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

Some observations concerning the expert evidence 19 [68]

Practical completion and the builder's defences 58 [160]

Alleged maintenance problems and emergence of defects 75 [200]

Engagement of consultants for the bus turnaround area 108 [283]

Discovery of the interceptor pit and laying of asphalt 115 [302]

10. Miscellaneous claims of the builder 141 [ 380]

2. The Roman Catholic Trusts Corporation ("the Corporation") owns an area of land at 503 Springvale Road, Forest Hill at which is conducted a Catholic secondary school called Emmaus College. The Corporation is incorporated, and holds the land on trust for the benefit of the Roman Catholic Church, pursuant to the Roman Catholic Trusts Act 1907. Emmaus College is not a corporate body or an unincorporated association and it is not a registered business name; it is merely the name of the school conducted at the site.

5. The College determined that it required a hall for various school activities and an improved facility within the school grounds for the movement and parking of buses and cars. In January 1990 the College engaged an architect, Paul Anthony Hede, to provide architectural services for the proposed works. Hede engaged consulting engineers Perrett Simpson Pty Ltd ("Perrett Simpson"). Following the preparation of documentation the job went to tender. On 17 August 1990 a contract was let to a builder, Van Driel Ltd ("Van Driel"). Work commenced on site in early September 1990 and was seemingly completed in about mid-1991. On 21 July 1991 the project works were officially opened. The school took occupation on 23 July 1991, on which day the builder claims that the works reached practical completion.

8. By September 1991 there was evident failure in the road pavement in the bus turnaround area and the roof of the hall was not watertight. Then, in May 1992, defects became apparent in the floor of the hall. Investigations were carried out in the three areas. The roof and the driveway were rectified. The floor was a more difficult problem. It has not been rectified.

11. On 14 February 1997 the Corporation filed a writ against Van Driel and Perrett Simpson as defendants. On 19 September 1997 Perrett Simpson joined Hede as a third party. Not long after Hede was added as the third defendant to the proceeding.

14. Each defendant has claimed contribution or indemnity from the other under Part IV of the Wrongs Act 1958. Perrett Simpson's claim against Hede is made by its third party notice. The other claims are made by the short form of notice applicable between existing parties to a proceeding.

17. The Corporation's claim against each defendant is for the loss and damage allegedly suffered as a result of defects for which the defendant was liable. The claims against the builder and the architect are based in contract and a duty of care in tort while the claim against the engineer is based only on a duty of care in tort. The first and third defendants raise a counterclaim.

20. The Corporation filed up to date particulars of its loss and damage during the trial. The amounts claimed are:

Plus interest from payment to 1 August 2000, and continuing

Plus interest from payment to 1 August 2000, and continuing

Plus interest calculated on investigation cost from payment to 1 August 2000, and continuing, say

Legal costs incurred pre-writ associated with above:

Plus interest from payment to 1 August 2000, and continuing, say

Damages or an indemnity in respect of third defendant's counterclaim:

Excluding (e) and (f) the claim totals $398,995.19, subject to interest being revised to the date of judgment.

25. The Corporation claims each item of loss and damage from the builder. The claim against the engineer is limited to (a), (d), (e) and (f) which in dollar terms, and excluding (e) and (f), is $125,917.80 subject to interest being brought up to date. The architect is sued for (a), (b), (d) and (e), which in dollar terms, and excluding (e), is $175,950.48 subject to interest being brought up to date.

28. Amounts of this magnitude are not such that without more, such as the determination of an important matter of principle, would warrant litigation being conducted in this Court with the intensity and cost that has obtained in this case. The defects in the bus turnaround area and the roof had been investigated and rectified prior to the writ being filed. The floor had been investigated but rectification works had not been carried out due to the complexity of the issue and the cost of rectification. Thus had the situation ground to the point it was at when the writ was filed on 14 February 1997. There had been an alleged practical completion, followed quickly by the manifestation of defects, the more readily rectifiable of which had been attended to. Eventually the writ was filed, an event which could hardly have been surprising but which resulted in a level and extent of legal activity out of proportion to the size of the claim and the issues involved.

31. When the writ was filed it carried a statement of claim which particularised the defects and the amounts claimed. The areas of claim were those mentioned above, namely, the roof, bus turnaround area, the floor and legal costs. It is worth looking back and noting the amounts then claimed. The total amounts claimed were: against the builder $271,275.28, against the engineer $73,340.00, and against the architect $118,812,68. The Corporation also claimed interest. It seems staggering that claims of such relatively modest amount and which raised no particular point of principle were considered, let alone permitted, by the legal practitioners involved and those for whom they acted to be an appropriate occasion for the vexatious and tendentious way in which the litigation was conducted following the filing of the writ. One can only wonder at the relative enormity of the costs that have been incurred. Experienced people with reasonable minds, allowing for differences of opinion, and having regard to the realities of litigation and the high costs involved, ordinarily would seek to avoid, and would have avoided, such litigation.

34. A perusal of the file reveals that prior to the trial commencing on 1 August 2000 the case was before a Judge or a Master in the order of 30 times. In my view that number of occasions was intolerable. It is not a sufficient answer for a legal practitioner or a client to say that at one time and then at another they thought of this or that point to agitate. Legal practitioners should conduct cases in the courts with a concentration on substance, expedition and a minimum of cost. It is difficult to see how that central proposition, and the attendant public and private interest, was observed in this case. In the course of the pre-trial jousts, the proceeding was fixed for trial on 16 August 1999 on an estimate of duration of 30 days. That fixture was put off and the trial was refixed for hearing on 1 August 2000 when it came on before me, following further pre-trial jousts, on an estimate of duration of 20 days. It ran for 24 days. There were issues of fact and law but no issue of principle was raised for determination.

37. Many witnesses were called. The plaintiff called 14 witnesses and tendered one short witness statement by consent. The builder called 13 witnesses, the engineer three and the architect two. A number of the witnesses were called to give opinion evidence based on their expertise in a particular area. I refer more particularly to the matter of witnesses below.

41. In this section I am concerned to identify the issues as defined by the pleadings. I do not overlook the several points made by counsel in final address.

45. The building contract was in writing dated 17 August 1990. It was the JCC B 1985 Without Quantities Building Works Contract and incorporated plans and specifications and certain other documents. The contract provides that the site be made available to the builder on or before 23 August 1990 and that for the sum of $1,473,616 the works referred to in the contract be undertaken and brought to practical completion by 6 June 1991. The third defendant is stated to have been appointed as architect for the purposes of the contract. The parties to the contract are the Proprietor, which is named on the face page of the contract as Emmaus College, and the Builder, which is named as Van Driel Ltd. The word Proprietor is not defined in the contract. For the Proprietor the contract was executed by Luc Julianus Omer Matthys, then the parish priest of St Thomas the Apostle's Parish, Blackburn, and now Bishop of Armidale.

48. The Corporation is the only plaintiff and sues on the basis that it was the Proprietor under the contract and that as such it contracted with Van Driel. Van Driel denies that it contracted with the Corporation. Van Driel claims that it contracted with either the members of the board of Emmaus College and its executive or the members of the Association of Canonical Administrators of the College. The other defendants do not rely on this point. As Perrett Simpson was engaged by the architect it could not have been, and it was not, sued on a contract. Hence it never took a point that the Corporation was not a competent plaintiff against it. Initially, in its defence, the architect took the builder's point. It abandoned the point at an early stage of the trial.

51. It is common ground that the builder was required to carry out the works in accordance with the plans and specifications and other contract documents and in a proper and workmanlike manner. The builder is also sued in negligence, it being alleged that the circumstances which constitute a breach of the contract also constitute a breach of the duty to take reasonable care. The duty of care, but not a breach, was admitted at an early stage in the trial.

54. The third amended statement of claim (which I refer to as the statement of claim) alleges that the builder was in breach in the following respects:

(a) the multi-purpose hall was not watertight and water penetrated due to:

(i) inadequate and/or defective flashing to the south and north walls at curved roof areas and to the roof generally;

(ii) inadequacies with and defective installation of the sky lights to the roof;

(b) failure of the bitumen pavement at the bus turnaround area caused inter alia by a failure to construct in accordance with contractual requirements and to properly compact the sub-base and base course to the pavement;

(c) failure of the floor to the hall due, inter alia, to excess moisture in the concrete slab.

Much greater detail of the alleged defects was provided in particulars filed prior to the trial. Further particulars of (c) were provided during the trial.

61. In its fourth amended defence (which I refer to merely as the defence) the builder denies that it was in breach. The builder alleges further that, if it was in breach of the contract or a duty of care, any loss and damage suffered in consequence was suffered by Emmaus College and not by the Corporation. In particulars to this plea it was stated that the amounts referred to in the particulars of loss and damage were paid by Emmaus College and not the Corporation.

64. The Corporation's statement of claim concludes with an allegation against each defendant that the Corporation had been deprived of the use of the money comprising its loss and damage, and claimed damages for the loss of use of such monies in accordance with the principle in Hungerfords v Walker. Each defendant denied the allegation and opposed the claim. It is clear from the particulars of loss and damage and the plaintiff's submissions that this claim was abandoned.

67. Having responded to the statement of claim against it, the builder proceeds with some further pleas and concludes with a counterclaim. In paras. 11-15 it is alleged that the builder is not liable for the costs of any rectification work which may have been undertaken by others, because the proprietor failed to comply with cl. 5.06 of the contract which inter alia required the builder to have been in default of a notice from the architect requiring the builder to perform the works before others were engaged to perform them. Certain works to the roof, and the bus turnaround pavement and associated drainage, are referred to in particulars of this plea. The plaintiff denies this allegation.

70. Then the builder alleges (in para. 16) that if it was liable for the costs of any work undertaken by others which was not the subject of an instruction from the architect, any amount recoverable is limited to the amount by which that cost exceeds the amount which would have been payable to it if it had performed the work. This is based on the provisions of cl. 5.06. Again the plaintiff denies the allegation.

73. Then it is alleged by the builder that the works it performed were damaged by others prior and subsequent to practical completion on 22 July 1991. Of the five items of damage stated in the defence (para. 17), three were abandoned in the course of final addresses. The two remaining are: first, sewerage and storm water drains and rectification of drains including the main outfall drain; and, second, the failure of the College to maintain floor sealer to the floor of the hall in accordance with the manufacturer's recommendations. The plaintiff denies this claim.

76. Then it is alleged by the builder that, if it is liable in respect of the floor, the plaintiff has had the use and benefit of the floor and any damages should be reduced by the value of that use. The plaintiff denies the allegation.

79. Then the builder alleges that, if it was liable in respect of the bus turnaround area, the rectification works have resulted in a betterment to the plaintiff for which the builder is not liable. The work represented by the betterment is beyond the scope of the builder's work under the contract. The plaintiff denies this allegation.

82. Paragraphs 18-20 of the defence, alleging that the contract required that notice be given before litigation was commenced, were abandoned in the course of final addresses.

85. In para. 22 of its defence, the builder alleges that the plaintiff has failed to pay a variation of $2,816.35 for the supply and installation of cast iron drains in lieu of UPVC drains across the existing septic tank. In para. 23 it is alleged that the plaintiff has failed to release a bank guarantee in the sum of $36,840.40. The matter of a final certificate is then referred to in some further paragraphs as a basis for alleging the builder has suffered loss and damage. Then in paras. 24-26 the builder claims to be entitled to certain site and off-site administration costs: alternatively $22,800 (para. 24), or $47,600 (para 25), or continuing since 26 April 1991 (para. 26). The builder claims to be entitled to set off these amounts against any amount payable to the plaintiff. By a counterclaim the builder seeks an order that the plaintiff deliver up the guarantee.

88. In a defence to the counterclaim the plaintiff alleges that the builder's several claims of set off are barred by s. 5(1) of the Limitation of Actions Act 1958.

92. The plaintiff alleges that the architect engaged the engineer to carry out the structural and civil design of the works, all necessary inspections thereof and to ensure that the works accorded with the design intent. By its defence the engineer denies this allegation. The fact is that the architect did engage the engineer. There was no issue that the engineer was engaged or, despite denials in the defence, that it was a term of the engagement that the engineer owed a duty to exercise reasonable care and skill in performing the requisite services or that it owed a duty of care in tort which extended to the plaintiff to exercise reasonable care and skill in performing the services.

(a) it was engaged to and did prepare structural computations and drawings and make periodic inspections of the building works during construction to observe accord with design intent;

(b) it was not engaged to perform full time supervision of the works;

(c) the builder was solely responsible for carrying out the building works in accordance with the contract drawings, specification and directions given inter alia by the architect.

101. The plaintiff alleges that in breach of its duty of care the engineer was negligent in producing an inadequate design of the bitumen pavement for the bus turnaround area having regard to the soil conditions, in not obtaining or giving proper advice as to investigating and testing the soil in the area, and inadequately designing the level of compaction works and/or checking that those works were properly carried out by the builder. The engineer denies these allegations and alleges that it was not obliged to ensure that the compaction works were properly carried out.

104. The defence then denied the claim of loss and damage. In the alternative it alleged that any loss or damage was caused by factors for which it was not responsible. Both in the defence and further particulars the engineer identified these as: a failure by the builder to properly carry out the works including compaction of the sub-base, laying the pavement to the specified thickness and attending to drainage problems identified by the engineer; the failure of the school to act in accordance with the engineer's recommendation as to removal of a disused septic system; and the failure to install suitable sub-surface drains.

107. By further pleas the engineer alleges that its design of the bitumen pavement was adequate, that it had obtained advice from a geotechnical engineer McGregor Soil and Research Engineering Pty Ltd ("McGregor") on the soil conditions in order to obtain appropriate recommendations on the foundations and design parameters for the extensions, that it used the advice in designing the works, and had communicated the advice to the builder and the architect.

111. The plaintiff alleges that by an agreement made in or about early 1990 the Proprietor by its agent James Christian Fabris, who is and was the Principal of the College, engaged the architect to undertake all structural and engineering services required for the proper carrying out of the works. Originally the architect's defence had taken the same point as the builder that it had not been engaged by the plaintiff. This was abandoned by counsel at an early stage of the trial and, consistently, in his closing address counsel stated that the architect did not rely on the defence that "he was engaged by anyone other than the plaintiff". To bring the defence into line with this concession, and other points of defence that had been abandoned, I gave the architect leave to file an amended defence and counterclaim very late in final addresses. By oversight, I think, the amended defence that was filed deleted the plea, and omitted to add a new plea in substitution, to the plaintiff's plea of the agreement. In the circumstances this does not matter as the architect's position is clear. Indeed in para. 23 of the architect's counterclaim it is alleged that in or about early 1990 the architect was engaged "by the plaintiff" to carry out architectural services and to engage other consultants as required including engineers on behalf of "the plaintiff" in respect of the works.

114. The defence denies the usual allegation that it was a term of the agreement that the architect act with the care and skill of a reasonably competent architect and that he was under a duty in tort to act with reasonable care. These propositions were not however disputed at the trial. The defence also denies an allegation that the architect be paid 12% of the final building cost of the works. Nothing turns on this as the fact is that the architect was engaged on an agreed basis of remuneration. Also denied is the plaintiff's allegation that the architect's fee was inclusive of all consulting services necessary for the works. The allegation was simply too wide in the circumstances.

117. The plaintiff then alleges that in the following areas the architect failed to properly carry out his services:

(a) the design of the roof was defective concerning the flashing to the north and south walls and generally, and to the skylights, and he failed to ensure the placement of proper flashing and installation of the skylights;

(b) the design of the bitumen pavement at the bus turnaround area was defective having regard to the soil conditions, he did not obtain proper advice or advise as to the need for such advice concerning the soil conditions, the design regarding the compaction works was inadequate and he did not ensure those works were properly carried out, and did not ensure the builder properly carried out the works.

123. In his defence the architect denies these allegations and alleges, in summary, that: he properly performed his services as architect; he was not engaged to supervise the works as distinct from a periodic inspection; he was not an engineer; the second defendant was engaged to design and supervise the construction of the bus turnaround area and carry out and advise as to carrying out all testing and investigations in relation to it; the second defendant engaged McGregor; the services of an hydraulics engineer were utilised when required; the builder was engaged to carry out the works in accordance with the contract and design intent. The architect was entitled to rely on the consultants as being reasonably competent to perform the tasks they undertook. In all the circumstances the architect had not been negligent.

126. The defence then denies the claim of loss and damage. It further alleges that any such loss and damage has been suffered by Emmaus College and not the plaintiff; counsel for the architect ignored this contention in final address and I take it to have been abandoned.

129. The defence then alleges that the plaintiff did not rely on advice of the architect. Rather, the plaintiff relied, in respect of matters that were not architectural, on the particular consultant engaged by the architect on the plaintiff's behalf, and on the Diocesan Building Advisory Service.

132. It is then alleged, on the hypothesis that the architect was in breach in relation to the hall and that the plaintiff had suffered loss and damage as a result, that the plaintiff had the continued use and benefit of the hall since construction and that any damages should be reduced by the value of that benefit. Then, in relation to the bus turnaround area, it is alleged that the method of rectification had resulted in a betterment to the plaintiff. These matters were relied upon by way of a set off.

135. The defence concludes with a counterclaim for $15,850 for services provided in connection with rectification works and which services are alleged to have been outside the scope of the initial agreement. The amount is claimed as a variation to the initial agreement or on a quantum merit. In addition the architect claims the amount of any income tax payable on the amount or an indemnity in respect thereof. The plaintiff denies this claim on the basis that all of the services were provided under the architect's engagement for the project.

139. I referred earlier to the total number of witnesses. In this section I identify the witnesses as they were called by the different parties and, in a general way only, the issue or issues with which their evidence was concerned.

143. The first witnesses were Bishop Matthys and Sir Thomas Francis Little, Archbishop of the Roman Catholic Archdiocese of Melbourne during the relevant period and now Archbishop Emeritus. Their evidence was concerned with the issue whether the Corporation was the proper plaintiff.

146. The next two witnesses were Douglas William Burton, the Property Officer of the plaintiff, whose evidence concerned the Corporation's ownership of the College land and buildings; and Diego Vilchez, an employee of the Catholic Archdiocese of Melbourne, who was engaged as a building adviser with the Diocesan Building Advisory Service ("the DBAS"). The DBAS is a service established as part of the Diocesan Building Committee ("the DBC"). The DBC was established by the Archbishop of Melbourne to provide advice and recommendations to the Corporation in relation to capital works over $15,000 proposed to be undertaken at parishes and schools owned by the Corporation. Vilchez interviewed the tenderers for the Emmaus College project.

149. The next witness was Fabris, the Principal of the College. He was the person who gave evidence for the client of background matters leading to the award of the contract, events during the course of the works, discovery of defects and their investigation, rectification works and the present situation. He was examined over a period of somewhat more than two days.

152. Next to give evidence was John Robert Browning, a building consultant. The College engaged him in June 1993 to investigate the leaking of water into the hall. He gave evidence of investigations into that problem and of the remedial works undertaken. He also gave evidence of the problem concerning the floor and of investigations in an attempt to identify the cause of the problem. His evidence occupied a little under two days.

155. The following four witnesses gave evidence of tasks they performed as part of the investigative work undertaken by Browning.

(a) Ian Hamilton Mudge, a concrete consultant, conducted moisture tests of the concrete slab to the hall to ascertain the relative humidity of the slab and hence the level of moisture in it.

(b) John Bland Hay, a specialist in the performance of timber and timber products, conducted moisture tests of the plywood sheets in the Gransprung floor that had been laid on the slab. To understand this, it is useful now to describe the flooring system adopted. First is the concrete slab which covered the entire floor area of the hall. A 200 micron plastic sheet was laid on the slab. On top of this was laid the Gransprung floor. This type of floor is comprised of a sandwich of two layers of 12mm ply laid diagonally, the sheets being stapled and glued together using a water based adhesive. The sheets are laid on a matrix of 8 mm expanded rubber pads attached to the underside of the lower sheet of ply. They rest on the plastic sheet. They keep the ply off the slab and the plastic sheet and create a cushion effect for users of the floor. Granwood blocks are then glued to the surface of the upper ply. The blocks are a composition mix, not timber, and are 10 mm thick and rib-backed.

(c) Franklin Maxwell Campbell, who had long experience in the airconditioning ventilation industry, devised a system of introducing air, assisted by fans, to ventilate the underside of the lower plywood layer of the floor with the object of ascertaining by testing whether the moisture level in the flooring system could be reduced.

(d) Leopold Franz Cerny in December 1994 drilled 210 pairs of holes into the floor, the first into the top ply sheet and the second into the bottom sheet, for the purpose of testing moisture levels in the sheets. He also cut openings into the hall to allow fans to be installed as part of Campbell's scheme to ventilate the space below the ply.

162. The roof rectification work was dealt with by the contractor who performed the work, Robert Mather Rossiter, who at the time owned Garry Owen Roof and Building Services ("Garry Owen").

165. On the issue of the bus turnaround area, evidence was given by a geotechnical engineer Jack Ronald Morgan, a principal of Golder Associates Pty Ltd ("Golder"), who in early April 1992 were asked by the architect Hede to provide a geotechnical assessment of the failed pavement in the area. Golder submitted a proposal which was accepted by the College on 5 June 1992. Golder investigated and reported on the matter. In August 1993 the College asked Golder to prepare a specification for rectification works and this was provided in September. The works were carried out under Golder's supervision in January 1995. The contractor engaged for the works was Tasman Urban Developments, a division of Superdriveways Pty Ltd, a director of which, Charles Ernest Richardson, gave evidence at the trial.

168. The remaining witness called by the plaintiff was Matthew Andrew Buckle, a geotechnical engineer employed by Hardrock Geotechnical Pty Ltd, consulting engineers, who at the request of Browning attended at the site on 27 September 1999 to investigate and test soil obtained from four holes which had been cut through the slab of the hall floor on 7 September 1999. He was asked to conduct limited moisture tests on the filling and natural soil at the four locations to determine the soil moisture content, and to comment on the results. The soil was tested and he reported and advised on the results.

171. As mentioned earlier, the plaintiff tendered a witness statement by consent. It was by a solicitor to establish as fair and reasonable a large proportion of the legal costs claimed by the plaintiff.

175. Four of the witnesses called by the builder were its two joint managing directors, a director who was the project manager, and a former employee who was the site foreman for the works. The joint managing directors were Siegfried Stehle and Brian Thomas McKeogh. The project manager was Jeffrey John Edwards and the foreman was Robert John Kanngieser.

178. The division of functions between Stehle and McKeogh was that Stehle was responsible for seeking work and for the preparation and submission of tenders and negotiations leading to the signing of a contract, while McKeogh's main responsibility was in the carrying out of a project. Stehle gave evidence of the tender and of the steps leading to the award of the contract, on the issue whether the Proprietor under the contract was the Corporation, and on the time spent and costs recoverable by Van Driel since practical completion. He also identified a number of documents in the Court Book. McKeogh's involvement was attendance at a pre-tender interview, a number of visits to the site and a meeting and a letter after practical completion.

181. Edwards and Kanngieser gave evidence of matters that occurred on site concerning the areas relevant to the case.

184. Evidence was then given by the following sub-contractors to Van Driel:

(a) Terrence Edward Potten was the managing director of Terry Potten Flooring Pty Ltd ("Terry Potten Flooring") which installed the Gransprung floor in March/April 1991. He gave evidence of testing for moisture in the slab and, being of the view that it was appropriate to do so, of then laying the floor commencing with the plastic sheet. He gave evidence of subsequent observations of the floor and concerning its proper maintenance. Among other things, he said that in July 1992 he replaced some of the surface blocks in the floor. In the course of this work moisture was noticed under the Granwood block layer. The builder was informed and told that there was no point in carrying out further repairs to the floor until the cause of the moisture ingression was established.

(b) Frank Robert Dalsanto was the project supervisor for Ortech Industries Pty Ltd ("Ortech") which installed the roof on the hall. He gave evidence as to that and of subsequent returns to the site to check for leaks.

(c) Graeme Stanley Savage was an estimator and project manager for Ace Contractors and Staff Pty Ltd ("Ace") which carried out the earthworks for the project and constructed the bitumen pavement and associated works. These works included site preparation and proof rolling. He gave evidence as to the carrying out of the works and of relevant matters that occurred in the process.

(d) Ronald Gregory Cooper was the general manager of Ace. He too gave evidence of relevant events in the course of the works. As with Savage, his evidence was directed to the works in the bus turnaround area.

191. The remaining five witnesses were of the expert category. They were either engineers or architects and were called to give their opinion on one aspect or another of the case.

194. The first called was Ian Lachlan McKenzie. He is an environmental/geotechnical engineer and a director of Beveridge Williams & Co Pty Ltd ("Beveridge Williams"), Environmental Division. He gave evidence as to the natural movement of water on the school land and of the need for adequate subsoil drainage to the north and north-west of the hall to intercept the natural direction of the flow of ground water in a south-easterly direction (towards the bus turnaround area) and hence a continuing source of water to the underside of the hall slab.

197. The second expert called was Geoffrey Colin Nixon of GC Nixon and Associates Pty Ltd, consulting civil and structural engineers. Nixon inspected the site on 5 July 1999. While he made some comments concerning the roof, his evidence was directed to dealing with the claim against the builder on the bus turnaround area and the failure of the hall floor.

200. The third expert called was an architect, Leigh James Harding, who inspected the hall including the floor and the surrounds on 5 July 1999. His evidence was principally directed to the matters of moisture ingression in the floor including the source of that moisture, and leaks to the roof.

203. The fourth expert was Brendan Joseph Corcoran, a civil and structural engineer with The GHD Group. He has particular expertise in concrete. He inspected the site on 14 July 2000 upon being engaged on behalf of Van Driel. His evidence was concerned with the slab and a range of matters which he considered bore on or might explain the ingression of moisture into the slab and the floor.

206. The fifth expert was a civil and structural engineer David Beauchamp. Initially, at their request, he had provided two reports to the third defendant's solicitors in May 1998. The third defendant did not propose to call Beauchamp and the first defendant, having previously been provided with a copy of the reports, announced it would do so during the trial. His reports were tendered in the course of his evidence. He dealt with a series of issues concerning the design and building of the roof, the floor, and the pavement, and the location of professional responsibility.

210. The three witnesses called by Perrett Simpson were a director Dale Andrew Simpson, a former employee Martin John Brock, and a civil engineer Peter Robin Jack who gave evidence as an independent expert.

213. Simpson was the principal at Perrett Simpson responsible for the project. Perrett Simpson had previously worked on projects with an architectural firm of which Hede had been a member, and both firms had previously been involved at the College. He agreed Perrett Simpson's retainer for the project with Hede. He entrusted day-to-day responsibility for the project to Brock, subject to his continuing supervision. He gave evidence as to matters that occurred during the course of the works and subsequently when problems arose. His evidence, and that of the other witnesses, was directed to the bus turnaround area which was the only part of the project in respect of which the engineer was sued.

216. Brock gave evidence of the initial discussions, the design work and matters that arose in the course of the works and subsequently when problems had arisen.

219. The evidence of Jack was directed to dealing with and refuting points of attack upon the quality and competence of Perrett Simpson's design for the pavement and their instructions concerning the construction of the vehicular area.

223. The two witnesses called by the architect were the third defendant Paul Anthony Hede and a former employee Philip Glenn Templeton, who was employed by Hede in September 1990 to September 1991. In his employment, Templeton was the administering architect for the project subject to Hede's supervision.

226. Hede gave evidence of background matters; his retainer for the project, which included responsibility for engaging and paying the fees of consultants; his engagement of Perrett Simpson; the documentation and tender and letting of the contract; and of matters that occurred in the course of the works that concerned the areas in issue including his counterclaim.

229. Templeton's evidence was of lesser compass both in terms of time and the matters dealt with.

Some observations concerning the expert evidence

233. Unfortunately, but noticeably in my opinion, there was a tendency in some but not all of the expert witnesses to be a soldier to advance the interest of the party who called him, as distinct from being an independent expert expressing an opinion to assist the court. As to the position of an expert witness in a civil case I refer with respectful agreement to the judgment of Cresswell J in National Justice Compania Naviera SA v Prudential Assurance Co Ltd.[1]

236. During the trial I had to draw attention to the necessity for a witness called to give opinion evidence to state his instructions and identify the materials provided to him. This is to enable the other party and the Court to know the factual basis on which the witness has formed the relevant opinion. At present I merely make the point and do not develop the instances in the trial in which this requirement was not satisfied.

239. I mention one further matter concerning the expert witnesses. While the facts in this case occurred around 10 years ago and the passage of such a time must diminish recollections, there was to be detected, really in the case of the first defendant, a concentration on expert evidence and, by comparison on some important aspects, a lightness or lack of evidence of the fact of what actually happened on the site in the course of carrying out the works. This is not to say that there was no evidence of what occurred during the works but that in more than one critical respect the evidence was light on or lacking in detail or persuasion as to what had actually occurred. Unless the relevant fact or facts can be found, or there is a satisfactory basis on which a relevant inference may be drawn, the expert called to give opinion evidence may lack a sufficient evidentiary basis on which to found his opinion.

243. The plaintiff and the builder agree in their pleadings that the building contract was in writing. They also agree that the party with whom the builder contracted was not Emmaus College although that name was placed in the contract as the "Proprietor". It is also common ground that when Bishop Matthys placed his signature on the contract under the words "Signed by the Proprietor" he did not do so on his own behalf. When he signed the contract he did not add any words to indicate the capacity in which, or on whose behalf, he signed it; nor did he inform the builder's representatives present at the signing of the contract of the capacity in which, or on whose behalf, he signed the contract. Nevertheless, it is common ground that he signed the contract for another party and that that party was not Emmaus College. The question is: who was that party?

246. As mentioned at [15] the Corporation submits that the proper conclusion is that it was the Proprietor under the contract, whereas the builder submits that the Proprietor was either the members of the board of Emmaus College and its executive or the members of the Association of Canonical Administrators of the College. In his submission, counsel for the builder did not opt for or prefer one of those two as being the Proprietor; it was for the court to decide which of the two was the Proprietor under the contract.

250. It is useful at this point to set out some evidence regarding the structure of the College, the contents of the contract, and how it came to be executed. There was evidence from Little, Matthys, Burton, Vilchez, Fabris, Stehle, McKeogh and Hede which was relevant to these points. I have had regard to their oral evidence and their witness statements, but I do not consider it necessary to set it out in full. Unless stated otherwise, I accept the evidence I describe below as the fact; most of it was not in dispute.

253. As I have mentioned, the Corporation holds the land at 503 Springvale Road on trust for the Roman Catholic Church pursuant to the Roman Catholic Trusts Act. Following his appointment as Archbishop of Melbourne, Little became one of the six trustees and remained so during the relevant time. The Emmaus College Board Constitution, ratified by the Archbishop on 6 October 1980, governed the operations of the College from about that date. According to cl. 3, ownership of the land and buildings occupied by the College was vested in the Corporation. By cl. 4, the member parishes were to underwrite the cost of land and buildings. One of the member parishes was St Thomas the Apostle's Parish, of which Matthys was the parish priest between 1986 and 1996. The constitution then provided for a College Board, which pursuant to cl. 5(c) had "executive power to act under the authority of the Archbishop and within the terms of diocesan regulations regarding the establishment and conduct of schools"; by cl. 6(d) the Board was responsible for controlling the College finances. The membership of the College Board included, amongst others, the Principal ex officio and four parish priests elected by the parish priests of the region. Fabris, having become the Principal in 1982, was on the Board throughout the relevant time; by March 1990 Matthys had been elected to the Board. Although not expressly provided for in the constitution, various committees were established within the Board, including the Buildings, Grounds & Equipment Committee, of which Fabris was a member by December 1989 and through the relevant period; there was also an Executive Committee of the Board which, according to the minutes of the annual meeting of the College Board held on 15 March 1990, included Fabris and Matthys. The constitution does not refer to contract-making power; Mattys's evidence was that the Board does not have power to enter into contracts.

256. The structure of the College was altered during 1990 and 1991. By decree of the Archbishop on 11 May 1990, the Association of Canonical Administrators of Emmaus College ("the ACA"), consisting of the priests of the member parishes, was established as a private juridical person. Matthys was elected as its first president. The decree states:

" The College will be governed by the Association according to the Statutes for the Association of Canonical Administrators of Colleges approved by me on 2nd December, 1988, and by the provisions of ordinary administration as defined in Canon Law and determined by the Archbishop."

To this extent, the 1980 constitution appears to be varied. The Statutes referred to in the decree provide, amongst other things, that the role of the ACA includes signing contracts in relation to the financial arrangements of the College; apart from the specified responsibilities, all other matters are delegated to the College Board according to the College's constitution. I add that the ACA existed in an informal way before the Archbishop's decree; for instance, it is referred to in correspondence in May and June 1989.[2]

263. By a process that is not entirely clear, a new Constitution for Emmaus College, Forest Hill dated 13 May 1991 was adopted, one of its purposes evidently being to acknowledge the role of the ACA as created by the Archbishop's decree of the previous year. The new constitution, which begins by stating that the College has been established "[w]ith the approval and under the direction of the Archbishop of Melbourne", is in substantially similar terms to the 1980 constitution, certainly in relation to the clauses I have referred to (now differently numbered), except to the following extent.

(a) Ownership of the land and buildings is still stated to be vested in the Corporation, but it is now added that the Corporation holds the land and buildings in trust for the member parishes of the region.

(b) There is a definition of "Canonical Administrators" as "the Parish Priests of the Member Parishes acting as a juridical person. (Canons 113-123)". This is clearly a reference to the ACA.

" is managed by the Emmaus College Board, under delegation from the Canonical Administrators, in accordance with the Constitution which is approved by the Archbishop. According to the provision of Canon Law the College Board acts as a Board of Management, and is responsible to the Canonical Administrators who in turn are subject to the vigilance of the Archbishop. (Canon 1279.)"

(d) The clause about executive power now states that the Board has "executive power to act under the authority of the Canonical Administrators, and within the terms of diocesan regulations regarding the establishment and conduct of schools".

(e) Some aspects of financial management require the involvement of the Canonical Administrators.

Some new provisions also deserve mention: cl. 7 provides for an Executive to act with delegated authority on behalf of the Board, apparently taking over the function of the Executive Committee of the Board under the former constitution; and cl. 18 provides for distribution to the member parishes of any surplus upon winding up or dissolution of the College. There is still no express reference to contract-making power.

273. At this point it is possible to draw some conclusions about the College. Emmaus College itself is not a legal entity; rather, it is the name of a school. It is part of the Roman Catholic Church. The plaintiff Corporation holds the land on which the school is conducted on trust for the Church. In fact, the Corporation is the legal owner of not just the land on which Emmaus College is conducted, but all the property (real and otherwise) of the Church. It is readily to be understood that, for practical reasons, correspondence will be conducted in the College's name, separate accounts will be kept in relation to the College, there will be a bank account in the College's name, etc. The College has a measure of independence in its operations, but this is within the confines of constitutions and decrees made by, or with the authority of, the Archbishop; whatever other authority the Archbishop may have, the currently relevant capacity in which he acts is as a trustee of the Corporation. The College's limited independence of action is in no way an indication that it has independent legal personality, just as it would be absurd to suggest, for instance, in the case of an individual who operated two businesses, that the fact that there were separate bank accounts or that books were kept separately somehow indicated that each business had legal personality. The correct analysis of the operations of the College is that it is part of the Church, all of whose property is held by the Corporation for the benefit of the members of the Church; all acts in respect of the College are legally those of the Corporation, performed under delegated authority. The ACA may be a juridical person, but in relation to the College it can only act within the confines of the authority given to it by the Corporation.

276. Having described the structure of the College, I now set out, to the extent relevant, the steps leading to the execution of the contract on 17 August 1990.

279. The project was initially to proceed in 1989 and to that end Little wrote to Fabris on 17 May 1989, relevantly stating:

" The Diocesan Building Committee has conveyed to me its recommendations regarding the project for a multi-purpose hall, toilets, changeroom, canteen, carpark and earthworks. I hereby give my approval for the project provided that the Archdiocese receive an assurance in writing from the Canonical Administrators of the College to jointly and severally underwrite the debt servicing requirements of this project, while at the same time continuing to meet the Diocese's obligations, particularly to the Diocesan Extension and Maintenance Fund. I am given to understand that the estimated cost will be $2,527,582. The Roman Catholic Trust's [sic] Corporation for the Diocese of Melbourne hereby authorises you to act as agent for the Corporation for the purpose of executing any necessary contract documents (excluding the obtaining of finance and property sale/purchase) in this project."

At this stage, there was consideration of selling part of the land occupied by the College to help fund the project, but instead the Board decided to reduce its scope. On 6 December 1989, the Buildings, Grounds & Equipment Committee determined that the architect should be engaged for the revised project. The architect redesigned the project on the basis of a project cost of $1.69 million. In order to allow the architect to apply for building approval for the revisions, on 23 April 1990 Fabris wrote a letter addressed "to whom it may concern" at the Nunawading City Council in the following terms:

" As owners of the land, we hereby give permission to Hede - Architects, Interior Designers to submit for Building Approval for the proposed works at Emmaus College, Junior School, 503 Springvale Road, Forest Hill."

The letter was on Emmaus College letterhead, but Fabris signed "For the Roman Catholic Trusts Corporation". This shows clearly his awareness of the letter of authority from Little and of the capacity in which he was acting. The resulting building approval, dated 24 August 1990, showed the name of the owner as "Catholic Diocese of Melbourne" and its address as "Cathedral Place, East Melbourne".

286. At a meeting of the College Board on 21 June 1990, Fabris reported that approval had been obtained from the Grants Allocation Committee, Diocesan Finance Feasibility Committee, Diocesan Building Committee and the Schools Provident Fund. These are various bodies within the structure of the Roman Catholic Church, and I comment on two of them only.

(a) I have already described the role of the DBC (and the DBAS within it) at [43] above. The DBC is guided in its activities by the Diocesan Building Procedures Manual, the relevant version being Issue 7 dated 19 June 1989. Counsel for the builder placed much reliance on the Manual, and specifically statements in it that the building contract will be "prepared and signed between the proprietor (client) and the contractor (builder)" following formal approval by the Archbishop, or that "[t]he client will then enter into a contract with the successful tenderer". It is clear from a statement in the Manual, that the DBC "will ensure that contracts on projects entered into on [Corporation] property do not put the [Corporation] at risk by client failure to observe proper duties and regulation to such projects", that the client is not the Corporation (although it is implicit in the statement that the Corporation remains ultimately responsible for the project). In this case, according to Vilchez, the "client" was Emmaus College.

(b) The reference to the Schools Provident Fund refers to a loan from that body for $1.5 million, later reduced to $1.4 million.[3] The loan was obtained in the name of Emmaus College. The ACA had agreed to underwrite the debt servicing requirements of the earlier project in 1989; according to Matthys's evidence, such an agreement was a normal requirement for a project of this sort, and I would infer that either the ACA's agreement in relation to the earlier project carried over, or that a new agreement was reached in relation to the lesser amount. By the constitution, as I have mentioned, the member parishes were also required to underwrite the cost of land and buildings. The actual source of funds for repaying the loan, however, was a levy on parents of students attending the College.

291. As the time for tendering and then executing the contract approached, on 25 June 1990 Little wrote to Matthys in the same form as the earlier letter to Fabris, relevantly stating:

" The Diocesan Building Committee has conveyed to me its recommendations regarding the project for Emmaus College - Forest Hill Campus re the Multi-Purpose Hall and School amenities. I hereby give my approval for the project. I am given to understand that the estimated cost will be $2,000,000. The Roman Catholic Trust's [sic] Corporation for the Diocese of Melbourne hereby authorises you to act as agent for the Corporation for the purpose of executing any necessary contract documents (excluding the obtaining of finance and property sale/purchase) in this project."

The letter was addressed to Matthys as president of the ACA. I accept it as an authentic document.[4]

296. The project then went to tender. The tender documents included the specifications prepared by the architect, which were headed "Specification for Alterations and Additions at Emmaus College, Junior School at 503 Springvale Road, Forest Hill". I note that in Section 000 Preliminaries, Subsection 999 Schedule to Preliminaries, the signage to be placed at the site is specified to include the words: "PROPRIETOR: Emmaus College".

299. Van Driel submitted a tender dated 26 July 1990, together with a related letter of the same date, both addressed to the "Diocesan Advisory Service" (clearly intended to refer to the DBAS), and qualified the tender by a letter dated 31 July to the architect. Tender interviews were conducted on 10 August at a hall in Brunswick Street, Fitzroy owned by the Corporation. The minutes of the College Board meeting on 16 August 1990 record that the architect and DBAS had recommended Van Driel be awarded the contract, that the Executive Committee of the Board agreed, and that the contract would be signed the next day.

302. Execution of the contract indeed occurred on 17 August 1990, at the presbytery of St Thomas the Apostle's Parish, Blackburn attended by Matthys, Fabris, Stehle and the architect. The contract refers to the parties as the "Proprietor" and the "Builder".

305. For the "Proprietor", Matthys signed his name only, with no indication as to the capacity in which he did so. Matthys had the letter from Little with him, but he did not refer to it in any way; nor was he asked for any authority. Matthys stated in his evidence that he signed the contract for and on behalf of the plaintiff Corporation. Further, he gave evidence that he had not been requested by any member of the College Board or the ACA, nor any person associated therewith, to enter into the contract on behalf of Emmaus College, the College Board or the ACA, and that he had no authority or permission to do so. After execution, the Proprietor's part of the contract was lodged with the DBAS.

308. For the "Builder", Stehle superimposed his signature over a stamp containing the words "Van Driel Limited" and the company's address. He said that a representative of Emmaus College signed the contract on behalf of Emmaus College and "that was good enough for me". The builder had executed contracts for various groups within the Roman Catholic Church over the previous 30 years; McKeogh estimated that 25% of the contracts were with the Corporation and 75% with other entities.

311. It is convenient at this stage to make some further reference to the contract. The contract commences in cl. 1.01 by stating that the agreement is made between the Proprietor and the Builder. Clause 1.02 provides that the Builder shall upon the site being made available by the Proprietor commence the execution of the works, thereafter regularly and diligently proceed to execute and complete the works, and bring the works to practical completion by the Date for Practical Completion (which by cl. 1.06.09 was 6 June 1991, subject to adjustment). Clause 1.03 provides that the Proprietor shall, subject to the contract, make the site available to the Builder on or before the Date for Possession (which by cl. 1.06.08 is 23 August 1990) and shall, in consideration of the Builder carrying out its obligations under the contract, pay to the Builder the Contract Sum (which by cl. 1.06.07 was $1,473,616). Clause 1.06 is a definition clause. It provides that in the contract and, subject to inconsistency, the words and phrases set out in the clause shall have the meanings given to them in the clause. The first definition, in cl. 1.06.01, is of the Proprietor and reads:

"The Proprietor - Emmaus College of 503 Springvale Rd. Forest Hill 3131".

The name and address of the College are inserted in hand. This was done by the architect on the basis that he had at all times received instructions from Fabris, who he understood was acting under the instructions of the College Board and its Building Advisory Committee; in addition, D'Orio Davis Hede Pty Ltd, a practice of which the architect had been a principal, had done so with a previous contract for the College. The contract does not otherwise define the word "Proprietor". By inserting the name Emmaus College on the face page of the contract and in the definition in cl. 1.06.01, no more was done in this respect than to refer to the name of the school conducted at 503 Springvale Road, Forest Hill. As mentioned, it is common ground that Emmaus College was not the Proprietor with whom the builder contracted; it was not a legal entity and had no capacity to contract. I add that by cl. 3.04 and 3.05, the Builder is granted legal possession of the site for the purposes of conducting the works and later access to make good any defects.

316. I also mention briefly the specifications, which are incorporated by reference into the contract and to which the definitions in the contract apply. The document in fact adopts terminology from the contract such as "Proprietor" and "Builder". In Section 000 Preliminaries, Subsection 070 Site, it is stated:

" The Principal [defined in the specifications to have the same meaning as "the Proprietor"] or persons authorized by the Principal will continue in possession and occupancy of the parts of the site and existing buildings shown in the Drawings ...";

" Due to Proprietors [sic] need for continuous occupation of the site the builder is to submit a site management plan to the architect for approval prior to commencing work".

Thus the specifications contemplate that the Proprietor may not be the occupant of the site but has the right to determine occupancy.

323. For the sake of completeness, I set out some further facts subsequent to execution of the contract referred to in evidence. First, the insurance for the works by Catholic Church Insurance Ltd was in the name of "Roman Catholic Trusts Corporation for Diocese of Melbourne: Emmaus College - Forest Hill". Secondly, Stehle pointed out in his witness statement that the builder received various correspondence relating to the project from the College on College letterhead; and all payments were received from Emmaus College. Thirdly, in 1996 an appeal in relation to a planning permit at the College was brought before the Victorian Administrative Appeals Tribunal in the name of Emmaus College. Fourthly, by a letter dated 13 February 1997 to the Corporation's solicitors, Mr E W Excell, business manager of the Catholic Archdiocese of Melbourne, stated that the Corporation would in normal circumstances become the plaintiff or defendant in legal action arising out of ownership of its property.

326. These are the circumstances in which there was a contract between a Proprietor and a Builder. Under the contract, the Builder--Van Driel--undertook performance and received payments, but it is common ground that the party named as Proprietor--Emmaus College--was not the Proprietor and there is uncertainty as to who the Proprietor was, that is, as to the identity of the party with whom the builder contracted.

330. During final address, Mr Stirling made a fairly lengthy oral submission addressing his written submissions on the issue of the identity of the Proprietor. The treatment by Mr Dixon was considerably shorter. I was assisted by Mr Dixon's submissions; I refer to them only where necessary.

333. The starting point in understanding both submissions is the parol evidence rule, which was usefully described by Mason J (as he then was) in Codelfa Constructions Pty Ltd v State Rail Authority of NSW:[5]

" The broad purpose of the parol evidence rule is to exclude extrinsic evidence (except as to surrounding circumstances), including direct statements of intention (except in cases of latent ambiguity) and antecedent negotiations, to subtract from, add to, vary or contradict the language of a written instrument".

337. In relation to the exception in respect of surrounding circumstances mentioned by his Honour, he concluded:[6]

" The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning."

His Honour went on to state that this exception does not in general make admissible evidence as to statements and actions of the parties which are reflective of their actual intentions, aspirations or expectations.[7] I do not rely on statements of this type referred to above.

342. There is another exception to the parol evidence rule which is relevant in this case: where there is ambiguity on the face of the written instrument as to the identity of a party to a contract, extrinsic evidence is admissible to identify the party or the relationship between the parties or the capacity in which a party contracted.[8] As Lord Parker of Waddington said in Fung Ping Shan v Tong Shun:[9]

" There can be no doubt that parol evidence as to the identity of a party is always admissible, but in considering such evidence it is of paramount importance to bear in mind the indicia of identity afforded by the deed itself."

The words of Mason J in respect of evidence of actual intention would be equally relevant to this exception. I have not had cause to rely on such evidence.

347. In this case, either of these two exceptions applies to allow consideration of evidence other than the words of the contract itself.

350. I now turn to the submissions for the builder. Mr Stirling placed reliance on the words of Lord Parker and "the paramount importance" of "the indicia of identity afforded by the deed itself". He also referred to Edwards v Edwards[10] as authority that extrinsic evidence may be led to clarify an ambiguity or misdescription as to a party, but not to contradict the face of the contract. For that reason, he submitted, only persons within the structure or framework of "Emmaus College" could be identified as the Proprietor, namely the members of the College Board and Executive, or the members of the ACA; there was no warrant for the imposition on the builder of a party that is not referred to in the contract or described by it.

353. In emphasising the expression "the indicia of identity afforded by the deed itself", Mr Stirling appears to have neglected the indicia other than the name placed in clause 1.06.01 and on the face page of the contract. On the face of the written instrument in this case, looked at as a whole, there are indications that the Proprietor should own or at least control the land to the extent that enables it to meet its underlying obligation to make the site available and give possession to the Builder: see cll. 1.03, 1.06, 3.04 and 3.05 of the contract and the parts of the specifications referred to at [88] above. It is instructive, and consistent in this regard, that the second meaning of "proprietor" in the Oxford Dictionary is:

" One who holds something as property; one who has the exclusive right or title to the use or disposal of a thing; an owner".

The word "Proprietor" would thus be understood as a reference to the owner or the person who otherwise has the right or title to the use or disposal of the property in question. In this case, that properly was the land and buildings at 503 Springvale Road, Forest Hill at which the school known as Emmaus College was conducted. The Corporation was registered as the proprietor of the fee simple estate in the land and owned the buildings erected thereon. Although there is no reference to the Corporation in the contract or the documents incorporated into it, the indications are strong that the ambiguous definition of the Proprietor as "Emmaus College" is intended to refer to the registered proprietor of the land, that is, the Corporation; and while it is possible, as Mr Stirling submitted, that the party with whom a builder contracts could be a licensee or lessee, the contract in this case is not consistent with the Proprietor being a licensee, lessee or any other occupant.

358. By contrast, neither the contract nor the documents incorporated in it refer to or name the members of the College Board and its executive, or of the ACA. Nor is it a necessary inference from the use of the words "Emmaus College" themselves that any such body or any of the persons constituting them was intended to be the Proprietor. Looking at the contract as a whole, I would reject any submission to that effect. While the College Board and its executive, and the members of the ACA, may be candidates for consideration as persons within the structure and framework of "Emmaus College", as Mr Stirling said, so too is the plaintiff Corporation. What is more, as the legal owner of the land and all College property, the plaintiff is the best contender to be the Proprietor.

361. That is on the face of the written instrument, and if that was the only evidence to be examined in determining the identity of the Proprietor I would conclude that the Proprietor was, and was intended to be, the Corporation. However, there being an undeniable ambiguity in the naming of "Emmaus College", which is not a legal entity capable of entering into a contract, as the Proprietor, it is appropriate to consider the surrounding circumstances and extrinsic evidence.

364. Notwithstanding his submission I have already mentioned, that the inquiry should be focused on the contract itself, Mr Stirling went on to refer to such evidence. He submitted that the relevant approach was to identify the legal persons standing behind "Emmaus College";[11] and he referred to the approach in relation to a voluntary association, which he said was to choose from the persons under the umbrella of the organisation to give effect to the intention of the parties. Mr Stirling relied on the words of Scott LJ in Bradley Egg Farm Ltd v Clifford:[12]

" That the plaintiffs intended to make a real contract with somebody is beyond doubt; but it is equally beyond doubt that they had never formed any intention in their own minds beyond the vague one of making a contract with the person or persons the law would hold responsible on the contract. They did not, of course, think about it at all; they merely assumed, with the confidence natural to a nation which normally carries out its contracts, that somebody would be responsible. They expected performance and not breach; but the rest was assumption which they never even began to think about. In these circumstances, what is the function of the law? Surely it is to imply an intention on the plaintiffs' part to make their contract with the person or persons to whom alone in the circumstances of the case the law regards as the persons responsible. That cannot be the society, for it does not exist. The law, therefore, has to choose from the various persons associated together under the umbrella of the society's name, those most concerned in the function of making contracts, those of the associated persons who were most directly concerned, and to discard those who were, for any reason, least directly concerned."

There is nothing in any of these statements to exclude the plaintiff as the contracting party in this case. The registered proprietor of the land on which Emmaus College is operated and the legal owner of all College property could fittingly be described as the legal person standing behind the College; the registered proprietor of land and legal owner of property falls within the umbrella of the organisation of the College; the registered proprietor is a person who in the circumstances of the case the law could regard as the person responsible for a building contract on its land; the registered proprietor is directly concerned, in that its proprietary rights are affected. It should not be assumed from the application of principle by Scott LJ to the situation before him that only natural persons are to be considered.

369. 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.

372. 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.

375. It remains only to mention the Manual which, as I have stated at [80] above, refers to the client (which Vilchez said was Emmaus College in this case) entering into the building contract with the successful tenderer. I would merely comment that the Manual is described as a set of guidelines; it is not a legal document, having been prepared by the DBC in conjunction with a firm of management consultants. It is perhaps somewhat loose in its description of the relationship between the groups and entities within the Roman Catholic Church: for instance, under the heading Roman Catholic Trusts Corporation, it is stated that "[a]ll Real Estate Property owned by the Archdiocese and its instrumentalities is held for statutory purposes in the name of the Roman Catholic Trusts Corporation", which is not an entirely accurate description; then there is the statement I have quoted at [80] above, which suggests that "the client" (who is to sign the contract) is not the Corporation, while at the same time suggesting that the Corporation retains responsibility for the project; then there are flow charts showing that formal approval of a tender must be obtained from the Archbishop, which is consistent with the Corporation being the party to the contract. I conclude that the Manual is not definitive on the question of the relationship between the constituent elements of the Roman Catholic Church and cannot be determinative of this case.

378. In the result, whether the contract be examined within the confines of its own terms or in the context of its surrounding circumstances, the only possible conclusion is that the Proprietor was, and was intended to be, the plaintiff Corporation. The builder may have been actually unaware that this was the case for some time after the contract was entered into, but objectively considered it must be so. This can hardly be an imposition on the builder in light of its own evidence (from McKeogh) that the Corporation was not uncommonly the party with whom it contracted and that its concern was payment and not the identity of its contracting party within the Roman Catholic Church.

382. I mention at this stage a related point, relied on ultimately only by the first defendant, which likewise forms a threshold issue. It is relevant only to the roof and the bus turnaround areas, for which rectification works have been completed and paid for by the College, the funds having been levied from parents of children attending the College from time to time as the works were conducted. It does not relate to the gymnasium floor, which remains unrectified. The question is: is the defendant liable for loss and damage allegedly suffered by the plaintiff, if that loss and damage has been made good by a third party?

385. There was evidence from Fabris relevant to this question. He confirmed that the rectification works, and the legal fees for the plaintiff's solicitors, had been paid for out of the Emmaus College operating account. He said there was a clear expectation or assumption within the Board and the ACA that the proceeds of any judgment in favour of the plaintiff Corporation would be transferred to the Emmaus College operating account; he had no reason to expect otherwise.

388. Mr Stirling argued the point only briefly. He submitted that the party bringing the action must have suffered loss and damage,[14] and that that was not the case here in relation to the roof and bus turnaround area because Emmaus College had paid for the rectification already.[15] This submission can be dismissed immediately on the basis of my findings about the structure of the College at [77] above, namely that the Corporation is the legal owner of all the property held in the name of the College, including bank accounts from which the relevant amounts were paid. It cannot be said that a third party is involved in this regard. The plaintiff Corporation cannot be criticised for using its own funds to rectify defects in the works to minimise damage and allow use of the facilities in anticipation of recovering those amounts in this litigation.

391. In any event, Mr Dixon argued, it is not a relevant concern for a party in breach of a contract that the actual loss suffered as a result of the breach has been paid for by a third party. He referred to St Martins Property Corporation Ltd v Sir Robert McAlpine Ltd,[16] which addresses the point directly. In that case, the plaintiff corporation, referred to in their Lordships' speeches simply as "Corporation", entered into a building contract with the defendant builder on land to which Corporation would be entitled to a leasehold interest upon completion of the development. About 1½ years later, unbeknown to the builder, Corporation purported to assign its interests in the property and under the contract to a related company, another plaintiff referred to as "Investments". The assignment of contractual rights was held to be ineffective because a term of the contract forbade assignment without notice. Breaches of the contract were alleged in respect of the period after the attempted assignments. Remedial works had been carried out; Corporation had initially paid for those works, and then recovered the amount from Investments. Corporation sought substantial damages, notwithstanding that it was not out of pocket. The defendant argued that Investments had incurred the cost of rectification, but had no cause of action under the contract; and that, while Corporation had a cause of action, it had suffered no loss. If this argument were correct, in words that appear apposite to the current case, "the claim to damages would disappear ... into some legal black hole, so that the wrongdoer escaped scot-free".[17] Lord Griffiths said:[18]

" The second ground upon which the recovery of damages is resisted is that Investments in fact reimbursed Corporation for the money they spent on the repairs. But here again in my view who actually pays for the repairs is no concern of the defendant who broke the contract. The court will of course wish to be satisfied that the repairs have been or are likely to be carried out but if they are carried out the cost of doing them must fall upon the defendant who broke his contract."

Corporation was held entitled to recover substantial damages from the builder, although the majority so held on a different basis from Lord Griffiths. The decision was applied by the English Court of Appeal in Darlington Borough Council v Wiltshier Northern Ltd,[19] with Steyn LJ adopting Lord Griffiths' statement of principle without even the condition that the damages received would be used for the purposes of rectification. Then, in a long and complex set of judgments in Alfred McAlpine Construction Ltd v Panatown Ltd,[20] a majority in the House of Lords accepted Lord Griffiths' formulation, although with various discussion as to the rationale for the statement, the merit of the ground for decision of the majority in the St Martins case, and the effect of the third party having an independent right of suit. Lord Millett alone held, as Steyn LJ had in Darlington Borough Council, that the plaintiff's intention as to the use of any amount received did not affect whether the plaintiff was entitled to recover.

396. Without having heard argument on this most recent authority, let alone the decision below which the House of Lords overturned,[21] that is sufficient comment on the case on my part. It suffices to say that the current state of authority supports Mr Dixon's submission. Thus, even if Emmaus College were a third party, on the basis of the authorities I have referred to, the plaintiff Corporation would be entitled to recover more than nominal damages in relation to the loss suffered in respect of the building contract. I am satisfied that any damages would be transferred to the Emmaus College operating account.

400. I turn at this point to consider the three areas of defect alleged in respect of the works, namely the roof, the floor and the bus turnaround area. It is convenient to begin with the roof.

403. I referred at [7] above to the particulars of loss and damage filed during the trial. The total amount claimed in those particulars in respect of the roof (before interest) is $28,615.57, consisting of $15,546.57 for repairs and $13,070 as the cost of investigation and report. However, the evidence, the relevant part of which had well and truly been given by the twenty-first day of the trial when the particulars were filed, does not support these amounts. On the evidence, the cost of repairs was $13,300 paid for initial rectification works, and then an additional $815.57, a total of $14,115.57. The amount of $13,070 for the cost of investigation and report was based on the total of invoices paid to Browning. But these invoices related to his work on both the roof and the floor. Browning was asked to provide a breakdown of these invoices, and his further evidence-in-chief was that his fees in respect of the roof were $4,878 and the remainder was in respect of the floor. These amounts were based on his time billing database, and I am satisfied that it is an accurate reflection of the breakdown of his costs. Thus the total amount claimable in respect of the roof (before interest) is not $28,615.57, but rather $18,993.57, consisting of $14,115.57 for rectification and $4,878 for Browning's work.

406. To describe the roof of the multi-purpose hall in general terms, it is a sprung arched corrugated iron roof, which might be described colloquially as a barrel vault. The corrugated iron used is 0.53 Custom Orb zincalume. The arching is along the shorter, east-west axis; the apex of the arch runs centrally north-south down the length of the hall. The slope of the roof varies between 20° (at the east and west edges) and 0° (at the apex), the radius of the curvature being 23 metres. At the south and north ends of the building, the wall consists of a precast concrete panel. The arch of the roof lies partly above the precast panel, and the wall is extended to meet the line of the roof with a section of supported corrugated iron sheeting, the corrugations being horizontal rather than vertical. Thus at the north and south ends of the building, at the centre the roof meets the corrugated iron sheeting and to the sides meets the precast concrete panel which forms a parapet. Purlins, running the length of the roof on the north-south axis, form part of its supporting structure. Between the roof sheeting and the purlins is a layer of "sisalation", a type of sheeting the primary purpose of which is to catch condensation on the underside of the roof and drain it away. The sisalation sheets are lapped to prevent leakage into the body of the building. The only breaks in their continuity is at penetrations such as skylights; it is at such points that water that has entered the roof sheeting is likely to be expressed.

409. The architect's drawings provide for skylights to be placed in the roof. The specifications specify "Tunnel-lite" by Atlite (Vic) Pty Ltd ("Atlite") as a proprietary item. The skylights actually installed were by Akron Pty Ltd ("Akron"). It is useful at this point to describe the relevant features of a skylight. The skylight rests on top of purlins, at an angle in accordance with the slope of the roof. As there is a penetration of the roof, there must be a means to prevent water entry to the building. This is achieved by a system of flashings including a type of flashing called a "soaker" consisting of a sheet of metal which sits under the roof. The purpose of the soaker is to act as a temporary holding tray for any water that enters at the upper edge of the skylight, until it is drained away. A "cog" may be fixed to the upper end of the soaker; its purpose is to impede water flow over the top edge.

412. Before turning to the facts relating to leakage of the roof, I make some preliminary comments in respect of the contract.

415. First is the issue of precedence of documents under the contract. Clause 2.02.01 provides an order of precedence in case of discrepancy or inconsistency within the Contract Documents, which are the documents constituting the agreement under cl. 1.06.03, including the contract itself, the specifications, the architect's drawings and the builder's tender documents. The first item on the list of precedence in cl. 2.02.01 is "This document", being the contract itself, to which is added in hand "& documents referred to in 1.06.03". Effectively, therefore, there is no order of precedence between these documents; the parties have agreed that they all have equal precedence and any inconsistency must be resolved by looking at the documents as a whole.

418. Secondly, the specifications require that the builder use manufactured items in accordance with current published recommendations of the manufacturer and that materials and workmanship be in accordance with the relevant standard of the Standards Association of Australia. In relation to the roof, the relevant manufacturer's recommendation was the Lysaght Building Industries Steel Roofing and Walling Manual and the relevant standard Australian Standard 1562--1980 "Design and Installation of Metal Roofing". In relation to the skylights, the Atlite manufacturer's instructions were in evidence, but not the instructions for the Akron skylights that were actually installed.

421. Thirdly, in relation to the installation of the Akron skylights instead of Atlite, it is relevant to determine which was the proprietary item required to be installed under the contract.[22] The specifications state in relation to proprietary items that the builder may offer a "similar alternative item having the required properties", having provided all available technical information. The architect may then "in his absolute discretion adopt or reject the alternative". In its tender letter dated 26 July 1990, which is not expressly stated to be a non-conforming tender, the builder stated that its price was based on alternative roof lights and flooring system (another proprietary item) being "allowable"; the letter did not state what the alternatives were. In its further tender letter dated 31 July, the builder stated that its tender price included the specified floor but that a saving of $23,100 could be offered if the alternative by Terry Potten Flooring was adopted; there was no reference to alternative skylights. The builder provided information in relation to the alternative flooring, and the change was approved by the College and formalised in the form of a contract variation, seemingly in accordance with the provisions of the specifications that I have referred to. However, no such procedure was conducted in relation to the skylights. There is no evidence that the builder obtained approval for an alternative. I conclude that the Atlite skylights remained the required proprietary item.

424. Fourthly, the contract requires the builder to supervise the works; cl. 6.03 states:

" The Builder is and shall be responsible for the superintendence of the Works so as to ensure that the Works are executed in accordance with this Agreement. For the purposes of such superintendence the Builder shall maintain on the Works during their progress a competent person to superintend the Works together with any assistants."

The superintendent provided by the builder was primarily Kanngeiser, who was on site full time, assisted by Edwards, who attended the site 2-3 times per week. Notwithstanding that the contract contemplates that the builder will sub-contract portions of the works, the builder must nevertheless supervise all the works and retains primary responsibility for sub-contracted works; cl. 4.02 states:

" The Builder by sub-contracting any part or parts of the Works shall not [subject to a currently irrelevant exception] be relieved from any of his liabilities or obligations under this Agreement."

Accordingly, I will not necessarily differentiate between the builder and its sub-contractors below.

431. I add that the architect is in no way responsible for supervision. Hede said his role was "to see that what is on the contract documents is actually built" before certifying completion. In relation to a situation where it was difficult to tell whether the work was in accordance with the contract documents, he said that was why the building contract provided for rectification by the builder. I accept this as a correct analysis of the architect's obligations. Counsel for the builder submitted that it was consistent with these obligations that the architect get up on the roof after the roof was installed and have "one decent look", which the architect conceded he never did. I accept that it was the reasonable course of action for the architect to have done so. However, this failure does not excuse the builder's primary obligation to install the correct skylights. The fact is that as soon as the architect became aware that non-proprietary skylights had been installed, he instructed the builder in accordance with the contract to rectify the situation. It is not alleged that any damage resulted from the delay in the architect's action.

434. Fifthly, the builder is required in the specifications to guarantee the works or ensure that the Proprietor has the benefit of guarantees, including a guarantee that the roof be "watertight and free from weather penetration and/or deterioration for a period of ten (10) years from the date of Practical Completion".

438. The first report of the roof leaking was Item 7.12 "Leaking Roof to be repaired" in a list of items requiring action sent from Fabris to the architect on 20 September 1991, some two months after the official opening of the project. The College reported further leaks, either at the northern wall, causing water damage to the wall, or around the skylights, restricting the use of the body of the hall. There was also leakage through a ventilator on the west wall of the hall. Specifically, the subsequent chronology of complaints and responses is as follows.

441. On 8 November 1991 the architect faxed the builder requiring the builder's attention to leaks during a rainstorm the previous day as reported by the College. Ortech (the roofing sub-contractor) attended on site and attempted to silicone seal the skylights. On 24 January 1992 the architect reported by fax to the builder that the College had advised that the roof leaks had still not been fixed, and reminded the builder "once again" that leaks needed to be fixed urgently. On 14 February the architect faxed to the builder a report by the College of a substantial leak from a skylight during heavy rain. A letter from the architect to the builder dated 25 March attaches a list of outstanding defect items, which includes "North West wall still leaking". By letter dated 27 March the builder advised that the roof had not leaked when inspected by the builder that day during rain. On 7 April the architect forwarded to the builder by fax another report of a leak from the College and requested the builder to attend to the matter while the leak was still apparent. On 30 April the architect faxed to the builder for urgent attention a report from the College of a major leak.

444. In late May 1992 the architect inspected the skylights with a representative of Atlite, who reported that the installed skylights were not manufactured by his company. On 3 June the architect wrote to the builder requiring replacement of the Akron skylights with those specified. By letter dated 10 June, the builder advised that it was the under-flashing installed by Ortech that was leaking and that all leaks appeared to have been attended to; in relation to the Akron skylights, the letter refers to the alternative mentioned in the builder's tender. By letter dated 7 July the architect pointed out that no alternative had been approved, and that the Atlite skylights were to be installed. A letter dated 10 July from the builder to the architect asserts that the builder's tender had precedence over the specifications under the contract, with the result that an alternative was allowed.

447. On 24 July 1992 the architect wrote a detailed letter to the builder setting out deficiencies of the Akron skylights, concluding that they would not have been approved as an alternative to Atlite, and pointing out that in any event the roof lights simply did not perform. On 20 August the architect wrote to the builder enclosing a report from the College of "the latest round of leaks", expressing concern at the lack of any response to the letter of 24 July, and requiring the builder's most urgent attention and attendance on site regarding the leaks. On 26 August the builder replied to the architect that it was waiting for a response from Ortech before responding to the 24 July letter and stated that the leaks indicated in the 20 August letter had been "attended to". On 3 September the architect forwarded to the builder a report from the College of leaks of the same extent as reported in the previous 2-3 weeks.

450. In a letter to the builder dated 9 September 1992, Ortech stated that in its opinion the roof leaks were due to incorrect installation of soaker flashings at the head of each skylight. The error was that Ortech's roof installers had failed to place silicone sealant between the metal soaker and the roof sheeting in accordance with standard trade practice. To remedy this, Ortech had replaced each soaker base and installed it correctly in accordance with industry standards. It was further stated that the type of skylight had never been the cause of water entry.

453. A defects list prepared by the College and sent to the architect under cover of a letter dated 1 October 1992 still included water stains on the north wall and leaking around the skylights. On 6 November the architect restated to the builder by letter that the alternative skylights had not been approved, would not have been approved, and had not performed adequately; the architect insisted that the roof lights be replaced with those specified. By a letter dated 11 November, the architect relayed to the builder a further complaint of a leak notwithstanding a recent statement from Edwards that the roof was watertight, noted that the builder's roofer had attended the College but not done a total reseal of the roof deck joints, and expressed concern that the leaks were jeopardising the stability and integrity of the floor, which was also experiencing problems at this time. In a letter of the same date in the other direction, the builder argued that the alternative skylights were "allowable" under the terms of its tender (which is now stated to have equal ranking in terms of precedence), that the Akron skylights were suitable, and that any leaks were attributable to the flashings to which the builder had "promptly attended"; the builder would not replace the skylights without separate payment by the Proprietor. On 22 December, the architect issued an architect's instruction no. 27 requiring the builder to rectify leaks along the north and south walls and repaint stained concrete panels, and to replace all skylights with those specified and render all roofs watertight.[23]

456. To summarise the position up to this point, the College reported a litany of leaks, the evidence of which I accept. The reports were conveyed to the builder. The builder's responses were ineffectual and did not make the roof watertight as a matter of fact; Fabris described the builder's response to defects generally as "poorly planned, sporadic and half-hearted". The builder refused to replace the non-proprietary skylights. Its stance could be described as recalcitrant, and no doubt caused frustration and inconvenience to the College, which merely wished to have a watertight roof as guaranteed under the specifications.

459. In June 1993, the College engaged Browning to investigate the leaks, which were continuing. He inspected the hall on 18 and 30 June, resulting in a report dated 7 July, and then again on 2 September, leading to a second report dated 13 September. The reports identified the cause of roof leaks as the shallow pitch of the roof and inadequate soakers to the skylights; the second report also identified problems with the south and north wall flashings. I will describe the contents of the reports further below. Both reports were provided to the builder, who refused to act on the recommendations they contained. The builder continued to deny liability and alleged that Browning's suggested remedial works would not guarantee watertightness in any event. In a letter dated 7 February 1994, the architect refused to issue a final certificate until the builder had complied fully with the architect's instruction referred to at [126] above, referring specifically to the wrong skylights having been installed (which were still leaking).[24] The builder's reply of 22 February states that the skylights were installed in accordance with the contract and that leaks were being monitored as part of the builder's guarantee obligations.

462. In April 1994, the College board determined to engage Browning to supervise the rectification works recommended in his reports. Notwithstanding a request from the builder (in a letter to the College dated 28 April) to place their roofing contractor under Browning's direction to complete the rectification works, on 26 May the board determined to implement Browning's recommendations without involving the parties originally involved in the works, and by letter dated 31 May Fabris notified the builder of this decision. In a letter to the architect dated 31 August 1994, Fabris states that the leaks were continuing, and that the walls had twice been repainted by the College but further staining had occurred. In a letter to the architect dated 29 September, in response to a letter from the architect dated 22 September which does not appear to be in the court book, the builder states that the skylights were in accordance with the contract and were not leaking, and states, referring to the letter from Fabris of 31 May, that the leaks to the north and south walls were being fixed by the College (as though they were no longer the builder's responsibility).[25]

465. The rectification works were in fact conducted by Rossiter (working as Garry Owen) under Browning's supervision, beginning in about August 1994. The College paid a total of $13,300 for the rectification works, of which Rossiter estimated about 75% related to work on the skylight soakers and about 25% to the flashings at the north and south walls; he was not able to estimate a further breakdown. In relation to a hood installed over the ventilator, Rossiter estimated it accounted for about $100 of the $13,300. Of the $4,878 of Browning's fees attributable to the roof, he estimated about three-quarters related to the skylights and one-quarter to the flashings.

468. On 5 October, while the rectification works were still under way, Browning reported to the College a problem with leakage in certain wind-rain conditions: namely, that when the wind blew from the south and there was heavy rain, water was penetrating under the overlaps of the corrugated iron roofing at the (relatively flat) apex of the roof and making its way to the upper edge of the skylight soaker. This is consistent with a view expressed earlier by Ortech in a letter dated 25 February 1994, that water was penetrating through the side laps at the flat roof apex and being expressed at the skylight soakers. Browning proposed to cover the joins with a further sheet of corrugated iron and the College agreed to this solution. The College paid a further amount of $815.57 to Rossiter for this work.

471. In November 1994 the College reported a further leak around two skylights during a hail storm. Some minor leaks to four skylights occurred in mid-1995 in "exceptional wind rain conditions", according to a later report by Browning. Currently, one skylight leaks in a minor way when the wind blows from the north, but otherwise Fabris has observed no other problems with the roof.

474. I add that some years after rectification, in preparation for this litigation, reports partly concerning the roof were prepared by Beauchamp (11 May 1998), Nixon (3 August 1999) and Harding (9 August 1999). I will refer to Beauchamp's evidence below. Nixon referred to the roof leaks only in passing and I do not need to mention his evidence in this section. In relation to Harding, an architect who was called by the builder, I was not greatly assisted by his evidence. It rarely added to the evidence of Browning or Beauchamp and lacked specificity; the basis for many statements remained unclear, his witness statement merely stating that he had perused "the relevant parts of the Plans, Specification, copies of the Contract, reports, photos and correspondence as provided" without listing them. Nor did he impress me with his level of knowledge of the facts of the case. I have taken all his evidence into account, but will refer to it only where necessary.

478. Although stated by Browning in his oral evidence to be very much a secondary problem compared to the soakers, it is convenient to mention first a source of water ingress to the roof identified by Browning in his first report. This was the large relatively flat area towards the apex: without sufficient fall, water could be blown laterally under joins in the roof sheets before it had the opportunity to drain. The statements of Browning and Ortech that I have referred to at [131] above are confirmatory of this being a source of water entry, and I conclude that this was the case.

481. The architect designed the roof within the parameters provided for by the manufacturer: the radius of curvature of 23 metres is well within the radius range of between 10 and 35 metres recommended in para. 7.2 of the LBI Manual for a sprung arched roof of 0.53 Custom Orb. I am satisfied that there was no element of design fault in this respect. Rather, the indications are that the builder breached its contract in two material respects: laying the roof sheets and sealing the joins between them.

484. In relation to laying the roof sheeting, para. 4.4 of AS 1562--1980 states:

" LAYING THE SHEETING: Work shall start at the leeward end of the building, so that side laps are protected from the prevailing weather."

In other words, overlaps in roofing material should face away from the direction of the prevailing weather, so that the prevailing wind does not push water laterally under the join. Rossiter stated that this reflected normal practice in laying a roof and Harding said that was how he would lay the roof. The evidence was that the weather at the College site comes from the south south-west. It is apparent from photographs of the roof taken before completion of the rectification works that the overlaps in the corrugated iron roofing face into this prevailing weather.

489. In relation to sealing the joins between roof sheets, para. 7.2 of the LBI Manual states:

" Side laps should be sealed with LBI recommended sealants over the crest of the arch where the slope is less than the recommended minimum for that sheet profile."

The recommended minimum slope for a sheet profile of 0.53 Custom Orb is 5°. Dalsanto, who laid the roof originally for Ortech, did not recall applying silicone to the side laps between the sheets of the roof and I find that he did not do so to any area regardless of the slope.

494. While on the topic of the slope of the roof, I add that, by the architect's calculation, the roof pitch reached 5° at a point 2005 mm (i.e. about 2 metres) from the apex; the top of the skylights, as he designed them, was 2750 mm from the apex where the pitch of the roof was 6.86°. Beauchamp confirmed the calculation that the skylights commenced beyond the 5° point, and I find this to be the fact.

497. To conclude, I find that the laps faced the wrong way and no sealant was applied, and that in these respects the installation of the roof breached the requirements of the contract and normal building practice on the part of the builder. Furthermore, I am satisfied that the builder's breach contributed to water ingress to the roof in certain wind-rain conditions as outlined by Browning and that the water found its way to the upper edge of the soakers. Finally, notwithstanding Harding's view that Browning's rectification method (the additional layer of corrugated iron over existing roofing joints) was not a recommended method of roof flashing, I find that the rectification work proposed by Browning was reasonable and necessary in the circumstances of rectifying an initially defective installation.

501. It was common ground, I believe, that there was no defect with the manufactured skylights, whether Atlite or Akron. The problem was rather with the soaker flashings around them. In his second report, Browning made observations about the condition of the soakers as installed, which I accept and find as the fact. In his witness statement, which mirrors the second report, he identified seven factors in relation to the design and installation of the soakers which in his opinion contributed to water penetration. He expanded on these factors in oral evidence and described the soakers "as a package" as the primary problem with the roof. I consider Browning's seven factors in turn, including the question of the use of non-proprietary items.

504. (1) The soakers fitted by the builder were on average 120 mm to the upper edge of the skylights and 180 mm wide to the sides, and were not fitted with cogs. In Browning's opinion, this soaker system was defective: the soakers were too short, and would have been too short even with the addition of cogs, because of the shallow roof slope and the significant wind pressure at the site. The result was that water could run over the ends of the soakers, down along the sisalation until it found a gap, and then down into the building. Harding also said that wider soakers were necessary, because of the lack of fall.

507. The specifications contain some general requirements about soakers being 100 mm or 150 mm wide, but in terms of design there is a specific statement in the Atlite installation instructions that the soaker to that skylight is to be "not less than 200 mm". The correct analysis of the various documents incorporated into the contract is that the architect designed a 200 mm soaker. The soakers actually installed in Browning's rectification works were 500 mm wide at both the upper edge and the side. In relation to the side soakers, he said that he adopted this width because he took the view that the existing soakers were far too narrow, but also out of an overabundance of caution (which I do not consider was unreasonable in the circumstances) to remove absolutely any risk of water entry. Although he was not asked specifically, I infer that this statement applies equally to the upper soakers and conclude that even 200 mm soakers would have been inadequate.

510. Browning said the size of the soakers was a design defect. Harding agreed. Beauchamp did not answer the question directly: he said, somewhat hypothetically, that if the architect did not check with the manufacturer whether the standard flashing details were adequate when the slope of the roofing was less than 5°, then the design would be inadequate. But it is hard to give the statement meaning: there was no evidence from the manufacturer whether there were any such special requirements, nor did Beauchamp himself know; in any event, the skylights were not designed to start where the slope was less than 5°. Further, notwithstanding this statement about the angle of the roof, Beauchamp gave oral evidence that soaker size depends on the area of roof that is discharging into it as well as the angle. I find Beauchamp's evidence inconclusive on this point. I am satisfied, in accordance with the views of Browning and Harding, that the inadequate width of the soakers was a design defect.

513. (2) The soakers were not fitted with cogs. These were added during rectification. When asked a question about cogs not being specified for these works, Browning's evidence was that whether to fit a soaker with cogs was an aspect of the builder's expertise. The builder failed to adequately exercise that expertise in this case. I have referred at [141] above to Browning's evidence (which I accept) that the soakers as installed were marginally too short to the upper edge to be effective even if a cog had been fitted. But this does not render the builder's failure irrelevant: the absence of cogs is nevertheless a contributing factor to the leaks considering that the architect intended a longer soaker.

516. (3) The skylights had been fixed to the purlins before the corrugated iron roof was installed; the roof was then screwed to the purlins through the soakers; the screws were then removed and the holes sealed up. In Browning's opinion, this was not a good fixing alternative and increased the likelihood of leaks. I accept Browning's conclusion, and I find that the fixing method contributed to the leaks. This is clearly a building defect. Rectification included sealing these holes.

519. (4) There was no second purlin at the upper edge of the soaker for fixing the roofing as was normally provided (according to Browning) to ensure proximity between the roofing and the soaker. Browning's opinion was that this had two effects: first that the roofing could lift up, allowing wind pressure to force rain up and over the soaker, and secondly that the end of the soaker could sag downwards, reducing its effectiveness. Harding gave an opinion along similar lines on this point.

522. Browning and Harding both said this was a design defect. Beauchamp said the architect's drawings did not show additional supports, but it would have been wise to do so. He referred to AS 1562--1980, the LBI Manual and the brochure for the Atlite skylight. The last of these shows a second purlin supporting the soaker. Counsel for the architect submitted that if the Atlite skylights had been installed and the manufacturer's recommendations followed, a second purlin would have been installed. The position is summed up in a passage of cross-examination of Browning by counsel for the third defendant:

" The fact that it sagged, therefore, Mr Browning, is a building defect, isn't it? --- The answer to that is quite simple and that is if the engineering drawings showed the additional purlin in that area and the builder didn't put it in, then the builder is responsible. That is not quite correct, Mr Browning, I suggest to you, because I have already taken you to the specifications and it says under the specifications that proprietary items are to be installed according to the manufacturer's specifications? --- Yes, that is a valid point."

There remains a conflict between the architect's drawings and the manufacturer's instructions, which is difficult to resolve in light of the lack of precedence between contract documents (see [115] above). I think it is sufficient to say that, taking into account the opinions of the three experts, it would have been reasonable for the architect to have shown an item as structurally significant as a second purlin on the drawings provided to the builder.

527. Does that exonerate the builder? The manufacturer's instructions for the Akron skylights not being in evidence, it is not possible to say whether the builder complied with these instructions. I restate Browning's view that a second purlin is "normallly provided". I note Beauchamp's opinion that the builder should have allowed for additional supports in order to comply with AS 1562--1980 and the LBI Manual. Accordingly, if the Akron installation instructions did not expressly provide for a second purlin, I would infer that the builder ought to have known that good building practice required one. Reasonable action on the part of the builder would have been to query the absence of a second purlin. This could have been done at any point: if before the roof sheeting was installed, the second purlin could have been installed; if afterwards, the soaker flashings could have been made thicker and thus more rigid. The latter is what actually occurred in Browning's rectification works.

530. (5) On 20 of the 22 skylights the drained joint between the upper edge of the soaker and the corrugated iron roofing had been heavily sealed with silicone. This appears to be the work by Ortech described at [125] above. Browning said this had the effect of creating a dam behind which water could build up, increasing the tendency over time for the roof to leak. He recommended removal of the sealant, and this was done in the rectification works. Browning's opinion on this point was not disputed, and I accept it. The defect was a building defect.

533. (6) In Browning's view, the side soakers were not always sufficiently tightly clamped to the roofing, allowing water to penetrate to the sisalation. I find that this was a building defect. See [142] above as to how the side soakers were rectified.

536. (7) On six of the skylights the top corners of the soakers had been cut out. Browning considered that this increased the scope for water penetration from these soakers. Again Browning's view was not disputed. I accept it and find that the defect was a building defect. I note that there was no rectification cost attributable to this defect, since all the soakers were replaced with larger ones.

539. To conclude in relation to the seven factors identified by Browning, I find that each was a factor contributing to water entry at the skylights. The defects are attributable to the builder except (1) and, in part, (4). In each case, I find that the rectification works conducted under Browning's supervision was warranted and the costs reasonable.

543. In his witness statement, Browning identified several defects in relation to the south and north wall flashings which required rectification work. I accept as the fact Browning's evidence in his report as to his observations of the actual state of the flashings.

546. (1) In relation to the area where the roof meets corrugated iron sheeting, the architect's drawing did not show any flashing. Browning initially said this constituted a "faulty design detail". Later, in cross-examination by counsel for the architect, Browning accepted that the absence of a flashing was perhaps not a design defect in itself if what had been drawn was perfectly constructed, but said that it was "a very large ask" to expect the builder to cut the corrugated iron so tightly that the roof-wall intersection did not leak. Beauchamp's evidence was that a junction between corrugated wall sheeting with horizontal corrugations and a curved roof was not common, and it would have been prudent for the architect to provide a flashing detail; such a flashing was difficult, but not impossible to build, with this type of joint having been used in several award-winning buildings. In his report, he had said the architectural design was "defective" in not providing a suitable flashing detail at this point, but in oral evidence he changed the adjective to "deficient": the detail was simply absent from the architect's drawings. Taking this expert evidence into account, I conclude that it was unrealistic for the architect to expect the builder to cut the corrugated iron wall sheeting so exactly that, in the absence of any flashing, the risk of water entry was eliminated at all points along the roof-wall junction. Nor was it reasonable in the case of an unusual type of joint to leave the builder to flash the area without any guidance. The absence of any flashing was a design defect. But it was plain that a flashing was required.

549. In this respect, the builder was also at fault. During the works, Dalsanto discussed with Kanngeiser how to flash the joint. Kanngeiser contacted Templeton to ask how to proceed; Templeton could not recall such a conversation, but I accept Kanngeiser's evidence that it did occur. Kanngeiser received no response. Yet the fact is that he allowed the works to be handed over as complete without building any flashing. Rather, he merely attempted to seal the gap with silicone, a method which was clearly ineffectual, in light of Fabris' evidence (which I accept) that a gap remained large enough for a bird to fly through. Browning agreed in his oral evidence that, if such a gap remained, the chance of water penetration was obviously greatly increased. Beauchamp agreed in oral evidence that such a gap was indicative of bad building. Browning, Beauchamp and Harding all accepted that, having identified a problem and asked for instructions, it was unwise or an unexpected course of action for Kanngeiser to have proceeded without obtaining those instructions. In the circumstances, the builder is also liable for this defect.

552. (2) In relation to the area where the roof abuts the precast concrete panel, Browning said in his report that the detailing was bad, with reliance on silicone to stop water penetration, and noted that the parapet cappings were not set to drain water away from the curved roof joint.

555. Again, it is obvious that the point where the curve of the roof and the top of the concrete panel meet requires careful flashing. According to Beauchamp's report, the architect's drawing of this flashing could have been clearer; Beauchamp clarified in his oral evidence that he did not mean by this that there was a design defect. Browning said in his oral evidence that his rectification works in accordance with his report were no more than what he would have expected the builder normally to do. He concluded in his witness statement that the failure to do so was a building defect. I agree, and add that the rectification works were reasonable in the circumstances.

559. The architectural drawings for the ventilator show a silicone joint between the panel and frame. Beauchamp's report described this design as "deficient". The following passage from cross-examination of Beauchamp by counsel for the architect clarifies his position:

" Do you say it's a design defect to use a silicone joint? --- I would say that there are better details and in using a silicone joint, you are relying entirely on the integrity of the silicone and how well it is applied. If you have an overflashing then the water flows over the overflashing so that you're not reliant on a single piece of workmanship or on a single seal. So while a silicone joint can work, I would suggest that there are better details. If it's properly constructed, it will work, won't it? --- If it's properly constructed, it should work."

In other words, it would have been safer to include a flashing, but it was not a design defect not to do so. Counsel for the third defendant pointed to the fact that no leaks were reported from the other ventilators of the same design to support his submission that there was no design defect.

564. I accept Beauchamp's evidence in this regard and conclude that the defect was a building defect. As I have mentioned, rectification of this leak consisted of placing a hood over the ventilator, the costs for which were about $100. I consider the rectification works to be reasonable in the circumstances.

Practical completion and the builder's defences

568. I now deal with the builder's defences referred to at [20]-[21] above, which are contained in paras. 11-16 of the defence and depend on cl. 5.06 of the contract. I note at once that these defences were not mentioned by the builder's counsel in his final address. It might have been supposed that they were abandoned. Yet when counsel for the plaintiff queried their status during his own address, counsel for the builder said they were maintained, adding only some perfunctory remarks. Perhaps not surprisingly, counsel for the plaintiff did not feel the need to respond. Despite this lack of full submissions, if the defences are maintained then I must explore and deal with them.

571. Before turning to cl. 5.06 of the contract, it is appropriate to determine whether practical completion of the works had been achieved. The plea in para. 11 is that the works reached practical completion on or about 22 July 1991. The builder provided further and better particulars of the plea in which it was stated that practical completion was constituted by the act of the school in commencing to use and occupy the works, with the consequence under cl. 9.10.04 of the contract that on and from such date the works were deemed to have reached practical completion.

574. There was a paucity of evidence about practical completion. The evidence of McKeogh, Edwards and Kanngeiser was that practical completion occurred on occupation being taken of the works. That is consistent with the builder's particularised case. Insofar as Stehle's evidence might carry a suggestion that the builder applied to the architect for a notice of practical completion, I reject it; he was a far from impressive witness, being aggressive and argumentative and at times lacking responsiveness. Hede said in his witness statement that "partial practical completion" of the project occurred in about July of 1991 and referred to two pages in the court book, but he was not cross-examined on that statement, or as to the occurrence of practical completion in general, and the parties excluded the document on the final tender of the court book. Hence, I do not know the contents of the document or what was comprehended by the phrase "partial practical completion" or the facts on which the statement was based. The court book does contain a letter from Hede's office to the builder dated 19 July 1991 (it is the next document in the court book after the excluded two pages) which records that the building is being officially opened on 21 July with occupation being taken on 23 July and confirming "your undertaking to complete outstanding works and Architects' Inspections list issued on the full contract works, in the immediate future". There was no evidence explanatory of the matters referred to in this letter, in particular of the terms of the "undertaking" or as to the relationship of the undertaking and performance of works to practical completion.

577. How are these limited statements to be understood in the context of the contract? Under the contract, practical completion is governed by cl. 9.09 (Practical Completion) and cl. 9.10 (Occupation before Practical Completion). There is no acceptable evidence that the procedure in cl. 9.09 for the builder to apply to the architect for a notice of practical completion was followed,[26]

and in fact the builder does not rely upon that clause. The evidence of Hede and the letter dated 19 July indicate that something passed between the builder and the architect, including a list of works to be attended to, but no attempt has been made to fit whatever happened, or was agreed or undertaken or done in consequence, within cl. 9.09.

582. Can the events be considered, then, to fall within cl. 9.10? Under cl. 9.10 of the contract, there are two scenarios by which occupation of the works is possible prior to practical completion. The first, contained in cll. 9.10.01-9.10.03, arises if the builder has failed to achieve practical completion by the contract date (in the contract stated to be 6 June 1991); upon the architect issuing a notice of occupancy, the proprietor may, with the consent of the builder, occupy the whole or a definable part of the works prior to practical completion. The architect is to issue the notice of occupancy after agreement between the parties as to the matters contained therein, which shall include: the whole or part to be occupied; the date of occupation; the date for practical completion; and the effect of occupation on the contract concerning insurance, liquidated damages, security and the defects liability period. The second scenario, under cl. 9.10.04, arises if the proprietor occupies or uses the works or part thereof prior to practical completion without following the procedure in the first scenario and in the absence of any other written agreement with the builder. The result is that "the whole of the works shall be deemed to have reached Practical Completion on the date of commencement of such occupancy and/or use".

585. All of this is interesting but there is a want of evidence to establish the applicability of any of these provisions to the case. The builder failed to explore the issues in evidence and thus establish an evidentiary basis for the plea in para. 11 of the defence. It may be accepted, and I do accept, that the school commenced to use or occupy the area of the works on 23 July but that does not establish the occurrence of a deemed practical completion under the terms of cl. 9.10.04. That is the builder's case and it is either established on the facts or it is not.

588. Each scenario in cl. 9.10 depends on certain factual premises. The builder does not rely on the first scenario and that is understandable. Apart from the evidence of Hede as to partial practical completion (whatever that means) and the letter dated 19 July 1991 there is no evidence of a consent or agreement as referred to in the first scenario, and I was not pointed to a notice of occupancy. I repeat that counsel for the builder developed no submission whatsoever to establish the plea in para. 11 of the defence, let alone point me to the evidence bearing upon the matter of practical completion. The second scenario in cl. 9.10.04 applies if occupation or use is taken before practical completion in the absence of an agreement under the first scenario or "other written agreement". The first point that arises is how the partial practical completion referred to by Hede is to be accommodated. Again I ask, what does it mean? The builder did not explore the issue. Was Hede referring to something he agreed to, and, if so, in respect of what part of the works, or on what terms, did he agree to "partial practical completion". It may be that the correct inference from the letter dated 19 July is that practical completion would be achieved on completion of the list of works, but that may be reading too much into the letter. I do not know, but sufficient doubts are raised as to whether the school did commence to occupy or use the work areas or part thereof before practical completion within the meaning of cl. 9.10.04. Then there is the separate point whether in any event the occupation or use was pursuant to a written agreement. Although I was not directed to a reply by the builder to the architect's letter of 19 July, the possibility arises that the letter is the written repository of an agreement.

591. In all the circumstances I am not satisfied on the balance of probabilities that the builder, who bears the onus on the point, has established the elements of cl. 9.10.04 were satisfied and that accordingly practical completion was deemed to have occurred on 23 July 1991. If practical completion was never achieved, the defects liability period would not have commenced under cl. 9.11.

594. I move then to the allegations in paras. 12-16 of the defence which are based on cl. 5.06 of the contract. This clause provides that if the builder does not comply with an architect's instruction the architect may issue a notice to the builder requiring compliance within a reasonable time, and if the builder does not comply the proprietor may employ others to execute any work necessary to give effect to the architect's instruction and recover the costs from the builder. If, however, the work is a variation, cl. 5.06.04 provides the proprietor is limited to recovering the excess over and above what would have been payable by the proprietor to the builder under cl. 10.16 dealing with variations.

597. I note that cl. 5.06 applies to the time in which the builder is engaged in executing the contract up to practical completion. On practical completion the defects liability period commences under cl. 9.11, and from then cl. 6.11 is the provision which deals with architect's instructions to remedy defects, the builder's failure to do so in a reasonable time and, in that event, having the defect made good by others "under the provisions of Clause 5.06". The defence omitted any reference to cl. 6.11 as the gateway to cl. 5.06 in the circumstances that practical completion had been attained as the builder claimed. Neither counsel referred to cl. 6.11 or suggested that any point turned on the fact of the attaining of practical completion. The builder's allegation is that the architect did not give it a notice requiring compliance with any of his instructions within a reasonable time stated in the notice. As a result the builder is not liable for the cost of works carried out by others to give effect to such instructions. Further, any such work that was not the subject of any instruction was not work the subject of the contract; in particular such work was, relevantly to the roof, stated to be the provision of the second purlin and the wider soaker, the additional flashing of the north and south walls and the second cover sheet, and the hood over the ventilator. Then, in para. 16 of the defence it is alleged that if the builder is liable for the costs of the work that was not the subject of an architect's instruction, the amount recoverable is limited by reference to the provision concerning variations; that provision is cl. 5.06.04 referred to above.

600. As a result of counsel for the builder not advancing a substantive submission in support of the allegations in the defence, he did not go to the evidence, including the documents in the court book, to establish the factual premises that constitute the allegations. What he did, in effect, was to leave me, if I felt so inclined, to trawl through the court book to see what I could find which one way or the other might bear on the issues raised in the defence. It is unhelpful and a vexation in relation to the burden upon a judge required to write a judgment for counsel to conduct a case in this way. If counsel wishes to rely on a point in the pleadings he or she should address a submission on the point, succinctly and sufficiently with appropriate references. It may be said that counsel for the plaintiff could or should have addressed a submission, although in that respect a relevant factor is that his address followed that of counsel for the builder who had ignored the matter, and it was the builder's point to establish.

603. The rectification works were not in the nature of variations. Insofar as the builder is concerned, the works remedied failures on its part to carry out the works with appropriate skill and care and in accordance with good building practice. That the architect also bears a responsibility does not alter this fact. The builder was in breach and is sued to recover the costs incurred to rectify the works. All the costs were incurred reasonably both in terms of their amount and the efficiency with which the works were carried out.

606. It was not submitted by counsel that cl. 5.06 (whether or not in conjunction with cl. 6.11) constituted a code that ousted any common law rights of the plaintiff and which limited recovery to circumstances of observance of its strict terms. I do not find it necessary to consider the issue although this case is singular for the fact that the builder refused to rectify the defective works and manifested an intention not to meet its obligations under the contract.

609. The evidence discloses that having failed in several respects to properly execute the works, and despite repeated requests by the architect to rectify the situation, the builder made the ineffectual efforts referred to above but, as a matter of substance, simply refused to meet its obligations. It manifested an attitude of defiance and unwillingness to attend to rectification of the works and, in so doing, and in continuing to refuse the architect's requests and instruction, indicated an intention not to observe its contractual obligations. In the circumstances referred to earlier it was reasonable for the school to conclude, even when the builder sought to come back on site to rectify the roof, to refuse to permit the builder to do so and to engage others for the purpose. I find it was reasonable, and that it was the fact, that by that stage the school had lost confidence in the builder's ability and desire to properly perform the work. The situation, in short, resulted from the builder's breach of contract and the school's reaction in engaging others for the works was reasonable in light of the breach and the builder's conduct.

612. The allegation that the architect had not given a notice requiring compliance with his instructions seems shallow in the extreme in light of the continual efforts of the architect to have the builder rectify the problems. I repeat that counsel for the builder did not seek to establish the defence by reference to, and analysis of, any communication of the architect to the builder. In my view the communications sufficiently constituted instructions and requests to comply and on their terms and in the circumstances constituted satisfaction of the requirements of cl. 5.06. The builder did not comply with the instructions and requests and in consequence others were engaged and the resulting costs are recoverable. As I say, I do not need to consider whether the costs would be recoverable apart from cl. 5.06 by reliance upon the common law rights of the plaintiff.

615. I referred above to the builder's request that it be able to return to the site to rectify the roof. It was not submitted that I should find that in truth the builder then had no genuine intent to rectify the works either in a proper and workmanlike manner or at all. I would incline to much doubt on the point but do not make a finding in the absence of a submission. I do find, however, that it was reasonable for the school to have lost confidence in the builder's ability to properly perform the rectification work, and its desire in that regard. Even to this day the project has not reached final completion under the contract by reason of the builder not having complied with an architect's instruction (see [126] above) which includes defects in issue in the litigation.

618. There is one final point. That concerns the defence that the amount of the builder's liability is limited by reference to the provisions concerning variations. Even if any item of the cost was a variation the claim in the defence must fail. It was not established what the builder's cost of performing the works would have been and hence the amount of any excess recoverable was not established. The builder raised the point but did not address it.

622. The plaintiff's claim in relation to the roof succeeds, with the result that the plaintiff is entitled to recover the amount of $18,993.57. Of that sum, however, I find that the builder is solely liable for the $815.57 paid in respect of the additional roof sheeting and the $100 attributable to the ventilator hood. That leaves $13,200 of the amount initially paid for the rectification works and the $4,878 constituting Browning's fees, in respect of which I find the builder and the architect are liable to the plaintiff. The total of the two items is $18,078. These amounts will carry interest.

625. The question of contribution remains in respect of the $18,078. Each of the two items was estimated to be attributable as to 75% (i.e. $13,558.50) to skylight rectification and as to 25% (i.e. $4,519.50) to the north and south wall flashings: see [130] above. I accept each of these estimates as reasonably reliable. I consider the just and equitable contribution in relation to the skylights to be one half (i.e. $6,779.25) by each of the builder and the architect; and in relation to the south and north walls, I consider it to be one third (i.e. $1,506.50) by the architect and two thirds (i.e. $3,013) by the builder.

629. I now turn to the defect alleged in respect of the floor. The plaintiff pursues this claim only against the builder; the plaintiff does not claim that the defective floor was the result of any breach by the engineer or the architect of any duty of care or contract. However, there is a general claim by the builder for contribution from the engineer and architect. I will assess this claim after dealing with the plaintiff's claim against the builder.

632. It is useful to first clarify the amounts in dispute. Unlike the roof and bus turnaround area, the floor has not been rectified; the claim is thus for the costs of investigations conducted between 1993 and 1996, and current replacement costs. The amounts claimed in the particulars of loss and damage are $17,040.60 (plus interest) and $164,648 respectively, as I have set out at [7] above. The latter figure was an estimate by Browning produced during the trial, based on updating an itemised costing in his report of 20 December 1995 according to the Rawlinsons Building Price Index; it may require further updating. Also, Browning suggested in his report of 20 December 1995 that the "significant expenses involved in the drying process" needed to be included in the total cost of repair, which may not have been done. In relation to the former figure ($17,040.60), it was not clear to me exactly how it was calculated, although it presumably relates to the sum of invoices paid by the College for the work of Hay, Mudge, Campbell, Cerny and Browning. These amounts, on the evidence, were $6,700, $2,053, $8,511, $976.60 and $8,192[27]

respectively, a total of $26,432.60. I will need to hear counsel further on the amounts.

638. It is necessary at this point to describe the site of the College. I base my description on the evidence of witnesses--in particular that of McKenzie, the general nature of which I have described at [56] above--and on the maps, drawings and aerial photographs in evidence. I was aided in my understanding of the evidence by own observations at a view of the site during the trial.

641. The College property is essentially rectangular. It slopes down from the north-west to the south-east. To the west and east of the site are grassed ovals. In the central part of the property are the school buildings. The multi-purpose hall was built to the east of the existing buildings, in a position where there had once been a gravel staff car park. Directly north of the pre-existing buildings, and to the north-west of the multi-purpose hall, is a large bitumen area marked for tennis and basketball.

644. The property is bordered on the west by Springvale Road and on the east by Stanley Road. Alongside part of the northern boundary (towards Springvale Road) is a bitumen car park for what was once the amusement park Wobbie's World, and along the remainder are residential properties. The subdivision for these properties was in about 1992 or 1993 and before that date there was a dam just north of the tennis and basketball courts. There is an unsealed trench drain along most of the northern boundary leading down to Stanley Road. To the south of the property are residential properties facing Hawthorn Road. The property has driveway access to Hawthorn Road near the College buildings. The bus turnaround area, connected to the driveway, was built to the south-east of the multi-purpose hall.

647. According to McKenzie's evidence, which was not contradicted and which I accept, the soil in the area consists of highly weathered mudstone overlain by a layer of stiff brown sandy clay (which is effectively impermeable), which is further overlain by loose grey silty sand. The permanent water table sits in the mudstone layer, but during winter and spring it is common for there to be perched water in the silty sand; this is water that has entered the silty soils in the general vicinity and, unable to penetrate down through the clay, flows along the silty soil layer following the general contours of the land forming a temporary water table. Due to its temporary nature, an investigation during a dry period might show no near-surface water. McKenzie stated that prior to development of the property a natural depression had existed through the area of the multi-purpose hall, from the north-west (i.e. the tennis and basketball courts) to the south-east (i.e. the bus turnaround area). In his view, the depression would operate as a natural drainage course for water. A stormwater system follows essentially this path. A process of cut and fill has been required to produce the level areas of the College, which interrupt the natural slope. In places, therefore, the levelling has cut through the top layer of silty sand and down into the clay.

651. By a letter dated 6 February 1990, the engineer requested MacGregor Soil & Rock Engineering Pty Ltd ("MacGregor") to do a site soil investigation and report in relation to the works, which at that stage did not include the bus turnaround area. MacGregor drilled two boreholes in the north-east and south-west corners respectively of the proposed area for the hall; engineering logs were taken but no laboratory testing was done. MacGregor produced a report dated 11 February, which was provided to the engineer and the architect. The report states that no groundwater was encountered at the time of testing, describes the soils as moist, and otherwise makes a few cautionary points about drainage, including that "Leaks in plumbing, including stormwater, sewage and drainage should be repaired promptly to prevent long-term ingress of water into the subsoil" and that "The presence of groundwater within the surface soils may lead to construction difficulties especially during wet Winter and Spring months". There were no specific recommendations about slab design. Simpson considered the results typical for the area.

654. 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.

657. While on the topic of drainage, I mention some other evidence pointed to by the builder as suggestive of a generally poor drainage situation on the site. This was evidence of seepage out of the ground , for instance at the tennis courts, at the bottom of the stairs leading from the level of the hall floor up to the tennis courts and at the retaining wall in that area, and in the amphitheatre area to the north of the hall. While I accept this evidence, I think this is an insufficient basis for making inferences about water flow specifically in the vicinity of the slab.

660. Meanwhile, excavation and slab construction progressed. The minutes of site meeting for 1 November 1990 record that excavation of the floor was 95% complete; concrete blinding (for soft spots) was 100% complete; and the floor slab was 50% complete, meaning that the southern slab had been poured. On 9 November concrete was poured for the north slab. The minutes of site meeting for 15 November record that the slab was 100% complete.

663. 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.

666. There was little specific evidence about the actual construction of the slab. Kanngeiser referred to the laying and taping of the under-slab membrane--the laps were about six inches as opposed to the 200 mm specified--and walking over it with the building inspector and the engineer. He described how the membrane came up on the inside of the formwork and was looped over the top. He described the situation at the stage when the formwork was removed:

" [the membrane] either flops back onto the ground and when you are backfilling on the outside, you push the polythene back up, up to the outside, and you keep it there, so that at least the polythene is up to the ground level on the outside so that there's less possibility or chance of getting any dampness under the slab."

There are a number of comments that can be made about this description. First, it does not comply with the specifications, in that the underlay is not fixed at the top of the vertical face by tape sealing at the level of the damp proof course. Secondly, it acknowledges the possibility of dampness getting under the slab. This seems not unlikely given the method Kanngeiser described for backfilling the outside, namely pushing fill up with a bobcat. Thirdly, the use of the present tense in this explanation, and his regular reference elsewhere to what he "would have" done, suggested that Kanngeiser was not necessarily speaking from a direct recollection of the construction of this slab.

671. It is necessary to mention an electrical services conduit trench that runs underneath the slab from roughly half way along the western wall in a south-easterly direction. It appears clearly on an electrical services plan by Adrian Newman and Associates Pty Ltd dated March 1990. Although there was a lack of evidence about its actual construction, clearly it was dug before the sub-base was prepared, electrical services were run along it, and it was re-filled. In the ordinary course, the fill would have been compacted and a clay plug would have been placed where the trench penetrated under the edge beam. Kanngeiser could not recall any details of how the trench was backfilled for this particular job. Savage did not think that there was any compaction testing of the fill under the slab, which would include the trench, notwithstanding the requirements under the specifications (Section 210 "Groundworks" Subsection 143 "Placing and compaction" and Subsection 700 "Services groundworks") to compact fill to specific density ratios. I find that no testing was done .

674. The next stage was construction of the walls and roof, which is relevant to the question of drying of the slab. Again there is limited evidence of actual construction, but I accept the following outline of events. The wall panels were delivered on 22 November 1990 and erected the next day. The minutes of site meeting for 29 November record the panels as 98% complete. By 13 December the roof was 10% complete, so the minutes of the site meeting say. They also record that the site was to shut down for Christmas on 21 December and resume on 17 January 1991. According to the site diary, eight hours of roofing construction time was lost due to rain on 22 January 1991. A further unspecified length of time was lost to rain on 24 January, according to the site diary. The minutes of site meeting for 31 January and 14 February still record the roof as 10% complete.[28] On 25 February four hours of construction time was lost due to extreme heat. By 28 February, the minutes of site meeting record, the roof was 99% complete; Kanngeiser said the roof would be weather-tight at this point.

678. I have referred at [117] above to the process by which an alternative to the specified floor was approved. This process began with the builder's tender in July 1990, included the provision of technical information by Potten and inspection of a completed floor at Our Lady of Scared Heart College in Bentleigh, and concluded with acceptance by the College and a contract variation in March 1991. The approved alternative was by Terry Potten Flooring, which I have described at [46(b)] above. To recapitulate, the structure of the flooring system as installed was, from the bottom: concrete slab; 200 micron plastic sheeting; 8 mm rubber pads (or air); two sheets of 12 mm ply; and the Granwood blocks. I may refer to the floor as "parquetry", reflecting the evidence, even though this may not be a strictly accurate description of a floor of composition mix blocks.

681. No change was made to the specifications on account of the adoption of an alternative floor. The architect merely adopted the manufacturer's recommendations for the above-slab design. On 14 March 1990, he had been provided with literature about the floor installed by Terry Potten, including a brochure about Gransprung flooring. The architect provided a copy of the brochure to the College under cover of a letter dated 17 August 1990 (the day the contract was signed). The brochure contains technical data and refers to a damp proof membrane of 1000 gauge polythene being laid above a clean, dry and level sub-floor. I note the departure from the 1000 gauge polythene damp proof membrane in the actual construction of the floor, a departure which at first glance appears significant. No evidence was given as to how it came about. The architect was taken to the reference to the 1000 gauge polythene damp proof membrane in re-examination, but otherwise nothing was made of the departure in the course of evidence or submissions. I will refer to it only as necessary.

684. The minutes of site meeting note the parquetry as having commenced on 28 February 1991, although it is not clear exactly what was done; I infer it was preliminary work only. Kanngeiser gave evidence that his practice, which he followed in this case, was to contact the flooring contractor when, upon visually inspecting the slab and based on his knowledge of drying conditions, he considered it might be sufficiently dry to start laying the flooring. On 6 March 1991, Kanngeiser telephoned Potten and was told that he was working at Ocean Grove. In other words, he was not available to start laying the floor. The minutes of site meeting for 14 March state that the parquetry is under way; apparently this was merely a reference to Kanngeiser's call to Potten on 6 March. The site diary for 18 March notes that Potten is to start installing the floor on 27 or 28 March. I would infer this diary entry was based on a telephone call to Potten.

687. According to Potten, he attended the site to assess the slab moisture content. In his witness statement he said it was "late March" 1991. He observed that the slab did not "look" wet and there was no pooling or ponding of water. Potten said he proceeded to test the slab in about 10 different areas with an electrical resistance tester. This was the type of tester he had used since 1974. The resistance tester produced readings between 5.8% and 6.1%, which Potten considered dry enough to begin laying the floor. Kanngeiser's evidence was more specific about dates. On 27 March, he telephoned Potten to confirm when he would come on site; he did so the next day and began work. Kanngeiser did not record Potten as present on site on any separate day to conduct tests. There is an issue whether Potten in fact conducted any tests; if so, whether they were adequate; and whether objectively considered the slab was sufficiently dry to begin laying the floor. I will deal with these issues below.

690. Work on the floor progressed over the following weeks through March, April and May with up to five of Potten's men on site. By 11 April, the flooring was 75% complete. By 8 May it was 90% complete. The floor was completed by 24 May 1991, when Terry Potten Flooring provided the following guarantee:

" Our company together with Granwood Flooring UK Limited and Granwood Australia Pty Ltd gives the following guarantee for the Gran-Sprung flooring system installed at Emmaus College Junior School, Stanley Road, Vermont South. Five year guarantee on workmanship and materials combined with a five year guarantee against buckling, cupping, warpage of the tile due to humidity or climatic conditions. The guarantee excludes the polyurethane seal, as wear varies according to usage."

Potten's evidence was that the flooring appeared satisfactory to him when he gave his guarantee, save for a slight orange peel effect in some areas of the polyurethane sealer.

695. I interpolate at this point that the builder is required under the specifications to ensure that the Proprietor has the benefit of a guarantee in the following terms: "Flooring: Parquetry, ceramic tile and vinyl sheet to be guaranteed for a minimum of five (5) years". I also reiterate that under the contract the builder retains responsibility for sub-contracted works: see [118] above.

698. Under cover of a letter dated 8 May 1991, Potten had provided to the architect his recommendations for maintenance of the floor, which he said should start immediately upon the building being handed over to the client. The written materials Potten provided stressed the importance of regular maintenance (with approved equipment) and the exclusion of dust dirt and grit. It appears that the builder also provided maintenance literature to the architect attached to a letter dated 31 July, although the attachments were not in evidence.

Alleged maintenance problems and emergence of defects

702. On 12 August 1991, Potten attended the College to inspect the floor. He reported the results to the builder by fax: he had observed a build up of dust and grit suggesting lack of proper maintenance. Potten agreed to apply a coat of seal to the floor over the September break.

705. In a letter dated 25 March 1992 from the architect to the builder, the architect recounts a conversation with Potten in January when he (the architect) "reaffirmed non acceptance of the dimpled floor"; Potten's response was to allege lack of proper maintenance; although not convinced by this explanation, the architect had agreed to Potten writing to the College with further maintenance instructions. The list of outstanding defect items attached to the architect's letter of 25 March states:

" Resanding of floor done but not to schools [sic] satisfaction. Some joints still not covered properly. Work still not to college [sic] satisfaction."

710. He responded to the builder in a letter dated 27 March 1992. The letter states that full maintenance recommendations had been handed over when the floor was completed, but "from our various inspections we believe that the maintenance is not being carried out sufficiently. On all occasions we have visited the floor has been in need of a scrub and burnish." He recommended a regime of scrubbing and burnishing.

713. By May 1992, the College had noticed a burst bubble appearance and cracking of tiles. A meeting was arranged between Potten and the College for 8 May. Potten did not attend, [29] as reported in the College's letter to the architect dated 15 May, in which the College advised of cracked tiles, splitting and uplifting. At a meeting later in the month, the College stated that the finish of the floor was not as per the sample provided and stated a view that Potten was obliged to re-sand and re-polish the entire floor. According to a letter from Fabris to the architect dated 29 May, Potten had admitted that the finish applied to the floor was "standard", but not the finish on the sample previously provided and on the basis of which the College had decided to adopt the alternative flooring system; the difference arose from a different method of application of the sealing compound, of which Potten was well aware but neglected to draw to the client's attention. Fabris stated that in the circumstances it was not unreasonable for the client to have assumed that the floor installed would be the same as the sample, and that the College held the view that Potten was obliged to re-sand and re-seal the entire floor.

716. Potten agreed to replace the floor in the areas of the "key" of the basketball courts marked onto the floor, which were showing signs of damage from moisture ingression, but did not agree to replace the entire floor. The work was done during July 1992, at which time Potten noticed moisture under the block tiles. He reported to the builder by fax dated 14 July that he had found that the plywood under the blue tiles in the key area was wet. He added in cross-examination that he had pulled up the floor in that area down to the concrete slab and observed that there was no ponded water either above or below the plastic sheet; he said that in prior cases where water had damaged the ply layer, the source was flooding or rainstorms and ponded water was readily visible; he was looking for similar symptoms in this case but found none; he concluded the slab was dry, although he did not test the moisture levels. His fax continued that he could not repair the floor until the source of the water was identified and the plywood had dried out. The builder forwarded the fax to the architect.

719. In a letter dated 7 October 1992 to the builder, the architect listed outstanding defect items, including:

" Repairs to basketball keys have a patched appearance. Manufacturer has advised that the new work will fade to match the existing. Emmaus have noted that response from Terry Potten unsatisfactory. The whole floor needs to be re-sanded."

723. According to Potten, in about October 1992 he spoke to a representative of Granwood Hille Pty Ltd, which was the Australian master agent for Granwood and Gransprung products. In a letter to Fabris dated 9 November, the managing director of the company commented that the patchy appearance was because Potten's rectification was temporary until the source of the water problem was identified. He said any orange peel effect was due to humidity but would not affect performance. He apologised that the difference between the sample and the installed floor--the cause of which he did not actually identify in the letter, although it appears that he had discussed the matter with Fabris--had not been brought to the College's attention. He recommended that no further rectification work be carried out until the water problem had been alleviated and a full report completed. Finally, he noted that some of the loose blocks were directly under a skylight. The letter was provided to the architect.

726. In a letter from the architect to the builder dated 11 November 1992, which I have referred to at [126] above, the architect referred to the letter to Fabris from Granwood Hille Pty Ltd and drew attention to a possible correspondence between loose blocks and water from roof leaks.

729. On 1 December 1993 the builder wrote to Fabris stating that in its view the problems with the floor derived from water ingress at the north and south walls at ventilation louvres.

732. By letter dated 7 February 1994, which I have referred to at [128] above, the architect refused the builder's request for a final certificate on the basis inter alia that the presence of moisture in the gymnasium floor was causing lifting. In a response dated 22 February, to which I have also referred, the builder claimed that moisture in the floor was caused by users of the building failing to close metal louvres which had been installed in accordance with the plans and specifications.

735. I have referred to Fabris' description of damage to the floor as at 1992 at [203]; Browning gave a description of its state in 1995 which I refer to at [213] below. In his witness statement Fabris described its current state, based on his own observations, as follows:

"? Over the past 4 years 15 longitudinal cracks have appeared on the gym floor

? 15-20 area cracks (along the edge of tiles) have appeared on the gym floor

? Approximately 10-15 tiles have lifted. These have been reglued by the College. One of the tiles was so badly cracked that we had to have a replacement tile constructed and installed

? In my view the cracking is not stabilising or decreasing. If anything it is getting worse."

743. I have already referred at [128] above to the College's appointment of Browning in June 1993 to investigate roof leaks. He produced the two reports dated 7 July and 13 September. The second of these also makes reference to the floor. Browning makes initial observations about the lifting of the parquetry flooring and states four likely causes; he accepted in cross-examination that none of these four options were in fact causes, as became apparent after further testing. I make no further mention of them.

746. Browning's subsequent reports on the floor failure were dated 8 December 1993, 5 May 1995 and 20 December 1995. Essentially, they report on two types of testing which Browning had overseen: moisture testing of the plywood layers by Hay, and relative humidity testing of the slab with a hygrometer by Mudge. It is fair to say the accuracy of the tests was not challenged. I will describe the two types of testing separately below.

749. Browning began by identifying three types of damage to the floor: (1) line fractures, corresponding to the joint lines of the upper layer of plywood, in a random distribution around the floor; (2) cupping of tiles, observed only beneath the leaking vent at the west wall; (3) loose tiles, mostly in the south centre area of the floor. Browning commented that the locations of parquetry failure did not coincide with the roof leaks, although he did not rule out a causal connection; he said the roof leaks should be rectified to isolate that possibility.

752. I will now summarise the results of Hay's tests, and Browning's comments on them, according to the date of testing. I mention that, according to Browning and as confirmed by Hay, the maximum acceptable moisture level for ply was 12%, beyond which it would delaminate and swell over time. The first test involved removing the parquetry blocks in three areas and testing the plywood underneath.

26 November and 7 December 1993--Moisture levels of the two sheets of plywood were in the range 15-20%. In one of the three areas, the air gap was between the two sheets of ply rather than between the lower sheet of ply and the plastic membrane.

Following an inspection of the floor on 1 September 1994, by a letter dated 23 September Campbell proposed a method of ventilating the underside of the lower plywood layer by forcing air through the gap under the length of the floor. (I note that this was when the roof was being rectified; there were no substantial leaks after October 1994. See [ 132] above.) The necessary fans were installed in about December 1994, at which time Cerny drilled a systematic grid of 210 pairs of holes through the blocks; one of each pair of holes went down to the top layer of ply, the other hole to the bottom layer. The holes were sealed with aluminium tape except when measurements were being taken, to prevent atmospheric moisture from affecting the readings.

21 December 1994--The moisture levels of both the top and bottom sheets were in the range 14-20% for the majority of points, with peaks of up to 32% about half way along the west wall and in the north-west and south-east corners.

758. On 27 January 1995 the fans were turned on, set to maximum speed.

19 February 1995--At this point, three weeks into mechanical drying, the readings were generally lower than the previous test. In Browning's words, they dropped dramatically. Some parts of the bottom layer were moister.

Browning said the drying was likely to indicate removal of water that had entered the flooring system as a result of the roof leaks. The increased moisture in some parts of the bottom sheet was possibly due to air circulation under the bottom sheet distributing moisture more evenly.

26 March 1995--Eight weeks into the drying process, the top sheet of ply had become slightly wetter in parts, while the bottom sheet had become drier. Some parts of the bottom sheet were less than 12% for the first time. The upshot was that the moisture levels in both sheets of ply had dramatically reduced since 21 December.

The imbalance between upper and lower sheets was likely, in Browning's view, to be due to air flow removing moisture more quickly from the bottom sheet, with which the air was in direct contact.

16 July 1995--Both sheets of ply had become wetter again. As for the top sheet, there were several peaks of up to 20% in the centre of the floor. A peak of up to 22% remained half way along the western wall. As for the bottom sheet, there were two noticeable peaks in the south centre of the floor at 18% or more.

Browning's view was that the likely cause of the increase was moisture rising from the slab through gaps in the membrane.

5 November 1995--Both sheets were tending to return to the drier state as at 26 March 1995. The top sheet remained wetter than the bottom sheet, with a peak remaining along the western wall.

Browning commented that the peak in moisture in the ply sheets along the western wall tended to indicate that the lower sheet was in contact with the slab, allowing moisture to pass into the floor system at a greater rate than could be removed by the flow of air. The fans were eventually turned off, perhaps a few months into 1996.

769. Mudge's tests involved drilling holes into the concrete slab and sealing calibrated hygrometers into the holes for 22 hours. His methodology was an adaptation of that in Australian Standard 1884--1985 "Floor coverings--Resilient sheet and tiles--Laying and maintenance practices". He has been using it for some 25 years, during which time (so he said in his witness statement) his test results had always been accepted as fair and representative. The methodology was not challenged in cross-examination and I accept it as at least as accurate as the method in the Australian Standard. According to that standard, the maximum relative humidity for satisfactorily laying a floor covering is 70%. Mudge's tests initially measured relative humidity in one location only.

26 November 1993--The hygrometer reading was 87%.

Browning commented the laying of a plastic sheet above the slab would virtually stop drying of the slab, and that once laid moisture would then stabilise at the average level of the slab. However, the plastic sheet would not completely prevent the transfer of water vapour into the flooring system unless great care had been taken to ensure that laps were taped and there were no holes. Browning said that the stability of the flooring system depended on the plastic membrane keeping out all of the moisture from the slab; however, it was clear from his discussions with the manufacturer that the primary role of the plastic membrane was to provide a slip joint between the rubber blocks and the concrete, not to waterproof the floor. In his later tests, Mudge measured nine sites roughly evenly spaced around the floor area.

9 to 16 January 1994--The relative humidities ranged between 92% and 99%. The south-east corner was the wettest.

According to Browning, these readings were close to saturation point.

13 to 20 November 1995--There was a significant reduction in the hygrometer readings to the north end with a lesser reduction progressively southward and eastward, with a high degree of moisture still present at the south end. The range was between 70% and 90%.

Browning commented that the fact that moisture had reduced (which could only be by vapour escaping upwards) was an indication that the membrane between the slab and the flooring system was either damaged or not waterproof. Mudge returned to do further tests as the date of trial approached.

31 July 1999--The hygrometer readings had increased to between 83% and 95%, with the most prominent increase being at the northern end and some increase also at the south end.

Mudge described the slab in this state as saturated.

780. To draw together the strands of the testing by Hay and Mudge, I begin with a reference to Potten's witness statement where he stated:

" It is obvious that the gransprung floor has deteriorated because the plywood underlay has been affected by moisture."

Potten also stated that the fracturing of the composition mix blocks was due to expansion of the plywood base. I agree with these statements. The question therefore becomes: what were the causes of moisture ingression into the flooring system?

785. I accept the results that Hay and Mudge produced, which show that moisture levels in the ply layers and relative humidity levels in the concrete slab fluctuated notwithstanding the introduction of mechanical ventilation, which would tend to have a drying effect. I also accept Browning's comments that decreases in the slab humidity were evidence of vapour transmission up through the plastic sheeting (or gaps in it), and that increases were evidence that further moisture was entering the slab from below.

788. The possible causes of moisture ingression to the flooring system referred to in evidence overall fall into the general categories of residual water and external water. The former consists of water remaining from the pour itself, or which entered the slab before the floor was laid; the essential question here is whether the slab was dry enough for the floor to be laid. The latter consists of further water that may have entered the slab from below since the floor was laid, for instance as the result of an improperly compacted conduit under the edge beam, a break in the under-slab membrane, or poor drainage around and beneath the slab. These could be an ongoing cause of damage regardless of the initial state of the slab.

791. An additional potential source of water mentioned in some of the builder's correspondence that I have referred to, and by some of the builder's witnesses in evidence, was accumulated water above the slab or the plastic sheet as the result of the roof leaks. This seems an improbable cause of the damage to the floor considering that the roof leaks were rectified by October 1994 but the damage to the floor has been ongoing; there is also the fact that Potten found no ponded water on the slab or plastic sheeting in July 1992 (see [204] above) as might have been expected if this was a cause. Ponded water was not referred to in the final submissions of either the plaintiff or the first defendant. It is not necessary to consider the point any further.

795. Further testing and reporting by experts occurred as the trial grew nearer. I will take the opportunity to describe this evidence briefly at this point. I add that I have taken the experts' evidence into account, but apart from my comments in this section I will only mention it where necessary to resolve the issues on the facts as I find them.

798. Beauchamp produced a report dated 11 May 1998, which I have referred to in relation to the roof leaks; it also discusses the floor. In his opinion, both the engineering design of the slab and the architectural design of the floor were adequate. He thought it unlikely that water vapour rising from the slab was the cause of moisture in the ply, because such vapour would be vented from the floor by the pumping action of the sprung floor. A far more likely cause of damage to the ply, he stated, was water that leaked into the building due to flashing problems and accumulated under the flooring. His statement about rising vapour appears to be made in relation only to moisture from the original pour of the concrete, not any additional moisture that may have entered the slab from below; Beauchamp does not consider this as a source of moisture to the plywood, and in this sense his opinion is deficient. Nor did he elaborate on the "pumping action", whether in his report or in his oral evidence, and on what basis he considers it would be effective to ventilate the air gap such as to remove the possibility of vapour transmission to the ply.

801. On 5 July 1999, McKenzie of Beveridge Williams supervised the excavation of four test pits. Mudge was present to observe the testing and took some photographs. Two of the pits directly abutted the slab, one to the west about half way along the wall, and one to the east near the south-east entry steps. The objective was to intercept the electrical conduits running under the slab, although the conduit was not encountered to the eastern side. The engineering log for the western pit, where electrical conduits were encountered at 0.75 m depth, comments that the backfill material surrounding the conduits appeared moist to wet. Laboratory testing of soil samples showed an elevated moisture content at this point compared to the pit on the eastern side of the hall. Mudge's general observations included that some of the blinding concrete below the slab was obviously damp, and that the under-slab polythene membrane was severely creased and laps were not sealed. I accept Mudge's evidence as to his observations. Although limited to one particular pit, it is specific and detailed, whereas the only other evidence, from Kanngeiser (see [190] above), was generalised and perhaps reconstructed. Mudge commented that folds and creases would allow easier access for water to the underside of the slab by means of channels formed by the creases; lack of taping of laps would allow water to ingress the slab underside. McKenzie returned to the site on 6 July and noted that no free water was present in the western pit.

804. Harding, the architect, also attended the site on 5 July 1999. He conducted no tests of his own. His conclusions, which he presented in a report dated 9 August, were that the possible sources of moisture in the ply were either water ponded on the plastic sheet due to flooding or vapour rising from the slab. The comments I made about the lack of specificity of his evidence at [ 133] above apply equally here; for instance, the basis for attributing moisture in the ply to vapour rising from the slab was not set out and was not explained in oral evidence.

807. Nixon too was present on 5 July 1999. Like Harding, he conducted no tests. He inspected the area to the north-west of the hall (by which he seems to mean the tennis and basketball courts) and observed water weeping from the ground; also, there was water running in the stormwater pit. On this basis, he suggested that there was considerable groundwater in the silts overlaying the clay and mudstone, or at least more than when MacGregor did its soil investigation (see [185] above), and that the terrace for the multipurpose hall intercepted this layer. The suggested inference seemed to be that the slab intercepted free water in the silty topsoil and as such was sitting on saturated soils containing free water. Nixon did not successfully defend this inference in cross-examination.

810. Next came further testing by Beveridge Williams, which was duplicated by Buckle. In September 1999, four boreholes were cut through the slab, a distance in from each of the four corners. Beveridge Williams' results showed that fine packing sand lay directly beneath the under-slab membrane; it was dry. Otherwise the underlying soils (and fill material at the southern end of the slab) were moist. No free groundwater was observed. Buckle's results were similar; he was referred during his oral evidence to the 1990 MacGregor report, and concluded that there was nothing to suggest that the moisture conditions under the slab had changed significantly since then. The results are clearly inconsistent with any theory that the water table was so high as to saturate the soils under the slab and force free water into the slab, or that a hydrostatic head of water was directed up under the slab. I note that Nixon did not have the benefit of these test results until he was in the witness box.

813. McKenzie attended the site again on 2 June 2000. He produced his witness statement setting out the evidence I have described at [56] and [184] above about the general lie of the land. In oral evidence he added an observation that there was no water weeping out of the ground at the north-west corner of the hall on the occasions that he attended the site. I accept this as the fact.

816. Finally, just before the trial commenced, on 14 July 2000 Corcoran inspected the site. He was the concrete expert. His opinion was contained in a witness statement dated 27 July. He had conducted no tests of his own. He commented in detail on factors affecting the drying time of the slab, which I will discuss below. Referring to Potten's stated test results of 5.8% to 6.1%, he said that a marginal departure from the Australian Standard in moisture levels of the slab when the floor was laid would have no practical significance. In any event, he stated, residual water in the slab was unlikely to be a cause of moisture ingression to the ply, although he did accept in cross-examination that it was possible that residual water contributed. The only conclusion, he said, was that there was an external source of water penetrating into the slab and ultimately penetrating into the flooring system. He suggested hydrostatic groundwater as the cause, being liquid water entering the slab under a hydrostatic pressure head; this was based on part of the slab being under the water table in that vicinity due to the slab being cut into the slope; he suggested the hydrostatic water head was sufficient to push moisture up between the beams under the slab, and eventually through the floor in certain conditions. Extraordinarily, he had not been given the results of under-slab testing by Beveridge Williams and Buckle which contradicted this hypothesis.

819. I made some general comments about the reliance on expert evidence at [ 70] above. The point can be made again now that the factual and opinion evidence in relation to the floor has been described. Some of the builder's experts (specifically Nixon and Corcoran) were ill-served by the builder's solicitors in that they were not provided with reports by other experts (specifically McKenzie) which might have affected their views. Some experts, particularly those who had not conducted their own tests, could only work on the basis of hypothetical facts; in this respect the opinions tend to float in the ether, because the evidence about what actually happened during construction was very sparse and some of it I do not accept. Finally, Harding's evidence was generally unconvincing. In conclusion, although there was an impression created that this part of the claim was a "battle of the experts", that impression was in the end rather illusory.

823. I have referred at [116] above to requirements under the contract in relation to manufacturer's recommendations and Australian Standards. The specifications (Section 553 "Resilient Finishes" Subsection 140 "Workmanship") state that the test for dryness of a concrete substrate is the electrical resistance test in Appendix A to AS 1884--1985. Notwithstanding Potten's assertion that AS 1884--1985 relates to floors installed directly onto a concrete subfloor and is not relevant to the Gransprung floor where there is an air gap,[30] the fact is that the contract makes this standard applicable.

826. Although it is only the electrical resistance test in Appendix A that is made applicable by the contract, much was made during the trial of the "rule of thumb" for dryness which precedes that test in Appendix A, and it is appropriate to mention it. The rule of thumb provides that:

" under average conditions in Melbourne, and with good ventilation, a typical 100 mm thick slab of normal concrete drying from one face only, will take about 4 months to dry to a moisture content in equilibrium with the surrounding air".

Mudge translated the rule of thumb as 25 mm drying per month, and said the latter was universally known and adopted as good building practice in relation to laying of floor coverings on concrete substrates. The appendix goes on to say that time should be calculated from when the slab was last wetted by rain or dew, since dry concrete absorbs moisture rapidly, and that drying will take longer if ventilation is poor, humidity high or the temperature low, and shorter with good ventilation in hot, dry weather. There is then provision for electrical resistance testing and hygrometer testing, to which I will refer shortly.

831. The circumstances in this case were that the slab was 125 mm thick, and accordingly the period of drying under the rule of thumb would normally be five months. As I have found at [ 192] above, the wall panels were completed in November 1990; there was substantial rain on 22 January 1991, which was sufficient to interrupt the roofer's work for the whole day; the roof was 10% complete (whatever that may mean) until at least 31 January; there was four hours of extreme heat on 25 February; the roof was watertight by 28 February. On the face of Appendix A, the slab having been exposed to a significant amount of rain on 22 January, that was the date from which counting should have commenced under the rule of thumb.

834. It is at this point that Corcoran's multipliers come into play. Based on a CSIRO publication making reference to results of the Swedish researcher Nilsson, Corcoran presented multipliers for temperature, humidity and grade of concrete by which the figure under the rule of thumb could be adjusted. He referred to temperature, rainfall and evaporation records from the Bureau of Meteorology variously at its Mitcham, Vermont and Scoresby stations. He estimated that temperature alone would reduce the drying time by two months. In relation to rainfall, he said that a wetting by rain or dew did not necessarily negate the entire drying period before that time; it was a question of degree, depending on other factors such as temperature, humidity and evaporation rates; he referred to rainfall readings for 23 December 1990 and 4, 5, 6 and 24 January 1991 and said that the rainfall that occurred should not have significantly increased the drying time. He then considered the grade of concrete and concluded that, on the basis of concrete grade alone, drying time would be reduced by one month. His overall conclusion was that, in the circumstances of this slab, sufficient time had passed by late March 1991 for the slab to have dried to an appropriate level for laying a flooring system.

837. I do not accept this conclusion. It has an air of unreality. For one thing, Corcoran did not have figures for any records of humidity, so presumably the multiplier for humidity has not been applied. Secondly, it was not explained how the various multipliers interacted; could they be applied cumulatively, or was there some more complex relationship? Tellingly, Corcoran did not attempt to calculate an actual figure for what the drying time should have been in the circumstances of this case. Thirdly, and I think most importantly, the figures that Corcoran used were not specific to the site and the slab under consideration. The specific evidence was of eight hours' rain on 22 January 1991, yet Corcoran's data does not include any rain on that day. Nor was account taken of the effects of the walls and roof in their various stages of completion, or of attempts by workmen to protect the slab, on rain, temperature, humidity or ventilation.

840. In the result, Corcoran's evidence is, I find, inconclusive. This perhaps reflects the reference to the test as a "rule of thumb": it is approximate only and subject to the actual testing. I would not speculate on whether a period of roughly five months (from completion of the slab by 15 November 1990 to the laying of the floor on 28 March 1991) could be reduced to roughly two (from the last wetting on 22 January 1991) through the influence of the factors identified by Corcoran. I am simply not in a position to do so on the evidence.

843. The only real significance that can be attached to the rule of thumb in the current context is the light it casts on the modus operandi of Potten. It is necessary to comment on Potten as a witness. He was both aggressive and defensive, argumentative and unresponsive. I formed the impression that he may have been somewhat hard of hearing, but this is not sufficient to explain away the manner in which he gave his evidence. That manner was consistent with an awareness that his judgment was under direct attack. There were several respects in which his evidence was unsatisfactory, which I will discuss in the following paragraphs dealing with his conduct. Overall, he was an unimpressive witness, and I have the greatest hesitation in accepting any of his evidence without corroboration.

846. I might mention initially a tendency in his witness statement to imprecision and sliding across the truth. I have mentioned the glossing over of his failure to attend a meeting in footnote 29 at [203] above. There was a looseness of expression in his description of attending the site for testing purposes, which I refer to at [244] below, which might have given a false impression. In addition, until corrected when he gave his oral evidence, his witness statement referred to testing with a hygrometer, rather than an electrical resistance tester, presenting a veneer of greater accuracy: see below at [241] in relation to the different tests. Further, his witness statement began by saying:

" [Terry Potten Flooring Pty Ltd] has been supplying and installing granwood and gransprung floor since 1965 and since that time has installed several hundred such floors in various buildings throughout Victoria. No person or corporation in Australia has as much experience as I have in relation to gransprung and granwood floors."

This was revealed as somewhat misleading when it emerged that his first experience with the Gransprung floor was in 1988. When the College was considering adopting the Gransprung floor, Potten wrote to the architect on 3 September 1990 with some examples of installed Gransprung floors which the College might inspect; the list contained only two cases, one of which was in Warnambool. The inference is open that Potten would not have suggested the Warnambool floor if there was another available in Melbourne. The further inference is that Potten had installed only two such floors at this time.

851. In relation to the rule of thumb, I merely say that it was a test of which Potten ought reasonably to have been aware--it seems that he was--and which he ought reasonably to have considered as an initial step in deciding whether to proceed with laying this floor. But Potten was not concerned with industry standards, as is apparent from the following passage in cross-examination in relation to the difference between electrical resistance testing and hygrometer testing:

" [I]t is an accepted and standard practice within the industry to use a hygrometer, isn't it?---I wouldn't know. I don't use one. So you don't know what the accepted standard practice is; you only know what you use?---Correct."

Potten referred to what might be described as his own rule of thumb, that a typical slab should be down for six weeks before laying commences, although he did not elaborate on what this rule was based. Yet his own evidence was that he did not ask the foreman Kanngeiser any questions about how long the slab had been down or when it was last wetted by rain, and Kanngeiser had no recollection of him doing so. In relation to how long the slab had been down, he said he presumed the slab was a typical slab that had been down for more than six weeks. In relation to the last wetting, he appears to have assumed from the fact that the roof was on that there had been no relevant wetting by rain. Such a willingness to make assumptions without basis is indicative of lack of reasonable caution in proceeding with the job.

857. As I have said, the test for dryness of the concrete substrate made applicable under the contract is the electrical resistance test in Appendix A to AS 1884--1985. More specifically, this is a reference to cl. A5 "Electrical Resistance Test" in Appendix A. Clause A5.1 describes the necessary apparatus: a resistance meter with sufficient sensitivity to clearly distinguish changes of 0.5%; electrodes for insertion into holes drilled in the concrete; and conductive jelly to be placed into the holes. Clause A5.2 describes a testing procedure: holes 25 mm deep are to be drilled in the concrete at intervals specified by the manufacturer of the instrument; the electrodes are to set in the holes using the conductive jelly and connected to the resistance meter; the moisture content is then read to the nearest 0.5% after allowance is made for the temperature of the subfloor. Satisfactory results are described in cl. A5.3:

" The concrete floor shall not be considered sufficiently dry if the moisture content of the subfloor exceeds 5.5 percent as determined by the apparatus"

The allowance for rounding to the nearest 0.5% might be considered a reflection on the overall accuracy of the test: a range of 0.5% is fairly significant when readings are in the order of 5-7%. The standard itself goes on to comment on the accuracy of electrical resistance testing:

" Electrical test apparatus of this type may not necessarily determine the exact moisture content of the subfloor and discretion should be used in the interpretation of the results. If any doubt exists with regard to moisture content of the subfloor, the flooring manufacturer should be contacted."

I note that the discretion is in interpretation of results; it does not extend to reinterpreting the 5.5% standard for dryness. In context, the import of the sentence about contacting the flooring manufacturer is that the manufacturer may suggest a more accurate test or making allowance for special circumstances. It does not mean that the manufacturer's instructions and standards take precedence.

864. There was some uncertainty as to the device Potten used for measurement. In cross-examination, he described putting two concrete nails about 5 mm into the concrete about 100 mm apart, putting a prong on each and then obtaining a reading. I accept this as a description of an electrical resistance meter, using what Potten described as the "pin method" or the "electrode method". He referred to colour bands on the dial of the meter, ranging from green (0-3%) through yellow (3-5%) to red (5-10%). Kanngeiser described observing the tester using a "dooverlackie", which might have had only one prong, which was merely held to the concrete; he could not recollect any holes being drilled into the concrete, although he said the tester may have driven in a nail and touched the prong to the nail. Kanngeiser was hesitant in proffering this evidence: it was apparent that he did not entirely understand the nature of the testing device when he observed it, and accordingly it is not surprising that he would have trouble describing it, especially after almost ten years. There was no evidence as to what device matching Kanngeiser's description other than an electrical resistance meter Potten might have been using. Subject to my findings below about when and whether Potten conducted any tests, I conclude that it was an electrical resistance meter that he used.

867. However, Potten's "pin method" was clearly different from the apparatus and procedure described in Appendix A: he did not drill holes; he did not use conductive jelly; his concrete nails went only 5 mm into the slab; he did not make any allowance for the temperature of the subfloor. It was implicit, if not express, in his evidence that his method was less accurate than the "gel method" (as he described it) described in Appendix A, which was in turn less reliable than a hygrometer. Accordingly, even if I accepted Potten's statements about the readings he supposedly achieved, some doubt might remain about their accuracy and reliability, especially considering Browning's evidence that concrete dries from the top down, so that a measurement of moisture at the surface might not be indicative of actual slab moisture content.

870. Potten stated during cross-examination that he had followed the manufacturer's instructions, and that he could not diverge from them. The manufacturer's instructions for laying a Gransprung floor on a concrete slab state:

" Gransprung could start to be installed as soon as the moisture content in the base has reduced to a realistic level (5% to 7%)."

The percentages appear to be a reference to electrical resistance testing. In relation to this more liberal standard, I would merely comment that there is nothing in the contract to suggest that compliance with either the manufacturer's recommendations or the Australian Standard is sufficient; if both provide a standard, then it would be prudent and necessary to satisfy both standards. The use of the words "realistic level" imply the use of judgment and commonsense in accordance with the particular circumstances. Prudence and reasonable practice would also dictate following the local standard, the manufacturer's information being based on a British Standard.

876. I now turn to the actual evidence of testing. There are two issues here: first is whether Potten conducted the tests at all, and if so on what date; second is whether the results were sufficient to indicate that the laying of the floor could commence.

879. I have mentioned at [196] Potten's statement in his witness statement that he tested the slab moisture content in "late March". The implication is perhaps intended that this refers to a day before 28 March 1991, when his men came on site to commence work. However, in light of the finessing about dates that I have referred to in footnote 29, I would not be prepared to make such an inference. In his oral evidence, Potten would say no more than that he probably visited the site a few days before 28 March, based on his normal practice; he said he did not test the concrete on his first inspection, but when the materials were unloaded (which was 28 March). Kanngeiser's evidence was inconclusive on this point: his site diary did not show anyone on site in relation to the floor before 28 March and although he said he remembered "someone" coming out and making the tests beforehand, in the end this appeared to be based on the illogicality of sending men onto site without having tested first. Although I consider Kanngeiser to have been essentially an honest witness, there was an element of reconstruction in this respect. I accept, based on Kanngeiser's evidence, that he observed Potten or "someone" testing the slab, but I conclude that this was not before 28 March. This is consistent with Potten's oral evidence. To the extent that Potten's evidence may suggest that testing was done before 28 March, I reject it. Indeed, if not for this evidence of Kanngeiser, I would find that Potten conducted no tests at all.

882. Next, I consider the testing that was done. It is clear in this regard that Kanngeiser relied on Potten to take the appropriate measurements; he was not aware of the Australia Standard; he thought it took about four weeks for concrete to dry and thought the slab would be dry enough because no rain had fallen on it for more than four weeks. As mentioned, Potten said in his witness statement that he used an electrical resistance meter to test the slab in about 10 spots and that he obtained readings of between 5.8% and 6.1%.

885. Even if I took them on face value, Potten's supposed results of between 5.8% and 6.1% would not satisfy the standard in Appendix A, being above 5.5%. But the precision of his statements about the readings gained an unrealistic air when Potten was cross-examined. He claimed to have a distinct recollection of testing several (meaning about seven) places and getting an average of 5.8% to 6.0%; I note how this differs from his witness statement. He said he had written down the results of the readings, but that he had thrown away the piece of paper immediately upon finding that the slab was "quite okay" (presumably according to the manufacturer's instructions); but Kanngeiser did not think the tester made any notes. Potten said he noted the numerical readings, which varied by two to three, adding that "There wasn't a great deal of difference"; he had earlier said that the lowest reading was "either on the borderline or just in the red", i.e. just on 5%.

888. It is difficult to comprehend, based on this evidence, how Potten's statement that the readings were between 5.8% and 6.1% could have any reliability. There is the shift from talking about actual readings to talking about averages. Then there is the contradictory evidence from Kanngeiser, which I accept, that the tester took no notes. Further, there is the unlikelihood that Potten took and remembered numerical readings: this was a witness who earlier in cross-examination spoke primarily in terms of the coloured zones on his meter. And the comment that a variation of two or three was not a great difference seems extraordinary when such a variation above 5% would take the readings to the maximum acceptable level (by the manufacturer's instructions which he was following) or beyond. A further consideration is the simple passage of time (he was first asked to recall the readings "a couple of years ago") and the number of slabs he had tested in the meantime ("heaps").

891. Based on all these factors, I reject Potten's evidence of the precise testing results as fabrication. He made up the contemporaneous note, supposedly since discarded, in an attempt to add an air of reliability to his evidence. I infer from his reliance on the manufacturer's instructions that his readings were, in the main, between 5% and 7%, although it appears that some may have been higher. Certainly, some of the readings were above 5.5%, the acceptable level under AS 1884--1985. To attempt to say anything more specific than this would be to engage in speculation. As such it is difficult to attach any meaning to Corcoran's evidence that a marginal departure from the Australian Standard would have no practical significance. This statement was made with reference to Potten's stated test results of 5.8% to 6.1% from 10 sites, and in cross-examination on this point he referred to "5 or 6 per cent". He did not identify exactly what was "marginal". Further, there was an element in Corcoran's assessment of confidence in Potten's judgment as an practitioner with 20 or 30 years' experience with "this particular flooring system", but the fact is that Potten had only been installing the Gransprung floors since 1988, which at the relevant time in 1991 was a period of two or three years; I would not have the same faith in his judgment.

894. Furthermore, I find that Potten was indifferent to the precise results of the testing. I take into account the fact that he had five men on site ready to begin work; Kanngeiser had been inquiring for some weeks when he could lay the floor, and Potten admitted he had "told a few furphies" about materials being delayed at the docks to hold him off; Potten was busy and had other jobs going or scheduled. In other words, from the point of view of running his business, there were pressing reasons to start the job immediately, and I find this is what he did. He was not concerned about the moisture level of the concrete. He took the risk.

898. I now summarise my findings about residual water. The electrical resistance test in Appendix A to AS 1884--1985 is made applicable under the contract, the appropriate moisture level being less than 5.5%. The rule of thumb is not determinative, and is in any event inconclusive. Nor can the 5.5% standard be replaced by a more liberal standard in the manufacturer's instructions. Potten did conduct some tests using the "pin method", but results achieved by that method must be viewed with some circumspection. There was no testing before Potten's workmen attended on site to commence laying the floor. His readings were not between 5.8% and 6.1% as he stated; rather, they were in the main between 5% and 7%. Some of his readings were above the acceptable level in AS 1884--1985, and some may well have been above the acceptable level in the manufacturer's instructions. But Potten would have gone ahead with laying the floor regardless of the readings.

901. I conclude that the slab was unacceptably moist when Potten laid the Gransprung floor. Certainly, there is no evidence to conclude that the slab was initially sufficiently dry according to AS 1884--1985. This contributed to the floor failure when moisture was transmitted to the ply layers, either as vapour or through direct contact of ply with the slab. If proper testing had been done and the results properly considered, laying of the floor might have been delayed until the slab was drier, or consideration may have been given by the architect to using a membrane with greater waterproofing qualities than the one he specified.

905. Residual water may explain the initial presence of water, but not the subsequent rise and fall (upon forced drying) of moisture as set out in the results of Hay and Mudge's testing: see [214]-[216] above. Logic and common sense dictate that this must be the consequence of water coming up from underneath the surface of the slab, and I find that this was the case: I adopt Corcoran's conclusion in this regard that I have referred to at [228] above. The problem is establishing exactly how this occurred, in light of the impracticability of looking under the slab and the absence of thorough evidence about how it was laid. Thus there is by necessity a degree of inference required.

908. The theorem advanced by the plaintiff, established primarily through the evidence of Browning and Mudge, is as follows. Water travelling down the slope through the upper layer of silty soils in the perched water table would meet the edge of the slab at its north-west corner. The water would not be able to go under the slab, due to the impermeability of the clay directly under the slab at that point, and the pressure of the edge beam and wall panel above it creating a tight seal between the slab and the clay. The water would then follow the path of least resistance; specifically, it was diverted along the edge beam along the west and north walls of the hall. The water would continue until it found a path of less resistance down the slope, for instance uncompacted fill or an uncompacted electrical conduit trench. The conduit trench could act as an aquifer to convey water under the slab. Water under the slab could enter the slab through perforations in an improperly installed under-slab membrane. And creases in the membrane and/or failure to ensure it came up the side of the slab up to ground level could provide another opportunity for water entry into the slab, this time directly from the side.

911. The theorem was accepted by Buckle. It was put to the builder's expert witnesses and they accepted various aspects of it; none was able to contradict it. I accept it as reasonably probable on the basis of the facts as found, such as they are. In doing so, I think it is neither possible nor necessary to show a direct correlation between the areas of the concrete slab or ply layers with increased humidity or moisture and any specific points of water entry. I expressly reject the suggestion that the water table was above the level of the slab or that a hydrostatic pressure head forced liquid water into the slab.

914. 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.

918. I am mindful of the defences raised by the builder, which I have described at [22] and [23] above, as I draw together the strands of this part of the claim.

921. At this point it is possible to conclude that the plaintiff is entitled to succeed against the builder in respect of the floor defect. The plaintiff never received the floor it contracted to buy. The next step is to determine the quantum of the builder's liability.

924. Potten provided a quote for replacement by a letter to the builder dated 30 April 1997. The total figure of $73,224 was made up of $68,704 for supply and installation of a new Gransprung flooring system and $4,520 for removing and disposing of the existing floor. The quote provides for saving some of the existing floor covering plates and allows for independent moisture testing of the slab on removal of the existing floor. The line markings are to be painted not inlaid; Potten no longer installs inlaid lines due to their prohibitive cost. In his second witness statement Potten updated the figure to July 2000 at $87,000.

927. I have referred to Browning's estimate for replacement of the floor at [180] above. As mentioned, the total updated figure is $164,648 although further updating may be required and additional items may be included. Browning's itemisation allows testing the slab, verifying drainage and sealing of the edge of the slab, and sealing the slab surface with an epoxy resin before laying the floor; it makes provision for supervision and profit. This raises the question of whether the epoxy resin, the price quoted for which was $19,985 in 1995, should be included.

930. Mr Stirling submitted that the epoxy resin coating was not specified in the original contract and that accordingly the plaintiff had no entitlement to it by way of compensatory damages. He referred generally to Bellgrove v Eldridge.[31] I reject this submission. The application of an epoxy resin coating is a measure to reduce, and hopefully eliminate, vapour from the flooring system. It is a sensible and practical alternative to knocking down the hall to rebuild the concrete slab. Bellgrove v Eldridge makes clear that the plaintiff is entitled to recover the amount required to rectify the defects complained of and so give the plaintiff the equivalent of a building on its land which is substantially in accordance with the contract.

933. I conclude that the claim for the epoxy resin coating is allowable. And overall I prefer the evidence of Browning as to costing. It is comprehensive and adopts an appropriately cautious approach to ensure that the floor does not suffer from the same defects again. I reject Potten's evidence.

936. Finally, there was a defence for a reduction of damages for the value of the plaintiff's use and benefit of the floor since 1991. This is where the alleged failure of the College to maintain the floor sealer (see [22] above) has some relevance. The routine maintenance recommended by Potten consisted first of sweeping with an electrostatic mop after activity, and secondly of regular cleaning and burnishing depending on usage. I have referred at [200]-[202] above to Potten's evidence about the presence of dirt and grit, and the need for scrubbing and burnishing. Fabris said the floor was dry mopped once per day. In other words, the College was following the first direction about maintenance. There was no evidence about the College's burnishing regime, if any. What Potten may have observed on one occasion is not conclusive. To the extent that Potten's evidence is inconsistent with Fabris's, I reject it. The evidence that remains is insufficient to establish a failure to maintain the floor in a sense relevant to the damage it has suffered.

939. Then there is the point about the plaintiff's use and benefit of the floor. In this regard, the builder sought to establish the life expectancy of the floor. The evidence relied on by the builder was that of Potten. In his second witness statement, Potten stated that a Gransprung floor in the circumstances of Emmaus College would have a life expectancy of 25-30 years if maintained well to very well, 20-25 years if maintained averagely, and 15-20 years if maintained poorly; by contrast, in cross-examination Potten said that he would expect a properly maintained Gransprung floor to last 20 years. The inconsistency was not explained. It is yet another example of the unsatisfactory nature of Potten's evidence. I note that only 13 years has passed since Potten began installing the floors, so the basis for his statement is not personal knowledge. I reject Potten's evidence on this point. The only other evidence was from Hay. He did not give specific figures for life expectancy for this floor, but stated that "if the substrate is dry and stable, there is no reason why the floor wouldn't last a very long time". I conclude there is insufficient evidence to determine the life expectancy of this particular floor.

942. But that is of no consequence because I reject Mr Stirling's submission on this point. He submits that I should reduce the damages for which the builder is liable on the basis that the plaintiff has had the benefit of a floor for some 10 years out of a life expectancy which I have been unable to determine, but which it is convenient to refer to as X years; 10 years out of X years could constitute a substantial proportion of the life expectancy; if the damages are not reduced, the plaintiff will receive a brand new floor with a life expectancy of a further X years, and will have had the windfall benefit of a floor for 10 years.

945. There are a few things that may be said about this submission for the builder. First, the authorities do not support the submission, as was pointed out by Mr Dixon. There is no suggestion in Bellgrove v Eldridge[32] that the damages awarded to the owner of the building, which were by way of demolition and reconstruction of the house, should be reduced for the owner's use of the defective building prior to judgment. In Bacon v Cooper (Metals) Ltd,[33] Cantley J expressly rejected a similar defence in relation to a replacement rotor for an item of machinery, having referred to Harbutt's Plasticine Ltd v Wayne Tank and Pump Co Ltd[34] and The Gazelle.[35] His Honour said that each case should depend on its own facts so as to avoid absurdity in restoring the plaintiff to his position before the loss occurred. The decision was applied in The Imperial College of Science and Technology v Norman & Dawbarn.[36]

948. The circumstances in this case are that the plaintiff never had the floor it paid for. It got a defective floor. Having a defective floor for 10 years, for which the builder was liable but in relation to which the builder refused to admit liability, forcing the plaintiff to undertake expensive and lengthy litigation, is no windfall. Further, there was no suggestion that the plaintiff was responsible for the length of time this litigation took to get to trial. The plaintiff should not be punished for the exigencies by which the case happened to come before me. Finally, I was not presented with a satisfactory basis for valuing the use and benefit of the floor; it is not simply a matter of dividing the value of the floor by X to obtain an annual figure. Perhaps, extending the line of the argument, the plaintiff should be awarded the price of acquiring a floor that had already been used for 10 years; but that would be impractical and absurd. In the result, this defence fails.

951. That is sufficient to deal with the builder's liability to the plaintiff. There remains the issue of the builder's general claims for contribution against the engineer and the architect. As I have stated, both claims are made by the short form of notice, so there is no statement of claim: they are each merely a general claim for contribution based on the premise that the plaintiff would have succeeded against the engineer and the architect respectively. I add that the second and third defendants did not participate in this aspect of the claim, and counsel directed no submissions to it.

954. I have already mentioned at [222] above Beauchamp's opinion that both the engineering design of the slab and the architectural design of the floor were adequate. Admittedly this may have been the result of his view that, because of the pumping action of the floor, it was unlikely that vapour rising from the slab was the cause of moisture in the ply. Nixon and Corcoran both accepted that a slab of this design could sit on moist soils without difficulty. In other words, they supported the adequacy of the engineer's design of the slab.

957. Mr Stirling did not submit that I should reject these views of his own expert witnesses. Yet he advanced a submission contrary to those views, to the effect that the engineer and architect should have been alive to water problems on the site and should have reconsidered the design of the concrete slab and the flooring system accordingly, for instance by adoption of a bituminous tanking system underneath the slab. He submitted that both the under-slab membrane and the plastic sheet between the slab and the floor were inadequate to prevent transmission of moisture to the Gransprung floor. The water problems pointed to by Mr Stirling included runoff from the northern boundary drain, weeping water observed in the general vicinity of the hall, problems with the sewerage and stormwater drains referred to at [22] above, and the emergence of the problem of the interceptor pit in the bus turnaround area. The submission depends implicitly on a finding that the soils in the area of the multipurpose hall were more than normally moist.

960. I have found, contrary to Mr Stirling's submission, that the northern boundary drain was not a matter for concern: see [186]. In relation to the observed weeping water, I have found the evidence inconclusive as to water flows near the slab: see [ 187] In relation to the sewerage and stormwater drains, I have referred at [186] to the fact that none of the problematic pits identified in the CR Knight report were near the multipurpose hall; rather, they were to the west in the main body of the College buildings or on the far side of the bus turnaround area; in relation to the interceptor pit, the fact that it is in a general sense downhill of the hall does not necessarily mean that the soil under the slab was as saturated as the interceptor pit turned out to be. I will mention drainage issues in more detail when I deal with the bus turnaround area, but suffice it to say for the moment that I do not consider there to have been any departure from reasonable practice on the part of the engineer or architect in not changing the design of the slab and floor, and I reject the defence referred to at [22] that the builder's work was damaged by the acts or omissions of others. Further, the evidence from the geotechnical investigations was that the soils were not more than moist, either in 1990 (MacGregor: see [185] above) or in 1999 (McKenzie and Buckle: see [226] above). Mr Stirling relied on evidence from Browning and Mudge, who were the plaintiff's witnesses, that the above-slab membrane was inadequate and the design of the floor did not consider the need to protect the floor from all vapour, which is why an epoxy resin coating to the slab is now required. Nixon also mentioned this point in his witness statement.

963. I consider it somewhat perverse, in a case where the builder called a bevy of expert witnesses, to impliedly be asked to reject the clearly stated evidence of several of them (Beauchamp, Nixon and Corcoran) that the design of the slab and floor were adequate in order to accept the evidence of the plaintiff's witnesses, all in aid of establishing a contribution claim by the builder against parties who had the good sense not to engage in evidence to contest it and in respect of whom the plaintiff alleged no relevant error. I do not do so. In any event, the architect in fact specified a different membrane above the floor (see [194] above), and the effect of this fact on the experts' opinions was not explored, although it must give their evidence less weight. It is not established that the plaintiff would have succeeded in a claim against the engineer or architect. The builder's claim for contribution in respect of the floor defect fails.

966. In the result, the plaintiff is entitled to payment of $168,842 (subject to updating) for replacement of the floor. The plaintiff is also entitled to the costs of investigations, plus interest from the date of payment. I will hear counsel further to clarify the actual amounts of the invoices paid by the College.

970. This is the only part of the plaintiff's claim which is brought against all three defendants. I have summarised the particular allegations against each of them at [17], [30] and [35] respectively above. The general nature of the alleged damage is that the bitumen pavement in the bus turnaround area became unacceptably distressed soon after construction in 1991. The bitumen was in fact replaced in 1995 by Tasman Urban Developments under the supervision of Golder.

973. The amount of the plaintiff's claim is for the costs of rectification work. In order to understand the plaintiff's particulars of loss and damage which I have referred to at [7] above, and thus to understand precisely the subject of the claim, it is necessary to refer to the amounts paid to Tasman Urban Developments and Golder in some detail. The provenance of the amounts at [7] above was not expressly mentioned during the trial, although all counsel seemed to accept them. I was assisted in determining their derivation by correspondence received from Mr Dixon in the course of preparing this judgment, which was provided to the other counsel.

976. By way of background, I should expand slightly on the general description I have already given at [183] above of vehicular access to the College. I have mentioned that there is a driveway from Hawthorn Road. As at 1990, this was an existing driveway built in about 1968. The drawings for the project show an existing bulbous area of bitumen near the College buildings, to provide a turning circle for vehicles. The new works for the bus turnaround area involved extending the arc of the bitumen out into the eastern oval to increase the turning circle. Some temporary parking was to be provided in the centre of the combined bitumen area, around which buses would travel.

979. The invoices for Tasman Urban Developments refer to areas 1, 2 and 3, and zones 2, 3.1 and 3.2, which are explained in some figures produced by Fabris during the trial. The "areas" are areas of excavation and backfill, with two also involving the addition of drains; they correspond to the areas in Brock's rectification plan that I describe at [327] below. The "zones" relate to pavement reconstruction: zone 2 corresponds roughly to the pavement added under the engineer's design; zone 3.1 is essentially the "bulb" of the pre-existing pavement; zone 3 is the driveway down to Hawthorn Road.

982. There were two initial invoices from Tasman Urban Developments dated 9 February 1995. The first itemises rectification works in areas 1, 2 and 3 ($10,918, $2,520 and $2,192 respectively, a total of $15,630); pavement reconstruction in zone 2 ($41,100); and pavement reconstruction in zone 3.1 ($29,000). An amount of $4,000 is deducted from the sum of these items as "saving for combined project", to produce a total of $81,730. The second invoice for pavement reconstruction to zone 3.2 is in the amount of $14,000. A further invoice dated 28 February for "additional works required and/or requested" during the rectification works; the total of the invoice is $13,715, including $4,991 for additional agricultural drains; an amount of $2,340 is deducted for excavated soil disposed of on site and saving for reusable base course; the total amount payable under this invoice is thus $11,375. The invoices from Tasman Urban Developments total $107,105, but not all items are claimed.

985. Mr Dixon made clear that the plaintiff's claim in respect of the invoices from Tasman Urban Developments does not relate to the $29,000 for zone 3.1, the $14,000 for zone 3.2, or the $4,991 for the additional agricultural drains. Thus the claim does not relate to replacement of pre-existing pavement. It does relate to the $15,630 for areas 1, 2 and 3; the $41,100 for zone 2; and an amount of $6,384 for the remaining items in the invoice of 28 February, which must be reduced to $4,322. This produces a total of $63,114, which is clearly what is intended by the $63,115 for rectification works in the plaintiff's particulars. I make two comments at this point. First, perhaps curiously, the defendants are given the benefit of the $2,340 deduction from the 28 February invoice, but not the $4,000 deduction from the first 9 February invoice. Secondly, the amount of $2,062 in the invoice of 28 February, which is stated to be for "additional section at Hawthorn Road entrance", could not be claimed by the plaintiff; it relates to pre-existing pavement. I deduct this amount from that claimed in respect of the Tasman Urban Developments invoices, to come to a figure of $61,052.

988. In respect of Golder's fees, the invoices were not in evidence, having ultimately been excluded from the court book. While I have not seen the invoices, I rely on Mr Dixon for the fact that invoices for $3,900 related to Golder's report, $560 related to administration of the tender process and $12,650 related to supervision, of which only half ($6,325) was claimed to allow for supervision of the additional works in respect of which no claim is made. The total of the invoices is $17,110, of which $10,785 is claimed. Morgan stated in his witness statement that Golder was duly paid a total of $27,895.99, but gave no details; presumably some of it relates to the additional works. The difference of $10,785.99 from the total of the invoices was not explained in evidence and Mr Dixon was unable to reconcile the amounts. Without more, there is insufficient basis to say that it relates to the relevant works. I will take $10,785 to be the amount under claim in respect of Golder's work. Together with the amount claimed in respect of the work of Tasman Urban Developments, the total is $71,837.

991. Another introductory fact is that the College was converted from septic to sewer in 1987 or 1988; CR Knight did the work connecting the College to the MMBW sewerage system. D'Orio & Hede Pty Ltd, an architectural firm of which the architect was a principal before he commenced practice on his own, was involved in the work, but was not the architect personally in charge. I note that cl. H2.18 "Demolition" of CR Knight's tender documents states:

" On completion of sewer drainage works, the Contractor shall pump out existing septic tanks and associated pits, and treatment plant and remove from site in an approved manner. The existing septic tank and pump well distribution pits to sand filter shall have tops and bottoms broken out and filled with clean filling."

995. I mention this in relation to an interceptor pit (described by Brock in a letter to the architect dated 18 September 1990 as approximately 30 m long, 3 m wide and 1.5 m deep) that was discovered during excavations of the southern part of the bus turnaround area in September 1990. Fabris said that the old septic tank was located about 4-5 m to the west of the kerb of the then existing bitumen paved area, and the interceptor pit, which took overflow from the septic tank for dispersal, was 15-20 m away from the tank to the east. He said he had received an assurance, presumably from CR Knight, that the tank had been sealed and the pipes connecting the tank to the pit had been removed. Some doubt might be cast on the validity of this assurance in light of the subsequent events in relation to construction of the bus turnaround area, although the absence of the interceptor pit from subsequent drawings by CR Knight might be consistent with CR Knight having done all that it considered was required to be done during the sewerage conversion work. However, in the absence of evidence from CR Knight I make no finding in this regard; to do so would be to engage in speculation which could be most unfair in respect of a person whom no party saw fit to join as a party or even call as a witness. I accept that for the purposes of this project the interceptor pit was an unknown contingency until it was found. In any event, the only consequence of the initial ignorance of the interceptor pit is that the time for consideration of its effect on pavement design was delayed until discovery.

998. The final preliminary task is to mention the experts who gave evidence in respect of the bus turnaround. Not the entire panoply was involved in this question. Morgan (of Golder) was the main expert. He was called by the plaintiff. He produced a report dated 20 August 1992 ("the Golder report") for the purposes of rectification. Other experts were Beauchamp and Nixon for the builder and Jack for the engineer. I will refer to their evidence as necessary. Harding also made some comments in relation to the pavement, but they were cursory, conclusionary and not helpful; I will not refer to them further.

Engagement of consultants for the bus turnaround area

1002. The architect's fee proposal dated 15 January 1990, accepted by the College, was an all-up cost expressed as a percentage of the final building cost and "including fees for architectural, mechanical and electrical consulting engineers, hydraulics and structural engineers and quantity surveyor". The architect stated that he was responsible for the engagement and fees of the civil, mechanical, electrical, hydraulic and structural engineering consultants, and accepted that he had responsibility for coordinating the consultants. It was pursuant to this arrangement that the architect engaged the engineer, and CR Knight for the hydraulic work.

1005. The evidence suggests that the bus turnaround area was not initially part of the project but was added later. The actual progress of design work was as follows. Drawings by the architect dated December 1989 show a bus turnaround area, although it does not appear to correspond exactly with the ultimate design. A drawing of existing services prepared by CR Knight and dated January 1990 appears to indicate the location of the multipurpose hall but not that of the bus turnaround area; it does not show any services in that area. As described at [185] above, a site soil investigation was commissioned from MacGregor on 6 February and the report was dated 11 February; it relates only to the area of the slab for the multipurpose hall, suggesting that the bus turnaround was not part of the project at this stage. A plan prepared by the architect as a base for civil work was stamped as received by the engineer's office on 19 February. The engineer's civil plans for the bus turnaround area are dated February, presumably being after 19 February. The hydraulic services drawings prepared by CR Knight are dated March 1990. On this chronology the bus turnaround appears to have been added as a new component of the project at some time between 11 and 19 February.

1008. However, a sequence of invoices and correspondence in March, April and May 1990 relating to the engineer's fee suggests that civil design and documentation was added as a new item to the engineer's retainer between 9 and 27 April. Although these invoices speak of the project in prospective terms, I take this to be in recognition of the fact that the retainers in theory relate to work yet to be done. For example, the engineer's letter dated 9 April states:

" It will be necessary to obtain a site soil investigation and report prior to commencement of structural documentation. This work should be carried out by a geotechnical engineer, and will be invoiced seperately [sic] from the above."

In fact, the only site soil investigation conducted at the design stage was that by MacGregor in February. The invoices and letters were prepared after the event. The fact is that the work had already been done.

1013. I note in relation to this correspondence that the engineer's fee is stated to include "periodic inspections during construction to observe accord with design intent". This statement relates specifically to the structural engineering, but I infer it applies equally to the civil side of the project. So much seems to be accepted by the engineer in a letter dated 22 October 1992. Certainly, the engineer was not responsible for supervising the works as a whole.

1016. In relation to hydraulic design, I have stated that the architect engaged CR Knight. The architect said they were engaged to be the hydraulic engineers on the project. The evidence about the retainer is not sufficient to determine precisely what CR Knight was asked to do in respect of the bus turnaround area and when.

1020. CR Knight prepared the drawing of existing services dated January 1990 which I have already mentioned. It shows the pre-existing bitumen area but not the bus turnaround area. There is no indication of the interceptor pit or traces of an old septic system. By March 1990, which is the date on the hydraulic services plan "H5" prepared by CR Knight, the bus turnaround area is clearly shown. Again there is no indication of the interceptor pit. A few further comments may be made about this drawing. First, it bears the label "hot & cold water services". Secondly, a reinforced concrete pipe is shown cutting roughly north-south across the bulge in the pre-existing bitumen and part of the new bitumen area, towards a proposed bus shed; this may be a pre-existing service, judging from the reference on drawing "H6", a drawing of external hydraulic services in the multipurpose hall area, at that position to "connect to exist 150 RCP drain". Thirdly, the drawing shows several existing pits within the new bitumen area and directs: "Provide new medium duty gatic covers to existing pits. Pits to finish flush with new pavement level. Adjust pit structures as required." However, no pipes or lines are shown extending from these pits. It is not apparent from the drawing whether attention has been directed to the question of drainage design for the bus turnaround area, although there are indications that the drawing is not necessarily intended as a full drainage design.

1023. I now turn to the engineer's contribution to the design. Brock performed the day-to-day work on the project, subject to Simpson's supervision; they discussed the design as necessary and Simpson would overview documents before they were issued. According to Brock's witness statement, the materials on which he based his design work were: CR Knight's January 1990 drawing of existing services (which does not show the interceptor pit); the architect's base plan for civil work; and some other plans ("SK01A" and "SK01B" dated December 1989) by the architect. CR Knight's drawing "H5" which showed the unconnected pits is dated March 1990 and presumably was not available to Brock at this stage. However, the unconnected pits were shown on the architect's base plan for civil work.

1026. The resulting design appears in the civil plans "C1" and "C2" dated February 1990. They indicate a pavement of 200 mm thickness: 50 mm thick asphalt and 150 mm thick compacted fine crushed rock sub-base on a compacted sub-grade (if required). According to the filling notes, compaction was to be to a degree equivalent to 95% relative compaction described in AS1289 E1.1; no filling was to be placed until the site had been inspected by the engineer or its representative. As far as I am aware, nothing in the specifications for the project adds to these requirements. The legend to civil plan "C1" shows how a proposed stormwater pit is to be indicated, but none are shown on the plan and the legend merely states "Refer Hydralics [sic] Drawings".

1029. Brock used the "design by experience" method. He produced a standard design based on what he considered to be the anticipated conditions. The question is whether he had any reasonable basis for anticipating the conditions. According to the Golder report, the engineer was asked to supply records of the design method used for pavement thickness but was unable to do so; I infer there were none. Thus it is necessary to look to less direct evidence.

1032. Brock had designed another roadway within the College in about 1988, so he was aware of the site conditions in a general sense. He said in his witness statement that when he designed the bus turnaround area he took into account the pre-existing bitumen; he added in oral evidence that the aspects of the existing roadway that he took into account were its thickness, its condition (which was serviceable), and the geographical area that it was in (where he had successfully designed pavements before). Yet he did not believe he inspected the existing roadway at the time of designing the bus turnaround area. I find that he did not. Thus the claim to have taken into account the existing conditions at the time of design is illusory. In my view, a prudent designer would not have relied on conditions being identical after two years; a further inspection was warranted. As for thickness of the pavement, in a letter dated 3 May 1991 Brock referred to the existing roadway consisting of 25 mm asphalt on a 100 mm granular sub-base (a total pavement thickness of 125 mm). While it could be inferred that he had this level of detail at the time of design due to his prior work at the College, there was no express statement to this effect. I am not prepared to draw such an inference. Later statements that the 200 mm pavement he designed in 1990 was 60% thicker than the existing 125 mm pavement are commentary on comparative thickness, not statements of what he took into account at the time of design.

1035. Brock said in cross-examination that he assumed the sub-grade would be of medium quality. Brock agreed that he did not receive any written information about traffic loadings;[37] there is no evidence that he took loadings into account. He did not obtain instructions about the design life of the new pavement. A letter from Simpson to the architect dated 22 October 1992 states that the specified pavement had a design life of approximately 15 years, but this is clearly a calculation made in response to the Golder report and not a statement as to any assumption made during design.

1038. Several witnesses gave evidence in relation to the "design by experience" method. They were in general agreement with Morgan, whose evidence was most specific and which I accept. I mention the others only where necessary. Morgan explained that the method involves a transfer of experience from an existing pavement by making an assumption that the sub-grade conditions under the new pavement will ultimately be the same as under the existing pavement in terms of the equilibrium value of moisture. In his view, design by experience often leads to reasonable and economical designs. He added that a prudent designer would inspect the site to examine the general topography and conduct some tests, by digging holes or using a spade to uncover the ground, to ensure that the conditions were in fact similar. Jack referred to assessing the depth of the existing pavement, the length of time it had been there, and its condition. He said that with a small pavement area like this one, sometimes boreholes would not be done. Beauchamp's view was that it is preferable to do soil tests even with the "design by experience" method, because otherwise the designer lays himself open to the unknown. Morgan said that in an urban situation, where there has been previous land use, it may not be evident that conditions will be similar or the same, even in an immediately abutting area; proximity is not the sole criterion. He said it was difficult to assess whether an increase in total thickness from 125 mm to the proposed 200 mm was adequate, but he thought it probably was in circumstances where the sub-grade moisture content was similar.

1041. Morgan referred to two other possible methods of design, the Country Roads Board method and the Residential Street Criteria method. They are each dependent on: (1) the California Bearing Ratio (CBR), which expresses the strength of the sub-grade which varies with wetness; (2) the pavement design life (for which 20 years was the norm); and (3) the intended traffic loading of the pavement over its design life measured in Equivalent Standard Axles (ESA). He said it was essential--or at least highly desirable--to have a good estimate of the CBR value; this would involve an interpretation as to wetness over time. While factors such as CBRs, design life and ESAs were not expressly stated to be applicable to the "design by experience" method, I conclude it is implicit that general considerations in pavement design such as sub-grade strength, design life and traffic loading should be taken into account when using that method.

1044. Morgan made calculations of total pavement thickness using the two methods, based on CBR values of 3% and 6%, normal design life (20 years) and various ESA values of between 1.0 × 104 and 1.0 × 105. For a CBR of 3%, the results were in the range 325-400 mm. For a CBR of 6% the range was 200-290 mm; if the figure of 200 mm is excluded (the minimum design thickness at 1.0 × 104 and CBR of 6%), the range was 260-290 mm. He recommended adoption of a CBR of 3% as a conservative estimate for design purposes for the rectification work, based on the information he by then had available, namely his own CBR measurements and those in a MacGregor report dated 9 January 1992. However, he did say that "[m]any engineers might design for CBR values or 5 or 6% in the absence of site specific information".

1047. The evidence as to the basis for Brock's design as I have referred to at [292]-[293] makes clear that he took no action to satisfy himself that the conditions of the sub-grade in the area of the new pavement area would reach an equilibrium similar or identical to that under the pre-existing pavement, such as to make the "design by experience" method appropriate: he did not inspect the site; he did not turn over the soil or do any other testing; he merely assumed that the sub-grade would be of medium quality; he did not make an assessment of the variations in wetness over time. It hardly lies in the mouth of the engineer to now complain that, even if Brock had done these things, he may not have discovered the interceptor pit or any other evidence that the sub-grade was not substantially similar to that under the pre-existing pavement. By proceeding as he did he excluded any possibility of doing so. The fact is that it was not substantially similar, as I will set out below. Further, in producing his design, he did not take into account important factors such as the pavement design life and the intended traffic loading. If he had done so, the probability is that he would have designed a thicker pavement, regardless of the assumption he had made about the strength of the sub-grade.

1050. A further question at the initial design stage is the responsibility for drainage design. On the evidence I have set out at [285]-[287] above, responsibility for drainage in the bus turnaround area was not expressly specified in the retainer of either the engineer or CR Knight. Simpson stated that he did not know why, but the engineer was not commissioned to design drainage on the site at all; he said it was usual for the civil engineer to also do drainage to ensure that the drainage needs of the designed pavement are integrated into the drainage designs generally. Brock gave similar evidence in his witness statement. I accept this description of the usual role of the civil engineer in relation to drainage. Brock said that CR Knight was responsible for all of the design in relation to drainage matters, both in the area of the multipurpose hall and in the bus turnaround area. The basis for this statement was not explored. Brock could not point to discussions or correspondence with CR Knight about drainage; I was not directed to any by counsel and I infer there was none. Brock said he thought it would be reasonable to assume that there would not be any drainage problems. But, on the evidence, it is not established what the engineer knew about CR Knight's retainer and whether Brock's assumption was reasonable in the circumstances.

1053. Considering that drainage is normally part of the civil engineer's work, it seems curious that there is no record or evidence of the engineer inquiring what was being done in that area. In light of the stated need to integrate drainage into the design, it is also curious that the engineer would sign off on a design without considering whether any alterations might be required for coordination purposes, for instance in relation to the runoff from the kerbs and spoon drains shown on the engineer's design, or in relation to the unconnected pits of which he should have been aware from the architect's base plan for civil work. The engineer made no communication with CR Knight at all in relation to drainage in the bus turnaround area. However, I accept Morgan's opinion that he would consider drainage to be the area of expertise of the hydraulic engineer, and that it was satisfactory in the circumstances for the engineer to rely at this stage on drainage considerations being dealt with by the hydraulic engineer.

1056. The responsibility for ensuring that drainage issues were adequately dealt with must lie with the architect. Having separately engaged a hydraulic engineer, it was his function as coordinator of the consultants to ensure that the hydraulic and civil engineers' work "covered the field" and see that drainage was incorporated into the overall design. There is no evidence that he did anything to ensure this was the case.

1059. I now return to the chronology of events on site.

Discovery of the interceptor pit and laying of asphalt

1063. Many soft spots were encountered on the site during excavation and caused continuing problems.

1066. One of these was the interceptor pit, which was discovered during bulk excavation on 11 September 1990. According to the earthworks subcontractor Ace, in a letter to the architect dated 3 April 1992, the clay filling overlying the filter began to flex at first and then went wet and boggy. Savage's witness statement described "a soft area that flexed and showed some movement under rolling".

1069. Kanngeiser telephoned Brock and asked him to attend the site. Brock did so and asked Kanngeiser to dig down and determine the depth of the pit. This was done immediately. Brock instructed Kanngeiser to cease work in that area until instructed by the architect. Brock then produced a letter to the architect dated 12 September. Having described the pit, he recommended:

" The septic system should be removed in it's [sic] entirety to a firm base and filled with compacted approved material, in accordance with our drawings. This is necessary due to the uncertain nature of the existing septic and the fact that its location will be subject to heavy bus wheel loads."

The statement suggests an awareness of traffic loadings for the first time.

1074. A request for information from the earthworks contractor Ace to the builder also dated 12 September 1990 states:

" Please advise action to be taken over old sand filter under car park. We suggest excavation & backfilling with NDCR [nondescript crushed rock] if this area is to hold up under buses."

1078. A variation quotation by Ace dated 13 September 1990 presented four options, which were:

1. $3,500 for excavation of 125 m3 of screenings and clay, backfilling with on site material;

2. $8,125 for excavation of 125 m3 of screenings and clay, backfilling with scoria nondescript crushed rock;

3. $6,480 for excavation of 285 m3 of screenings, clay and sand, backfilling with on site material;

4. $17,670 for excavation of 285 m3 of screenings, clay and sand, backfilling with scoria nondescript crushed rock.

The fourth option corresponded to Ace's recommendation of the previous day. Savage gave the quotation to Kanngeiser, who appears to have passed on its general contents to the architect orally. Fabris said he discussed the $17,000 figure with the architect; they considered the amount excessive; Fabris asked the architect go back and see if there was an equally effective but cheaper version of the rectification. To the extent that subsequent correspondence by Cooper (3 April 1992) and Stehle (21 December 1992) suggests that the College was concerned only with the cost and not the effectiveness of the solution, I reject it.

1086. On 13 September 1990 MacGregor attended the site at Brock's request and produced a report the next day. Five bore holes were drilled in or near the interceptor pit which, according to the engineering logs, showed that all soils were wet, although no groundwater was encountered. The report recommended as follows:

" Place sub-base material and compact. Soft areas, eg due to previous exploratory pits, should be identified during the rolling and replaced with approved imported material. The gravels and sands are, in our opinion, satisfactory to remain beneath the proposed pavements."

1090. Brock relayed the contents of the MacGregor report to the architect by letter dated 18 September 1990. He wrote:

" In the opinion of the Geotechnical Engineer, the existing material is adequate and does not require replacement. As the Builder has disturbed some of trench material, [sic] all soft areas are to be removed and replaced with approved imported material. Sub-base material is then to be placed as specified on our drawings."

The College accepted his advice. I infer that, being of lesser scope, the cost of these works was less than the $17,670 previously quoted by Ace. According to Ace's letter of 3 April 1992, having heard of the College's decision, Ace warned that it was doubtful in these circumstances that the pavement would withstand the heavy and frequent loadings of the buses in the area and might break up in the future. It was not made clear to whom the warning was given.

1095. In another letter to the architect dated 18 September 1990, Brock refers to the discovery of further soft spots in the bus turnaround area. The builder was instructed to remove soft spots and replace with compacted site derived clay . Brock states:

' The "soft spots" are partly due to poor drainage in the area. It appears that some services, i.e. sub soil drainage, stormwater drainage, sewer, cold water etc, have been either disturbed or damaged and are adversely affecting the sub grade. The Builder is responsible for locating, repairing and/or diverting these services, prior to placing of any sub-base.'

1099. A few comments are necessary here about the engineer's response to the MacGregor report as appearing in his two letters of 18 September 1990. Brock's own advice had been that the septic system should be removed in its entirety: see [304] above. In his first letter he took MacGregor's statement that "The gravels and sands are, in our opinion, satisfactory to remain beneath the proposed pavements" and turned it into a statement that "In the opinion of the Geotechnical Engineer, the existing material is adequate and does not require replacement". It is not a precise statement of MacGregor's advice, but Morgan accepted that it was a fair statement. What is clearly not a restatement of MacGregor's advice is the instruction described in the second letter to the builder to remove soft spots and replace with compacted site derived clay. This is new advice from Brock. In this regard, Beauchamp commented that it was not good practice to place a clay material over gravel or sand, since water could accumulate in the gravel or sand and cause the overlying clay to soften. Nixon gave a similar opinion, that overlying clay in such circumstances would lose strength with increased moisture and be detrimental to the stability of the pavement and cause it to fail. I accept this view. Thus it is unnecessary to consider the submission that Brock was a mere conduit for MacGregor's advice.[38]

1102. Returning to the chronology, on 21 September 1990 Brock instructed Kanngeiser as recorded in a confirmation of instructions and echoed in a letter to the architect dated 24 September as follows:

' The Builder brought our attention to the continuing presence of various "soft spots" within the paving areas. In our opinion, the "soft spots" are caused by inadequate and possibly damaged sub-soil and surface stormwater drainage. According to the Builder, "soft spots" in the sub-grade originally identified were removed and replaced with compacted filling. If this is indeed the case, the sub-grade will be adequate when fully dry and the sub-base should be proof rolled to re-compact the area in order to ensure that "soft spots" have been removed. The long term performance of the pavement critically relies on adequate drainage. It is the Builder's and the relevant Consultant's (i.e. Hydraulic Engineer) responsibility to ensure that proper surface and sub-soil drainage from the surrounding areas and new pavement is provided. We suggest that the Consultant considers providing sub soil drainage (i.e. ag. drains) to the new paving areas.'

1106. This letter is significant. It directs the architect's attention to the need to refer the matter to the hydraulic engineer, although the reference to "long term performance" does not convey a sense of urgency. But it also should have alerted the engineer to the need to revisit the entire design. Clearly the factors underlying the "design by experience" method--specifically, the assumptions about the ultimate equilibrium value of moisture of the sub-grade--had changed. Morgan said that a prudent pavement designer ought to have revisited his design when the interceptor pit was found. I agree. Further, having raised the drainage issue himself, the question arises whether it was reasonable for Brock not to follow up whether any steps had been taken in this area; the need for integration between the civil and hydraulic designs was a more pressing issue once the unexpected interceptor pit had been discovered.

1109. On 3 October 1990, Brock reported to the architect on his inspection of the project the previous day. The letter makes reference to soft spots being caused by inclement weather conditions and magnified by inadequate site drainage, but this reference (and in fact the whole letter) is directed specifically to the carpark and access road to the eastern side of the proposed gymnasium. The access road, to Stanley Road, was being used by construction vehicles, and passed to the north of the eastern oval. The inadequate site drainage therefore seems to be a reference to the northern boundary drain. According to Kanngeiser, the access road became impassable and construction vehicles had to use the Hawthorn Road entrance. It appears that the College was not pleased with this situation, although it is not clear what other option was available.

1112. Following a site meeting on 4 October 1990, it was determined to obtain the report from CR Knight that I have described at [ 186] above. The preliminary report dated 9 October was followed by a full drainage report dated 11 April 1991. Construction of the bus turnaround area appears to have gone into remission in the meantime. While I am again disadvantaged by the absence of evidence from CR Knight, Hede did state that repairs were done whenever a pit or leaking pipe was found by the builder; in a letter dated 16 March 1992 to the architect Fabris referred to having received a written assurance from CR Knight that all stormwater drains directly linked to the builder works were correctly connected and were operating effectively; in its letter dated 3 April 1992, Ace reported that the stormwater drain diagonally crossing the pavement had been found to be blocked and saturating the adjacent sub-grade, and was partially replaced and cleaned. I find that all the appropriate work was done. Stormwater was eliminated as a cause of moisture ingression to the pavement area.

1115. The site meeting minutes for 26 April 1991 state on the one hand that roadworks asphalting had commenced, but on the other hand that the builder advised that the asphalting would commence on 29 April. The evidence below is that the asphalt was laid on 26 April. According to Cooper's witness statement, delivery dockets for materials delivered to site indicate that those materials were greater than what was required to construct the specified pavement thickness.

1118. By a letter to the architect dated 3 May 1991, Brock reported on an inspection of the project on 26 April. It is not clear why a full week passed between the inspection and the letter. The letter states:

" At the time of the inspection, hot-mix asphaltic pavement was being laid to the new carpark area. Various soft spots to the crushed rock sub-base were identified and highlighted to the contractor. The Builder was advised to cease surfacing operations to the soft spot areas until weather conditions allowed further drying and proof rolling confirmed that the sub base is adequate."

1122. Fabris gave evidence in his witness statement that he observed proof rolling and observed a visible and noticeable sponge effect. The surface appeared to be very spongy and soft in a number of areas. He expanded on this description in cross-examination: he went down to observe the works on the day the asphalt was laid; there was rolling going on prior to the asphalt trucks coming in; this is what he was referring to in his witness statement; towards the western end of the interceptor pit, there was a wet stain on the surface; he observed the same sponginess when the trucks drove over the areas that had appeared spongy during rolling. Fabris spoke to the architect about the wetness and sponginess. In a later letter to the architect, dated 16 March 1992, Fabris stated that the asphalt had been laid on a wet surface. He also said it started to weep immediately after sealing. Kanngeiser was not able to give evidence contradicting Fabris: he was not present for the entire time, and could only say that he didn't notice anything out of the ordinary when he was. Ace's own evidence, as seen in the letter of 3 April 1992, is that water was seeping out between the old and new asphalt even immediately after asphalting was completed. Ace says that it orally requested many times that the services in the area be checked, as the volume of water indicated that it was more than merely ground water seepage.

1125. In relation to compaction, I have referred to the requirements of the civil plans produced by the engineer at [290] above. Australian Standard 1289, to which reference is made, was not in evidence, so I am unable to say whether, for instance, compaction testing is specified. But the engineer stated in a letter that proof rolling is an adequate substitute for compaction testing, and Morgan agreed with this statement. I accept that this is the case. However, no records were kept of either compaction testing or proof rolling.

1128. In respect of Brock's instruction to the builder for surfacing operations to cease, Fabris said his observations were made on a single day; he did not recall observing the sponge effect on any other day. Kanngeiser's recollection was that the asphalt was laid in one day. Cooper had no recollection that the asphalt was laid in two stages, nor could he point to any document or evidence that suggested that this was the case. I conclude that Brock's instruction was not obeyed.

1131. I accept Fabris's evidence of the sponginess and weeping. Morgan stated that if it was possible for a lay person to observe sponginess during proof rolling, it could be assumed that compaction had not been achieved; asphalt laid on spongy ground is likely to fail; it is not a satisfactory method of operation for a pavement constructor to do so. I accept Morgan's conclusion. It would apply regardless of whether compaction was being assessed by testing or by proof-rolling. The overall picture of work performed on this day is of repeated failures on the part of the builder: a failure to cease laying the asphalt when directed by the engineer; a failure to supervise the work of Ace; a failure to achieve adequate compaction levels.

1134. Another letter from Brock to the architect dated 3 May 1991 is a report on the pre-existing pavement. The origin of the letter appears to be disquiet on the part of the College at continued use of the main driveway by construction vehicles notwithstanding express instructions to the builder to the contrary. Brock describes the pavement for the access road from Hawthorn Road as in a severe state of distress. Deformation along the lines of wheel loads pointed to high wheel loads from construction vehicles as a cause, although he also cited poor sub-surface drainage and inadequate construction of sub-grade, sub-base and wearing surface as probable causes. He described the rest of the pre-existing pavement as in fair to poor condition. Although it would be possible to cut and patch, he recommended that, due to probable sub-surface inadequacies, the entire area be reconstructed. He also recommended that a hydraulic consultant's recommendations be obtained as to installation of sub-surface drains and review of the stormwater drainage system in the area as a whole. Simpson stated that he approved this letter, to which drawings and notes were attached.

1137. The letter deserves comment. The observations as to the state of distress are exaggerated. The Golder report dated 20 August 1992 and based on field investigations at the site in June, about a year after Brock's letter, classes the pre-existing pavement in Categories 1 and 2, meaning that there was some visible deterioration in the form of variable cracking, but all areas were serviceable. This is not consistent with the driveway being in a severe state of distress and the remaining area being in a fair to poor condition. I accept the observations in the Golder report. Brock was pandering to the College's displeasure with the builder in overstating the degree of damage. If I accepted Brock's descriptions, it would tend to weaken his claim that his design by experience was appropriate, since it would tend to show that the pre-existing pavement was not in fact in a satisfactory condition even at the time of his design.

1141. The College took occupation of the works on or about 21 July 1991. According to the architect, the bus turnaround pavement began to fail in about September 1991. A building project report dated 18 September 1991 states: "Driveway asphalt outside the garage breaking up badly". The "garage" is a reference to a shed build on the southern side of the bus turnaround area; thus the asphalt that is breaking up is in the area of the interceptor pit. I have mentioned Fabris's observation in his letter to the architect dated 16 March 1992 that the asphalt started to weep immediately after sealing; he added that it continued to weep after every prolonged rain period.

1144. The situation continued to deteriorate. By letter dated 12 December 1991 the architect reported to the engineer that "the new car-park and bus turning area at the college has broken up seriously, with a major depression occurring in front of the bus garage". The engineer attended the site and replied to the architect by letter dated 17 December 1991, recommending that a geotechnical investigation and report be carried out to establish the cause of the pavement distortion.

1147. The result was another report by MacGregor, dated 9 January 1992. MacGregor drilled three boreholes and found as follows:

" The pavement at test location 1 has failed with major rutting. The base course material was grossly contaminated with clay as a result of pumping during failure. [original italics] The test locations 2 & 3 were in areas where the surface has failed by cracking due to excessive deflections. These tests indicated a pavement thickness of 150mm and 170mm respectively. The penetrometer testing has shown the clay filling immediately beneath the base course to have a CBR in the order of 3-4. The crushed rock and sand filling (due to presence of former interceptor pit) was dense and has an insitu CBR in excess of 20."

Groundwater was encountered and observed to be running along the bottom of the base course layer and on top of the compacted clay filling. The report states that this water would lead to some softening of the clay fill subgrade, and that a build up of water within the base course layer would lead to a major reduction in strength of the base course. The report concluded that the failure of the pavement was due to a combination of: (1) insufficient pavement thickness for the traffic intensity and loadings; and (2) poor drainage and subsequent building up of groundwater in the pavement base course.

1152. A meeting was held on site to inspect the distressed pavement on 29 January 1992. Present were representatives of the College, the builder, Ace (Cooper), the engineer and the architect. According to a letter from the engineer to the architect dated 4 February, water seepage through pavement joints was observed on this occasion, suggesting that the sub-base course was saturated and thus weakened. It seems to also have been at this meeting when, according to a letter from Simpson to the architect dated 22 October, another area of damage at the northern edge of the new pavement area was identified; the builder and Ace said they knew the cause of this failure and that it would be repaired with the interceptor pit area. In a letter dated 21 December 1992 to Fabris, the builder states: "In relation to the area to the north work will proceed to restore the roadway on a date to be mutually agreed between yourselves and our Company". There was some evidence from Kanngeiser about a stormwater pit in that area which had been built on fill and which the College told him it would have its own excavator repair later. On this evidence, there is no basis for a finding of fault specific to this northern edge of the pavement.

1155. Brock prepared a rectification plan, which was attached to the engineer's letter of 4 February 1992. It shows an agricultural drain along the northern side of the interceptor pit area, where failed pavement is to be removed to the crushed rock layer and refilled with a more permeable compacted crushed rock sub-base and new asphalt pavement; there is another area of distressed pavement at the northern edge of the bus turnaround area which, it is stated, is to be rectified in the same way as the interceptor pit area. The plan also shows an area of the pre-existing asphalt which apparently is also to be rectified by the laying of agricultural drains; the plan states that this area is to be separately priced by the builder, although there was no explanation why. I note that CR Knight is no longer involved at this stage; the engineer has assumed the role of designing drainage in the form of agricultural drains.

1158. From this point, there was further correspondence between various parties. It could be described as attempting to locate the cause of the failure; on a less generous view, it could be described as finger pointing and jockeying for position. Without setting out the correspondence in detail, the basic positions of the parties, together with the date of the letters in which the views are contained, were as follows.

The College--Liability for rectifying the distressed pavement lay with the engineer, the builder and Ace. The tests prior to construction of the pavement were inadequate and the works undertaken to overcome a known fault were ineffective. (16 March 1992)

The builder--The builder had merely carried out the instructions of the architect and engineer. (3 April 1992)

Ace--There was no faulty workmanship on the part of Ace. It was the College's responsibility to cut off and seal the old septic system, and also to make the engineer aware of it so that any design modifications could be made. (3 April 1992)

The engineer--Notwithstanding the finding in the MacGregor report that the pavement was thinner than specified, the major cause of failure was inadequate sub-surface drainage. The engineer's advice for remedial work was in accordance with MacGregor's report of 14 September 1990 (see [307] above). It was the builder's responsibility to attend to drainage problems. (4 February, 24 March 1992)

1165. Meanwhile, by fax dated 5 February 1992, the architect asked the builder for urgent pricing on the proposed rectification works. Quotations were provided by the builder and separately by Ace. The College's Buildings, Grounds & Equipment Committee considered the quotes; by letter to the architect dated 16 March, Fabris conveyed the Committee's wish to receive other quotations. The architect obtained several quotes. He stated that this work involved a separate commission.

1168. On 27 March 1992 a meeting was held between representatives of the College, the builder, Ace (Cooper), the engineer and the architect to discuss the pavement failure, the result being that an independent geotechnical report would be commissioned.

1171. As at 28 April 1992, there was still disagreement as to who would pay for a geotechnical report and the ensuing rectification works. The College determined to pay for a report itself. On 5 June 1992 it authorised Golder to undertake a geotechnical assessment. The result was Golder's report dated 20 August 1992, in respect of which Morgan gave evidence.

1175. Golder staff attended the College on 11 June 1992 and drilled six hand auger holes and conducted six dynamic cone penetrometer tests. A sample of subgrade soil was taken for lab testing.

1178. The location of the auger holes were shown in Figure 1 attached to Golder's report, which became page 1071 of the Court Book. I will refer to the auger holes as AH 1 to AH 6 in accordance with the figure. I note that AH 3 and AH 6 appear to be in the area of pre-existing pavement. The pavement condition is shown in the figure by shading corresponding to numbered categories, namely:

Category 1--No cracking or deformation evident in pavement; may contain some minor zones of Category 2 pavement condition; pavement in serviceable condition.

Category 2--Visible deterioration of pavement evident in the form of variable cracking in asphalt surfacing; pavement in serviceable condition.

Category 3--Visible deformation of pavement including cracking, minor rutting, and loss of shape; asphalt surface disturbed; pavement in marginally serviceable condition.

Category 4--Visible significant deformation, including major rutting and loss of shape; asphalt surface badly disturbed; crushed rock sub-base disturbed and loosened, and contaminated by sub-grade materials; pavement in unserviceable condition.

"Serviceable condition" was said to mean "performing satisfactorily for its present function". In summary, there were Category 4 areas at the interceptor pit and the northern edge of the bitumen, and Category 3 areas surrounding those areas. The driveway was classed Category 2. Most of the pre-existing bulb of pavement and most of the new pavement was Category 1.

1186. In terms of pavement materials, the pavement was found to consist of asphalt ranging between 40 mm and 50 mm in thickness, above a crushed rock base course which was between 105 mm and 150 mm thick at five test sites; at AH 6, the base course was found to be 310 mm, believed to be backfill for the services trench. Thus the total pavement thickness (asphalt and crushed rock) was found to be between 150 mm and 200 mm, excluding AH 6. In Morgan's view, allowing for difficulties in measurement and construction tolerances (he said that a departure of 10 or 20 mm was not critical), any measurement less than 180 mm suggested that the pavement thickness was deficient. It was noted, however, that pavement thickness bore no direct correlation to the visible degree of failure. For instance, the pavement thickness at the test locations demonstrating the greatest failure were 150 mm (AH 4, Category 3) and 200 mm (AH 1, Category 4) respectively.

1189. The crushed rock was found to be wet in all test locations, and in four (AH 1, AH 2, AH 3 and AH 6) water was observed to pond in the bottom of the auger hole. The sub-grade was wet at two locations (AH 1 and AH 2) and elsewhere was moist. Morgan commented that gravity drains would be ineffective in drying out low permeability clay soils, although they could usefully prevent water from entering the sub-grade. He added that the continued presence of the interceptor pit as a sump of permeable material could have acted as source of water, elevating moisture content of the surrounding clay soils and leading to their relatively low strengths. In Morgan's view, water was unlikely to have emanated from the clay sub-grade; rather, it was flowing through the permeable base course, having entered through cracks, joints or even the low permeability surface. The presence of water in the base course would keep the clay sub-grade relatively wet.

1192. The sub-grade underneath the crushed rock, generally consisting of silty clay of high plasticity, was assessed in terms of its CBR. The CBR was inferred to be in the range 3% to 5% in five locations. At AH 5, the CBR was inferred to be about 14%, reducing to about 7% below 0.4 m. In Morgan's view, a CBR of 3% was appropriate on the assumption that the sub-grade comprised Silurian clays, although many engineers might design for CBR values of 5% or 6% in the absence of site specific information. Based on calculations according to the Country Roads Board method and the Residential Street Criteria method, he concluded that pavement failure shortly after construction was consistent with expected performance of a pavement with nominal depth of 200 mm on sub-grade of CBR 3%; in other words, such a pavement would be expected to fail.

1195. Morgan's overall conclusion was that the failure was a result of inadequate pavement thickness to support the applied wheel loads for the sub-grade strength present in the areas demonstrating failure for an assumed 20 year design traffic loading. He recommended that redesign be conducted on the basis of a CBR of 3%, with a pavement thickness of around 400 mm. He said that the cost of full reconstruction might not be warranted at that time in the areas which were performing satisfactorily, although he considered that even the Category 1 areas "may still prove inadequate in the long term"; in oral evidence he said he would expect the entire pavement to deteriorate fairly shortly. He suggested that a staged reconstruction could be adopted to reduce costs. In other words, Morgan recommended a complete reconstruction with a thicker pavement if expenses allowed, and otherwise a staged (but total) reconstruction.

1198. Mr Cosgrave for the engineer submitted that some aspects of Morgan's evidence were objectionable or of little weight, and I should deal with those questions now. I state at the outset my conclusion, that there is no reason to give lesser weight to Morgan's evidence.

1201. (1) Mr Cosgrave submitted that, because Morgan did not himself operate the boreholes or do the other tests that resulted in his report, his evidence was strictly inadmissible (or of little weight) insofar as it dealt with the results of those tests performed by other unidentified persons. The report was in fact admitted into evidence without objection. As to weight, I would not attach lesser weight to his evidence because it was based on the results of tests done by staff under his supervision, which is what I infer happened.

1204. (2) Mr Cosgrave pointed to an inconsistency in Morgan's evidence. In his report he said that Category 1 pavements "may still prove inadequate in the long term", whereas in cross-examination he said "we would suspect that it would deteriorate fairly shortly", and "while on a particular day we looked at the pavement it was carrying traffic okay, our judgment was that it would not continue to do so and it would require reconstruction within the short term". He explained later in the cross-examination that in saying that the pavement would require reconstruction in the long term, he was trying to make the point that it would require reconstruction (and not just rehabilitation) well inside a normal design life of 20 years. I find that, while there was some looseness about the use of the descriptions "long-term" and "short-term", his explanation is clear enough. I accept it.

1207. (3) Mr Cosgrave submitted that Morgan exhibited a negative attitude towards the engineer by suggesting that the serviceable area of the pavement was limited to Category 1 areas, whereas Categories 2 and 3 are in fact also serviceable. On a careful examination of the transcript passage cited by Mr Cosgrave, I am not satisfied that Morgan made that suggestion. I would not draw any conclusion about Morgan's evidence on this account.

1210. (4) Mr Cosgrave said Morgan quibbled about whether the interceptor pit was the major source of the problem with the bus turnaround area. All Morgan did was to distinguish between "major" in terms of cost and area: he said the interceptor pit did not affect a major part of the area of the pavement, but it was a major problem because of the cost of rectification. This is not an irrelevant distinction; I would not call the answer quibbling.

1213. (5) Mr Cosgrave referred to Morgan's recommendation during rectification works (see [348] below) to add 161 m of perimeter agricultural drains to the pavement, whereas previously only 42 m had been specified for the rectification works. Mr Cosgrave submitted that it reflected poorly on Morgan's reliability that such a drastic change was required, notwithstanding his previous careful consideration of an appropriate rectification method. The fact is that Richardson for Tasman Urban Developments reported a lot of seepage water in certain areas during the course of rectification, and the 161 m of agricultural drains were added in response. I do not consider it unreasonable for Morgan to have altered his specifications in response to the actual conditions discovered on site; that is precisely what the engineer did not do in the first place.

1216. I now turn to the correspondence following the Golder report; I adopt the same abbreviated form as previously.

The builder--The builder had merely constructed the pavement in accordance with the design provided. The risk of the eventuality of unexpected sub-surface conditions was assumed by the College, not the builder. The College rejected the proposed solution to the problem in the interceptor pit area and sought a cheaper scheme. (21 December 1992, 15 February and 17 August 1993, 29 September 1994)

The engineer--If compaction levels do not meet the specified standard, this is due to the builder's failure to supervise; the engineer was not engaged to supervise. In any event, it is an adequate substitute for compaction testing in projects of this size to use proof rolling to verify the effects of field compaction, as the builder did in this case. It was up to the builder to attend to drainage problems identified in the engineer's reports. The specified pavement has a design life of approximately 15 years, which is a reasonable design life, especially considering the absence of specific criteria in the design brief. Agricultural drains should be added during rectification. General replacement of the pavement is neither required nor warranted. (22 October 1992)

1221. The architect proceeded to issue architect's instruction no. 27 dated 22 December 1992 (to which I have referred at [126] in respect of the roof) directing the builder to "make good failed bitumen pavement at bus turn around area" in accordance with cll. 6.03 and 6.04 of the contract. The builder claimed that any such work would be a variation to the contract. Twice, by letters dated 7 February and 29 November 1994, the architect refused the builder's request for a final certificate due to failure to comply with the architect's instruction no. 27, including a failure to rectify the bitumen in the bus turnaround area.

1224. Following a tender process administered by Golder, the rectification works were conducted by Tasman Urban Developments under the supervision of Golder in January and February 1995, according to a description of work dated 28 September 1993. The scope of the work is stated to be:

(i) the removal of some or all of the existing pavement and replacing it with a 410 mm total thickness of new pavement;

(ii) construction of approximately 42 m of agricultural drain and connection to an existing stormwater pit.

Compaction of a minimum dry density ratio of 100% Standard in the top 300 mm of sub-grade was specified. Any soft, wet or loose areas exposed during compaction that did not improve with further compaction were to be excavated as directed and replaced with imported fill. In the area of the interceptor pit, existing backfill was to be excavated and removed to a depth of not less than one metre; any water or water-softened material encountered was to be removed and the pit then backfilled with imported fill. The agricultural drain was to be laid at a depth of 900 mm, within the imported fill. There is some reference to areas 1, 2 and 3, and zones 2, 3.1 and 3.2, which I have described at [ 276] above. Thus it is clear that the works incorporate the areas of both the pre-existing and new pavements.

1231. I have mentioned the two initial invoices from Tasman Urban Developments dated 9 February 1995 at [277] above.

1234. During the course of the rectification works, some conditions of the site differed from what was expected. In particular, former agricultural drains were exposed at the sub-grade and were found to be making water; the stormwater drain was found to be located above the design sub-grade level; and the crushed rock on the northern face was quite wet, suggesting a path for water to move into the newly constructed pavement. These conditions were described in a letter from Morgan to the College dated 10 January 1995. Morgan's letter confirmed alterations to the scope of the works that had been discussed on site; Morgan's suggestions included construction of an agricultural drain around the perimeter of the pavement area at approximately 200 mm below sub-grade level and the lowering of some stormwater pipes to below the sub-base level; some other works were requested by the College.

1237. Tasman Urban Developments issued its further invoice, which I have also mentioned at [277] above, on 28 February, corresponding roughly (but not exactly) to the items listed in Morgan's letter of 10 January.

1240. Finally, I note that in December 1997 some modifications affecting the bus turnaround area were conducted: part of the bitumen near the multipurpose hall was converted to a student waiting area, and a bitumen roadway was constructed allowing access to vehicles from the turnaround area around the northern edge of the eastern oval and into Stanley Road. Thus the pavement area ceased to be a "turnaround", as vehicles now enter the College at Hawthorn Road and exit at Stanley Road.

1244. I have already found various failures on the part of the builder, engineer and architect. I now consider whether and how each failure contributed to the damage suffered in the bus turnaround area.

1247. I begin with the interceptor pit. I have referred at [310] above to the superimposition of the engineer's advice to replace the soft spot with compacted site derived clay over MacGregor's advice that the gravels and sands were satisfactory to remain under the pavement. I have accepted the view that accumulation of water in the gravel or sand caused the overlying clay to soften. I conclude that this contributed to the failure in the area of the interceptor pit. This is at the level of design by the engineer.

1250. In relation to compaction, although specifying a higher standard of compaction for the rectification works, Morgan does not criticise the compaction specification of the engineer (set out at [290] above). I find no fault with the engineer in this regard. The problem was with the actual construction work of the builder, and the sub-contractor for whom the builder has responsibility, the inadequacies of which I have described at [316]-[320] above. Specifically, it was not satisfactory building practice for the builder to proceed when compaction had not been achieved. The builder's failure in this regard was another factor contributing to the failure in the interceptor pit area.

1253. In relation to the area of pavement failure at the northern edge, I have found at [326] above that there was no basis for a specific finding of fault.

1256. There are further issues of pavement thickness and drainage in respect of the bus turnaround area generally.

1259. I have concluded at [297] above that at the initial design stage Brock had an inadequate basis for designing by experience and did not take into account relevant factors such as design life and traffic loading. But the more important question is his design input when the interceptor pit was discovered. As I have concluded at [312] above, Brock ought to have revisited the entire design at this point. It is even clearer than at the earlier stage that a prudent designer would have designed a thicker pavement for the sub-grade conditions of this site if he had turned his mind to the relevant factors. I accept Morgan's conclusion that the pavement was simply inadequate in the circumstances.

1262. As for the builder, notwithstanding Cooper's evidence that more material was delivered to site than required for the specified pavement thickness (see [315] above), the fact is that the testing by both MacGregor (see [325]) and Golder (see [334]) showed that the pavement was as thin as 150 mm at various points. MacGregor's tests were in the direct vicinity of the interceptor pit; most of Golder's tests within the new pavement area were also near the pit or the failed area of pavement at the northern edge; at AH 5, the one auger hole classed as Category 1, the pavement thickness was 170 mm. This is the only specific evidence of thickness for the parts of the new pavement other than the interceptor pit and northern edge. As I have mentioned at [334] above, Morgan said that a departure of 10 or 20 mm from the specified thickness was not specified and that a thickness of less than 180 mm was deficient. I accept this statement and find that the construction of the pavement was deficient, both in the areas of the interceptor pit and northern edge, but also generally. This construction defect exacerbated the inadequacy of the engineer's design.

1265. In relation to drainage, I have found at [300] above that it was up to the architect to ensure that drainage was attended to. This was even more so once the interceptor pit had been discovered and the engineer specifically directed his attention to the matter; Brock's letter of 21 September 1990 to the architect clearly refers to surface and sub-soil drainage: see [311]-[312] above. While CR Knight was brought onto the site in October 1990, the focus appears to have been on stormwater drainage: see [314] above. But there is no evidence that CR Knight considered the installation of any agricultural drains and no evidence that any were in fact installed, notwithstanding Beauchamp's view, which I accept, that it was normal practice to design and install agricultural drains behind kerbs on the high side of the pavement. Morgan said expressly that there were no drains around the north-eastern perimeter that had been installed at the time of construction.

1268. Morgan said that drainage as such might not cause a pavement to fail; rather, the pavement in this case failed because the sub-grade material was soft as a result of water either being present to start with or getting in during the life of the pavement. He said that the perimeter agricultural drains would maintain existing conditions of the sub-grade by preventing further water from getting in. The fact is that water was observed by MacGregor running along the bottom of the base course layer on top of the compacted clay filling in January 1992: see [ 325] above. While I make no finding as to the precise origin of the water, I find it would have been prevented by perimeter drainage. I accept MacGregor's conclusion, which is in accord with Morgan's, that that water would soften the clay fill sub-grade and could lead to a reduction in strength of the base course.

1271. I conclude that, due to the problems with both thickness and drainage that I have set out, reconstruction of the new pavement was both necessary and warranted.

1274. To remove the possibility of doubt, I add a note that it was not established that damage to the pre-existing pavement had been occasioned or, if so, was attributable to any act or omission by any defendant. The pavement was not designed by the architect or engineer or built by the builder. It had been constructed in about 1968 and was still classed in Categories 1 and 2 by Morgan in 1992. I have dealt with Brock's letter of 3 May 1991 at [321]-[322] above: it does not demonstrate damage caused by the builder to the driveway. The Golder report assesses the pre-existing pavement together with the new and recommends a complete reconstruction; from the work that was subsequently done, it might be inferred that this was meant to include the pre-existing pavement and was taken to so mean. However, while some of the auger holes do possibly relate to pre-existing pavement and the report makes findings in relation to those auger holes in respect of moisture and CBRs, and while some of the statements in that report might be applicable to the pre-existing pavement, the focus of the Golder report is very much on the design and construction of the new pavement and I do not see a causal connection between those findings and comments and the breaches of the defendants. Correctly, the plaintiff did not claim the cost of replacing the pre-existing pavement.

1278. I now deal with several matters raised in the builder's defence.

1281. The first matter to deal with are the defences referred to at [20]-[21] above. These are the defences contained in paras. 11-16 of the defence and which depend on cl. 5.06 of the contract.

1284. As noted at [20] the plea in paras. 11-15 related to certain works to the roof and to the bus turnaround pavement and associated drainage. As the defence related to the roof and the hall (but not to the floor) I dealt with the defence and the plea in para. 16 in the section of this judgment concerning the roof: see [160]-[176] above. It remains to deal with the pleas in paras. 11-16 insofar as they concern the bus turnaround area. It is therefore appropriate to note in more detail the description of the work in particulars to para. 15 of the defence which the builder relies on as undertaken by another party and which work was not the subject of the building contract. The work is removal of pavement constructed by the builder in accordance with the contract and replacement with a 410 mm pavement specified by Golder, and construction of 42 linear metres of agricultural drain and connection to an existing stormwater pit as specified by Golder.

1287. Having identified the works in question it is sufficient to refer to and adopt the discussion of the defences in paras. 11-16 at [160]-[176] above. That discussion and conclusions are as applicable to the matters raised concerning the bus turnaround area as they are to the matters raised concerning the roof and hall. It is, however, necessary to add that the position with the bus turnaround area differs in that certain of the works carried out by others were outside the scope of works in the building contract and hence not truly items of rectification. As pointed out above, these works and the cost of performing them have been excluded from the costs recoverable in this litigation.

1290. It is unnecessary to consider the matter further. The defences in paras. 11-16 relating to the bus turnaround area fail.

1293. The next point is the allegation referred to at [22] above that the work of the builder on sewerage and storm water drainage works and rectification of drains including the main outfall drain was damaged by other persons prior and subsequent to practical completion on 22 July 1991. In final address counsel for the builder referred to this as a drainage issue in the context of causation in relation to the hall area. In other words, the allegation did not relate to the bus turnaround area. In any event, even if it did, it would fail as there was no evidence to support such an allegation.

1297. I conclude that the plaintiff is entitled to recover all amounts in its particulars of loss and damage, except for the $2,192 attributable to area 3, in relation to which I have found there is no basis for a finding of fault in respect of the sub-grade, and the $2,062 which I have mentioned could not be claimed. Based on the figures at [ 277]-[279] above, the total amount is $69,645.

1300. There was a difference in approach as to whether it was appropriate to award this sum to the plaintiff as damages or some other sum arrived at on a different basis. The difference was expressed in the submissions of counsel for the plaintiff on the one hand and counsel for the engineer (whose submissions were supported by the other defendants) on the other hand.

1303. Counsel for the plaintiff submitted that it was reasonable and just in the circumstances of the case to recover the rectification costs of $69,645: see Bellgrove v Eldridge.[39] In relation to the architect counsel submitted specifically that he should be found to have contracted to produce a result, namely a bus turnaround pavement capable of handling the peak hour influx of buses and the commercial refuse trucks, such a pavement being that designed by Golder. This was to be distinguished from an engagement to exercise due care and skill as an architect in performing work pursuant to his engagement. There is reference to this distinction in Auburn Municipal Council v ARC Engineering Pty Ltd.[40] It is sufficient to say that in my view the architect's engagement was of the latter kind and not the former.

1306. In the course of his submission that the appropriate measure of loss, and damages recoverable, was the cost of rectification, counsel referred in addition to Bellgrove to the New Zealand case of Bevan Investments Ltd v Blackhall & Struthers[41] and Duncan Wallace, Hudson's Building and Engineering Contracts (11th ed) at 8.143. In the circumstances it was reasonable for the plaintiff to recover the cost of rectification.

1309. Against this, counsel for the engineer addressed an alternative submission. First, relying on evidence of Fabris that the money the College spent on the new pavement in 1991 was totally wasted, he submitted that the loss was represented by that expenditure. Relying on evidence of Savage as to the cost of those works and allowing for various other costs, he submitted that the loss was about $38,000, although at another point he referred to the original cost in 1990 of the pavement being around the $40,000 mark.

1312. The alternative basis on which counsel submitted damages could be awarded was more generous to the plaintiff. On this basis, which also relied on evidence of Savage, it was submitted that the damages were the amount remaining after deducting $25,000 from the claim which, as noted above is $69,645. The amount of $25,000 is derived from Savage's evidence that the extra cost in building the thicker pavement in 1991 would have been approximately $25,026. Unless that sum, rounded to say $25,000, was allowed the plaintiff would to that extent obtain a windfall gain at the expense of the defendants if it recovered the full rectification costs. On this basis the claim is $44,645. Counsel referred to W Jeffreys Holdings Pty Ltd v Appleyard & Associates[42] and Beregold Pty Ltd v D Mitsopoulos (trading as D Mitsopoulos & Associates)[43] to support these submissions.

1315. Counsel for the plaintiff did not accept the reliability of the figures relied on in the first submission for the engineer. He submitted the engineer had not placed satisfactory evidence before the Court to show how or to what extent the original cost of work was less than the cost of rectification. He submitted that the evidence indicated that on either basis submitted by the engineer there was not an appreciable difference from the cost of rectification. The evidence of Savage amounted to the thicker pavement being about 40% more expensive, while the evidence of Stehle had it at about 50%. Either basis produced a figure of about $40,000. To this must be added a variation of $4,367 for agricultural drains and $2,125.20 for the pit and soft spots. This produced a total of $46,492.20. Counsel submitted an allowance be made for engineering fees, but I do not agree as these were borne by the architect. Counsel addressed no submission as to how an allowance should be made in respect of the architect's fees. Finally, counsel submitted that the figure for comparison was the amount of $63,114 which was the cost paid to Tasman Urban Developments for constructing the pavement.

1318. I have already found that the reconstruction of the pavement, including the attendant work of new drainage, was necessary and warranted. I find that the further work, including the nature and degree of supervision, was reasonably undertaken in response to the circumstances confronting the College. I find that the rectification works undertaken were the only practicable way of remedying the situation and obtaining a pavement that was appropriate for the purpose of the College. In this situation it does not seem to me that an issue of betterment arises. In this case the facts and findings lead me to conclude that the plaintiff is entitled to, and should succeed on its claim to recover, the costs of rectification. I find that all of the items were reasonable in amount and properly and reasonably undertaken.

1321. But it is necessary at this point to return to the builder's defence concerning the betterment issue. I referred to this at [24]. The issue concerning betterment here is that the extra pavement thickness and drainage works involved a scope of work that was not within the builder's engagement. Hence, while the builder was at fault in the performance of the works, the method of rectification was significantly beyond the contractual scope of work. The position of the builder is distinct from the engineer and architect, who each were obliged to exercise professional skill and judgment to achieve the desired result. I conclude that in the case of the builder the betterment approach should be adopted. On this approach the amount of $25,000 should be allowed against the claim of $69,645.

1324. It remains only to say that I consider the just and equitable contributions by the three defendants to be 40% on the part of each of the builder and engineer and 20% on the part of the architect.

1328. This section concerns the plaintiff's claim for legal costs incurred prior to commencement of the proceeding. In the particulars filed during the trial the amount claimed was $16,586.11 (see [7]), but as stated in Exhibit S the claim is for $14,706.11. Neither the claim nor the amount was contested. The claim is allowed. The only question that arises is whether the claim should be borne by the defendants equally or on a proportionate basis according to their assessed responsibility for the three areas of rectification. Against the former is the fact that initially and for some time the architect was not a defendant to the proceeding. The joinder followed the architect being made a third party by the engineer. On balance it seems to me that the fair and just course is that the costs be borne on a proportionate basis, in accordance with the three defendants' respective liabilities for the roof, floor and bus turnaround area. This is subject to some figures being updated or confirmed, and interest being calculated. I will hear counsel once this has been done.

1332. The plaintiff seeks an order that the defendants pay the amount of any GST payable by it in respect of any judgment amount, or an indemnity in respect of such GST. The result of discussion at the trial was that I should hear counsel on this aspect after judgment. The parties would then know what was payable to the plaintiff and have had a greater opportunity to acquaint themselves with the operation of GST in relation to judgments for damages. Accordingly I will hear counsel on the issue.

1336. I now deal with several issues raised in the builder's defence.

1339. The first concerns a variation of $2,816.35 which the plaintiff has not paid or allowed; I referred to this at [26]. The builder raised a set-off and counterclaim to recover this amount. The plaintiff does not dispute the item but submits that the claim is barred by s. 5(1) of the Limitation of Actions Act. According to the plaintiff's counsel the relevant dates were these: the cause of action was complete by 26 April 1991 but the claim was not made until 26 February 1998. Those facts were not disputed. The builder conceded that the counterclaim was barred but submitted that it could rely on the claim as a set-off. Counsel for the plaintiff disputed this, contending that the set-off also was barred by the statute. Counsel for the plaintiff elaborated on this submission in a memorandum provided subsequent to the trial. Neither at the trial nor in response to the memorandum did counsel for the builder address any submission to establish that the claim could be relied on as a set-off. That may have reflected a view that it was out of proportion to devote resources in the Supreme Court, with all the expense that this case has involved, to a claim for less than $3,000, and that it was appropriate to leave it to me to come up with a decision on the matter, for better or worse. I can understand that approach although it was his client's point and it gave me no assistance in deciding the case. For its part, it might have been supposed that the plaintiff would have conceded the set-off in order to concentrate on more important matters. After all, the builder performed the work and the plaintiff has retained the benefit of it. But none of that mattered to the plaintiff which was happy to have the benefit without paying for it. Wherever commonsense and practical judgment might have been found it was not to be found with the plaintiff on this point.

1342. The submission of counsel for the builder is that the application of s. 30 of the Limitation of Actions Act rests on the distinction between a set-off which may be raised as a defence and a cross demand enforceable only by an independent claim. He referred to McDonnell & East Ltd v McGregor[44] and Sidney Raper Pty Ltd v Commonwealth Trading Bank of Australia.[45] The time bar applied to the latter type of claim and it was submitted that the builder's variation claim was in that category. If the submission is correct the builder's claim must fail. Whether it is correct must rest on an analysis of the party's rights under the contract. I heard no submission on that matter. In other words I do not have the benefit of a submission of the construction and operation of the contract relative to the builder's right to recover the value of a variation, by independent claim or certificate or set-off, from the plaintiff. I do not propose to spend time trawling through the contract on such a minor point on which counsel have not addressed the necessary submissions. I will hear counsel on the point, assuming it continues to be pressed.

1345. The next claim of the builder is that in breach of the contract the plaintiff has not returned a bank guarantee dated 22 August 1990. Related to this allegation is the plea in para. 27 of the defence that in breach of the contract on or before 31 May 1994 the services of the architect were terminated or otherwise discharged and no other architect was appointed in his place. It was then alleged (in para. 28) that by reason of those matters no final certificate was or could be issued under the contract and no instructions could be given to the builder in respect of the contract. It was then alleged (in para. 29) that consequently and in breach of the contract the proprietor under the contract had not released the guarantee to the builder. As a result (it was alleged in para. 30) the builder had suffered loss and damage the amount of which was relied on as a set-off (para. 31). Finally, there was a counterclaim for an order for the delivery up and release to the builder of the guarantee. There was no counterclaim for the alleged loss and damage.

1348. In final address the submission of counsel for the builder was put in a sentence or two: if it is found the builder substantially completed the works it is entitled to the return of the guarantee. Further, determination of the architect's retainer precluded the builder from obtaining a final certificate. Nothing was said as to the amount of any set-off and I take it to be abandoned.

1351. 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.

1354. The final point raised in the builder's defence is the claim for site administration costs in paras. 24-26. Paragraphs 24 and 25 are alternatives while para. 26 is expressed as being further or in the alternative. Extended and off-site administration costs are claimed in paras. 24 and 25, in the former from 26 April 1991 until 22 July 1991, and in the latter from 26 April 1991 to 19 February 1992. In para. 26 the builder claims all costs and expenses incurred in connection with the contract on and after 26 April 1991. The builder relied on the amount or amounts thus produced as a set-off.

1357. The claim was put on the basis that the builder's tender letter had stated the quotation was a fixed price and that extension of time costs would be charged at the fixed rate of $1,900 for each week of the extended contract period to allow for site administration costs. That sum was used to produce a quantification of the claim under paras. 24 and 25. The builder provided further particulars dated 22 April 1998 in which a quantification was provided under each paragraph. They are not identical. In his evidence Stehle said the particulars were correct. In final address counsel for the builder said nothing as to which paragraph of the defence should succeed or in what amount. Stehle had been cross-examined on the claim and, in effect, although without saying so, counsel must be taken to have left it to me to conclude as I considered correct. His final address on the issue was a summary reference of several sentences.

1360. The claim (in paras. 24-26) was first made in the further amended defence and counterclaim dated 6 February 1998. In cross-examination Stehle explained that while the builder had always had the right or option to make the claim, it never did so from 26 April 1991 until 6 February 1998 when it raised it in the amended pleading in the litigation. That was without any prior notification to any person. Clearly, the claim was an afterthought brought into existence to seek to find some ground of attack or defence.

1363. Counsel for the plaintiff submitted that the claim had no merit. He further submitted that even if the claim had merit it was statute barred as the claim was not brought within six years of the accrual of the cause of action. It is correct that with the exception of continuing bank charges and a small amount or two under para. 26 the amounts claimed in the particulars were incurred or suffered, and the cause of action was complete, prior to six years before the claim was raised. Those amounts, which constitute the exception, are small in relation to the total and in themselves not such as to warrant the set-off being raised.

1366. Assuming the builder is entitled to bring the claim, the issue which is raised as to set-off stands in the same position as the set-off claim in respect of the variation. I have a submission from the plaintiff but nothing from the builder. If that is where matters stood I would hear from counsel on this issue also. However I consider the claim fails for other reasons which I can shortly state.

1369. First, the builder's reliance on the tender document referring to the quote as a fixed price and to the extension of time cost of $1,900 per week refer to two different things. The builder submitted his price on 26 July 1990 stating that the price was firm provided the works could be commenced on site within four weeks from that date and completed as per its work program within 10 calendar months. The price was accepted and the parties entered into a lump sum contract in which the builder's price was stated to be the contract sum or such other sum as shall be determined from time to time in accordance with the contract. There was provision for variations and extensions of time. The date for possession of the site was 23 August 1990 and for completion was 6 June 1991. The figure of $1,900 related to and was designed to cover the builder against site administration costs incurred due to the time for practical completion being extended: see cl. 9 of the contract.

1372. It is therefore seen that reference in the builder's submission to the quotation being a fixed price is irrelevant to the present issue. The present issue is not concerned with the amount of the contract sum. The issue is concerned with the liability to pay or allow site administration costs of $1,900 per week in the period of contract extensions. Even if I was wrong in that understanding, the builder's tender letter held the price firm for four weeks. It is in that sense that the price was fixed. The contract was entered into within that period for the tender sum but on terms and conditions which allowed for variation in that sum. It is certainly not acting within four weeks, let alone a reasonable time, to seek to vary the contract sum at the time when it did in 1998. But, in truth, that is not what the builder was seeking to do. What the builder was seeking to do was establish an entitlement to site administration costs calculated by reference to the stipulated rate without bringing the claim within the provisions of cl. 9 of the contract, that is to say, without relating it to an extension of time, or even to actual performance and what was happening on the job in order to establish an entitlement.

1375. In addition there was the unsatisfactory evidence of Stehle as to the time from when it was appropriate to commence the calculation and the period in respect of which the costs might be claimed. The evidence was self-serving and contrived.

1378. Then there was the further fact that the claim was not related to any breach of the contract or other fault of the College. Doubtless that was because it could not be. That seems a sufficient and likely reason why, in combination with the defective works the consequences of which the College was struggling with, the builder never made this claim.

1385. I conclude with the architect's counterclaim. I referred to this at [40] above.

1388. In his evidence Hede identified and relied on a schedule annexed to his defence which contained a chronological outline of the work performed by him between 18 March 1992 and 22 July 1997. In the pleading of the claim (paras. 24 and 25 of the defence and counterclaim) it is alleged that following on the failure of the builder to remedy certain defects to the works the plaintiff retained or requested the architect to carry out work in respect of rectification and assist the plaintiff in pursuing its legal proceeding against the builder. It is alleged that the work requested of the architect, and performed, was outside the scope of his original retainer. In these circumstances, and whether as a matter of agreement or quantum meruit, the architect was entitled to be paid for his services and the amount claimed to $15,850 was a reasonable amount.

1391. The architect's claim addressed itself to the existence of defects which the builder had failed to rectify. It is not stated but the premise must be that the builder was responsible for the defects, not merely that for some incidental reason it had failed to rectify them. Indeed this is made clear by the further particulars provided by the architect dated 7 April 1998. The particulars refer to defects in the bus turnaround area, the skylight and the floor. I have found that the architect is liable in respect of the bus turnaround area and the roof. That means that the factual premise in the architect's plea is wrong. It means that the architect's work related to the rectification of work for the defective nature of which he was in part responsible.

1394. The schedule of work was simply a running chronology. The items were not allocated to the three areas in question: bus turnaround, roof and floor. Nor was any such break-up attempted by counsel in evidence or in final address. It is not possible for me to attempt any such division, in particular by isolating the items that relate to the floor in respect to which the architect was not sued and is not liable to contribute. Even if it was possible to make a division I would have no way of assigning a value for such item or items as the evidence simply assigned a gross number of hours for the work. Furthermore, the time spent was allocated to principal and senior architect but again there was no evidence to establish which of them worked what hours in relation to which item of work in relation to any of the areas, in particular the floor. Moreover, in relation to the bus turnaround area there is the difficulty in assigning items (and a value) in respect of work that Hede referred to as outside the scope of the original work. Hede said that that extra work related to the driveway and was the obtaining of prices from three different contractors. When asked to do so, Hede could not find a reference to that work in the schedule. In other words, he was unable to identify an entry in the schedule which related to work other than that associated with the project and the subject of the litigation.

1397. Hede never rendered an invoice for the work the subject of the counterclaim. He explained that omission on the basis that he had an on-going relationship with the school under which he would obtain further fees for further works, and in fact he had had one subsequent project. He also agreed that the building contract had not reached final completion because instruction no. 27 was outstanding. He also agreed that the builder and its contractors had been given a fair opportunity to rectify defects before the College engaged others to do so. In view of my findings, that conclusion extends to the architect himself.

1400. In these circumstances and for these reasons I am of the view that the counterclaim fails for want of establishing, on the balance of probabilities, any particular item or items of work done, and by whom and at what value, by the architect in relation to work which was either additional work (in the sense of being outside the scope of original work) or an area of the work (that is, the floor) in respect of which the architect has not been adjudged at fault.

1404. To summarise my earlier conclusions, in respect of the roof the plaintiff is entitled to recover $18,993.57; the builder is solely liable for $915.57; as to $13,558.50, the just and equitable contribution is one half by each of the builder and architect; as to $4,519.50, the just and equitable contribution is one third by the architect and two thirds by the builder. In respect of the floor the plaintiff is entitled to payment of the costs of investigations (plus interest) and the cost of replacement, subject to clarification and updating as I have referred to at [180] above. In respect of the bus turnaround area the plaintiff is entitled to recover $44,645 against the builder and $69,645 against the engineer and architect, for which I consider the just and equitable contribution to be 40% by the builder (but to an amount limited to $44,645), 40% by the engineer and 20% by the architect.

1407. The plaintiff is also entitled to pre-trial legal costs of $14,706.11 which, as I have found at [378] above, is to be borne by the defendants proportionately to their final responsibility in respect of the roof, floor and bus turnaround area as variously updated and clarified, and after allowing for interest of the relevant amounts. I will hear the parties as to GST (see [379]) and the builder's set-off claim if it is pressed (see [382]). The assorted claims by the builder, and the architect's counterclaim, fail.

1410. I will adjourn the further hearing to Friday 31 August 2001, when I will hear counsel as to any matters which still require it, including costs, and make final orders. I should be provided with minutes of orders by 4.00 pm on Thursday.

[1] [1993] 2 Ll LR 68 at 81-82.

[2] See, for instance, [[] below.

3] The first defendant referred in cross-examination of Fabris to the inclusion of freehold land and buildings and improvements as non-current assets of the College on the College's balance sheet submitted as part of the documentation for the loan. However, in re-examination the witness was shown notes to the balance sheet, which state that "[a]lthough the College's Freehold Land is officially owned by the Catholic Diocesan Trust, it is included in the financial accounts of the College as per advice from the Catholic Diocesan Trust". Fabris stated, and I would infer, that the "Catholic Diocesan Trust" was a reference to the plaintiff Corporation.

[4] I say this because the first defendant, in response to a notice from the plaintiff to admit this letter, served a notice of dispute. This was apparently not to dispute the authenticity of the letter as such, but rather on the basis that it was not "what it purports to be", in the terms of RSC Chapter I Order 35. Apparently the first defendant was thus wishing to indicate a dispute as to the interpretation of the document. This is not the purpose of Order 35. The interpretation of the document is a task for the judge in any event.

[5] [1982] HCA 24; (1982) 149 CLR 337 at 347.

[6] [1982] HCA 24; (1982) 149 CLR 337 at 352.

[7] [1982] HCA 24; (1982) 149 CLR 337 at 352. Mr Stirling also referred on this point to Rosser v Austral Wine and Spirit Co Pty Ltd [1980] VicRp 33; [1980] VR 313 at 316; McClean v Kennard (1874) 9 LR Ch App 336 at 347-8; and Kennedy v De Trafford [1897] AC 181 at 188.

[8] Mr Stirling referred to Lewison, Interpretation of Contracts (2nd ed) at 45; Fung Ping Shan v Tong Shun [1918] AC 403 at 406; Lovesy v Palmer [1916] 2 Ch 233 at 238-9; Edwards v Edwards [1918] HCA 2; (1918) 24 CLR 312 at 316; Re A&K Holdings Pty Ltd [1964] VicRp 36; [1964] VR 257 at 263. Mr Dixon referred to Halsbury's Laws of Australia at [110-2325] (and cases cited therein); Greig and Davis, The Law of Contract (1987) at 418-9; Chitty on Contracts (27th ed) at 12-107; and The Ines [1995] 2 Lloyds' LR 144.

[9] [1918] AC 403 at 406.

[10] [1918] HCA 2; (1918) 24 CLR 312 at 316.

[11] M&M Civil Engineering Pty Ltd v Sunshine Coast Turf Club (1987) 2 Qd R 401 at 407.

[12] Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378 at 386. Mr Stirling also referred to Peckham v Moore [1975] 1 NSWLR 353 at 367, 369; Carlton Cricket & Football Social Club v Joseph [1970] VicRp 65; [1970] VR 487 at 499; Smith v Yarnold (1969) 90 WN(NSW) 316 at 323.

[13] As Mr Dixon pointed out, referring to Carlton Cricket & Football Social Club v Joseph [1970] VicRp 65; [1970] VR 487 at 498-9 per Gowans J, where a person allegedly signs on behalf of all the members of a voluntary association, that person must have authority to bind each member personally. Mr Dixon submitted that this was not established on the facts of this case. I agree.

[14] As to which he referred to Coulls v Bagot's Executor and Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460 at 501-2.

[15] He did not submit that the parents who had paid the building levy in respect of rectification works were third parties who had made good the loss and damage.

[16] Reported with Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85.

[17] [1994] 1 AC 85 at 109 per Lord Browne-Wilkinson, citing GUS Property Management Ltd v Littlewoods Mail Order Stores Ltd 1982 SLT 533 at 538 per Lord Keith of Kinkel.

[18] [1994] 1 AC 85 at 97.

[19] [1994] EWCA Civ 6; [1995] 1 WLR 68.

[20] [2000] UKHL 43; [2000] 3 WLR 946. Their Lordships' speeches were delivered on 27 July 2000.

[21] (1998) 88 BLR 67. Mr Dixon's written submissions contained this reference, but it was not elaborated on either in written or oral submissions.

[22] Browning stated in his first report of 7 July 1993 that both Atlite and Akron used the same general soaker details, which was according to the industry standard, and that it was thus quite likely that the proprietary Atlite skylights would also have leaked in this particular installation. While I consider that this view has considerable persuasiveness, reducing the relevance of the installation of Akron skylights, it was submitted for the architect that some of the alleged building defects would not have eventuated if the builder had used the proprietary Atlite skylights and followed the manufacturer's instructions. I consider this situation below.

[23] The instruction also requires the builder to re-sand and re-coat the gymnasium floor to remove the dimpled appearance and to make good the failed bitumen pavement in the bus turnaround area.

[24] The letter also refers to the rectification required to the bitumen in the bus turnaround area and the damage being cause by moisture in the gymnasium floor.

[25] In relation to the bus turnaround area, the builder refers to previous advice to the architect that the builder accepted no responsibility for the pavement. The letter states that the cause of pavement failure was saturation of the subgrade, an ineffective drainage system on the property and the interceptor pit. The builder denied responsibility for designing the pavement sub-base of redesigning the existing drainage. Any further work, the letter states, would be a variation.

[26] Under cl. 9.09, the builder may apply to the architect for a notice of practical completion and in response the architect may, in accordance with the three sub-paragraphs of cl. 9.09.02: (a) issue the notice; (b) issue a list of further work required (upon completion of which the builder may apply again); or (c) require open-endedly that the builder make further progress before applying again. I am not satisfied that the builder applied (or reapplied) for a notice. No application having been made to the architect, it was impossible for the architect's response to be triggered. In any event, there is no evidence that the architect issued a notice under sub-para. (a), and the evidence I have referred to at [[] above, although suggestive of the procedure in sub-para. (b), is inconclusive.

27] I have mentioned Browning's breakdown of his invoices between the roof and the floor at [[] above; the amount attributable to the floor was $8,192, being $13,070 less $4,878.

28] Mudge's witness statement listed the roof as 80% complete on 31 January 1991. He was asked in evidence-in-chief about the discrepancy but did not give a satisfactory answer, saying only that the 80% figure might have been based on some information he was given by the solicitors. He seemed to accept the documentary evidence, and so do I. The origin of the 80% figure may be handwritten marks on some copies of the site meeting minutes for 31 January crossing out "10%" and inserting "80%". The obvious inference is that these were working copies which were marked up during discussions or at a subsequent meeting. I mention the point only because some of the expert witnesses read Mudge's witness statement and may have relied on the 80% figure.

[29] Potten's witness statement attempts to gloss over this failure to attend the meeting: para. 15 of the witness statement refers to a meeting being arranged; para. 16 speaks of what occurred "[a]t the end of the May meeting" as though it were the same meeting, even though the subject matter corresponds to the later meeting described by Fabris.

[30] Potten's view was based on the air gap beneath the lower sheet of ply having a ventilation effect in addition to a cushioning effect. He said that when people run and jump on the floor, the resulting depression operated to push air out from under the floor. He said the franchisor of the Gransprung floor would have measured this effect, but no supporting evidence was provided. As I have mentioned, Beauchamp referred to this effect, but without elaboration it cannot add any force to Potten's stated opinion. Corcoran's statements about the ventilation effect were based on the possibility of air movement with changes in temperature. In sum, there was no evidence, apart from at the level of generality I have referred to, to establish that the "pumping action" on the air gap had a sufficient ventilation effect to remove vapour from the gap. I do not accept that this was the case. Even if I did, the electrical resistance test in Appendix A is still applicable under the contract.

[31] [1954] HCA 36; (1954) 90 CLR 613.

[32] [1954] HCA 36; (1954) 90 CLR 613.

[33] [1982] 1 All ER 397 at 400-2.

[34] [1970] 1 All ER 225; [1970] 1 QB 447.

[35] [1844] EngR 337; (1844) 2 Wm Rob 279, 166 ER 759.

[36] (1986) 8 Con LR 107 at 125-7.

[37] The architect gave evidence that a traffic engineer was consulted as to traffic management, but not loadings. He could not confirm that the traffic engineer's design layouts had been provided to the engineer, although he noted that the final layout was in accordance with the traffic engineer's. Those design layouts were not in evidence. I infer that the architect conveyed their contents to the engineer, and also the fact that the area was to bear school buses. There is no evidence that the engineer asked for or obtained the number of buses and other heavy vehicles.

[38] Mr Cosgrave for the engineer submitted that the very reason for engaging MacGregor was because the engineer did not have specialist knowledge in this area, and it was reasonable to rely of the specialist's advice. I note that Morgan did not accept that a structural engineer should necessarily fall in with the approach of a sub-consultant geotechnical engineer. Mr Dixon referred to a passage in the Appeal Division's decision in Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] VicRp 4; [1993] 1 VR 27 at 52-3 in which the engineer had recommended a cheaper option involving an element of risk without notifying the client of that risk.

[39] [1954] HCA 36; (1954) 90 CLR 613.

[40] [1973] 1 NSWLR 513 at 531.

[41] [1973] 2 NZLR 45; on appeal [1978] 2 NZLR 97.

[42] (1990) 10 BCL 298; Supreme Court of New South Wales (Cole J), 9 February 1990.

[43] (1999) 15 BCL 290; Supreme Court of New South Wales (Cole J), 10 November 1992.

[44] [1936] HCA 28; (1936) 56 CLR 50 at 57-58.

[45] (1975) 2 NSWLR 227 at 236-237.