Wyong Shire Council v Neuman

SOLICITORS : Ebsworth Lawyers for plaintiff Clarke Kann Lawyers for defendant

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST

55093/2008 Wyong Shire Council v Neumann Contractors Pty Limited JUDGMENT 1 His Honour: This is the hearing of a separate question for determination in these proceedings. The separate question arose as a result of a decision of McDougall J on 30 October 2008 and I made an order for a separate question in accordance with his decision. Before referring to the separate question I will first set out some background to the proceedings that is helpfully set out in the parties submissions, which I will use with some modification. 2 The defendant Neumann Contractors Pty Limited is the contractor pursuant to a contract with the plaintiff Wyong Shire Council for the rehabilitation of the Bateau Bay Landfill, Passage Road, Wyong, New South Wales. 3 The plaintiff is the Principal under the Contract. The present Superintendent's Representative is the Manager of Contracts and Special Projects of Wyong SC, John Tennant. Works commenced in or about March 2007 and have progressed. 4 A dispute has arisen between the parties concerning the subsurface drainage works and in particular: 1. the requirements of the Specification in respect of the gravel drainage layer; and 2. the material to be used for the drainage layer. 5 The works under the Contract include the supply of materials and construction of sports fields on the rehabilitated landfill area. The site of the works is an area of approximately 5 hectares in area. Of this area, there are to be two playing surface areas of approximately 1.8 hectares being the AFL oval and the junior soccer fields 6 The scope of the works under the Contract generally involves: 1. Re-levelling of the existing landfill waste in each of the Southern and Northern landfills; 2. The application of a geo-synthetic clay liner over the waste to "seal" the waste and minimise odours from the Site; 3. The compaction of the waste to minimise settlement of the waste; 4. The application of various layers of material (known as fill) over the GCL to ultimately form a smooth and level surface; and 5. The application of turf to form various playing surfaces for sporting fields and the installation of various surfaces to form pathways, roads, garden beds, etc. 7 The last two matters are detailed on the plans as consisting of: (a) Turf; (b) Topsoil as required by the landscape Specification; (c) A geotextile layer; and (d) A drainage gravel layer with subsoil drains. 8 Together, these materials form the sports playing field. 9 The drainage layer is specified as 300mm in depth and is covered by a geofabric. Within the drainage layer is a network of PVC subsoil drainage pipes. The placement of the material for the drainage layer is specified as requiring "low ground pressure plant", in a manner which "prevents damage to the GCL (the geocomposite layer). 10 During the course of the works, the defendant proposed the use of a product known as Envir-O-Agg as a suitable medium for use under Specification 217. The Superintendent and the plaintiff have rejected the use of the Envir-O-Agg as it asserts that the material does not conform to the requirements of Specification. 11 That is the issue which prompted the present separate question which is; "1. Whether the Enviro-Agg material complies with the Specification; 2. If not, in what way(s) does the Enviro-Agg material not comply with the Specification?" 12 The relevant part of the Specification is as follows "GRAVEL DRAINAGE LAYER 217.14 MATERIAL 1. Gravel drainage layer material shall consist of a natural, processed material which at the time of incorporation into the works is capable of being placed in accordance with the specified requirements to form the subsurface drainage layer. 2. Gravel drainage layer shall be clean, durable washed gravel, with a max particle size of 10mm, with 90% by weight between 2mm and 5mm, and with less than 3% by weight fines (i.e., material passing the 0.075 mm sieve) 3. Gravel drainage layer used in the subsurface drainage layer shall have a permeability of greater than 1x10-3 m/s. 4. Gravel drainage layer materials shall not be placed until the Contractor has produced documentary evidence to the Superintendent that these materials conform to the requirements of the Specification. Quality control and testing shall be carried out in accordance with Specification 102 - QUALITY CONTROL REQUIREMENTS. This action constitutes a HOLD POINT . The Superintendent's approval of the submitted details of the material is required prior to the release of the hold point. 5. All gravel drainage layer material shall be sourced from an off-site source and approved by the Superintendent prior to its use. 217.15 PLACEMENT AND COMPACTION 1. As shown on the drawings, the Gravel drainage layer material shall be placed to form the subsurface drainage layer of the capping system. The subsurface drainage layer shall have a nominal thickness of 300 mm 2. The Gravel drainage layer material will be placed directly on the GCL. The Contractor shall prevent damage to the GCL and shifting of the pipes during this activity. 3. Contractor shall ensure that Gravel drainage layer material placed on the GCL meets the following constraints to prevent damage to the liner: a. Gravel drainage layer material shall be placed on the GCL in a manner that prevents damage to the GCL. b. Only low ground pressure plant shall be used to spread the Gravel drainage layer material on the GCL. c. The low ground pressure plant shall at all times maintain a minimum Gravel drainage layer material thickness of 150mm beneath their tracks. The plant is not permitted to make hard starts, stops, or turns. d. Placement of Gravel drainage layer material shall proceed immediately following the placement and inspection of the. GCL,

e. The Contractor shall inspect the Gravel drainage layer material placement frequently for conformance with these requirements and shall keep written inspection notes.

f. The Contractor shall repair at his expense, and to the Superintendent's satisfaction, any damage to the GCL occurring during Gravel drainage layer material placement. 4. Compaction of the Gravel drainage layer shall be limited to that achieved by the action of the low ground pressure plant used to spread the material. No additional compaction shall be performed unless directed by the Superintendent." 13 The Envir-O-Agg filter material is part of a range of "Envir-O-Agg" products described by the supplier, Blue Circle as: "A range of manufactured sands and aggregates produced specifically from the coarse by-product of coal fired Power Stations (commonly referred to as "bottom ash")". 14 As supplied the material has a grading particle size distribution of between 7 mm to 2 mm. This is outside the range described by the Specification and the parties are agreed that for the purposes of this question that the material which will be supplied will also be graded by a wet sieve method to have particle sizes within the terms of the Specification. In the course of the hearing before me this modified material was referred to as processed Envir-O-Agg. 15 The defendant called three experts. They were Dr Burman, Mr Young and Mr Bowler. The plaintiff called one Mr Davies. 16 In this hearing Dr Peter Redman was appointed as a person to assist the court pursuant to rule 31.54 of the Uniform Civil Procedure Rules. Dr Redmond sat with me on the bench during the hearing of the matter and cross-examined various experts after others had cross-examined them. After the conclusion of the hearing I had his assistance for the purpose of collating the evidence but not for the purpose of expressing any opinion on the subject matter of the hearing. 17 There were a number of different aspects on which there was a difference of opinion. Natural, processed material 18 Clause 217.14.1 of the Specification requires that the gravel drainage layer material shall consist of "a natural, processed material". Mr Davies in his report (exhibit B) set out some definitions of the meaning of the descriptive terms in the Specification for the gravel drainage layer in accordance with accepted civil engineering usage and understanding. That table is as follows: TABLE 1 - Definitions Derived from or constituted by nature or natural geological processes. Occurring as insitu bedrock "natural"' or as rock material in various transported forms having been derived from bedrock, namely alluvial and glacial deposits, scree and talus. "processed" Washed, screened, crushed, sorted, treated as may be specified, blended. "clean" Not containing clay lumps, organic matter, friable particles, wood. or other foreign and "deleterious" materials. Able to retain material properties, for example (but not limited to) strength, size, dimension and shape, colour. "durable" Able to withstand agents of modification or destruction, able to resist wear and decay. Will have test properties that conform to nominated limits or requirements stated in various Australian Standards, where such tests are specified, according to experience indicating reliable correlation of the test with durable service life of the rock material. "washed" Immersing, flooding or spraying the aggregate with water to remove dust, fines, clay and like materials The terms "gravel" and "sand' in engineering use have a meaning based on the particle size of the material. These are defined in the Australian Standards using the Unified Classification System as follows: gravel has particles in the range 2mm -60mm sand has particles in the range 0.06mm - 2 mm "gravel" For the purpose of interpreting the specification where it refers to "gravel', the engineering definition above is adopted. A similar meaning of the word "gravel' is also conveyed by the common usage of the term as contained in The Concise Oxford Dictionary 5th Ed, namely: "Coarse sand and small water-worn or pounded stones....". Such constituents are broadly consistent with the engineering definition of "gravel'.

19 Of interest in the present question are the definitions of natural and processed. Although the definition of natural to which Mr Davies has referred is one which various other experts accept, I note that in the Shorter Oxford Dictionary one of the meanings of the word "natural" is as follows: "6. Existing in, or formed by, nature; not artificial 1568." 20 Mr Davies' view was that by virtue of its origin it was a by-product of an industrial process, Envir-O-Agg is not a natural material. He accepted that it was processed. 21 In paragraph 8 of his report Dr Burman had the following to say on the question under consideration. "Natural, processed material The specification calls for a "natural, processed material" which I understand to be a naturally occurring material that has subsequently undergone some form of processing intended to modify the natural material such that it thereafter confirms to other specific requirements. It is my understanding that Enviro- Agg is produced from the coarse by-product of coal fired power stations, commonly referred to as bottom-ash. Hence, Enviro- Agg is the product of coal processed by firing in power station boilers and subsequently processed by recovery and grading of the ash residue. Whether this qualifies as a natural, processed material depends on the stage at which the naturalness of the base material is judged and to the extent of processing intended. Coal is a natural material, bottom-ash is not. If coal is considered to be the base material and combustion is accepted as a treatment process then Enviro-Agg is a natural processed material; if bottom ash is taken as the base material then Enviro-Agg is not. Whether or not Enviro-Agg meets this requirement of clause 217.14 is a matter of semantics and to the extent of treatments that can be encompassed within the intent of processes." 22 In cross-examination Dr Burman was asked whether he regarded Envir-O-Agg as being a natural product and he said that he was somewhat ambivalent in that regard. He did not think the term was well defined and that it could be interpreted in either way as set out in his report. He accepted that bottom ash was not a natural product. 23 Mr Young gave evidence that Envir-O-Agg was not a natural processed material. He also added that the issue of material being natural is not considered relevant as it did not have measurable engineering properties which would affect performance. 24 Mr Bowler gave evidence that because Envir-O-Agg material was produced as by-product of coal (a natural material) and was processed by burning in a coal fired power station that it could be considered as natural processed material. He has adopted one of the alternatives postulated by Dr Burman. 25 Cross-examination of Mr Bowler exposed the conceptual difficulty of determining whether a particular material was a natural processed material. He was taken to the question of whether silk spun by a silk worm would lead to a gown made of silk being a natural material. He also was referred to the illustration of whether a sheet of paper was a natural product because it started life as a tree. Mr Bowler could not give an example of a material that would not be natural given that reasoning. 26 In my view this approach does not accord with the proper grammatical reading of the requirement in the Specification. The material, which is to be placed, has to be "a natural material" and it also must have some other attributes involved in the notion of processing. It has to be such a material at the time of incorporation into the works and force has to be given to the use of the article "a" in the expression. One is not placing coal as part of the drainage layer. In my view Envir-O-Agg is not "a natural, material" although plainly it is processed during the course of its supply for use in this application. 27 It was the defendant's contention that as the word "natural" has no clearly defined meaning it must be viewed in the context of what it may possibly add to the performance characteristics of the drainage medium. This is clearly a reference to the requirement for durability and it was submitted that the concept of "natural" was not important or de minimis. I will return to this argument later. Clean, durable washed gravel 28 So far as clean was concerned Mr Davies agreed from an inspection of the material that the material could be described as clean. The other experts did not disagree on this aspect and I accept it is clean. 29 So far as the requirement for washed is concerned Mr Davies in his report said that it was washed but this appears to be simply an acceptance of a statement by the contractor to that effect. Neither Dr Burman nor Mr Bowler addressed this matter and the only positive evidence was that given by Mr Young. In cross-examination he gave evidence that Envir-O-Agg material was washed through a dredging process at the Eraring Power Station tailings dam so it is actually cleaned with water. It is also wet screened before going to stock pile. In further questioning he described wet screening as a washing mechanism which has sprays on it to aid the material going through the screening vents. 30 The material is also produced at Vales Point Power Station. Mr Young did not know whether similar treatment was applied at Vales Point. On the assumption that the product is sourced from the Eraring supply I would conclude on the evidence that it is washed. 31 There was agreement amongst the experts that based on the particle size distribution of the processed Envir-O-Agg the material could be described as gravel. 32 The critical matter in this clause of the Specification is of course the requirement that the gravel drainage layer shall be "durable". There is no definition of durable in the Specification nor does the Specification refer to any required tests to establish durability. The Shorter Oxford Dictionary defines durable as "capable of continuing in existence; persistent; permanent …able to withstand change, decay, or wear…able to endure toil". Unlike the definition offered by Mr Davies there is no reference to retaining material properties such as strength, size and dimension. As the evidence demonstrated there were two tests which were regarded as indicators of durability, namely, the Sodium Sulphate Soundness test and the Los Angeles Abrasion test. Mr Davies in his report gave his definition of durable by including a reference to a specification of rock materials for drainage filters in dams where durability is a critical matter. His comments on durability appear at 5.5, 5.7 and 5.8 of his report which are as follows: 5.5 As an example of the specification of rock materials for drainage filters in dams, where durability is critical, Fell, MacGregor, Stapledon & Bell (in Geotechnical Engineering of Dams) include requirements for: "dense, hard durable aggregates with similar requirements to that specified for coarse aggregates", and "manufactured by crushing, washing screening and recombining sand-gravel deposits and/or quarried rock", and drainage filter materials "must not change in gradation in time, nor have any apparent or real cohesion or ability to cement as a result of chemical, physical or biological action".

Impact of the Specification Requirements Durability 5.7 The requirements stated in 5.5 above are universally common in specifications for engineering design and construction using rock materials where durability of the rock needs to be guaranteed. The requirement for durable rock in the Gravel Drainage Layer for the Bateau Bay project is no different. This is to ensure the filter action (preventing loss of fine material from one or more of the drainage layers), and the permeability (the ability of the layer to drain the water at the required rate) are both maintained.

5.8 The Enviro-Agg has a distinctly lower particle strength (based on hand assessment) compared with a natural rock material (eg, crushed igneous rock as supplied from Boral Emu Plains). I would have a concern that the placement and trafficking of the Enviro-Agg during construction will result in particle breakdown and generation of additional fines, which would adversely affect the permeability of the layer through clogging of the voids in the drainage layer, and/or at the slot openings in the drainage pipe.

The weakness of the Enviro-Agg particles is demonstrated in the report of Turfgrass (in JT3-W, page 140) where (under the heading Reservations) the firm reports that the fly ash "seemed to be relatively soft" and a simple test indicated that fines are easily generated by mild self abrasion. 33 It can be seen from his comments in 5.8 that this raises a fundamental matter regarding the interpretation of the Specification namely whether the requirements of the Specification apply to the material as placed or apply to the material immediately prior to its placement and the demonstration of compliance with 217.14 of the Specification which is defined as a hold point. 34 His reference to the definition in 5.5 from Professor Fell's work is more in the nature of an implied term in the contract rather than the proper construction of the term "durable" where it appears in the Specification. 35 I will first deal with the matter considering its position prior to placement. The Sodium Sulphate Soundness test is one that assesses the susceptibility to breakdown under wetting and drying with the added involvement of sodium sulphate in the solution used for soaking. The sodium sulphate penetrates fine cracks in the aggregates and expands on crystallisation in the drying phase breaking apart the aggregate particles. There were tests of this nature carried out which produced results at 10.1% and 6.4%. Although Mr Davies initially took the view that they did not meet the requirements described in the reference work to which he referred he conceded that, with the processed Envir-O-Agg, it certainly met the requirements even for the most severe conditions. Mr Bowler also agreed that the tests complied with these limits. 36 The Los Angeles Abrasion test is one which assesses the susceptibility to breakdown under mechanical action of placement and rolling in the construction phase. As agreed by Mr Davies this description incorporates a consideration of the effect of placement of the material. It appeared in cross-examination of Dr Burman that there had been a Los Angeles Abrasion test with a result of 46%. Apparently the usual limits for placement at dams are between 40% and 45%. However, as explained by Dr Burman that was for use in dams where there is heavy mechanical compaction of the dam filter mechanism. In the present case the Specification did not call for such compaction and his view was that he would regard it also as appropriate to indicate durability given the different environment for placement in the present matter. 37 The problem about placement and compaction is of course that those very actions may affect the particle size and ultimate durability given the strength of the material. 38 This was illustrated by questions put to the witnesses about the strength of the material and the demonstration of being able to crush the material between one's fingers. Dr Burman did not equate strength with durability. He regarded the strength of the material as not relevant to durability. Mr Young and Mr Bowler took a similar view. Mr Davies views about durability are founded upon strength and the effects of placement and trafficking. 39 I return to the question of whether or not compliance with the Specification has to be demonstrated before or after placement of the material. As is apparent from the first clause of 217.14 this addresses the actual drainage layer material and contains the requirement for it to be "a natural processed material". There is another requirement that the material is capable of being placed in accordance with the specified requirements to form the subsurface drainage layer. In contrast clauses 2 and 3 of 217.14 make reference to the gravel drainage layer. In the second clause the gravel drainage layer is required to contain the relevant durable gravel with a particular particle size. In the third clause it is once again the layer rather than the material which is to have the relevant permeability greater than 1x10-3 m/s. 40 The plaintiff's submission was that clause 217.14.1 of the Specification should be read as: "material which at the time of incorporation into the works is capable of being placed such as to ensure that it is in accordance with the specified requirements to form the subsurface drainage layer."

And that when read this way it would pick up the second and third clauses as part of the specified requirements. 41 I have earlier referred to the requirement in the fourth clause of 217.14 which is described as a hold point. This is the production of documentary evidence that the materials conform to the requirements of the specification. The relevant parts of Specification 102 are as follows: Gravel Drainage Layer Source

Grading 1 contract 1 per 2000 tonnes placed AS 1289.3.6.1 Clause 217.14

Gravel Drainage Layer construction Deleterious 1 contract 1 per source Visual Inspection Clause substances 217.14 Permeability 1 contract 1 per source AS 1289.6.7.1 Clause 217.14 Prevent Material placed four times per day Visual inspection Clause damage to underlying GCL each day And documentation 217.15

42 The first of these makes reference to the gravel drainage layer source and the second refers to inspection during the actual construction for the purpose of preventing damage to the underlying GCL. That is not a requirement directed towards preventing damage to the drainage layer material in the course of compaction. 43 It is interesting that in the third clause of 217.14 there is reference to the two different concepts of "gravel drainage layer" and "sub-surface drainage layer". The first of these expressions is also used in clause 2. The later is referred to in clause 217.15.1 and is shown diagrammatically in the drawings. 44 The first requirement in Specification 102 is "gravel drainage layer source" and this includes permeability as a required test for each supply contract. So too are tests for cleanliness and particle size. Bearing in mind that in clause 217.14.4 materials are not to be placed until there is evidence that the material conforms to the requirements of specification it seems to me that the specification requirements in clauses 2 and 3 of 217.14 are specification requirements for material prior to placement. The clauses should be construed as if the word "material" were inserted after the word "layer" where first occurring in the same way that it appears in clauses 1, 4 and 5. 45 The plaintiff's suggested construction of clause 217.14.1 is not necessary as the clause in its existing form can be read as a reference to placement requirements under 217.15. 46 It is notable that in 217.15 of the Specification the various requirements there are for the purpose of preventing damage to the liner or GCL. There is no consideration of the effects of the spreading mechanism on the properties of the material. 47 The Specification, having regard to the testing regime and approval requirement seems to be directed to determining: (a) the appropriateness of the material before placement and (b) the placement in a way that would not affect the GCL.

It does not deal with the material requirements once in situ. Given that there are tests such as the Los Angeles Abrasion test, which could have been used to determine the appropriateness of the material after placement, it seems that this is a deliberate framing of the specification to omit such a requirement. Accordingly, I am satisfied that the requirements in clauses 1, 2 and 3 of 217.14 have to be met in respect of the material prior to its placement. 48 I return to the question of durability. As there is no specified test to determine that matter and such tests as have been postulated by the experts as appropriate to determine durability, namely, the Sodium Sulphate Soundness test do indicate that the proposed material is durable. Mr Davies views are contrary to the interpretation of the specification and depend upon a concept (strength), which is not part of the specification. Accordingly I am satisfied that it is durable. If the appropriate time was after placement the Los Angeles Abrasion test would also indicate that it is durable. Particle size distribution of the gravel 49 In respect of the compliance with the requirement that the gravel drainage layer material shall have a "max particle size of 10mm, with 90% by weight between 2mm and 5 mm and with less than 3% by weight fines" there was no disagreement that the processed Envir-O-Agg which would be supplied would meet this requirement prior to placement. In addition when cross-examined whether placement could still be handled within the terms of the 10% tolerance allowed for in this part of the Specification Mr Davies indicated that he had done no testing to check but he expressed concerns as to whether it would meet the requirement. The other experts could not shed any light on the extent of any breakdown which might occur during the placement in accordance with the Specification. However this is, as I have found above, not a requirement of the Specification. Permeability of the gravel 50 This requirement is quite specific being that the "subsurface drainage layer shall have a permeability of greater than 1x10-3 m/s". There were permeability tests carried out on samples in 2005 and 2007. The results ranged between 0.81x10-3m/sec and 3.9x10-3m/sec . Later testing by GHD in November 2008 gave a value of 3x10-3m/sec on a sample between 4.754mm and 1.18mm in size and loosely placed. Apparently this sample complied with the Specification grading distribution requirement in contrast to the earlier samples. 51 The test reports in 2008 showed that the compaction was "loose placement" and this no doubt was the interpretation of the Specification requirements for compaction. A copy of the Specification had been supplied for the test reports. Earlier tests had used what was described as "standard" compaction. Considering the terms of clause 217.15.4 "loose placement" is probably more appropriate. 52 Faced with these wide variations, including those that plainly do not meet the Specification, the evidence of Dr Burman was that there was effective compliance with the Specification. With regard to the difference in grading Dr Burman expressed the following views:

"REDMAN: I have a question of Dr Burman, with reference to the AST and the GHD permeability test, you have given consideration to the samples that were tested?

REDMAN: What is the outcome of that general assessment in terms of the relationship between what is being tested and what is proposed?

BURMAN: I don't believe there is a unique relationship between the grading and the permeability so they are simply results of laboratory tests, and I don't think that the fact that there is a; particular grading and the fact that the result of one by ten to the minus three, and three by ten to the minus three are at all very far apart in terms of what permeability means. So therefore you would have had to provide something further for me to take their comment more seriously than just a passing remark.

REDMAN: Would you expect permeability to increase or decrease if the sort of fraction that is present in these samples was absent?

BURMAN: It may decrease but it may not, it depends on the proportions and on the packing. It is more likely to be affected by the material at the lower end of the grading and specifically there is a tentative relationship with the proportion of material passing the 10 percent."

53 Mr Young expressed the opinion that there was compliance "for all practical purposes". He referred to the differences in test procedures for different laboratories as perhaps a possible explanation for the differences. 54 The defendants submissions on this approach were as follows: 9. Subject to the proper construction of the Specification, the issue of whether "Processed Enviro-Agg" complies with the Specification is an issue of fact and degree. The law does not concern itself with "minor departures", the concept of "de minimis non curat lex". The "de minimis" principle is often dealt with in a construction context by reference to the concept of substantial compliance. 10. Therefore, the defendant respectfully submits that even if the Court were to determine that "Processed Enviro Agg" did strictly comply with every aspect of the Specification, the Court could still determine that it did comply if it were also of the view that any departure was minor, and inconsequential to the performance of the material as a drainage medium in the proposed application. "

55 They referred in submissions to the following quote from Hudson's Building and Engineering Contracts 11th ed (1995) Sweet & Maxwell at p 485 in these terms: "Also, Romer U.J. indicated in the same case that a builder renouncing his obligations could not claim substantial performance. Similarly, in Dakin v. Lee there are passages to the same effect. . Where, however, there has been apparent completion in the sense that "the work though finished' or done' is in some respects not in accordance with the contract" or "a man fully performs his contract in the sense that he supplies all that he agreed to supply but what he supplies is subject to defects of so minor a character that he can be said to have substantially performed his promise" Dakin v. Lee and Hoenig v. Isaacs show that the doctrine will apply. Even in such a case, however, it is submitted that, in accordance with the overriding principle suggested above, there must be no element of delib­erate disregard of his obligations by the contractor, if not in the com­mission of the original breach then at least, if detected in time, in refusing to remedy it. One class of deliberate departure from the contract, however, may nevertheless qualify as a sufficient substantial performance, it is submit­ted. Exact performance of all details of a specification is not infrequently impossible in construction contracts because of some subsequent event or factor beyond the control of the contractor, for example, a particular material or product may no longer be obtainable, or the design may prove difficult or even impossible to construct due to unexpected physical con­ditions in cases where the contractor is responsible for completion under the contract. The duty to mitigate damage by a technical breach of con­tract (as, for example, by substituting a different available material or varying the work to overcome a difficulty) may be consistent with bona fide performance of the contract." 56 This has to be seen in the context of what is the nature of the doctrine of substantial performance. It is a doctrine, which allows the contractor to recover the sum due to him under an entire contract notwithstanding that there have been some defects or non-compliance with the Specification. What I am concerned with at the moment is not whether the contractor can recover but whether there is compliance with the Specification. In that area of discourse there is no room to maneuver. At the end of the contract when a contractor is claiming substantial compliance doing so of its own nature involves acceptance of non-compliance with the Specification. In my view the doctrine has no application to the present question and the court should not embark on a hypothetical determination of what will only be a relevant question at the end of the contract. There may be by then many more defects to consider in determining whether there has been substantial compliance. It was for this reason no doubt that McDougall J was reluctant to embark on a consideration of further downstream positions at this stage of the proceedings. 57 If one has to have regard to all the tests I would conclude that compliance with the Specification has not been demonstrated. If it is appropriate to have regard to only the 2008 tests then compliance has been demonstrated. The relevant difference is that it is on material that meets the specified grading requirements. Dr Berman's evidence does not however suggest that this fact will cause a different result. It may do or it may not. 58 It is clear that the 2008 results were obtained a short time before the hearing and after the dispute arose between the parties. That dispute arose because on 4 September 2008 the plaintiff had sent to the defendant a show cause notice to comply with the directions relating to the material. There was a response by the defendant in detailed terms refuting the notice and referring to the previous correspondence containing the test results. Accordingly the 2008 results were after that particular dispute arose. However the parties had for the purpose of resolving the dispute agreed on one variation to the factual circumstances namely the use of the processed Envir-O-Agg material to meet the grating requirements. They have not however so far as I am aware agreed to a factual variation in respect of the existing dispute namely that the relevant permeability test was the 2008 result. 59 It is important to remember the limits to which the Court can go in determining a preliminary question. In Bass v Permanent Trustee (1999) 198 CLR 334 the Court had the following to say on this matter. " [45] The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy. In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd , Kitto J said: "[J]udicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons ... [T]he process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which ... entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist." [46] Similarly, Professor Borchard in his pioneering work, Declaratory Judgments stated: "A judgment of a court is an affirmation, by the authorized societal agent of the state ... of the legal consequences attending a proved or admitted state of facts. It is a conclusive adjudication that a legal relation does or does not exist. The power to render judgments, the so-called `judicial power,' is the power to adjudicate upon contested or adverse legal rights or claims, to interpret the law, and to declare what the law is or has been. It is the final determination of the rights of the parties in an action which distinguishes the judgment from all other public procedural devices to give effect to legal rights." (Footnotes omitted.) [47] Because the object of the judicial process is the final determination of the rights of the parties to an action, courts have traditionally refused to provide answers to hypothetical questions or to give advisory opinions. The jurisdiction with respect to declaratory relief has developed with an awareness of that traditional attitude. In In re F (Mental Patient: Sterilisation) , Lord Goff of Chieveley said that: "a declaration will not be granted where the question under consideration is not a real question, nor where the person seeking the declaration has no real interest in it, nor where the declaration is sought without proper argument, eg in default of defence or on admissions or by consent." By "not a real question", his Lordship was identifying what he called the "hypothetical or academic". The jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law and such a declaration will not be hypothetical in the relevant sense. Barwick CJ pointed this out in The Commonwealth v Sterling Nicholas Duty Free Pty Ltd . However, that is not the present case. [48] It is true that some have seen the use of the declaratory judgment as little more than the giving of an advisory opinion. However, one crucial difference between an advisory opinion and a declaratory judgment is the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties. Thus, the authors of one recent text on declaratory judgments emphasise that, where the dispute is divorced from the facts, it is considered hypothetical and not suitable for judicial resolution by way of declaration or otherwise. They say : "If ... the dispute is not attached to specific facts, and the question is only whether the plaintiff is generally entitled to act in a certain way, the issue will still be considered theoretical. The main reason for this is that there may be no certainty that such a general declaration will settle the dispute finally. Subsequent to that declaration a person (the defendant himself or someone else) may be adversely affected by a particular act of the plaintiff. It may then be doubtful whether this act is covered by the declaration. In such a case the affected person will probably be entitled to raise the issue again on its special facts. Indeed, such a declaration will in effect be a mere advisory opinion." [49] As the answers given by the Full Court and the declaration it made were not based on facts, found or agreed, they were purely hypothetical. At best, the answers do no more than declare that the law dictates a particular result when certain facts in the material or pleadings are established. What those facts are is not stated, nor can they be identified with any precision. They may be all or some only of the facts. What facts are determinative of the legal issue involved in the question asked is left open. Such a result cannot assist the efficient administration of justice. It does not finally resolve the dispute or quell the controversy. Nor does it constitute a step that will in the course of the proceedings necessarily dictate the result of those proceedings. Since the relevant facts are not identified and the existence of some of them is apparently in dispute, the answers given by the Full Court may be of no use at all to the parties and may even mislead them as to their rights. Courts have traditionally declined to state -- let alone answer -- preliminary questions when the answers will neither determine the rights of the parties nor necessarily lead to the final determination of their rights. The efficient administration of the business of courts is incompatible with answering hypothetical questions which frequently require considerable time and cause considerable expense to the parties, expense which may eventually be seen to be unnecessarily incurred. " 60 I should not therefore embark on the determination of something outside the relevant dispute which would be the case if I determined the matter only on the 2008 result. Accordingly, I am of the view that the material does not comply with the permeability requirements of the Specification. 61 Returning briefly to the meaning of the word "natural". The defendant advanced the argument, to which I referred in paragraph 27 of the judgement, that the meaning of the term "natural" must be viewed in the context of what it may possibly add to the performance characteristics of the drainage medium, specifically durability. On the defendants reasoning it followed that if the term "natural" has no bearing on the durability as required by the Specification then the concept of "natural" in itself was not important or de minimis. For the same reasons as expressed in relation to permeability this notion of substantial compliance does not apply in determining the present question; whether the Envir-O-Agg complies with the Specification. For the reasons expressed earlier, it is my view that Envir-O-Agg is not a natural material as required by the Specification. 62 I answer the questions as follows:

Question 1. Whether the Enviro-Agg material complies with the Specification;

Question 2. If not, in what way(s) does the Enviro-Agg material not comply with the Specification?

Answer 2. The material is not a natural material and it does not comply with clause 217.14.3 of the Specification. 63 I will hear the parties on costs.

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