Roman Catholic Trusts Corporation v Van Driel Ltd [2001] VSC 310 - VSC 2001 case summary — Zoe

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Roman Catholic Trusts Corporation v Van Driel Ltd [2001] VSC 310

[2001] VSC 310

Supreme Court of Victoria|2001-08-28|Before: Hansen J

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At a glance

Source facts

Court

Supreme Court of Victoria

Decision date

2001-08-28

Before

Hansen J

Source

Original judgment source is linked above.

Judgment (600 paragraphs)

[1]

[2001] VSC 310

[2]

Contract - Building contract - Multi-purpose hall and bus turnaround area for Catholic regional college - Alleged defects to roof and floor of hall and bus turnaround area - Whether installation of roof defective - Whether installation of skylights defective - Whether installation of north and south wall flashings defective - Whether moisture in concrete slab residual moisture - Whether further moisture entered slab from below - Whether construction of pavement above interceptor pit defective. Tort - Engineer engaged by architect - Multi-purpose hall and bus turnaround area for Catholic regional college - Alleged defects to roof and floor of hall and bus turnaround area - Whether design of pavement in bus turnaround area adequate in respect of interceptor pit and generally. Contract - Architect's design contract - Multi-purpose hall and bus turnaround area for Catholic regional college - Alleged defects to roof and floor of hall and bus turnaround area - Whether design of roof defective - Whether design of skylights defective - Whether design of north and south wall flashings defective - Whether architect responsible for drainage in bus turnaround area. Parol evidence rule - Exceptions to parol evidence rule - Surrounding circumstances - Identity of a party - "Emmaus College" inserted as Proprietor in building contract - "Emmaus College" not a legal entity - Roman Catholic Trusts Corporation owns land on which works conducted - Whether party to contract is Corporation, College board or executive, or Association of Canonical Administrators - Whether Corporation is proper plaintiff - - - ; - RSC Chapter I Order 35 (Admissions). Loss and damage - Where rectification works completed and paid for by "Emmaus College" - Whether plaintiff suffered loss and damage - - ; Contribution between defendants - .

[158]

In addition, once an inquiry has been opened into the surrounding circumstances and extrinsic evidence, it does not logically follow that the line of sight should be limited to looking within the structure of Emmaus College only at the groups that Mr Stirling specified. The surrounding circumstances and extrinsic evidence, looked at as a whole and as I have set out more fully at [74]-[90] above, are these: the Corporation is the registered proprietor of the land and buildings, as is acknowledged in the College's constitutions from time to time; by those constitutions the member parishes were liable to underwrite the cost of land and buildings, and in addition the ACA agreed to underwrite the cost of the project specifically, meaning that the Corporation retained primarily liability; the actual source of funds for repaying the Schools Provident Fund was a levy on parents; Fabris wrote in the Corporation's name to authorise the architect to obtain the building approval; the Board and the Executive Committee, of both of which Matthys was a member throughout the relevant period, made decisions concerning the project, including the scope of the project and, later, the award of the contract to Van Driel; acting on the recommendations of the DBC, by the letter to Matthys dated 25 June 1990 Little, who was a trustee of the Corporation, approved the project and authorised Matthys "to act as agent for the Corporation for the purpose of executing any necessary contract documents ... in this project"; Matthys had the letter with him when he signed the contract; he had received no other authority, written or oral, to sign the contract on behalf of another person or persons; the builder was aware from previous contracts with Church organisations that the Corporation was sometimes the contracting party; after execution, the Proprietor's part of the contract was retained by the DBAS, not the College; the contract works were insured in the name of the Corporation; the view within the Archdiocese is that the Corporation is the appropriate party in litigation involving land owned by the Corporation.

[159]

The circumstances are consistent with the Corporation being the Proprietor under the contract and the appropriate plaintiff in this case. Although the actual funds for the project came from parents, the primary liability lay with the Corporation; the builder may have received payments from Emmaus College, but this is explained by the internal circumstances of liability within the College. In relation to the loan from the Schools Provident Fund, it is not surprising that this was in the name of Emmaus College, given that it is an internal arrangement within the Church. Although some decisions about the project were made by the Board, they were within the scope of the constitution from time to time, which was made by or through the Archbishop; and the decisions were of the type one would expect to be made by the people most directly affected by the project. The most important decision about the project--whether to proceed--was made expressly by the Corporation, as is apparent from the letter of approval and authority to execute the contract from Little to Matthys. The ACA, being a juridical person, had limited contract-making power, but is clearly not the appropriate legal entity to be dealing with land owned by another legal entity. Matthys had authority to sign the contract on behalf of the Corporation, but there is no evidence that the members of the Board or the ACA authorised him to do so with the intention that he make them personally liable;[13] in any event, there is no evidence that the members of the Board or the ACA themselves had authority from the Corporation, the undoubted source of authority for dealing with the Corporation's land. The inescapable inference is that Matthys signed under the authority of the letter from Little. He may not have reported orally or in writing to the Corporation afterwards, but the Proprietor's part of the contract was sent to the DBAS, which was in liaison with Little, and this act really conveys everything that a donor of authority would need to know: namely, that the contract had been signed in accordance with the authority.

[260]

Excavation of the site began by early September 1990. The earthworks sub-contractor was Ace. Savage gave evidence of cutting into the higher part of the hall site and using the excavated material to fill the lower part; the fill was then compacted. The site was found to be extremely wet (which is perhaps consistent with McKenzie's evidence about temporary water tables), and consulting engineers CR Knight & Associates (Australia) Pty Ltd ("CR Knight") were asked to produce a assessment report in respect of the existing drainage system. A preliminary report dated 9 October identified two problems: urgent works were required to unblock the outfall drain at the south-east corner of the property, which was collecting runoff from the area of the main College buildings via the stormwater drain I have mentioned; and the open drain along the northern site boundary, which was required to collect drainage from properties above the boundary such as Wobbie's World, was in extremely poor condition, being obstructed by weeds and debris. In relation to the latter, the immediate solution was to clear the open drain, which would have a marked effect, with constant maintenance thereafter; a permanent maintenance-free solution would be to replace the drain with a concrete channel. The immediately necessary works (i.e. not the installation of a concrete channel) were conducted during October by a contract plumber outside the terms of the building contract. A full drainage report was commissioned, and CR Knight eventually produced it on 11 April 1991. It recommends work on various stormwater pits (none near the multipurpose hall) and excavating wet spots for inspection; it does not refer to any problem with the northern drain. Although it was suggested by counsel for the builder during the course of the trial that the northern drain contributed to a drainage problem on the College site, I infer from the fact that works were done to clear the northern drain and that no concern was expressed in the subsequent report that it ceased to be a relevant issue. I am strengthened in this view by the inference, from the builder's failure to call any representative of CR Knight to give evidence, that such evidence would not have assisted the builder.

[263]

The slab was designed by the engineer. The slab and footing plan shows a slab 125 mm thick for the multipurpose hall with edge beams of 400 mm and a grid of intermediate beams also of 400 mm. This design is known as a "waffle pod raft slab". In the ordinary course of construction, the beams are formed by making allowance for their shape when preparing the sub-base; porous material is used to build up any areas where this is necessary, such as the areas between the beams or if a beam had been over-excavated; an underlay membrane, which is to some extent impermeable to vapour, is placed over the sub-base, the sheets being overlapped and taped; reinforcing for the concrete is put in place; the concrete is then poured onto the underlay. Mudge gave evidence, which I accept, that the possibility of perforation when laying the under-slab membrane was very high. There are requirements in relation to the slab contained in the specifications. Section 220 "Concrete" Subsection 116 "Underlays, Membranes" states that a waterproofing underlay or membrane is required; lap joints are to be not less than 200 mm, with the laps facing away from the concrete pour; unavoidable penetrations such as service pipes and the like are to be sealed; the underlay is to be taken up vertical faces as far as the damp proof course, where applicable, and fixed at the top by tape sealing. Browning added that the top of the damp proof course in this case would be the bottom edge of the tilt slab panels, although he later conceded that no damp proof course was shown on the relevant drawing. Subsection 124 "Reinforcement" provides for supports for the concrete reinforcements: a metal or plastic plate is to be placed under each support to prevent puncturing of waterproofing membranes or vapour barriers. Mudge's opinion was that the drawings and specifications required a slab in waterproof condition, allowing only for the limited degree of vapour transmission through a fully sealed membrane. I accept that opinion. I do not consider it inconsistent with Nixon's statement that the slab would not be considered to provide a waterproof system.

[373]

I summarise my findings as follows. I accept the evidence as to a tight seal between the edge beam and the clay. McKenzie stated that he observed no water weeping up to the pavement in the vicinity of the north-west corner: see [227] above. I infer that water coming down the slope was diverted from the north-west corner of the slab along the edge beam towards the south and east. The water found its way underneath the slab. The path of least resistance by which it did so was along the conduit trench running from about half way along the western wall to the south-east, or through the fill at the southern end of the slab. I have found at [ 191] above that no compaction testing was done, without which it is impossible to be satisfied that the fill and trench were adequately compacted; I conclude that they were not so compacted. Once under the slab, the water entered the slab through the inevitable perforations in the under-slab membrane (see Mudge's evidence at [189] above); another possibility is that the creases and untaped laps which Mudge observed at the side of the slab (see [223] above) continued underneath it, and I find that they did. Water also entered the slab directly from the sides; the fact is that in parts the membrane was pushed down and creased and the laps were not taped: again, see Mudge's evidence at [223] above. Whatever the precise level to which the builder may have been obliged under the contract to bring the membrane up the vertical face of the edge beam (see [189] about the absence of a damp proof course on the drawings), allowing the membrane to become pushed down and creased as Mudge observed was clearly in breach of that obligation. The failure to properly compact the trench and fill, and the failure to tape the laps in the under-slab membrane and allowing it to become pushed down and creased constitute lack of reasonable care and attention on the part of the builder during construction. These failures caused water to enter the slab and thence the floor.

[537]

I reject the builder's submissions. It is sufficient to refer to the following facts. As discussed above, following occupation of the building in July 1991, the builder did not apply for a certificate of practical completion and none was issued. The College voluntarily (and without request and as though practical completion had been achieved) returned the first bank guarantee to the builder on 19 February 1992 and, as contemplated by the contract, continued to hold the guarantee in question as security. The architect issued an instruction no. 27 dated 22 December 1992 which required the builder to attend to matters the subject of the litigation. The builder never complied with the instruction being of the view it was not obliged to do so. In essence, as Stehle recognised in cross-examination, the question as to whether the builder was obliged to have done so was left for determination in the litigation. Of course the litigation sought to recover the costs of carrying out works in the instruction and rectifying defects in the areas identified. I accept Hede's evidence that the builder was given a fair opportunity to rectify defects before others were engaged for that purpose. I also accept that Hede correctly stated the fact to be that the project never reached final completion because the instruction no. 27 remained outstanding and included the defects the subject of the litigation. Stehle conceded, correctly, that if the builder should have, but had not, complied with the instruction, it was not entitled to a final certificate. My judgment establishes the builder was in error in not complying with the instruction. In any event, on 13 October 1994 the builder had withdrawn all prior claims for a final certificate and then and subsequently sought advice as to when a final certificate may be claimed. The response, in short, was to refer to instruction no. 27, and ultimately others were engaged to perform rectification works. A claim for a final certificate was not made. Finally, not only was the architect's retainer not terminated as alleged in the defence but nothing that passed between the College and the architect was the reason why the architect did not issue the builder a final certificate. The reason was because the builder was not entitled to the certificate. In the circumstances the plaintiff has been entitled to retain the guarantee as security. The counterclaim fails.