Roads and Traffic Authority of New South Wales v Welling and Comerford

Court of Appeal (NSW)|2000-12-08|Before: Handley JA, Powell JA, Heydon JA, Hunter J, Giles J

CITATION : Roads and Traffic Authority of New South Wales v Welling and Comerford [2000] NSWCA 360 FILE NUMBER(S) : CA 40252/00 (Welling); 40253/00 (Comerford) HEARING DATE(S) : 8 December 2000 JUDGMENT DATE : 8 December 2000

Roads and Traffic Authority of New South Wales (Appellant) PARTIES : Gerhardus Hendrikus Welling (Respondent) William Kevin Comerford (Respondent) JUDGMENT OF : Handley JA at 37; Powell JA at 39; Heydon JA at 2

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT 55035/98 (Welling) FILE NUMBER(S) : 55034/98 (Comerford) LOWER COURT Hunter J JUDICIAL OFFICER :

M G Rudge SC/D A C Robertson (Appellant) COUNSEL : M L Williams SC (Welling) N A Cotman SC/M Pesman (Comerford) I V Knight, Crown Solicitor (Appellant) SOLICITORS : Carroll & O'Dea (Welling) Ferrier Chambers (Comerford)

ADC v White Construction (unreported, NSWSC, 14 October 1993, Giles J) Coulton v Holcombe (1986) 162 CLR 1 Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615 Hill v The Commissioner for Main Roads (1989) Aust Torts Reports 80-260 McDonogh v The Commonwealth (1985) 9 FCR 360 CASES CITED: Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 Robinson v Campbell (1992) 30 NSWLR 503 Skinner v Australian Telecommunications Corporation (1992) 27 NSWLR 567 Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1993) 29 NSWLR 549 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Water Board v Moustakis (1988) 62 ALJR 209 DECISION : See paragraph 36

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES v WELLING and COMERFORD

1 HANDLEY JA: I ask Heydon JA to deliver the first judgment. 2 HEYDON JA: Background This is an appeal against orders of Hunter J made on 15 March 2000 relating to the grant of leave to the parties to adduce evidence additional to that tendered before referees who had made two reports. 3 On 6 January 1989 a road bridge forming part of the Mitchell Highway over the Macquarie River at Wellington collapsed. It was the property of the Roads and Traffic Authority of New South Wales ("the RTA"). The matter has been outstanding for so long that no further time should be taken by reserving judgment given that the case is one in which I have formed a firm view. 4 The bridge collapsed when an excavator owned by Gerhardus Hendrikus Welling ("Mr Welling") carried on a vehicle, namely a low loader, driven by William Kevin Comerford and owned by W K Comerford, K B Comerford and J L H Comerford ("the Comerford parties") came into contact with the superstructure of the bridge. 5 In proceedings 55034 of 1998 (formerly 13584 of 1993) the RTA sued the Comerford parties for the damage to the bridge and the Comerford parties cross-claimed against the RTA for the damage to their vehicle. 6 In proceedings 55035 of 1998 (formerly 21036 of 1994) Mr Welling sued the Comerford parties and alternatively the RTA for the damage to his excavator. 7 On 3 September 1998 the primary judge made the following order (Grey 2D-F): "That pursuant to Part 72 Rule 2(1) of the Rules of Court, in each proceeding the question of the cause of the collapse of the Wellington Bridge on 6 January 1989 to be referred to Geoffrey Verge, consulting engineer, to inquire and report to the Court on that question." 8 On 14 December 1998 Mr Verge provided his report. It concluded (Grey 33P): "On the balance of probabilities the collapse of the bridge was caused by a buckling failure of the bridge deck in accordance with the contentions of the defendant."

By "defendant" he meant the Comerford parties. 9 In reaching his conclusion, Mr Verge was rejecting the RTA's theory of the collapse and upholding the theory advanced by the Comerford parties. The RTA's theory was that the excavator being carried across the bridge in the low loader had its arm in too high a position, that it struck the upright of the bridge, and that that caused the collapse. The contention of the Comerford parties, in the simplest terms, was as follows. The bridge included a number of unrestrained concrete slabs sitting on cross girders. Over the years, the embankments had moved and the bridge itself had moved. This generated compressive forces which caused adjoining concrete slabs to buckle and pop upwards at the moment when the low loader was coming across the bridge. This pushed the low loader up, and the arm of the elevator struck the bridge. This process was described as a "toggle buckle". 10 By way of background, the bridge was described thus by the referee (Grey 10R-11N): "The bridge was built in 1920 and has two main steel truss spans of approximately 37 m each and 11 concrete approach spans of about 9 m each (five at the Wellington end and six at the Dubbo end). The deck is about 12 m above normal water level, however, this level varies being controlled by Burrendong Dam some 15 km upstream. The bridge is typical of structures of that time and has some features that differ from current practice for medium span road bridges. The steel trusses have members of latticed built up sections and the overhead bracing comprises angle truss members. The entry panel of each truss has an inclined angle truss brace rigidly connected to the diagonals to form a portal frame. The concrete deck of each truss comprises 10 separate slabs each 6.3 m wide and 3.7 m long. The slabs are supported by steel beams but not tied to them with shear connectors except at the end of the first and last slab where the slab edge is enclosed in a steel channel riveted to the cross beam. The concrete approach spans are connected rigidly to their supporting piers by reinforcement so that movement of the deck arising from temperature changes, concrete shrinkage or traffic forces requires The piers to bend or the deck to crack. According to the RTA maintenance file Ex D41, the bridge has a history of movement and distress requiring repairs for many years. The piers and abutments supported on timber piles had settled and rotated towards the river. The movement joints and gaps at the steel spans had closed so that the deck slabs were compressed. The abutments and wingwalls had cracked and some piers flexed and cracked. Some approach span beams and headstocks had cracked and moved to act as expansion joints." 11 The referee's findings on buckling were as follows (Grey 27S-Y): "The bridge deck is unusual in that each main span comprises ten slabs 200 mm thick, 6.3 m wide and 3.7 m long and unconstrained except at the ends of the span where the slab edge is enclosed by a steel channel. There seems little doubt that the slabs were subjected to high compressive forces during hot weather when the slabs expanded against the bridge abutments. Under this condition the slabs act as a series of plates subject to an in plane compressive force and also a bending moment arising from the eccentricity of this force with respect to the centroid of the cross section. Some eccentricity of the force is inevitable in practice and the eccentricity has an important effect on the critical buckling load of a slab. (In theory if there were no eccentricity the slab would not buckle; it would fail by crushing of the concrete.)" 12 On 30 March 1999 Einstein J adopted the report in each set of proceedings. The parties thereafter moved their attention away from any deficiencies in the conduct of the Comerford parties and towards the RTA's role in relation to the bridge. 13 On 21 May 1999 Einstein J made the following order (Grey 40-41): "That, pursuant to Part 72 r 2 of the Rules of Court, refers to Messrs G C Verge and the Honourable John Brownie QC for inquiry and report to the Court the following questions: In Proceedings No 55034 of 1998 … (2) Is the Roads and Traffic Authority of New South Wales liable to pay damages to the Cross Claimants by reason of: * public nuisance; * negligence; or * breach of statutory duty as pleaded and particularised in paragraphs 11, 12 and 13 of the Cross Claim? In Proceedings No 55035 of 1998 Is the Roads and Traffic Authority of New South Wales liable to pay damages to the Plaintiffs by reason of: * public nuisance; * negligence; * breach of statutory duty as pleaded and particularised in the Statement of Claim in Proceedings No 55035 of 1998 … Note: The Referees are not asked to find or determine the nature or quantum of any damage suffered by the Roads and Traffic Authority, Comerford … or Welling but should assume, only for the purposes of each Reference, that each of the Roads and Traffic Authority, Comerford … and Welling suffered some damage as a result of the collapse of the Wellington Bridge on 6 January 1989."

It will be seen that the parties were left at large to prove commission of the torts referred to, so long as the specified pleadings and particulars were adhered to. 14 Counsel for the Comerford parties, in his opening address to the referees on 14 July 1999, said (Grey 54V-55Q): "The Comerfords, in either negligence or public nuisance, need to establish an act of misfeasance by the RTA as a highway authority. As you probably are both well aware, it is not good enough for this bridge to have fallen into disrepair and that condition to have materially contributed to the collapse as found by Referee Verge. Something must have been done by the RTA to have caused or materially contributed to the state of affairs that led to the collapse, as found by you, Mr Referee Verge. To establish public nuisance the RTA needs to establish all that it is required to establish to get up on its negligence claim. So we will concentrate on the negligence cause of action. We do not pursue the breach of statutory duty cause of action so that you will be invited to find the RTA liable, at the suit of the Comerfords, by reason of the RTA's negligence, by reason of an act of misfeasance. Now, what was that act? It will be the Comerfords' contention, or it is the Comerfords' contention, that repairs effected to the bridge materially exacerbated problems within the bridge, particularly materially exacerbated problems of [in plane] compression forces in the concrete deck slab [in plane], which deck slab Referee Verge found, by reason of those [in plane] compression forces, to have acted in a particular way and to have led to the collapse of the bridge. The burden of the Comerfords' position is that the repairs to cracks in the bridge, and the placement of product in the expansion joints of the bridge, exacerbated the [in plane] compression forces and materially contributed to the collapse by the so-called toggle buckle. It is, if you like, in that positive way, by those positive acts, rather than mere omissions that the Comerfords will seek to establish the act of misfeasance in the Roads and Traffic Authority." 15 The Comerfords were thus relying on two acts of misfeasance. The first was that the RTA, in carrying out routine repairs, had injected a rigid epoxy as opposed to a flexible epoxy in certain cracks which had opened up over the years in the piers of the bridge. The second act of misfeasance was carrying out work to certain rotation joints in the bridge. There were gaps in the bridge which over the years had closed because of movements back and forth. Both gaps - the rotation joints - had cover plates over them and the traffic passing over the cover plates had caused them to pop up and down. That led to spalling of the concrete below. The RTA, as part of its regular maintenance, removed the cover plates and refilled them, using only epoxy material, and replaced the cover plates. 16 Counsel for Mr Welling did not disagree with the issues as propounded by counsel for the Comerford parties. The issues as presented in opening did not change during the hearing of the reference. The referees summarised them as being (Grey 47K-L): "(a) injection of Megapoxy into cracks (in the piers); and (b) inserting Set 45 into the gaps in the deck over piers 6 and 8." 17 On 30 September 1999 the referees reported that the RTA was not liable to the Comerford parties and Mr Welling. 18 On 10 December 1999 the primary judge heard argument in which the RTA contended that the second report should be adopted and the other parties contended that it should not. He reserved judgment, and made reference to two applications for special leave being heard that day in which the High Court was being asked to reconsider the law on non-feasance in relation to highway authorities. In fact the High Court referred both applications to a full bench to be argued as on an appeal. 19 The primary judge then re-listed the matter on 11 February 2000 and invited further submissions from the parties, which were heard on 8 March 2000. The topic which the primary judge raised with the parties was whether there was a negligence issue not addressed in the second report which ought to be considered. 20 On 15 March 2000 the primary judge made the orders against which this appeal is brought, and in a reserved judgment stated his reasons for that course. After setting out the background, he referred to the two acts of negligence relied on against the RTA. He said (Red 21 line 11-23 line 40): "In relation to the first alleged act of negligence, the referees noted the following: 'The experts agree and we concur that cracks in the piers would reduce their stiffness and increase their flexibility thus more readily accommodating the movements. [The Authority's engineer] proposed that the cracks should be sealed with a flexible epoxy to maintain the status quo; in the event the pier cracks were sealed with a rigid epoxy. If the cracks were sealed with a flexible material this would permit the cracks to move so that the flexibility of the cracked piers would not alter in any significant way. … we are of the view that sealing the pier cracks with rigid epoxy probably had only a marginal and temporary effect on the behaviour of the bridge. The fundamental defects in the original design and construction of the bridge led to the excessive compression of the bridge deck and its ultimate failure. Any change to the flexural rigidity of the piers arising from sealing the cracks was not significant compared with the movement of the Wellington end abutment, the closing of the gaps and temperature expansion of the deck.' Dealing with the second alleged act of negligence, the referees concluded that both the rotation joints and the expansion joint had ceased to operate as a result of them being 'practically closed'. The Authority's repair work was described by the referees as follows: 'Apparently the steel cover plates to the rotation joints had worked loose under the traffic and the edge of the concrete had broken away to form an irregular space at the top of the concrete slab. The joints were repaired by the following procedure: remove the steel cover plates; insert a temporary timber spacer at the top of the joint and against the steel protection angle at the end of the steel span; provide a temporary filler to close the bottom of the gap between the slabs; fill the space with Set 45 a rapid setting mortar; remove the timber spacer and insert a compressible seal in the space at the top of the joint; and replace the steel cover plate and fix to the steel span with chemical anchors. Clearly this work was intended to cure problems arising from the loose cover plates, the spalling of concrete at the edge of the concrete approach spans and the ingress of deleterious matter into the joints. It did not attempt to address the long-term problems in the design and construction of the bridge.' The referees reached the following conclusion: 'Considering all the evidence regarding the repair of the rotation joints, we are not able to determine the precise effect of this work on the likely behaviour of the joint if it were subject to in-plane compressive forces. However, on the balance of probabilities we consider that this repair work is unlikely to have appreciably altered the performance of the bridge deck compared with its condition prior to the work.' As a result of the way in which the second reference was conducted, the referees did not address any responsibility of the Authority in performing repair work on expansion and rotation joints which was ineffective in restoring the function for which those joints were designed and which aided serviceability of the bridge deck for traffic. The significance of that omission, in my view, is reflected in the following opinion of the referees in the second report: 'The expert evidence of Dr Ivering and Mr Kell is conflicting in part on the issue of foreseeability. Dr Ivering's opinion is that a structural analysis as suggested by Mr Kell if carried out prior to 1988, was not warranted and in any event would not have predicted a buckling failure. And further that no reasonably competent bridge engineer could have foreseen that the bridge would suffer the catastrophic collapse as found in the previous reference. Mr Kell's opinion is that an investigation should have been undertaken to assess the condition of the abutments and the probable compressive force induced in the deck. And that if this disclosed a force in excess of any value for which the bridge may have been designed, the unrestrained deck slabs should have been examined to check their susceptibility to buckling failure. This apparently prudent approach advocated by Mr Kell may have been coloured by hindsight. Nevertheless we concur with his view that similar buckling failures have occurred in slabs on ground and that the construction of the Wellington bridge deck is unusual in that the concrete slabs are not restrained by the supporting steel beams. We do not accept the inference from Dr Ivering's comment that because there was no visible distortion of the concrete slabs, a structural analysis was not warranted. Unfortunately a buckling type failure is especially dangerous : (a) it may be difficult to predict and (b) if it occurs it does so often without any warning. An engineering investigation of the bridge structure if carried out in 1988, probably would have disclosed a large compressive force in the deck and the vulnerability of the unrestrained concrete slabs to a buckling or pop-up failure . Although a structural analysis of the slabs probably would not have been conclusive it should have raised the possible risk of a deck failure. If a deck slab were to pop up this would pose some danger to a vehicle traversing the bridge at that time. But it would require a highly imaginative and risk averse engineer to predict the possibility of a catastrophic collapse such as occurred.' [emphasis added] In my view, those opinions of the referees call for consideration of a negligence issue which was not addressed in the second report. I raised these concerns with the parties by re-listing the matter on 11 February 2000 and invited further submissions from the parties which were head on 8 March 2000. In light of those submissions I have decided that, in determining whether the second report should be adopted, varied or rejected, Comerford and Welling should be afforded the opportunity of having a wider issue of negligence considered than that addressed by the referees. The wider issue of negligence is of the kind examined in Hill v The Commissioner for Main Roads (1989) Aust. Torts Reports ¶80-260; (1989) 68 LGRA 173; and McDonogh v The Commonwealth (1985) 73 ALR 148; (1985) 9 FCR 360." 21 Whatever the third issue was which was raised by the primary judge, it was one which he raised of his own motion, though he gave the parties full opportunity to debate whether it should be considered. This Court was informed that the same arguments which the appellant propounded to this Court were put to him.

The RTA's submissions 22 The RTA's written submissions were relevantly as follows (Orange 5K-7G): "In the Appellant's submission his Honour's exercise of the discretion pursuant to Part 72 rule 13 of the Supreme Court Rules to permit the consideration of a wider issue of negligence and to allow the adducing of further evidence miscarried. The broad principles to be applied in the consideration of a referee's report pursuant to Part 72 are set out in the judgment of the Court of Appeal in Super Pty Limited v SJP Formwork (Aust) Pty Limited (1993) 29 NSWLR 549. A central proposition laid down in that case is that the reference is not 'to be treated as some kind of warm-up for the real contest'. For that reason it is important that the Court, in exercising the powers conferred by Part 72 Rule 13, does not disregard the conscious decisions of the parties in relation to how they would put their case at the hearing before the referees. In the Appellant's submission, by permitting the Comerford parties and Welling to argue a wider issue of negligence which was expressly not in issue before the referees and in so doing giving leave to those parties to adduce further evidence, his Honour failed to have regard to the importance of requiring parties to put forward their full case at the hearing. The Respondents chose how to put their case at the hearing before the referees. They did not seek to argue the 'wider issues of negligence' now permitted to be addressed. It is a universal principle of the just and efficient administration of justice that a party must put forward its full case at hearing and may not, save in the case of a pure point of law or construction involving no possibility of further evidence, raise before the Court at a subsequent stage matters which could have been but were not raised at the earlier hearing. These principles are firmly established in respect of appeals by such authorities as Suttor v Gundowda (1950) 81 CLR 418 at 438; Coulton v Holcombe (1986) 162 CLR 1 at 7-8; Water Board v Moustakis (1988) 62 ALJR 209 at 211; and Robinson v Campbell (1992) 30 NSWLR 503 at 507. In the Appellant's submission those principles ought be applied in the consideration of the reports of referees pursuant to Part 72. The Appellant's submission is directly supported by the decision of Cole J in Skinner v Australian Telecommunications Corporation (1992) 27 NSWLR 567 at 575F. In ADC v White Construction (unreported Supreme Court of NSW, Common Law Division, Construction List, 14 October 1993) Giles J permitted a point not taken before a referee to be raised in opposition to the adoption of the referee's report but did so after referring to the decisions cited in paragraph 20 above and stating: ADC did not suggest that it might have met reliance upon the terms of the contract in this regard by other evidence, or conducted the proceedings before the referee in some other way had such reliance been apprehended, and the point is one of law the raising of which will not significantly add to delay or costs. While no explanation was given for the failure to put the argument to the referee, I would infer that the significance to the question on which the parties were at issue of an aspect of the material before the referee was overlooked.'" 23 The orders of the primary judge appear to contemplate that further evidence will be called before him, not the surviving referee. He thus appears to have acted under Part 72 rule 13. That rule appears to give the primary judge power to do what he did. The RTA conceded that he had power to do what he did, but argued that his discretion had wholly miscarried.

The "third issue" 24 It was not clear at the outset whether the issue on which further evidence is to be called is an issue which has been pleaded. Mr M G Rudge SC, who appeared with Mr D A C Robertson for the appellant, could not assist the court on this topic, because, understandably, he was not clear precisely what the third issue is. The orders do not define it, and limit the new evidence only "to the issue of the Authority's alleged negligence". The reasons for judgment use only general language. If the issue has been pleaded, it should have been identified by reference to the pleadings. If it has not been pleaded, an amendment should have been formulated, sought and considered. Mr N A Cotman SC, who appeared with Mr M Pesman for the first respondents, in effect conceded that the issue had not been pleaded, because he indicated a desire for an opportunity to formulate the point in writing.

The respondents' submissions 25 When Mr Cotman was asked to identify the third issue, he had some difficulty in doing so. He did stress that the primary judge was not leaving the matter open for complete re-argument and for a fresh tender of evidence on a wholly uncontrolled basis (though order 1 made by the primary judge might suggest otherwise). He identified the issue initially in his written submissions (Orange 9P-11K): "His Honour's exercise of his discretion to allow the parties to argue the 'wider issue of negligence' did not miscarry. The Comerfords relied on two particular acts of misfeasance alleged against the RTA. Those acts (the filling of cracks in the bridge piers with rigid epoxy and the insertion of mortar into the gaps in the bridge deck over piers 6 and 8) on the Comerfords' case had the effect of removing the capacity of the bridge deck to expand without generating compressive forces within the deck known to affect the bridge. There is no dispute that this inability to expand and the compressive forces so created was the ultimate cause of the bridge's failure while the Comerfords' truck was on the deck. The referees concluded that those acts did not appreciably alter the performance of the bridge deck as to its capacity to expand compared to its condition prior to the work (Grey Brook p 51). If that were the only conclusion of the referees that may have been the end of the matter. No causation could be established between the work and the failure. However, in reaching that conclusion the referees also made a finding that the repairs to the gaps above piers 6 and 8 did 'not attempt to address the long-term problems in the design and construction of the bridge'. It is that finding that caused His Honour to defer adoption of the report pending further hearing (Red Book 26.10 to 27.35). The effect of the finding in paragraph 4 above is to raise a new legal issue: can the RTA be liable in negligence in circumstances where it, in effect, carries out a cosmetic repair that fails to address a known danger, but which does not of itself increase that danger but which danger is the one that causes the relevant injury? The Comerfords concede that that point was not taken before the referees. However, that point is not inconsistent with the concession made by the Comerfords at the commencement of the second reference (RTA submissions paragraph 7). The Comerfords wish to have the opportunity afforded by His Honour to have that issue addressed. The Court has allowed points not taken before a referee to be argued ( ADC v White Construction (unreported, NSWSC, 14 October [1993], Giles J) subject to certain conditions. In the present case: (a) the consideration of the further issue will not add significant delay or cost (particularly relative to the delay and cost of these proceedings generally); and (b) any prejudice to the RTA can be met by an appropriately formulated order, which His Honour has already foreshadowed (Red Book 27.55). The Comerfords are personal litigants. His Honour properly took account of this (Red Book 27.41). They have been the subject of a substantial claim by the RTA, which claim was found by the first referee to be without foundation. The interests of justice require that they be afforded the opportunity to have their cross-claim properly and completely heard." 26 In oral argument Mr Cotman handed up a document to the following effect: "Comerford: The Wider Negligence Issue 1. In the second report, Grey AB 48D, is extracted the material as to the RTA knowledge of the compressed state of the bride deck from 1976 . 2. That condition predated the accident of January 1989 by at least 13 years: Id. All 'design' compression joints on the bridge had closed. 3. That was the condition referred to in the first report, Grey AB 11, and by His Honour, Red AB 19.30. 4. That condition was one that gave rise to the possibility of the 'well known' phenomenon of buckling: Grey AB 27M. In roads and concrete slabs (the bridge being both) 'blow-ups are not unusual', where thermal expansion is not controlled by such means as compression joints Id. Red AB 20.30. 5. Therefore, the condition the RTA had observed in 1976 gave rise to in-plane stress through the deck slabs and gave rise to the real risk of 'pop-up' failure of the deck slabs, which slabs were and remained unconstrained: Red AB 20.15. 6. Informal compression joints were operating on the bridge to allow it to expand under thermal expansion, i.e. other parts of the bridge had broken or sheared or cracked to accommodate expansion: Red AB 20.5. 7. One, if not the, informal expansion joint in the bridge deck was the very place at which the work described at Grey AB 50 was done in 1988 . This place was the gap between the first slab on the bridge and the last slab on the approach ramp. 8. At the time of the work there was a spalled gap of 75-100 mm between the tops of the two slabs, about the design expansion joint size, Grey AB 50K. 9. The 'repairs' done by RTA in 1988, and before, continued the bridge deck in a state of compression. That is to say, the bridge was 'maintained' not by addressing the cause of or otherwise ameliorating the in-plane forces or anchoring the slabs, but by doing work to give the bridge the appearance of a sound structure, e.g. filling cracks in the piers and filling spalled edges in slab at the entrance to the bridge: Red AB 22.10. 10. The issue not addressed by the Referees is whether the RTA was negligent in that, the RTA having chosen to do work on the bridge, it chose to do work that maintained the in-plane stress conditions by restoring a spalled slab-end rather than by ameliorating them by increasing the size of the gap between the same two slabs, or fastening down the slabs. 11. Thus, while the Referees found the work done did not make things worse , see the Referees' finding set out at Red AB 22.20, they did not address the significance of the fact that the work chosen to be done was ineffectual to make things better. This is the issue referred to by His Honour at Red AB 22.30. 12. In dealing with misfeasance, the Referees looked at the exacerbation issue without looking at the amelioration issue, having found actual knowledge of the RTA of the condition requiring amelioration and actual work undertaken by RTA on the structure." 27 It is extraordinarily difficult to extract from the reasons for judgment of the primary judge any chain of reasoning to the effect pointed to by Mr Cotman. Mr Cotman also made attempts to isolate the "third issue" by recourse to the cases which Hunter J cited, namely Hill v The Commissioner for Main Roads (1989) Aust Torts Reports 80-260 and McDonogh v The Commonwealth (1985) 9 FCR 360. With all respect to Mr Cotman's skill, these attempts were unsuccessful. 28 Mr Cotman also submitted that it may not be necessary to call any further evidence. That, however, was not the primary judge's approach. Whether that course is necessary or not, it seems to be a real possibility. Mr Cotman also said a point of law arose which ought to be dealt with. The point turned on the question: does Hill's case only apply to the creation of a trap, exacerbating the problem, or does it go further and deal with failures to address an underlying problem on a road? He submitted that the narrower version of Hill's case was a live issue and its consideration had not been deliberately suppressed by his clients. He submitted that the primary judge was right in permitting the parties to go to that issue and the others raised. The fact is, however, that they were not raised at the start of the second reference. If they had been raised earlier, they were then abandoned.

The arguments considered 29 In my opinion the appeal should be allowed for the following reasons. 30 First, it is impossible to understand from either the orders or the reasons for judgment what the point is on which further evidence is to be called. 31 Secondly, it is no answer to that difficulty to say, as Mr Cotman did, that the matter could be worked out in the course of directions hearings before the primary judge. Parts of 10 December 1999, 11 February 2000 and 8 March 2000 have already been devoted to that enterprise without success. It was not unreasonable for the appellant to seek relief from this Court before further costs were expended below. 32 Thirdly, even if the issues are as Mr Cotman would have them, and even if the issues do not involve questions of non-feasance only (and paragraph 11 of the document Mr Cotman handed up in oral address suggests that they do) the case is one in which the non-RTA parties elected to run the reference in a particular way. They were represented by experienced and capable solicitors and counsel. They made concessions before it, recorded at the start of the second report. They opened on a relatively narrow basis. The "third issue" which they seek to raise, if Mr Cotman's explanations about it are correct, is a matter which rests on extremely technical questions. It is an abuse of process to seek to agitate the third issue at this stage of so ancient a case when so much care has been taken by the Commercial List judges and by the referees to decide the facts identified as being in issue. 33 I would add to the appellant's citation of Super Pty Ltd v SJP Formwork (Aust) Pty Ltd two other citations. In Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615 at 621 Cole J also places weight on the importance of adhering to a referee's report when all parties had a full opportunity to put all relevant matters before the referee. Secondly, I refer to Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631. The appellant took the court to a passage in the middle of page 646. The general observations of Mason P at that point (with whom Gleeson CJ and Priestley JA concurred) are strongly adverse to the respondents' stance. The circumstances are not completely analogous, since there the new point was raised on appeal, not before the judge at the time for consideration of adoption of the report. But the case suggests that at least as a matter of discretion, it would be unsound to permit one party to propound, after two references, a point it had either never taken before or had abandoned before. In the particular complex circumstances of this case, to permit the non-RTA interests to take advantage of the orders of 15 March 2000 would be to permit an abuse of process. 34 In all the circumstances the primary judge's exercise of the discretion has miscarried. 35 I would wish to reserve the question of the extent to which the principles associated with Suttor v Gundowda Pty Ltd apply to references in the manner urged by the appellant's submissions. I do not wish to give encouragement to this course, but there may be exceptional cases where in justice a new point can be taken before the judge when the reference is being considered for adoption by the judge. I am, however, clear that this case is far from being an appropriate case.

Orders 36 I would propose that orders 1-3 in the Notice of Appeal be made (subject to argument on the question underlying order 3, namely costs). That is, I favour the following orders:

That the decision and orders of Hunter J of 15 March 2000 be set aside.

That the proceedings be remitted to Hunter J for consideration of the adoption of the report in accordance with Part 72 rule 13.

That the respondents pay the appellant's costs of the appeal. 37 HANDLEY JA: The decisions on SCR Part 72 referred to by Heydon JA demonstrate that the discretion conferred by rule 13(2) should not be exercised to permit what amounts to a new trial or an additional trial of new issues on a motion for the adoption of the report. 38 Rule 13(2) enables additional evidence to be led with the leave of the court but that discretion is to be exercised, having regard to the need for finality in litigation. Parties are bound by the manner in which they conduct the proceedings, including proceedings on a reference and to the general principle that a new point which would require a new trial can only be entertained and upheld in the most exceptional circumstances. No such exceptional circumstances have been established here. I agree with the orders proposed. 39 POWELL JA: I agree with Heydon JA and the additional observation of Handley JA, and I agree that in each appeal the orders proposed by Heydon JA should be made. 40 HANDLEY JA: Mr Williams, do you have any submission on costs? 41 WILLIAMS: No. 42 HANDLEY JA: The orders will be as proposed by Heydon JA. **********

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Judgment (19 paragraphs)

Parties

Cases Cited (10)