The Course of Dealings
446 To my mind, the correspondence between the parties between June 1992 and 17 November 1993 and the objective file notes recording what occurred at certain of the meetings which took place between those dates, clearly establishes that there was to be a 'bid' phase and a 'post-bid' phase.
447 Part of the materials enclosed under cover of Civil and Civic's invitation to tender, submitted to Wards on 23 June 1992 [J1], delineated between the bid phase and the post-bid phase [see the section headed 'General' forming part of the Scope of Works document - earlier set out]. Plainly Wards was then on notice that after the bid phase it was to be responsible for participation in design development. This was to ensure that 'document intent as priced and detailed [remained] within the fixed price provided by Wards for submission'. Risk on design development was clearly announced as risk which 'is therefore borne by Wards unless major changes to scope' were required by the client, NSW Water Services or the Water Board. In the case of 'major changes', a new price would be required and Wards would need to show 'that rates and commercial viability are in line with the original document'.
448 Mr Cherrie accepted that until the blanks in the blank subcontract enclosed with J1 were filled in, one could not have a meaningful contract [T128.35].
449 Mr Levido accepted that the concept of Wards bearing the risk of design development unless major changes to scope were required by the client, stayed the same throughout his association with the project and that there was never any dissent from Wards. [T220.05]
450 Mr Levido also accepted that the draft contract provided with the letter, J1, was a blank contract and would need to be amended and added to before it could be signed by the parties [T221.35].
451 Mr Pittolo, in relation to document J1, gave evidence that at no time prior to the signature of the subcontract did he look at any draft or other version of the subcontract [T265.35]; that changes to the drawings might result in changes to the scope of works [T266.05]; that when he came on board the project, he knew that it was likely that when the final contract came to be signed, the design would not be finally complete [T267.30]; that one of the things that was a feature of the proposed arrangement between the parties was that it was made quite clear to Wards that when they finally signed up for the lump sum, the design might not be complete finally [T268.5]; and that his understanding of design risk from the time he joined the project up to the time he left was similar to that contained in the June 1992 Scope of Works document, namely that risk on design development was borne by Wards unless major changes to scope were required by the client [T268.55].
452 Mr Niederberger under cross-examination, in relation to document J1, gave evidence that when he came onto the project, he understood the statement that 'after the bid phase, Wards will be responsible for the participation in design development' to be true [T371.45]; and that he understood to be true that the risk on design development was to be Wards unless major changes of scope were required by the client [T372.25].
453 By 25 June 1992, the parties had engaged in 'ongoing discussions over three months' leading to the submission by Wards under cover of letter of that date, of its 'preliminary final assessment' for the relevant works. Importantly, that letter [J2]:
(a) included an item for 'design contingency' making provision for $1,130,000;
(b) included express reference to further discussions being anticipated to include 'risk assessment particulars with respect to design'.
454 Clearly enough, there would have been no need to include the reference to 'risk assessment particularly with respect to design', had the parties been looking forward to a standard subcontract with a clause providing for variations in the usual way to be found in lump sum building contracts.
455 Under cross-examination in relation to document J2, Mr Ward gave evidence that different persons had different understandings of the words 'design development' [T52.40].
456 Under cross-examination, in relation to document J2, Mr Levido gave evidence that he was aware of the competition between design development and variations by August 1993, that this tension was clear to him as from August 1993 and never changed for as long as he was involved in the project [T225.55]; that there was simply no doubt that after Wards signed the contract, it was quite clear that it had design development risks [T228.55]; and that it was always appreciated that drawing schedules such as those provided in 1992 would need to be and were in fact amended from time to time to take up the extent of changes or alterations in the design. [T230.10]
457 As early as 1 July 1992, Mr Glasgow of Wards had already focussed on the importance of achieving, for the purposes of finalising Wards' submission, a proper understanding of how, within the contractual documents to be brought into existence, the potential tension between what would be a 'variation', and what would be 'design development', was to be reconciled. Mr Glasgow's note, deserves to be repeated. It read:
'Scope of Work/Variations
Given that the project is still in the stages of design development and the detail of scope of work is unable to be closely defined - what constitutes a variation? How will it be differentiated from a "design development encompassed in the original scope"?'
458 At the centre of this case stands Wards' contention that close to two years later, it signed a contract which so differentiated but failed to take the time or trouble to read the relevant clauses.
459 Wards' tender submitted to Civil and Civic under cover of letter of 7 July 1992 [J3], allowed 'a small global risk contingency to cover the costs of details not available on the 'preliminary' drawings'.
460 Plainly enough, the drawings at that stage and thereafter were undergoing a process of gradual evolution. The list of drawings upon which Wards' 7 July 1992 lump sum price was said to be based, had been revised on a number of occasions by 7 July 1992 - see the abbreviated number revisions, part of the Drawing Schedule enclosed with document J3. The evidence clearly establishes that drawings were further revised up to May 1994. Appended to this Judgment as Appendix L is a document which records the dates of and transmittal number by which the 18 May 1994 contract drawings, as well as specifications, were transmitted by Civil and Civic to Wards.
461 It is common ground that some 32 design meetings took place up to 18 May 1994. These were attended by representatives of both parties. The minutes are in evidence. They clearly evidenced the evolution of design.
462 Further clarification of Civil and Civic's intent during the 'post-bid' phase, to work towards establishing a contract with Wards, is to be found in Civil and Civic's letter to Wards of the 16th July 1992 [J4].
463 The crucial 3 August 1993 Civil and Civic letter [J6], has been set out in full. Paragraphs 5 and 6 were clear. The letter outlined the three phases in contemplation. The first was up to TGMP acceptance. The second was from TGMP acceptance to contract. And following contract (the third phase), 'any risks associated with further design development' was to be borne by Wards within GMP, with one exception. This letter did not include any warranty by Civil and Civic that at the time of contract, design would be 'complete' or would be 'virtually complete'.
464 The Scope of Works [PX3 page 142 - part of J6] importantly made plain that it was provided for the purpose of pricing of Wards' TGMP:
'The following civil and structural components will form the works for pricing of a . . . TGMP by Wards . . . '. [Emphasis added]
465 The section of the Scope of Works under the heading 'General' was, with one immaterial exception, word perfect to that form of words enclosed with J1.
466 The drawings enclosed with J6 had again been revised.
467 Under cross-examination in relation to document J6, Mr Ward gave evidence that paragraph 6 of the letter was clear at the time he read it and that he was clear that, in the event that Civil and Civic contracted with Wards, any risk associated with further design development after the time of contract, was to be borne by Ward unless there was a major change to scope required by the client for which Civil and Civic received additional funds [T20.05]; and that he understood that Wards was responsible for design development [T21.45]; that the only exception to Wards' responsibility for design development, was where there was a major change to scope by the client where moneys would go from the client to Civil and Civic [T22.15]; that the terms of paragraph 6 would have to be incorporated in the contract [T24.10]; that Wards accepted that paragraph 6 was a term which either did or was to govern the contractual relationship between the parties [T25.30]; that it continued to be his understanding from August 1993 to May 1994 that a term such as that in paragraph 6 of the letter, governed the relationship between Civil and Civic and Wards [T27.50]; that paragraph 6 of the letter expressed the design development risk and Wards' appreciation of it [T39.55]; that Wards cannot point to any document which indicates that Wards' exposure to design development risk was limited to design developments suggested by Wards - and that there is nothing in the letter to that effect and that the 23 November 1993 letter from Wards to Hornicks shows that Mr Manion perceived that design development might involve what would otherwise be a variation [T56.20]; and that it is clear from the documents produced by Ward up to November 1993 and from as early as July 1992 that Wards was exposed to risk as a result of design development which might otherwise be a variation [T57.20].
468 Mr Cherrie, under cross-examination in relation to document J6, gave evidence that the initial process was leading up to no more than an agreement within the TGMP - that once the TGMP was agreed between the parties, there was no guarantee that Wards would end up with the contract - and that the agreement of a TGMP did not constitute a contract for the construction of anything [T134.45]; that there were a number of phases of design development, these being the phase leading to the submission of a TGMP, the phase between TGMP and GMP and the phase after contract [T136.30]; that he understood that right up to the time when the contract was signed, there may or may not be a contract [T138.15]; that a number of things were clear from the 3 August 1993 letter, namely that there may or may not be a contract; that if there was going to be a contract, it was subject to a condition that further design development after contract was a risk borne by Wards; that there was an exception where there was a major change to scope required by the client for which Civil and Civic got money; however, if the client did not require a variation which resulted in money being paid to Civil and Civic, Wards were stuck with the design development risk [T138.35]; that paragraph 6 of the letter is a contractual provision which is meant to speak from the time when the contract is signed and is referable to whatever the scope is at that time ; that the draft contract submitted with the letter was a blank subcontract which was not in any way adapted to the project and would require the incorporation of a term reflecting paragraph 6 of the letter one could not make a meaningful contract out of it without filling it in or being able to fill in the blanks; and that paragraph 6 of the letter continued to represent his understanding up to and including May 1994 of the exposure of Wards to design development risk [T143.25].
469 Mr Levido's evidence in relation to the document J6, was that all the way to the time of contract the works may change in detail or scope [T231.25]; that Wards was accepting further design development risk after the time of contract with the exception mentioned in the letter [T233.30]; that Wards had the risk of design development after contract [T234.30]; that the actual concept of design development remained constant during the entirety of his involvement with the project [T235.20]; and that the concept of design development had to be addressed in the contract before signing [T236.25].
470 Mr Pittolo gave evidence under cross-examination in relation to the letter document J6, that there would be design changes between TGMP and GMP; that it was up to Wards to decide whether or not at the end of that process, it wanted to nominate a different GMP; that if, for instance, Wards perceived that design changes had made the work significantly more expensive, it might put its hand up for a higher GMP [T271.55]; that he understood in January that if Wards contracted with Civil and Civic any risk associated with further design development were to be borne by Wards and the only exception was if there were major changes to scope required by the client for which additional funds were made available to Civil and Civic [T272.40]; that somebody needed to address the blanks in the blank subcontract to put in the contractual terms in relation to design development and variations [T274.10]; that it was obvious that the scope of works provided by Mr O'Connell in 1994 had to be different to the 3 August 1993 scope of works ; that the scope of works talks about the sort of work in general terms which is to be done and the sort of risks each party bears in respect of that work [T331.55]; that the Scope of Works provided by Mr O'Connell in 1994 had to be an update of the scope of works in the letter [T332.5]; that the scope of works says who bears the risk in respect of particular work or changes in that work [T333.15]; and that the scope of works was something which would need to change as time went on [T335.10].
471 Mr Niederberger under cross-examination in relation to the letter J6, gave evidence that it was clear that the final break-up of works might vary from current scope [T373.25]; that it was clear from the letter that design development would occur during the TGMP to GMP phase [T376.5]; that it is clear from the letter that there would be design development after the TGMP process was found acceptable and agreed [T376.30]; that he understood that paragraph 6 would be a term of the contract [T377.45]; that it was clear to him that once Wards signed a contract, Wards would bear the risk of further design development [T377.55]; that it was clear from the letter that there might be design development after the time of contract and that Wards would bear the risk in respect of this [T378.1]; that what the scope of works says about risk is the same as his understanding of risks at all times [T379.15]; that the draft subcontract is a blank subcontract [T379.40]; that the appendix to the draft subcontract is totally blank and that he knew this when he read it [T379.55]; that the contract needed to be filled in [T380.15]; that there was no clause in the draft contract in relation to design risk; that design risk is included in the letter; that he assumed the letter would be included in the contract; that the person signing the contract would make sure it was included [T380.30]; that design development could have been suggested by Civil and Civic [T386.10]; and that nothing in the letter J6 indicates that design development is only something which Wards did [T387.15].
472 Wards' letter of 23 August 1993 [document J7], clearly recognised the design risk exposure of Wards, and proposed contract conditions to share that risk. Those conditions were never accepted by Civil and Civic. No evidence was adduced suggesting that Civil and Civic ever responded to the proposal. The enclosures to the letter under 'Risk Profile' importantly recognised that Wards would be exposed to design risk 'generally throughout [the] project as original scope lacked detail which may increase construction costs'.
473 Under cross-examination in relation to the letter document J7, Mr Ward gave evidence that he would need to take steps to see whether the terms it had proposed were accepted and incorporated in the final contract [T31.40]; that before a final contract was entered into, the tension between the 3 August 1993 and 23 August 1993 letters would need to be resolved [T33.20]; and that it was clear to Mr Ward as at 23 August that the original scope lacked detail and that there was a design risk to Wards generally throughout the project which might increase construction costs [T37.15].
474 Under cross-examination in relation to letter J7, Mr Cherrie gave evidence that the design and scope were changing during the TGMP phase [T147.45] and that he could not say whether Civil and Civic agreed to any of the contract conditions proposed by Wards [T152.05].
475 Mr Levido under cross-examination in relation to the letter J7, gave evidence that there was no agreement with Civil and Civic as to the conditions referred to in the 23 August 1993 letter [T239.40]; and that it was important for Wards to think about the design risk that it was undertaking in reaching a lump sum figure because if it got the exercise wrong, it could be exposed to significant loss [T243.45].
476 Under cross-examination in relation to the letter J6, Mr Niederberger gave evidence that he realised that there were differences between this letter and the 3 August letter and that these differences were never resolved [T390.40].
477 Wards' letter of 20 September 1993 [document J7A], does not seem to add materially, being in generally the same form as document J7. Mr Levido gave evidence in relation to this letter that it was clear to everybody who was working on the project that the scope was changing from time to time [T246.25].
478 Wards' letter of 26 September 1993 [document J8] further evidences Wards' knowledge and understanding of the phased procedure then in place, Wards describing the transition from TGMP to GMP as 'the Price Validation Period'. The references to the potentially large 'windfall wins and losses' in relation to design improvement, make plain that Wards were well and truly aware that risks could lead to losses. In so far as the letter proposed yet a different variant from Wards' previous proposals on design risk allocation, the proposal was never accepted nor apparently responded to. The attached table furnished detail of the design risk heads quantified as 'contingency from TGMP'.
479 Under cross-examination in relation to the letter document J8, Mr Ward gave evidence that Wards' staff appreciated that there was an upside and a down side to the design development process [T47.05]; that the letter shows that design was a risk to Wards [T49.15]; and that Wards had to review and accept the project programme prior to agreeing the final GMP [T103.50].
480 Mr Cherrie under cross-examination in relation to document J8, gave evidence that the process of design development might result in benefit or detriment to Wards [T175.25]; and that design development might result in a blow out of costs which would expose Wards to an uneconomic lump sum contract [T176.15].
481 Mr Levido under cross-examination in relation to the letter J8, gave evidence that it was his understanding and to his observation the understanding of others within Wards, that one of the last things Wards would have to do prior to signing off on a contract was to look at the programme current at the time and to make sure that it was acceptable to Wards [T247.50]; that design development could lead to design change [T248.30]; that he was never told that design would be complete by the time of contract but his view was that it would be near complete [T249.05]; that it was Wards' intention that changes in scope brought about by amendments to the design were to be monitored [T249.30]; that the TGMP to GMP conversion might result in potentially large wins and losses [T250.10]; and that it was abundantly clear that whatever the final contract was going to do, it had to deal with matters of additional contractual agreement that had been suggested by Wards [T251.10].
482 Mr Niederberger under cross-examination in relation to the letter J8, gave evidence that there might be a risk to Wards in the order of $200,000 in relation to the project programme [T404.10]; and that the last page under the heading 'Design Risk' indicated possible design overruns for Wards and that those were not things suggested by Wards [T405.20].
483 Outside of the question of whether or not Mr Cherrie attended the 22 October 1993 design meeting, two at least of the records of that meeting [J8A and J8B], as both Mr Cherrie and Mr Niederberger conceded, appeared to cover many of the same issues. J8A includes the words 'design development risk to stay with us' (meaning Wards). Document J8B importantly include:
'WCE to take on design development. Therefore no variations unless Civil and Civic gets a variation (i.e. need to use the pot of money made at start).'
484 This last note is particularly important as it brings into the parties' discussions the term 'variations', plainly meaning to refer to the usual variations clause to be found in lump sum building contracts.
485 The third record probably misdated 21 October [J8C] in Mr Glasgow's handwriting, uses words similar in purport - 'Wards will be responsible for design development risk - unless Prospect Water can get variation from client'.
486 Under cross-examination in relation to Mr Levido's note, document J8A, Mr Cherrie gave evidence that Mr Levido's note was consistent with paragraph 6 of the 3 August letter [T157.55]. Mr Levido also gave evidence that Greg Robinson had said that design development risk was to remain with Wards after the contract and that the note correctly summarised Mr Levido's understanding at the time [T254.55]. Mr Niederberger gave evidence that he agreed with Mr Levido's notes that design development risk was to remain with Wards [T407.5].
487 Under cross-examination in relation to Mr Niederberger's handwritten notes, document 8B, Mr Cherrie gave evidence that Mr Niederberger's note was very closely the same as what was in the 3 August letter [T158.15]; that Mr Niederberger's note correctly set out Mr Levido's understanding that design development risk lay with Wards after contract and that there would be no variations unless Civil and Civic got a variation. [T258.25]
488 Under cross-examination in relation to Mr Glasgow's handwritten notes, document J8C, Mr Cherrie gave evidence that Mr Glasgow's note was the same concept that those at Wards had taken from the 3 August letter and that Mr Glasgow's perception of Wards' risk was one which he had as at October 1993. [T162.30] Mr Niederberger gave evidence in relation to document J8C that he agreed that Mr Glasgow's notes that Wards were responsible for design development risk unless there was a variation from client, expressed his understanding at the time [T407.40]; and that this appeared to be a sentiment well known to people at Wards at the time [T407.45].
489 Wards' letter of 17 November 1993 [document J9], was closely cross-examined on. The cross-examination raises the question of what the parties understood by use of the words 'define scope' in the third paragraph.
490 Mr Ward's evidence in relation to the letter J9, was that the 3 August letter continued to have relevance as at 17 November 1993 [T41.30]; that the TGMP was the starting point for a process that would lead to a submission which may or may not result in there being a GMP which Civil and Civic found acceptable - that there may or may not be a contract entered into between the parties based upon the GMP [T41.55]; that as at 17 November 1993, there was to be a final contract in the future in addition to the correspondence up to that time; that after 17 November there was to be a period of an exchange of views about design development leading up to that contract; that Civil and Civic may or may not enter into a contract with Wards at the end of the period; and that nothing was promised to Wards by this time about Civil and Civic entering into any arrangement for the construction of anything [T44.10]; that one cannot have design development without change [T45.05]; that Wards and Civil and Civic were looking forward to the preparation of a final contract and did not think that 17 November 1993 was the end of the process for a final contract [T50.15]; that the 17 November 1993 letter did not conclude a contractual arrangement [T53.45]; and that he accepted that anyone who reviewed on more than an absolutely cursory basis the chain of letters from 3 August to 17 November would have been alerted to the necessity to look at the formal contract to see how those matters were resolved. [T61.10]
491 Mr Cherrie's evidence under cross-examination in relation to document J9A was that as at 17 November, both parties were well aware that there was to come into existence a formal contract which would pull together the various matters discussed and that it was not until and unless that contract was signed, that Wards and Civil and Civic could be taken to have agreed to do the work set out in drawings current at that time [T153.30]; that the letter was the start of the process for moving from TGMP to GMP [T168.30]; that the reference in the letter to the costs of design development was the concept which the parties had in mind as expressed in the 3 August letter [T168.50]; and that a further process of design development was being looked forward to as at 17 November [T170.55].
492 Mr Levido's evidence under cross-examination in relation to the letter J9, was that by the time he left the project, the blank standard form subcontract had not been filled in any way [T259.05].
493 Mr Pittolo's evidence in relation to the document J9, was that at the end of the TGMP to GMP phase, there may not be a contract between the parties; that there was to be a continuing process of design development leading up to the contract [T278.05]; that there was a continuing process of revision of drawings and that Wards knew that what it had to build was in the current drawings not what was in some drawings from previous years [T278.50]; and that the Bill of Quantities did not say anything about who bore the risk in respect of particular work or change in that work [T333.5].
494 Mr Niederberger's evidence under cross-examination in relation to J9, was that there had to be further design development before the TGMP was converted into a lump sum [T408.40].
495 The 'early works package' letter of intent of 6 December 1993 from Civil and Civic [document J10], referenced Civil and Civic's invitation to provide a TGMP of 29 July 1993 - being document J5. It stated that 'a Formal Subcontract Agreement is being prepared' and that the letter of intent was 'subject to the execution by both parties of the said Agreement'. The letter of intent dealing with early works was simply a pre-cursor to a contractual process.
496 The December 1993 purchase order number 210311, document J11, does not seem to me to add any matter of special significance to the issues.
497 The plus/minus register dated January 1994, document J11A, being the first such register, has a particular relevance both in relation to the purpose for which the register was being prepared and updated and because, for example in relation to the column headed 'Action', one there finds reference to 'potential for additional works not in current scope'. Mr Pittolo's evidence under cross-examination was that he understood that when Wards signed the contract, Wards would bear the risk for design development [T263.1]; and that he accepted that it did not require much thought to understand that as Wards was to bear the risk of design development when it signed the contract, it had become very important for Wards to go to design meetings and to understand what was happening to the design that they were going to have to construct [T263.10].
498 The 7 February 1994 early works contract [document J12], has already been referred to. Under cross-examination in relation to this document, Mr Ward accepted that any officer of Wards could have read the early works contract had they wanted to [T60.20]; that it was clear from the correspondence that people who wrote the correspondence would have to assume that there was something to be done by way of agreement before contractual terms were incorporated [T60.55]; and that clauses 6.10 and 6.30 of the early works subcontract are consistent with the correspondence from June 1992 up to the time of the contract [T63.35].
499 Under cross-examination in relation to the early works subcontract, Mr Cherrie gave evidence that the design development process was still continuing as at 7 February [T188.55]; that the lists of drawings and specifications from August 1993 had been well and truly superseded by February 1994 - and that to the extent that the February contract involved works, there would inevitably have been changes to the drawings involving those works between June 1992, August 1993 and February 1994 [T189.05]; that it was quite plain that the terms of the standard form subcontract that had been exchanged early on in dealings with the parties, would not have been appropriate to sign in that form by February or by May - and that a large number of things had to change in the contract [T191.55]; and that clause 6.10 and 6.30 expressed in formal words the concept of the comparison between design development and variation, that competition having been well known to exist to Wards back in 1993 and all the way through the process of design development - and that all this contract did was to put into formal words that concept [T192.40].
500 Mr Pittolo under cross-examination in relation to the early works subcontract, gave evidence that as at 7 February there were still matters yet to be resolved to be incorporated into the final contract [T283.35]; that when the final contract came around, it was important to look at what was comprehended in it [T285.45] and that the Manion 'contract conditions' document contained extracts from the 7 February 1994 contract [T359.55].
501 As to the minutes of the monthly project review meeting number one dated 15 March 1994, document J13, Mr Ward gave evidence that it was clear to everyone at the meeting that there was still a contract in the future and that it was to be resolved for the end of March; that nobody thought there was already a contract at the end of 17 November 1994 and that everybody thought there was going to be a contract and it was coming up [T66.50].
502 Under cross-examination in relation to the minutes of the 15 March 1994 meeting, Mr Cherrie gave evidence that during this time, he was aware that there was to be a contract resolved at some time [T180.10].
503 Under cross-examination in relation to the annotated schedules of substantial completion, document J15, Mr Ward gave evidence that it was clear that a member of the Wards staff appreciated the day before the May 1994 contract was signed, that the dates in the schedule were to go into the contract [T102.05].
504 Mr Cherrie in relation to document J15, gave evidence that he was aware that the schedule of substantial completion was being discussed and drawn up on the Tuesday prior to the signing of the contract [T201.40].
505 Mr Pittolo gave evidence that he saw the schedule of substantial completion on 17 May and knew that the matter was being raised for the purposes of incorporation into the 18 May contract - it was a new document which he had not seen before [T317-35]; that he was clear that what Mr Niederberger and Mr O'Connell were doing in agreeing the schedule of substantial completion, was finalising the document for the purpose of inclusion in the contract [T339.50].
506 Mr Niederberger under cross-examination in relation to document J15, gave evidence that he agreed that the dates in his handwriting at the bottom of the schedule of substantial completion were agreed with Mr O'Connell to be included in the contract [T413.30]; that he referred to the programme he was preparing to come up with the dates in the schedule [T413.40]; and that when he checked, the contract dates were correctly recorded by Mr O'Connell in the contract [T414.25].
507 Document J15A is the last plus/minus register of 14 May 1994 prepared four days prior to the Subcontract being signed. Mr Cherrie under cross-examination in relation to this register, gave evidence that the register contained both positives and negatives and considered both the effect which could be assessed contractually at the time and also looking forward to future potential effects [T181.30]; that the plus/minus register tracked things different to what was on the variation summary [T182.20]; and that he understood as at 18 May that Wards was still under the same risk as that described in the 3 August letter [T184.55].
508 The monthly project review meeting number three held on 16 May 1994, two days prior to the Subcontract being signed, has already been referred to. Mr Ward gave evidence in relation to this meeting that it was clear to everyone at the meeting that the contract was to be resolved for signing by Wards on 18 May [T76.35]; that the minutes of the meeting recorded mutual satisfaction of the plus/minus register and that there was no document or conversation recorded disagreeing with the minute [T77.45]; that it is quite possible that the reason that the reference to the plus/minus register and the minutes changes after 16 May, is that from the time of contract onwards, design development risk was to be borne by Wards [T79.15]; that there are many items on the plus/minus register which do not stem from design development suggested by Wards [T79.25]; and that design development inevitably involves design change [T79.50].
509 Mr Cherrie's further evidence was that the May 1994 contract was to be the final subcontract [T193.30].
510 In relation to the minutes of site meeting number seventeen of 16 May 1994 [document J17], Mr Ward's evidence was that the minutes meant that Wards was in front on the plus/minus register at that stage relative to the lump sum which was just about to be incorporated into a contract [T82.45].
511 Mr Cherrie's evidence in relation to these minutes was that had Wards assessed the plus/minus register and found itself to be well behind, Wards might consider asking for a higher lump sum price even at that late date [T198.35].
512 Mr Niederberger's evidence in relation to the 16 May 1994 site meeting minutes was that he had to finalise the overall construction programme with Civil and Civic by 17 May because of the signing of the contract on 18 May [T413.5] and that he accepted that Mr Cherrie had said that the plus/minus register was ahead as at 16 May 1994 [T413.15].
513 Turning then to the 18 May 1994 subcontract, document J18, Mr Ward's evidence was that he did not think as at May 1994 that they were agreeing to construct the project as defined by the list of drawings in the 3 August 1993 letter - and that Wards knew that what they had to build was what was on the drawings as at May 1994 [T98.55].
514 Mr Cherrie's evidence under cross-examination in relation to the 18 May subcontract included that the list of drawings in the contract continued to be developed and changed right up until the contract was signed [T131.10]; that there was no doubt that there were two competing concepts, namely a variation claim and design development risk [T132.15]; that clauses 6.10 and 6.30 accurately reproduced the competition between design and development risk and variations and that was a competition which had been understood throughout the time he was involved in the project [T198.55]; that the list of documents to be included in the contract had to be the list of documents as updated as at 18 May; that there would have been no point in annexing a list current in June 1992 or August 1993 or any other particular time other than 18 May; that the schedule of substantial completion reflected negotiations up to and including that day [T200.30]; that he believed the 18 May contract was a summary of the agreements which had been reached at that point in time [T200.50]; and that the May 1994 contract was to reflect discussions up to and including 18 May [T206.10].
515 Mr Pittolo under cross-examination in relation to the subcontract, gave evidence that he believed that all matters in that document were discussed between January and May [T291.25]; that he believed there was an agreement on everything as of 18 May [T291.55]; that he understood that design development risk remained with Wards [T292.55]; that Wards knew it signed up to build what was in the revised drawings on 18 May [T325.45]; that it was obvious that the scope of works provided by Mr O'Connell in 1994 had to be different to the 3 August 1993 Scope of Works ; that the scope of works talked about sort of work in general terms which is to be done and the sort of risks each party bore in respect of that work [T331.55]; that the Scope of Works provided by Mr O'Connell in 1994 had to be an update of the Scope of Works in the 3 August letter [T332.5]; that the scope of works said who bears the risk in respect of particular work or changes in that work [T333.15]; that the scope of works was something which would need to change as time went on [T335.10]; that he was not surprised that the scope of works contained allocation of design development risk to Wards [T336.40]; that Mr Pittolo already knew that there were many areas where design details were still required [T347.35]; and that Mr Pittolo's interest at the time of copying extracts of the contract would have been in the appendix [T354.50].
516 Mr Niederberger's evidence in relation to the subcontract was that the list of drawings needed to be updated to be incorporated into the contract [T381.40]; that he had to finalise the overall construction programme with Civil and Civic by 17 May 1994 because of the signing of the contract on 18 May 1994 [T413.5] and that he accepted that Mr Cherrie had said that the plus/minus register showed that Wards was ahead as at 16 May 1994 [T413.15].
517 As to the letter from Wards to Hornicks of 23 May 1994, Mr Pittolo's evidence was that he was personally involved in the Subcontract with Hornicks [T341.10].
518 In relation to the letter from Mr Aldis to Pittolo of 20 June 1994, Document J18A, Mr Ward gave evidence under cross-examination that the letter reflected that Mr Aldis had the same understanding of design development risk and the same small exception to that risk as had existed in the documents since June 1992 [T86.45]. Mr Cherrie, under cross-examination in relation to the same document, gave evidence that the letter reflected the understanding which persisted at Wards up to and after June 1994 of the design development risk which was consistent with the 3 August letter [T209.40]. Mr Pittolo under cross-examination in relation to the same letter, gave evidence that he already knew that there were many areas where design details were still required [T347.35].
519 As to the letter from Mr Aldis to Mr Cherrie of 5 July 1994, Document J20, Mr Ward's evidence was that the Aldis letters recorded exactly the same risk in relation to design development that Wards had been informed of by correspondence commencing in June 1992 [T88.40]; that design development risk included cost associated with ramifications of design development [T91.10]; and that there was nothing in the 3 August 1993 letter or any other letter which restricted Wards' risk on design development to development suggested by Wards [T91.55]. Mr Cherrie, under cross-examination in relation to this letter, gave evidence that the letter was consistent with the 3 August letter and did not come as a surprise. [T210.15] Mr Pittolo's evidence under cross-examination in relation to the letter, was that the letter was in similar terms to the 20 June 1994 letter [T351.25].
520 As to the 17 June 1994 Hornicks Subcontract, Document J21, Mr Cherrie's evidence was that the changes to clause 6.30 could not have been left to a general assistant [T217.20]. Mr Pittolo's evidence under cross-examination in relation to the Subcontract, was that he was responsible for preparation of the Subcontract [T342.5]; that it was not a simple exercise of changing all 'Wards' references to 'Hornicks' [T342.30]; that he added the definition of 'main contract' and other non-standard changes [T343.5]; that after the standard changes of 'C&C' to 'WCE' were made, he scanned the contract and saw that the changes made in clause 6.30.2 and other clauses did not make sense so that he changed 'WCE' to 'client' [T344.10]; and that clauses 6.10 and 6.30 were no different to the understanding Mr Pittolo always had in relation to design development and variations [T344.35].