Supreme Court of SA|2004-03-24|Before: Debelle J

SOUTH PARKLANDS HOCKEY & TENNIS CENTRE INC v BROWN FALCONER GROUP PTY LTD No. SCCIV-97-286 [2004] SASC 81 (24 March 2004)

SOUTH PARKLANDS HOCKEY AND TENNIS CENTRE INC and OTHERS v BROWN FALCONER GROUP PTY LTD and OTHERS

2 The first and third defendants have admitted liability but did not do so until the eve of the trial. In a moment details of that admission will be noted. The plaintiffs have, by leave, discontinued the action against the second defendant. I directed that the discontinuance has the effect of a final judgment for the second defendant. The question of the costs of the second defendant have been reserved. The issues between the parties are essentially, although not entirely, whether, notwithstanding the admission of liability, the defendants have any liability in damages to the plaintiffs and, if so, what is the proper assessment of those damages.

3 It is convenient to describe the second, third and fourth plaintiffs before describing the first plaintiff. The second plaintiff, Pulteney Grammar School ("the School") is a school on South Terrace, Adelaide. Pursuant to arrangements with Adelaide City Council, it has playing fields in the parklands south of the City of Adelaide, lying between South Terrace and Greenhill Road. For convenience these parklands will be called "the South Parklands". The School had the use of hard tennis courts in the South Parklands but they were of poor quality. It also fielded a hockey team. In 1992 it was seeking substantially to improve the quality of its hockey field and tennis courts.

4 The third plaintiff, Adelaide Hockey Club Inc ("the Hockey Club"), is a hockey club which in 1992 was located in the South Parklands. At that time, the club fielded teams at all levels of junior and senior competition. It fielded teams at the highest level of district competition in metropolitan Adelaide, called "the premier league". Its playing field in the South Parklands had a grassed surface. In 1992 it was seeking to establish a high quality hockey pitch with a synthetic surface to international standards. At that time other clubs in the premier league competition were also seeking to establish synthetic pitches to an international standard. Plainly, the Hockey Club was concerned to have a pitch of the same standard as its competitors in the premier league.

5 The fourth plaintiff, Veterans Tennis Association Inc ("the Tennis Club"), is a tennis club which in 1992 had about 400 members drawn from many parts of the metropolitan area of Adelaide. In 1992 it did not have its own courts or club facilities. It played tennis on courts at Payneham and at Millswood which it hired for its members. It was seeking to establish its own headquarters with courts and club facilities. It intended holding major tournaments on its own courts.

6 In the latter part of 1992 these three plaintiffs had agreed to combine in a joint venture to establish a facility which could be used both as a hocky pitch and as tennis courts. The facility was to be established in the South Parklands at an area known as Park 20. Park 20 is in the area bounded by South Terrace, Lewis Cohen Avenue, Greenhill Road and Peacock Road. The tennis courts used by the School were in Park 20. Initially, other organizations, including the South Park Bowling Club, were to be involved but in the result only the School, the Hockey Club and the Tennis Club participated. The three participants agreed to form an association called "The South Parklands Hockey and Tennis Centre Inc." to run the new facility. That association has a board of management with equal representation of the three participants. The association was incorporated pursuant to the Associations Incorporations Act in October 1994 and it is the first plaintiff.

7 When this action was listed for hearing, there were three defendants. The first defendant, Brown Falconer Group Pty Ltd ("Brown Falconer"), carries on business as architects. As will be seen, the second, third and fourth plaintiffs engaged it to act on behalf of the joint venture, first to obtain development and building approvals and then to design the facility, manage the tender process and supervise construction.

8 The third defendant, Connell Wagner Pty Ltd ("Connell Wagner"), carries on business as civil and structural engineers. Brown Falconer engaged it to provide civil engineering services in connection with the project. Connell Wagner is now called "CE Services Pty Ltd" but I shall continue to refer to it as "Connell Wagner", the name under which it traded at all relevant times.

9 In the course of its retainer by Brown Falconer, Connell Wagner engaged Golder Associates Pty Ltd ("Golder Associates"), a company which carried on business as geo-technical engineers, to conduct a soil survey of the site of the proposed facility. Golder Associates conducted that survey and reported to Connell Wagner. Golder Associates was the second defendant but, as already mentioned, the action against it has been discontinued.

10 The plaintiffs initially relied on three causes of action. As against Brown Falconer, the plaintiffs claimed damages for breach of contract, in negligence, and for misrepresentation contrary to s 52 and s 53A of the Trade Practices Act 1974 (Cth) and s 56 and s 59 of the Fair Trading Act 1987 (SA). Very early in the trial and after the first and third defendants had admitted liability, the plaintiffs abandoned the claims for misrepresentation. As against the second and third defendants, the plaintiffs' cause of action was in negligence.

11 Brown Falconer has admitted liability in contract to the second, third and fourth plaintiffs and in negligence to all plaintiffs. Connell Wagner has admitted liability in negligence to all plaintiffs. Contribution notices had been exchanged between Brown Falconer and Connell Wagner. They have resolved the issues as to contribution. They have agreed that Mr Trim QC and Mr Lunn would represent both Brown Falconer and Connell Wagner at the trial.

12 The plaintiffs' claim for damages is mainly grounded on the cost of replacing the playing surface and the base beneath it. The plaintiffs first assert that the proper means of rectifying the damage is to remove the existing surface and then rectify the base beneath the playing surface and lay a new base and surface. They initially proposed two methods of construction. The first is very costly. The estimated cost of that proposal including fees of $25,000 and a contingency of $86,300 is $969,300. As an alternative assessment, they advance a cheaper form of rectification which, depending on the methods of construction employed, could cost at least $610,000. As the case progressed, the latter was the plaintiffs' preferred proposal. In addition, they claim damages for loss of use of the playing surface during the rectification works, survey costs, and general damages for the disturbance and inconvenience caused by the breach of contract and the wrongs committed by the defendants.

13 The defendants' case is that the plaintiffs' claim for damages is misconceived. They contend that the plaintiffs are not entitled to damages to reconstruct the pitch for two reasons. The first is that that is not the proper measure of damages. The second is that the plaintiffs did not have the financial capacity to construct a pitch to the standard they now seek. The defendants say that the budgetary constraints under which the plaintiffs laboured in 1994 prevented anything like the form of construction which they now seek so that the plaintiffs obtained a pitch to the standard they were able to afford in 1994. The plaintiffs, they contend, have only suffered nominal damage. Alternatively, if rectification is the proper remedy, the defendants contend that the pitch can now be remedied at a cost of less than $100,000, a sum considerably less than that which the plaintiffs seek. That is because in the almost eight years since the pitch was constructed the ground beneath has stabilised enabling a less expensive method of rectification than the plaintiffs propose.

14 It is, therefore, necessary to examine the financial resources of the plaintiffs for this project in 1994, the causes of the site movement beneath the pitch, whether rectification is appropriate and, if so, the correct method of rectification, and the proper method of assessment of damages in a case of this kind.

15 Although the defendants have admitted liability, it is necessary to examine the events leading to the action in more detail in order to have a proper understanding of the issues on the question of damages.

16 In the reasons which follow, when I use the expression "the plaintiffs", I mean the second, third and fourth plaintiffs until October 1994 when the first plaintiff was incorporated. Thereafter, the plaintiffs will mean all four plaintiffs except where the context indicates the contrary. I will use the expression "the pitch" to refer to the playing surface and the base beneath, except where it is necessary to examine the construction of the pitch in some detail. The expression "the playing surface" will refer to the synthetic turf pitch laid on the base.

17 The intended project was to construct a playing surface suitable for hockey and tennis. There were three main elements of the project. They were

1. the hockey pitch and tennis courts, which included fencing and flood-lighting of the playing surface;

2. a pavilion or spectator stand which was intended to be a roofed spectator stand of modest size with a canteen, changing rooms, toilet facilities, storage rooms and other facilities beneath; and

3. an extension of the South Park Bowling Club premises to provide additional change rooms.

The site for the new facility in Park 20 included the area on which the old tennis courts used by the School were located. The courts were old with a deteriorating bitumen surface. The work involved removing those courts as well as some trees. The fact that part of the site comprised the old tennis courts and that trees were removed was to have consequences for the new facility.

18 Thus, the concept was to replace deteriorating tennis courts with a new synthetic playing surface capable of being used both as a hockey pitch and as 12 tennis courts. The playing surface was to be surrounded by a high cyclone fence. The playing area was to be floodlighted. It was proposed to erect a pavilion on the west side in the form of a small spectator stand beneath which would be four changing rooms, store, canteen and other facilities. The Hockey Club would thus have a high quality pitch, the Tennis Club would have 12 high quality courts as well as its own facility, and the School would have a pitch and tennis courts of high quality.

19 From mid 1992 until November 1994, when the contract to construct the works was made, the project was the subject of many meetings between representatives of the three participants. Not all of those meetings were attended by representatives of all three participants. It is unnecessary to examine what occurred at each meeting.

20 In the negotiations and meetings concerning the project, the School was represented by its Administrator Mr Carroll; the Hockey Club was represented in the main by Professor Spencer, a Professor of Dentistry at the University of Adelaide, and Mr Spawton; and the Tennis Club was mainly represented by Mr Dew, a former manager in the SGIC and a Mr Pike. At different times both Mr Dew and Mr Pike had been presidents of the Tennis Club. These were not the only persons involved in the project. Evidence was given by Professor Spencer and by Messrs Carroll, Spawton and Dew. They all gave their evidence candidly, although I think Professor Spencer and Mr Spawton tended to present a more rosy picture as to the capacity of the Hockey Club to make its financial contribution than the objective facts might suggest. In fairness to Professor Spencer, he did describe the task of raising the Hockey Club's contribution as a "challenge". Subject to that proviso, I accept the evidence of those witnesses.

21 Mr Carroll kept quite detailed notes of meetings and made reports to the School's Headmaster and Finance Committee. He had real concerns whether the Hockey Club would be able to make its contribution. He did not believe that the Tennis Club would be willing to modify its proposals for the pavilion. In the result, he was wrong on both counts. The Hockey Club was able to make its contribution and the Tennis Club did modify its proposals for the pavilion and the project proceeded. I find that Mr Carroll was at times unduly pessimistic. No doubt that might have been a consequence of his concern to achieve a viable outcome.

22 On 25 September 1992 the plaintiffs applied to the Commonwealth Government for a grant for this project. The application shows that in 1992 the estimated cost of the project was $582,000. The funding was to come from the following sources:

By letter dated 2 March 1993, the Commonwealth Government offered a grant of $237,000. The claim for the grant had to be lodged with the relevant Commonwealth Government department before 20 May 1995. That effectively meant that the funds had to be expended before 20 May 1995.

23 It will have been noticed that the School was originally intending to make a higher financial contribution than the other two participants in the project. However, by 27 July 1993, the School had decided that it would make the same contribution as the other two participants. On 27 July 1993 the School wrote to both the Hockey Club and the Tennis Club informing them of that decision. Thereafter, the School's attitude remained the same. In the result, the three separate organizations contributed equally to the project.

24 In addition to applying to the Commonwealth Government, the plaintiffs applied to the Adelaide City Council on 2 September 1993 for a grant of funds. The Council declined the request.

25 It was originally intended that the South Park Bowling Club Inc would be a member of the joint venture. The bowling club has a frontage to Greenhill Road and is immediately south of the present hockey and tennis centre. Although it was not a party to the application to the Commonwealth Government for funding, it joined the plaintiffs in the application for planning approval in December 1993. However, by about June 1994, it had decided to withdraw from the proposal.

26 On 5 April 1993, the plaintiffs appointed Brown Falconer to prepare site plans and negotiate on their behalf with the Adelaide City Council.

27 In mid-July 1993, the plaintiffs asked four firms of architects to submit tenders for the costs of designing the facility, preparing the necessary drawings, calling tenders and supervising the construction of the facility. They stated that the budget for the proposal was between $500,000 and $600,000. Four tenders were received including one from Brown Falconer. On 4 August 1993 the plaintiffs appointed Brown Falconer to proceed with preparations and sketches for an application to the Adelaide City Council for development consent. Mr Riseby was the architect at Brown Falconer responsible for the project.

28 Brown Falconer prepared sketches and plans for the project and on 22 December 1993 lodged with the Adelaide City Council an application for development consent. On 22 March 1994 the Council granted development consent and on 31 October 1994 it granted building approval. The delay between the grant of development consent and building approval is unexplained and I find that it is one of the consequences of the fact that in the first part of 1994 there was no certainty that the necessary funding for the project would be available.

29 On 23 September 1993, a meeting of representatives of the plaintiffs and Mr Riseby was held. The estimated costs of the project had increased by about $100,000.00. Most of that increase had resulted from the costs associated with the construction of the pitch. The plaintiffs began to consider how they might modify their proposal to stay within their budget. One suggestion was to modify the pavilion. The plaintiffs met regularly and relatively frequently through 1993 and 1994 to discuss the proposal, to note progress on financial arrangements, and to discuss modification of the project to keep it within a cost which they could afford. Although the parties were prepared to modify their proposals concerning the pavilion and changing rooms, they did not modify the specifications for the playing surface and its lighting. For all participants, the quality of the pitch was of the highest priority. They had instructed Mr Riseby that they wanted a hockey pitch to an international standard and tennis courts with a surface of the highest quality. The Hockey Club had delivered to Mr Riseby a specification published by the International Hockey Federation for a hockey pitch of international standard. Plainly, the construction of a hockey pitch to the required specification would result in tennis courts to the required quality and standard sought by both the School and the Tennis Club.

30 In early 1994, Brown Falconer was in a position to give advice as to the cost of the project. As at 15 March 1994 the estimated cost was $687,000.00. By that time, the Commonwealth had informed the plaintiffs that the grant of $237,000.00 would be made. That meant that the three participants would each have to contribute at least $150,000.00 if they were to finance the project in equal shares. By 7 April 1994 the Tennis Club was able to give an assurance that it could provide funding to $150,000.00. The School was also then able to contribute that amount. The Hockey Club believed that it would secure a grant from the State Government which would enable it to make its contribution of $150,000.00.

31 In 1992 the Hockey Club had some 240 members. Its hockey field was then on a grassed playing field further east in the South Parklands than Park 20. It was keen to raise the standard of its pitch from a grassed pitch to a synthetic pitch constructed to the specification for an international hockey pitch. It had entered into arrangements to sell its facilities at its existing playing field to Pembroke School. That realised a little over $70,000. It was looking to the State Government to provide financial assistance in the form of a grant of $45,000 to assist it in making its contribution to the project. Throughout 1993 and 1994 it made several approaches to the State Government. The Hockey Club was reasonably confident that it would secure a grant from State Government. On about 19 May 1994 an official of the Hockey Club was informed, by an officer in the Department of Recreation and Sport, that the State Government was likely to grant $50,000 in the year ending 30 June 1995.

32 In a letter to Mr Carroll dated 22 August 1994, the Hockey Club set out its capacity to contribute its share of the funding stating that it believed that in a few days it could have its financial contribution in place. It listed the sources of funding:

Grant from State Government or loan from National Australia Bank

The Hockey Club was still trying to secure a grant from the State Government as late as September 1994. On 19 September 1994 the Hockey Club wrote to the Premier seeking special consideration of its request for a grant and emphasising the need for an early decision. The State Government refused the request. In about October 1994, the Hockey Club secured a loan from the National Australia Bank of $45,000.00. It was then able to make the same contribution as the School and the Tennis Club.

33 Throughout 1993 and as late as August 1994, the School was concerned whether the Hockey Club would be able to contribute its share of the funding. The Hockey Club had to look to other avenues to obtain funds. Mr Carroll's notes show this was a source of concern to him and at times he wondered whether the proposal would fail because of the inability of the Hocky Club to contribute its share. Mr Carroll's concerns were such that he considered alternative proposals. However, his notes show that the project could not proceed without the participation of and the financial contribution from the Hockey Club.

34 The uncertainties as to funding were not the only difficulties for the project in 1994. The increase in the estimated costs of the facility caused the School and the Hockey Club to ask the Tennis Club to modify its proposal for the pavilion. Mr Carroll at least was concerned that the Tennis Club would not agree to any modification. By October 1994 his concerns proved unfounded and the Tennis Club agreed to modify its proposal.

35 The uncertainties as to finance caused Mr Carroll to press for the financial position to be resolved before tender documents for the project were prepared. He expressed this view at a meeting of the plaintiffs on 7 April 1994. In the event, the tender documents were prepared before it was known whether the Hockey Club would be able to contribute the full amount of its share. It appears that the three participants were each making contributions from time to time towards the costs then being incurred.

36 By letter dated 1 June 1994, the plaintiffs asked Brown Falconer to proceed to submit the project to tender. The letter to Brown Falconer asked that the project be put to tender in three components namely:

The tennis and hockey complex on a stand-alone basis.

Extensions at South Park Bowling Club to provide additional change rooms.

The letter requested Brown Falconer to provide a number of services including civil, structural and hydraulic works. Brown Falconer accepted the appointment by letter dated 8 June 1994.

37 The tender process demonstrated a potential increase in the cost of the project to as much as $827,000. Brown Falconer reported by letter dated 26 August 1994. Representatives of the plaintiffs met Mr Riseby on 26 September 1994 and on other occasions to discuss and examine modifications to the project. I repeat three main elements of the project. They were:

38 The hockey pitch and tennis courts which carried with it the fencing and lighting of the playing surface. Both the Hockey Club and the Tennis Club were anxious that the lighting be of a high standard for night competition. Associated with the playing surface were additional works to comply with the conditions of development consent imposed by the Adelaide City Council.

39 A pavilion or spectator stand. This was originally intended to be a roofed spectator stand of modest size with a canteen, changing rooms, toilet facilities, storage rooms and other facilities beneath the stand.

40 An extension of the South Park Bowling Club premises to provide additional change rooms.

In the event, the plaintiffs decided to proceed with the construction of the hockey pitch and tennis courts and the other items in paragraph 1 above. The design of the pavilion was extensively modified and the total cost of the project was reduced. The quotation for the cost of construction of the revised pavilion was $83,930.00. The plaintiffs did not proceed with the extensions to the South Park Bowling Club. The cost of constructing the pitch and associated works was $601,404.00.

41 I find that the quality of the playing surface, for what was to be the hockey pitch and tennis courts, was of the highest priority for all three participants. Reference has already been made to the fact that a specification prepared by the International Hockey Federation had been given to Mr Riseby. The raison ď être for each of the plaintiffs being involved in this project was to obtain a playing surface of the highest quality.

42 The construction of the pitch and associated works was let to Premier Sports Surfaces Pty Ltd. The contract with Premier Sports Surfaces Pty Ltd was formally signed on 30 November 1994. However, Premier Sports Surfaces commenced the work early in November 1994. Practical completion of the work was certified on 3 March 1995. No claim has been made against Premier Sports Surfaces.

43 In early June 1994, Brown Falconer had engaged Connell Wagner to provide the civil engineering surfaces required for the project. One aspect of the civil engineering services included examining the state of soils below the intended playing surface. This was necessary in order to design an appropriate base for the playing surface to ensure that it would remain level notwithstanding soil movement beneath. Another aspect of the retainer of Connell Wagner was to prepare plans of the works associated with the construction of the playing surface and its base. In short, Connell Wagner was responsible for obtaining an analysis of the soils at the site and preparing the plans and drawings for the pitch and its base.

44 Connell Wagner retained Golder Associates, geo-technical engineers, to report on soil classification. By letter dated 22 June 1994 Golder Associates reported to Connell Wagner. The report examined the soils at different points and made recommendations as to preferred methods of construction. The section of the report dealing with the soils below the proposed hockey pitch and tennis courts is set out below. The underlining has been added by me for the purpose of indicating the passages which called attention to the high risk of soil movement.

Bore 3 was placed at the location indicated by Connell Wagner Pty Ltd within the proposed hockey and tennis courts. The predicted ys at this site is 73mm. The site is classified Class E1 (Extremely high soil movement potential).

On the basis of previous experience with and testing of similar soils it is recommended that a design CBR of 3per cent be adopted for the pavements of the hockey and tennis courts.

The extremely high soil movement potential revealed by this investigation may be expected to lead to premature distress to the pavement as the normal seasonal changes in the moisture regime trigger movements in the pavement. It is possible therefore that maintenance or reconstruction of the pavement will be required before the end of its design life.

The above site classifications do not allow for the effect of any subsequent site works after the time of drilling, such as benching or filling of the site. If works such as this are carried out a revised site classification may be necessary."

On 28 July 1994, Connell Wagner delivered to Brown Falconer a specification for site works for the pitch.

45 In November 1994, while Premier Sports Services was constructing the site works for the pitch, Connell Wagner visited the site and inspected the work. On 11 November 1994, the attention of Connell Wagner was drawn to what was described as "soft areas". These were remedied by filling. Given the admission of liability, nothing turns on the facts in this paragraph.

46 Very little evidence was given on the method of construction of the pitch. However, it is clear that the site was levelled, a base some 150mm thick of crushed dolomite, or similar material, was laid and levelled and the playing surface and shock pad were laid on top of that base. Contrary to usual practice the playing surface was glued to the shock pad.

47 The plaintiffs took possession in about March 1995. The playing surface remained even and level for a short time. However, winter rains in June 1995 caused soil movement below the pitch causing the pitch to heave, resulting in a substantial deformation of the playing surface. The effect of the movement was first noticed following rains in late June 1995. On Sunday, 24 June 1995 Professor Spencer of the Hockey Club telephoned Mr Carroll to inform him of significant movement in the playing surface. The movement had occurred at a number of places causing rise and fall at different points of the surface. The movements had caused water to form in large pools and the pools clearly demonstrated the extent of the deformation at different points in the playing surface and that the deformations had occurred over the greater part of the playing surface. The exhibits include photographs taken on 24 June 1995 and on other occasions after rainfall. Those photographs graphically illustrate the extent of movement and the resultant pooling of water.

48 The deformations in the playing surface are extensive and can be readily noticed by an ordinary visual inspection. Variations in level occur over the whole of the playing surface. Generally speaking, the area of the whole of the pitch has risen to an average of 50mm and about one third of the pitch has risen more than 100mm. At different points in the playing surface there are rapid changes, that is to say, there are areas where there is quite a steep difference in levels. The surface is distorted. The heave of the playing surface is most pronounced in the south-east corner of the pitch, where several large pine trees had been removed to make way for the pitch. Because trees are a desiccant, removal of the trees would be likely to result in an increase in moisture content after the pitch had been put in place. The variations in the surface are readily apparent after rain has fallen on the surface when water forms large pools on the surface.

49 It is still possible to use the playing surface for both hockey and tennis but players have to tolerate erratic ball movement. The variations in level have a significant effect on ball movement for both hockey and tennis. For hockey, water in the depressions can noticeably slow or even stop the ball after it has been struck. Whether the surface is wet or dry, the deformations obviously affect the accuracy of passing from one player to another. In addition, there is a risk of injury from accidental undercutting of the ball which causes it to rise with the risk of striking a player. After heavy rain, members of the Hockey Club attempt to sweep rain from the pitch. If rain should fall in the course of a match and cause pools of water to form, it is not reasonably practicable to stop the game to sweep away those pools. Problems with rain have caused games to be delayed. As hockey is essentially a winter sport, these problems have been continually present. The pooling of water is a frequent problem for the Club. At one stage, members of the Club who were premier league players led what Mr Spawton described as a "players revolt" concerning the unsuitability of the surface not only for competition games but also for practice.

50 The evidence was, and I find, that in hockey the run of the ball is a very important aspect of the game particularly with more skilled players. The surface is now not suitable for premier league competition in the district competition so that, not only is it not possible to play those games on this pitch, but also the Hockey Club cannot allow its facilities to be used for inter-state or international games or even by players practising for inter-state or international games. On 21 April 1998, Hockey SA wrote to the Hockey Club informing it of complaints it had received concerning the unevenness of the surface and asking the Hockey Club to inform it as to progress of these proceedings. I find that concerns about the uneven surface have not been confined to the plaintiffs.

51 For tennis, the variations in surface cause an erratic and irregular bounce of the ball. The ball not only bounces either high or low in some locations but in others it bounces either left or right instead of coming relatively straight on towards the players. In addition, the variations in surface level create a risk of injury to players running to play a stroke. On 31 July 2000, Tennis SA wrote to the Tennis Club. It referred to complaints it had received as to the uneven surface and stated that it would not recommend the facility for competitions while the pitch remained in that condition.

The Playing Surface is Not Fit for its Intended Purpose

52 I find that the surface is extremely deformed and constitutes a substantial departure from the standard of playing surface specified by the plaintiffs. The variations cause such interference with the ordinary movement of either a hockey or tennis ball that the surface is unsuitable for competition in district hockey as well as for tennis competition. In its present state the surface is suitable for a little more than social tennis or hockey. I find that the playing surface is wholly unsuited for the specified purpose. The plaintiffs did not get the pitch they had specified and had contracted to have constructed for them.

53 Expert evidence was given as to the cause of the deformation of the pitch and means by which the problem could be rectified. The experts were Messrs Grounds and Goldfinch, who were called by the plaintiff, and Dr Mitchell, who was called by the defendant. They are all geo-technical engineers whose expertise is in relation to soil mechanics, foundation engineering and geology. Shortly stated, a geo-technical engineer is concerned with anything to do with the soils and rocks forming the earth's crust and the science includes soil movement.

54 The geo-technical experts agreed that the pitch has been constructed in an area which is well known for having highly reactive clay soils beneath the surface and in an area where gilgai structures can occur. "Gilgai" is an eastern Aboriginal word meaning "small water hole". Gilgai structures occur in clay soils. A gilgai structure is an extremely reactive clay soil profile which causes undulations, sometimes of severe magnitude, often of reasonably small magnitude. They are usually dome shaped. Gilgai structures have the capacity to exaggerate the effect of shrinking or swelling of clay. Under certain conditions extremely reactive clay can form a dome close to the surface. The effect of the gilgai is the greater when it is close to the surface because it is dome shaped and, being close to the surface is more subject to seasonal effects causing shrinking and swelling.

55 Based on the results of the soils tested by Golder Associates, Dr Mitchell believed that a gilgai structure was located below the playing surface. Mr Grounds and Mr Goldfinch disagreed, saying that it was not possible on the available evidence to reach that conclusion. They said that further soil surveys were necessary before it could be concluded that a gilgai existed. In the event, it is not necessary to determine whether a gilgai structure does exist beneath the pitch because all of the geo-technical experts agreed that the foundation soils are highly reactive clays and, as will be seen, they all agreed that at the time of the hearing, the area beneath the pitch was approaching equilibrium.

56 The playing surface is a virtually impermeable membrane, allowing very little water to pass through it. The swelling in the clays beneath the pitch was caused by placing this virtually impermeable surface over the area of the pitch which in turn has altered the moisture content in the clay soil beneath causing it to heave. Shrinkage or swelling will occur depending on whether the foundation soils were wet or dry before the surface was applied. The surface was laid in the period November 1994 to March 1995. The experts agree that the soils below the surface were dry so that later rains caused the soil beneath the pitch to absorb moisture and swell. A general heave occurred beneath the playing surface causing differential and significant deformation of the playing surface. The movement was not uniform across the pitch.

57 One cause of differential movement in the playing surface was the fact that part of the playing surface had been laid over the old tennis courts which had been removed to make way for the new playing surface. As the old tennis courts had been in place for some years, the moisture content beneath them had reached a level higher than that for surrounding areas which were not covered by that bitumen surface and, of course, higher than the area from which trees had been cleared. In the result, the movement in that part of the new playing surface is not as pronounced as in other areas.

58 Some other possible causes of soil movement were scattered smaller trees and shrubs in what is now the northern half of the playing area and an oval which had extended into part of what is now the northern area of the pitch. In addition, there are other trees in what is now the south-eastern corner of the pitch. Another likely cause of the movement was the clearing of a number of pine trees which were removed to make space available for the pitch. Trees act as a desiccant so that the removal of the trees would result in less moisture being extracted from the soil.

59 After a period of time, the soil beneath the pitch will reach a state of equilibrium. The geo-technical experts agreed that at this site that period was about ten years. They also agreed that in November 2002 the soils below the surface were approaching equilibrium, that is to say, a state where the moisture content of the soil remains constant. The time taken to establish equilibrium depends on a number of factors including the initial soil moisture, climatic influences, location of trees and the geo-technical characteristics of the soils beneath the pitch.

60 The plaintiffs consulted several experts to advise on what could be done to rectify the problems with the pitch. In addition to Messrs Grounds and Goldfinch, they consulted Mr Gilbert, a civil engineer, and Mr Finlay, who has extensive experience in constructing pitches of this kind. The defendants consulted Dr Mitchell. Each of these consultants gave evidence. In addition, evidence was given as to the costs of various proposals. The evidence as to costs was given for the plaintiffs by Mr Finlay and Mr Tulla, a quantity surveyor, and for the defendant by Mr Williams, a director of Premier Sports Surfaces Pty Ltd, the company which had constructed the original pitch and the works associated with it. Mr Tulla's evidence was based in part on information given to him by Mr Williams. I accept Mr Tulla's evidence but, for reasons to be given later, it is necessary to adjust his estimates. Mr Williams' evidence essentially commented on the costings prepared by Mr Finlay. As I have mainly relied on the evidence of Mr Tulla for estimates of costs, it is unnecessary to deal with the evidence of Mr Williams.

61 The plaintiffs first consulted Mr Goldfinch, who is both a structural and geo-technical engineer. He gave some preliminary advice in September 1995. The only written report prepared by him which sets out how to rectify the problem is dated 23 June 1999. In that report he expressed the view that the defendants ought to have warned the plaintiffs of the problems of constructing a pitch on this site. In his view, the options in 1995 were to relocate the proposed pitch to a site with more stable soil, to investigate whether it was possible to construct a flexible pavement to support a pitch upon these highly reactive soils, or to examine a more expensive structural solution to deal with the soil condition. There was no further evidence from Mr Goldfinch on the flexible platform. The more expensive structural solution involved the construction of a reinforced concrete pier and suspended slab with a clear space beneath the slab to accommodate future movement of soil. It was likely to have cost a little less than $1 million. Not only was that a cost beyond the financial capacity of the plaintiffs, but there are also real questions as to whether it was a reasonable solution. The plaintiffs did not proceed with it. This pier and slab proposal is the first of the alternative methods of rectification which the plaintiffs set out in their Statement of Claim. As the hearing progressed, it became apparent that they were not pressing to construct the pitch in that way. It is necessary, however, to note that this was one of the means proposed to deal with the problem of highly reactive clays in the period 1995-2000.

62 In 1996 the plaintiffs consulted Mr Grounds and Mr Gilbert. Mr Grounds investigated the geo-technical issues and reported to Mr Gilbert on 9 July 1996. On 12 July Mr Gilbert reported to the plaintiffs. His report included recommendations as to possible solutions. He proposed two options. The first, described in his report as Option A, was founded on the premise that, with time, the site would achieve a uniform and relatively stable moisture regime, that is to say, it will approach equilibrium. It would then be possible to reconstruct the pitch. Option A involved removing the synthetic surface, regrading the site and replacing the surface. Mr Gilbert suggested that edge effects be minimised by installing a barrier around the perimeter of the pitch but deeper than the 900mm root barrier which currently exists. He estimated that the work would take about four weeks. He emphasised that extreme care should be taken during this work to ensure no drying out occurs while the ground beneath the playing surface was exposed. Plainly, Mr Gilbert was not recommending that the work in Option A be undertaken in 1996. Option A required the soil beneath the pitch to have reached or at least be very close to equilibrium. Mr Gilbert warned that, with this treatment, a risk of future soil movement still existed.

63 Mr Gilbert's Option B was a more thorough and more costly solution to the problem. He proposed excavating the area of the pitch to a depth of, say, 1200mm and replacing it with a cement stabilised fill which was to be thoroughly compacted as it is laid. Care would have to be taken to prevent clays from drying while exposed to the course of the work. The pitch would then be remade. He believed that a raft of this kind 1200mm thick would even out the effects of soil movement beneath the surface. There was no costing of this proposal. Mr Gilbert's opinion was that the cost of the excavation and replacement filling was of the order of $300,000 plus the cost of re-laying the pitch.

64 When making his recommendations, Mr Gilbert was relying on geo-technical advice from Mr Grounds. In his report dated 9 July 1996 Mr Grounds had made recommendations which were the basis of Mr Gilbert's Options A and B. Mr Grounds had said that, in order to be effective, excavation of the kind proposed in Option B should be to a depth of one to two metres. In that report, Mr Grounds had said that it would be years before equilibrium would be established and stated that removal and re-levelling of the pitch should not occur until the state of the equilibrium had been achieved. The extremely reactive nature of the clay soils caused him to state that the options for remedial works were limited at that time.

65 In August 1997, reports from Dr Mitchell and Mr Grounds were exchanged by the parties. Dr Mitchell had provided a report dated 13 August 1997. Mr Grounds commented on it in the report dated 29 August. Dr Mitchell replied on 30 September and Mr Grounds commented on that report in a letter dated 8 December 1997. It is unnecessary to examine all of the issues debated by these two experts. It is sufficient to note that Dr Mitchell did not believe that Mr Gilbert's Option B would be an effective method of remedying the problem. In his report of 13 August 1997, Dr Mitchell proposed a conventional pavement design with a pavement thickness of "at least 300mm". However, he warned that, even with a thickness of 300mm, surface movement would still be expected to occur so that continual maintenance of the pitch would be necessary. Commenting on the fact that thickness of the base for the pitch as constructed was 150mm, he described it as "significantly less than that usually adopted for an expansive soil type encountered at this site".

66 In his report dated 29 August 1997 Mr Grounds disagreed with Dr Mitchell's views. He reaffirmed that view on 8 December 1997. In his opinion, a base excavated to a depth of 300mm was unlikely to provide the required degree of an even level surface for the pitch which would last the life of the pitch so that periodic reconstruction would probably be necessary. In his view, excavations to a depth from two metres up to four metres were required to reduce significantly the extent of differential changes in the playing surface. Mr Grounds' views in December 1997 were influenced by field investigations and bore holes sunk during an inspection in September 1997. The evidence shows that excavation to the depth recommended by Mr Grounds was a highly costly exercise and beyond the financial capacity of the plaintiffs. Mr Grounds then mentioned alternative solutions but again recognised them as being too expensive.

67 Dr Mitchell responded to these views in a letter reporting to the first defendant's solicitors dated 30 September 1997. He disagreed with Mr Grounds' advice that excavation up to four metres and replacement with engineered filling would resolve the problem. It is unnecessary to explore this exchange and the reasons for it since this solution was not then and is not now economically feasible. Dr Mitchell also reaffirmed the possibility of a flexible pavement 300mm deep.

68 I have summarised these reports because they indicate that in the period 1995 to 2000, it was not possible to design and construct a financially realistic remedy to the plaintiffs' problem. The cost of the remedies suggested by those advising the plaintiffs were well beyond the financial capacity of the plaintiffs. Neither the plaintiffs nor the defendants submit that it was feasible or reasonable to construct a replacement pitch in the period June 1995 to October 2002.

69 I find that, given the reactive nature of the soil, there was no reasonable means available in the period June 1995 to shortly before the trial of providing a satisfactory remedy to the problems with this playing surface.

70 By the time the action had come on for hearing, the soils beneath the pitch had stabilised to a considerable extent. There was unanimity of view among the experts that the soils below the pitch were approaching equilibrium. However, none of the experts was prepared to state that equilibrium had been reached or guarantee that soil movement will not occur in the future. By the time of the hearing, the pitch had been laid for almost eight years. The parties had caused surveys to be made of the levels of the pitch. Those surveys showed that there had been substantial deformation in June 1995 but that the extent of movement had declined in subsequent years, that is to say, the later variations in the playing surface are noticeably less than the original deformations. The original deformations have, however, remained.

71 I find that at the date of trial the soil was reaching a state of equilibrium and, while there might be future movement in the soil, it would not be significant and certainly less than what had first occurred in 1995.

72 While there was unanimity of view that the site was reaching equilibrium, the experts differed on what remedial action could now be undertaken. I summarise the effect of the evidence. There were two schools of thought. Dr Mitchell, the defendants' expert, proposed removing the playing surface, re-levelling the 150mm base and replacing the surface. The other school of thought was expressed by the plaintiffs' experts who rejected Dr Mitchell's proposal as not providing a sufficiently stable base. In the view of the plaintiffs' experts, it was necessary to excavate to a depth to provide a base for the playing surface and its shock pad. The potential for movement in the future caused the plaintiffs' experts to be unwilling to accept Dr Mitchell's re-levelling proposal. In their view, Dr Mitchell's proposal would not be a guarantee against future movement beneath the surface.

73 Basing his opinion on the reports of Mr Grounds, Mr Gilbert said that he would not proceed with his Option A because it would leave the pitch subject to risk of future movement and irregularity of surface, particularly at the edges. His Option A is very similar to Mr Mitchell's re-levelling approach. In Mr Gilbert's view, seasonal conditions could affect the behaviour of the pitch particularly at the edges. Option A was, he said, a compromise solution with risks. He believed that a version of his Option B would be more thorough and more suitable. Mr Goldfinch was not prepared to accept the re-levelling option unless a vertical barrier, some 1.5 meters to 1.8 metres deep was constructed into the soil at the edge of the pitch to prevent movement of moisture.

74 Mr Grounds was asked in cross-examination whether he "would give the re-levelling option a go". He assented to that proposition. However, when his evidence is read as a whole, it is quite apparent that he believed (as does Dr Mitchell) that the re-levelling option requires the future maintenance of the surface as well as later re-levelling. He also believed that further soils tests should be undertaken before proceeding with the re-levelling option. In short, his view that a thin base over the soil leaves the playing surface subject to future soil movement, particularly at the edges of the pitch.

75 Soil tests conducted by Mr Grounds show that there is a further difficulty with re-levelling the existing base at 150mm. The playing surface is constructed with a slight rise in the centre so that water falling on the surface flows to the perimeters of the surface. The consequence is that the base at the perimeter of the playing surface is only about 700mm thick, a very thin base against future soil movement at the edges of the playing surface. I accept this evidence.

76 The view of the plaintiffs' geo-technical experts, as well as Mr Gilbert, was that Mr Gilbert's Option A was an inadequate remedy. I accept their evidence for reasons noted later. I find that the pitch would still be liable to deformation in consequence of soil movement beneath and that problem would be more pronounced at the edges of the pitch.

77 I turn to examine whether the other forms of rectification proffered by the plaintiffs' experts are a feasible solution. Although there is not a complete unanimity of view on some issues, the effect of their evidence is that it is possible to construct a new pitch which will serve the plaintiff's purposes. The reconstructed pitch should be designed so that it will have a thicker base, intended to suppress differential movement in the soil beneath the pitch. While there could be no guarantee that the reconstructed pitch will not move, it was unlikely that the pitch would move as a whole and would not result in differential movement which has caused the deformation which currently exists. The proposal would also assist in preventing differential movement at the edges of the playing surface.

78 Mr Gilbert's suggestion of Option B has already been described. It involves removing the pitch and its 150mm base, excavating to a depth of say 1200mm and replacing with a cement stabilised material which is compacted as it is laid. The pitch surface would then be remade. Mr Gilbert's purpose was to construct a kind of raft which would even out the effects of soil movement beneath and any differential movements in the pitch. He agreed that an excavation to 1200mm and filling in the matter proposed was very expensive. He was willing to accept a base of lesser depth than 1200mm provided it was thicker than the existing one 150mm base.

79 The effect of the evidence of Mr Goldfinch was that the minimum solution to the problem was to excavate the site to a depth of 300mm and replace it with engineered fill. This, he said, would provide a stiff crust which should be able to suppress any localised differential movement, although it could not guard against general heave. He preferred an excavation to a depth of one metre. The greater depth would enable a stronger crust more likely to have long-term success.

80 The proposals of the plaintiffs' geo-technical experts were consistent with Mr Finlay's recommendation. Mr Finlay has a long experience of at least eighteen years in laying both natural and synthetic playing surfaces in New Zealand and in Australia. He has been involved in laying some 60 artificial playing surfaces. Although he trained as a surveyor, most of his professional life has been as a partner in a land development company whose business includes the development of playing fields and racetracks. Although Mr Finlay has no training in geo-technics, he plainly has substantial expertise in laying turf or artificial playing surfaces. As he is not a geo-technical engineer, he must rely on their advice. Mr Finlay unwisely ventured some opinions in the field of geo-technics and that evidence was not satisfactory. However, notwithstanding that, his unquestioned expertise in constructing pitches and relaying artificial surfaces was convincing. It was not challenged and I unhesitatingly accept it. I accept his evidence describing the process of constructing a new pitch, resurfacing a pitch when the artificial playing surface has worn out and, in a general way, the costs involved in remedying the existing situation.

81 Mr Finlay said that an excavation to 350mm replaced with engineered fill to provide an overall base of 500mm was required. In his view it was necessary to have a base 500mm deep to provide a platform with structural integrity. A base of only 150mm would, he said, continue the existing problem. Mr Finlay's evidence was that, in the ordinary course, a pitch of this kind would not be constructed with a base only 150mm thick. He said that in his experience he had never seen a pitch built with a base only 150mm deep. The general rule was to construct a base 200mm to 250mm thick with crushed rock which was then compacted. On top of that, another layer of crushed rock of smaller size is made and compressed to a further depth of 150mm. The base is therefore about 400mm thick. This provides a stable base designed to absorb movement in the soil beneath. The thickness of the base might be increased by reason of the condition of the soils beneath the intended pitch. In this case, he recommended an excavation to a depth of 350mm to provide an overall base 500mm thick.

82 Mr Finlay's evidence was that in the usual course a blinding layer of a fine graded material is laid on top of the base to a depth of 20mm. This allows for a fine degree of grading which cannot be achieved with larger sized stones. The blinding layer also serves as a cushion for the shock pad. The shock pad is a rubber underlay for the artificial turf. The shock pad serves as a cushion to absorb the shock of persons running on the playing surface. The artificial surface is then laid on top of the shock pad. When the artificial surface must be replaced, it could be removed but the shock pad can be used again. A shock pad lasts the life of two playing surfaces.

83 The plaintiffs' pitch has been constructed with a shock pad glued to the playing surface which, as Mr Finlay's evidence shows, is contrary to standard practice. In addition, the plaintiffs' pitch does not include a blinding layer.

84 I accept Mr Finlay's evidence as to the usual method of construction of a pitch of this kind. Although he is not a geo-technical engineer, he is the only witness with experience in constructing pitches of this kind, his experience is very extensive and his evidence is persuasive on this issue. It is also consistent with the evidence of the plaintiff's geo-technical experts.

85 Mr Finlay's proposed base of 500mm is not as deep a base as that of Mr Gilbert's Option B but the intent and purpose is the same. As Mr Goldfinch said, it is a matter of degree. Mr Goldfinch would accept a base of 300mm but preferred a base one metre thick. Mr Finlay's proposed base is consistent with Mr Goldfinch's evidence. Thus, the effect of the evidence is that the most suitable remedy for this pitch is to re-lay it with a pitch 500mm deep.

86 As mentioned earlier, in his report of 13 August 1997, Dr Mitchell had said that he would have considered a base 300mm thick but qualified that view by adding that even with a base of that thickness "continual maintenance of the facility must be anticipated.". He called the base "a pavement". He said it would minimise the effect both of significant shrinking and of movements in the soil beneath the pitch. Dr Mitchell expressed the view that, with the appropriate equilibrium of the site, there is little difference between a base of 150mm deep, 300mm deep and 500mm deep.

87 There is, therefore, a conflict between the opinion of Dr Mitchell and the opinions of the plaintiffs' experts. I prefer the evidence of Messrs Gilbert, Grounds and Goldfinch to that of Dr Mitchell. Dr Mitchell was, I believe, too absolute in his opinions. One example is whether a gilgai structure is located beneath the pitch. More importantly, his re-levelling proposal was, on any view, a stop-gap measure which would require re-levelling in the future. Even though the site is approaching a state of equilibrium, the potential for soil movement remains, albeit of a lesser degree in the past, and it is necessary to guard against it. Furthermore, Dr Mitchell's proposal leaves the perimeter of the pitch more susceptible to movement than the centre. Movement of the perimeter could cause levels to rise with consequent ponding of water on the playing surface, near the edges. The evidence of Mr Goldfinch is consistent with that of Mr Gilbert to the extent that he proposes a form of construction which will provide a kind of raft to even out these effects of soil movement beneath the pitch. The thicker base provides a surer remedy against movement at the perimeter of the playing surface.

88 I find that a pitch constructed with a base 500mm deep (excavated to a depth of 350mm) will provide a kind of raft which will absorb the soil movement beneath in a way which will even out any differential movement. Such a pitch will be structurally stronger than Dr Mitchell's proposal. One important feature of this solution is that it will reduce the potential for movement at the edges of the pitch in a way which could not be achieved by Dr Mitchell's re-levelling option. The result will be a pitch which is reasonably fit for the plaintiffs' purpose. Such a pitch is the appropriate form of rectification.

89 The basic purpose of an award of damages is to put the party that has suffered loss in the same position as he would have been if he had not sustained the wrong: Livingstone v Rawyards Coal Co [1880] UKHL 3; (1880) 5 App. Cas. 25 per Lord Blackburn at 39. That same principle was expressed in Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60 at 63 by Mason CJ, Dawson, Toohey and Gaudron JJ, Brennan J agreeing in these terms:

"The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed."

When assessing damages in a building case such as this, there is no relevant difference in principle between the law of contract and the law of tort. The general rule at common law is that where a party incurs a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with respect to damages, as if the contract had been performed: Robinson v Harman [1848] EngR 135; (1848) 1 Ex. 850 per Parke B at 855 [1848] EngR 135; [154 ER 363 at 365] affirmed in The Commonwealth of Australia v Amann Aviation Pty Limited [1991] HCA 54; (1991) 174 CLR 64 per Mason CJ and Dawson J at 80, per Brennan J at 98-99, per Toohey J at 134 and per McHugh J at 161.

90 The assessment of damages in this case is complicated by the fact that in 1995, when the pitch was first damaged by the heave of the soil beneath, it was not realistic to rectify the problem or replace the pitch. As stated earlier in these reasons, it was then impracticable to seek to re-level the site and, because the cost of constructing a playing surface which would not be likely to be affected by soil movement beneath was of the order of $1 million, it was not financially reasonable to rectify the pitch in that way. Not only were the plaintiffs not in a financial position to pay the additional cost of constructing such a pitch, but it was neither a feasible nor reasonable financial proposition to do so. It is well established that a court will not order damages for rectification where the proposed remedial work is not a reasonable course to adopt: Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 at 617-619. One example is where the expenditure on the proposed rectification is out of all proportion to the benefit to be obtained: Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344; see also Applegate v Moss [1971] 1 QB 406. The only alternative available in 1995 would have cost about $1m. That was a cost out of proportion to the benefit.

91 Another question bearing on the assessment of damages is the fact that the plaintiffs were in 1994 and in 1995 subject to the budgetary constraints identified earlier. The defendants contend that, because it was not reasonable to construct a replacement pitch and because the cost of a replacement pitch was beyond the financial capacity of the plaintiffs, the plaintiffs are entitled to nominal damages only. The submission is grounded on the reasons of Hutley JA in Auburn Municipal Council v A.R.C. Engineering Pty Ltd [1973] 1 NSWLR 513. In that case, design engineers had been guilty of negligence in designing foundations for buildings for a works depot for the plaintiff council. The land on which the buildings were constructed settled unevenly with the consequence that the buildings had to be rebuilt on new footings at a very substantial cost. The conduct of the case created some difficulties in the Court of Appeal but it is unnecessary to stay with those difficulties. It is sufficient to note that in the course of his reasons, Hutley JA (with whom Hardie JA agreed) discussed the proper method of assessment where structures which have been erected are useless and have to be rebuilt. In the view of Hutley JA, the proper measure of damages was the wasted expenditure in erecting the building plus the cost of restoring the site to its original condition. His Honour's reasoning did not allow the plaintiffs to recover the cost of constructing a replacement building. His reasoning was grounded on the proposition that the designer cannot be called upon to do anything more than exercise his skill to produce a correct design and any damages for that neglect but he cannot be called upon to give the client the structured design (at 531). Thus, an engineer whose negligent design caused the erection of a useless structure cannot be held to be liable to erect a proper structure (at 534).

92 The decision in Auburn was not followed in Bevan Investments Ltd v Blackhall and Struthers (No 2) [1978] 2 NZLR 97 at 108-109 where the correct approach is explained. Subsequent decisions in this country have not followed the reasoning of Hutley JA but, instead, have applied the principle that, generally speaking, the measure of damages for defective advice is the cost of making good the defective work: Beregold Pty Ltd v Mitsopoulos (1992) 15 BCL 290 and Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd [2001] NSWCA 313. Hutley JA himself acknowledged this principle in Auburn at 534 - 535. In Hyder Consulting at [19] Meagher JA described the cost of rectification as an impeccable method of calculating the loss and at [99] Giles JA said that the cost of rectification should ordinarily provide the basis for damages. The decision in Auburn should not, I think, be regarded as a correct statement of the principles for assessing the damages payable for negligent design. Instead, it should be regarded as an example of the principle in Bellgrove v Eldridge, that is to say, it is an example of the principle that, where it is not reasonable to require the design engineer to pay the cost of a replacement building, the measure of damages is the wasted expenditure and the costs of making good the land.

93 The plaintiffs do not seek to recover their wasted expenditure. Instead, they claim damages so that they may rectify the problems with the pitch. As already noted, they will not be entitled to damages for rectification unless the rectification is necessary and a reasonable remedy. As the reasons in Bellgrove v Eldridge show, the question whether the work is necessary and reasonable is a question of fact. Plainly the issue will depend on the facts and circumstances of each case. Before examining the facts in this case, some other relevant principles are noted.

94 The first is that, where rectification involves the performance of work which should have been included in the original design and would have caused an additional cost over and above the cost of the works as originally performed, the building owner must pay that additional cost: Beregold Pty Ltd v Mitsopoulos (supra); Hyder Consulting (supra). So in Beregold, where an engineer had negligently designed a concrete slab for a building, the building owner was entitled to damages for rectification but had to pay the difference between the amount payable for the slab constructed to the correct specifications and the amount actually paid for the original slab. In Hyder Consulting, an engineer had designed an inadequate pavement. The building owner was entitled to rectification but, as the remedy required a thicker pavement, had to pay the additional cost over and above the cost of the original pavement.

95 Secondly, although damages are usually assessed at the date of the breach: Wenham v Ella [1972] HCA 43; (1972) 127 CLR 454 at 460 and 473, the damages may be assessed at a later time if, in all the circumstances, it is reasonable to do so or it is necessary to provide adequate compensation: Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 per Mason CJ at 355 - 356, per Wilson, Toohey and Gaudron JJ at 367, and per Dawson J at 386 - 387. It is reasonable for rectification work to be postponed in order to permit ground to stabilise: Bowen v Paramount Builders (Hamilton) Ltd [1977] 1 NZLR 394 at 411; Bevan Investments (supra) at 115 - 116. In one sense, waiting until the ground conditions have stabilised is one form of mitigating loss. If the damages are assessed at a later time than the date of the breach, interest will not be calculated from the time when the cause of action arose but from the date of the assessment: Bowen v Paramount Builders (supra) at 411 - 412.

96 If the construction work as rectified produces works which are more valuable to the owner than the works as originally designed, consideration will have to be given to the question of betterment. The question of betterment was helpfully examined and discussed by Sheller JA in Hyder Consulting at [27] - [55]. I respectfully agree with the editors of the section on Building Law in Halsbury's Laws of Australia Vol 3(2) para 65-115 who summarised the relevant principles as to betterment in these terms:

"Where the rectified building is more valuable than that contracted for or damaged, the contractor is not entitled to have the cost of rectification reduced to allow for the betterment to the proprietor unless:

(1) the betterment is

(a) the result of the voluntary choice of the proprietor,

(b) the result of a failure to mitigate the loss, or

(c) out of all proportion to the loss caused by the breach of contract;

(2) the value of the building lies in its being a commercial commodity; or

(3) the rectification work also involved rectification of defective design for which the contractor is not responsible." (footnotes omitted).

As Sheller JA said in Hyder Consulting at [54], if the plaintiff has no other reasonable choice than to replace or repair what has been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant, is reasonable as damages. In each case it is a question of fact.

97 With those principles in mind, I turn to the question whether, at the date of the trial, the plaintiffs have established that the rectification work was necessary and reasonable so that the defendants must pay damages in an amount equal to the cost of the rectification of the pitch.

98 For the reasons already given I find that it is necessary for the pitch to be rectified. I next turn to examine whether it is reasonable to do the work. The delay in the resolution of the issues between the plaintiffs and defendants has had one fortunate outcome in that the soil beneath the surface is in a more stable condition and is approaching equilibrium. I find that it is practicable in October 2002 to carry out rectification work which could not have been carried out earlier. Although the plaintiffs mentioned two alternatives in their Statement of Claim, their case at trial was that the second and cheaper alternative should be the appropriate remedy. They seek rectification work in the form of a pitch re-constructed in the manner proposed by Mr Finlay. It has already been described. The question is whether it is reasonable to proceed in that way: Bellgrove v Eldridge (supra). A reconstructed pitch of the kind described will accommodate future movements of soil beneath the playing surface so that, while there may be some heave of the pitch it will not cause undue deformation of the playing surface. If soil movement should occur beneath the playing surface, the method of construction will even out any differential movement.

99 The purpose of each of the plaintiffs participating in this project was to construct a high quality playing surface which could be used for playing both hockey and tennis. As already mentioned, that was the highest priority for each. For the School, it meant replacing old deteriorating tennis courts and a grassed pitch. For the Tennis Club, it meant establishing its own centre and its own courts for its activities instead of using hired courts. In addition, it would have courts of high quality. For the Hockey Club, it meant a new facility instead of its former grassed playing surface, a facility with a playing surface of the highest quality. The plaintiffs have been committed to the project and to the site since they first discussed plans for the project in 1992. They have been using the facilities since 1995. The negligence of the defendants has caused the plaintiffs to construct a playing surface at this location and, instead of being provided with a playing surface of the highest quality as specified, they have been forced to tolerate a playing surface of inferior quality quite unsuited to their needs. In short, the plaintiffs have got something altogether different from that which they specified and contracted to have provided to them. Although the playing surface is not entirely useless, it is of an extremely low standard and should be replaced. The soil conditions are now suitable for a replacement pitch. It is entirely reasonable for the plaintiffs to seek to replace it provided that the costs of doing so are not unreasonable. I find that, if properly advised, they would not have constructed a pitch on this site. However, that is only one part of the question. The other part is whether it is financially reasonable to rectify the pitch as proposed.

100 The pitch, which I have found should be reconstructed, is a more substantial pitch (and therefore a more expensive pitch), than that initially constructed. The defendants contend that in 1994 the plaintiffs did not have the financial capacity to construct a pitch to that specification and so should not be entitled to recover damages in an amount equal to the cost of such a reconstructed pitch.

101 The evidence clearly demonstrates that in 1994 and 1995 the plaintiffs had limited funds to proceed with this project. It is also apparent that they did not have the funds necessary to construct the pier and slab which Mr Goldfinch proposed in 1999. However, the plaintiffs do not seek to construct such an elaborate structure. The stage has now been reached where it is possible to construct a pitch which will produce a playing surface suitable to the plaintiffs' purposes. The plaintiffs have, for some eight years, endured the defects of the existing playing surface. It is well settled that it is reasonable to postpone rectification work until suitable building conditions exist: Bowen v Paramount Builders (Hamilton) Ltd (supra). It was reasonable for the plaintiffs to wait until the ground had stabilised before seeking to reconstruct the pitch. In the end, the question is whether the plaintiffs have acted reasonably in waiting until now to seek to reconstruct the pitch. For the reasons already given, I find that they have. While their lack of funding prevented them from proceeding to implement rectification in 1995 and following years, there were other reasons which caused them to delay repairing the pitch. They had advice that it was prudent to wait until the ground had stabilised. Their difficulties stemmed from the fact that the defendants had negligently failed to advise them not to construct a pitch on this site. Their duty to mitigate their loss also required deferment: see generally Dodd Properties Ltd v Canterbury City Council [1979] EWCA Civ 4; [1980] 1 WLR 433. Finally, they were forced to delay in any event by the fact that the defendants denied liability right up until just before the trial. I therefore think that, as it is appropriate to assess damages at the date of the trial and not at the date of the loss, the financial position of the plaintiffs in 1994 and 1995 is irrelevant.

102 For reasons which I will give in a moment, I am satisfied that the cost of reconstructing the pitch is reasonable. The defendants asserted that the plaintiffs had not proved they intended to reconstruct the pitch and so were not entitled to the damages they seek. The question has been held to be immaterial: Bellgrove v Eldridge (supra) at 620. However, I am in any event satisfied that the intention exists. As already mentioned in these reasons, the pitch is most unsatisfactory. A playing surface of top quality is the raison ď être for the existence of the first plaintiff and the joint venture of the other plaintiffs. There can be no doubt the plaintiffs intend to rectify the pitch.

103 Even if it is relevant to determine whether the plaintiffs, in 1994 and 1995 had the financial capacity to construct a pitch of the kind proposed, I am satisfied that they would have found the funds required. As the pitch is of a higher standard than that initially constructed by the plaintiffs, they are obliged to pay for the extra cost occasioned by the deeper base. The question, therefore, is whether the plaintiffs had the financial capacity in 1994 and 1995 to pay the extra cost. I will determine that issue in a moment after examining all of the other costs associated with reconstruction of the pitch.

104 There are two estimates of the costs of reconstruction. They have been prepared by Mr Tulla and Mr Finlay. Mr Tulla estimates the cost of reconstructing a pitch in October 2000 at $612,150. Since then costs have increased by a total of 5.57 per cent. The total cost in October 2002 is, therefore, at least $646,250. Mr Finlay's estimate of the total cost is $650,000. His estimate is based on the costs in 1999 of constructing a hockey pitch in a Melbourne suburb.

105 The items included in each statement are not identical and so it is not possible to make a direct comparison. I list the main factors preventing a direct comparison.

1. Mr Tulla's estimates are for a pitch with a base 300mm thick. Mr Finlay's estimates assume a base of 500mm thick. Mr Tulla has allowed a further $70,000 to provide for the extra cost of constructing a base to 500mm. The sum of $70,000 is an estimate made in 1998 so that sum must be increased to allow for subsequent increases in cost.

2. Mr Finlay has allowed $62,500 for the cost of providing an asphaltic concrete layer. He admitted that that treatment was what he called "Rolls Royce treatment" to provide an impervious base. It is a cost which should be deducted. The plaintiffs are at liberty to construct a pitch with that treatment but, if they do, it is not a cost to be borne by the defendants.

3. Mr Finlay's estimate of the costs of supplying and laying a new shock pad and new surface total $313,000. Mr Tulla's estimate for the same item is $240,000 in 1998. If that sum is increased to reflect the costs in 2002 and GST is added the result is $292,600. Mr Finlay's estimate nevertheless exceeds Mr Tulla's by some $20,500.

4. Mr Tulla's costs for removing the existing surface are less than Mr Finlay's, even if an allowance is made for an increase in costs from 1998 to 2002. Mr Tulla has not allowed for costs in removing the existing base and stockpiling it. Items 1-3 of Mr Finlay's estimate ($19,000) correspond with item 1 in Mr Tulla's estimate ($30,000). Mr Finlay's costs include the removal of the base and stockpiling it, in a further $24,000. According to Mr Williams, Mr Finlay's costs in items 1, 2 and 3 are rather low. I accept Mr Williams' evidence, as he is aware of local costs. In addition, it is necessary to add statutory charges of $5,000 to Mr Finlay's estimate.

5. Mr Finlay's costings are more recent than those of Mr Tulla. Mr Tulla made his first estimate in 1998 and has included a factor by which they should be increased to 2000. He has then included a further factor of 5.57 per cent to allow for an increase of costs to October 2002. However, Mr Finlay does not make any allowance for cost increases since 1999.

6. Mr Finlay has not included the following items which appear in Mr Tulla's estimate which in 1998 had the following costs:

7. It is not clear whether Mr Finlay's estimates include Goods and Services Tax. A tax of this kind must plainly be included. I assume that it has been included.

When all these adjustments are made the two estimates produce a cost which, allowing for a reasonable margin for the different approaches, are broadly speaking the same. Subject to one qualification, I prefer to ground the assessment of damage on Mr Tulla's estimates, as they are based on costs in Adelaide and he has provided a formula to enable the estimates to be increased to reflect the costs at October 2002.

106 The qualification concerns the cost differential of some $20,500 between the estimates for the cost of replacing the shock pad and installing a new playing surface. These two items together constitute the most expensive item in the reconstruction work. Using Mr Tulla's estimates, they represent 45 per cent of the total cost of the works. Mr Finlay's is a more recent estimate, albeit one obtained in 1999. On one view, it would be proper to increase that cost to bring it into line with today's costs but counsel for the plaintiffs has not led any evidence which proves how such an adjustment should be made. Given that these two items represent such a substantial part of the costs it is proper, I think, to add a further $20,500 to Mr Tulla's estimates to provide for the costs of those two items. In my view, because they are such a significant portion of the costs a conservative approach of this kind must be taken. I will make that adjustment later.

107 Another necessary adjustment follows from the fact that Mr Tulla's estimate is for the cost of constructing a pitch with a 300mm base but Mr Finlay's estimate is for a pitch 500mm thick. It is necessary to adjust Mr Tulla's estimate to allow for the additional 200mm thickness. Mr Tulla estimated that cost in 1998 to be $70,000. However, it is not appropriate simply to add $70,000 to the total cost to produce the cost for a pitch 500mm thick. There are two reasons. First, a base 150mm thick already existed and had been paid for the plaintiffs and, secondly, Mr Finlay's proposal requires that the excavation be to a depth of 350mm only. I will make the necessary adjustments in a moment.

108 Another adjustment must be made to reflect the fact that the replacement pitch is of a higher standard than that originally constructed. The plaintiffs must, therefore, contribute towards the cost an amount equal to the cost of providing a more substantial base: Beregold (supra).

109 The estimates of costs were estimated as at October 2002. Although the trial was in November 2002, I have assessed damages on the basis of the estimates as at October 2002. The increase in costs from the 1998 estimates to October 2000 was 5 per cent and from October 2000 to October 2002 it was 5.57 per cent.

110 Those are the premises on which the following assessment of the liability of the defendants for damages is founded.

111 I first estimate the additional costs which must be paid by the plaintiffs for the thicker base.

112 I start with the evidence of Mr Tulla that the cost of constructing a pitch to replace the existing pitch in October 2000 was $612,150. Since then costs have increased by a total of 5.57 per cent. The increase in cost to the day of the trial is $34,096, say $34,100. Thus, the total cost in October 2002 is $646,250.

113 I proceed to make the adjustment for the fact that the reconstructed pitch will be 500mm thick and not 300mm thick. The plaintiffs must bear the greater part of that cost but subject to a number of adjustments. An adjustment must be made for the extra 200mm. However, it is not simply a case of adding the extra $70,000 estimated in 1998 by Mr Tulla and increasing it to achieve the cost in October 2002. It is necessary to adjust the $70,000 estimate in two ways. The first is to allow for the fact that the plaintiffs are not to be required to pay again for 150mm of filling. The second is that Mr Finlay required an excavation only to 350mm. Thus, the plaintiffs are required to pay for only an extra 50mm excavation. Mr Tulla's estimates are supported by work sheets showing the cost of filling and excavation so that it is possible to make these adjustments.

114 If the base is constructed to a depth of 500mm, there is an additional cost of $70,000. That amount includes $12,540 to excavate the extra 200mm. I accept Mr Finlay's evidence which requires that the excavation be to a depth of 350mm, with the rest of the 500mm base being above ground level. The total cost in excavating the extra 200mm is $12,540. It is reasonable to conclude that the additional cost of excavation for the extra 50mm is $3,135, being one quarter of $12,540. The plaintiffs must pay the cost of $3,135 as it is a cost associated with a thicker base. The cost of providing 200mm of fill is $57,570. As mentioned above, that amount must be offset by the fact that the plaintiffs have already incurred the cost of filling to provide the initial 150mm base. They are not liable to incur that cost again. The plaintiffs are liable only for one quarter of that cost for the extra 50mm, namely $14,392.50. The plaintiffs must pay the sum of $14,392.50 and $3,135 which must, therefore, be added to the sum of $165,000. The balance of the estimate of $70,000 is to be paid by the defendants.

115 One further set of adjustments must be made. Mr Tulla's estimate of the cost of constructing a base to a depth of 300mm at $165,000 includes the sums of $9,975 and $1,425 for placement and removal of plastic sheeting to protect the soil beneath the pitch from drying out. Those two costs will be incurred no matter what method of construction is adopted. The plaintiffs are, therefore, not liable for those costs. The sums of $9,975 and $1,425 (a total of $11,400) must, therefore, be deducted from $165,000.

116 The calculations of the sum payable by the plaintiffs in light of the above adjustments is as follows:

Cost of new base $165,000.00

less placement and removal of

plastic sheeting during work 11,400.00

153,600.00

plus excavating an extra 50mm 3,135.00

additional filling for 50mm 14,392.50

171,127.50

plus increase in costs to October 2000 8,556.00

$179,683.00

plus increase in costs to October 2002 10,008.00

$189,691.00

The plaintiffs must, therefore, contribute $189,691 to the cost of the new pitch.

117 The cost of constructing a pitch with a base 500mm deep based on Mr Tulla's estimate of costs begins with the cost of constructing a base 300mm thick estimated in October 2000 to be $612,150. To that must be added the sum of $70,000 (a 1998 estimate) which must be adjusted in this way:

Cost of extra 200mm (1998 cost) $70,000

less 150mm excavation not required 9,405

60,595

plus increase in cost to October 2000 3,030

63,625

plus cost of base 300mm thick 612,150

675,775

plus increase in cost to October 2002 37,640

$713,415

Of that cost of $713,415, the plaintiffs must contribute $189,691 because the playing surface has been constructed on a deeper base than that originally specified by the defendants. In the result the defendants must pay $523,724 damages for a reconstructed pitch and playing surface.

119 The cost of this work is not, I think, unduly expensive nor out of proportion to the original cost of laying the playing surface. As the letter from Brown Falconer to the plaintiffs, dated 20 August 1994 shows, the cost of laying the pitch was $443,345. That cost would have increased as a result of increases in building costs. The sum of $523,724 represents an increase in costs in the order of 18 per cent since 1994, which is in line with the increase in costs in that period of eight years. The matter can be examined another way. If the increase in costs from October 2000 to October 2002 of 5.57 per cent is applied to the eight year period from 1994 to 2002, the increase would be approximately $99,000 which compares with the fact that the difference between the damages and the original cost is some $80,379.

120 The plaintiffs had specified a level playing surface constructed to international standards for hockey. They did not get that surface. A pitch of that quality can now be constructed at a reasonable cost. For these reasons, it is reasonable for the defendants to be ordered to pay $523,724 damages to rectify the pitch. For the reasons given earlier, there is no entitlement to interest on this assessment except from the date of trial.

121 That conclusion might be tested another way. The total sum expended in 1994 on the playing surface, lighting and ancillary facilities was $601,404. The wasted expenditure of the plaintiffs would, therefore, exceed the amount which the defendants must pay as damages and substantially exceed it if an allowance is made for the increased cost of doing the original work in 2002.

122 The defendants advance two further submissions on the question whether it is reasonable for the defendants to be ordered to pay damages for rectification of the pitch. Both are based on the life of the playing surface.

123 The only evidence as to the usual life of an artificial surface was given by Mr Finlay. I accept his evidence. Most fields last about fourteen years. A few might have to be replaced after ten years. Others will last 20 years. The life of the surface depends on the extent and degree of the maintenance of the surface and on the amount of use. The effect of his evidence is that, generally speaking, a pitch will last fourteen years. A replacement period of ten years is recommended to users as an appropriate period over which to amortise the cost of the surface. That is plainly conservative accounting advice.

124 The first of the defendants' arguments is that the reconstruction of the pitch should wait until the playing surface has to be replaced. The argument is without merit. At the date of trial, the plaintiffs have had to endure the deficiencies of the existing surface for almost eight years. I do not think they should be required to endure them any longer. Furthermore, delaying the work places the plaintiffs at the risk of having an award of damages liable to erosion as a consequence of an increase in construction costs.

125 Mr Trim QC contended that the plaintiffs should not carry out the rectification work until the playing surface is to be replaced. The surface is not yet due for replacement. Mr Finlay's evidence indicates the playing surface will last some fourteen years. The pitch is now almost eight years old. The plaintiff should not be required to endure another six years of a most unsatisfactory playing surface. In addition, they are losing revenue from competitions which cannot be held on this playing surface. It is entirely unreasonable in my view to require the plaintiffs to wait. There is no evidence to suggest that the surface would not last fourteen years.

126 The second argument is that the plaintiffs should give the defendants credit for betterment. The argument was not clearly articulated. The effect of it appears to be that the plaintiffs will be getting a new playing surface ahead of the time when the surface would have to be replaced. I have already referred to the relevant principles. This is one of those cases where a plaintiff has no other reasonable choice but to replace defective workmanship. Furthermore, the plaintiffs are paying the cost of having a pitch with a more solid base as well as a blinding layer. Although they will be getting a new surface now instead of in about another five years' time, that benefit of no consequence. The plaintiffs will have to replace the playing surface in another 15 years or so and that is so far into the future that the present value of the advantage in replacing it now is of no real benefit to the plaintiffs. There is no proper basis upon which to require the plaintiffs to give a credit for betterment.

127 For the reasons given earlier, it is irrelevant to inquire whether the plaintiffs in 1994 had the financial capacity to pay for a pitch constructed to the standard recommended by Mr Finlay.

128 However, for the reasons which follow, I am satisfied that they could have raised the additional funding required. In October 1988 the extra cost was some $170,000. That cost would have been less in 1994. Although there is no evidence on this issue, it is a fact of ordinary experience that increases in cost from 1994 to 1998 were greater than in the period 1998 to 2002. The increased cost in 1994 would have been less than $150,000. It is difficult in the absence of evidence to determine how much less.

129 It was understandably difficult for Mr Carroll, Professor Spencer and Messrs Spawton and Dew to state now whether the entities they represent would have been in a position in 1994 to raise funding in excess of their respective contributions of $150,000.00 and, if so, how much extra.

130 Plainly, a decision to contribute would depend on how much more funding was required and what would be achieved by that extra funding. There could be little doubt, and I find, that the project was of great importance to each of the three participants. Each had its own reasons for wanting the project to come to fruition and those reasons complemented one another.

131 I find that both the School and the Tennis Club could have raised as least an extra $50,000.00 each. I find that the School would have been prepared to make a contribution over and above the contribution of the others if that would enable the project to proceed. It had at first been willing to do so. If at least one other participant in the joint venture matched its contribution, it would have done so notwithstanding that it was not prepared alone to make a significantly larger contribution. The School's attitude to the question of increasing its financial contribution was coloured by the fact that it was keen to have the facility. It was also anxious to have a playing surface of the highest quality, a matter it saw as a very high priority. It was an integral part of its sporting facilities. However, as Mr Carroll frankly admitted, the additional amount which the School would be prepared to pay would very much depend on what extra work was required and how much it would cost.

132 The evidence shows, and I find, that the Tennis Club had the capacity to raise additional funds from members by debentures. In 1992 it had some 400 members. Mr Dew's evidence was that in 1994 the Tennis Club had 260 members. That seems to conflict with the number stated in Exhibit P2. Whatever the precise number is it clearly had an active membership which increased to 400 again in later years. Most were retired and, according to Mr Dew, would have been able to lend money to the Club. Neither the plaintiffs nor the defendants explored at length the question of how much could be raised in that way. Mr Dew's evidence was that $60,000 to 70,000 could have been raised. I accept that unchallenged evidence. If the Tennis Club had raised an average of $200 per member, not a high amount for it particular membership, that would have realised a total of $52,000, assuming a membership of 260. It is, therefore, not unrealistic to expect that it could have raised the amount estimated by Mr Dew.

133 Thus, it is likely that a sum in excess of $100,000.00 could have been raised. That still leaves a substantial shortfall. The reliance of the Hockey Club on a grant from the State Government leads to the conclusion that in all probability it could not have raised a substantial amount in excess of its contribution of $150,000.00. Mr Spawton suggested it could have raised another $25,000.00. There was also evidence from the Hockey Club which proves that one alternative which was not explored because of the defendants' negligent advice was to invite another hockey club to participate in the venture. If extra funding was required, that would, I think, have been a means which would have been actively explored and was likely to have enabled whatever extra funding was required. In short, there were a number of further avenues to explore. I find the extra funding would have been found.

134 In his cross-examination, Mr Dew agreed that the viability of the proposal was determined by the financial strength of the weakest of the three participants. In a sense that is true. However, the answer overlooks an important factor, namely, that the project was of such importance to at least the School and the Tennis Club that each was, in all probability, willing to pay a higher contribution than the Hockey Club in order to bring the project to fruition rather than see it fail. It must be repeated that all three participants were very anxious to create a hockey and tennis complex with a surface of very high quality.

135 The plaintiffs claim the cost incurred in obtaining surveys to measure the extent of the deformation of the playing surface and to obtain a picture of the extent of deformation in the years following the initial soil movement in June 1995. Where surveys have been conducted for the purpose of determining the extent of the damage suffered and for the purpose of determining what remedial action should be taken, the costs of surveys is allowable as damages. If the surveys are undertaken for the purpose of prosecuting the action, the cost is more properly allowable as part of the costs of the action. I am satisfied that the surveys were for the purpose of determining the extent of the damage and for the purpose of determining what remedies should be undertaken. The surveys were necessary to determine if and when remedial work could be undertaken. It is a cost incurred in the process of rectification: cf Rowlands v Collow [1992] 1 NZLR 178 at 203 -204 and so is a cost incurred in consequence of the breach of contract by the first defendant and the negligent advice of both defendants. See also the discussion in Keating on Building Contracts (7th ed) para 8 - 41. The survey costs total $17,942.95. I allow that sum as damages.

136 The plaintiffs also claim damages for costs they will incur in hiring alternative facilities while the pitch is being reconstructed.

137 Mr Finlay estimated that the work involved in removing the existing surface, excavating to a depth of 350mm, reconstructing the pitch and relaying the new surface would take six to eight weeks. The work must be carried out in a confined space as the playing field is surrounded by a high cyclone mesh fence. Given that damages must be awarded on a once and for all basis, it is proper to adopt the more conservative estimate of eight weeks. In addition, Mr Finlay recommended that, once the blinding layer had been constructed, the work should pause for a period of twelve weeks to enable monitoring of the base and detection of movement. If movement does occur, the blinding layer should be levelled before the shock pad and playing surface are installed. The need for monitoring period depends on the nature of the base. Given the particular nature of the soil conditions beneath this playing surface, it appears to be desirable to provide a further safeguard against future movement of the playing surface. There is no evidence from a geo-technical engineer which questions the suggested monitoring period. Mr Finlay was not challenged in cross-examination on this issue. I find, therefore, that a monitoring period of twelve weeks is reasonable. Thus, the total delay will be a period of twenty weeks. They will be entirely deprived of that facility during the period of reconstruction. They will have to incur the cost of hiring alternative facilities.

138 I examine first the loss to the Hockey Club. The senior teams at the Hockey Club already use other facilities for training. Professor Spencer estimated that it will be necessary to hire other facilities on which junior teams can train and play for thirteen hours in each week. The cost of hiring facilities at another club is $60 per hour. At The Pines Stadium operated by Hockey SA the cost is $120 per hour. Given its duty to mitigate its loss, the Hockey Club is not entitled to be indemnified for the cost of hiring a pitch at The Pines Stadium. On that basis, damages would be in the sum of $15,600 being thirteen hours per week for twenty weeks at $60 per hour. The evidence was that the most suitable time to reconstruct the pitch was in autumn or spring. If reconstructed in autumn, the Hockey Club will have commenced training. If reconstructed in spring, the Club may be nearing the end of its season. In the absence of any detailed evidence on these issues, I allow only about two-thirds of the sum of $15,600; say $10,000.

139 The Tennis Club uses the courts in both summer and winter. The summer competition is from October to May and the winter competition from June to September. During the summer, the courts are used four nights in each week and on Tuesday afternoon. During the winter season, the courts are used two nights in each week. The Tennis Club will have to hire courts to enable their competitions to continue. As the most suitable time to reconstruct the playing surface is in autumn or spring, in all probability, the reconstruction will occur in either spring or autumn during the period October to May. The cost of hiring courts at the Roselands Centre is $2600 per week and at the Millswood Tennis Club $1800 per week. As the Tennis Club must mitigate its loss, it can recover only at the lower rate. There is no evidence as to the cost of hiring the courts for four nights and on Tuesday afternoons. I allow four sevenths of the cost of hiring the courts at Millswood, an amount of $1,028.60, say $1,030 per week. Allowing for a reconstruction period of twenty weeks, the result is $20,600.

140 There is no claim for goods and services tax on these hiring costs. I assume that the claim includes that tax.

141 The plaintiffs claim general damages for the disturbance and inconvenience consequent upon the failure of the defendants to advise them appropriately. They have had not only to endure a substantially deformed surface but have had the inconvenience of having to make alternative arrangements for their sporting activities. They have had to sweep water from the surface or put up with it. They have had to put up with erratic ball movement in both hockey and tennis. They have had the limited use but not the enjoyment of this playing surface. As a general rule, damages may be recovered for inconvenience, discomfort and distress where the contract is for work to the plaintiff's house but not where the work is for a commercial enterprise. However, in Auburn (supra) disturbance was allowed in the sum of $20,000 for the reduction in efficiency in losing the intended council depot. That was a substantial sum in 1973. In my view, it is proper to allow an award in this case. The purpose is not entirely commercial and the inconvenience has been substantial.

142 In England, it has been said that awards of general damages under this heading should be "modest" or "restrained": Perry v Sidney Phillips & Son [1982] 1 WLR 1297 per Lord Denning MR at 1303; Watts v Morrow [1991] EWCA Civ 9; [1991] 1 WLR 1421 per Bingham LJ at 1445. In Australia those epithets have not met with approval. General damages, which are considered to be fair and reasonable, may be recovered for the physical inconvenience and mental distress directly related to the inconvenience caused by the breach of contract: Boncristiano v Lohmann [1998] 4 VR 82 at 94 - 95 and the cases there cited. The plaintiffs have had to endure substantial inconvenience over several years in consequence of the breach. I think an award of $30,000 is a very conservative assessment of damages for that loss.

Cost of Rectification 523,724.00

Extra cost of shock pad and surface 20,500.00

Survey costs 17,942.95

Hire of alternative facilities

Hockey 10,000.00

Tennis 20,600.00

General damages 30,000.00

$622,766.95

Of that sum, interest is payable only on the survey costs and the general damages. The survey costs were incurred between 31 August 1995 and 1 November 2000. The most convenient course is to award a lump sum for interest. I allow $10,500 interest on the survey costs. The general damages includes compensation for years of inconvenience and disturbance. Again, the most appropriate course is to fix a lump sum for interest. I allow $11,000 for interest. I allow interest on the general damages. The total award for interest is $21,500.

144 I will hear the parties on the question of interest on the award and on costs. I will also hear the plaintiffs on the question whether the whole of the award is payable to the first plaintiff.

SOUTH PARKLANDS HOCKEY & TENNIS CENTRE INC v BROWN FALCONER GROUP PTY LTD No. SCCIV-97-286 [2004] SASC 81

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Judgment (180 paragraphs)

SOUTH PARKLANDS HOCKEY & TENNIS CENTRE INC v BROWN FALCONER GROUP PTY LTD No. SCCIV-97-286 [2004] SASC 81 (24 March 2004)

Parties

Cases Cited (5)