Plaintiff v Defendant

1 BMD Major Projects Pty Ltd ("BMD" or "the contractor") primarily claims against the Victorian Urban Development Authority as the successor to the Urban and Regional Land Corporation ("VicUrban" or "the principal") under a "latent conditions" clause of a contract between them dated 22 March 2002 based upon AS 2124 1992. The claim is also maintained on the grounds of unjust enrichment, breach of contractual warranties and breaches of the Trade Practices Act 1974 (Cth) and other claims on the contract. BMD's main claim, however, is that it contracted to undertake extensive excavation, filling and rehabilitation works at the former Niddrie Quarry upon an expectation about the physical conditions of the site which differed materially from the physical conditions encountered. VicUrban challenges any entitlement to the claim and maintains a counterclaim, on various grounds, for loss and damage said to arise, essentially, from what it says was BMD's failures which resulted in the capping layer across the site being lower than required.

2 The proceeding occupied a total of 36 days with 23 witnesses giving evidence in long, detailed and substantial written witness statements as well as orally. The court book is made up of 37 lever arch folders including 7 folders of written witness statements. The transcript in the proceeding totals 3765 pages. There is, further, a large number of additional exhibits which are not found in the court book, and written submissions from the parties.

3 The parties dispute many of the facts and issues raised in the proceeding, and the evidence upon which they turn frequently overlaps. Accordingly it may be easier to follow the facts and issues in my reasons for decision if I set them out where necessary to give context to the issues as I deal with them and in explanation for my conclusions.

4 The disputes arise from a project to develop a site in Niddrie formerly used as a quarry. The Niddrie Quarry had been used to quarry basalt rock from the 1920s to approximately 1976 and then remained vacant until around 12 April 2002. The previous year, on 22 May 2001, Breese Pitt Dixon Pty Ltd ("BPD"), on behalf of VicUrban, invited an expression of interest from BMD for the excavation, placement and compaction of overburden and other associated materials at the former Niddrie Quarry. BMD submitted its expression of interest on 22 May 2001. On 12 September 2001 BPD called for tenders on behalf of VicUrban for work on the site for the filling and quarry rehabilitation for a proposed residential estate. By letter dated 12 September 2001 Mr Breese of BPD wrote to Mr McPadden, of BMD, noting that tenders were closing on 26 October 2001, and enclosing for BMD's "pre-tender activities" some information partly on compact disk and partly in hard copy. On 8 October 2001 Mr Breese wrote again to Mr McPadden enclosing further information noting that the date for the close of tenders had been extended to 7 November 2001. A further extension of the closing date for tenders was communicated by email on 1 November 2001 extending the date to 21 November 2001. There was further correspondence and communications between 12 September 2001 and the closing date for submission of tenders. On 21 November 2001 BMD submitted a tender having received information on behalf of VicUrban including technical details and the proposed contracts.

5 There were further communications between BMD and VicUrban after BMD's tender was submitted. On 13 December 2001 BMD and VicUrban met to discuss the tender and on 18 January 2002 there was a meeting in Brisbane to clarify BMD's bid. BMD was the successful tenderer and was awarded the contract. The contract was dated 22 March 2002 but was finalised and formally executed later. Works under the contract, however, commenced before its formal execution.

6 The contract provides for payment of a lump sum price for the works but entitled BMD to claim additional amounts if it encountered "latent conditions" within the meaning of clause 12.1(a). Clause 12.2 provides that BMD (referred to as the "contractor" in the contract) may "forthwith" give notice to the Superintendent (who was provided by the definitions clause and the annexure to be Mr Hawkins of BPD) that it has become aware of a latent condition. Clause 12.3 provides that delay caused by a latent condition may justify an extension of time under clause 35.5. It also provides that a valuation be made under clause 40.5 if a latent condition caused the contractor to carry out additional works, use additional constructional plant and incur extra cost. Clause 35.5 provides that the contractor may give prompt notice to the Superintendent when it becomes evident to the contractor that any act or omission of VicUrban (referred to in the contract as the "principal" being the successor in law to the Urban and Regional Land Corporation) may delay the contractor's work under the contract.

7 BMD maintains that it encountered latent conditions which caused it to carry out additional works, to use additional and different constructional plant and to incur additional cost in the performance of the works in the amount of $6,972,574. The additional work involved the excavation, processing and placement of additional quantities of overburden and the need to carry out an alteration in processing methodology involving the need to change from screening to crushing of oversized rock. The additional quantities were located in areas on the site referred to as the Northern Stockpile, the Eastern Stockpile, the Avenue Stockpile and the Quarry Floor Stockpile. The additional crushing was said to be necessary because all other options involving the unprocessed disposal of oversized rock contained in the additional quantities had been exhausted. This was said to require the oversized rock from the additional excavation to be processed into Type A material by crushing before placement. The conditions as encountered were also said to have caused delay referrable to the placement of additional material and delay costs due to the preparation of wet base.

8 BMD contends that it gave effective notice under clauses 12.2 and 35.5 of the contract of the latent conditions. It also claims to have given written notice of the number of days extension claimed as soon as practical following the claims for an extension of time for practical completion in respect to each of the four stockpiles. The Superintendent has allowed some but not the bulk of these claims, leaving an amount in dispute of $6,301,816 under this claim.

1. Quarry Floor Stockpiles/Southern Stockpile claim

9 BMD claims that it gave effective written notice pursuant to clauses 12.2 and 35.5 to the Superintendent of a latent condition found on site in what the particulars to paragraph 34 of the second further amended statement of claim ("the statement of claim") describes as the "Quarry Floor Stockpile". That notification is said to have been by a letter dated 2 August 2002.

10 The letter dated 2 August 2002 appears to have been faxed to the Superintendent, and received by him, on 6 August 2002. VicUrban contends that this notice was not given "forthwith" as required by clause 12.2 upon BMD having become aware of the latent condition. In this context "forthwith" may be taken to mean "as soon as reasonably practicable or as soon as reasonably possible": see Re JW Armstrong Constructions Pty Ltd v Shire of Cook;[1] see also Hudson v Hill;[2] Hillingdon v Cutler;[3] Measures v McFayden.[4] The evidence of Mr Waterson for BMD, its construction manager and principal witness, was that he, and therefore BMD, became aware that the level of the natural ground as encountered on site differed from that depicted in the bulk earthworks plan when test holes were being dug in the last week of July 2002. Exploration was being undertaken by a backhoe in the Southern Stockpile on Wednesday, 24 July 2002, to locate the natural surface in the area known as the Southern Stockpile. Mr Waterson informed both Mr Leonard, VicUrban's Construction Operations Manager, and the Superintendent, Mr Hawkins ("the controlling person throughout"[5]), of these results. Both were said by Mr Waterson to have observed the test holes in his presence and that Mr Hawkins said that BMD should undertake further exploration to determine the extent of additional excavation. Deeper holes were dug on Friday, the 26 July 2002 and again later until Tuesday 30 July 2002.

11 The written notification dated 2 August (but faxed on 6 August) refers to previous "verbal advice" (a statement which is not disputed). In such circumstances I consider the giving of the written notice to have been "forthwith" as contemplated by the contract: BMD became aware of something, gave prompt oral notification, invited the Superintendent and VicUrban itself (through Mr Leonard) to assess the situation themselves, was required to undertake further investigations, made those investigations, and then sent the formal written notification. Provisions like clause 12.2 must be construed in accordance with business common sense: see McCann v Switzerland Insurance Ltd;[6] Pacific Carriers Ltd v HBP Paribas;[7] Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd;[8] Maggbury Pty Ltd v Halfele Australia Pty Ltd.[9] A stricter construction would encourage, if not compel, contractors to be more concerned with anxiously satisfying a formal temporal requirement of notification rather than to explore the underlying needs and circumstances of the situation. The learned authors of Building and Construction Contracts of Australia[10] suggest that the word "forthwith" strictly means "immediately". The dictionary definition of "forthwith" does give "immediately" as one meaning. In many circumstances "forthwith" may be used to mean "immediately", but the task of construction of contracts is not that of determining what meanings words could have but, rather, which of the possible meanings of a word is the one which the parties intended.[11] The dictionary definition of "forthwith" also includes "without delay" as a meaning, and I think this better conveys the sense in which the word was used in this contract.[12] Whether the notices were sent "forthwith" in this sense, is, of course, dependent upon the facts and context. The notice dated 2 August 2002, on the facts and in the context in which it was sent, as I have set out above, was, in my view, sent "forthwith"; that is, was sent without delay and as soon as reasonably practicable or as soon as reasonably possible in all the circumstances.

12 The letter of 2 August 2002 makes no express mention of "the Quarry Floor Stockpile". It refers, rather, to an area described as "the Southern Stockpile". In the letter it is said that the extent of earthworks required in that area differed materially from that anticipated at tender. The first paragraph of the letter is expressed to be a notification of a latent condition under clause 12. The latent condition is described in the letter as being that the extent of excavation required to expose natural surface in "this area" had been shown to be significantly lower than the levels anticipated at the time of tender "based on all information available to the contractor". The letter goes on to describe the additional work required, namely, additional excavation of overburden material, additional placement of structural fill, additional base and possibly wet base preparation and additional fill platform interfacing. The extent of all of these items was estimated to be approximately 35,000 cubic metres. The letter also said that the location of the material was on "the critical path for the project" and would cause delay and disruption to the project. It was estimated at the time that the delay would be of a maximum of four weeks but longer if significant areas of wet base were encountered. The cost of the claim was not estimated in that letter, but was said to include the excavation, haulage and placement of the additional material.

13 The first reference to the latent condition extending beyond the area described as the Southern Stockpile was in a letter from BMD to the Superintendent dated 5 March 2003. That letter referred to earlier correspondence and, in particular, by a reference notation indicated the 2 August 2002 notification. The March 2003 letter said that the quarry base surface had been exposed "in the main quarry floor" rather than only in the Southern Stockpile. The letter enclosed a survey plan prepared by R.E. & L.M. Gertzel Pty Ltd ("Gertzel"), surveyors, together with a table, showing volumes of fill at certain chainages across the site as marked on the survey plan, and survey crosssections. It is clear from the survey plan and the table that at least three-quarters of the site shown in the survey plan cross-section is beyond the Southern Stockpile. It mentions "latent condition" in its title line but it does not purport to claim a separate latent condition from that notified the previous August.

14 VicUrban contends, in effect, that such notification as may have been given by the August 2002 letter cannot encompass the quarry floor areas included in the March 2003 letter beyond the Southern Stockpile. Mr McConville, BMD's project surveyor who prepared the plan enclosed with BMD's March 2003 letter, gave evidence that the plan for the claim for over excavation in the "quarry floor" area went beyond the Southern Stockpile into the Central Stockpile, the Lake Base Stockpile and the Northern Stockpile. There is correspondence capable of being separate notification of latent conditions in the Northern Stockpile, the Eastern Stockpile and the Avenue Stockpile (which I deal with below), but none separately for the area known as the Central Stockpile and the Lake Base Stockpile.

15 The notification obligation is found in clause 12.2 which provides:

If during the execution of the work under the Contract, the Contractor becomes aware of a Latent Condition, the Contractor shall forthwith and where possible before the Latent Condition is disturbed, give written notice thereof to the Superintendent.

If required by the Superintendent, the Contractor shall provide to the Superintendent a statement in writing specifying -

1. the Latent Condition encountered and in what respects it differs materially;
2. the additional work and additional resources which the Contractor estimates to be necessary to deal with the Latent Condition;

1. the time the Contractor anticipates will be required to deal with the Latent Condition and the expected delay in achieving Practical Completion;

1. the Contractor's estimate of the cost of the measures necessary to deal with the Latent Condition; and
2. other details reasonably required by the Superintendent.

It is clear from this provision that the obligation to notify is not, and ought not to be seen as, a mere formality. The requirement for notification serves important functions, one of which is to enable the Superintendent to evaluate the latent condition being claimed. The first paragraph of the clause requires not only that the notification shall be made "forthwith" but "where possible before the Latent Condition is disturbed". The juxtaposition of "forthwith" with "where possible before the Latent Condition is disturbed" may support the view that "forthwith" accommodates the passage of some time between awareness and notification. However, whether it does or not, the additional requirement that notification "where possible" be before disturbance of the latent condition, indicates something of the practical significance of notification. The second paragraph of the clause identifies the kinds of matters which the Superintendent may require in writing and also reveals a purpose of the notification as being more than a mere formal requirement to be complied with for its own sake.

16 The 2 August 2002 notification, on its terms and in the context in which it was sent and received, may fairly be construed as notification not only of the condition in the location then worked on (namely, the Southern Stockpile) but, more broadly, as notification that the natural surface levels were lower than expected on the site at least in the areas proximate or contiguous to the Southern Stockpile. The parties' conduct after notification in August 2002 is consistent with them having seen the notification as broader than strictly formal notification in the specific area known as the Southern Stockpile only. The evidence of Mr Waterson is that as excavation was undertaken and areas became exposed, there were joint surveys undertaken and that at all times the supervisor was made aware that the latent conditions notified on 2 August 2002 were extending beyond the Southern Stockpile. Indeed, that is what one would expect upon the discovery of a latent condition of this kind: namely, that its extent was a matter of discovery as works were progressively undertaken. So much is evident also from the Superintendent's requirement, when first notified of the latent condition, that there be further investigations.

17 White J in Re JW Armstrong Constructions Pty Ltd v Cook[13] specifically declined to be understood as concluding that "identification of the location of the latent condition is necessary" in order to satisfy the requirement of notification under a provision such as clause 12.2. There may be circumstances where identification of the location may be necessary to satisfy the requirement of notification but, where that is so, it is likely to be because the identification of the location is needed to convey meaning and understanding of the latent condition notified. Clause 12.2 does not in terms say that the location of the latent condition needs to be identified, although some of the things which the Superintendent may require to be specified will, perhaps, enable the location to be determined. The critical factor to whether there has been notification must be whether the location is a necessary ingredient to an understanding of the latent condition being notified.

18 In my view the latent condition notified by letter dated 2 August 2002 was of a substantial variation to the natural surface levels from those which had been anticipated on the plans. The reference to the Southern Stockpile in the notification dated 2 August 2002 was not, nor was understood to be, nor should have been understood to have been, the locational limits of the latent conditions being notified. It was, as I have indicated, of the nature of the latent condition which was notified that its extent might not be known at once or with precision. The latent condition claimed was that the material surface level was below the level which had been anticipated and it was only capable of exact determination by excavation and survey: that is, that it was in the very nature of what was being notified that its extent was unknown and hidden until excavated and revealed. In cross-examination Mr Waterson said that the stockpile areas on the plans were arbitrary lines on a drawing which did not mean anything on site. I accept that the notification dated 2 August 2002 was not limited to the Southern Stockpile but extended at least to the areas proximate to it, namely, the Central and Lake Base Stockpiles as claimed by BMD.

19 Counsel for BMD also submitted, however, both in writing and orally that the written notification dated 2 August 2002 satisfied the conditions of clauses 12.2 and 12.4 for all claims and that it was the only notification of the existence of the latent condition which was required. In other words that the 2 August 2002 notification extended beyond the Southern Stockpile area to include the areas described as the Northern Stockpile, the Avenue Stockpile and the Eastern Stockpile. VicUrban's counsel contended that this was contrary to the way in which the case had been pleaded and relied in particular upon paragraphs 34 and 36 of the statement of claim.

20 I am unable to accept BMD's argument that the 2 August 2002 notification was a sufficient notification of latent conditions in the Northern, the Avenue and the Eastern Stockpiles. Those three stockpiles are not as close to the Southern Stockpile as were the Central Stockpile and the Lake Base Stockpile, nor is the contention open on the pleadings. The latent conditions said to have been encountered were pleaded in paragraph 28 of the statement of claim more broadly than, and without reference or limitation to, the Southern Stockpile. The same is true of the pleading in paragraph 29 about the time and place of encountering the latent conditions. That is to say that those paragraphs are consistent with a contention that the notification of 2 August 2002 was relied upon in the pleadings to extend beyond the Southern Stockpile into what might fairly be understood to come within the "quarry floor". The particulars in sub-paragraph (b)(i) of paragraph 29 in the statement of claim, for example, refer to the Quarry Floor Stockpile and not to the Southern Stockpile. Paragraph 34 of the statement of claim, however, is the only paragraph in the pleading which purports on its face to identify the written notifications. Written notification of a latent condition is a material pre-condition to entitlement under the latent conditions provisions of the contract. The particulars to paragraph 34 identify the correspondence relied upon as written notice under the contract. Paragraph 36 of the pleading is to the same effect in relation to written notice of the number of days extension claimed under the contract. It is clear from the pleading that the latent conditions claimed in the areas known as the Northern Stockpile, the Avenue Stockpile and the Eastern Stockpile were not contended to have been incorporated in the notification of 2 August 2002. The evidence of Mr Waterson also shows that he sought to give separate notices in respect of latent conditions in the Northern Stockpile, the Avenue Stockpile and the Central Stockpile. His evidence may not, of course, determine the proper construction of the statement of claim, but it may have the effect of there being no evidence to support the pleading as counsel for BMD suggested in final submissions that it should be construed.

21 It is not necessary for me to consider whether, in any event, VicUrban is now estopped from relying upon strict compliance with the contract. However, if it were necessary for me to do so, I would find that it was estopped in respect of the description of the extent of the latent condition. A meeting occurred on 6 August 2002 between Mr Waterson, representing BMD, and Messrs Taber and Leonard, representing VicUrban. Mr Taber was VicUrban's General Manager and General Manager of Business Operations, and Mr Leonard was VicUrban's Constructions Operations Manager. Mr Waterson made notes of the meeting and recorded Mr Taber as assuring BMD, in effect, that the strict terms of the contract were to be put aside (at least in respect to the issues then under consideration). Mr Waterson's notes were prepared to report to, and to inform, others within BMD and I accept the notes to have been a faithful statement of his recollection of the meeting. The notes were contemporaneously made and were not undermined by the evidence of the other participants at the meeting or by the cross-examination of Mr Waterson. Mr Taber said that he had called the meeting and that one of the reasons why he had done so was to invite a renewed spirit of co-operation after some complaints had been made by BMD senior management and hopefully to get improved co-operation throughout the site. Another reason given by Mr Taber was to emphasise to BMD that the quality criteria in the specification was absolute and would not be compromised. His evidence concerning Mr Waterson's contemporaneous notes was certainly not that of rejection of accuracy or such as to cause me to doubt that Mr Waterson's was a faithful account of the matters recorded and conveyed. I am confident that Mr Waterson would, in an internal BMD memorandum, have been more forthright and blunt if the meeting had gone less favourably than he recorded. I am also satisfied that the outcome of the meeting, and the assurances given to BMD through Mr Waterson in the context of the meeting, were relied upon by him and by BMD. It would be wrong in such circumstances for VicUrban to rely upon strict compliance with the notification provisions if I had not found that notification had been given beyond any strict boundary of the Southern Stockpile.[14]

22 VicUrban submits that the Quarry Floor Stockpile claim does not, however, constitute a latent condition under clause 12.1 of the contract. Clause 12.1 provides:

1. physical conditions on the Site of its surroundings, including artificial things but excluding weather conditions, which differ materially from the physical conditions which should reasonably have been anticipated by the Contractor at the time of the Contractor's tender if the Contractor had -
   1. examined all information made available in writing by the Principal to the Contractor for the purpose of tendering; and
   2. examined all information relevant to the risks, contingencies and other circumstances - having an effect on the tender and obtaining by the making of reasonable enquiries; and
   3. inspected the Site, its surroundings and all improvements and fixtures on the Site and its surrounds (including all physical conditions and characteristics, facilities, services and access); and
   4. all information relevant to the risks, contingencies and other circumstances having effect on the tender and obtainable by making of reasonable enquiries; and
   5. all other risks, matters and things which may be relevant to the carrying out of the work under the Contract or the performance of the Contractor's other obligations under the Contract; and
2. any other conditions which the Contract specifies to be Latent Conditions.

Clause 12.1A carves out an exception from clause 12.1 in the following terms:

Latent Conditions are not associated with the encountering of or measures required to address physical conditions or characteristics of the Site where such physical conditions or characteristics of the site;

1. have been identified or could reasonably be expected to exist, from the site investigation completed for the Site; or
2. could reasonably be expected to be associated with the Site as a result of the Site's history, past uses and associated site conditions; or

1. have arisen as a consequence of the work practices employed by the Contractor in undertaking the Works as determined by the Superintendent.

The essence of a latent condition under clause 12.1 is that the physical conditions found on the site or in its surroundings differ materially from the physical conditions which should reasonably have been anticipated by the contractor at the time of the tender on the hypothesis of the five matters specified in sub-paragraphs 12.1(1)(i) - (v) and not excluded by clause 12.1A.

23 VicUrban contends in particular that BMD did not make the enquiries it ought to have made as required by clause 12.1(a) because, amongst other matters, it did not examine the information contained in a file, referred to in the proceedings as "the Boral file", which it had obtained from the quarrying division of the company which had purchased the Niddrie Quarry from Albion Reid Pty Ltd. More precisely what is put is that BMD in fact did make reasonable enquiries at the time of tender but that it did not then examine the information in the Boral file which the earlier reasonable enquiries had produced. VicUrban contends that an examination of the Boral file would have led BMD to the conclusion that there was a discrepancy between the plans that had been provided to it for tender purposes and the quarry as it had been excavated in 1974. Mr Clark, an expert witness called by VicUrban, explained that the plans showed that the bench in the Southwest corner of the site had been excavated during quarrying operations. It was his opinion that a reasonable contractor reviewing the Boral file would have been alerted to possible differences in the natural surface level to those shown in the maximum extent of excavation plan after making enquiries of Boral and examining the material in the Boral file.

24 The conditions upon which clause 12.1 operates are to be determined objectively; that is, that what should reasonably have been anticipated by the contractor at the time of tender is to be determined by an objective assessment of the facts rather than by what the particular contractor may have done or not have done: see Glenorchy City Council v Tacon Civil Construction.[15] The enquiry occasioned by clause 12.1 requires a determination of questions of fact: namely, what conditions had been encountered, whether they were physical conditions, whether they differed materially from those ascertainable, and what could have reasonably been anticipated: see Atlantic Civil Pty Ltd v Water Administration Ministerial Corporation;[16] Hawker Noyes Pty Ltd v New South Wales Egg Corporation.[17] It is not surprising that the parties would make the operation of a latent condition depend upon objective circumstances rather than the actual or particular knowledge or lack of knowledge of the contractor. The effect of the latent condition clause is to shift to the principal the economic burden of a risk which had been contractually assumed by the contractor. It is fundamental to the shifting of that risk that the occasion for the shift be, as much as possible, beyond the control or fault of the parties but be determined by, and be dependant upon, objective criteria and measures. In that way the parties agree to change which of them will bear the economic burden of a risk, and agree to make that change by reference to a neutral standard or measure which depends upon independently verifiable factors beyond the reasonable diligence or control of the party that will otherwise be relieved of the burden.

25 BMD contends that a consequence of the standard under clause 12 being an objective one is that it is irrelevant to consider whether or not it had the Boral file. I do not agree with that contention because it is contrary to what is an important purpose of the clause; namely, to encourage and require the making of enquiries by the contractor: VicUrban, as principal, agreed to accept an additional risk of a latent condition but only if the contractor has done all that it reasonably could or should. BMD personnel did make enquiries of others about the condition of the site and by those enquiries came into possession of a file. In my view the reasonable enquiries which a contractor would, and should, make include those enquiries which may be prompted by any previous enquiry it has reasonably undertaken and which it ought reasonably to have undertaken; indeed, the reasonable enquiries which a contractor should make extend to making reasonable enquiries about things known or discovered even if those matters had been known or discovered other than by having made reasonable enquiries or the result of reasonable enquiries (knowing something - however it came to be known - may carry the consequence of an obligation to make enquiries about it). Mr Tuttiett was the senior estimator of the project for BMD and said that he was given the Boral file by either Mr Fogarty or Mr Lynch of BMD. Mr Tuttiett explained that his purpose in reading the file was to ascertain whether it provided any further insight to assist BMD in the preparation of its tender. He then passed it on to Mr Miroshnikoff to see whether it might assist him in the detailed planning and programming of the job. It is, therefore, relevant that BMD had the Boral file to what reasonable enquiries it should have made for the purposes of clause 12.1. The contrary view urged upon me by BMD would discourage the making of enquiries which the clause has made a condition of entitlement to a claim.

26 The evidence of Mr Clark is, as I have said, that a reasonable contractor would have been alerted to possible discrepancies in the natural surface level from those on the maximum extent of excavation plan after it had made enquiries and examined the material in the Boral file. The critical question, however, is whether BMD should reasonably have anticipated the contents of the Boral file; that is, whether it ought to have examined the Boral file beyond such consideration as was actually given to it. There is no suggestion that BMD chose to ignore the contents of the Boral file because they did not want to be affected by knowledge of its contents. On the contrary, the evidence is that they made enquiries of Boral and indeed secured the Boral file, but that their consideration of it did not prompt them to make any deeper investigation or analysis. That may in part have been due to the comfort which they had obtained from the extent and quality of the information which had been provided to them (and to all the other tenderers) by VicUrban and its consultants. But, in part, it was also due to the fact that such review of the Boral file as was undertaken by BMD, and by others, did not prompt them to undertake any further analysis.

27 Both Messrs Tuttiett and Miroshnikoff, BMD's senior estimator and assistant senior estimator respectively, reviewed the Boral file and were not put on a chain of enquiry to look for inaccuracies in the detailed information which had been provided prior to the tender. Mr Waterson reviewed the Boral file shortly after the commencement of the works and provided it to the Superintendent, Mr Hawkins, for his review. Mr Hawkins' comment was that he did not believe it was of much use. Mr Hawkins' evidence was that the file was initially looked at by him together with Mr Leonard of VicUrban during a meeting which lasted for half an hour to an hour but that neither saw anything in the file which was considered to be of any benefit. Mr Hawkins took possession of the file for a period of at least some days and copied it, but returned it to BMD or to VicUrban without comment about any conclusions that they were able to make from the information in the file. Mr Hawkins at no time made any comment to Mr Waterson to the effect that the file contained anything of particular relevance to the project and made no mention of it after returning it to Mr Waterson. Mr Hawkins gave some evidence about a conversation with Mr Waterson concerning the absence of the south west corner bench revealed in the Boral file, but counsel for VicUrban did not press this in submissions and it is both contrary to the evidence of Mr Waterson and, in my view, improbable and likely to a faulty recollection. Mr Waterson's account and recollection on this issue is both more likely to be accurate and better fits the other evidence and events. Mr Leonard of VicUrban certainly did not support Mr Hawkins on this point and, given the significance of the revelation said to be found in the Boral file, the recollection of Mr Hawkins is likely to have had corroborating evidence if it had occurred as was suggested.

28 The context in which the Boral file is said to have significance is also important. Extensive and detailed information had been provided by VicUrban to assist tenderers in pre-tender activities. The information had been prepared or compiled by BPD and had clearly been prepared after much work, over many months, after extensive consultation, at considerable cost, and in order to obtain an accurate cost estimate for the heavy civil works to be undertaken to enable contractors to understand the extent of the works which were to be undertaken. In other words, the context in which the Boral file is said to have significance is that of earlier investigation thought by those retained by VicUrban to be substantial, relevant and reliable information, albeit that VicUrban did not warrant the accuracy of the information, and informed the tenderers that they should make enquiries to satisfy themselves about the accuracy of the information which had been supplied.

29 By letter dated 12 September 2001 Mr Breese of BPD, on behalf of VicUrban, wrote to Mr McPadden of BMD enclosing materials and information for the specific purpose of assisting BMD in its "pre-tender activities". What was enclosed was:

(i) A compact disk containing the information shown on the attached Schedule N:\h6330\Volume\INFO.DOC.

(ii) "Compilation Report of Geotechnical Investigations and Bore Logs, Valley Lake Niddrie" prepared by Golder & Associates Pty Ltd.

(iii) Bulk Earthworks plan 6330/BE Version 2, Sheet 1 of 3.

(iv) Existing Surface Contours plan 6330/BE Version 1, Sheet 2 of 3.

(v) Finished Surface Contours plan 6330/FS Version 2, Sheet 3 of 3.

(vi) Request for Access to Site Form.

The information was voluminous, detailed and prepared by reputable and experienced experts. The disk enclosed with the 12 September 2001 letter contained a great deal of information including, importantly, a plan setting out the maximum extent of excavation compiled from other plans contained on the disk together with two files dating from 1954. Although the disk itself might not have been opened at this time by those at BMD, it had, amongst other information, a plan purporting to be a plan of maximum extent of excavation ("the plan of maximum extent of excavation"), a bulk earthworks plan, and a plan showing existing surface contours of the site. More information was conveyed between 12 September 2001 and the date of execution of the contract, but the project as anticipated by all was of the maximum extent of excavation to natural surface levels being much less than they turned out to be.

30 Mr Bollen, VicUrban's project manager until August 2002, accepted in evidence that it was made clear to tenderers that the information provided to them had been prepared by reputable consultants for their assistance. Mr Breese, of BPD, gave evidence of the importance of the information which had been provided to the tenderers by VicUrban. He said that the drawings and digital information provided on the compact disk should have enabled the tenderers to make their own determinations as to the extent of the earthworks required. Providing the information on disk and hard copies enabled the tenderers to run models for themselves to determine whether they were comfortable with the estimated volumes provided. His evidence was supported by Mr Easton, a civil design engineer at BPD, who had been the author of the bulk earthworks plan. His view, not unnaturally, was that the bulk earthworks plan was important to the tenderers because it enabled them to ascertain the scope of works for the project by identifying the natural surface levels to which the stockpiles were excavated. According to him the drawings contained significant information to enable a contractor to calculate how much material needed to be excavated from the stockpiles. The drawings themselves, as prepared by BPD, were described as setting out the "maximum" extent of excavation and the information frequently identified the reliability of the sources from which the information was determined (such as aerial photographs, photogrammetry and direct survey levels), albeit that there may have been limitations of accuracy or precision.

31 For present purposes it may be accepted that VicUrban did not warrant the accuracy of the information and, further, that it positively urged tenderers, including BMD, to satisfy themselves about the accuracy of the information that had been supplied to them to assist them in the tender process. In that regard I note in particular that part of the material on the disk, as explained by Mr Gilbert included words of caution. Some doubt about the reliability of the information might also be felt by the explanations given on the drawings and conveyed with the information generally, such as that the features were derived by aerial photography which might be suitable for overall planning purposes but not any other purposes. Similarly, the tenderers, including BMD, asked questions to which replies were given and all, both questions and answers, were circulated to all tenderers. Of particular relevance are the questions and answers numbered 13, 15 and 24:

1. Is the guaranteed maximum lump sum price based on the schedule/estimated quantities?

Answer: Quantities are provided as a guide only - see answer to Q14.

1. Is the limit of excavation as per the provided reduced levels?

Answer: The contractors should make their own assessment.

1. Can you tell us what natural surface levels were used in computing the stockpile volumes?

Answer: Levels derived from aerial photos and photogammetry [sic] from 1954 to 1989 together with direct survey levels. This information was supplied on disk with the tender documents.

For present purposes it may be accepted, therefore, that VicUrban made clear both that it did not proffer the information as accurate or reliable and that it stressed to the tenderers that it was for them to satisfy themselves about the accuracy of the information. The entitlement to a latent condition does not, however, depend upon a contractor establishing error in the information conveyed by a principal or fault on the part of the principal. BMD's entitlement under the latent conditions clause does not depend upon the information supplied by VicUrban having been warranted as accurate or reliable; nor does it depend upon a conclusion that VicUrban was in any way at fault in what it did.

32 The test to determine what BMD should reasonably have anticipated is to be judged by what a competent and suitably qualified contractor would expect to encounter by way of physical conditions in the execution of the works: Ryde City Council v Transfield Pty Ltd.[18] Mr Clark's opinion was that a reasonable contractor would (after examining the Boral file) have been alerted to the possible differences in the natural surface level from those shown on the maximum extent of excavation plan. Mr Raisbeck, on the other hand, an experienced geotechnical engineer also called by VicUrban, said in cross-examination that a contractor would need to have had reasonable expertise in geotechnical engineering or to have hired a technical engineer to analyse the contents of the Boral file, to have found something of geotechnical significance. He said that a contractor looking at the Boral file would have been unable to find something of geotechnical significance but that a contractor who engaged a geotechnical engineer to look through the file may have found something of geotechnical significance. He accepted that the reason that two engineers with knowledge of earthworks projects (namely, Messrs Waterson and Hawkins) would not be expected to find anything of geotechnical significance in the file was because they were not geotechnical experts. The material in the Boral file itself does not contain information in a form that, without more, would make a reader realise or apprehend that the information on the plan of maximum extent of excavation was wrong or needed to be re-examined. The evidence of Mr Raisbeck is, in my view, significant as an expert in the relevant field of expertise and knowledge giving evidence to the effect that a reader of the information in the Boral file would need to have that expertise and knowledge to realise the potential significance for an earthworks contractor of the information in the Boral file. It is telling that a person with specialised knowledge (Mr Raisbeck) believed that it is necessary to have that expert knowledge to appreciate and evaluate the significance for an earthworks contractor of the information in the Boral file. VicUrban was not able to point to any particular fact or matter on the face of the Boral file which would cause a non-expert in the position of a contractor to seek the assistance of a geotechnical engineer. As against this BMD had information which pointed to different natural surface levels from those actually encountered. With all the caveats and qualifications which that information may have had, it is information which had probative value to an earthworks contractor: it was detailed, professionally prepared and honestly proffered by VicUrban as being of assistance. Accordingly I do not consider that BMD should reasonably have anticipated the information which might be found in, or deduced from, the Boral file after expert investigation. More particularly, I do not consider that BMD should reasonably have anticipated that the natural surface levels were different from those shown on the maximum extent of excavation plan even allowing for the qualifications of accuracy and cautions in the materials and reports conveyed to them to assist them in their tender.

33 The natural surface level was in fact lower than the levels described by the drawings such as the plan of maximum extent of excavation. A consequence was that BMD was required to excavate, process and place 329,082 cubic metres of material more than anticipated. This figure is comparable to that calculated and accepted by VicUrban's representatives as the extent of extra excavation and I see no reason not to accept it.

34 BMD also puts its claim as a breach of contractual warranty. It says that by the contract VicUrban warranted the extent of excavation required and that the warranties were breached because the quantities in fact in stockpile exceeded the quantities said to have been warranted by clauses 1.1 and 1.2 of Appendix A of the general description of works when read with the bulk earthworks plan and the plan of maximum extent of excavation. It will be more convenient to deal with the issues raised in this contention in the context of the Trade Practices claim. However, I should indicate here that I do not accept BMD's arguments that there was any warranty in the terms claimed or that there was any breach of it. Clauses 1.1 and 1.2 which are relied upon express the quantity as being "approximate" and at the end of clause 1.10 the contract states in clear and emphasised terms that the preceding "information" was not warranted as to accuracy. VicUrban says that the word "information" appearing after clause 1.10 should be limited to only part of what appears in clause 1.10 but, in my view, "the above information" after clause 1.10 is to be understood as referring to all of the information appearing above those words wherever found in clause 1. The caution at the end of clause 1.10 appears at the very end of clause 1 and is set out in bold type face, in larger font size and are underlined.

35 Any fair reader of those words would be put on notice that a caution was being given that ought properly to be noticed and considered in relation to all of the matters in clause 1. The contractor was, in that caution, not only being told that VicUrban did not warrant the accuracy of the information but, in addition, that BMD should make all enquiries and investigations necessary to satisfy itself of the accuracy of the information. The words used are words of general application in the context of what the writer thought, and the reader should think, was a matter to take into account when assuming or assessing the economic risks of a major earthworks contract. Furthermore, if it be relevant, I can see nothing in the contract that would enable a fair reader of it to treat a figure expressly stated as being "approximate" to be a warranty of precision. There is nothing to indicate that actual measurement had been undertaken of what was in the stockpile, nor of agreement about the quantity. Furthermore, since there was no warranty about where the natural surface level would be found there could have been no warranty about the quantity of the materials in the stockpile.

2. Avenue Stockpile, Eastern Stockpile and Northern Stockpile

36 Clause 12.2 of the contract required BMD, as I have indicated above, to give written notice of a latent condition. It did so by letter dated 2 August 2002 when sent by fax on 6 August 2002. The latent condition notified was that the extent of excavation required to expose natural surface was significantly lower than the levels anticipated at the time of tender. That condition extended beyond the area initially identified and described as the Southern Stockpile: it intruded into those other areas described as the Eastern Stockpile, the Northern Stockpile and the Avenue Stockpile. The subsequent notification to the Superintendent dated 4 June 2003 (Northern Stockpile), 17 June 2003 (Avenue Stockpile) and 17 March 2003 (Eastern Stockpile) were notifications of separate latent conditions.

37 The letters to the Superintendent dated 2 August 2002, 4 June 2003, 17 June 2003 and 17 November 2003 were each notifications under clause 12.2 and given "forthwith" as required by the contract. VicUrban contends that the notifications were not given forthwith because BMD was aware: of over excavation in the Avenue Stockpile from February 2003; of over excavation in the Eastern Stockpile before November 2003; and of over excavation in the Northern Stockpile from February 2003 and April 2003. However, I do not accept that the evidence makes out those claims. The evidence of over excavation in February 2003 was largely about work being done by another contractor. Mr Waterson and Mr McConville were pressed about this in cross-examination and I accept as both accurate and probable that they had insufficient awareness of the conditions exposed by the discovery of a buried fuel tank in February 2003 in works undertaken by another contractor: it was not their work at the time, the areas had not been surveyed by BMD, and it was not significant to them at the time.

38 In contrast, evidence of Mr Waterson in relation to BMD's awareness, and its temporal proximity to notification, is persuasive. He was, of course, the person at BMD who was responsible to ensure compliance with the contract and who signed the notifications. I have already referred to the evidence of his becoming aware of the conditions leading to the notification dated 2 August 2002. His evidence concerning the subsequent "notifications" of 4 June 2003, 17 June 2003 and 17 November 2003 tell a similar story: formal written notification promptly upon becoming aware of the extent of the conditions found. Bulk excavation in the Northern Stockpile area began in May 2003 and it became apparent to him at the end of May that there were "dramatic variations" in the levels in that area: the notification of that fact occurred by letter dated 4 June 2003. It became apparent to him by mid June that the natural surface levels in the Avenue Stockpile were "some depth below" that expected, and notification of that fact occurred by letter dated 17 June 2003. The area described as the Eastern Stockpile was not surveyed until late in the works. The works methodology on the site resulted in the area not being surveyed until November 2003 (once the excavation of the overburden was complete). In fact the survey results were provided to Mr Waterson on 17 November 2003 and on the same day were sent to the Superintendent together with notification of the fact of over excavation. In each case the notifications were given "forthwith" as required by the contract.

39 The quantum of BMD's claim for the latent condition concerning over excavation is $6,971,587 less the amount of $670,758 previously certified by the Superintendent and paid. The quantum claim is made up of the following:

Direct costs claimed by BMD to be incurred as a result of the latent conditions in each of the four areas as follows:

Additional works as a result of a change in topography in the area of the Northern Stockpile

Additional works as a result of haulage requirements in the area of the Avenue Stockpile

Value of delay claims caused by the latent conditions:

- and the additional wet base treatment needed in the "quarry floor" area

These figures are taken from in the plaintiff's written submissions and the evidence in the witness statement of Mr Waterson, but they differ from those in the pleadings by $987: the amounts claimed for the quarry floor area is $627 less in the written submissions and the amount claimed for delay in relation to the placement of additional Type A material is $360 less in the written submissions. I will ignore the additional amounts since they were not pressed.

(a) Additional placement of Type B and Type C material in "quarry floor" stockpile

40 BMD has claimed $1,018,980 ($1,109,607 in Schedule 2 of the statement of claim) for additional processing of Type B and Type C material in the quarry floor area. The total additional amount of excavation claimed by Mr Waterson was 196,956 cubic metres: 156,681 cubic metres of Type B material and 40,275 cubic metres of Type C material. These figures are based upon the survey report prepared by Mr McConville on 16 June 2003 which is sufficiently accurate to establish a basis for calculating the claim. The process undertaken to calculate the figures was a comparison of the maximum excavation surface and the actual excavation surface surveyed after the removal of the overburden stockpiles. This was calculated in a Gertzel survey report which was attached to a letter dated 16 June 2003. Page 2 of the Gertzel report provides a net extra excavation figure of 196,956 cubic metres in the quarry floor area. By "net difference" the figure took into account any areas that were actually exposed at a higher level (that is, less excavation than was anticipated, or none at all) than was indicated on the bulk earthworks plan. The Superintendent's surveyor also calculated this volume of additional excavation and arrived at a slightly higher figure of 199,844 cubic metres. Accordingly, I see no reason to reject the figures upon which Mr Waterson has based his calculations.

41 Any amount payable to BMD is to be calculated under clause 40.5(c) of the contract. Clause 40.5 operates where the contract provides that a valuation should be made under clause 40.5. Clause 12.3 of the contract provides that a valuation shall be made under clause 40.5 where, amongst other things, a latent condition causes the contractor to "incur extra cost". Clause 40.5 provides various circumstances by which to determine the amount for valuation and, by sub-clause 40.5(c) (which is applicable here), provides that "reasonable rates or prices shall be used in any valuation made by the Superintendent".

42 I accept BMD's contention that the "reasonable rates" to be employed for the calculation under clause 40.5(c) of the contract are the prices in the lump sum schedule to the contract. The schedule to the contract provides amounts in the lump sum schedule, from which it is possible to derive rates applicable to the excavation, processing and placement of Type B and Type C material. That process has been undertaken and a rate of $4.406 per cubic metre can be determined as the pro rata rate for Type B material and $8.16 per cubic metre as the pro rata rate for the Type C material. These were, indeed, rates comparable to those arrived at by the Superintendent in his valuation. By letter dated 3 September 2002 to Mr Waterson, the Superintendent reviewed the latent condition claim made by letter dated 2 August 2002 and informed Mr Waterson that the additional work was considered an extension of Type B requirements and, accordingly, would be paid at the rate in Item 11 to the Schedule of Separable Portion 2, namely, $4.406 cents per cubic metre (inclusive of base preparation). Similarly, contract variation order No. 8 dated 19 December 2003 from the Superintendent adopted rates from the schedule for Separable Portion 2 in the contract.

43 VicUrban contends that any allowance which should be made ought to be reduced by deducting from the quantities an amount of 0.5 metres over the site. The Superintendent had made such an assessment when initially allowing the claim. On 29 May 2003, for example, the Superintendent wrote to Mr Waterson allowing the claim in part upon the basis that material 0.5 metres below the design maximum excavation level had been approved for payment. Expert witnesses called by VicUrban, namely, Mr Clark and Mr Raisbeck, adopted a similar approach. BMD contends that this reduction in the quantity allowed upon which to calculate the quantum is wrong and indefensible.

44 The Superintendent's initial response to BMD's latent conditions claim did not refer to any reduction in quantity whether by 0.5 metres or otherwise. Mr Hawkins' letter of 3 September 2002 to Mr Waterson advised the latter that the latent conditions notice dated 2 August 2002 had been reviewed and said that the additional work was considered to be an extension of the Type B requirements and "accordingly will be paid at the rate in schedule item 11 of Separable Portion 2 (i.e. $4.406/Cm which is inclusive of base preparation)". The letter went on to say that the extent of the additional works would be quantified when an approved base was exposed over the area in question. Nothing was said about any reduction in the quantity upon which the payment would be calculated. Between September 2002 and May 2003 Mr Hawkins seems either to have changed his mind or to have decided then to express his earlier decision of reducing the quantity of material on which the claim would be allowed. On 29 May 2003 he wrote to Mr Waterson informing him that material 0.5 metres below design maximum excavation level had been approved for payment. A consequence of this was, of course, to reduce substantially the amount for payment. Mr Waterson replied on the next day disagreeing with this approach and seeking a meeting with survey staff to agree to the quantity upon which the claim was to be paid.

45 The only reason given by Mr Hawkins prior to the commencement of this proceeding for his decision to allow for over excavation only below 0.5 metres, was in a letter dated 17 July 2003 to Mr Waterson in which he said that a survey accuracy of plus or minus 0.5 metres on the estimated excavation levels was "considered reasonable". Mr Hawkins dealt with the reduction in the quantity allowed for over-excavation in his witness statement given in evidence in this proceeding. There, he again stated his view that an allowance below the 0.5 metre level was considered reasonable, that is, that he would only allow the over-excavation from 0.5 metres below the design excavation base, but gave as his reason the fact that the estimates had been calculated by "aerial photogrammetry". The reference to photogrammetry in the witness statement might seem curious given that no reference to photogrammetry had previously been made by Mr Hawkins and indeed, that his knowledge of photogrammetry when tested in cross-examination, might not be thought to have enabled him to make much of a reliable assessment of its impact upon levels. In any event, he was tested on this issue in cross-examination in some detail and in the end his opinion seemed to come down to not much more than an engineer's general view of a fair thing. He did say that it was his "considered opinion", but he did not point to any consideration by him at the time of making his decision (other than perhaps the subsequent statement about the inaccuracy in photogrammetry) and was unable to explain why an allowance of an amount of 0.5 metres should be made as against any other figure at or around that, or, for that matter, why it should be 0.5 metres below rather than above the design excavation base.

46 Each of Mr Clark and Mr Raisbeck similarly considered that an allowance of 0.5 metres below maximum excavation base was appropriate. Mr Clark said in his witness statement that he considered "the accuracy of the natural surface levels could reasonably be expected to be within a variance of plus/minus 0.5 metres from those shown" on the maximum standard excavation plan. Mr Clark also considered relevant the accuracy or inaccuracy of photogrammetry, although it is not clear how that consideration led Mr Clark to decide on a reduction of 0.5 metres as compared with any other amount. Mr Raisbeck, on the contrary, expressed a positive opinion based upon his experience that variations of up to 0.5 metres in levels should have been anticipated from the known precision of aerial photogrammetry to determine the original surfaces, but, in his case also it was not clear why a variation either up or down should be made or why, on an area as large as this, the possibility of variation should not be regarded as statistically cancelled out.

47 It was strongly argued for BMD that it was entitled to rely upon the maximum extent of excavation plan as being "the maximum" extent of excavation (as its name suggested) without having to allow any amount for variation. I do not think that much can be made from the use of the word "maximum" in the plan no matter how important the plan was to the scope of the works. It is unrealistic to proceed from the assumption that there was a precisely determined maximum extent of excavation beyond which BMD was entitled to additional payments. On the other hand, it does not follow that the variability in precision either of the photogrammetry information or of the plan itself would necessarily justify a reduction in the total amount of extra excavation once a latent condition is established. The approach taken by each of the Superintendent, Mr Clark and Mr Raisbeck would, on one view, have the effect of treating the latent condition as occurring only after the half metre of additional excavation. Furthermore, and more importantly, the disallowance of a half metre of additional excavation across the entire area would potentially have a distorting, and capricious, impact. If, for example, the over-excavation in a small area was very deep whilst in an adjoining area there was none at all, then the averaging effect of allowing only over-excavation below the half metre design level could potentially have the effect of entirely denying very substantial over-excavation in the area as a whole. Assume, for example, that there was over-excavation of 30 metres in depth over an area of one square metre and no over-excavation at all in the adjoining 14 square metres, the effect of averaging over-excavation below a half metre over the whole of the 15 square metres would be capricious.

48 The fact that each of Mr Hawkins, Mr Clark and Mr Raisbeck have given evidence in support of a reduction of the quantity by an average of half a metre is something I do not ignore. They are familiar with earthworks operations and, all things being equal, I would defer to their judgment and would adopt a similar approach. On the other hand, I am not satisfied that it is defensible in the current circumstances. Mr Raisbeck's evidence may support a conclusion that photogrammetry has a plus or minus half metre degree of error but that does not automatically translate into it being defensible that BMD should find itself with a disallowance of an average half a metre across the whole of the area in which a latent condition has been found to exist. The same is true of the evidence of Mr Clark. The evidence of Mr Hawkins would have had more weight to my mind if he was able to show how it was that his opinion was reached by considering factors that would make the averaging of half a metre appropriate in the particular case. A bald statement such as it being a "considered opinion" is as unenlightening as if he had said "I have my reasons" without revealing them: there is no measure of reason given in his statement. The effect of averaging produces capricious outcomes and, therefore, I cannot adopt the approach taken by Messrs Hawkins, Clark and Raisbeck.[19] I have no reason other than to allow any variation of plus or minus 0.5 metres to be averaged across the site as a whole. The over excavation having been established (as I accept that it has) it should prima facie be allowed in the quantity shown without reduction unless defensible reasons can be shown to reduce the actual over excavation by some amount: there are no reasons which I consider defensible for me to adopt any figure for over excavation other than the actual quantities on the evidence. Accordingly I allow the amount of $1,018,980.00 claimed.

(b) Additional placement of Type A material in Eastern Stockpile

49 The claim of $350,333 in relation to the Eastern Stockpile is for additional volume of material placed as Type A. This calculation is based upon a rate of $8.07 per cubic metre for 43,412 cubic metres estimated as the over-excavated amount referrable to the Eastern Stockpile. The rate of $8.07 is the same as that adopted by the Superintendent in the contract variation order dated 19 December 2003 and, as previously explained, I consider it reasonable for the purposes of clause 40.1(c) of the contract.

50 An issue that arises in respect of this, and also in relation to the Eastern Stockpile claim, is whether the Type A rate is to be applied for placement of the material. VicUrban contends that the applicable rate, if any, should be that for the material that was being placed at the time of any over-excavation. In this respect VicUrban adopted the analysis of its expert, Mr Clark, to the effect that the material type that was actually being placed should be used to value the amount of additional excavation. As against that, counsel for BMD contended that such an approach is wrong because it does not link the claim with the causal impact of the latent condition. BMD's contention is that the causal impact of the latent condition was necessarily to increase the quantity of Type A material that had to be placed "because all of the Type B and Type C were placed to the original levels required." There was, so the argument went, no actual adjustment of the Type B and Type C levels on the site. That may be accepted as common between the parties (as was contended) but it does not follow that there is thereby demonstrated a causal link between the latent condition and the placement of Type A material. Indeed, it is pertinent to recall that the Type A material placed overall was less than had been contemplated at the outset. The logic relied upon by BMD would equally support a conclusion that the maintenance of the Type B and Type C levels were also made possible by a reduction in the Type A material consequent upon the latent condition: that is, that a causal link between the latent condition and the Type B material can be seen from the fact that the level of Type B was able to be maintained.

51 BMD's contention was put, perhaps differently, in part of Mr Waterson's written witness statement when explaining the impact of the Superintendent's directions concerning maintenance of the Types B and C layers and the reduction of the Type A level. His conclusion was expressed by saying:

As all other types of material could be sourced from the over burden within the drawings, the effect of any additional excavated material in the Eastern Stockpile would be to directly increase the volume of material to be processed and placed as Type A capping material. That is, if the material won from the additional excavation had not existed, then the Type A material actually processed and placed by BMD on site would have been reduced by that volume. If the material did not exist, BMD would not have needed to place it as Type A.

These assertions by Mr Waterson of consequences and conclusions (assuming them to be admissible) do not detract from the proposition that the lowering of the capping layer permitted the excavated material to be used as Type B or Type C material and, therefore, of establishing a sufficient causal link between any over excavation and the laying of the material as either Type B or Type C material. In my view the temporal connection for which VicUrban contends is certain and is a more reliable guide for the determination of the value of any over excavation. Accordingly I accept VicUrban's contention that the rate to be applied to this claim is that referable to the Type B material, namely $4.41 per cubic metre, producing a figure of $191,446.92.

(c) Additional placement of Type A in the Avenue Stockpile

52 It may next be convenient to deal with BMD's claim for additional placement at the Type A rate in the Avenue Stockpile area because it raises the same issue as those just dealt with. That claim is for over excavation of 24,035 cubic metres at the Type A rate in the amount of $193,962. I consider the temporal connection to be appropriate for the reasons above and, therefore, the value of the amount for additional excavation to be allowed in this area at the Type B rate is the sum of $105,994.35.

(d) Additional placement of Type A in the Northern Stockpile

53 BMD's next claim is for $521,960 based upon an additional 64,679 cubic metres of excavation at the Type A rate. The evidence in respect of this claim is not entirely satisfactory. The written submissions rely upon a paragraph in the witness statement of Mr Waterson that does little more than identify the calculation. The preceding paragraphs in the witness statement describe requirements by the Superintendent to carry out further additional excavation. That evidence seems to put the claim in the same position as that considered in relation to the Eastern Stockpile and the Avenue Stockpile. On that basis I would recalculate the figure at the Type B rate in preference to the Type A rate. There is, however, some doubt about the actual amount of over excavation. Mr Waterson relies upon a survey report which shows a quantity of over excavation of 64,518 cubic metres rather than the 64,679 cubic metres in the witness statement and statement of claim. The lesser figure appears to be more reliable and in the circumstances I allow and recalculate the amount under this head at the Type B rate at $284,524.38.

54 BMD claims $415,811 for additional wet base costs in connection with the Southern Stockpile quarry floor area. The claim is not put as a separate latent condition, but, rather, as a consequence of the condition notified by the notice dated 2 August 2002. The Superintendent did allow part of the claim as a contract variation although he reduced the quantum claimed by the amount of half a metre previously discussed. The 2 August 2002 letter described the additional work required as including "possibly wet-base preparation". The claim for additional wet base preparation is part of the costs pleaded in paragraph 32 of the statement of claim as having been incurred in connection with the latent conditions already considered and not as a separate latent condition in its own right. On 19 November 2002 Mr Waterson on behalf of BMD wrote to the Superintendent confirming verbal advice given the previous Friday that the area exposed under the Southern Stockpile "continues to be below that anticipated at tender" (referring to the letter of 2 August 2002) and indicated that the area "most recently exposed" placed that section of the "quarry floor into a wet base situation". The letter went on to confirm previous communications that additional wet base preparation was not thought by BMD to be adequately recompensed through the schedule rate as had been suggested by the Superintendent and that BMD would be recording costs and associated delays due to this additional work. On 18 July 2003 the Superintendent expressly rejected a claim for additional wet base preparation stating that wet base preparation was included in the schedule rates and was not accepted as a variation. VicUrban contends that the claims for wet base preparation were correctly rejected by the Superintendent and that an allowance for the wet base preparation was made in the contract.

55 It seems clear enough that the contract sum made some provision for wet base preparation. Clause 5.3.1.3 of the general conditions required BMD to maintain dewatering where structural fill was to be placed over a wet natural sub grade (that is, below the natural ground water level or existing lake level). Clause 2.42 of the general conditions provided that VicUrban (through a contractor other than BMD) would take the lake water level to RL19.0 and hold this level for 14 days after a letter of acceptance, at which time the pumping contract would be terminated. From then the remaining water could be used as required for moisture conditioning of the fill and dust suppression at BMD's discretion. Mr Finlayson gave evidence that the level of water within the quarry prior to the commencement of the project was about RL25. Mr Leonard gave evidence that the lake was handed over to BMD at or about RL19 around 8 April 2002.

56 BMD's claim, however, is not that it had not made some allowance for wet base treatment in the contract price, but that the latent conditions encountered were of a kind which necessarily required it to incur additional wet base treatment costs. Mr Waterson accepted that BMD "did allow for an estimated quantity of wet base preparation". The proposition put by BMD is, rather, that the allowance was only included within bills of quantity item No. 8 of the lump sum for Separable Portion 2 and not within items 10 or 11 which are relevant to this claim. Counsel for VicUrban contended that Mr Tuttiett had conceded in cross-examination that wet base preparation had been included in his allowance for Item 11, however, I do not think that to be what Mr Tuttiett's evidence in cross examination shows. His evidence was not that he had made an allowance for wet base treatment in Item 11 in the schedule but, rather, that that is where it should be found "if it appears anywhere in Appendix 4". His answer in cross examination does not contradict the affirmative statements of Mr Waterson to the effect that the amounts claimed are in addition to those provided for in the contract. In any event, Items 10 and 11 deal with the excavation, sorting, blending, carting, conditioning, placing and compaction of specified quantities of, respectively, Type C and Type B material. There is no provision for either of these two items in the contract for wet base treatment. Mr Clark purported to give evidence in his witness statement about the construction of the contract asserting his view that the specification "clearly sets out requirements for the preparation of any wet base treatment which might be encountered below Type B and Type C fills and placing of coarse rock at the base of Type B fills". I do not accept either his construction of the contract or the appropriateness of "evidence" of that kind being led through an expert witness to that effect.

57 The amount of $415,811 claimed is explained by Mr Waterson in some detail in his witness statement. In essence, Mr Waterson calculates the cost per square metre for wet base preparation and filling based on average pad sizes of 1,377 square metres having regard to four categories of items of expenditure, the time estimated to be dedicated to those items and a cost rate for each item either on an hour or a day basis. That enabled the calculation of additional costs of $55,752 which, on an average pad size of 1,377 square metres, produced a rate of $40.48 per square metre. In contrast, Mr Clark in his witness statement sought to reject a number of the items because, for example, from "their description and times allowed" they seemed to have been duplicated. This is an unsafe way of proceeding to analyse the claim, or to give "evidence" which may claim to be helpful, meaningful, probative or admissible, and indeed (if it be relevant) Mr Waterson in his second witness statement rejected any duplication in calculation as a fact. I do not think it necessary to rely upon Mr Waterson's rejection of Mr Clark's assertion for me to conclude that the assertion of Mr Clark is unhelpful and provides no probative evidence to the extent that it is based upon a conclusion to be drawn from a description in the evidence of another person. My assessment of Mr Waterson as a witness is that he was a careful and professional man who gave truthful answers to the best of his recollection. The nature of the work undertaken by him, and by BMD generally, gives me confidence that care had been taken by Mr Waterson to avoid duplication. I would thus not infer from any description of items making up Mr Waterson's calculation that any contained duplication.

58 A more significant point is made by Mr Clark, however, when he said that he considered a reasonable price for the work ought to be based upon the contract amount for similar items of plant and labour rather than those used by Mr Waterson. Again I express considerable disquiet about such observations as either admissible or probative evidence from an expert. Nonetheless, whether the point is made by him or by counsel, the question is whether reasonable rates for the purposes of clause 40.5(c) should be the actual cost rates incurred by BMD as used by Mr Waterson or those set out in the contract provisions for valuing additional work in the absence of specific contract rates. The calculation made by Mr Clark based upon the contract rates would produce a rate of $29.17 per square metre which, if applied to the additional area of 10,252 square metres claimed by BMD as requiring wet base treatment, would produce an amount of $299,634.24. It seems to me that this is the better and correct approach to determine the reasonable rate to be applied under clause 40.5(c). The amounts derived from the contract were amounts agreed between the parties prior to encountering circumstances likely to give rise to dispute. The contract rates provide a more reasonable measure, as between these parties in relation to this project, of what may be regarded as agreement between them and lessens disputes about whether particular amounts which may actually have been incurred had been incurred unreasonably or without sufficient regard to the interests of the principal. I would, therefore, allow $299,634.24 for additional wet base treatment.

(f) Additional works as a result of a change in topography in the area of the Northern Stockpile.

59 BMD claims $87,350, as reasonable costs under clause 40.5(c), as a result of what is described in its submissions as the change in topography in the area of the Northern Stockpile. This sum was calculated by Mr Waterson as the addition of $49,950 for additional bulldozing and handling, plus $37,400 for additional screening operations of 93.5 hours. These appear to be his estimates based upon the actual costs incurred as a result of the latent condition notified by letter dated 4 June 2003. That letter notified the Superintendent of a latent condition described as being that the extent of excavation required to expose the natural surface in the area defined as the Northern Stockpile was shown to be significantly lower than the levels anticipated at the time of tender. The additional work said to be required in the letter was additional excavation of overburden material and additional benching and access operations due to the steep nature of the excavation face compared to the design levels. By letter dated 15 August 2003 the Superintendent was notified by Mr Waterson that the additional excavation and fill in the Northern Stockpile was complete and submitted a basis and quantification of time and costs associated with the additional work. The additional costs claimed in that letter were for an amount different from that stated above. It claimed $82,319 for what was described as additional earthworks operation utilising dozers to push the additional material across a steep face to an area where it could effectively be excavated and processed. The explanation given for this methodology was that the topography of the area where the additional material was located was narrow and very steep and did not allow excavation and processing in situ as anticipated. This resulted in double handling of the material which was more costly than the bulk earthworks rates calculated using the lump sum price. The additional works calculated by BMD in its letter of 15 August 2003 involved an additional 60,977 cubic metres of materials. On that day the Superintendent directed BMD to remove some further material as a brick had been found in the exposed surface of material previously identified as natural material under the stockpile indicating that there was some additional overburden that needed to be removed.

60 The evidence of Mr Waterson is that the depth of overburden stockpile material contained in the Northern Stockpile was found by BMD to vary dramatically from that which was shown on the bulk earthworks plan. The exposed natural surface showed that the surface was up to 12 metres below that which was represented in the bulk earthworks plan representing an additional 64,679 square metres of excavation. VicUrban contends that part of the claim related to over-excavation in the Northern Stockpile as at February 2003 and, in addition, that the Superintendent had noted that excavation was proceeding lower than the maximum extent of excavation plan in April 2003. The Superintendent did note on 2 April 2003 at a site inspection that the Northern Stockpile "excavation appears to be extending 2-3m lower than" the maximum excavation level on the north west corner to natural. Next to that note, however, were the words "review required". Whatever may have been known by April it is I think fair to say that it was significantly different from what was claimed in June and I consider that a latent condition did occur in the area which was notified forthwith.

61 Mr Waterson's estimates are based upon actual costs and are supported by invoices. Mr Clark disagreed with Mr Waterson on a number of the elements constituting Mr Waterson's calculations. Those criticisms do not displace the evidence of Mr Waterson and, accordingly, I accept the claim as made.

(g) Additional works as a result of haulage requirements in the area of the Avenue Stockpile

62 $94,028 has been claimed by BMD for excess haulage costs in the area of the Avenue Stockpile. This issue gave rise to considerable evidence about a bridge and the earth moving capacity of trucks. The factual issues relevant to the claim were set out in Mr Waterson's witness statement in which he explained that the area of the Avenue Stockpile was physically segregated from the rest of the site given that it was located on the eastern side of Steele Creek and that the bulk of the overburden material was located on the western side of the quarry. Accordingly, a temporary steel bridge was constructed by BMD over Steele Creek to gain access to the Avenue Stockpile. The bridge was some five metres above the level of the creek and was located where a former old wooden bridge had been located which BMD had removed because it was unsafe.

63 The extra costs claimed of $94,028 is an attempt to estimate the additional cost which had not been allowed for in the tender. The tender had assumed a typical haulage operation using 40 tonne dump trucks hauling 60 loads per day at $18 per cubic metre per load at $140 per hour. The haulage rate allowed for in the tender was, therefore, $1.30 per cubic metre. Haulage cost for the Avenue Stockpile material across the bridge proved to be different because, in essence, the load limitations of the temporary bridge did not allow use of the 40 tonne dump trucks which had been allowed for in the tender. Different haulage equipment needed to be used resulting in lower loads and, therefore, a higher rate per cubic metre. Mr Waterson's estimate was of a $4 per cubic metre cost using 11 tonne road trucks hauling 30 loads per day at five banked cubic metres per load at $60 per hour. The difference between the two rates was $2.70 per cubic metre and on this figure BMD has calculated the additional cost not allowed for in the tender by multiplying the $2.70 per cubic metre by the additional excavation of 34,825 cubic metres needed to be hauled across the creek over the bridge.

64 Considerable evidence was given about haulage capacity of trucks, especially that of a Volvo A40D dump truck. Mr Clark's witness statement also considered the claim and expressed a view that the daily production of 11 tonne on-road trucks was not "justifiable". Mr Clark's view, such as it was, was that he considered a more realistic production rate to be 40 loads per day which would give a cost of $3 per cubic metre for the on-road trucks and, therefore, an additional cost for additional haulage using 40 tonne trucks of $1.70 per cubic metre. Mr Clark also reduced the claim in other ways, including by allowing only additional over-excavation below the 0.5 metre design maximum excavation level to the actual surface level which I have previously rejected. In the circumstances I see no reason to reject Mr Waterson's quantum or the basis upon which the quantum was calculated.

65 VicUrban, however, objects that the claim should not be allowed because it was up to BMD itself to determine the method of construction of the bridge and of the vehicles used on site to haul the material. Counsel for BMD submitted that the bridge was an existing bridge which "was upgraded because it was unsafe to use." However, Mr Waterson's evidence, in contrast to BMD's counsel's submission, was not that the bridge was upgraded but that the former bridge was removed and a new one constructed by BMD in its place. It is clear from the evidence that BMD constructed the new bridge before realising that the conditions encountered would require much more haulage of material. There was certainly no suggestion in the evidence that BMD constructed a bridge deliberately unsuitable to permit haulage at the quantities initially contemplated at the time of tender. That is to say, there is no suggestion that BMD built a bridge so as to maximise or increase the costs that it would seek from VicUrban. It is true, as VicUrban submits, that BMD itself determined the method of construction of the bridge and the vehicles used on site to haul material, but that does not break the causal nexus between the over-excavation and the need to deal with it by using smaller trucks with lower carrying capacity. Nor am I able to find in Mr Clark's witness statement probative evidence that would require me to disregard Mr Waterson's estimates of haulage rates or costs. Accordingly, I allow that claim.

66 BMD has claimed $2,907,633 as additional costs under clause 40.5(c) for the need to crush oversized rock flowing from the latent conditions notified in each of the quarry floor, the Northern Stockpile, the Eastern Stockpile and the Avenue Stockpile areas. In other words, what is put is that part of the claim in respect of additional excavation carried the consequence of a need to undertake additional processing (that is, mainly crushing) of the additional material that could not reasonably have been anticipated at the time of tender. The need to deal with the quality of the material (and therefore including its crushing) is also part of a separate latent condition to which I shall refer later. There is substantial overlap in the evidence relating to these two separate claims and I shall deal with most of them in the context of the separate latent condition notified in respect of oversize material. In the present context the issue is whether the oversize component of the material may relevantly be regarded as an incident of the over-excavation claim and, if so, whether the quantum claimed is justified.

67 It may be that a consequence of over excavation was that the additional material needed to be processed. Mr Waterson has calculated the claim of $2,907,633 as a need to convert the additional material into Type A material. His witness statement contains calculations but, as BMD's counsel explained in final addresses, Mr Waterson assumed the additional cost of crushing 124,952 cubic metres at $23.27 per cubic metre as the need to crush materials over and above 100mm to achieve Type A because of the requirement to carry out extra excavation.

68 I do not consider this claim to arise from the latent condition constituting the over excavation. It may be that the over-excavation resulted in a need to deal with the additional material but it does not follow that the additional material needed to be dealt with as Type A. Even if I were to accept that the percentage of oversized material may have been greater than had been anticipated and also that the compaction rate may have been higher than could reasonably have been anticipated (both matters which I will consider later), it does not follow that the additional material needed to be dealt with as Type A material. It is incumbent upon BMD to establish the causal and necessary link between the over excavated amount and the additional cost said to arise from its processing. There is nothing about over excavation as such that would necessitate its processing as Type A material. BMD's argument appears to be not so much that the over excavation required production of Type A material, but that the quantity of the over excavated material which was oversized led to it having, in the circumstances (and in particular in the context of its screening operations), no option other than to process the additional material as Type A material. I am not satisfied that this follows, or has been established, as a consequence of, and as flowing from, over excavation. If BMD is entitled to this claim it must be as a consequence of the separate latent condition which it has claimed relating to oversize material. The management and processing of the material was always an obligation of BMD under the contract. Mr Waterson's witness statement contained detailed analyses designed to show that both the volume and type of excavated material had a direct impact on methodology, or, as he also put it "the need to use crushing material to produce Type A material". Whilst I can see how the combined effect of "volume" and "type" may, on his analysis, lead to a need to produce Type A, I am not persuaded that the crushing is a necessary consequence of over excavation alone: that is, without what was being over excavated also being oversize. Especially since (as I explain later) BMD had allowed for the risk of the need to crush, was contractually obliged to crush (at its expense if required by the Superintendent), had taken that into account in its tender, and had a positive obligation to manage and process the material. Accordingly, I do not allow this claim unless it is to be allowed as part of the claimed latent condition for oversize rock considered below.

(i) Value of delay claims caused by the latent conditions

69 Additional costs have been claimed by BMD for the delay said to have been caused by the latent condition in relation to the quarry floor area ($329,728), the Eastern Stockpile area ($192,007), the Northern Stockpile area ($286,068), the Avenue Stockpile area ($106,304) and for the additional wet base treatment in the quarry floor area ($446,421).[20] The claims have been made under clause 12.3 of the contract which provides that delay caused by a latent condition may justify an extension of time under clause 35.5. It also provides that a valuation shall be made under clause 40.5 for the extra cost incurred of delay or disruption. Clause 35.5 provides that a contractor shall be entitled to an extension of time for practical completion if the contractor is or will be delayed in reaching practical completion by, amongst other factors, a latent condition provided that the contractor gives the Superintendent a written claim for an extension of time for practical completion within 28 days after the delay occurs.[21] Clause 36 provides that where the contractor has been granted an extension of time under clause 35.5 for any delay caused by, amongst other matters, a latent condition, the principal shall pay to the contractor such extra costs as are "necessarily incurred" by the contractor by reason of the delay. Clause 35.5A makes clear that the failure to give notice within the time periods required by clause 35.5 shall prevent the contractor from being entitled to an extension of time for practical completion.[22]

70 VicUrban submits that the notifications for extension of time were not made within the time required by the contract. The date for practical completion of Separable Portion 2 was extended from 22 March 2003 to 30 June 2003, although there was some disagreement about why this had occurred. Mr Whinfield stated on behalf of VicUrban that it occurred because BMD could not meet its production requirements and that there was an apprehension on the part of VicUrban that BMD might, therefore, have been tempted to sacrifice the quality of its work in order to receive speedy payment. Mr Waterson disagreed and suggested that the only reason for VicUrban granting the three months extension of time was to ensure that the western wetland area of the site was completed by December 2002. This reason was put to Mr Bollen in cross examination and denied by him. Of the competing explanations, if it matters, I prefer that given by Mr Whinfield as Mr Waterson's explanation is not supported by the contemporaneous documents. Mr Whinfield was VicUrban's acting project manager at the time and was better placed to explain the factors relevant to VicUrban agreeing to the extension. Accordingly, I accept his evidence that from VicUrban's point of view the amendments to the contract were intended to provide BMD with some flexibility and latitude in meeting its production requirements whilst still ensuring that VicUrban would be presented with a quality base that could be used as a foundation for the residential development that was required.

71 The date for practical completion was extended further by the Superintendent on two other occasions. On 30 June 2003 the Superintendent extended the date for practical completion to 21 July 2003, that is, by three weeks (15 working days). On 18 July 2003 the Superintendent gave a further extension of two days, namely, to 23 July 2003.

72 The letter dated 2 August 2002 has, on its second page the heading "Delay". VicUrban contends that the letter "while mentioning" delay "did not seek an extension of time". I agree with that contention to the extent that the letter of 2 August 2002 does not use the word "seek", but a fair reading of the letter is that an extension of time for delay was being claimed. What follows in the text under the heading "Delay" began by noting that the location of the material was "on the critical path for the project and will cause delay and disruption to the project". It was noted that acceleration to alleviate the delay was difficult and that it was then estimated that "this delay" would be a maximum of four weeks but longer if significant areas of wet base were encountered. A reference to the material being on "the critical path" is a clear reference, as between these parties, to there being an impact on the date for practical completion. The letter of 29 November 2002 to the Superintendent was asserting that the situation encountered could not adequately be recompensed through the schedule rates, that is, that it was being maintained as a latent conditions claim and, in that context, that any "associated delays due" to this additional work were being recorded. The letter of 5 March 2003 from BMD to the Superintendent also refers to "delay and disruption costs". I think that this correspondence should fairly be read as including a claim for delay.

73 VicUrban contends that it was not until 7 May 2003 that the phrase "extension of time" is mentioned in respect of either the Southern Stockpile or the quarry floor claims by which stage, as the argument goes, the conditions in clause 35.5 for making a written claim for an extension of time within 28 days of the delay occurring had not been met. I am not able to accept this contention. It seems to me that it was clear from the letter dated 2 August 2002 that an extension of time was being claimed. Neither clause 35.5 nor any other clause in the contract requires any particular form of words by which to convey to a reasonable reader that a written claim for an extension of time was being made. In my view a reasonable reader reading the letter dated 2 August 2002 would have been on notice that an extension of time for practical completion was being sought having regard to the then notification that latent conditions had been encountered on "the critical path" and that a delay was anticipated of some four weeks if not longer. Such a construction of the contract, and of the documents which are sought to be relied upon pursuant to the terms of the contract, is consistent with what a reasonable person would understand a document to mean having regard to the person and the object of the transaction: see Pacific Carriers Ltd v BNP Paribas,[23] Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd.[24]

74 Notification of a latent condition in the Northern Stockpile area was given by Mr Waterson on 4 June 2003. That letter, like that dated 2 August 2002, is fairly to be read as a claim for extension of time for delay. The same is true of the other two latent conditions claimed for, respectively, the Avenue Stockpile and the Eastern Stockpile. The Avenue Stockpile latent condition claim was notified by letter dated 17 June 2003 and the Eastern Stockpile was notified by letter dated 17 November 2003. Each of the letters of notification dated 2 August 2002, 4 June 2003 and 17 June 2003 are in broadly similar terms. The letter dated 17 November 2003 is in different form, but all four of the letters of notification are relevantly to the same effect. Each in my view put the Superintendent on notice of delay and is fairly to be read as a request for extension of time for practical completion, albeit that it was not then possible to determine how much delay would be encountered or involved in the work.

75 The contractual obligation imposed upon BMD by the second paragraph in clause 35.5 was, in respect of each of the four latent conditions notified, to make a written claim for an extension of time for practical completion within 28 days after the delay occurred. That claim (namely for an extension of time for practical completion) could, but need not, also give notice of the number of days extension claimed. That is made clear by the sixth paragraph in clause 35.5 which expressly provides that with any claim for extension of time for practical completion, "or as soon as practicable thereafter", the contractor was to give to the Superintendent written notice of the number of days extension claimed. I have, for the reasons set out above, concluded that the four letters relied upon are each fairly to be read as making a claim for an extension of time. The next issue is, then, whether written notice of the number of days extension claimed was made either in each of the letters or as soon as practicable thereafter. It is plain that the number of days extension were not claimed in each of the first three notices relied upon but that the letter of 17 November 2003 plainly claimed 0.83 months extension of time for delay and disruption costs. The written notice of the number of days extension claimed in respect of the three earlier latent condition claims were, however, given as soon as practicable after the making of the claim for an extension of time for practical completion in the circumstances which existed at the Niddrie Quarry site. 4.1 months extension was the period of time claimed in respect of the Quarry Floor Stockpile by letter dated 16 June 2003. 1.1 months extension was claimed for delayed practical completion by letter to the Superintendent dated 15 August 2003 in respect of the latent condition notified for the Northern Stockpile. 0.32 months extension for the date for practical completion was claimed by letter dated 28 July 2003 to the Superintendent in respect of the latent condition notified in respect of the Avenue Stockpile. I accept Mr Waterson's evidence concerning the notification of the periods of delay claimed. The evidence establishes that the Superintendent was informed of the progress of works, of the discovery of the conditions promptly as they were discovered, and that the periods of delay claimed for practical completion were notified as soon as the periods of time were sufficiently ascertainable by a process that made the quantifications reliable.[25]

76 Separate submissions were made on behalf of VicUrban in respect of the delay claim for the wet base treatment, however, the delay claimed for the wet base treatment was not made, and ought not to be regarded, as a separate latent condition. Accordingly, any delay claim arising from the circumstances of the wet base, are to be regarded as a consequence of the latent conditions notified.

77 BMD supports the quantum of its delay claim first upon the evidence of Mr Waterson and alternatively on the evidence of Mr Tozer. A significant difference between the evidence of the two is that Mr Tozer, an independent expert, relies upon a critical path analysis whilst Mr Waterson does not. In my view the analysis of Mr Tozer is to be preferred over that of Mr Waterson because what is essential is to determine whether any delay had an impact on the outcome for the parties. The purpose of a critical path analysis is to determine the criticality of an event in a disciplined way so as to be able to make a meaningful evaluation of its significance to the time taken to complete the works. On the other hand it must be said that a critical path analysis will not necessarily produce an exact indication of whether an event was critical to the delay of a project, with the result that different analyses undertaken by different people may produce substantially different conclusions.

78 In this case there was a critical path analysis undertaken by Mr Tozer on behalf of BMD and another undertaken by Mr Lynas on behalf of VicUrban with different conclusions and with each analyst being critical of the other's analysis. I have considered each of the reports and the criticisms which each has made of the other. I have also taken into account the submissions which have been made by counsel and, of course, the oral evidence given by each of the two expert witnesses. In the end I have preferred the reports and evidence of Mr Tozer to that of Mr Lynas. I accept the criticism of the analysis made by Mr Lynas that his reliance on the two BMD programmes for the works may not be sound. BMD had produced two works programmes at different times: the first was produced in April 2002 and the second in September 2002. The first BMD programme, as Mr Tozer noted (and is not in dispute), was flawed. The reason for that was because of interface constraints between lots, due to batters and differing levels, which meant that there would be insufficient areas available for the placement of Type A fill at the planned rates until much more of the Type B structural fill had been placed. The second BMD programme was produced to address these concerns but it was a target programme indicating the best progress that could be achieved if sufficient placement zones became available within restrictions, which, however, did not occur. A number of matters were put to Mr Lynas in cross examination which caused me to doubt the basis upon which his conclusions were drawn and which appeared from his answers to give him some doubt as well.[26] There were a number of matters put to him which he was unable to deal with without further checking and he generally left me with a doubt about the confidence with which I could adopt his conclusions. Accordingly I accept the conclusion of Mr Tozer of delay of 161 days or 7.28 months.

79 The entitlement for delay costs to be valued under clause 36 is for such extra costs as are "necessarily incurred" by BMD. BMD's delay costs were calculated using on site and off site overheads. The word "necessarily" appearing before the word "incurred" is significant and should be given some effect. That effect includes a careful identification of those costs incurred which may fairly be regarded as having been incurred "necessarily"; in my view, a reliable nexus must be shown by BMD for its entitlement in such terms to be made out.

80 BMD relied upon the evidence of a Mr Vincent to support its delay cost claim by reference to the so-called Hudson formula.[27] His evidence was, however, that at the time he prepared his report, he did not consider whether the Hudson formula was an appropriate methodology to apply in this case and, indeed, that he had preferred other methodologies. He had not previously used the Hudson formula and had prepared his report by placing the figures he was given into the formula and accepted that the formula may have been an inappropriate methodology to use in light of the fact that BMD was a new entrant into the Victorian industry. He had not asked to see any further documents to complete his report and said that he would have found the project summary cost evidence to be a useful tool if he had had it when preparing his report. I mean no criticism of Mr Vincent (whom I found to be a careful, helpful and reliable witness) when concluding that his evidence ultimately did not satisfy me of the appropriateness of relying upon the Hudson formula as he had applied it on the facts available to him.

81 On the quantum of extra costs necessarily incurred by BMD arising from the delay I consider the methodology employed by Mr Clark to be more reliable and a better method for quantifying the claim. Mr Clark analysed the figures and materials which were relied upon by Mr Waterson in his witness statements and then compared them with allowances in BMD's tender for 12 months duration on the original project as planned. His calculations support a conclusion of a daily cost of overheads plus direct costs of performance of $2,605 per calendar day which I accept as the relevant daily allowance for the 161 days delay as calculated by Mr Tozer, namely, $419,405.

82 I should also add, if it were necessary to decide the issue separately, that I do not think BMD has established its claim for the off-site overheads because, at the very least, it has not shown that those costs are affected in any way by a contract overrun or by a reduction in the time of the project. Off-site overheads are not necessarily specific to any one project and not necessarily incurred because of a delay in any one project.[28]

83 A separate latent condition was notified on 21 August 2002 when Mr Waterson wrote and faxed a letter to Mr Hawkins. That letter referred to verbal advice given on 9 August 2002 that, following excavation of approximately 250,000 cubic metres of the stockpile overburden, and the commencement of screening operations on the site, indications revealed that the extent of oversized material in the overburden stockpiles significantly exceeded the amounts indicated by, or could reasonably be inferred from, the tender documents, having regard to the matters set out in clause 12.1A. The reference to clause 12.1A is to the exceptions to what might otherwise constitute a latent condition which I have previously set out.

84 The quantum of this claim is $837,929 and is said to arise from BMD's claim that the particle size composition of the stockpile material differed materially from that which could reasonably have been anticipated at the time of tender. This is said to have caused BMD to carry out additional work, namely the crushing of oversized rock. The crushing is said to have been necessary because the screening operations used by BMD were producing greater volumes of oversized rock in the course of processing Type A fill than could reasonably have been anticipated by BMD. It argued that the greater volume of oversized rock generated by the additional oversized rock exhausted all options available on site for use of the unprocessed disposal of oversized rock on site. BMD argues that this meant that the additional oversized rock generated could only be placed as Type A fill after it had been crushed.

85 BMD maintains that a reasonable expectation was that about 35% of the stockpile material would comprise particles greater than 60mm in size and, by extrapolation, that about 29% of the material would comprise particles greater than 100mm. It contends, however, that in fact 51.7% of the material in the stockpiles comprised particles greater than 100mm in size.

86 One of the reports available to BMD at the time of tender was prepared by Golder & Associates Pty Ltd ("Golders") and dated 2 November 1998 ("the first Golders report"). Golders were engaged by VicUrban and are reputed to be the pre-eminent specialist geotechnical consultants in Melbourne having been involved in providing geotechnical advice for several proposed projects on the Niddrie Quarry site since 1984. The evidence was that Golders had developed a unique understanding of the difficult site conditions at the Niddrie Quarry and have a unique site knowledge and experience which formed a fundamental element of VicUrban's development proposal.

87 The first Golders report was a review of the site to assess "the likely percentage of basalt rock available in the stockpiles" that would be suitable for crushing and use within the site. Table 1 to that report (at p 2) identified the fill by categories in which "cobbles" were defined as material between 60mm to 200mm in size and "boulders" were defined as material greater than 200mm in size. The summary to the report referred to conclusions drawn by MPA Williams & Associates ("MPA Williams") from 1989 site investigations that stockpile fill material, comprising a high percentage of basalt, cobbles and boulders, was likely to comprise about 40% of the overall available stockpile volumes at the site. The summary in the first Golders report went on to state that investigations for the Eastern Stockpile indicated that the cobbles and boulders category comprised about 42% of the overall stockpile thickness investigated. Table 8 to the report set out a summary of expected proportions of cobbles and boulders in each stockpile comparing them with the proportion of cobbles and boulders as an average of the MPA Williams estimate. It showed a variation which the author of the first Golders report estimated in general terms as overall "about 35% of the fill material" in stockpiles A to E being likely to comprise basalt cobbles and/or boulders (as defined). The first Golders report concluded by noting that Hyder Consulting (Australia) Pty Ltd had assumed for the project design "then" in contemplation (that is, at the time of making the statement) that 40% of the available site stockpile fill would comprise cobbles and boulders, of which 20% would be suitable for crushing into product suitable for the project requirements. Golders themselves concluded that they would expect that at least 60% of the basalt, cobbles and boulders would be of sufficient hardness to be suitable for crushing. The first Golders report, therefore, has some significant variation of the expected percentages of cobbles and boulders (as defined) expressed to range from between 35% to 40%.

88 BMD also had available another report which had been prepared by Golders. On 8 October 2001 Mr Breese of BPD on behalf of VicUrban sent to Mr McPadden of BMD, amongst other things, a report dated September 2001 by Golders ("the second Golders report") containing its assessment of fill stockpiles. The second Golders report is lengthy and includes information described as "Important Information About Your Geotechnical Engineering Report" which was prominently labelled as such both on the top of the document and on the preceding page where they were the only words apart from the words "Appendix C". That important information about the geotechnical engineering report contained warnings about the report, emphasising the significance of the purpose for which such a report might be prepared and the fact that it contained matters of opinion and judgment rather than precise and exact measurement.

89 The primary enquiry to determine the existence of a latent condition is what should reasonably have been anticipated by BMD at the time of its tender upon the hypothesis contemplated by clause 12.1(a)(i) through to (v). This enquiry is, however, qualified by the express exception in clause 12.1A which provides:

Latent Conditions are not associated with the encountering of or measures required to address physical conditions or characteristics of the Site where such physical conditions or characteristics of the site;

1. have been identified or could reasonably be expected to exist, from the site investigation completed for the Site; or
2. could reasonably be expected to be associated with the Site as a result of the Site's history, past uses and associated site conditions; or

1. have arisen as a consequence of the work practices employed by the Contractor in undertaking the Works as determined by the Superintendent.

This exception imposes an additional requirement to undertake additional enquiries. Amongst those enquiries is one into what objectively could reasonably be expected having regard to the site's "history, past uses and associated site conditions".

90 It was submitted by BMD that a reasonable contractor was entitled to rely upon the conclusion, which is confidently described in its written submissions as "unequivocally" arrived at by Golders in Table 8 of the first Golders report, as to the likely composition of the fill material in the stockpile, namely, that "it appears that overall, about 35% of the fill material in stockpiles A to E is likely to comprise basalt, cobbles and/or boulders" without (as the submission contended) being required to undertake further enquiries or to engage geotechnical engineers to seek "to second-guess that conclusion". I do not agree. BMD relies upon the pre-eminence of Golders and their unique position in relation to the site as, I think, may be accepted. Mr Raisbeck gave evidence that Golders had been progressively conducting geotechnical investigations on the site since 1994 and were in possession of geotechnical investigations conducted by other well-respected geotechnical engineers as, indeed, was disclosed in the first Golders report. Golders had been engaged by VicUrban by the time of tender as part of the team of consultants working on the project for some 12 months. The first Golders report was an extensive document and had been provided to the tenderers for the stated purpose of assisting them in their "pre-tender activities". The report had been internally reviewed by others within Golders before it was published. Mr Goad, a civil engineer and Victorian Manager of Golders, said in cross-examination that the first Golders report was provided to tenderers as "a convenient reference point". The second Golders report had also been provided as part of the tender information and had been prepared after Golders had decided that further investigation was warranted in relation to material in excess of 600mm particle size. Golders had formed the opinion by the time of the second Golders report that it had prepared all of the geotechnical investigation that it considered was required for the project to go ahead. Mr Bollen accepted in evidence that Golders had been retained because of its recognised position in the industry as a leader and expert in its field and having developed a bank of knowledge in relation to the site which other possible consultants did not have. He also accepted that it was made clear to tenderers that this extensive information had been prepared by reputable consultants, was provided for their assistance and was all part of an endeavour on the part of VicUrban to achieve the lowest contract price and to remove risk to the contractor.

91 BMD also draw attention to the information expressly contained in the two reports. The covering letter to the first Golders report stated that the purpose of the compilation report was to provide information in support of tender documents for the proposed construction contract for the development. The first Golders report included a report of the stockpile material types dated 2 November 1998. The "stockpiles material types report" was expressed as a review by Golders of "material types expected within the stockpiles located on the site of the former Niddrie quarry". No other report summarised the geotechnical investigations and made conclusions about the expected grading of materials in the stockpiles. The review included reference to the results of stockpile investigations prepared in a number of reports, including various reports prepared by Golders and the report prepared by another geotechnical consultant, MPA Williams to which I have previously referred. The review defined cobbles to be "rocks of 60mm to 200mm" and boulders to be "rocks of greater than 200mm". It noted in relation to stockpile C that "if the stockpile comprises overburden materials from the adjacent eastern quarry extension area as expected, then the fill stockpile materials may become finer with increasing depth". Mr Raisbeck accepted that this could indicate to a tenderer that Golders considered it possible that the actual percentage of cobbles and boulders would become less with increasing depth. The results of the review were then said to have been presented in a concluding table headed "Summary of Expected Proportions of Cobbles and Boulders in Each Stockpile". Under that table Golders stated that it appeared to them that an overall percentage of 35% of the fill material in stockpiles A to E is likely to comprise basalt cobbles and/or boulders. Under the classification system used in the report cobbles were materials between 60mm and 200mm and boulders were materials of 200mm or more which meant that some 35% of the materials were expected to be 60mm or greater. This conclusion, as BMD noted, was not expressly qualified in any way. Mr Raisbeck accepted that on the basis of this conclusion "it would not be unreasonable to assume that something less than 35% of overburden contained particles less than 100mm". The first Golders report was of limited value in the assessment of the amount of overburden material that would be greater than 600mm, being the maximum dimension for Type B material, because the particle size classification system used specified all rock over 200mm in size as a single percentage and did not provide further information identifying the percentage of material smaller or larger than 600mm. The purpose of the second Golders report was to assess qualitatively the percentage, size and range of, oversize material greater than 600mm. The second Golders report did not expressly withdraw or qualify any of the conclusions stated in the first Golders report.

92 It may fairly be concluded from all this that the Golders reports were all intended to be used and relied upon. That, however, is not sufficient to determine whether a latent condition has arisen, particularly in light of the express exceptions which are plainly intended to, and do, narrow what may be a latent condition. It is significant that the parties agreed that latent conditions could not be found in circumstances where the physical conditions or characteristics of the site could reasonably be expected to exist from the site investigation or could reasonably be expected to be associated with the site as a result of its "history, past uses and associated site conditions".

93 The respective percentage sizes of the expected materials to be found on-site was a matter of critical importance to BMD in the discharge of its obligations and to the risks that it was assuming by entering into the contract. BMD was contractually obliged to crush materials where, in the opinion of the Superintendent, BMD had not "been diligent in ensuring that there [was] sufficient fill types set aside to complete the filling in accordance with the contract drawings". Clause 2.33 of the General Conditions in Appendix 8 to the Contract, went on to provide that the Superintendent might, at his sole discretion, direct in such circumstances that an approved crushing plant be set up to make up any shortfall in fill type. Any plant was to be established in accordance with condition 17 of the draft planning permit, and with the approval of the responsible authority, "at the sole cost of" BMD. BMD had, and clearly understood that it bore, the risk of there being oversize greater than that shown in the tender documents. Indeed, it made an allowance of $320,000 for this contingency. In a facsimile from Mr Alan Tuttiett to Mr Breese, BMD candidly acknowledged that the $320,000 which had been allowed in its bid to compensate "for the risks involved in the changing character of stockpile material which has been placed over many years by different quarry operators with possibly different quarrying procedures and outcomes", might "well be insufficient to meet" BMD's commitments under the contract. Mr Tuttiett was "genuinely concerned that what [was] represented in testing to date may not be fully representative of the material deposited at lower levels". Furthermore, there were, as I have indicated above, many cautions in the reports themselves.

94 This evidence leads me to conclude that a reasonable contractor in BMD's position should not reasonably expect that about 35% of the stockpile material would comprise particles greater than 60mm in size and about 29% of the material greater than 100mm in size. Nor, however, does the evidence establish actual reliance upon such an expectation from representations in the Golders reports. It was Mr Tuttiett who was engaged in the process of considering the proportion of oversized material when he was estimating the tender for BMD, not Mr Waterson (whose first involvement was in January 2002 after tender). I have already referred to the facsimile from Mr Tuttiett to Mr Breese expressing concern about the reliability of the conclusions expressed in the Golders reports. However, a letter from BMD to Mr Breese dated 10 December 2001 shows that BMD made an allowance for the risk that it would have to crush rock as a result of the makeup of the stockpiles. The letter stated that BMD had assessed how Type A and Type C material could be produced without crushing materials from the stockpile, acknowledged that the available information on which the assessments had been formed did not cover the full depth of the material in the stockpiles and that the nature of the materials in the stockpiles could be different from that shown by the test pits, and noted that if that risk was removed BMD said it might reduce its price by up to $320,000.

95 Expert evidence was also led about what a reasonable contractor might conclude or do in the circumstances of BMD. Neither Mr Clark nor Mr Raisbeck considered that a reasonable contractor would simply accept the conclusions of the reports constituting the Golders compilation report as accurately and reliably describing all of the material in the stockpiles and the distribution of materials throughout them. Mr Raisbeck was of the opinion that a reasonable geotechnical engineer would have correlated the data on particle size distribution in the Golders compilation and assessment reports and would have provided BMD with an overall interpretation. In his opinion the variability of the various fill categories would have provided an opportunity to estimate the amount of scalpings from the fill material and whether these could be used in other areas at the site or whether they needed processing to meet the specified fill-type gradings. Mr Raisbeck undertook such a task for the purposes of the trial and, after interpreting the combined MPA Williams and Golders test pit data, concluded that an indicative average cobbles and boulders content (that is, greater than 60mm) would be 45.7% of the Eastern Stockpile compared with the 35% said to have been adopted by BMD. Mr Mostyn, an expert witness called by BMD, disagreed with some of the conclusions arrived at by Mr Raisbeck. He was prepared to conclude that about 35% of the fill material in stockpiles A to E was likely to comprise basalt, cobbles and boulders as defined. I found both Mr Mostyn and Mr Raisbeck to be impressive witnesses, each respecting the other and, whilst disagreeing with each other's conclusions, acknowledging that a reputable expert in the same field held a contrary view. It is not uncommon for experts to differ in their conclusions. It is perhaps also common for experts to believe that a contrary view was not tenable notwithstanding that it was held by a reputable member of the expert's discipline. Such differences are not uncommon amongst lawyers. In any event the contractual tests of what should reasonably have been anticipated by BMD, or what could reasonably be expected to be associated with the site, et cetera, as provided for in clause 12.1A, are ones for me to decide, albeit with the benefit of such expert opinion on matters that may assist in the conclusion that do not, of course, amount to impermissible evidence of the ultimate issue. I do not think I need to reject Mr Mostyn's views about the reliability of the Golders reports in order for me to conclude that a reasonable contractor in BMD's position could not reasonably have anticipated (and as it happens did not reasonably anticipate) the precision which the Golders reports are now said by BMD to contain. Putting aside the expert evidence that the parties have put on at trial, the contemporaneous expert opinion on oversize was consistent with the evidence of Mr Raisbeck rather than Mr Mostyn. Mr Finlayson, a geotechnical engineer and Golders project manager, was asked in September 2003 by the Superintendent to investigate BMD's allegation of greater than reasonably anticipated oversize. He reported to the Superintendent that the percentage of rock that could be inferred from the tender data to be greater than 600mm was 16% to 17% and to be greater than 100mm and greater than 600mm was 42% to 44%. During the project, the parties agreed to get a joint, albeit non-binding, assessment of the percentage of oversized rock that could reasonably have been anticipated in the stockpiles of overburden on the site at the time of calling tenders. The parties agreed to retain a geotechnical engineer, Coffey Geosciences Pty Ltd, whose senior principal (Dr Ian Johnston) reported on 21 August 2003 that the percentage of rock that could reasonably have been anticipated as oversize was 42%.

96 It is unnecessary for me to consider a further claim made on behalf of VicUrban, namely, that the oversize latent condition claim was in the nature of an "ambit claim" or otherwise not maintained seriously. For this proposition VicUrban relied upon a number of matters including the fact that the claim was pressed by BMD for some time without any geotechnical expertise or geotechnical foundation. Internal correspondence by Mr Waterson to Mr Fogarty might, I think, fairly read as an attempt to create a claim that might not have much foundation to it. Nonetheless, it is for present purposes sufficient for me simply to conclude that BMD has not satisfied me that the oversize latent condition claim is sustainable on its terms without having to evaluate whether it was made in good faith.

97 BMD makes four claims for contractual variations. Clause 40 of the contract provides for its variation. Clause 40.1, headed "Variations to the Work", permits the Superintendent to give a variety of directions to the contractor and provides:

1. increase, decrease. [sic] or omit any part of the work under the Contract;
2. change the character or quality of any material or work;

1. change the levels, lines, positions or dimensions of any part of the work under the Contract;

1. execute additional work; and/or
2. demolish or remove material or work no longer required by the Principal.

The Contractor shall not vary the work under the Contract except as directed by the Superintendent.

The Contractor is bound only to execute a variation which is within the general scope of the Contract.

No variation directed under this Clause 40 shall vitiate or invalidate the Contract.

A variation may involve the omission of any part or parts of the Works and the Contractor acknowledges and agrees that:

1. the Principal may engage people other than the Contractor to carry out that part or parts so omitted; and
2. notwithstanding the timing and extent of the omission of any part or parts of the Works, such omissions will not constitute a basis to allege that the Principal has repudiated the Contract. The Superintendent shall not direct a variation after the Date for Practical Completion except where the variation is in respect of rectification work referred to in Clause 37.

If a variation results in a reduction of the time required for the execution of the Works, the Principal may determine a reasonable reduction in the time for Practical Completion and revise the Date for Practical Completion by notice to the Contractor.

Notwithstanding Clause 40.1(c), the Superintendent may direct the Contractor to change the levels, lines, positions or dimensions of any part of the Works under the Contract if the changes to the levels, lines, positions or dimensions arise as a consequence of the availability of materials as described in Appendix 8. Such direction shall not be deemed to be a variation under this Clause 40.

A direction under this clause may be a variation entitling the contractor to additional payment. Clause 40.3 provides that a contractor shall not be entitled to any payment in relation to any variation unless the contractor has been instructed in writing to carry out the variation pursuant to clause 40.1 and has given notice of the estimated impact of the variation in accordance with clause 40.2. Clause 40.2 requires a contractor, upon the receipt of a notice in writing from the Superintendent of a proposed variation under clause 40, to advise the Superintendent of the effect that the variation will have on the construction programme and time for practical completion, and provide an estimate of the cost (including any delay cost) of the proposed variation. The second paragraph of clause 23 provides that any direction given by the Superintendent under the contract shall not be considered a variation unless the contractor can show that such direction causes a material change to the works or the work under the contract, or otherwise specified by the Superintendent.

98 The first of the variations which BMD claims entitles it to additional payments arising from a direction given by the Superintendent on 7 March 2003 to stockpile Type A material in the cul-de-sac area. VicUrban does not contest that the Superintendent gave such a direction to BMD on 7 March 2003. What VicUrban does contest is whether other areas were available for placement of Type A at the time and whether the direction related to Type A material over and above that which could be placed in alternative areas.

99 The Superintendent's evidence was that by March 2003 work was being undertaken by both Golders and BMD in relation to the possible redesign of the finished surface level. Concerns had been raised about the balance of materials on site to complete the works to the anticipated design finished surface level and in particular the requisite amount of Type A fill which was shown in the drawings as being at least five metres in most areas but six metres in some. The issue was discussed at a site meeting on 7 March 2003 at which the Superintendent instructed BMD to commence stockpiling Type A material in the cul-de-sac area pending the finalisation of a review of materials balance and any redesign of the site. Mr Hawkins' evidence is that the instruction to stockpile the material related only to material that could have been placed on the existing Type A pads in the cul-de-sac and the "overflow" natural surface area adjacent to the cul-de-sac. Mr Hawkins' evidence in his witness statement was that the direction to stockpile Type A material was not a "necessity" (contrary to what he says was BMD's assertion) but a precautionary measure taken to preserve the Type A material being produced by BMD's screening process at the time in the event that there would be inadequate material to produce Type A to complete the project. It was also his evidence that at the time that BMD was stockpiling Type A material in the cul-de-sac (namely, early March to mid and late April 2003), areas of completed Type B fill existed where Type A could possibly have been placed. The decision to stockpile rather than to place Type A in those areas was made pending the finalisation of the redesign as the areas ready to take Type A material were potentially affected by the redesign that was being considered at the time. Mr Hawkins explained in his witness statement that part of his reasoning behind the instruction was a reluctance to instruct BMD to place the Type A in those potentially affected areas at that time and then, if the redesign did not lower the Type A layer in that area, later need to direct BMD to rework the areas by scraping up to two metres of Type A from the finished surface.

100 BMD contends that it could not effectively have placed the material in any area other than the cul-de-sac during March and April 2003 and that the Superintendent's instruction delayed and interfered with the capacity of BMD to place excavated material. On 12 March 2003, Mr Waterson wrote to the Superintendent confirming the discussions of the previous Friday (7 March 2003) and informed the Superintendent that BMD had commenced stockpiling Type A material in the cul-de-sac and that BMD would seek additional costs as a variation of the contract. On 7 April 2003, Mr Waterson sent a facsimile to the Superintendent confirming that they were "currently on hold" in the lake perimeter area pending possible design changes and that in the meantime they were stockpiling the Type A material in the cul-de-sac. On 30 May 2003, Mr Waterson again wrote to the Superintendent referring to the letter of 12 March 2003 and confirmed BMD's price "for rehandling of Type A material in the cul-de-sac area due to the redesign" at $4.42 per cubic metre. That letter explained that the fee contained no delay and disruption costs although some might have been thought claimable.

101 A claim for delay was subsequently made on 18 August 2003. That notice was purportedly made under clause 35.5(b)(1) of the general conditions of the contract and referred to the direction to cease placement of Type A material in the cul-de-sac area and to stockpile it pending resolution of the design level as set out in the earlier letter of 12 March 2003. VicUrban contends that this claim for delay cannot be made because it was not made "within 28 days after the delay occurs" as required by clauses 35.5 and 35.5A.

102 BMD's claim now is for $214,317 as a direct cost (based on a $4.42 per cubic metre rate) plus delay costs of $301,286. The Superintendent certified, and VicUrban paid to BMD, $165,828.96 for direct costs on the amount certified by the Superintendent. The amount which BMD claimed for direct costs was $4.42 per cubic metre in respect of 48,488 cubic metres of material. The Superintendent accepted the amount quoted but disallowed $1 per cubic metre for remoisture conditioning.

103 It is agreed between the parties that the amount payable for this item is to be determined under clause 40.3. In that context the issue is what are "reasonable rates". VicUrban has paid the amount at the $3.42 per cubic metre rate certified by the Superintendent after disallowing $1 per cubic metre for remoisture conditioning. Mr Clark reviewed the Superintendent's disallowance and considered a deduction of $1 per cubic metre to be an appropriate deduction from the rate which BMD claimed. Mr Clark's view generally, however, was that the reasonable rate should be that determined using the plant and labour rates, work methods and productivities used in calculating the prices in the contract where comparable rates, methods and productivities can be demonstrated. In general I agree with that approach but in respect of this particular item it is appropriate to have regard to the conduct of the parties and to what they may otherwise have agreed to. Specifically I note that BMD had provided an analysis which had calculated its variation cost at $5.57 per cubic metre but said that it would agree to $4.42 per cubic metre. The Superintendent, and VicUrban, similarly accept the $4.42 per cubic metre as the appropriate base rate subject, however, to whether it is appropriate to make a variation and disallowance of $1 for remoisture conditioning.

104 The evidence available to me does not justify the reduction of $1 for remoisture conditioning. Mr Hawkins gave his determination to BMD by PAN 267 dated 25 September 2003. He indicated there that he allowed part of the payment but that the rate should be reduced by the $1 per cubic metre for remoisture conditioning. In his witness statement he explained that an allowance for moisture conditioning was an unnecessary claim as the material was being stockpiled only at that stage and not conditioned and placed. Mr Waterson's contrary evidence is that remoisture conditioning was an activity that had to be undertaken. He was challenged in cross-examination on this but was not shown to be inaccurate or wrong in his statement of the fact. There was also the evidence of Mr Tozer who explained why remoisture conditioning was necessary and that of Mr Clark who expressed a different view. Both were cross-examined at some length about the need for remoisture and the use of water carts and other devices for providing moisture. Mr Waterson's evidence on this point is sufficiently persuasive that moisture conditioning was an essential feature of the task being undertaken and that, therefore, I do not regard the allowance as having correctly been made. Accordingly, I find the reasonable rate for the direct costs was $4.42 per cubic metre and that BMD is entitled to an additional $48,488 on this item.

105 Entitlement to the additional delay costs claimed of $301,286 depends on the impact of the works and whether notification has been made within the time provided by the contract. The second paragraph in clause 35.5 required notification of delay "within 28 days after the delay occurs". That phrase was considered in Queensland v Multiplex Constructions Pty Ltd[29] in which Davies JA and Lee J said:[30]

In the first place, unlike the learned primary Judge, we think that a natural meaning of the phrase "after the delay occurs" is after a time at which the contractor can say that it has been delayed notwithstanding that that delay may be continuing. Secondly the construction advanced by the respondent may lead to inconvenient and even unfair results in cases in which, like this one, the delay is substantial.

The purpose of the notice provision in the third paragraph, unlike the general warning notice of the possibility of delay required by the first paragraph, is to alert the Superintendent to the need for investigation of the facts on which the claim is based in order to determine whether that justifies an extension of time for practical completion. The later any such notice is given after commencement of the delay, the later the Superintendent may appreciate that need and the more difficult it may be for him to verify whether there has been delay and, if so, its cause. And where the delay and its cause continue for a very long while without any such notice being given the principal and the Superintendent may be misled as to the likelihood of practical completion on the due date. Consequently, though it cannot be said that paragraphs 8 and 9 of cl.35.5 require adoption of the appellant's construction, that construction leads to a result which is more convenient and fair.

Counsel for BMD invites me to distinguish or depart from this decision urging me to construe the words "after the delay occurs" in the circumstances of a latent condition, which is continuing, to be when "the full extent of the delay can be ascertained". The High Court has recently said that a trial judge should not depart from decisions of an intermediate appellate court in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless convinced that the interpretation is "plainly wrong": Farah Constructions Pty Ltd v Say-Dee Pty Ltd.[31] Similar reasoning would extend to decisions on constructions of contracts which have wide circulation throughout Australia where consistency of interpretation is plainly desirable. In any event, I consider the conclusion reached in Multiplex to be correct. The purpose of the notice is to alert the Superintendent of circumstances to enable him to make investigations and consequential decisions and determinations. That purpose is not served by a construction of the words "after the delay occurs" in the context of a continuing delay at any point after a contractor can reasonably say that delay has begun.

106 BMD contends that by the time that notice was given on 18 August 2003 the delay "which had occurred by that time" was a delay of 26.7 days; but that is not consistent with the evidence. Mr Waterson conceded in evidence that he would have known that there was a delay to the date of practical completion caused by stockpiling Type A by the end of March 2003. He also accepted that by the end of April he knew of the consequences of stockpiling and indeed that there were "obvious effects" on the critical path of the stockpiling in the cul-de-sac. Furthermore, as I have earlier indicated, correspondence on this point expressly disallowed a claim for delay which, by 18 August 2003 when it was made, was too late. Accordingly, I make no allowance for costs for delay.

107 If it be necessary to consider whether in March or April BMD could effectively have placed the materials which were in fact stockpiled in other places, the evidence does not show that there were areas available for placement of Type A during the time BMD stockpiled the material in the cul-de-sac. A letter from Mr Finlayson to Mr Hawkins dated 25 August 2003 described various fill areas that may have been available at various stages of the project. Mr Bremner was able to identify pads from his computer data supporting this conclusion. Mr Waterson's evidence, however, was that substantial other areas were available after 16 April for placement of Type A but that 16 April was after they had ceased stockpiling and replacing Type A in those areas. Mr Waterson rejected the suggestion put to him in cross-examination that BMD had chosen to stockpile because it permitted BMD to be paid a variation and receive more money. His response, which I accept, was simply that for him willingly to double-handle material was not true.

2. Extra layers and tolerances in placing Type B material

108 The second contractual variation claimed by BMD concerns an alleged instruction to BMD in May 2002 that the surface tolerances on the placement of nominal one metre depth layers of Type B fill were required to be plus or minus 100mm, that 3-D digital terrain modelling was to be undertaken at each nominal Type B layer and that each layer was to be fully surveyed and approved before subsequent layers were placed. Mr Waterson's primary evidence concerning this issue was that shortly after the start of Type B placement in May 2002, the Superintendent imposed an approval process which required detailed and time consuming 3-D digital terrain modelling to be undertaken at each intermediate Type B layer. The Superintendent rejected any layer where the model showed a one metre thickness to be exceeded in any area by more than 100mm.

109 Mr Waterson identified the date when first directed in these terms to be "on or about 16 May 2002". The two met on 17 May 2002 together with Mr Fogarty to inform the Superintendent of the time and cost implications of using this form of survey modelling to enforce what Mr Waterson referred to in his witness statement as an "unspecified" (by which I assume him to mean "not expressly stated in the contract in so many words") tolerance requirement. This was followed up by a letter on or about 27 May 2002, a construction meeting on site on 31 May 2002, and a letter dated 11 September 2003 purporting to be a notice under clauses 35.5 and 46 of the general conditions of contract that BMD had been delayed in reaching practical completion by a direction given by the Superintendent.

110 BMD contends that what the Superintendent did amounted to an instruction within the meaning of clause 40.1 of the general conditions of the contract which changed the character or quality of the work within the meaning of that clause entitling BMD to additional amounts by way of direct costs of $232,205 and additional costs for delay and disruption of 1.49 months of $232,891.

111 A question needing to be considered is whether the contract contained any specified tolerance in the placement of Type B material. BMD accepts, as it must, that clause 5.4.4.1 contained a specification for the placement of Type B fill but contends that that specification permitted a tolerance. Clause 5.4.4.1 of the specification is found in Appendix 8 to the contract under, first, the heading "Placement of Structural Fill" and, secondly, the heading "Layer Thickness". The second paragraph to clause 5.4.4.1 says that each lift of Type B fill for compaction shall be placed in not less than two layers of equal thickness such that the compacted fill "does not exceed 1.0m thickness". It goes on to make other provisions including provisions about quality assurance systems and the need to provide verification of layer thickness to the Superintendent within three hours of the completion of layer placement. That verification was required to include the method used to assess the layer thickness, the results of the assessment and the signature of BMD verifying the accuracy of the information. The clause also contained a table described as "structural fill placement data" by reference to fill type and maximum layer thickness as compacted showing one metre for the Type B fill.

112 BMD's first proposition must, in my view, be that the words "does not exceed" in clause 5.4.4.1 appearing before the words "1.0m thickness" do not mean that the thickness cannot exceed one metre in thickness. I do not accept that proposition and, on this ground alone, do not accept this variation claimed by BMD. The natural meaning of the phrase "does not exceed 1.0m thickness" in the clause is that each layer must come within that limit: it may be less, but it may not be more.

113 It is not strictly necessary for me to consider the many other interesting factual disputes in relation to this variation, but it may be of assistance if I make one or two general observations about some of them. The terms of the specification appear clear to me but, if it be accepted that there was some ambiguity about the matter, the proper course was to pursue the process provided for in clause 8.1 of the contract for the resolution of ambiguities and discrepancies. That process might have resulted in BMD having an entitlement under clause 40.5, but it was not pursued. The process not having been followed, it is, I think now not open to BMD to seek as a variation something which, on my view, requires the resolution of what must either be described as an ambiguity or a discrepancy within the meaning of clause 8.1: James Cook University v Walter Construction Group Ltd.[32] Secondly, a requirement that the compacted lift did "not exceed" a one metre thickness did permit a tolerance below one metre. Thirdly, I accept the evidence of Mr Clark and Mr Raisbeck that whatever might be "best industry practice" in general it has not been established to apply to the work done at this site because of its particular features and its intended purpose of residential development. I accept that this site presented a specific set of standards and requirements for achieving a higher quality of fill than might normally be achieved of lesser fill thicknesses and lower design standards for filling works such as embankments and roads. Accordingly, I do not regard BMD's recourse to "best industry practice" as being a sufficient answer in this case. The design brief for the project was to provide a foundation to allow construction of standard footing systems for a residential development. This requirement was endorsed by the Moonee Valley Council which required confirmation of compliance with the specification since it was the council which was to assume control and responsibility for the infrastructure areas located within the final development precinct. Stringent requirements for compaction were required to meet these aims. In any event, BMD has not discharged its burden of showing that "best industry practice" was appropriate in a project such as this: the evidence of Mr Clark and Mr Raisbeck that it was not appropriate was not displaced by BMD. Fourthly, I do not regard the requirement for 3-D digital terrain modelling as being a relevant variation. Clause 5.4.4.1 required verification and the Superintendent could, I think, choose what to accept as verification. Furthermore, surveys of placed fill and preparation of the digital terrain models were performed by BPD, not BMD, at VicUrban's expense and there seems no evidence that these surveys delayed BMD's ongoing work. Fifthly, the claim for delay and extra costs was some 15 months after the alleged direction and BMD has not discharged its burden of proof that it gave notice within 28 days "after the delay occurs".

3. Additional tolerances at Type A/B interface

114 The third contract variation claim is of $149,750 for direct costs and $93,423 for delay costs for what is said to be a variation of the contract "to the effect that the placement of Type B material was to be carried out to a plus or minus 100mm tolerance at the Type A/B interface (five metres below the finished surface level) and to a plus zero tolerance in areas where the finished surface level might be redesigned at a later date". Mr Waterson's evidence was that on or about 13 May 2003 all of the Type B material in the main fill area had been placed. Trimming then commenced upon this material prior to the area being surveyed in readiness for approval by the Superintendent to commence placement of Type A. On the same day the Superintendent directed Mr Waterson verbally that it was a requirement of Golders that the trimming work to be performed to the top of the Type B material must have a zero upper limit tolerance in the majority of areas due to a redesign of finished surface levels. Mr Waterson's evidence went on to state that he was incredulous as to why "such a tolerance would now be introduced in relation to the Type B material".

115 On 16 May 2003 Mr Hawkins issued site instruction No. 91 to BMD requiring that BMD implement forthwith the requirements in a report from Golders sent to Mr Waterson at the same time. There were further discussions about this requirement subsequently, and on 26 May 2003 the Superintendent issued site instruction No. 94 to the effect that for all areas unaffected by the redesign (that is, all areas where Type A would be placed at greater than or equal to five metres in depth) the required tolerance on the top of the Type B layer would be plus or minus 100mm, and that all areas where the Type A layer was less than five metres in depth, the Type B layer was to be finished with a "zero + tolerance" within the zero-100mm range.

116 VicUrban accepts that site instruction No. 91 was a variation but says that it was not one giving rise to a claim under clause 40 of the contract because it was said to relax the contract tolerance requirements over the areas unaffected by any redesign of the finished surface level. BMD maintains that there was no provision in the contract which required such tolerances to be imposed as those set out in site instructions 91 and 94 and that VicUrban's reliance on clause 2.30 of Appendix 8 of the general description of works is misplaced.

117 Clause 2.30 provides under the heading "tolerance":

Finished surface levels shall be within 050mm of those shown on the approved plans or to such levels as the Superintendent may approve in writing.

Both parties appear to accept that the "finished surface levels" referred to in this clause are to the "finished surface level as described by the plans and schedules contained in Appendix 8". Where the parties differ is in what they say is the consequence of that construction. BMD contend that there was a finished surface level contemplated by the contract being the level of the surface when placement was finished but that no other levels, for example at the top of the Type B layers, were provided for in the drawings in Appendix 8. In contrast, VicUrban contends that a consequence of clause 2.30 referring to the finished surface levels of the plans is that the depth of the Type A fill must necessarily have determined the levels of the Type A/B interface which could simply be ascertained by deducting the depth from the finished surface level.

118 I accept VicUrban's submission as the correct interpretation of the contractual provisions. There are a number of drawings in Appendix 8 including one which shows clearly both the proposed finished surface level as well as the difference in depth then contemplated between the finished surface level and the depth of the Type A fill from the top of the Type B fill. I do not think it necessary, or appropriate, to consider any of the expert evidence attempting to provide commentary upon the interpretation of the contract. If, however, it were necessary to have regards to expert evidence for the proper construction of a technical matter in the contract, I note that Mr Clark expresses an opinion that in his experience, levels of layers of construction which are lower than the finished surface level are commonly determined by deducting a specified layer thickness from the finished surface level. It is equally irrelevant, and inappropriate, to have regards to what may have been said to the tenderers prior to the formation of contract. However, if that be relevant as part of the matrix of fact bearing upon the proper construction of the contract, then I note the substantial amount of material prior to contract bearing upon the depth of the Type A fill zone with no reference to a tolerance. In that regard I note in particular BPD's letter dated 12 September 2001 (setting out specific quantities for tenderers to consider as part of their preliminary assessment including the clear statement "Type A material will be the top five metre of the fill zone"), contract drawings 6330, numbered 3 and 4, BMD's facsimile to BPD dated 7 January 2002 (referring to a possible decrease in the quantity of Type A material), BPD's response dated 9 January 2002 (stating that "the design depth of Type A material cannot change"), and BMD's facsimile to BPD dated 10 January 2002 (which may implicitly be regarded as acceptance that the design depth would not have altered).

119 It is therefore unnecessary to consider the quantum of the claim either for the direct costs or for disruption and delay. That said, if it were necessary to do so, I would accept the quantum of direct costs made by BMD as sufficiently established on the evidence but would reject the cost for delay and disruption as not having been made in time and, in any event, that BMD had not sufficiently established that the delay period claimed reflected any delay actually experienced by BMD. In that regard I note the contrast between the evidence from an examination of the drawings created by Mr Bremner with the oral evidence given by Mr Waterson. I do not think BMD's evidence can be accepted on the balance of probabilities. Mr Bremner's drawings from data he observed during the GPS survey system and collected during the project is persuasive to establish that during the period of June 2003, the Type B material was still left short of the Type A/B interface level in a number of areas across the Southern Stockpile in Lots 12, 13 and 16 so that, contrary to what Mr Waterson recalled, it was not ready for trimming by then.

120 The fourth claimed variation is for an amount of $35,175 for the cost of geofabric material placed in an area known as the "bath-tub". There is no doubt that geofabric material was placed in the area and that the cost was $35,175. The dispute on this issue is about who should bear its cost. VicUrban's claim is essentially that BMD is not entitled to extra payment because the variation was one for its convenience. BMD, on the contrary, claims that the variation was not for its own convenience.

121 Clause 40.4 of the general conditions in the contract provides:

If the Contractor requests the Superintendent to approve a variation for the convenience of the Contractor, the Superintendent may do so in writing. The approval may be conditional.

Unless the Superintendent otherwise directs in the notice approving the variation, the Contractor shall not be entitled to -

1. an extension of time for Practical Completion; or
2. extra payment,

in respect of the variation or anything arising out of the variation which would not have arisen had the variation not been approved.

The Superintendent shall not be obliged to approve a variation for the convenience of the Contractor.

BMD is not entitled to extra payment in respect of a variation coming under this clause unless the Superintendent directed otherwise. He has not done so and, accordingly, the first question is whether the variation was for the convenience of BMD such as to attract the operation of clause 40.4.

122 The preponderance of evidence favours VicUrban's conclusion that the variation was for BMD's benefit. In or about May 2003 significant volumes of large rocks were being generated by BMD from operations on site which could not be managed without crushing; an operation which BMD wished to avoid. Mr Waterson thus requested the Superintendent to approve the placement of large rocks to a depth of three metres in the bath-tub area. On 27 May 2003 the Superintendent issued site instruction No. 98 confirming verbal advice that a coarse rock layer could be placed in the bath-tub area on a particular basis. On 3 June 2003 he issued site instruction No. 99 confirming other verbal advice regarding the placement of fill in the bath-tub zone stating (on the second page of that site direction) that at RL24 metres a G3 geofabric is to be placed over the coarse rock fill.

123 Clauses 5.1.8 and 5.6.2 provide that coarse rock fill could be placed in wet areas up to a maximum of one metre depth at the bottom layer of Type B fill areas but not at all under Type C fill areas. Mr Finlayson gave evidence that the proposal to use coarse rock fill in the bath-tub area proceeded in two stages. First, there had been a proposal to use large rocks to a depth of three metres as a variation to the design requirements approved by Golders. Secondly, BMD made another proposal to place coarse rock in the same area but to a level of RL24. BMD's proposal was discussed at site meeting No. 30 held on 30 May 2003 at 8.30am. Item 5.2 of the minutes record a discussion about using coarse rock fill in the bath-tub area up to RL24 in lieu of Type B material. Part of the minutes record:

It was agreed that this would occur subject to a geofabric layer being placed across the coarse rock fill. It was also agreed that Type A material would be placed within the Road Reserve and that the remaining clay material on site could be placed underneath the settlement ponds. BMD advised that approximately 20,000m3 of clay, which was remaining in stockpile around the site, could be disposed of in this area.

On 2 June 2003 Golders confirmed that coarse rock fill could be placed as described but to a maximum level of RL 24 only and that, at that level, a sheeting of G3 geofabric was to be placed over the rock fill. The evidence of Mr Hawkins, which I accept, is that Mr Waterson proposed placing coarse rock fill up to RL24 and that he approved that proposal subject to the placement of a layer of geofabric over the rock fill. That is consistent with the minutes of the site meeting and the terms of site instruction 99.

124 Mr Waterson's contrary assertion is that BMD sought permission to place the oversized rock in the bath-tub, but that the determination was a joint decision between BMD, BPD, Golders and VicUrban. Mr Waterson's evidence, in my view, is not inconsistent with that of Mr Hawkins in the sense that acceptance of what Mr Waterson said does not necessarily lead to the conclusion BMD seeks. The same is true about the debate concerning the evidence of Mr Dempsey. It was submitted by BMD that the evidence of Mr Dempsey contradicts BMD's defence and, perhaps more importantly, that in cross examination he "had to resile from" evidence given in his witness statement. I do not agree that this accurately characterises Mr Dempsey's evidence. He did say in cross examination that "on reflection" the placement was for the benefit of both parties but that statement, whatever it might mean, does not supply the answer to whether clause 40.4 of the general conditions applies. It need hardly be said that the performance of any work, and potentially all variations sought "for the convenience of" BMD, might in a general sense, be regarded as being for the convenience of, and to the benefit of, the principal for whom the work is being done. The fact that it may be possible to see benefit to the principal does not preclude the variation being for the convenience of the contractor in the sense contemplated by clause 40.4. In any event, the critical enquiry is not whether the work was done for the convenience of the contractor or the principal, but rather, whether the variation through which the work was being conducted was for the convenience of the contractor. The evidence satisfies me that the variations requested by BMD and the variation itself was for BMD's convenience notwithstanding that the variation was producing work which might also ultimately benefit VicUrban.

125 BMD claims interest in the amount of $1,143,304.17 on the late payment of progress payment claims.

126 Clause 42 provides for the making of payment claims, their certification and their payment. Clause 42.9 provides for the payment of interest on overdue payments in the following terms:

If any moneys due to either party remain unpaid after the date upon which or the expiration of the period within which they should have been paid then interest shall be payable thereon from but excluding the date upon which or the expiration of the period within which they should have been paid to and including the date upon which the moneys are paid. The rate of interest shall be the rate stated in the Annexure and if no rate is stated the rate shall be 18 percent per annum. Interest shall be compounded at six monthly intervals.

The rate of interest on overdue payments is provided for in item 46 of the annexure referred to at 10%. BMD claims that interest under clause 42.9 is payable in respect of progress payment claim 21, dated 5 December 2003, and progress payment claim 22, dated 18 December 2003. The statement of claim, at paragraph 136, appears also to make a claim under progress claim No. 2 for an unspecified amount but need not be considered further because there is no evidence in respect of the late payment of this claim and no submissions in respect of it were made on BMD's behalf.

127 VicUrban contends that progress payment claims 21 and 22 did not conform to the requirements of the contract for payment and were never payable in the amounts claimed because the Superintendent issued payment certificates in time for the payment of different amounts.

128 The general process created by clause 42 contemplates beginning with the delivery by the contractor to the Superintendent of claims for payment. Those claims must be supported by evidence of the amounts due and are to include certificates issued under clause 28.5 with such information as the Superintendent may reasonably require. The Superintendent is then given 14 working days (as calculated under the contract) to issue both to the principal and to the contractor a payment certificate stating the amount of the payment which, in the opinion of the Superintendent, is to be made by one to the other. The Superintendent is permitted to issue certificates even if the contractor fails to make a claim under the clause. The fourth paragraph to clause 42.1 provides, amongst other things, that the principal is obliged to make a payment to the contractor 28 days after receipt by the Superintendent of a claim for payment or within the 14 days of the issue by the Superintendent of a payment certificate (whichever is the earlier). A "day" is defined by clause 2 of the contract to mean, in effect, a business day excluding also public holidays.

129 The consequences of issuing a certificate are serious and, if only for that reason, has been held to require strict compliance. In Daysea Pty Ltd v Watpac Australia Pty Ltd it was said:[33]

[21] That reasoning is in my view compelling. As all of the cases I have just referred to establish, the consequences of issuing a certificate are serious. The proprietor is bound to pay the amount of the certificate notwithstanding that the amount is provisional only and subsequently may be found to be incorrect. Notwithstanding such considerations the proprietor must pay the amount specified in the certificate and take the chance that any excess can be recovered subsequently. Similarly, the contractor is not entitled to payment of anything more than the amount specified in the certificate though it may well be less than the progress claim made. Even though it may ultimately be found that the contractor was entitled to more, the recovery of any such amount must await the determination of disputes at the end of the contract.

[22] Because of the consequences which flow from the issuing of the certificate strict compliance with the provisions of Clause 42.1 is required. That, in any event, is the natural consequence of the use of the word "shall" in paragraphs [4] and [6] in particular. It is not necessary to imply any terms in order to arrive at that result. Interestingly all parties agree that the provision in relation to payment by the Principal consequent upon the issuing of a valid certificate is mandatory; in my view it would be odd if the provisions relating to the issuing of the certificate, though mandatory in terms, were held not to be so.

In this case the critical question is whether or not there has been strict compliance.

130 Mr Waterson calculated 14 days (as defined) after 5 December 2003 to fall on 29 December 2003, although Mr Hawkins calculated it to fall on 31 December 2003. In either case the Superintendent's certificate dated 19 December 2003 was within the 14 days provided for, and it became payable within 14 "days" of its issue. Mr Hawkins' evidence was that the certificate was posted on 19 December 2003 to BMD at its Niddrie site address as he had previously been requested by BMD to do and, therefore, was deemed to have been received by BMD (in accordance with clause 7 of the contract) either on the actual day of receipt or on the third day after posting; that is, on 22 December 2003. Clause 7 is headed "Service of notices" and is of general application. Assuming deemed receipt by BMD on 22 December 2003, the certificate was paid in full within 14 days as required by clause 45.1. Mr Waterson accepted that the amount shown in the Superintendent's certificate No. 22 (in respect of BMD's progress claim No. 21) was paid in full on 16 January 2004.

131 Mr Waterson hand delivered BMD's progress claim 21 dated 5 December 2003 to the Superintendent on that day. It claimed $11,733,796.66 (inclusive of GST) for works completed to 30 November 2003. Mr Waterson asserted in his written statement that the Superintendent failed to issue a payment certificate to BMD within 14 days after 5 December 2003 but that BMD only received from the Superintendent's office Payment Certificate No. 22 for $1,931,699.80 on 13 January 2004 (for BMD's progress claim 21) albeit that it was dated 19 December 2003. BMD's submission on this point depends, in part, upon an asserted failure by the Superintendent to provide the payment certificate by 29 December 2003 not to BMD but, rather, both to BMD "and to the principal". The facts enable me to infer that the Superintendent issued a payment certificate to the principal by 29 December 2003 but there is dispute about whether it was issued also to BMD by then. In that regard, I have considerable reservations that the proper construction of clause 42.1 be that the entitlement to payment on a Superintendent's certificate requires the issuing of the certificate both to the payee and to the payer. There is certainly an obligation for the payment certificate to be issued to both and it is desirable that both payee and payer should be informed by the Superintendent of a decision about the quantum to be paid, but the obligation to pay arises "within 14 days [as defined] of issue" of a payment certificate and, on one view, that occurred when received by the party obliged to pay. The contract is expressed in terms of the issue of a certificate as if it was one act only. In reality the Superintendent is required to "give" (to use a neutral word) a certificate to both parties. It is, in my view, a natural reading of the words that the Superintendent is required to effect the issue of two separate, but identical, certificates and that the issue of one is complete when received by the person who becomes liable by its receipt. The contrary construction advanced for BMD as contractor may be convenient on this occasion but would in many cases produce unfairness to the party entitled to receive payment. This construction assumes that the issue of a payment certificate does not occur until two (not one) pieces of paper are received by two different people. It would carry the curious consequence that the party otherwise obliged to make a payment, and who has received the piece of paper purporting to be a certificate to that effect, is able to avoid liability by showing that the person entitled to receive payment had not also received the piece of paper to that effect. I am not persuaded to construe clause 42.1 in that way and conclude that the certificate was issued by the superintendent in time.

132 In any event, on 18 December 2003 Mr Waterson mailed progress payment 22 dated 18 December 2003 to the Superintendent in the amount of $12,437,615.26. BMD claims (and VicUrban disputes) that this was the final progress payment claim. The Superintendent's payment certificate 23 (in respect of BMD's progress claim 22) dated 5 January 2004 for payment of $79,510.00 was faxed (albeit unsigned) from the Superintendent's office to BMD by, at least, 9 January 2004 and used by BMD to raise a tax invoice on 13 January 2004. The amount shown for payment took account of all previous certificates. The signed payment certificate was apparently received on 28 January 2004. It was paid on 4 February 2004 being within the time required assuming, of course, that it was issued as provided by the contract.

133 BMD contends that for the Superintendent's payment certificate to have been "issued" to BMD it was essential that a document purporting to be a certificate be both received and that it be signed. In some contexts it may be that for a document to be "issued" it will need to be signed, but I do not think the word "issue" in this contract should be given such a restricted meaning. For a certificate to be issued to a person it must be delivered to that person in the sense "that it must pass from the possession of" the person who gives it to the person who receives it: Koon Wing Lau v Calwell.[34] There is nothing in the terms of clause 42.1, or elsewhere in the contract, that requires the specific formality of signature as a mandatory requirement for the certificate to be "issued", provided that what occurs may safely be regarded as the issue by the Superintendent of a certificate for payment. Here a document purporting to be such was sent from a source unmistakably emanating from the Superintendent to the person entitled to received it with no reason to doubt the authority of the person to send it. The recipient could have been in no doubt about what was being received.

134 It becomes unnecessary for me to consider the other objections made by VicUrban that might disentitle BMD from payment of this claim. In particular it is not necessary to consider the strength of the proposition that progress payment claims 21 and 22 did not conform to the requirements of the contract and, therefore, that they did not require payment by the dates claimed by BMD. I should note, however, that the strength of this argument depends upon whether Mr Waterson complied with the obligation to provide two statutory declarations as required by the contract. This requirement, unlike whether the Superintendent needed to sign the certificate, is expressly stated in the contract and must be complied with: see FPM Constructions Pty Ltd v Blue Mountains.[35] The contract provided that there be two statutory declarations prepared at different points in time, and it is noteworthy that what is required to be provided is indeed a statutory declaration, that is, that the parties contemplated that the obligations to pay would in part depend upon one of the parties exposing themselves to the serious consequences created by the making of statutory declarations. Only one of the many statutory declarations made by Mr Waterson complied with the requirements and that was not one of the two statutory declarations in dispute. None of the statutory declarations appeared to comply with clause 43 b). There was never any agreement to vary the terms of the requirement to supply a statutory declaration as Mr Waterson accepted in re-examination and as is clear by his purported attempt to supply the statutory declarations. Furthermore, any suggestion that there was agreement for relaxation of formal compliance with these terms of the contract would be difficult for BMD to maintain given that its case on this point depends upon it being able to enforce strict compliance with the contract when contending, for example, that the certificate by the Superintendent had to be signed.

135 It is also unnecessary to consider the construction of clauses 42.1 and 42.1A urged upon me by VicUrban to the effect that BMD was only able to submit claims once per month and then only at the end of each month. A consequence of that submission was said to be that the Superintendent was only obliged to certify one of the two progress claims presented by BMD in December 2003 and that the 14 days in which he had to do so ran from the end of the calendar month in which the claims were presented, namely 31 December 2003. It may suffice to say that I accept the proposition that the effect of clause 42.1A upon clause 42.1 is to restrict the number and periods of claims to one each month. I also accept the construction of the clauses to require lodgement of payment claims at the end of the month. The clause does not expressly state such a requirement or limit a payee's entitlement to receipt of payment within 14 days by delaying the time for payment until 14 days after the end of a calendar month. However, the time for payment claims stated in Part A of the Annexure (which, by clause 1.2 of the formal instrument of agreement, has precedence over the General Conditions of Contract) as the "[e]nd of each calendar month or as prescribed by Clause 42.1". The consequence of there being no time prescribed in clause 42.1 is that the time to make the claims is the end of the month. It follows, therefore, pursuant to clause 42.1A that an obligation to pay did not arise earlier than had the claim been lodged as required by the contract. This obligation to pay is expressed in sub-clause 42.1A c) as falling upon "the Superintendent" whereas it ought to have said "the Principal". I would construe the contract in that way (that is, as expressing an error needing correction).

136 BMD also makes a claim under the Trade Practices Act 1974 (Cth) independently of the contract and the contractual provisions which I have thus far considered. Its claim is that VicUrban's conduct was misleading and deceptive or likely to mislead and to deceive contrary to s 52. The representations relied upon in the pleadings were the affirmative statements made in the tender documents, the answers to tenderers' questions, and the statements by or on behalf of VicUrban made at various meetings. The case as pleaded made no allegation of misleading and deceptive conduct arising from VicUrban's silence about known inaccuracies and uncertainties.

137 BMD's final submissions, however, sought to extend the misleading and deceptive conduct relied upon to what was said to be VicUrban's "silence about known inaccuracies and uncertainties in" information, and to what was said to be VicUrban's failure to provide all relevant information to BMD. VicUrban objected to these submissions contending, amongst other things, that had these matters been raised in the pleadings it would have conducted the case differently.

138 It is essential that any claim be fully pleaded so that the parties know clearly and unambiguously what they must answer. The need for proper pleading is fundamental to the need for a court to ensure fairness as between the parties. It is also fundamental to ensuring that the Court has had available all evidence which either party wishes to rely upon. It is undesirable for a party to conduct a case on a basis which leaves the Court in a position of having to determine a matter without all of the evidence which an opposing party may have led on a point if the point had clearly been raised and put in contention. In Truth about Motorways Pty Ltd v Macquarie Infrastructure Investment Pty Ltd[36] Foster J said:[37]

The statement of claim, in its present form, is based upon sections of the Trade Practices Act 1974 (Cth) ("the Act") to be found in Pt V - Consumer Protection. In the forefront of the statement of claim are contentions that the respondent has acted in breach of s 52 of the Act in that it has engaged in conduct, in trade or commerce, that is misleading or deceptive. In this connection it is important to remember that, as Fox J said in Brown & Anor v Jam Factory Pty Limited & Anor [1981] FCA 35; (1981) 53 FLR 340 at 348:-

Section 52(1) is a comprehensive provision of wide impact, which does not adopt the language of any common law cause of action. It does not purport to create liability at all; rather does it establish a norm of conduct, failure to observe which has consequences provided for elsewhere in the same statute, or under the general law.

It necessarily follows that when the section is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it is imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim. This is, of course, a fundamental principle of pleading. In this regard I cite, and state my respectful agreement with, the following passage from the judgement of Goldberg J in Phoenix Court Pty Ltd & Anor v Melbourne Central Pty Ltd (22 October 1997, unreported):-

The statement of Mason CJ and Gaudron J as to the function of pleading in Banque Commerciale SA En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286 bears repeating:

The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In Liq.) per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness.

These principles were restated more recently by Burchett J in Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR |P41-522. At 42,679 his Honour said:

The primary function (of a statement of claim) is to tell the defending party what the claim is that he has to meet. That is a matter of elementary and natural justice; the claim cannot be answered until it is known. When a sufficient defence has been filed to a sufficient statement of claim, a further function will generally have been performed - that of defining the question or questions for decision. This definition is required, of course, from an early stage, or else discovery and other interlocutory procedures are likely to prove misdirected, wasteful and unproductive. In order to achieve these fundamentals, a statement of claim must set out clearly, not just the bare claim that is made, but also `the material facts on which it is based', including facts that, if not specifically pleaded, might take the other party by surprise: Federal Court Rules, Order 4, r. 6; Order 11, rr. 2, 10.'

I lay particular emphasis upon the portion of the passage cited from the judgment of Burchett J, where his Honour observed that definition of the questions for decision is required "from an early stage" in order to avoid "misdirected, wasteful and unproductive" interlocutory procedures such as discovery.

I have had this consideration very much in mind when expressing the concerns I have regarding the lack of definition in the pleading of the applicant's case. Much interlocutory effort has already been expended in these proceedings on the basis, as claimed by the applicant's counsel, that access to the documents of the respondent and other persons and organisations are necessary, at this stage, in order to demonstrate the strength of the applicant's "case" by way of resisting the respondent's application for security for costs. I have decided, as I have previously indicated to the parties, that it is not my intention to dispose finally of those matters until the applicant's "case" is finally and precisely pleaded and the issues for trial have been defined by the completion of the pleadings, including defence and, if necessary, reply.

It is, in my view, of the utmost importance in cases based upon s 52 of the Act that this approach be adopted at the outset. Failure to do so can produce results exemplified by Cummings v Lewis & Ors (1993) 41 FCR 559 where, on appeal, the applicant sought to amend his original pleadings to assert a cause of action based upon s 52 of the Act which had not been originally pleaded but which, it was contended, could be accommodated by the findings of fact made by the trial judge. Experience is showing that the Court must be astute in the prevention of this type of situation by requiring, in the early stages of litigation, that claims based on s 52 be pleaded with appropriate precision and in a manner that enables the factual issues for trial to emerge with clarity.

The factual contentions about "silence" are in my view not properly raised on the pleadings and may not now be relied upon. Counsel for VicUrban said that the case would have been conducted differently had the case been pleaded differently and it may be that "the fact that counsel, acting responsibly, has said that the raising [of a point] may have affected the evidence he would have led is enough to dispose of the question": Commissioner of Taxation v Brambles Holdings Ltd;[38] see also NAJT v Minister for Immigration & Multicultural & Indigenous Affairs.[39]

139 In any event, even if I were to allow BMD to rely upon the matters which were not pleaded, I do not think it can succeed under s 52. BMD contends, and I accept, that whether conduct is properly to be characterised as misleading or deceptive is a factual question to be determined objectively, having regard to the particular positions of the parties, their knowledge and experience, and "all the circumstances of their communications": NEA Pty Ltd v Magenta Mining Pty Ltd.[40] BMD also contends, and I fully accept, that it would be erroneous "to look at isolated parts of a corporation's conduct". Thus, for the purposes of this argument, I accept the contention by BMD that the effect of any relevant circumstances or actions or any silence or inactions (contrary to the view I have expressed above) occurring in the context of a single course of conduct must be deduced from the whole course of conduct: Butcher v Lachlan Elder Reality Pty Ltd.[41] The problem for BMD, however, is, that it is unable to establish conduct by VicUrban which is contrary to s 52 of the Trade Practices Act on all of the facts, and also that it has not satisfied me that any conduct which might have been in breach of s 52 or was in fact relied upon by BMD.

140 The written representations relied upon by BMD do not justify the conclusions it wishes to draw from them. A fair reading of all of the documents contain ample warnings about the limited nature of the information supplied and indications about the value to prospective tenderers of the information provided to the effect that volumes and levels depicted were "approximate" and "estimates". BPD's letter seeking expressions of interest referred to the bulk earthworks plan which showed the "approximate" stockpiled material and an "estimate" of the volume of material in each of the zones. It referred to the existing conditions plan which showed the extent of the quarry at the "termination of works in mid 1970". It referred to the finished surface contours plan which showed the "approximate finished surface level". The draft contract provided to BMD on 22 May 2001 contained an express and clear notice from VicUrban that the particulars set out in the brief were for the "guidance" "only" of intending registrants and, more importantly, that "[a]ll descriptions, quantities, references to condition and other details are given in good faith and believed to be correct" and immediately went on to state that "[n]o intending registrant should rely on anything contained in this brief without satisfying themselves by inspection or otherwise as to the correctness and completeness of the information provided, and, if appropriate, seeking other advice." Pre-tender documentation contained clear statements that VicUrban did not warrant the accuracy of the information and that BMD should make "any enquiries and investigations necessary to satisfy themselves of the accuracy of the information".[42]

141 Part of the material on the disk initially supplied to BMD revealed that much of the information relied upon by BMD was sourced by means that may not have been entirely reliable. Thus, for example, the statement on plan 6330 that the topographical features had been derived by the means of aerial photography and that the data was "suitable for overall planning only, and should not be used for any other purposes". The plan also stated that critical dimensions measured from digital data must be confirmed by BPD, that some of the surface areas had been derived from 1989 aerial photography data and lake depth soundings each supplied by others that the surface area demarcated in a particular way on the ground sections was a preliminary design surface for the south-west corner of the site and was "subject to change".

142 BMD contends, and I accept, that exclusionary and disclaimer clauses cannot override the statutory prohibition against misleading and deceptive conduct or prevent the grant of appropriate statutory relief where loss or damage is, as a matter of fact, caused by contravention of s 52: Bowler v Hilda Pty Ltd;[43] Downey v Carlson Hotels Asia Pacific Pty Ltd.[44] However, as BMD also contends (and I accept), such "disclaimers" can be effective "if the clause actually has the effect of erasing whatever is misleading in the conduct" (Benlist Pty Ltd v Olivetti Australia Pty Ltd;[45] see also Downey v Carlson Hotels Asia Pacific Pty Ltd.[46]) In other words, such words will be effective if the effect of the disclaimer is to make clear something that, if allowed to remain vague or ambiguous, could have led a person into error. That in my view is the effect which the "disclaimers" relied upon by VicUrban had. To refer to them as "disclaimers" may itself be misleading because, in my view, they are more in the nature of clarification of VicUrban's understanding and beliefs about the information which BMD was being told by VicUrban to take into account. The so-called "disclaimers" are positive information for the benefit of BMD rather than an attempt to disavow liability for what was being proffered for assistance. The context in which this was occurring is also important because the parties intended and understood that a contractor was being asked to assume a risk in undertaking a project and that VicUrban was informing BMD about the extent to which VicUrban was able to be of assistance in conveying information to BMD that might be useful. In that way VicUrban took some care to inform BMD that it needed to ensure that the risk it was assuming was properly evaluated.

143 There were two oral representations affirmatively pleaded and relied upon by BMD. The first of them was a colourful statement attributed to Mr Bollen at a meeting on 18 January 2002. Three of the many people who attended that meeting gave evidence on behalf of BMD and two said that the statement was made. Mr Tuttiett, who at the time had the task of preparing the tender, did not recall Mr Bollen making the colourful statement alleged. The two VicUrban representatives who attended the meeting, and who gave evidence, positively said that the statement was not made. The two BMD witnesses who asserted that it was made did not make a diary note or any other record of the statement and the lack of any recollection by Mr Tuttiett, coupled with the denial of the other two witnesses, leaves me with substantial doubt about whether it was sufficiently accurately remembered for the evidence of it having been made to be reliable. More importantly, however, is that it seems an improbable statement to make on the terms remembered in view of the many qualifications and cautions and the trouble which the parties went to in defining precisely what would constitute a latent condition for their contract on this project. The confidence which the statement seeks to attribute to VicUrban about the correctness of the quantities is inconsistent with the very terms of the contract which seeks to leave the risk with BMD rather than with VicUrban, and which provides an objective measure if those very quantities prove sufficiently inaccurate as to constitute a latent condition. It also seems unusual that there is no evidence of anyone at BMD asserting the statement soon after it became clear that a disagreement had arisen. Finally, in respect of this oral representation, I think VicUrban correctly relies upon Jones v Dunkel[47] in noting that there were two other BMD representatives who attended the meeting neither of whom were called to give evidence about that matter and that in those circumstances an inference can be drawn from their absence that their evidence would not assist BMD in respect of what in this proceeding had been maintained as an important plank in its case. The second of the oral statements relied upon, said to have been made on 28 February 2002, does not appear to go to a representation of a kind that could meaningfully be regarded as false or misleading and, indeed, no submissions were made in respect of that statement in BMD's written or oral submissions.

144 I also accept VicUrban's submission that BMD has not established reliance upon the alleged representations about estimated quantities of fill or the information provided concerning the makeup of the stockpiles by VicUrban during the tender process. BMD's facsimile dated 10 December 2001 stated that it had measured higher volumes than the estimated quantities stated in the tender schedule for Types A, B and C fill and a lesser quantity for Type D fill. BMD said in the correspondence that it had used the measure resulting from its own calculations in its tender which had caused the tender price to be $1,020,000 above that which would have resulted by using the estimated quantities stated in the tender schedules. Both Mr Tuttiett and Mr Miroshnikoff agreed in cross-examination that BMD had not relied on the quantities as provided and that they had performed their own calculations. In facsimiles dated 18 January 2002 and 22 January 2002 BMD confirmed that the tender schedule items for material Types A, B, C and D, were lump sums and that it assumed all risk on material quantities with any quantity of Type A material above the quantity of 564,000 cubic metres to be measured in the provisional sum schedule for Separable Portion 2. Mr Miroshnikoff had been given the task by BMD to undertake the calculations for the tender and his statement records that the stated approximate volume of stockpile material was checked and that there was reasonable agreement. Evidently, however, BMD adopted its own measure of the stockpile volume being Mr Miroshnikoff's measure of 2,513,000 cubic metres.

145 In the event it is unnecessary to rule on the admissibility of evidence sought to be given by Mr Fogarty concerning the state of mind of BMD, or at least, his state of mind as it may be relevant to BMD. Paragraph 14 of Mr Fogarty's witness statement contained statements which counsel for BMD contended were admissible as "directly relevant to the question of causation which arises in the context of the [Trade Practices Act] claim and is fundamentally concerned with the subjective state of Mr Fogarty's mind". BMD's argument of admissibility relied upon what was said in Seltsam Pty Ltd v McNeill[48]. In that case evidence had been given about the kind of material which the witness had been gathering up with his hands. In that context the witness was asked about a hypothetical situation if "there had been a warning on the fibro sheet" to which he responded "I would never have used it". It was that evidence which the Court considered to be relevant and admissible "about" the state of mind of a person in the context of proof of causation.

146 Essentially the same proposition was put on behalf of BMD in relation to paragraph 14 of the proposed evidence of Mr Fogarty in which he purported to give evidence in the following terms:

1. Had I not been satisfied, prior to submission of BMD's tender, that the information on the drawings supplied by VicUrban for the information of tenderers concerning the levels of natural ground was reliable and accurate, to permit BMD to assess the volumes of material stockpiled and required to be excavated and placed, BMD would not have submitted an unconditional tender for the Project. BMD would either not have tendered at all or would have submitted a conditional tender which contained a condition to the effect that BMD would have a right to further payment should the natural ground levels provided by VicUrban prove to be inaccurate. The fact that the tender as submitted was not subject to such a condition reflected my reasonable belief that the information contained in the plans provided to tenderers was accurate and could be relied upon for tender purposes.

VicUrban objected to this evidence and relied upon a long line of authority of considerable force. In Cackett v Keswick[49], Farwell J said:[50]

[I]t cannot be enough for a man to swear that he would not have entered into the contract if he had kown something that was concealed from him. It is easy to be wise after the event, and many men can honestly persuade themselves when a company has failed that they would have been influenced by a circumstance which in all probability would have made no impression whatever on their mind. ... The test must be, Is the omission material? And if the Court sees that the fact omitted is of such a nature that it might reasonably deter ... the ordinary investor ... this is sufficient. It is in great measure an inference of fact to be drawn ... from the circumstances of the case.

In BNP Paribas v Pacific Carriers Ltd[51] Handley JA said at [46] in respect of the self-serving evidence of what information a witness had acted upon that the "inference of reliance can and should be drawn from objective considerations rather than the ex post facto subjective of an interested witness".[52]

147 In light of the observations in Seltsam, and the cases referred to, I would have admitted paragraph 14 in evidence but do not think I could confidently have placed much reliance upon the statement in the terms made. The proposed evidence about a hypothetical which might, but did not, occur, will often require more than its being said for it to be probative. There is nothing in the way in which paragraph 14 of Mr Fogarty's statement was couched which gives me confidence that it was more than what he had convinced himself might have been the case if events had been other than as they were. There is, for example no objective fact, matter or circumstance which gives confidence in adopting the view that his subjective belief is likely to be what would have occurred had events been different. The assertion that BMD would not have tendered at all is not given weight or substance by reference to facts which enable me to evaluate independently of his subjective statement whether the conclusion he asserts is one which I should accept as likely, probable or independently supported by objective facts. Indeed, the hypothetical assertion that BMD might have submitted a "conditional tender" to the effect that it would have a right to "further payment should the natural ground levels provided by VicUrban prove to be inaccurate" is inconsistent with the evidence that such a tender would not have been a valid tender. The evidence in issue in Seltsam was given orally rather than through a written witness statement which had had the benefit of preparation, reflection, legal assistance and, perhaps, advice from counsel. In such circumstances a Court should expect, at very least, that statements of a state of mind such as that proffered by paragraph 14 in Mr Fogarty's witness statement, have objective reference points which give confidence that weight should be given to the subjective evidence. The statement may be admissible, but if it is to have weight (that is, if the statement is to persuade a decision maker, with all the consequences which may flow to the rights, duties and obligations of other people) then it is desirable that the assertion of what "someone would have done" should be supported upon objectively verifiable evidence that gives the assertion force and substance.

148 It is also unnecessary for me to consider the alternative basis for the claim of loss and damage sought by BMD under the Trade Practices Act.[53] Paragraph 116 of the statement of claim pleaded, simply, that by reason of the alleged misleading and deceptive conduct, BMD had suffered loss and damage in the amount either of $6,301,816 or, alternatively, $5,565,787. The particulars relied upon were said to have been set out in amended schedules 2 and 3 to the statement of claim although, as became clear only on the last day of the proceedings, those particulars provided details of only the first of those two amounts. Late on the morning of the last day of the proceeding, day 36, counsel for BMD gave, for the first time, particulars of the alternative quantum of the claim. On 8 October 2007 a letter was sent to my associate for my attention seeking to substitute, without leave, the particulars which had been given for the first time on the last day of the proceeding (day 36) of something first pleaded some two years previously. It is inappropriate for particulars, evidence or submissions to be given by a unilateral communication other than in open court or as directed by a judge. The proper time and place to present evidence or argument is at the hearing.[54] Further material should not be filed without leave;[55] although some judges might not wish to deter the practice of putting in further written submissions which are delivered expeditiously, and are of substance, after the hearing.[56] The 8 October 2007 letter to my associate from BMD's counsel, perhaps predictably, produced a response from VicUrban's solicitors dated 11 October 2007 which, in my view, was also undesirable. They wrote requesting that they be kept advised about how I proposed to deal with the earlier letter. The 11 October 2007 letter concluded with the statement that "[s]hould His Honour be minded to take the plaintiff's letter and amended particulars into consideration when deciding the proceeding, the defendant would wish to be heard on the matter, particularly in regard to the lack of primary evidence supporting the particulars." It is undesirable for litigation to be conducted in this way and particularly undesirable for there to be any suggestion of an onus to be placed upon the judge, or the judge's associate, for any advance indication of any aspect of a reserved decision. If a matter arises after the conclusion of a hearing that is of sufficient importance it may be necessary for formal application to be made by one of the parties to resume the hearing before judgment.[57] It is not appropriate for the parties to seek advance or conditional indications from the judge, or the judge's associate, of a reserved decision, but for them to evaluate risks and to take such action, or make such application, as they may be advised to make. The 11 October 2007 letter prompted, again, perhaps predictably, a letter dated 15 October 2007 this time from the plaintiff's Brisbane solicitors, purporting to explain the "Amended Particulars" and concluding with a denial of any "alleged" "lack of primary evidence" "as asserted" "giving rise to any entitlement to the defendant to be heard further on the matter." In any event, it has not become necessary for me to decide either whether leave to file the substitute particulars should be given (notwithstanding that no leave was sought by counsel for BMD and that no explanation or reasons have been given in support of leave being granted), or whether VicUrban should be heard on the asserted lack of primary evidence (notwithstanding that no application to be heard was made), or whether it is appropriate for damages to be awarded under one or either of the bases sought under s 52.

149 The claim for unjust enrichment was pleaded by BMD but no separate submissions were made either orally or in writing. In Farah Constructions Pty Ltd v Say-dee Pty Ltd[58] it was said that unjust enrichment is not a definitive legal principle according to its own terms.[59] In Coshott v Lenin[60] Mason P said:[61]

A restitutionary cause of action cannot sit on top of an effective and continuing contractual arrangement where that would subvert or undermine the contractual allocation of risk. In and around contract restitution operates in a gap-filling role (see Update Constructions Pty Ltd v Rozelle Child Care Centre Pty Ltd (1990) 20 NSWLR 251 at 275; Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 545[75], 553[95], 577[166]). The statement of claim offers no clue to suggest a basis for regarding the parties' contractual arrangements as ineffective.

As in that case, BMD's claim must depend upon the contractual arrangements between them and statutes which govern their conduct, rather than a restitutionary claim which was not articulated in the submissions.

150 BMD seeks repayment of the sum of $672,000 which was deducted by VicUrban from progress payments due to BMD as liquidated damages. VicUrban contends that it is entitled to the amount by reason of BMD's alleged failure to provide adequate notices for extensions of time. I do not agree for the reasons which I have previously set out in relation to the extension of time claim. Clause 35.6 provides for the payment of liquidated damages for delay in reaching practical completion. Clause 35.6 provides:

If the Contractor fails to reach Practical Completion by the Date for Practical Completion, the Contractor shall be indebted to the Principal for Liquidated Damages at the rate stated in the annexure for every day or part thereof after the Date for Practical Completion to and including the Date for Practical Completion or the date that the contract is terminated under Clause 44, whichever occurs first.

If after the Contractor has paid or the Principal has deducted Liquidated Damages, the time for Practical Completion is extended, the Principal shall within 28 days of notifying the Contractor that the Date for Practical Completion has been extended, repay to the Contractor any Liquidated Damages paid or deducted in any respect of the period up to and including the new Date for Practical Completion less any costs reasonably incurred by the Principal in assessing and granting an extension to the time for Practical Completion.

The date for practical completion was extended to 23 July 2003 but BMD contends that it was entitled to extensions of time to complete the works. I have previously considered the evidence in respect of that entitlement and agree that it was entitled to an extension of time for 161 days. Accordingly, BMD is entitled to repayment of the sum of $672,000 which should not have been deducted.

151 It is unnecessary to consider the second basis upon which this claim was put by BMD, namely, that VicUrban was estopped from relying on the liquidated damages provision. I should, however, say that I would reject this basis of the claim for several reasons. First, because BMD has not made out sufficient representations to the effect that the liquidated damages provisions would not be relied upon. BMD relies upon a statement said to have been made by Mr Taber on 6 August 2002 recorded in a note as that the "contract will now be firmly placed in the bottom drawer and not waved around as it has been". Whatever this might mean, it cannot be taken literally. It is plain that the contract was intended to be performed if only to continue to effect the works. I cannot construe the remark attributed to Mr Taber as sufficient in the circumstances to constitute a representation to a reasonable person that the contract would be disregarded in the way contended in relation to the liquidated damages provisions. Secondly, there is no evidence of BMD relying upon a representation to the effect that the liquidated provisions would not be relied upon.

152 VicUrban's counterclaim is based upon the contention that BMD was contractually required to provide a five metre depth of Type A material across the site as a capping layer. The contract does not contain a provision in such terms, although it was understood from the outset that a capping layer of a thickness of at least five metres (and in some places six metres) was required. By letter dated 12 September 2001, BPD on behalf of VicUrban advised all tenderers to make preliminary assessments on the volume of Type A material being 744,500 cubic metres solid. On 7 January 2002 BMD wrote to BPD referring to a possible decrease in the quantity of Type A material and was informed in response on 9 January 2002, "[t]hat the design depth of Type A material cannot change". That response continued by noting that "therefore the Principal reserves the right to be able to call a halt to the placement of Type B material if forward material planning is indicating a possible shortfall of Type A material". The significance of the last observation is in part the evidence of a realisation that there might not be sufficient Type A material to achieve the desired quantities, and is in part the indication of what was then contemplated as the option or solution which the principal would elect: namely, calling a halt to the placement of Type B material. The BPD communication to BMD on 2 January 2002 accorded with the direct written observations from Mr Bollen of VicUrban to Mr Hawkins of BPD by fax dated 8 January 2002.

153 The desire to have a capping layer of Type A material of at least five metres depth was reflected in contract drawings 6330/3 and 6330/4. BMD's facsimile to BPD dated 10 January 2002 may be seen as implicitly accepting that the design depth of Type A material would not change. Mr Tuttiett gave evidence indicating that he understood that Item 12 in Appendix 4 of the contract provided for 564,000 cubic metres as the estimated volume in place of a five metre thickness "capping layer" of Type A structural fill. It may also readily be accepted for present purposes that the contract required BMD to manage a quantity of material from existing stockpiles of overburden and natural materials to be sorted and blended in accordance with the materials requirements for the projects, then placed, moisture conditioned and compacted in various fill areas around the site in accordance with the requirements for those fill areas. Clause 5.2.4 of the general conditions made BMD responsible for managing the winning, sorting, blending and stockpiling of materials as required, to ensure that the required volumes of all fill types necessary to complete the works were achieved. Appendix 4 of the contract identified the required quantity of Type A as 64,000 cubic metres. Clause 2.2 of the specifications to the contract made BMD responsible for ensuring that all operations and methods of construction, set out, materials and workmanship were safe, sufficient and in accordance with the contract documents.

154 These obligations were, however, subject to the contractual entitlement of the Superintendent to alter the finished surface levels shown on the plans. Clause 2.31 of the specifications provided that the Superintendent had reserved the right "to alter the finished surface levels shown on the plans contained in section 7 to ensure a balance between the quantity of existing overburden and proposed fill". This is consistent with the communications around 7 to 10 January 2002 to which I have already referred. That, in short, is what occurred.

155 On 18 July 2003 the Superintendent issued site instruction No. 122 to Mr Waterson confirming discussions of that day that the finished surface level for Type A areas was to conform with plans attached to that instruction. The site instruction reduced the overall thickness of the finished surface levels from a thickness of at least five metres throughout most of the site and was expressly given in reliance upon clause 40, which permitted the Superintendent to direct variations, including, by clause 40.1 c) which permitted the Superintendent to direct BMD to "change the levels, lines, positions or dimensions of any part of the work". The site instruction went on to note that it was issued as a consequence of the availability of materials and that works "associated with it [would] not be a variation."

156 VicUrban does not dispute that a site variation was made, but contends that it was made necessary because BMD had failed in its various obligations or warrantees bearing upon its duty to manage the resource so as to ensure that the minimum five metre layer of Type A fill would be available for the finished capping layer as evidenced in the drawing attached to the contract and the discussions at the commencement. However, I am unable to conclude in VicUrban's favour either that BMD failed in its duties or that any failure was the cause of the contractual variation effected by the Superintendent's site instruction numbered 122. The factual circumstance primarily occasioning the need for a redesign of the finished surface levels, and which I find relevantly to be its cause, was the shortfall of materials available to be placed. There may have been some material dealt with other than as VicUrban, or the Superintendent, might ultimately have wished, but the primary cause for the need to redesign the surface levels was that there was not sufficient material for placement. Essential to that circumstance was the compaction factor achieved on the site. It was important to the project that no additional fill material be brought onto the site from outside sources. Clause 5.2.2.1 in the general description of works in Appendix 8 to the contract provided that the importation of additional fill material from outside the site was not allowed without the prior written approval of the Superintendent and no additional fill was ever imported onto the site. The design of the works had assumed a compaction factor in the order of 0.925 or 7.5% whilst that actually achieved was in the order of 0.77 being a difference of some 23%; that is, that the effect of the compaction factor achieved meant that there was less material available when placed. Mr Hawkins accepted in cross-examination that the difference between the assumed compaction factor and the compaction factor achieved was "around" 23%.

157 By at least January 2003 there were discussions about the discrepancy between cut volumes and fill volumes as measured at that time. On 4 February 2003 Mr Finlayson of Golders wrote to Mr Hawkins about discussions which had been taking place on this topic, noting at the start of the letter, that the earthworks balance had been carried out on the assumption of a compaction factor of about 0.925 which, as explained, would mean that "there would be a 7.5% reduction in the volume of the existing stockpiles to the volume of the placed and compacted fill." That letter went on to discuss computed volumes indicating that the compacted fill was some 23% smaller in volume than the same amount of material occupied in the stockpile. Based upon the compaction factor of 0.77 then inferred, Mr Finlayson suggested that the proposed earthworks volume would encounter a deficiency in available fill material prior to the completion of fill placement. The letter went on to propose a number of measures which could be undertaken to assess the likely compaction factor and suggested a trial to get accurate results in relation to the Type B fill which, as was noted, was "the largest volume of fill required and [was] expected to have the greatest impact on the balance of cut and fill materials." The letter in its conclusion expressed the view that the compaction factor of 0.77 "to be unlikely", but that in the absence of any field measurements, Golders had no means of refuting or dismissing the figures produced by BPD.

158 By 2 April 2003 Mr Finlayson of Golders was able to recommend confidently that the required Type A finished surface level need no longer have been a minimum of five metres. The original assessment regarding the required thickness of Type A fill had been made in the design development stage before any full scale placement of structural fills and "as a consequence" a minimum Type A fill thickness of five metres was adopted. But by early April 2003, Golders and VicUrban, amongst others, had had the benefit of observing the placement of Type B fill over the preceding year and the production and placement of Type A fill over the preceding five months. Mr Finlayson's view at the time was that the Type B fill in terms of composition, grading, stability and placement was "generally of a higher quality than had been expected" and that as "a consequence" Golders had re-assessed the requirement for a Type A capping layer over the Type B fill and at that time considered the need for a bridging layer to be less critical. Mr Finlayson was able to conclude that the Type A fill should be the greater of either (a) at least three metres or (b) the required thickness to maintain at least two metres below the floor for a potential building platform. On 17 November 2003 the Superintendent wrote to VicUrban after reviewing the survey data provided by BMD and set out figures showing differences between quantities actually surveyed and the base inferred from the bulk earthworks plan before commencement of works. Mr Dempsey was taken in cross-examination to the figures relating to the compaction factor and, assuming the figures to be correct, accepted the conclusion that the 23% compaction factor would explain the cause of the shortfall of the material. The figures put to him are correct as is also the conclusion which he accepted would follow.

159 I also accept BMD's submission that the evidence discloses that there would have been sufficient material available to win the necessary quantity of Type A material for a five metre capping layer if the Superintendent had directed the lowering of the surface of the Type B fill had he preferred that option to achieve a cut fill balance based on the material available for placement. Mr Hawkins' evidence was that as at 6 January 2003 he had the option of giving a direction to lower the surface of the Type B layer (that is, to adjust the Type A/B interface level) if maintenance of the five metre Type A capping layer was paramount. His evidence in cross examination was that the options available to him as at 6 January 2003 were: to allow the finished surface level by decreasing the thickness of the Type A layer in a number of areas at the site; to excavate further into natural ground in order to obtain more material to process Type A material; or to lower the top of the Type B surface. He accepted the proposition that the option he adopted leading to the instruction given to BMD was given by him after lengthy discussions. 6 January 2003 was the date of an aerial survey. In cross examination Mr Hawkins said that when he became aware of the extent of the material shortfall, there was enough material in the stockpiles to enable him to have given a direction to BMD to process and stockpile 540,000 cubic metres of Type A material and, as a consequence, to lower the Type B levels.

160 It follows that I do not accept VicUrban to have made out its counterclaim.

161 BMD also claims the return of the one remaining bank guarantee which had been given under the contract. On 7 May 2002 BMD provided to the Superintendent four bank guarantees by way of security as required under clause 5.2 of the general conditions and Part A of the annexure to the contract. The Superintendent continues to hold one bank guarantee in the amount of $762,615.80.

162 On 7 February 2005 the Superintendent issued a final certificate which certified that BMD owed $27,990.20 to VicUrban which, in accordance with the terms of the contract, permitted the Superintendent to retain the bank guarantee. The amount said to be owing to VicUrban related to a failure to provide clearances from adjoining owners and an amount for the removal of rubbish from the western cliff top. In any event, it is plain from the foregoing reasons that there is no amount owing to VicUrban and, accordingly, the second bank guarantee should be returned to BMD.

163 I will hear the parties on the cost orders to be made in this judgment. Subject to orders as to costs I make the following orders that:

1. The defendant pay to the plaintiff the sum of $2,549,850.89 on the claims under the contract plus interest pursuant to statute.
2. The plaintiff is entitled to be repaid (to the extent not included in the previous order) the sum of $670,000 which had been deducted as liquidated damages.

1. The defendant deliver to the plaintiff the bank guarantee it continues to hold in the sum of $762,615.80.

1. The plaintiff's claim otherwise is dismissed.
2. The defendant's counterclaim is dismissed.

[1] (1995) 14 ACLR 165, 171.

[2] (1874) 43 LJCP 273, 280.

[3] [1968] 1 QB 124, 135.

[4] [1910] HCA 74; (1910) 11 CLR 723, 729 (Griffith CJ).

[5] Wormald Engineering Pty Ltd v Resources Conservations Co International (1988) 8 BCL 158, 161-2.

[6] [2000] HCA 65; (2000) 203 CLR 579, 589 (Gleeson CJ).

[7] [2004] HCA 35; (2004) 218 CLR 451, 461-2 (Gleeson CJ, Gummow , Hayne , Callinan and Heydon JJ).

[8] [2004] HCA 52; (2004) 219 CLR 165, 179 (Gleeson CJ, Gummow , Hayne , Callinan and Heydon JJ).

[9] [2001] HCA 70; (2001) 210 CLR 181, 198 (Gleeson CJ, Gummow and Hayne JJ).

[10] Thomson Lawbook Co, Building and Construction Contracts of Australia, vol 1, [4.280].

[11] See Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19; [1997] AC 749, 775 (Lord Hoffmann); and Australian Broadcasting Commission v Australasian Performing Rights Association [1973] HCA 36; (1973) 129 CLR 99, 109-110 (Gibbs J).

[12] See also Simpson v Henderson (1829) Mood & M 300, 301; 173 ER 1166, 1167-1168 (Lord Tenterden CJ); R v Worcestershire JJ (1839) 7 Dowl 789 at 790; 54 RR 902, 903 (Coleridge J); J B Saunders, Words and Phrases legally defined (3rd edition, 1989), 272; Boyes v Bluck [1853] EngR 540; (1853) 13 CB 652, 673; [1853] EngR 540; 138 ER 1355, 1364 (Cresswell J); Hudson v Hill (1874) 43 LJCP 273, 280 (Grove J); Brown v Bonnyrigg Magistrates [1936] SC 258, 262, 265 (Lord Carmont); Measures v McFadyen [1910] HCA 74; (1910) 11 CLR 723, 729 (Griffith CJ).

[13] (1995) 14 ACLR 165, 170.

[14] See Commonwealth of Australia v Verwayen (1990) 170 CLR 394, 412 (Mason CJ); see also Legione v Hately [1983] HCA 11; (1983) 152 CLR 406, 434-8 (Mason and Deane JJ); Canadian & Dominion Sugar Company Limited v Canadian National (West Indies) Steamship Ltd [1947] AC 46, 53-4; Discount & Finance Ltd v Gehrig's NSW Wines Ltd (1940) 40 SR (NSW) 598, 603.

[15] [2000] TASSC 51 (Unreported, 26 May 2000) [8].

[16] (1992) 39 NSWLR 468, 483.

[17] Library No 14077 of 1988 (Unreported, 11 November 1988).

[18] [2002] NSWSC 1037 (7 November 2002) [32]-[34], (2003) 19 BCL 225, 229-230.

[19] See Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111.

[20] See KBH Constructions Pty Ltd v PSD Development Corporation Pty Ltd (1990) 21 NSWLR 348, on the Court's jurisdiction to determine claims for extensions of time.

[22] See also Opat Decorating Service (Aust) Pty Ltd v Hansen Yunken (SA) Pty Ltd (1994) BCL 360, 363 (Bollen J); Australian Development Corporation Pty Ltd v While Construction (ACT) Pty Ltd (1996) 12 BCL 317, 339.

[23] [2004] HCA 35; (2004) 218 CLR 451, 461-2 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

[24] [2004] HCA 52; (2004) 219 CLR 165, 179 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

[25] Cf Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (1996) 12 BCL 317, 339.

[26] Cf Wiki v Atlantis Relocations (NSW) Pty Ltd [2004] NSWCA 174; (2004) 60 NSWLR 127; Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282 (Unreported, 20 October 2006) [132]-[144].

[27] Thomson Lawbook Co, Building and Construction Contracts of Australia, vol 2 (at Update 28) [14.435]; D Byrne QC "The Prolongation Costs Claim" (1988) 4 BCL 181.

[28] See Thiess Watkins White Construction Ltd v Commonwealth (1998) 14 BCL 61, 77-78.

[29] [1999] 1 Qd R 287; (1997) 14 BCL 329

[31] [2007] HCA 22; 236 ALR 209, 253 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ); [2007] HCA 22; (2007) 81 ALJR 1107, 1140

[32] [2002] QSC 047, (Unreported, 5 March 2002) [31].

[34] [1949] HCA 65; (1949) 80 CLR 533, 574 (Dixon J).

[35] [2005] NSWCA 340 (Unreported, Giles JA, 10 October 2005) [14]; see also at [120].

[36] (1998) ATPR 41-633.

[38] [1991] FCA 122; (1991) 28 FCR 451, 455 (Sheppard J). Although the mere statement that other evidence might have been adduced may not be sufficient: see Mealey v Mountains Development Group Pty Ltd [2003] NSWSC 830 (Unreported, 15 September 2003) [59].

[39] [2005] FCAFC 134; (2005) 147 FCR 51, 60-61 (Hill J).

[40] [2007] WASCA 70 (Unreported, Martin CJ, 29 March 2007) [116]-[117].

[41] [2004] HCA 60; (2004) 218 CLR 592, 625 (McHugh J). McHugh J was in dissent in the result but not in these observations.

[42] Cf Morrison-Knudsen International v Commonwealth (1972) 46 ALJR 265, 267 (Barwick CJ).

[43] (1998) 80 FCR 191, 207 (Heerey J).

[44] [2005] QCA 199 (Unreported, Keane JA, 10 June 2005) [82].

[45] (1990) ATPR 41-043, 51,590.

[46] [2005] QCA 199 (Unreported, Keane JA, 10 June 2005) [83].

[47] [1959] HCA 8; (1959) 101 CLR 298, 308 (Kitto J), 312 (Menzies J), 320-321 (Windeyer J). See also Cooks Construction v Brown [2004] NSWCA 105; (2004) 49 ACSR 62, 67 (Young CJ) and Seven Network v News Ltd [2007] FCA 1062 (Unreported, 27 July 2007) [465]-[473].

[48] [2006] NSWCA 198 (Unreported, Bryson J, 15 December 2005, 26 June 2006) [115]-[124].

[49] [1902] 2 Ch 456.

[51] [2005] NSWCA 72.

[52] See also Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434, 443-4 (McHugh J); JD Heydon, Cross on Evidence, (7th Australian Edition, 2004) [37110].

[53] See Brown v Southport Motors Pty Ltd (1982) 43 ALR 183, 186; Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413, 460 (Kirby and Callinan JJ).

[54] Butterworths, Civil Procedure, vol 1, (at Service 206) [I 49.01.125].

[55] See Dwyer v Commonwealth Bank of Australia (1995) 31 ATR 48, 57 (Sheller JA); Carr v Finance Corp of Australia Ltd (No 1) [1981] HCA 20; (1981) 147 CLR 246, 258 (Mason CJ).

[56] Kuek v Wellens [2000] VSC 326 (Unreported, 18 August 2000) [98].

[57] Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88; Re Australasian Meat Industry Employees' Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491, 493 (Toohey J); Butterworths, Halsbury's Laws of Australia (at 16 October 2007) 195 Evidence, '195 V (8) Re-opening a case' [195-8150].

[58] [2007] HCA 22; (2007) 236 ALR 209.

[59] Ibid, 444, Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ citing David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, 378-9.

[60] [2007] NSWCA 153 (Unreported, 20 June 2007).