Plaintiffs v Defendants

Supreme Court of Victoria|2011-09-07|Before: DIXON J

NEGLIGENCE - Duty of care - Economic loss - Landslip upon an inherently fragile escarpment owned by a third party contiguous with the plaintiffs' land - Failure of the remediation of that landslip by defendant - No physical damage to the plaintiffs' land - Whether there was economic loss - Expenditure by plaintiffs on engineered stabilisation of the escarpment - Whether risk of future damage to plaintiffs' land not insignificant -Whether expenditure to avoid prospective damage recoverable loss - Nature of the harm suffered - Factors relevant to determination of duty - Causation - Whether conduct of defendant a cause of claimed loss - Factors relevant to determination of cause - Whether prospective expenditure caused by conduct of defendant or naturally occurring conditions - Factors relevant to determination of breach - Whether defendant shown to have breached any duty owed - Whether defendant a concurrent wrongdoer - Whether Shire council caused the loss claimed by the plaintiffs - Wrongs Act 1958 (Vic) ss 24AH, , , , , , , .

EVIDENCE - Expert opinion - Failure to comply with concurrent evidence directions - Application of overarching obligations - Civil Procedure Act 2010 (Vic) ss 7, 9, 10 - Expert Code of Conduct - Supreme Court (General Civil Procedure) Rules 2005 r 44.06.

EVIDENCE - Expert opinion - Basis rule - Whether opinions expressed from specialised knowledge - Evidence Act 2008 (Vic) ss 76, 79.

WORDS AND PHRASES - 'harm' - 'insignificant risk' - Wrongs Act 1958 (Vic) ss 43, 48.

For the Third Defendant Mornington Peninsula Shire Council

1 Davey's Bay is a small, somewhat exclusive, dress circle location in Mount Eliza, within the Mornington Peninsula Shire. It is a prestigious, low density area of suburban Melbourne with large dwellings on substantial residential allotments. Many of the properties enjoy views of Port Phillip Bay and a smaller number have direct cliff top or foreshore reserve frontage.

2 This proceeding involves properties enjoying cliff top frontage above the Davey's Bay Yacht Club. These properties are the homes of the plaintiffs (whom I shall refer to as 'the Gunnersens') and the fourth defendant Mrs Henwood (who resides there with her husband and to whom I shall often refer to in this judgment as 'the Henwoods'). From their cliff top vantage, they each enjoy a panorama over the picturesque Davey's Bay, across the broad expanse of Port Phillip Bay with distant views of the city skyline, the coastline of the bay, and the Dandenongs. The panorama is predominately to the northeast, an outlook which enjoys minimum exposure to the prevailing direction of wind and rain.

3 The escarpment at Davey's Bay is a fragile environment, prone to landslips. It requires careful land management. Its fragile nature is understood by residents, landowners, local councils and government departments. The wider region of the Mornington Peninsula coastline of Port Phillip Bay has a long, well-documented history of landslips. There have been many expert studies and reports. This proceeding has come about to resolve disputes, essentially between neighbours with some common interest in preserving this fragile environment, arising out of circumstances following a landslip.

4 The court had the benefit of a view,[1] numerous survey and engineering drawings, and photographs. Along the northeast facing cliff top above Davey's Bay, from Davey Point looking southeast, are properties with access from Denistoun Avenue and further to the east, properties accessible from Elm Court. The Gunnersens purchased 6 Denistoun Avenue, Mount Eliza in November 1993 as their family home. It is an older residence, a lightweight timber structure on stumps, located, at the closest point, only a couple of metres behind the edge of the escarpment. On their title is about one third of the escarpment below, a triangular shaped area to the toe. To the northwest, the escarpment is Crown land and to the southeast, it is owned by the Davey's Bay Yacht Club. Crown land is managed either by the Victorian Department of Sustainability and Environment or by Mornington Peninsula Shire Council ('Mornington Shire') as the committee of management for the Mount Eliza foreshore under s 14 of the Crown Land (Reserves) Act 1978.

5 To the southeast, their original neighbour, Nigel Peck owned a large allotment of about 1.1 ha at 7 Denistoun Avenue, on which stood a stately old weatherboard residence. In the late 1990s, 7 Denistoun Avenue was subdivided. Three lots were created by the subdivision: two were prime building allotments on the cliff top, while the third consisted substantially of the face of the escarpment. The Henwoods purchased the lot next to the Gunnersens' property, which is now known as 7 Denistoun Avenue. The other lot was also sold for residential development. The balance of mostly unusable land comprising the escarpment below the Henwoods' land, was gifted to the Yacht Club.

6 During 1999 and 2000, the Henwoods constructed a residence at 7 Denistoun Avenue. In 2001, they moved into their home, becoming neighbours of the Gunnersens. Constructed on geotechnical advice, the footings and foundations of the Henwood residence are bored piers founded at differing depths within 12 metres of the escarpment and a stiffened raft slab beyond 12 metres from the escarpment. The residence is set further back from the edge of the escarpment than the Gunnersen residence. The title boundary of the Henwoods' land extends only a short distance down the face of the escarpment.

7 Immediately below, between the toe of the escarpment and the bay, is the Yacht Club. The Yacht Club complex is located partly on land which it owns and partly on Crown land. To the rear (southwest) of the grassed apron, at the base of the escarpment, is a long row of lockers used by club members to store sailing equipment. The lockers are partitioned from each other with separate doors in a long narrow building about two metres high, which stands on a wooden sub-frame resting on standard concrete stumps. The escarpment rises about 15 metres, as a steep vegetated slope, immediately behind the lockers. Above the escarpment at this point is the Henwood property. On the grassed apron at the toe, commencing near the lockers behind the main club building, there was a constructed access path climbing north westerly to the top of the escarpment. The course of the path was immediately below the Gunnersens' property and it rose to the top of the escarpment on Crown land.

8 In September 2004, two landslips occurred within days of each other. Referred to collectively as slip 1, these landslips destroyed the lower section of this path. Slip 1 occurred on Crown land above boat sheds belonging to the Yacht Club (also located on Crown land) and below the north-east corner of the Gunnersen land. The dispute does not now concern this slip. It was central to the settled claims made earlier in the proceeding against the State of Victoria and Mornington Shire.

9 In February 2005, another landslip, referred to as slip 2, occurred entirely on land owned by the Yacht Club immediately below the northeast corner of the Henwood land near its common boundary with the Gunnersen land. The slips were unrelated. Slip 2 caused damage to Yacht Club land and property, including partial demolition of the storage lockers, and gave rise to a need to remediate the surface of the escarpment. Together, these slips sharply focussed the attention of the Gunnersens on the risks to their property due to the fragile nature of the escarpment. The Gunnersens' concerns about the management of the fragile environment by neighbouring landowners had already been excited by events occurring over a number of years.

10 The following drawing illustrates in relation to the escarpment both the location of the slips and the alignment of title boundaries.

11 Following slip 2, although there had recently been precedent heavy rainfall at Davey's Bay, suspicion was immediately cast on a broken section of irrigation pipe immediately above slip 2 that was connected to the Henwoods' water supply. The Henwoods moved promptly to remediate the slope, engaging geotechnical engineers, who designed and supervised works, agreed with the Yacht Club, to restore the slope to the condition it was in before slip 2. The Yacht Club accepted these works as appropriate.

12 The Gunnersens, too, engaged consultants, a solicitor with past experience in like claims in the area and a geotechnical engineer Mr Warren Peck. Although issue was not contemporaneously taken with the remediation of slip 2, much attention was focussed generally on the stability of the escarpment, on how slip 1 might be remediated and whether engineered remediation works might improve the stability of the escarpment above the Yacht Club beyond the metastable state in which it existed. In the period from 2005 to 2009, a complex investigation of cause and consequence was conducted.

13 There were negotiations for a collective solution, in a context of litigation for this proceeding was commenced in late 2006. As I will shortly note, some agreement was reached between parties. In these investigations and negotiations, the positions and objectives of the parties naturally differed. The projected costs and expenses were substantial.

14 In 2008, further slip activity occurred at the site of slip 2. This movement was confined to the escarpment on land owned by the Yacht Club. It was influential in how the geotechnical experts saw the risks of future movement on the escarpment and opinions were divided. Various proposals for engineered stability works could not be implemented by agreement. Acting on advice, the Gunnersens obtained a declaration from VCAT that a particular engineering solution, recommended to them by Mr Peck and to be carried out on Yacht Club land, was essential to alleviate soil erosion and could proceed without Mornington Shire approval.

15 In 2009, the Gunnersens carried out engineering works installing 137 soil nails into the face of the escarpment at the site of slip 2, costing, with associated work, $866,544. The work is intended by its designers to improve the safety of the escarpment against slips.

16 At this early stage it is useful to explain how agreement about slip 1 has affected the structure of the proceeding and the issues which remain to be resolved by the court. The proceeding, when commenced in December 2006, named the State of Victoria, Frankston City Council, Mornington Shire and Denise Margaret Henwood as defendants. The Frankston City Council was the first defendant to exit the proceeding with a Deed of Release in October 2009.

17 The State of Victoria is also no longer a party. In late 2010, the Gunnersens resolved their claims with each of the State of Victoria and Mornington Shire. These settlements did not release Mornington Shire from the proceeding because a proportionate liability defence was taken by the Henwoods alleging that Mornington Shire was a concurrent wrongdoer.

18 The Gunnersens now seek no relief from Mornington Shire, having settled on confidential terms, which were in evidence. Such terms included an indemnity by the Gunnersens in relation to any liability or damages that may be apportioned against the Shire, including any liability to pay contribution and a covenant by, and indemnity from, the Gunnersens not to make any further claim or demand, institute any new proceeding, or reinstate any allegation made against the Shire in the pleadings. Mornington Shire has not participated in the proceeding since late 2010.

19 Broadly speaking, the Gunnersens claim the Henwoods breached agreements between them and, further, breached a duty of care owed by them to the Gunnersens. A further cause of action, based upon an alleged easement of support for the Gunnersens' land, was withdrawn at trial. Breach of legal obligations was alleged to have caused instability in the escarpment with consequent harm, or risk of harm, to the Gunnersens' property. This harm, or risk, is alleged to have caused the Gunnersens to incur expense.

20 The Gunnersens allege that 'by reason of the existence of slip 2', their land has declined in value. They also allege they have incurred expense in investigating the stability of the escarpment and the security of their property, in developing and constructing a remedial solution involving reinforcement of the escarpment by soil nails, and in investigating alternative solutions. They further contend these expenses are compensable damages caused by the conduct of the Henwoods in breach of their legal obligations. By the time this proceeding came on for trial, the Gunnersens had expended substantial sums totalling $1,026,170. The claim is broken down as follows:

(a) $866,554 was expended on the engineering, design, supervision ($110,482) and construction ($756,072) of a reinforced engineered remediation of part of the escarpment on land below the Gunnersens' land, owned by the Yacht Club;

(b) $32,398 was expended on investigations, including the services of an expert geotechnical consultant, and for survey work, including monitoring the plaintiffs land, between 2004 and 2008 for movement;

(d) $78,003 was spent on alternative remediation solutions: dual crib block retaining walls and, later, a secant bored pile wall, each of which was not proceeded with.

The quantum of these sums for the heads of damage described is agreed. The principal issue, globally, was whether the Gunnersens were entitled to recover this expenditure in negligence from the fourth defendant, Mrs Henwood.

21 The Henwoods, by their defence, apart from contesting factual allegations, contend that the remediation works were unnecessary or were excessive and resulted in a substantial benefit to the Gunnersens. Any risk of erosion and slippage upon the escarpment was the consequence of natural geological and environmental conditions. Defences of contributory negligence and voluntary assumption of risk were abandoned in final submissions. Further, the Gunnersens' claims are contended to be apportionable claims.[2] Mornington Shire was an alleged concurrent wrongdoer. The Henwoods contend that their liability is limited to the proportion of the loss or damage claimed by the Gunnersens that the Court considers just, having regard to the extent of the responsibility of the Henwoods for that loss or damage.

22 The Davey's Bay Yacht Club Inc is not alleged to be a concurrent wrongdoer and has never been a party to the proceeding. No explanation for its absence from the proceeding was proffered.

23 The remaining parties have proceeded to trial on the basis of an amended statement of claim, from which allegations against Mornington Shire were struck out, and an amended defence, in which allegations against Mornington Shire were reinstated. The plaintiffs have not filed a reply to that amended defence. Rather, the parties have, by agreement, proceeded on a statement of issues remaining between them for determination in the proceeding. The parties were content to conduct the trial on the basis of the agreed statement of issues and I will determine the proceeding on the evidence adduced rather than the pleadings.

24 It needs to be recorded at the outset that neither the pleadings nor the issues statement provide effective guidance as to the nature of the claims being made in negligence. The defendants took no issue with that state of affairs prior to or during the trial. I merely note that, in some respects at least, the lack of clear definition of an issue for determination obfuscated the extent and nature of the evidence led and the submissions made. There are legal issues, both complex and novel, arising out of this dispute, which may have been assisted by more careful pleading, including the scope and extent of the duty of care, the nature of the loss claimed and causation.

25 What is alleged is that the Henwoods, negligently and in breach of duty to the Gunnersens, took insufficient or no steps to prevent, detect or repair a leaking irrigation pipe. The escarpment also became weakened and more prone to collapse, on the one hand, by negligent failure to prevent or promptly rectify the leaking irrigation pipe and, on the other hand, by reason of actions in breach of permits and agreements in relation to the building of the Henwood residence. One such issue which arose out of disputes concerning the Peck subdivision of 7 Denistoun Avenue and the subsequent construction of the Henwood residence, concerns revegetation of the upper section of the escarpment, including both the sloping land below the cliff edge and the flat land behind it back to where the residence stood. This conduct caused slip 2 and, as a result, the Gunnersen land has developed cracks, has moved, and has otherwise shown signs of instability 'indicating the possibility of a further cliff face collapse involving or affecting the Gunnersen land'. The consequence of slip 2 and the possibility of further slips is that the Gunnersen land has declined in value, required installation of a dewatering bore, and until the Gunnersens carried out remediation works in 2009, 'weakened and put at risk the easement of support over the Henwood land in favour of the Gunnersen land'.

26 The key issues for resolution in the proceeding are, in summary:

• What is the nature of the harm claimed as damages by the Gunnersens and can such damages be recovered in negligence?

• Did the Henwoods owe a duty to the Gunnersens to take care not to inflict upon them loss of the kind claimed?

Did any wrongful conduct on the part of the Henwoods cause the loss and damage claimed by the Gunnersens?

• Was any duty owed by the Henwoods to the Gunnersens breached by the Henwoods?

27 The proportionate liability defence raises further issues:

Does Mornington Shire owe a duty to the plaintiffs as owners of land likely to be affected by the weakening of the escarpment by any awakening of the dormant slip behind the Yacht Club or by the onset of any further slips?
Did Mornington Shire breach any duty of care to the plaintiffs when granting the necessary permits for the subdivision and subsequent development of the Henwood property?
Did Mornington Shire cause the harm claimed as damages by the Gunnersens?
Was Mornington Shire a concurrent wrongdoer in relation to the claimed loss and damage?

28 I have determined that the Gunnersens' claims fail. I have also concluded that, had the Gunnersens succeeded, the proportionate liability defence would have failed.

29 I will now state my findings, observing that in addition to the sequence of events that led directly to the engineered remediation in 2009, for which damages are claimed, the issues raised require consideration of risk inherent in the fragile natural environment and, also, of Mornington Shire's involvement going back about 10 years, not just as an occupier of land but also as the local council.

30 The Gunnersens and the Henwoods do not appear to enjoy good relations as neighbours. So much might be thought to be obvious from their position as adversaries in litigation in this Court, but in addition, there is a history of incidents occurring on and in respect of their lands relating to building approvals and development, vegetation, objections to council, applications to VCAT, and of agreements between them to resolve particular issues, with allegations of breach of such agreements. Evidence was led about many of these matters. Some of this evidence formed background matters, irrelevant to the issues in dispute in the proceeding, but part of the history involves Mornington Shire in its role as the local council and whether its conduct in that role caused the loss and damage asserted.

31 The Gunnersens contended that the escarpment on the Yacht Club land was weakened and became more prone to collapse by reason of four matters. They were:

the wrongful actions of the Henwoods in constructing their home and associated works in breach of, and otherwise than in accordance with, the terms of planning permit P981681, the s 173 agreement, the March 2000 agreement and the 2001 agreement;
the wrongful devegetation of the Henwood land contrary to the conditions attaching to the said planning permit and the said agreements;
the wrongful installation of the reticulation system watering the land on the cliff top and/or the cliff face adjacent to the Henwood land;
the negligent failure of the Henwoods to prevent or promptly rectify the leaking of the reticulation system into the cliff face.

The Henwoods allege Mornington Shire failed to take proper steps, when discharging its functions as a public authority, to address stability issues arising from the reports in relation to the Henwood land, particularly in granting the building permit and in relation to vegetation issues. The failures of Mornington Shire have, it is alleged, weakened the cliff face on the Yacht Club land and rendered it more prone to collapse. These allegations take the inquiry back in time from the occurrence of slip 2.

32 At a much earlier, unidentified, point in time, probably prior to the Henwoods' purchase, a flyer had been distributed by Mornington Shire providing information to residents about the care needed in, and the appropriate strategies for, management of the fragile environment on the escarpment. This document was seen by the Gunnersens but not by the Henwoods. Mr Henwood was, however, familiar with the risks, and the appropriate responses, in terms of prudent land use about the escarpment. He described the recommendations made by Mornington Shire in the flyer as commonsense, agreeing, in particular, that property owners ought avoid the uncontrolled discharge of water onto the slope of the escarpment.

33 Concerns existed, at the time of the application for planning approval for the subdivision of 7 Denistoun Avenue, about vegetation on the escarpment. For those ignorant of the fragile nature of the escarpment, the panorama improves with removal of vegetation. In the period from the initial application for approval for the subdivision through to the construction of the Henwood residence, there were justifiable concerns about protecting the existing vegetation. It was discovered that copper nails had been placed in a mature Cyprus pine, presumably to destroy it. A stand of Aspen trees died suddenly and without apparent cause. The Cyprus pine was saved by the Gunnersens' prompt action. That tree stands just behind the edge of the escarpment, virtually directly above slip 2. Its importance to the integrity of the immediate area of the escarpment is not in doubt.

34 From at least 1999, permit conditions affected (what would become) the Henwood land, requiring the consent of the responsible authority for vegetation removal. While an application for planning permission for subdivision of 7 Denistoun Avenue was before the Mornington Shire, a further application was made for permission to demolish the existing property and clear vegetation. The permit issued required that native vegetation, other than on the land for construction of the development, must not be felled, lopped, topped, ringbarked or otherwise destroyed or removed except with the consent of the responsible authority.

35 In 2000, an obligation arose out of agreements, negotiated at the time the Henwood residence was being constructed, to revegetate both the area behind and over the edge of the escarpment, where inappropriate vegetation and noxious weeds had been removed. These areas were to be revegetated according to an agreed plan using appropriately selected and specified plants. The design was tailored to maximise the surface stability on the escarpment using appropriate vegetation. The need to exercise extreme care with water upon the escarpment was well recognised. However, the design provided that the vegetation should be carefully watered in with an appropriate irrigation system.

36 Planning Permit P981681 was issued by Mornington Shire on 22 December 1999. At that time, construction of the Henwood residence was already underway. The Gunnersens objected to the issued permit and applied for review to VCAT. The VCAT application was resolved by an agreement on 4 March 2000. The parties to this agreement were the Gunnersens, Denistoun 7 Pty Ltd, the registered proprietor of the land at 7 Denistoun Avenue being subdivided, and the Henwoods as purchasers by an uncompleted contract of sale for Lot 1 on that plan of subdivision. An amended permit was issued on 4 April 2000, following the resolution of the VCAT hearing in late March 2000.

37 A requirement of the amended permit, following on from the March 2000 agreement, was that particular restrictions on subdivision and development be recorded in an agreement pursuant to s 173 of the Planning and Environment Act 1987. Relevantly, the permit and the s 173 agreement were to provide that:

(a) Development on the cliff face or on any part of the land seawards of [the line of a stone fence] be prohibited except in accordance with development plans approved by the responsible authority.

(b) Prior to any building or works being constructed or undertaken cliff stabilisation measures must be effected to the satisfaction of the responsible authority in accordance with the said development plans.

(c) All development plans required for the purpose of the agreement must be prepared by a duly qualified geotechnical engineer (as to engineering matters) and a duly qualified arborist (as to vegetation matters) and submitted for approval to the responsible authority and the responsible authority must consult with any affected neighbouring owners prior to approving any such plans.

(d) The prohibition on the removal, destruction, felling, lopping, topping, ringbarking, poisoning or nailing of any vegetation on the land seawards of the line of the said stone fence without the consent of the responsible authority which consent must not be given without the responsible authority first consulting the owners and occupiers of adjoining lands and any requests for such consent must be accompanied by an arborist's report.

(e) Further management of the cliff face be in accordance with management plans approved by and to the satisfaction of the responsible authority.

(f) All disturbed surfaces on the land resulting from any development must be revegetated and stabilised to the satisfaction of the responsible authority.

The s 173 agreement between Mornington Shire and Denistoun 7 Pty Ltd was duly registered at the Office of Titles.

38 Earlier, in January 2000, Jeremy Tuxen, a gardening contractor employed by the Henwoods on the recommendation of the Gunnersens, provided a quote to Mr Henwood for landscaping works, to improve what the quote described as the badly eroded face of the escarpment below the Cyprus pine. The quote covered an area measuring approximately 14 metres wide by 7 metres in gradient. Mr Tuxen recommended, by the quote, construction of a retaining wall with sleepers, star pickets and wire mesh, and a drip irrigation system to re-establish vegetation. He also recommended six-monthly inspections to monitor the health of the vegetation, levels of erosion, and vermin activity.

39 By September 2000, this proposal, in a more refined form, was submitted to Mornington Shire for approval under the s 173 agreement. However, issues had by then arisen between the Gunnersens and the Henwoods concerning alleged breaches of permits. Some of these issues concerned vegetation and cliff integrity issues. Other issues involved work in contravention of the restrictions required by the s 173 agreement. The Gunnersens had concerns about unauthorised building works with potentially detrimental impact, and raised overlooking and privacy considerations. Solicitors were corresponding, and meetings were occurring between the Gunnersens and Mr Henwood and his consultants.

40 In February 2001, agreement to resolve differences was again reached between the Henwoods and the Gunnersens. Submitted to Mornington Shire at some earlier point was a drawing prepared in November 2000 by Murphy Design Group Landscape Architects - a landscape concept plan. Whether it ever met with the approval of Mornington Shire was not revealed in evidence. This drawing was adopted as the accepted proposal for the revegetation of the upper area of the escarpment below the Henwood land and became annexure 2 to the agreement of 17 February 2001. Clause 1.3 of the February 2001 agreement obliged the Henwoods:

1.3 To carry out or cause to be carried out prior to completion and occupation of the said dwelling house being constructed on Lot 1 landscaping works including the planting of trees and shrubs in accordance with the landscape plan comprising Annexure 2 and thereafter to maintain and keep maintained in good heart and condition all vegetation comprising such landscaping so that ...

41 The agreement secured due performance of the Henwoods' obligations including, as to revegetation, a $25,000 bank guarantee to be released upon conditions including certification by an independent landscape architect that the work had been satisfactorily completed.

42 It appears that the completion of the work was independently certified as satisfactory by one Allan Wyatt. In or about May 2002, the security deposit of $25,000 was returned to the Henwoods. There is a suggestion in the evidence that Mr Wyatt recommended further revegetation of the escarpment and that Mr Henwood intended to have that work done, having established with the Mornington Shire that the vegetation planting did not require a permit. As part of these revegetation works, the Henwoods caused an irrigation system to be installed but did so without approval from Mornington Shire, notwithstanding the terms of earlier agreements. Mr Henwood disingenuously suggested in evidence that the irrigation system was work which was too minor to warrant attracting the Shire's interest by seeking approval.

43 The irrigation system was a 19 millimetre diameter, high-density polyethylene pipe drip system. It was attached to the mains by a timer, which turned the water on every second day for approximately 10 minutes at a time. The irrigation system wound in and out of the vegetation on the escarpment and was mostly buried under mulch. The tap was at the front of the house near the mains connection. The irrigation system, which was zoned, was controlled from a control box in the house. The section of the irrigation system delivering water to the escarpment area was designated as a separate zone. During 2003, Mr Henwood instructed that the escarpment zone be turned off. However, plants began to die and the system was reconnected. There was no evidence that it was thereafter turned off again. Despite the debate about the significance of vegetation for stability, and the nature of the allegations made against the Henwoods in the respect, there was insufficient evidence for any finding of any deficiency in, or complaint of deficiency about, the vegetation of the escarpment in 2003-2004 after Mr Henwood reactivated the irrigation system in 2003. As I have noted there was a contractual obligation to maintain the vegetation and keep it in good heart and condition but there is neither allegation, nor evidence, of breach in this respect.

44 What happened concerning the operation and maintenance of this irrigation piping following installation is unclear. Mr Henwood had no recollection about this matter at all. The irrigation system on the escarpment was not readily visible from the Henwood property and once the vegetation had been replanted on the escarpment nobody walked on the escarpment, partially because it was very steep, but also to avoid destabilising the slope surface.

45 Mr Henwood believed, because it was his usual practice, that he inspected the irrigation system before paying Jeremy Tuxen, who did not give evidence. Mr Henwood did not thereafter inspect or attempt to inspect the irrigation system saying, indifferently, it was a matter left to Mr Tuxen. There was no evidence that Mr Tuxen had been informed or was aware of this responsibility, was directed to act in any particular way, or that he had ever inspected or maintained the irrigation system.

46 I find that neither Mr Henwood nor Mrs Henwood knew anything about the operation of the irrigation system. Despite the recommendation of Mr Tuxen in January 2000, that future management of the cliff face include six-monthly inspections, I find there was no form of management, inspection or maintenance of the irrigation system at all. Although the Henwoods understood the need to exercise particular care about water on the escarpment, and knew that such care was vital to manage the risk of slope instability and had received advice to that effect, they did nothing to monitor, maintain or manage the risk of inappropriate or unintended discharge of water onto the escarpment from the irrigation system. There was plainly a want of care for the proper management of the risk of slope instability upon and affecting the escarpment. Clause 1.3 of the February 2001 agreement did not, in terms, create an obligation to maintain the irrigation system as opposed to the vegetation.

47 In 2005, the Commodore of the Davey's Bay Yacht Club was Mr William Ferme, a retired engineer. On the evening of 29 January 2005, Mr Ferme was at the Davey's Bay Yacht Club with his wife. They had stayed behind on the premises to clean up after a social function. At about 11.30 pm Mrs Ferme drew Mr Ferme's attention to the sound of a sustained water flow on the cliff face above the lockers at the rear of the Yacht Club. Mr Ferme described distinctly hearing the sound of rushing water in a sustained flow for about four to five minutes before it abruptly stopped.

48 Mr Ferme had a particular interest in investigating this noise - he was aware of slope instability in the escarpment behind the Yacht Club. In September 2004, just days apart, two landslips (slip 1) had occurred following significant rain to the northwest of the Yacht Club, destroying the access walking path to the Club from that direction.

49 About a week later Mr Ferme and two members of the Yacht Club committee attempted to climb up the escarpment to investigate what Mr Ferme had heard. They observed the surface soils on the escarpment to be quite sodden. However, the difficulty of the scramble over saturated steep terrain resulted in an inconclusive investigation.

50 The beginning of February 2005 was marked by a period of heavy precedent rainfall. In the 24 hours before 9:00 am on 3 February 2005, heavy rainfall was indicated by the Bureau of Meteorology at Moorooduc (105mm) and Mornington (96mm). Ongoing, lighter rainfall followed that downpour for several days. In that month, Victoria experienced its wettest February since 1973 and the seventh wettest February over the preceding 106 years. Records from the Bureau of Meteorology identified an unusually intense low pressure system as the cause of this rainfall. The system brought abnormally low temperatures and severe storms with gale and storm force winds to most parts of Victoria. The centre of the low developed and deepened over Melbourne with very little movement and the continuous rainfall for about 30 hours was noted by the Bureau of Meteorology as the most significant feature produced by the low pressure system. Statistical evidence comparing the intensity of monthly precipitation from the Moorooduc station confirmed that this storm was, extrapolating to Davey's Bay, an extreme rainfall event for the escarpment. I consider that saturation of the surface soils, broadly across the escarpment as observed by Mr Ferme, was a probable consequence of the 3 February 2005 storm.

51 On 18 February 2005, Mr Ferme went to the club and found that there had been a slip on the escarpment above the eastern end of the lockers. The soil and debris, which had slid down the slope, dislodged the six easternmost lockers approximately one metre from their foundations.

52 Many of the significant issues between the parties turned on expert geotechnical opinion. The Gunnersens and the Henwoods each employed consultant geotechnical engineers who provided advice to each of them throughout the course of events. Such advice concerned investigations of conditions or appropriate responses to developments, such as remediation proposals or perceived risks to the stability of the escarpment. Most of these experts were involved in multiple roles: investigating cause and designing and certifying remediation projects on the one hand and, on the other, reviewing and commenting upon such remediation projects. These experts were also negotiating with each other, or supervising such dealings, on behalf of their instructing parties for possible global remediation solutions. Other parties, no longer active in the proceeding, such as Mornington Shire, also retained experts who have considerable experience with both the prevailing conditions and the various proposals. One of these experts was called in the proceeding. In addition, the Henwoods instructed an expert to express an opinion independent of any active involvement in the dispute.

53 Each of the parties also called valuers, with whose evidence I shall later deal. The comments I am about to make concern the geotechnical expert evidence.

54 Of a large and under-used court book, prepared presumably at significant expense, perhaps as much as one third of it was comprised of documentary material generated by, or for, the geotechnical experts. The Court Book comprised much source material as well as significant duplication, the purpose of which, like much non-expert material, was never revealed. More than a third of the hearing time in Court was consumed by the geotechnical experts. The Court was treated to traditional cross-examination of specialist experts. Each of these matters unreasonably increased, in my view, not only the legal expenses of the parties involved in the dispute but also the resources, in terms of judicial time, needed to resolve the dispute.

55 With the introduction of the Civil Procedure Act 2010, relevant parts of which commenced operation on 1 January 2011, an overarching purpose to be achieved in the determination of proceedings by this Court has been articulated: to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute.

56 By s 10 of the Act, the overarching obligations, set forth in Part 2.3 (ss 16-27), apply to the parties, the legal practitioners and, with some exceptions, to expert witnesses in civil proceedings, in addition to, rather than in derogation of, existing duties applying to experts, for example, the Expert Code of Conduct. There are sanctions for contravening the overarching obligations set forth in Part 2.3 (ss 28-31) of the Act. The Court may make any order it considers appropriate in the interests of justice when satisfied on the balance of probabilities of a contravention of any overarching obligation. Application for such an order is ordinarily to be made in the court in which the proceeding was or is being heard, and prior to its finalisation.

57 To enjoy the benefit of experts giving evidence concurrently, and in aid of that process, courts direct that experts confer and prepare a joint report prior to trial. Concurrent expert evidence is now the preferred process for taking expert evidence in civil cases. Its advantages will ensure its continued use. Enhanced judicial control over privately retained experts is achieved. The experience of the courts, mostly reported through extra-judicial comment in journal articles, conferences and seminars,[3] is greater efficiency and expedition, achieved by refocussing emphasis to professional dialogue rather than cross-examination. The process allows the critical areas of disagreement between experts to be more efficiently identified and processed, both on the taking of evidence and in judicial decision making.

58 On 8 October 2010, I ordered that pursuant to r 44.06, the expert witnesses for the parties communicate with each other and confer in the absence of the parties' lawyers, and file a joint report setting out the matters on which they agreed, the matters on which they disagreed and the reasons for disagreement. There was a point to this order. At one level, the order was capable of meeting the objects specified in s 9(a), (c), (d), (f) and (g) of the Civil Procedure Act 2010. It matters not that when the order was made, the Act was yet to commence operation. At another level, the order implements prudent contemporary trial management processes developed in recent times in the superior courts and of the type Parliament has chosen to endorse by the Act.

59 I was informed in openings that no joint report was available, although the experts had met in conference. Further, notwithstanding that the trial date had been fixed well in advance, one of the experts would not be in Australia to give his evidence during the time allocated. These factors, together with the large volume of expert material in the Court Book, most of which was unsorted in terms of its relevance to the remaining issues at trial, led me to conclude that the concurrent evidence process could be problematical. I acceded to the expressed desire of counsel to take evidence in the traditional way. As a result, the consequences I have referred to above at [54] were unavoidable. I have no doubt that concurrent evidence, or 'hot-tubbing', could have saved two days of hearing time. The attendant savings in reduced written material before the Court and in the processes of decision-making are not easily estimated.

60 At trial, the participating experts in the joint conference revealed the want of a facilitator as the primary reason for non-compliance with the order. Of itself, this requirement seemed capable of being readily satisfied by agreement or by court direction and seems a lame excuse. That the experts in this matter had rather a long association with their instructing parties, not just in opining on specialist issues but also in partisan negotiation of competing interests about complex and expensive solutions to technical problems, seems the probable explanation. Either way, the resultant inefficiencies will be borne by the parties and competing users of the resources of the civil justice system.

61 At an appropriate point before the proceeding is finalised, this issue can be revisited.

62 Section 76 of the Evidence Act 2008, proscribes evidence of opinion as prima facie inadmissible. There is an exception in s 79 in relation to opinions based on specialised knowledge:

79 Exception - opinions based on specialised knowledge

(1) If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.

There are several aspects to the statutory exception. It is not disputed that the various experts who expressed opinions to the Court have 'specialised knowledge' or that such knowledge is based on their training, study or experience. Rather there is an issue that some aspects of the opinions expressed cannot be said to be wholly or substantially based on specialist knowledge, usually by reference to experience, rather than training or study. Issues in this context arise concerning the evidence of most of the experts in both the geotechnical and valuation fields.

63 Expressing an opinion about an issue that may influence the decision of a willing, but not anxious, purchaser may fall within the field of expertise of a land valuer. It is not admissible opinion evidence if it is not wholly or substantially based in specialist knowledge and is merely analysis of fact.[4] A transparent process of reasoning is ordinarily necessary to demonstrate the basis of the opinion. Without it, opinions so expressed are inadmissible expressions of personal views, speculation, common sense and the like. As such, opinions expressed are dressed up with 'a spurious appearance of authority, [subverting] the legitimate processes of fact finding',[5] when careful evaluation of the logical steps to such opinions, including the basis for them, is needed. Opinions which do not go beyond a bare ipse dixit (I say so), fall short of being 'intelligent, convincing and tested'.[6] There is an element of discretion in concluding that an opinion is substantially based on specialist knowledge.

64 However, a failure to demonstrate that an opinion expressed by a witness falls within the s 79 exception is a matter that goes to the admissibility of the evidence, not its weight. What is ordinarily required of an expert is reasoning demonstrating sufficient connection between the opinion expressed and relevant specialised knowledge. If such reasoning is absent, the evidence of the expert will not be admissible to found the proposition expressed by the opinion.[7]

65 I have applied these observations when making findings on the expert evidence led at trial.

66 From the expert evidence, I will make some general observations concerning the geology and geological history of the area. The area of the escarpment in issue ('the site') is a section of north-easterly facing cliff face approximately 15 metres in height, the slope of which is approximately 40 to 43 degrees from horizontal. The cliff is generally covered in vegetation. To the northwest of the area in question, some engineered support for the escarpment is provided by an existing pre-cast concrete crib wall constructed in or about 1983. It is below the upper intact section of the access path I have described. Beyond that, the escarpment forms Davey Point. Further around to the west of Davey Point is a small bay around to Pelican Point.

67 To the southeast, moving away from the area in question, is a private steel staircase descending from the top of the escarpment to the beach at Davey's Bay and an access track from private land accessed via Elm St to the beach. Beyond this track, on a section of the escarpment east of a small gated lane, there was a major landslip in 1995, known colloquially as the Hosking slip. The small lane runs up to Brookwood Drive and provides access down to and across the beach to the Yacht Club. To the east beyond that lane is Kackeraboite Creek.

68 The geology of the Mount Eliza coastal foreshore generally is variable and complex. The geology of the site consists of a mantle of Tertiary age sediments comprising Baxter Sandstone, made up of ferruginous sandstone, sand and sandy clay with occasional gravel. To the east of the site, exposed in the sides of the Kackeraboite Creek bed, is Devonian granite. The presence of the Manyung Fault in the area has revealed the presence of a downwarp or fault in the vicinity of the site. To the east are clays weathered from the Tertiary Basalt prior to the Manyung Fault.

69 The main elements in the ground stratigraphy in the area of the site, as described from the surface, are:

A thin layer (typically 0.05 - 1m thick) of aeolian or coluvial, siliceous and calcareous sands.
The Baxter Sandstone of the Tertiary Brighton Group occurs widely over the Mount Eliza area and forms a mantle over the site. The sandstone usually overlies Marina Cove Sands from which they are often difficult to distinguish. The Baxter Sandstone consists of moderately to poorly sorted sands with variable amounts of gravel and sand. The silt and clay portions can be relatively high as a result of the weathering of the feldspars. The Baxter Sandstone is often ferruginised. Acid leeching often extends down to include the upper part of the Balcombe Clay, removing the carbonate. The ironstone layers are variable in thickness and cementation (often thin).
The Marina Cove Sands consist of well-sorted, very fine sands overlying the Balcombe Clay and underlying the Baxter Sandstone. Marina Cove Sands are often friable, but occasionally cemented with limonite and/or clays.
Balcombe Clay can be either calcareous or non-calcareous, fossiliferous, highly plastic clay. The clay and silt content can be variable and the Balcombe Clay can be a silt. In the area of Davey's Bay, the Balcombe Clay is reported to be non-calcareous silts and clays, often containing fossils. The particle size gradings show that the Balcombe Clay in this area contains a high proportion of clay. Further, it appears that the Balcombe Clay has been warped, resulting in a reduction of shear strength in the direction of the dipping to the northwest, although the relevant part of the escarpment slopes to the northeast. Balcombe Clay is recognised as a failure surface for landslips in this coastal region.

70 The history of ground movement and slope instability was studied for the City of Frankston in the Frankston Coastline Management Study in November 1993. The study examined the area of coastline between Olivers Hill and Canadian Bay. The study collates records of ground movements in this region over the preceding 25 years. In March 1997, the lead geotechnical consultants for that report, Douglas Partners Pty Ltd, prepared a further report Davey's Bay Stability Study for the Department of Natural Resources and Mornington Shire.

71 From the reports, I conclude that Davey's Bay is situated in a geologically sensitive area of naturally occurring landslides, where inappropriate developments and the changing pattern of land use has, in places, reduced the overall cliff stability. The history of instability is well established. Many residential buildings have been constructed either wholly within or on the margins of active landslide zones. Severe ground movements have caused damage resulting in the demolition of some buildings along the coastline or have required remedial foundation treatments. The first geological account of slope instability in the region was in 1900 and the phenomenon has been increasingly investigated and reported on since then. The foreshore area east of the Yacht Club has been particularly noted as an area of active instability and ground movement.

72 These and other reports were either commissioned or received and considered by the Department of Natural Resources and Environment, and at local government level, including by Mornington Shire. That much is clear from what general correspondence was in evidence between those entities. However, evidence of the precise nature and extent of such consideration or consultation, and of conduct in response to the information in and recommendations made by the reports, was not led at trial. Save to the very limited extent evident throughout this judgment, and as more specifically considered below. I am unable to make findings about the conduct of Mornington Shire in response to the content of these reports.

73 The forms of slope failure that are recognised include:

falls - both rock falls and earth falls;
slides - which can be either rotational, that is with a concave curved rupture plane, or translational with a sub-planar rupture surface; and
flows - referring to earth and debris flows which develop from slides.

Three specific landslip hazards have been identified for the site.

74 Slip type A is a shallow translation debris flow within the upper silty sands. This type of landslip originates in the surficial, silty sands that form the facing of the escarpment. The sands are typically shallow with a depth generally less than one metre. It is considered that this type of landslip is triggered by times of high or sustained rainfall, such as storm events or possibly by saturation by manmade watering systems. The result is a brief increase in pore water pressure and saturation of the sands. Localised shallow arcuate or translational flow of the upper sand can occur, which is typically extremely rapid. Generally large slips of this kind are localised and contained to a maximum width of about 10 metres, with an accumulation verge that extends approximately three metres onto the flat ground in front of the toe of the cliff.

75 Slip type B is a deeper global failure within the Baxter Sandstone. This type of landslip consists of a global circular failure plane that is predominantly within the Baxter Sandstone stratum for this site. This type of failure is most likely caused by a long-term rise in groundwater levels. It is considered less likely than the earth and debris flow failure, and typically has a moderate speed. Such landslips can generally be contained to a maximum width of about 20 metres with an accumulation zone that extends approximately 10 metres into the area in front of the toe of the cliff.

76 Slip type C is a deep-seated global failure that penetrates to the Balcombe Clays. This type of landslip consists of a global, circular failure plane that penetrates to the Balcombe Clays. It typically occurs in cliff faces where the Balcombe Clays are exposed or at shallow depth. It is typically slow. At the site, Balcombe Clays are found at or below the toe of the cliff. John Piper, one of the geotechnical experts called, and whose evidence I accept, considered that there is a low risk of this type of landslip occurring, even though the computed Factor of Safety (FoS) predicted slope failure.[8] The low FoS was explained by the use of conservative, sheer strength properties which were adopted in the analysis, and the likelihood that the dip of the Balcombe Clay is not to the north. There was little evidence to show that such a slip had occurred in the past. Slip type C would be catastrophic in its impact both on the usability of the boat storage area and the path, and in its effect on the properties behind the escarpment. As will later become apparent, the low risk of a type C slip due to naturally occurring conditions is significant.

77 Slip 2 was, I find, a type A slip. It disturbed the surface soils of the escarpment over a width of four to five metres, commencing at about RL13m and it extended approximately 10 metres down the slope. The slip plane, roughly parallel to the surface, was at a depth of about one metre. The volume of material, comprising the soil and debris flow that damaged the Yacht club lockers, was approximately 50 cubic metres in volume. The head of the slip was approximately three metres below the lowest sleeper in the retaining wall, about eight metres below the edge of the escarpment and approximately 11 metres below the easternmost point of the common boundary between the Gunnersens and the Henwoods. The axis of the slip, when notionally extended up the slope, positioned it below the easternmost point of the common boundary. I am also satisfied that there was a tension crack at the head of the slip, of about two metres in length, approximately half of which ran horizontally away from the top corner of the slip to the north.

78 Studies by John Piper for the Davey's Bay Yacht Club identified that there were risks to both persons and property from the prospect of slip activity at the site. Only slip type A poses a risk to persons because of the speed of movement of the slip debris. Identified at risk of a slip type A are people in or about the Yacht Club lockers and sheds, people on the relatively flat platform at the base of the escarpment and within three metres of it, people who are on the access path from the top of the escarpment to the Yacht Club and people who are at the top of the cliff face (within two metres of the edge of the escarpment). The risk to property includes risk of damage or destruction of the lockers and sheds of the Yacht Club, and risk to boats stored within three metres of the cliff face. Properties such as pathways and staircases could also be damaged. A slip type C, a deep-seated failure, could affect the properties at the top of the escarpment including both the Gunnersen property and the Henwood property. As I have noted, the Douglas Partners Davey's Bay Stability Study, identified damage to buildings and building foundations consequent upon severe ground movements.

79 The experts agreed as to the factors which can destabilise a marginally stable slope and cause type A slips. They are:

(a) Introducing water to the slope. Saturation increases the weight of the slope, resulting in seepage forces and softening of the clays on the sheer plain. Slopes may be saturated by a variety of causes including:

(i) rainfall;

(ii) run-off from ground surface above the slope;

(iii) broken irrigation pipes;

(iv) broken stormwater pipes, drains and other water pipes;

(v) leaking underground water storage tanks and leaking swimming pools; and

(vi) irrigation systems.

(b) Groundwater exiting at or close to the edge of the slope. This can contribute to the effects of saturation. In addition, pore pressures are added to the other driving forces. The saturated ground has increased buoyancy, which can reduce frictional resistance to sliding along potential sliding planes submerged beneath rising groundwater levels.

(d) Removing vegetation from a slope. This has a dual impact by reducing the reinforcing effect of the root system and increasing the moisture content in the soil by reduced evapo-transpiration. The additional surcharge load from vegetation is insignificant compared to these beneficial impacts.

(e) Marginal stability and susceptibility to creep movement. The experts agreed that in its natural condition, the face of the escarpment was metastable. There was evidence in local features, such as stone walls and established trees, of slow creep movement generally, although the rate of natural regression of the escarpment in the long term had not been assessed.

80 Water is implicated in most investigated landslips. The evidence did not reveal a thorough examination of groundwater or the hydrological properties of the stratigraphy at the site. It is accepted that the impermeable layers in the stratigraphy permit both groundwater flow under pressure and perched water tables, although there are no aquifers capable of providing water for domestic or agricultural use. The experts who gave evidence in the proceeding agreed that, broadly, the 50 to 70 residential allotments, including the extensive grounds with sports ovals of Toorak College behind the coastline in the Mt Eliza area, provide a rain catchment. This catchment is in part comprised of paved areas and rooves, which drain into stormwater systems. However, sufficient areas of lawn and garden exist for rainwater to percolate into groundwater which, seeping from the higher ground at Toorak College, is under pressure at the site. Such observations are mainly relevant to seepage or perched water and do not inform any consideration of variation in the level of the permanent groundwater table, which does not alter in the short term with rainfall. The regional groundwater table is affected by long-term change in conditions such as drought.

81 It is believed that the permanent groundwater table is at a depth of approximately 15 metres below the top of the escarpment. Consistently with that belief, Mr Warren Peck gave evidence, which in this respect I accept, that he observed groundwater seepage from the base of the escarpment immediately behind the main Yacht Club buildings at about RL6m on several occasions between 1998 and 2006. He observed that the seep ceased flowing towards the end of 2006, a time of general drought conditions.

82 The formation of perched water tables (seepage water) within the slump soil deposits at the base of the escarpment, following prolonged or heavy rainfall periods, may be of greater significance. Typically the surface and subsurface drainage conditions at the base of the escarpment are relatively poor, allowing very little water to drain from the slump soil deposits. The saturating effect of a perched water table can cause a significant loss of sheer strength in the underlying Balcombe Clay and also in the slump clay deposits. The accumulation of surface run-off water and seepage water within tension cracks can result in significant hydrostatic pressures. In appropriate conditions, layers of relatively impermeable material higher up in the stratigraphy can facilitate the development of perched water tables up the escarpment, having similar effect.

83 There were investigations of slip 2. On discovering slip 2, Mr Ferme asked Mr Vaughan Carter, a building contractor periodically engaged by the Yacht Club, to investigate the landslip. Mr Carter climbed up the slope, adjacent to the disturbed soils of the slip. He described the displaced soil and vegetation. The terrain was very damp from the bottom of the escarpment right through the length of the slip to above it. At the top of the slip, Mr Carter observed a horizontal crack about 300 millimetres wide and about two metres long running from the top northern side of the slip in a northerly direction. Just above the slip he discovered a section of irrigation pipe.

84 Mr Carter saw that the irrigation pipe had separated at a join from another section of nearby irrigation pipe. The end of the upper section of the pipe, which he presumed was connected to the mains water supply, was open. Expecting that it may have been sealed, Mr Carter searched the ground looking for a ratchet clamp. He described the surface of the ground below the open pipe as showing scoring of the soil - obvious signs that a lot of water had been discharged from the irrigation pipe. Mr Carter observed that the slope surface above the irrigation pipe was not as damp as the ground below it.

85 About two weeks later on 2 March 2005, Mr Ferme, with whom Mr Carter had discussed his observations, climbed the slope to investigate the slip. He found the open end of the irrigation pipe and his observations of the ground around the top of the slip were consistent with Mr Carter's observations. I will not repeat them. Later, in March 2005, photographs, to which I have already referred, were taken of the pipe and the surrounding ground surface by Mr Mel Palancian, a geotechnical engineer employed by Mr Peck's firm AMC Consultants. Mr Palancian was the first geotechnical engineer on site after slip 2. These photographs also recorded the open end of the irrigation pipe and the ground conditions as observed by Messrs Ferme and Carter.

86 That evening, Mr Ferme spoke to Mrs Henwood by phone. They had not previously met. Upon being told what Mr Ferme had observed, Mrs Henwood stated that she would turn off the watering system and get her gardener to reconnect the two hoses. Mr Ferme requested Mrs Henwood confirm when this was completed.

87 Several days later, not having heard from Mrs Henwood, Mr Ferme again telephoned and on this occasion spoke to Mr Henwood. Mr Ferme told Mr Henwood that Mr Ferme considered the watering system had caused the subsidence because the pipe was immediately above the landslip. Mr Ferme then sought confirmation that Mrs Henwood had done as she had undertaken and Mr Henwood replied that she had.

88 This pipe was part of the irrigation system Mr Henwood had established some time in late 2002 in the circumstances I have already described. The failure of the irrigation system and the discharge of water onto the escarpment were matters that were never disputed by the Henwoods. For her part, Mrs Henwood knew that the irrigation system existed but she paid it no attention. It was operated by the gardener, Mr Tuxen. Mrs Henwood imagined the irrigation system operated at night because she had not seen it in action. She did not know what tap it was connected to and had no recollection of her response to Mr Ferme's phone call.

89 Mr Henwood, when told by his wife of the matter, switched off the hose and contacted Mr Tim Holt of AS James, geotechnical engineers, seeking advice as to how best to rehabilitate the area of the escarpment where the slip had occurred.

90 By their defence, the Henwoods admitted that the watering system had been leaking for a period of approximately three weeks. No basis emerged in the evidence for any finding limiting the period of discharge of water by the watering system to approximately three weeks prior to the slip.

91 I find that water was discharged from the Henwood property by the irrigation system at mains pressure through the broken pipe for 10 minutes every second evening for a period of more than three weeks. Although it is probable that the period of discharge was much longer than three weeks, the evidence does not permit a finding as to when the period of discharge commenced or the quantity of water which may have been discharged onto the slope as a result of the failure of the irrigation system. I am satisfied that it is probable that a regular discharge of water from the irrigation pipe was occurring before the major storm experienced by the escarpment on 3 February 2005.

92 I find, upon the preponderance of expert opinion to which I now turn, that the discharge of water from the irrigation system directly above slip 2 was a necessary condition for the slip to occur. It was not the only operative condition. It was the factor which was present at the slip and not operative elsewhere. All other factors were operative on other parts of the escarpment, both at the relevant time and at other times, and slope failure has not occurred elsewhere. I conclude, on the balance of probabilities, that slip 2 would not have happened but for the failure to exercise reasonable care in maintaining and operating the irrigation system. The discharge of water from the pipe caused the slip to occur. It was a factor which made a material contribution to the risk of the slip occurring.

93 I reject the suggestion that the cause of slip 2 was a perched water table seeping from the face of the escarpment near the head of the slip. The evidence that such a perched water table existed was unconvincing. Notwithstanding this, there were many instances in the expert material in evidence, of assumptions that a perched water table was the source of seepage onto the face of the escarpment at the head of slip 2. Opinions were then based, in part, on acceptance of the assumption as fact.

94 Marcus Kalkman, a licensed surveyor, has a long association with the site. In May 2005, he surveyed the escarpment in order to accurately position each of slips 1 and 2. His survey plan dated 4 May 2005, was in evidence. It records the presence, in relation to slip 2, of a water fissure line at approximately RL12.7m running horizontally for two metres in length at the head of slip 2, with slightly more than a metre of that line extending horizontally beyond the upper northern corner of slip 2. Naturally, this survey plan has been used extensively by other experts. Reproductions from it featured in many of the experts' reports. It appears to be the primary source of expert assumption on the point. In evidence, Mr Kalkman was unable to recall the detail of the moisture evident at this water fissure line and did not know the origin of the water.

95 Photographs taken by Melkon Palancian shortly after slip 2 happened, showed evidence of water seeping from freshly slumped soils. Mr Palancian did not form a view as to the possible origin of the seepage. His photos were taken with a zoom lens because access across the steep, saturated, freshly-slumped soil was either impossible or unsafe, preventing close investigation. Mr Palancian could not relate the seepage he photographed to the water fissure line on the plan of survey.

96 There was no other evidence about water seepage at or about that point and no evidence as to the source of the seepage. Other geotechnical experts concluded that there was a perched water table seeping onto the face of the escarpment at or about the head of slip 2, but their conclusions were based on the observations of either Kalkman or Palancian. I am not persuaded on the evidence that there probably was a perched water table seeping onto the face of the escarpment at or about the head of slip 2. There are alternative, more probable, explanations for the observations. I refer principally to the evidence of saturation of the whole face of the escarpment, with which I shall shortly deal. I consider Mr Peck's and Mr Ervin's opinions, that there was seepage from the face of the escarpment from a perched water table at or immediately above the head of slip 2 prior to its occurrence, to lack proper factual foundation.

97 Periods of prolonged or heavy rainfall at the site contribute to surface soil saturation on the escarpment. Survey evidence showed that the surface fall of the Henwood property was across the property in a north-westerly direction parallel to, rather than over, the edge of the escarpment. On the contour survey, a shallow gully from the top of the escarpment extending down towards the Yacht Club buildings, is evident. Mr Henwood gave evidence that his landscaping works behind the edge of the escarpment created a fall away from the edge of the escarpment and this shallow gully, and back towards stormwater drainage grates. There is no evidence to suggest any localised flow of rainwater over the edge of the escarpment and down this shallow gully during heavy or extended periods of rain. Surface saturation would likely be consequent upon direct rainfall.

98 Max Ervin, a principal of Golder Associates and a very experienced and highly respected geotechnical engineer who gave evidence for the Henwoods, rejected the notion that the irrigation system played a triggering causative role in slip 2. Both Mr Ervin and Mr Holt, a principal of AS James and also called for the Henwoods, sought to play down the causal contribution of the broken pipe. Mr Ervin speculated on the volume of water which might have been deposited on the escarpment by the 3 February storm compared to the volume of water which might have been deposited from the broken irrigation pipe. His assessment that the rainfall was about six times the flow from the pipe was not based on field testing or independent investigation - it depended upon acceptance of rather speculative assumptions. It is unhelpful and I reject it.

99 Further, Mr Ervin assumes that seepage, inferred from the water fissure line reported by the Kalkman survey of 5 May 2005 rather than from saturation of the surface layers above, was adding to the volume of water on the slope. In this respect, Mr Ervin joined Mr Peck in drawing conclusions about the source of water above the slip based on assumptions not established in evidence. Ultimately, this speculation about the relative quantities of water from alternate sources was directed to a rather pointless debate amongst the experts as to whether the water discharged from the broken irrigation pipe was the triggering cause of slip 2 or merely a contributing cause.

100 In addition to Mr Holt, another engineer from AS James Pty Ltd, Stephen Mayer, gave evidence of his specific investigation and report about slip 2. Mr Mayer inspected slip 2 on 24 March 2005. He concluded that the flow of water from the failed irrigation system was a direct cause of the slope failure. The escarpment was, he said, of marginal stability. A concentrated flow of water onto the face of the escarpment led to localised saturation of the soils resulting in a weakening of the soil profile. This softening reduced the ability of the soils to withstand the gravitational driving forces acting on the escarpment. Additionally, saturation of the soil mass generated hydrostatic pressure within the soil profile, which acted as a contributing driving force of the slope failure. Mr Mayer accepted that a prolonged or heavy rainfall event could have a significant effect on a perched water table but considered that any perched water table would not necessarily be localised to the area where the slip occurred. The earlier heavy rainfall considered on its own, absent the discharge from the irrigation pipe, did not cause any other landslides on the escarpment.

101 Mr Holt did not attend the site in 2005. The thrust of his evidence was that the alterations of the landscaping and vegetation made by the Henwoods, including the irrigation system, were of no consequence to any potential or future instability on the face of the escarpment. Mr Holt attributed the cause of slip 2 to the natural conditions prevailing at the site at the time.

102 When asked to comment upon Mr Holt's opinion, Mr Mayer acknowledged that there had been high rainfall and that it may have contributed to the slip. However, Mr Mayer emphasised that in March 2005, he had observed a water channel extending up to a ruptured irrigation pipe directly above the head of the failure. When asked to comment upon the water fissure line evident on the survey drawing, Mr Mayer responded that he always looks for evidence of water flowing out of the ground in such a situation because it is an obvious sign of what may have contributed to the problem. However, on 24 March 2005 he made no such observation.

103 Mr Ervin also expressed his opinion about the cause of slip 2 without having himself investigated the conditions contemporaneously. He said most landslips are due to more than one factor. The discharge from the irrigation pipe would have contributed to any saturation of the slope but must be considered as a contributing factor and not the precipitator (trigger) for the failure. The cause of the slope becoming sufficiently saturated for the failure was a combination of factors including rainfall, associated run-off and seepage, and the pipe discharge. Mr Ervin accepted that the discharge from the irrigation pipe was a material contributing factor to the saturation of the ground at slip 2.

104 Mr John Piper, another highly experienced and respected geotechnical engineer, also has considerable experience of the site, having been retained by Mornington Shire in relation to slip 1. He too had not investigated the conditions of slip 2 contemporaneously. Mr Piper was not prepared to conclude that rainfall was the sole contributor to the landslip, remarking that the rainfall would be similar over the entire escarpment yet other sections of the escarpment did not fail during that extreme weather event. He also considered that seepage from a perched water table may have contributed but this conclusion is clearly based upon the notation upon the survey plan and I afford it little weight for the reasons I have discussed.

105 Mr Piper concluded that the causes of slip 2 included the geological ground conditions, the steepness of the slope, the presence of pre-existing slope failure and ground creep, and recent heavy rainfall. These features and impacts occurred along other sections of the escarpment in front of the Henwoods' property and the Gunnersen property, yet slope failure occurred only below the leaking irrigation pipe. A broken or disconnected pipe will, Mr Piper said, concentrate the flow of water at a particular location, resulting in saturation or at least increased moisture content at this location relative to other locations on the escarpment. In Mr Piper's view the discharge of water at a concentrated location, when combined with the other factors, could precipitate a shallow translational slope failure similar to that which occurred. He agreed with Mr Mayer that the leaking irrigation pipe was likely to be the primary cause of the failure.

106 Mr Reid, of MPA Williams and called for the Gunnersens, was contemporaneously instructed by Mr Ferme of the Yacht Club to advise it about the repair of slip 2. For that purpose Mr Reid reviewed Mr Mayer's report and inspected the repaired slope on 30 May 2005. Mr Reid endorsed Mr Mayer's comments about the cause of the slip and the recommended slope repair method.

107 Finally, the principal expert for the Gunnersens, Mr Peck, in a rather partisan fashion, noted Mr Henwood's acceptance that slip 2 was caused by his watering system, prompting Mr Peck to conclude there was no current need to consider groundwater issues in respect of that slip. In a letter of advice to the solicitors for the Gunnersens in September 2006, Mr Peck, after expressing his opinion as to the cause of slip 1, stated, 'causation for the Henwood slip is even more straightforward, from some points of view. The Henwoods simply did all the obviously wrong things and the Mornington Shire let them do it'. In a later report, Mr Peck stated that in his opinion, rainfall alone cannot be blamed for the slip since the 3 February storm was not a unique event - other extreme rainfall events have not triggered landslips at the site. Under cross-examination, Mr Peck expanded on his opinion that factors other than the unusual rainfall events were necessary conditions for the slip. The slope ought to have failed in November 2004, if not earlier. Something must have changed between the rainfall in November 2004 and the occurrence of the slip. Mr Peck identified two other factors: removal of vegetation from the vicinity of the slip and the failure of the irrigation system. In respect of the latter factor, his view was supported by Messrs Mayer, Piper and Reid.

108 I accept Mr Mayer's opinion about the cause of slip 2. It is significant that he was the only experienced geotechnical expert who investigated the site contemporaneously. Moreover, his professional opinion, cogently expressed, was corroborated by Mr Piper who stands apart completely from the interests of the parties, and has also expressed his opinion objectively and mostly within the confines of the available evidence. Their conclusions are also endorsed by Mr Reid, on behalf of the Yacht Club, and ultimately by Mr Peck, for the Gunnersens.

109 None of the geotechnical experts attributed the construction works, which had taken place on the Henwood land, as a cause of slip 2. Primarily for that reason, issues between the parties about compliance with permits and agreements in relation to various aspects of the construction work and the role of Mornington Shire were not necessary conditions for the harm alleged by the Gunnersens. Subject to one matter requiring further consideration, I find that the Gunnersens have not made out the allegation that the escarpment on the Yacht Club land was weakened and became more prone to collapse because of the wrongful actions of the Henwoods in constructing their home in breach of, and otherwise than in accordance with, the terms of planning permit P981681, the s 173 agreement, the March 2000 agreement and the 2001 agreement. I also find that the like allegation of the Henwoods, directed at Mornington Shire, has not been made out. These matters did not make any contribution to slip 2's occurrence with one exception - that the associated works governed by those permits and agreements did extend to matters pertaining to revegetation and water control. I have dealt with the latter issue. What of the causative role in slope stability of vegetation?

110 During the trial, the role played by vegetation above and on the face of the escarpment was more contentious than the role played by water in relation to slope stability. The important role played by vegetation in protecting the surface of the escarpment was not in debate. Rather, the significance of vegetation in assessing risk of slope instability, particularly instability affecting the land behind the edge of the escarpment rather than on the face of the escarpment, received different emphasis. The debate seemed to be generated more by counsel than the experts themselves.

111 Geotechnical engineers model slope stability to calculate FoS. It is a tool of their science, used especially in slope design but not inapplicable in assessment of the state of a natural slope. There are, I understand, different calculation methods available but a proprietary software program is commonly used, which employs limit equilibrium theory. What, in essence, is modelled is the relationship between the strength or resistance of the existing soils constituting the stratigraphy of the escarpment (the stabilizing forces) to the gravitational forces operating upon those soils.

112 Ideally, laboratory testing of sampled material from carefully located investigative bores generates the parameters for the variables used in the calculation. Such data inputs may include, for example, compressive strength (drained or undrained), effective cohesion, angle of friction, consolidation, mass, moisture content and pore water pressure of the component layers of soil, and may identify the stratigraphy and groundwater conditions found or being modelled. These variables may be assessed for assumed failure modes, for example, shear failure at 30, or say 45, degrees to axis. Assumptions can be added, such as the projected radius of a slip, the assumed failure plane, or the presence and influence of groundwater variation. The modelling program enables many calculations projecting differing circumstances or expected outcomes. For example, external loads, soil reinforcement engineering or complex pore water conditions can be modelled and analysed.

113 Where the stabilizing forces within the slope equal the opposing gravitational forces, the model produces a FoS of 1. Where the stabilising/gravitational force analysis result is less than 1:1, the modelled design can be expected to fail or will, within the adopted parameters, explain slope failure. Conversely, where that result is greater than 1:1 a designed or actual slope is expected to be stable. The higher the FoS the greater the extent to which the stabilising forces exceed the gravitational forces on the assumed failure plane. A slope modelled at a FoS at or only slightly above 1 is described as metastable and failure is being indicated, particularly in the event of a deterioration in any of the conditions that contribute to the destabilising forces. An obvious example of a factor causing deterioration is water, whether through saturation of surface layers or the impact of rising groundwater on subsurface layers. Experienced geotechnical engineers can assess the likely range of the FoS of a slope without necessarily conducting investigations.

114 The presence or absence of vegetation upon a slope is not a relevant variable or assumption in computer modelling of the stability of a slope. Designed engineered slopes may not be vegetated, as vegetation cannot be reduced to a number for input into the program. Vegetation can impact upon the variables that are used, for example, moisture content and the reinforcing effect of root structures may increase the strength or cohesion of soil layers. The presence of appropriate vegetation may permit greater confidence in the stability of a slope modelled with an acceptable FoS. On the other hand, appropriate vegetation may explain why a slope, modelled as metastable, has not failed when natural conditions vary.

115 The precise conditions in 2005 at the site of slip 2 were not investigated for this purpose. Its FoS at that point was not modelled, although the remediation works in 2009 were modelled by Mr Reid. The consensus of the geotechnical engineers is that the slope was metastable prior to the slip. The slope's FoS would have been about 1.1 or 1.2 when modelling for the assumed failure planes of shallow type A slips.

116 I find that there were no issues about vegetation relevant to the cause of slip 2. Only Mr Peck identified devegetation of the Henwood land as a cause of slip 2. He did so on the assumption that evidence would be presented at trial to that effect. Mr Peck postulated that a cause of slip 2 was a change in the vegetation conditions between September 2004, when slip 1 happened, and February 2005. There was no evidence of any change in the state of vegetation on the relevant part of the escarpment either at this specific time or over an earlier extended time frame, such as the 2004 calendar year.

117 I find that the allegation that wrongful devegetation of the Henwood land, contrary to the conditions attaching to permit and agreements, has not been made out and cannot have played any causative role in the occurrence of slip 2.[9] I also reject the notion that the fact of installation of the irrigation system, of itself, was a necessary condition for the occurrence of slip 2. What was necessary was the discharge of water from the broken irrigation pipe, not the existence of articulated water systems. It was not suggested that the discharge of water from the irrigation system, when properly maintained and operating correctly on the basis described, could have been a necessary condition for the occurrence of slip 2.

118 The Henwoods were negligent in permitting that discharge to occur. They never contended otherwise. Their knowledge of the risks to the escarpment from the irrigation system and their lack of attention to and interest in the irrigation system to avoid or minimise such risk have been discussed. The question of what harm, if any, was caused to the Gunnersens by that negligence is more complex.

119 I can only draw very limited conclusions, as at, say 1 March 2005. In theory, slip 2 had then compromised the FoS of the escarpment below the Gunnersen land. Slip 2 did not cause actual damage to the Gunnersen property. The FoS was not modelled at this time. Neither the assumptions to be adopted nor the material properties or other inputs into the calculation of FoS are identified. My inability to find the extent of compromise of the FoS so arises in part from the prompt remediation of the failure area by the Henwoods and in part from the fact that the parties did not call evidence directed to the specific time prior to remediation. I can, and do, find that slip 2's occurrence caused harm in the form of physical damage on the Yacht Club land and weakened the escarpment rendering it prone to further slips, an issue to which I shall later return. Consequently the slope required remediation.

120 The need for remediation was immediately recognised. Mr Henwood instructed AS James, and Stephen Mayer inspected the slip and prepared a report. He described his task as providing recommendations for remedial works to ensure that 'the long-term stability of the escarpment is not adversely' affected by the recent failure. Mr Mayer estimated the FoS against slope failure of the subject escarpment was in the range of 1.1-1.25, considering it to be marginally stable. In his report, Mr Mayer stressed the importance of managing the escarpment to ensure ongoing stability, referring particularly to uncontrolled discharge of concentrated flows of water, removal of vegetation and earthworks on or adjacent to the face of the escarpment.

121 Mr Mayer recommended removing the slumped soil mass from the slip and from the area at the base of the escarpment, supervised by a geotechnical engineer to ensure no further destabilisation of the escarpment. To protect the exposed clay against further erosion and to enhance revegetation, he recommended a product called Ecocell®. Ecocell may be described as an open-ended grillage of high-density polyethylene (HDPE) forming diamond-shaped pockets, restrained upon the slope using proprietary j-pins driven into the undisturbed clay. Topsoil is placed into the Ecocell pockets, providing a stabilised, suitable surface for re-establishing appropriate vegetation. Jute mat is placed over the Ecocells to prevent soil scouring. To complete the task, appropriate native vegetation, ranging from dense ground cover to shrubs and small trees with extensive root systems, is planted in the diamond-shaped pockets. Mr Mayer expected that maturity in the root systems of the vegetation would, within approximately two years, succeed the Ecocells as the source of stability to the surface layer of soil on the embankment.

In considering the proposed remedial works within the recently failed section of the escarpment it must be noted by all parties that the proposed works are aimed at restoring the level of stability which prevailed prior to the subject failure. Without extensive remedial works to the entire face of the escarpment it is not possible to increase the Factor of Safety against mass slope failure from the pre-existing level of approximately 1.1-1.25 to the normally minimal acceptable value of 1.5. In particular it must be noted by the Davey's Bay Yacht Club that, in line with current practices, the risk to property and possibly even human life would almost definitely preclude the construction of the storage lockers or any other structure along the base of the subject escarpment without the implementation of appropriate remedial works along the adjacent length of the escarpment.

123 Mr Henwood, who is a builder and developer, arranged for access to the Yacht Club and instructed subcontractors to remove the sheds at the bottom of the escarpment and carry out the recommended Ecocell remediation and proposed revegetation. This project was completed.

124 There is no direct evidence of consultation with the Yacht Club about the remediation of the slope although clearly, from the instructions given to Mr Reid of MPA Williams by Mr Ferme, some consultation had occurred. Mr Reid presented a report dated 30 June 2005, the purpose of which was to independently review the slope failure, the AS James report, inspect the repair, and provide comments upon the remedial action taken. Mr Reid reported that the Ecocells appeared to have been securely fastened to the slope with the proprietary pins in accordance with the manufacturer's instructions. More than 60 native shrubs had been planted and a protective cover of biodegradable Hessian material had been placed over the repaired area to limit erosion. He considered that the repair had essentially been carried out in accordance with the AS James report and the work carried out was well done.

125 Nevertheless, Mr Reid identified some deficiencies. First, the placement of the Ecocells had resulted in a dish shaped repair area because the topsoil backfill had not replaced the full thickness of the original face of the prior-slip slope. However, he concluded that the repair was reasonable and that placing multiple layers of Ecocell with additional topsoil, to avoid a dish shape, was inappropriate. Second, a large tension crack at the top and to the right of the slip had not been repaired. Third, there was an exposed face near the centre and to the right of the slip that had not been repaired. Mr Reid considered that each of these repairs should have been carried out by placing additional topsoil fill and planting more shrubs. The limited placement of more Ecocells could have been required. Repairing the tension crack should have prevented water collecting in the crack. Fourth, the topsoil appeared not to have been sown with grass. Mr Reid recommended maintaining the repair works, replacing shrubs that died or were in a poor condition and sowing topsoil areas with grass. Mr Reid made further recommendations concerning irrigation systems, stormwater drainage systems, surface rainwater drainage systems, and testing the mains water supply and other drainage systems operated by utility companies.

126 Mr Reid concluded his report with a caution. Noting that the area had experienced significant failures in the past and would continue to experience ongoing creep movement and minor failures, he predicted future failures unless preventative measures of the type he recommended were actively carried out. Mr Reid confirmed that the repair works carried out had only reconstructed the slope to a condition the same as or slightly better than it was prior to the landslip, warning that wet weather conditions could create serious risk, possibly requiring the area between the toe of the escarpment and the rear of the lockers to be deemed a restricted area.

127 Mr Peck stated he was not primarily engaged in respect of slip 2. He did not give evidence of having investigated the slip himself when first on site yet he made various comments about it. In 2008, when recommending the use of Ecocell in rectification works proposed for a global fix of the stability issues generally, Mr Peck also observed that Ecocell technology had already produced good results in the slip 2 area. In cross-examination, Mr Peck chose to characterise the 2005 remediation as a bargain-basement job. Explaining his opinion, Mr Peck stated that this solution did not address the problem that the hillside was not secured by either a retaining wall or soil nails or some combination of each - it was merely a superficial fix. Confronted with evidence that he had earlier told a VCAT hearing that the works carried out by Mr Henwood following slip 2 restored the contour of the slope to what it had been prior to the slip, Mr Peck stated that he now realised his prior statement was incorrect.

128 This was one of a number of errors acknowledged by Mr Peck. His acknowledged errors, which I will note in the context of the particular issue under discussion, are one matter that has led me to prefer the opinions of other experts to those expressed by Mr Peck when there is disagreement.

129 There was no evidence of further consideration or review of Mr Reid's report, nor was there any evidence that the further repairs suggested by Mr Reid had been carried out. There was no evidence that, thereafter, the Yacht Club or any person on its behalf, conducted regular maintenance or inspection of the escarpment, particularly of the remediation of slip 2. It was not suggested that Mr Henwood had agreed to, or otherwise accepted, any obligation of ongoing inspection and maintenance of the Yacht Club land. The failed irrigation system had ceased to be a problem.

130 I am content to rest my findings about slip 2 in 2005 on the evidence of Mr Mayer and Mr Reid. I can add that I did not detect any disagreement amongst the various geotechnical experts about the adequacy of the remediation work, provided one accepts that its purpose was to return the slope to the metastable state that existed prior to the occurrence of the slip. Two comments can be noted.

131 First, Mr Peck's contemporaneous views, which I set out below,[10] although not his evidence, conform with the broader balance of geotechnical opinion when viewed in this context. Second, the reports and recommendations of Messrs Mayer and Reid were reviewed by Mr Ervin in a report prepared shortly prior to trial. At that time no evidence of Ecocell remediation works remained. Mr Ervin's review was therefore confined to his critical analysis of these reports. Mr Ervin's conclusion that the 2005 works could reasonably have been expected to reinstate the area directly affected by slip 2 to a condition which approximated or improved the pre-slip condition depended on his assumption that the reinforcing effect of Ecocells on the layer of reinstated topsoil would enhance its ability to support the in situ mass of soil above. This assumption required that the mass of reinforced top soil extended to the headscarp of slip 2. Mr Reid confirmed in evidence that the Ecocells had been placed so as to provide a buttressing effect supporting the non-slipped mass of soil above. Mr Ervin further commented that for the remediated area to approximate or improve upon the pre-slip condition assumes that the slope was effectively revegetated, that good drainage practices were implemented and that the slope was appropriately maintained.

132 On the basis of the evidence of Mr Mayer and Mr Reid, I am satisfied that the remediation works carried out on slip 2 were a reasonable response by the Henwoods. The area was returned to a metastable condition approximating its condition prior to slip 2. I am unable to conclude that the works properly remediated the effects of slip 2. Deficiencies remained, as identified by Mr Reid. Each of Mr Mayer and Mr Reid expressed caution. Events to occur later in 2008 at slip 2 showed such cautions to be prescient foresight.

133 I find that Mr Henwood accepted, reasonably, advice from AS James that the remediation works had been satisfactorily completed. I find also that the Yacht Club accepted the broad thrust of Mr Reid's conclusion that the repair work had been carried out in accordance with the reasonable recommendations of AS James and that the work was well done. Notwithstanding these perceptions, the fact was that the deficiencies identified by Mr Reid, which I find to be conditions on the slope changed by the occurrence of slip 2, were not addressed. An increased risk of slope instability consequent upon slip 2, for which the failed irrigation system was a necessary condition, remained. The existence, and extent, of this risk warrants further consideration.

134 The pleaded allegation, that the escarpment on the Yacht Club land was weakened and became more prone to collapse by reason of negligent failure by the Henwoods to prevent or promptly rectify the leaking of the reticulation system into the cliff face, is not the essential issue. The leak was promptly stopped and the Henwoods, prudently acting on expert opinion, undertook the remediation recommended to the apparent satisfaction of all. At trial, the issue was defined in different terms. Did the conduct alleged against the Henwoods compromise the FoS of the escarpment below the Gunnersen land or otherwise threaten the stability of their property? Did it cause any damage to the Gunnersen property or a decrease in its value?

135 I consider that the FoS of the escarpment below the Gunnersen land, if modelled for a shallow type A slip, would be compromised to some extent by slip 2. However, the remediation work restored the slope to the pre-existing metastable condition for at least several years. It can reasonably be expected that the FoS of the escarpment below the Gunnersen land, modelled for a type A slip, would have been returned after the remediation work to a number appropriate for a metastable slope, for example, 1.1-1.25. I will explain below why I do not find that any actual damage, whether physical or economic, was caused to the Gunnersens' property by reason of slip 2 and its subsequent remediation. To evaluate in terms of legal liability for the harm claimed, the consequences of the deficiencies remaining at the site of slip 2 following the remediation work, it is necessary to carefully examine what occurred from this point through to the completion of the soil nailing - the expense of which the Gunnersens claim as damages.

The response of the Gunnersens to slope instability

136 The Gunnersens focused sharply on issues of slope instability following slip 1. They consulted their solicitors. In October 2004, the Gunnersens engaged Mr Warren Peck of AMC Consultants. Initially, Mr Peck was not asked to conduct a detailed geotechnical investigation of the exact causes and mechanisms causing slip 1 or to advise about potential remedial measures. Rather, he accepted a retainer to generally inspect the Gunnersen property and the adjoining properties, establish geotechnical survey monitoring points on the Gunnersen property, and provide ongoing geotechnical advice and consultation. Survey monitoring was arranged and the surveyor, Mr Kalkman, was engaged. Mr Peck did not personally take an active interest at the site until April 2005.

137 The Gunnersens were, not unreasonably, most concerned about the stability and integrity of the escarpment and the effect any risk to slope stability might have upon their land and residence. I accept that they have at all times acted to protect the integrity of their property as best they are able and with genuine intention. To this end they have acted reasonably in reposing their confidence in, and reliance upon, their chosen experts.

138 Mr Kalkman, on 28 October 2004, conducted an initial survey. He marked out 14 monitoring points to measure any movement over time in the Gunnersen land. Mr Kalkman was familiar with the escarpment and the adjoining properties. In 1997, he had been engaged by Nigel Peck as a consultant surveyor in relation to the proposed subdivision of 7 Denistoun Avenue. The subdivision proposal had, at one point, included an access road down the face of the escarpment to the Yacht Club. For the purposes of that proposal a detailed topographical survey of the escarpment had been carried out. In April/May 2005, Mr Kalkman also surveyed and recorded the locations and dimensions of the slips. His detailed survey work, relied upon by the various experts, was not subject to challenge at trial. However, as I will later note, the design of the remediation work ultimately undertaken proved to be based on an apparent misconception, at least for Mr Reid as designer, of the width of the slip. Notwithstanding Mr Reid's later variation of the scope of the remediation works, I find the position and dimensions of slip 2 in 2005, which I have already described at [77] to be as surveyed by Mr Kalkman. At the request of Mr Peck, Mr Kalkman returned to the site on numerous occasions to resurvey the monitoring points: 4 May 2005, 11 July 2005, 10 August 2005, 10 January 2006, 17 May 2006, 11 March 2008, 8 December 2008, 27 July 2009 and 31 July 2009.

139 Mr Kalkman's surveys in May and July 2005 appeared to indicate no significant change from the initial control co-ordinates surveyed in October 2004, after allowing for equipment tolerance. This survey period is contemporaneous with Mr Henwood's remediation works in the area of slip 2.

140 By July 2005, Mr Peck was interpreting the monitoring data from the May survey to show lateral movement towards Davey's Bay of the ground behind the escarpment. This observation seems to have been influential in Mr Peck's initial recommendation to install a dewatering bore. The purpose of the bore was to depressurise the groundwater in the vicinity of the escarpment. It required approval from Southern Rural Water. Contemporaneous correspondence and reports refer to this objective of groundwater depressurisation to improve the security of the escarpment. There is no mention of slip 2 or whether remediation work was completed satisfactorily. At that time, the bore was not justified as a response to slip 2.

141 In July 2005, Mr Peck advised the Gunnersens that the survey data indicated few significant ground movements since the May survey. Mr Peck described the ground near the two landslips as slightly more relaxed. Although he interpreted the data as indicating the possible risk of a further landslip, any such landslip was not imminent. Mr Peck suggested a watch be kept for tension cracks at the top of the slope and saw no reason to expedite the bore approval process.

142 In evidence, Mr Peck explained that his assessment of the monitoring data and the risk to the escarpment at that point in time had nothing to do with the remediation of slip 2. He agreed that the installation of the dewatering bore was prudent practice for improved long-term security from the risk of damage through escarpment instability. Depressurising groundwater was, he said, part of a strategy to minimize the risk of further slips or further movement on existing slips - not because of the failure of the Henwood irrigation system.

143 A dewatering bore and two monitoring bores were installed by March 2006 and thereafter the level and quality of the groundwater was monitored. These investigations showed that the direction of groundwater flow on the Gunnersen land is northerly across the Gunnersens' property towards slip 1, not slip 2. The evidence suggested that the dewatering bore did play a role in reducing groundwater pressure on the Gunnersen property. During 2007, there was a sharp decline in the volume of water pumped out, which correlated with the generally prevailing drought conditions.

144 At this stage, instability issues and the attendant geotechnical advice were not confined to slip 2. Care is needed in evaluating the evidence of such advice when slip 1 was a live issue. There was then, quite sensibly, an ongoing attempt to involve various parties: Mornington Shire, City of Frankston, the Department of Sustainability and Environment, the Davey's Bay Yacht Club and the Henwoods, in a global solution for the benefit of all. Mr Peck regarded the depressurisation bore as a more attractive alternative than building a massive retaining wall or, alternatively, running the risk of slope instability.

145 I consider that the bore was an appropriate and prudent response for the Gunnersens to take in response to the risk of escarpment instability arising from the natural conditions, particularly in the context of slip 1. I reject any suggestion that the Gunnersens incurred the expense of the bore as a necessary condition for harm suffered due to the occurrence of slip 2.

146 The evidence about the significance of the observations from the surveys was both contested and confused. Mr Kalkman concluded there was very little movement evident on comparing the initial survey to the final survey. On the other hand, Mr Peck found evidence of movement from one survey to the next. Mr Peck's evidence was difficult to follow due to his admitted transpositional errors in his reports regarding the direction of movement.

147 In March 2006, around the time the dewatering bore was installed, Mr Peck next reported on monitoring results. He concluded that the survey points in the vicinity of slip 2 showed the ground had relaxed, attributing the likely reason for this relaxation to be the remediation of slip 2 during 2005. In Court, Mr Peck resiled from this statement, saying the remediation works did nothing 'to bolster the slope' because several years growth of the vegetation is needed to affect stability through the development of root systems.

148 Having listened carefully to Mr Peck's evidence about the effect of the remediation of slip 2 and of his analysis of monitoring data, I was not satisfied that the Court could rely upon some of his conclusions. His investigative and analytical work appears to lack a sound basis. I so find primarily because Mr Peck stated the technique of using survey markers as an early warning system to detect ground movements was a technique that he was pioneering. It was not accepted practice amongst his peers. It was, apparently, only in that context that any of the other geotechnical experts showed any interest in the monitoring data. It is unnecessary, indeed unhelpful, for opinion to be expressed on a basis which does not enjoy professional acceptance. None of the other experts engaged with conclusions drawn from monitoring survey data.

149 There are further reasons. Mr Peck's evidence withdrawing his statement that the remediation of slip 2 in 2005 had been a benefit to the stability of the slope seemed partisan. Notwithstanding his acknowledgement of the Experts' Code of Conduct, his preparation of evidence for trial, and his participation in the failed joint conference of experts ordered by the Court, this error was not corrected at any earlier stage. He explained that he was resiling from that statement with the benefit of hindsight and three years thinking about the issue. Yet no clear statement of alternative reasons why evidence of relaxation of the tension in the ground was evident was proffered.

150 Also adding to confusion surrounding Mr Peck's opinions from survey data were errors, which only came to light in cross-examination, in transposition of the direction of lateral movement of monitoring points when reporting on survey results in 2008. Mr Peck conceded these errors, which had been overlooked. The transposition was, he said, insignificant. Mr Peck informed the Court that the monitoring data has nothing to say on the question of what caused any reactivation of slip 2. It is unclear to what extent the monitoring data played any useful role at all, although Mr Peck gave it a role to which I will refer in due course, in advocating to the Gunnersens the final engineering solution.

Alternative engineering solutions for escarpment stability

151 Throughout 2007, a global solution to instability in the escarpment was being debated among the various interested parties. The first proposal involved the construction of two retaining walls. One wall was to be an extension to the east across the site of the existing concrete block crib wall on Crown land, with a second retaining concrete block crib wall located below slip 2 and the Gunnersen land, partly on Yacht Club land and partly on Gunnersen land. The second wall would run behind the extension of the existing wall. The access path, destroyed in slip 1, would come down between the two walls. The walls were intended to provide some support to the toe of the escarpment. A margin of improvement in slope stability, modelled on an assumption of global failure, was anticipated. The indicative costing of this proposal was approximately $775,000.

152 By March 2008, added to the remediation proposal being considered were some rows of close spaced soil nails above the crib walls to reduce the likelihood of type A failure. Mr Peck recommended that the final stage of the retaining wall option would involve the use of Ecocell technology to re-establish native vegetation. On the basis of a report prepared by MPA Williams & Associates in May 2007 and a plan of survey by Mr Kalkman, this proposal was placed with Tattersall Engineering Consultants Pty Ltd for an indicative price estimate, for which the Gunnersens paid a fee. Whether the obligation to pay Tattersall's fee is properly included as loss and damage is in issue.

153 The crib wall remediation required a permit from Mornington Shire. There were additional difficulties in securing agreement for funding that work as it involved benefit for various other parties including the State of Victoria, Mornington Shire and the Yacht Club. There were difficult questions of access to the site. The litigation involving the Hosking slip, which had been settled, caused the parties concerns about their legal exposure.

154 The debate between the parties about the method and cost sharing arrangements for an engineered solution to slope instability was not aided by a lack of clarity from the experts. An expensive engineered solution could hardly be agreed, absent accepted design criteria or acceptance by parties of financial responsibility for achieving the proposed level of security against risk. I can mention several matters.

(a) One matter was Mr Peck's erroneous conclusions on monitoring analysis, which he put to other experts during the debate about whether the crib wall remediation might be adopted, to advocate the need for major remediation work on the escarpment. Mr Peck contended there was survey evidence of consistent movement at the closest monitoring points towards slip 2, which was significant as it was occurring during a drought when little or no movement would be expected to occur. He argued an urgent need for major engineering against global instability on the basis of an experimental technique not accepted by his peers, which was later shown to contain transpositional error.

(b) Another matter was the juxtaposition of the lack of agreement about fault assertion and exposure to legal risk, driven by the solicitors, with proper design parameters for any engineered solution, a matter for the experts. Despite no agreement as to the underlying design objective for the works, the question about bearing the cost and expense of engineering works was related to the issue of legal responsibility for the risks associated with, not solutions to avoid, expected future slope failure.

(c) The experts did not agree on a proper assessment, in technical terms, of risks of instability. The question of responsibility to minimise the risk of major or global instability, as opposed to shallow localised instability, was never resolved. Another matter was the geotechnical assessment of the risks inherent in inaction or superficial remediation works. While Mr Peck advocated a situation of emergency, counselling against waiting for the period apparently needed to obtain a permit for constructing the retaining wall solution, others, including Mr Piper, advised the Mornington Shire take a different view, an issue I will return to in due course.

155 It became apparent that an agreed solution was unlikely. There was also a question of delay in obtaining approval for construction of the crib wall solution if Mornington Shire declined, as it did, to expedite that permit. However, a permit would not be needed if the proposed engineering works were 'emergency works'. These matters came together during 2008 and resulted in the Gunnersens considering alternatives on their own initiative, at their own expense and in seeking orders from VCAT.

156 In connection with this question of the delay in obtaining a permit for the crib retaining wall construction proposal, I received evidence from a town planning consultant, David Alexander Hansen, who professed to extensive experience in dealing with applications to Mornington Shire. Instructed to assume detail about this proposal, Mr Hansen said that such works were construction works, which would require a permit. His opinion was that it was likely that it would take between 48 to 68 weeks to obtain such a permit. There were many variables involved in the detailed assessment of this timeline, some of which were explored in cross-examination. I do not consider that it was possible, on the evidence, to make any finding about the extent of delay that may have been involved in this process. Equally, I am not satisfied that the prospect of delay in obtaining a permit explains why the retention wall remediation system was ultimately not pursued.

157 Two other options were considered by the Gunnersens, one of which was the soil nails engineering solution ultimately adopted by the Gunnersens. The other option was to install a secant bored pile wall with a capped beam anchored back into the slope along the northwest boundary of the property at the top of the escarpment. Mr Peck explained that this option was being explored as an 'on site' solution in the event that the Gunnersens were unable to gain access or obtain permission to stabilise the two landslips by installing the engineered retaining walls. The secant bored pile wall would isolate the Gunnersen land to protect it, in particular, from the risk of global instability. The remaining surrounding escarpment could have collapsed, with all its associated damage, but the Gunnersen house and pool would have been protected.

158 For the Gunnersens, the secant bored pile wall option was attractive as discrete, entirely on their land and entirely for the security of the escarpment where it supported their land. The Gunnersens did not, however, regard the option as viable, fearing that its construction would cause substantial damage to their land along the eastern boundary at the top of the escarpment, their pool and patio. Introducing the necessary earthmoving equipment and materials was also likely to cause substantial damage to other parts of their property.

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