings founded in rock, and using tensioned rock anchors to hold them in place. However, further geotechnical investigation and consultation with a structural engineer is required before such measures can be undertaken.

[24] Mr Bowler's second report, dated 2 September 1999 and also to the Authority (exhibit 4, p. 141), followed the drilling of two bore holes on 18 August 1999, one upslope of the house and the other downslope. It was found that at the upslope bore hole there were residual clays to 4 m lying over weathered rhyolite, and that at the downslope bore hole there was colluvium down to 0.3 m and then silty sandy clay and silty clay to 4 m lying over rhyolite. Mr Bowler recorded that it was not possible to state conclusively the reason for the damage to the residence - at that time no footings had been exposed - but he offered the opinion that with adequate underpinning and improved drainage the potential for any further movement could be minimized.

[25] In a letter to the Authority dated 6 December 1999 concerning the 'remediation options' for the plaintiffs' house (exhibit 4, p. 195), Mr Bowler noted that the investigation led to the conclusion that landslip had been 'the principal cause of the extent of distress to the property, and we are satisfied that the engineering solution proposed represents the most effective solution of the problem'. That 'solution' involved drilling large bored piles external to the verandah of the house supporting external columns by offset pile caps and in addition internal columns. But Mr Bowler added this important qualification: 'However, given the inherent difficulties associated with a landslip area, the engineered solution is not a guarantee that it will prevent future landslip'. The 'engineered solution' was proposed in the knowledge that the insurance scheme administered by the Authority allowed for only $45,000 for repairs to the house.

[26] Mr Wright's first report was dated 27 June 2000 and his last 4 August 2003: exhibit 4, pp. 209 and 254 respectively. Mr Thorley's first report was dated 26 February 2002 and his last 14 February 2003: exhibit 4, pp. 268 and 316 respectively. In

Mr Thorley's report to the Authority of 14 May 2002 (exhibit 4, p. 291), his second, he expressed the view that the footing design was inadequate in that it did not 'fully address' the requirements of the geologist's report and did not identify properly the required founding materials. Had the footings all been constructed to the design depth as specified in the footing drawings, it was likely that the settlement would still have occurred, Mr Thorley said, 'although possibly to a lesser extent': the rear timber poles 'may still have experienced similar degrees of movement even if they had extended to 2 m in depth, given the materials exposed in the test pits' (p. 10). Mr Wright saw

Mr Thorley's report of 14 May 2002, and in his fifth report, dated 15 December 2002 (exhibit 4, p. 252), to the plaintiffs' solicitors, he said 'We agree with Coffey's conclusions that had the footings been constructed to the design depth that footing movement was still likely to have occurred'. Mr Wright added:

6. In our opinion the original footing design should have considered land slip. The site is very steep. A geological report on the area commented on land slip and reported some albeit small risk of land slip existed on the proposed construction site. The general area is renowned for slips. We saw evidence of numerous land slips along the top of the range in our limited trips to the site. In our opinion, the minimum duty of a competent engineer would have been to advise his client that his design would not accommodate land slip. The designer may have gone further and recommended to his client that it was or was not prudent to consider or design for land slip in light of the available information. There is no evidence that the footing designer provided any advice to his client or others regarding potential slope instability.

[27] Asked whether it was 'almost certain' that the footings would not have failed if the second defendant's design had 'addressed' Mr Murdoch's 'warnings and recommendations' properly, Mr Fox replied that he believed so. Mr Fox also said that even if the poles had been erected in accordance with the second defendant's design he did not believe that would have been 'adequate'.

[28] My conclusion is that the cause of the subsidence on 9 February 1999 was a landslip brought on by the heavy rain in the preceding week, but I should mention two other matters. The first was mentioned by Mr Murdoch in his letter of 20 February 1999 to Mr Smith: his recommendation that the house be built as far upslope on the site as possible. Mr Kirkby explained in his evidence, which I accept, that it was put as far up as the Council set-back requirements permitted. Secondly, on 9 February 1999 a sullage (or septic or transpiration) pit (or trench or bed) about 600 mm deep, 8.8 m long and 2.8 m wide, and so with a capacity of about 15,000 litres parallel to the house was on a terrace about 600 mm from the southernmost pole. The pit probably did have some effect on the area near it in introducing moisture into the adjacent soils, but it is clear, I conclude, that any effect that the pit had would have been only secondary to the primary effect of the rain, and that the effect would have been confined to the immediate area of the pit. I accept Mr Murdoch's opinion that the pit probably had some impact on what happened on 9 February 1999, but, had the posts been down to rock, the house would not have been affected. The Council plumbing inspector required the pit to be dug where it was, but after 9 February 1999 it was disconnected and the new sullage system put further down the slope away from the house.

[29] Although the plaintiffs have alleged other particulars of the second defendant's breaches of duty, the matters I have discussed are sufficient to support the plaintiffs' case against the second defendant. Had the three requirements been included there would have been little scope for error because the footings would have been inspected by a geologist independent of the builder and engineer. Had the geologist not been

Mr Murdoch it is reasonable to conclude that the geologist would have been given copies of Mr Murdoch's second report before his or her inspection, so that any

non-compliance with the three requirements would have been immediately obvious.

[30] On my assessment of the evidence the damage suffered by the plaintiffs' house may all be traced back to the second defendant's failure to follow in his design the three important recommendations in Mr Murdoch's second report. It is said on behalf of the second and third defendants that the chain of causation would have been broken even if the second defendant had followed Mr Murdoch's recommendations. That is because there is strong evidence from the excavations after 9 February 1999 that the builder did not follow the second defendant's drawings, deficient though they were. Of the five footings exposed only one of the poles was to the founding depth recommended by the second defendant, and even that one was not founded upon the stipulated 200 mm gravel plug. I am persuaded, however, that that result would not have followed had there been an independent geologist's inspection.

[31] I have mentioned that there is strong evidence from the excavations after

9 February 1999 that the builder did not follow the second defendant's drawings. There is evidence from another source, not so strong, to the same effect. It comes in the form of statements by the builder concerning the construction of the footings and contained in documents received in evidence pursuant to s. 92 of the Evidence Act 1977: exhibit 11. There were statements recorded by officers of the Building Services Authority and statements in letters. That evidence must I think be treated with some circumspection: there was no opportunity to test it by cross-examination and many of the statements were self-justifying, the builder no doubt conscious that he could be found responsible, or partly so, for the subsidence. When interviewed on

26 February 2001 by officers of the Dispute Management Division of the Authority, the builder said that he dug the footings 'until he either encountered a solid rock base or was able to excavate the holes to the designed depth of 2 m', suggesting a departure from the second defendant's design without authority. I repeat my conclusion, however, that such a course would not have been followed if an independent geologist had been engaged to inspect the footings. I should add also that the builder's notion of what was, and what was not, rock appeared to be flexible: in a letter dated

2 December 2002 to the general manager of the Authority the builder said, 'Clearly if one is digging a footing and the machine cannot go any deeper, and it looks like rock, even though the technical parameter might class it as stiff clay, as far as a builder is concerned it is rock'. Those words confirm the need for Mr Murdoch's requirement that footings be inspected by a geologist.

[32] Had Mr Murdoch's recommendation been followed the house would have been built on solid foundations which would have eliminated the risk of subsidence, I find. But it was submitted on behalf of the defendants that no-one knows, even now, whether it would have been reasonably possible to comply with Mr Murdoch's requirement that the footings go down to rock, because no-one knows with any certitude where the rock is. That is in my view no answer to the plaintiffs' case. There is no suggestion that there is no relevant rock, nor could there be I think. The uncertainty as to where it is merely means that drilling would continue until it was found.

[33] It is said on behalf of the defendants that there is no compelling evidence that the footings other than those beneath the south-eastern corner of the house are not 'performing satisfactorily', and there is no evidence to show that any of those other footings save for those exposed are not founded on rock 'or some other suitable material'. There was, of course, no evidence before 9 February 1999 that any of the footings, including those beneath the south-eastern corner of the house were not performing satisfactorily. What that event revealed was first that some of the footings had not performed satisfactorily; then it was revealed that the second defendant's design had not been followed by the builder; and then it became clear that the design was inadequate in any event.

[34] What conclusion, if any, can be reached on the evidence as to the state of the footings other than those in the south-eastern corner? They have either been constructed in accordance with the second defendant's design or they have not - and not necessarily all are in the one category. Those constructed in accordance with the second defendant's design, if there are any, must be regarded as at risk of failing if there is another landslip in this landslip-prone area. Those not constructed in accordance with the second defendant's design - and it seems likely that there will be a number when the state of the exposed footings is taken into account - must also be regarded as at risk of failing, unless they were taken down to rock. The latter possibility can safely be labelled as fanciful on the evidence. Mr Thorley, when cross-examined about the fact that only five of the fifty footings have been exposed, accepted that the remaining forty-five had shown themselves to be stable so far. When it was put to him that they might well go down to rock Mr Thorley said, 'You could almost say they won't go more than 2 metres because that's what the drawings show'. He agreed he did not know that, but added, 'but I've never known a contractor to build more foundation that he's been asked to'. I accept that evidence and therefore conclude that all of the footings are, on the balance of probabilities, inadequate in some way and that the house is as a result at risk of suffering further substantial damage if there is another landslip. The builder's statement in a letter dated 6 December 1999 to an officer of the Building Services Authority that 'Most of the footings went down to rock (interlocking boulders?) or were dug 2 m into solid ground' may safely be discounted on my assessment; and it should be noted that later in the same letter he added, 'While most footings are down to rock, some certainly are not'. It must be remembered that the subsidence of 9 February 1999 followed prolonged heavy rain and that since then there has not been such heavy rain. The only really heavy rain since then was in

February 2003 and the rain recorded then did not come close to reaching the massive fall recorded four years before.

[35] It was pointed out on behalf of the defendants that no witness could give evidence that the future movement of the upper footings is likely. Mr Bowler said that it was normal for landslip to progress upslope, but agreed he could not be certain that such movement would occur and could not be certain that there would be no movement.

Mr Wright too agreed he could not be certain. Mr Murdoch, in answer to a question in cross-examination, said of the upslope footings: 'If they haven't moved, depending on the depth that they're at they're probably okay', adding, however, 'but I would put them down into rock if I was doing any remedial work at all on that block'.

Mr Murdoch gave a quantitative assessment of the benefit of underpinning the upper footings in re-examination when he said 'You're probably going from sort of being

95 per cent. sure to being 99.9 per cent. sure'. I do not regard the latter assessment as more than a hasty guess, and, of course, subject to his previously-mentioned qualifications as to lack of movement and depth. The latter issue is of course at the heart of the matter. The effect of the defendants' proposition is that the plaintiffs will be required to bear the risk of any further subsidence even though they are not responsible for its creation. I am not persuaded that that is a correct conclusion in this case; the risk, although it cannot be quantified with any degree of certainty, is, on my assessment, a real one and in no way fanciful.

[36] It would not, in my view, be fatal to the plaintiffs that there had not been to now any further movement of footings in their house since the event that revealed the defects on the south-eastern side. The plaintiffs' case rests on the damage caused by the second defendants' negligent design and inspection: the erection of a house with defective footings liable to failure. But there is in any event some evidence of further movement since 9 February 1999.

[37] Mr Kirkby said that since early 1999 the gap in the floor between the flooring sheets in the studio of the house had enlarged, that cracks at the join between the wall and the floor in the bathroom towards the western end of the house had appeared during 2004 and appeared to be getting worse, and that a crack in a skirting board near the top step from a passageway level into the main bedroom was worse than it was a year or two before. Mr Kirkby conceded, however, that he could not be certain of further damage to the residence after early 1999 because no accurate measurements had been made. In Mr Bowler's report dated 24 May 1999 to the Building Services Authority (exhibit 4, p. 104) are recorded level survey results that the maximum vertical movement within the house was 60 mm, and that it occurred in the main bedroom: the extent of movement in the main bedroom, studio, and living room prevented the closing of sliding doors (p. 5). Crack inspections revealed cracks described as 'lower category cracks' existed throughout the eastern side of the house (p. 5). In Mr Wright's report to the Authority dated 27 June 2000 (exhibit 4, p. 209) he noted the maximum calculated level difference across the flooring framing was 99 mm (p. 3). In

Mr Thorley's report to the Authority dated 26 February 2002 (exhibit 4, p. 268) he noted that from measurements undertaken by others in the two years following

9 February 1999 it was apparent that differential movement of the house had occurred up to about 90 mm. Mr Bowler added, 'The magnitude of the total house movement is not known as no accurate level survey was undertaken prior to the existing movement occurring. This movement has resulted in cracking of the internal walls and window frames of the Studio, Bedroom and Living Room of 1 mm to 6 mm width, as previously measured, and misalignment of sliding doors. It is apparent from level surveys undertaken that the balcony and bedroom/studio area at the rear of the house has dropped relative to the front section of the house' (p. 1). In a report dated

9 February 2005 by Mr Fox to the defendants' solicitors (exhibit 4, p. 406), he noted that a slight slope had been observed 'generally within the house', with that slope towards the low side of the site. He added, 'This slope is equivalent to perhaps 40 millimetres of fall across the house without the obvious local subsidence at the

south-east. In my opinion this slope is readily explained by a drying of the reactive clay soils beneath the house, and is not relevant to the present matter' (p. 5).

[38] I see no reason to doubt Mr Kirkby's evidence on the existence of cracks about which he spoke and the levels within the house. In the absence of careful measurement, however, it is not possible to reach any clear conclusion as to whether there has been any substantial movement of the house after 9 February 1999, and, if there has been any such movement, its precise extent or the reason for it.

[39] It follows that the only reasonable way in which to rectify the defect in the footings of the house is either to underpin the whole of the house and not just part of it (the latter being contended for on behalf of the defendants), or to demolish it and rebuild it. It was common ground that damages against the defendants should be assessed on the principles explained in Bellgrove v. Eldridge [1954] HCA 36; (1954) 90 C.L.R. 613, i.e., remedial work contended for as a basis for assessing damages must be both necessary and reasonable; and see also Lyons & Ors v. Jandon Constructions & Ors [1998] WASC 224. It is common ground that underpinning the whole house would be more expensive than demolition and rebuilding, so assessing damages on the basis of the former would not be reasonable. The plaintiffs will therefore be entitled to damages assessed on the basis of demolition and rebuilding.

[40] To here I have focussed on the case against the second defendant. I turn now to the case against the third defendant. In para. 11(b) of its defence it admitted 'that it owed a duty of care to the Plaintiffs to take reasonable care in the provision of any services that it did, in fact, provide to the Plaintiffs, and to act in the manner of a reasonably competent consulting engineer'. The allegations against the third defendant in the plaintiffs' statement of claim are at first sight somewhat confusing, because, although it is clear from para. 13 that their case against it is based on the certificate of

29 March 1994 it is referred to elsewhere (in paras 14, 16(c), 17(c), and 21) as the 'design certificate'. As I have related, the design certificate was signed by the second defendant on 17 June 1993 while he was still employed by D.J. Brown & Partners Pty Ltd and before he took up his position with the third defendant on 30 August 1993.

[41] In para. 17(c) the plaintiffs allege that the third defendant owed to them 'a duty to take reasonable care, and to act in the manner of a reasonably competent professional engineer with expertise in the design of footings for residential dwellings and the issue of certificates of design'. In para. 21 the plaintiffs allege the third defendant breached the duty pleaded in para. 17(c) by:

(a) failing to act in the manner of a reasonably competent professional engineer, with expertise in the design of slabs and footings for residential dwellings, when executing the design certificate in circumstances where the design was clearly inadequate for the Site;

(b) executing the design certificate in circumstances where there was clearly inadequate inspection of the excavation of the footings and no inspection of the concrete pier excavation.

[42] In the latest particulars given of para. 21(a) the plaintiffs make it clear that what is referred to as the design certificate is the certificate referred to in their para. 11, because there is reference there to the inspection of footings:

As to paragraph 21(a) of the statement of claim RMA failed to act in the manner of a reasonably competent professional engineer when executing the design certificate by failing to recognise that the footing and slab design was inadequate and did not adhere to the recommendations of the Murdoch Report concerning:

(c) the poles being constructed in a trench, with no surrounding backfill and the effective footing size being reduced to 225 mm, equivalent to the pole diameter;

(d) the footing excavations not being inspected by a geologist;

(e) only 1 of the 5 footings inspected reaching the minimum 2 m shown on the drawings (as detailed in Coffey Geosciences Report dated 14 May 2003);

(f) neither of the 2 poles inspected founding on 200 mm plug of compacted gravel or on rock (as detailed in Coffey Geosciences Report dated 14 May 2003);

(g) None of the footing excavations being inspected by an engineer, and no concreting or reinforcement placement operations being inspected; and

(h) The plaintiff repeats and relies on paragraph 8 above.

[43] What the plaintiffs' case against the third defendant comes down to, then, is an allegation of negligence at the time of providing the certificate of 29 March 1994, after the inspection of footings, when then it should have been obvious to the second defendant, for whose actions the third defendant is vicariously liable, that the footings were inadequate in that they did not comply with the recommendations in

Mr Murdoch's second report. I am satisfied that that case has been made out, and that that negligence may also be regarded as a cause of the damage suffered by the plaintiffs.

[44] Both defendants have raised an issue of the plaintiffs' contributory negligence. No submissions were addressed to me by either defendant on that subject and in para. 29 of the written submissions provided to me on behalf of the plaintiffs that omission was noted and it was submitted that the allegations of contributory negligence could therefore be taken to have been abandoned. No challenge was made to that submission on behalf of the defendants in the written reply submitted on their behalf, and I shall accordingly not deal with that matter further save to say that the principal allegations concerning contributory negligence appear to be related to the position of the house on the slope and the position of the sullage pit. In relation to neither could the plaintiffs be held to be negligent, in my view, since they were merely complying with local authority requirements in both instances.

[45] I come now to the assessment of damages. As I have indicated, I conclude that the proper measure of damages is the reasonable cost of demolition and reconstruction of the house. On behalf of the plaintiffs $581,200 was contended for, and on behalf of the defendants $352,442.50. The plaintiffs do not seek damages based on the cost of footings and inspections additional to those referable to the second defendant's design. The only builder to give evidence on that subject was Mr Paul Brentnall of Brentnall Design & Construction, Caloundra. Mr Brentnall prepared an estimate of $412,989 including goods and services tax given in his letter dated 31 May 2003 to the plaintiffs' solicitors (exhibit 4, p. 360); and then later by a letter dated 26 January 2005 to the plaintiffs' solicitors provided a revised estimate of $523,700 including G.S.T. (exhibit 4, p. 363). Mr Brentnall said his costing was 'very, very conservative' and had been carefully prepared. There is no evidence to the contrary, and I accept it as correct. In the course of his oral evidence Mr Brentnall was asked about the possibility of re-using some parts in the present house such as bathroom fittings, appliances, timber, and leadlights. I accept Mr Brentnall's evidence that it would be difficult to re-use any of those things, apart from the leadlights. Furthermore it is probable that re-using the things other than the leadlights would lead to a reduction in the overall cost of demolition and rebuilding since salvage rights are a factor in arriving at the cost of demolition. The re-use of the leadlights would result in a saving of about $2,500, so that I assess the cost of demolition and rebuilding at $521,200: Mr Brentnall's $523,700 less the $2,500 saving on the leadlights. To that must be added $20,000 as agreed damages for inconvenience and distress, $16,720.40 an agreed figure for previous rectification costs, and $3,215.80 as agreed interest on previous rectification costs, and $20,063.80 as an agreed sum for alternative accommodation and storage fees. Accordingly I arrive at the plaintiffs' sum of $581,200.

[46] It was contended on behalf of the defendants that there should be some discount - in the order of thirty per cent. - on the principles explained in Malec v J.C. Hutton Pty Ltd [1990] HCA 20; (1990) 169 C.L.R. 638, to take into account the possibility of damage in any event. I am not persuaded that there is any reasonable basis for such a discount, since, had the footings been taken down to rock, the chance of damage to the house would be so slight as not to warrant consideration in this context. I reject also the suggestion made on behalf of the defendants that there should be a discount of fifteen per cent. applied to Mr Brentnall's price on the assumption that a cheaper builder might be found. There is no evidence that Mr Brentnall's estimate is excessive, and ordinary experience would tend to suggest that building costs are more likely to rise rather than to fall in any event.

[47] Had I been satisfied that the plaintiffs' damages should have been assessed by reference to the cost of a partial underpinning of the house I should have assessed the plaintiffs' damages at $193,200. The plaintiffs contended for $254,000 ($248,000 adjusted for an arithmetical error) and the defendants for $114,630 ($114,629.60 adjusted for an arithmetical error). The principal partial underpinning proposal referred to in the evidence was that set out in Mr Wright's report dated 28 August 2000 (exhibit 4, p. 242) and involved underpinning thirteen piers. The evidence concerning the cost of partial underpinning came from Messrs Fox and Renato Monteverde of

R. & M. Monteverde Pty Ltd, underpinning contractors of Coopers Plains. According to Mr Fox, in a report of 9 February 2005, the cost of partial underpinning would be $136,000 (exhibit 4, p. 406), but Mr Monteverde's original estimate dated

3 October 2000 was between $60,000 to $65,000, but that included relocating the sullage pit: exhibit 4, p. 256. On a 'normal' site, Mr Monteverde said, the cost would be $2,500 to $3,000 for each pier, but he added words to the effect that although $136,000 is a high price, it could be appropriate for the site in question. He also agreed it might not be enough. From the evidence of both witnesses it is clear that it is difficult to give a completely accurate estimate of the cost of underpinning a pier until it is known what is below it. I am satisfied that $140,000 is a reasonable figure, to include engineer's fees. To that sum must be added the cost of repairs to the house, which I assess, relying on Mr Fox's evidence, at $10,000. I should have allowed $3,200 for the cost of accommodation for the plaintiffs while the work is being carried on: $400 per week, based on the rental figures in the report dated 28 January 2005 by Mr Roger Loughnan, real estate agent (exhibit 4, p. 357), and Mr Fox's evidence that the work would take a couple of months. In addition there would be $20,000 as the agreed sum for inconvenience and distress, $16,720.40 the agreed sum for the previous rectification work, and $3,279.60 the agreed sum of interest on the previous rectification work.

[48] I should add that in my view it was reasonable for the plaintiffs to delay undertaking major rectification works while the liability of the defendants was still in issue: see London Congregational Union Inc. v. Harriss & Harriss [1985] 1 All E.R. 335, reversed in part, but not on this point, by the Court of Appeal [1988] 1 All E.R. 15.

[49] There will be judgment for the plaintiffs against the second and third defendants for $581,200. I shall invite further submissions on costs.