(2) accordingly, even if the sandstone fulfilled not only that function but also the function of cover soil, nonetheless it is only contractually relevant in so far as it is to be regarded as cover soil.
196 There would have been a requirement for cover soil to be imported even if the site had not been over-excavated. That is because the amount of cover soil available from excavation in areas of cut was insufficient to bring the areas of fill up to the top of waste profile. Had cover soil been imported, the council would have been required to pay for it at the appropriate rate specified in the schedule of rates. If sandstone were used in lieu of cover soil, the council would be liable to pay for it as cover soil unless the Superintendent's Representative approved some higher rate. In this case, the Superintendent's Representative approved payment at the rate for cover soil. In my view, he was right to do so.
197 There is no doubt that crushed sandstone was used in the northern landfill, and was paid for at a higher rate than the rate applicable to cover soil. But that does not seem to me to matter. The question for present purposes is: what is the applicable rate for ripped sandstone used as cover soil in the southern landfill? For the reasons that I have given, the appropriate rate is the rate for cover soil, because the only need for the use of ripped sandstone arose from Neumann's over-excavation of the southern landfill and the consequences that followed.
198 Issue 9 should be answered: "to the extent that crushed sandstone was imported and laid as cover soil in the southern landfill, the rate payable is the rate applicable to cover soil under the schedule of rates".
Tenth and eleventh issue: the underground tanks
199 It is convenient to consider these issues together.
The relevant facts
200 The starting point is the alternatives, in relation to underground water storage tanks, referred to at [53] above.
201 The tender required a rate per tank for the design, supply and installation of 100kL underground water storage tanks with their associated pumps, valves, connections and the like. Neumann offered to supply 107kL in situ concrete tanks, for a substantial cost saving. Before the contract was let, Mr Wassef raised with Mr Vasey the question of piling. Mr Vasey sent an email to Mr Wassef on 1 December 2006 that read as follows:
George,
I have received my prices back for piling from our piling contractor. Our rate would be as follows:
Rate includes 1 establishment, 72 treated pine piles x 150 diameter x 8m long each including splices at 6m.
Price incl. GST is $54.40/m.
Any queries, please call
Regards
Robert Vasey
SENIOR ESTIMATOR
202 On 20 December 2006, the council wrote to Neumann accepting "your offer to perform the works specified in the above contract… in the Schedule of Rates amount of $11,577,810.35 inclusive of GST". The letter also specified the contract documents. They included specifically the email that I have just set out.
203 At this point, there might appear to be a question as to whether the rate quoted by Mr Vasey was a rate per tank (i.e., a rate based on each tank's being supported by some 72 piles at $54.40 per metre) or a rate overall. The former construction may well be consistent with the requirement of the schedule of rates to specify (as Neumann did) a rate per tank. However, matters moved on.
204 Neumann prepared a WMS dated 2 February 2007 for the underground storage tanks. That document proposed to supply and install six tanks each of 150kL capacity with their associated fittings. It seems that what was contemplated was concrete tanks constructed in situ. That WMS was sent by email to Mr Wassef on 2 February 2007. The email stated, among other things, that "[i]f you are happy with the design I will put together a costing for the supporting structure (piles & slab)". The email noted a change to the piling that had been quoted before, and stated that the proposed piles had a greater capacity than the ones originally suggested "and are more cost effective".
205 Mr Wassef replied, stating in effect that he would be unlikely to have any concerns with the changed design "as long as no additional cost would be incurred", and indeed that Neumann could have the benefit of any cost saving. Mr Wassef said:
I do not see any grounds for approving any additional cost.
206 At this stage, it appears, the parties shifted their attention to the possible requirement for pile caps, or some other mechanism, to spread the point loads that the piles would generate. Mr Gilford sent an email to Mr Wassef, again on 2 February 2007, in which he stated that "[t]he requirement for the supporting structure is totally independent of the size or type of tank to be used". He claimed that slabs and piles "would be required even for Envirotanks as shown". Thus, he claimed, the supporting structure for the tanks, whichever tank was constructed, was a variation.
207 Mr Wassef did not agree, and required a WMS to be submitted that was consistent with Neumann's tender.
208 Neumann submitted a revised WMS by email on 5 February 2007. That email said, in effect, that there would be no cost advantage by using 150kL tanks as opposed to 100 (or 107)kL tanks.
209 There was substantial further correspondence between the parties. I do not think that much is to be gained by going to the detail of every email and every letter, since they become increasingly self-serving (in truth, a feature of much of the correspondence ammoniating from the parties - in particular, Neumann - in this case).
210 It is, however, necessary to record that on 16 April 2007, Neumann submitted a revised proposal for the tanks, and that work proceeded on the basis of this revised proposal after what Neumann said was an approval given in August 2007.
211 The revised proposal was for the design and supply of six 150kL concrete tanks with their associated fittings. The total, including piles and pile caps, was costed at $941,762.92.
212 On 3 August 2007, Neumann wrote to Mr Pradhan seeking approval of the proposal put on 16 April 2007. That request was reiterated by email sent on 6 August 2007.
213 On 7 August 2007, Mr Pradhan replied, stating, relevantly, that the work should proceed "as per the contract" but referring to cls 40.3, 40.4, 40.5(b) and 40.5(c) of the general conditions.
214 Mr Gilford replied the same day, stating that Neumann would not accept a direction under cl 40.4 (which relates to variations for the convenience of the contractor) and requiring "confirmation that the claim will be assessed on Clause 40.5(c), i.e. the Superintendent acknowledges that the claim is a valid variation".
215 Mr Gilford said that he had a telephone conversation with Mr Pradhan on 8 August 2007. According to Mr Gilford, Mr Pradhan said:
I support your claim that piling, pile capping and associated costs detailed in Neumann's letter dated 16 April 2007 constituted a valid variation to be assessed under Clause 40.5(c) of the Contract.
216 Mr Gilford sent an email straightaway to Mr Pradhan, copied to (among others) a Mr Michael Achelles of the council. That email stated, among other things:
Tanks - On this date you have advised us verbally that as Superintendent's Representative you are supporting our claim that piling, pile cap and associated costs as detailed in our letter dated 16 April 07 constitute a valid variation to be assessed under Clause 40.5(c) of the Contract.
217 Mr Gilford attached a revised costing which deleted an aspect of the earlier costing.
218 On 14 August 2007, after Neumann had engaged its piling contractor and had commenced work, Mr Gilford had a conversation with Mr Achelles. Mr Achelles said, apparently, that he would "recommend that the proposed variation to the tanks with piles and pile caps not be accepted by council. Pradhan did not have the authority to approve it". Perhaps not surprisingly, Mr Gilford queried Mr Achelles' assertion.
219 Mr Pradhan did not reply to Mr Gilford's email confirming (or purporting to confirm) the verbal approval and submitting a revised costing.
220 Mr Pradhan was not called to give evidence. There was no suggestion that he was unavailable. Mr Achelles was not called to give evidence, and there was no suggestion that he was unavailable to give evidence. (I note that Mr Achelles' role is obscure.)
The parties' submissions
221 Mr Greenwood submitted, correctly, that the full amount quoted by item 7.7 of the schedule of rates, together with the dollar amount stated in Mr Vasey's email of 1 December 2006, had been paid. That, he submitted, was the extent of the council's liability. If Neumann had failed to allow, in its tendered rate, for the cost of supplying and installing the slab necessary to support each tank, that was not something for which council was liable. The requirement to support the tanks on slabs always existed, and could not amount to a variation.
222 Mr Greenwood submitted further that, Neumann having chosen to supply and install six larger tanks, that was a variation for its convenience and not a variation directed by the Superintendent. He accepted that Mr Wassef had said that he would be likely to approve the installation of six larger rather than nine smaller tanks, but noted (correctly) that this was on condition that there would be no increased cost to the council.
223 As to the piling: Mr Greenwood submitted that the rate quoted in Mr Vasey's email of 1 December 2006 was an overall rate for all of the tanks, not a rate per tank. He submitted that if it were per tank then the cost savings that had been promised through the use of in situ concrete tanks would disappear.
224 Mr Rudge submitted that the rate proposed for piles in Mr Vasey's email of 1 December 2006 did not form part of the contract. I may say straight away that I do not accept that submission. As I have noted, the council's letter of acceptance expressly included the email as one of the documents forming the contract.
225 Mr Rudge referred to what he characterised as evolutions in the design of the tanks and the piling. However, he did not grapple with the problem that Mr Wassef's attitude was, consistently, that he would approve changes only at the convenience of Neumann, and would not approve them if they resulted in increased cost to the council.
226 At the heart of Mr Rudge's approach to these issues was his submission that I should accept Mr Gilford's evidence of the conversation said to have taken place between him and Mr Wassef on 14 April 2007. Mr Rudge relied on that conversation to show, in effect, that the council had accepted that the requirement for slabs and increased piling was a variation for which it was liable to compensate Neumann. For the reasons that I have given already, I do not accept this aspect of Mr Gilford's evidence, and I prefer Mr Wassef's account of the conversation (see at [60] to [64] above).
227 However, Mr Rudge pointed to the events of August 2007. He submitted that there was then an approval given under the contract, and that it was not open to the council thereafter to seek to withdraw that approval.
Decision
228 Were it not for the events of August 2007, I would conclude that: