Abigroup Contractors Pty Ltd v Sydney Catchment Authority

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NEW SOUTH WALES COURT OF APPEAL

CITATION:      ABIGROUP CONTRACTORS PTY. LTD. (ACN 000 201 516) v. SYDNEY CATCHMENT AUTHORITY [2004]  NSWCA 270

FILE NUMBER(S):
40784/2003

HEARING DATE(S):               29/03/04, 30/03/04

JUDGMENT DATE: 09/08/2004

PARTIES:
Abigroup Contractors Pty. Ltd. (ACN 000 201 516) (Appellant)
Sydney Catchment Authority (Respondent)

JUDGMENT OF:       Beazley JA Ipp JA Tobias JA   

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S):          55045/2001

LOWER COURT JUDICIAL OFFICER:     Nicholson J

COUNSEL:
D.F. Jackson QC/S.A. Kerr (Appellant)
S.R. Donaldson SC/M. Dempsey (Respondent)

SOLICITORS:
Clayton Utz (Appellant)
Phillips Fox (Respondent)

CATCHWORDS:
PROCEDURE - Supreme Court Rules Pt 72 r 13 - Adoption of Referee's Report.
APPEALS - Nature of Appeal from a hearing under Pt 72 r 13 - An appeal from a judge's decision pursuant to this rule is limited to review of the judge's decision to adopt, vary or reject the referee's report - Failure to deal with party's case - Appealable error.
TRADE PRACTICES - Causation - Reliance - Whether information merely passed on - Loss or damage "by" conduct of another person - Causation is the common law practical or common-sense conception of causation - Reliance is an aspect of causation - Express negative statement that something does not exist - It is not necessary in order to prove reliance for there to be an evidentiary statement to the effect that the representation was relied on.

LEGISLATION CITED:
Fair Trading Act 1987 (NSW)
Sydney Water Management Act 1998 (NSW)
Trade Practices Act 1974 (Cth).

DECISION:
1.  Appeal allowed
2.  Set aside the orders made by the trial judge on 23 July 2003
3.  Order that the Referee's Report be rejected
4.  Remit the matter to the trial judge for rehearing
5.  The respondent is to pay the appellant's costs of the appeal
6.  The costs of the hearing before the trial judge are to abide the outcome of the rehearing.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40784/03
SC 55045/01

BEAZLEY JA
IPP JA
TOBIAS JA

9 August 2004

ABIGROUP CONTRACTORS PTY. LIMITED v. SYDNEY CATCHMENT AUTHORITY

The appellant was the successful tenderer for a contract with the Sydney Water Corporation to construct an auxiliary spillway for Warragamba Dam. Under the contract, the contractor was required to excavate down to a solid rock base and refill the area with cement to the level necessary to support the spillway. Since the proposed contract was a lump sum contract under which the contractor bore responsibility for dealing with latent conditions, it was critical for the tenderer to have accurate information available to it at the time of preparing the tender.

The appellant claimed that the documents comprising the Invitation to Tender contained a representation to the effect that no plans existed of a particular outlet pipe that would have allowed it to determine the true level of the rock base. The appellant submitted that this representation was misleading and deceptive in contravention of the Fair Trading Act 1987 (NSW) and the Trade Practices Act

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Details
Case
[2004] NSWCA 270
Decision Date

CaseChat Overview and Summary

Abigroup Contractors Pty Ltd (the appellant) appealed to the Supreme Court of New South Wales against a decision of a judge who had adopted a referee's report concerning a dispute with Sydney Catchment Authority (the respondent). The dispute arose from a contract for civil works, where the appellant alleged it had suffered loss due to misleading information provided by the respondent regarding rock levels. The referee had made findings on several issues, including causation under the *Trade Practices Act 1974* (Cth) and the appellant's reliance on the respondent's representations.

The primary legal issues before the Court of Appeal were whether the trial judge erred in adopting the referee's report, particularly concerning the assessment of causation and reliance, and whether the trial judge had failed to deal with all issues raised by the parties, specifically regarding estoppel. The Court also considered the nature of an appeal from a judge's decision to adopt, vary, or reject a referee's report under Supreme Court Rules Pt 72 r 13, and whether such an appeal was limited to reviewing the judge's exercise of discretion.

The Court of Appeal found that the trial judge had erred in exercising his discretion by adopting certain parts of the referee's report. It reasoned that the referee's findings on causation and reliance, which were central to the appellant's claim, were flawed. The Court noted that while the referee accepted the appellant's expert evidence on the location of a pipe and embankment, this did not automatically lead to the conclusion that the trial judge's adoption of the report was correct. Furthermore, the trial judge had failed to address the issue of estoppel, which had been raised by the referee's findings and was agreed by both parties to be an error requiring remittal. The Court applied the common law conception of causation, which involves a practical or common-sense assessment, and confirmed that reliance is an aspect of causation.

Consequently, the Court of Appeal allowed the appeal, set aside the trial judge's orders of 23 July 2003, and ordered that the referee's report be rejected. The matter was remitted to the trial judge for a rehearing, with the respondent ordered to pay the appellant's costs of the appeal, and the costs of the initial hearing to abide the outcome of the rehearing.

Orders

Orders of the court

1. Appeal allowed

2. Set aside the orders made by the trial judge on 23 July 2003

3. Order that the Referee's Report be rejected

4. Remit the matter to the trial judge for rehearing

5. The respondent is to pay the appellant's costs of the appeal

6. The costs of the hearing before the trial judge are to abide the outcome of the rehearing.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The appellant called evidence relating to the 1951 cross-section and the location of the pipe depicted thereon from 3 main technical experts: Mr Lehmann, Mr John Gray and Mr John Braybrooke. There were other witnesses who will be referred to as necessary. The evidenceMr. Lehmann Mr Lehmann, the appellant’s survey manager, gave the following evidence in respect of the 1951 cross-section:“I have been shown a copy of [the 1951 cross-section] which I have been asked to assume comes from the Defendant’s documents and which is described as ‘Folly Creek Disposal Area fill over 30 pipe section 290 U.S. [Up Stream] of horseshoe bend sump to accompany report of inspection carried out on 25.11.51’ … . It is also stamped as follows ‘Apparently work as executed … 11-11-63’. I was aware from general discussions at the time I started on site that there was a pipe which had been layed (sic) under Folly Creek when Warragamba Dam was originally constructed. I have also been referred to clause DS-2.9.14(c)(ii) ‘Folly Creek Drainage’ in the Detailed Specification in which the Defendant states ‘during the closing phases of the original Warragamba Dam construction Folly Creek was filled in just upstream of the right side of the auxiliary spillway alignment forming an embankment of some 20m height. No plans are available of this embankment or of the outlet pipe’.In my opinion, the [1951 cross-section] shows the location of that embankment and pipe, the original surface level, the road under construction and slope of fill as at 25 November 1951. I say this because the reference to Folly Creek being filled in ‘just upstream of the right side of the auxiliary spillway alignment’ appearing in the Detailed specification is a reference to the same location as is represented in the [1951 cross-section] which drawing is described as showing the ‘Folly Creek Disposal Area fill over 30 pipe section 290 U.S. [Up Stream] of horseshoe bend sump’. … annexure ‘L1’.” (emphasis added) Mr. Lehmann said that had he had the additional documents including the 1951 cross-section at the time of tender “I would have formed the view that it was more than likely that the … rock level in the Concept Design Drawings was incorrect”. Mr. Lehmann supported his opinion by a diagram upon which he located in digitised form the existing design and excavation surfaces in 1999, the original and rebuilt surfaces in 1951 as well as the existing surface in 1950. The diagram indicated that the rock level was significantly lower than that depicted in the respondent’s tender documents. Mr. Lehmann’s methodology was not challenged and the Referee accepted his evidence.Mr. Gray Mr. Gray, SMEC’s design manager for the preparation of the tender, gave evidence that after the contract had been entered into he had engaged Douglas Partners to provide geotechnical design review services and geotechnical construction advice. Mr. Braybrooke was Douglas Partners principal engineering geologist. Mr. Gray said that:“.. in his experience when an organisation such as DPWS undertook the work [as here] an engineering company in the position of SMEC was entitled to assume that the work was done for the purpose of preparing the Concept Design and that it would be further developed and thereafter constructed. He added that having regard to the time … that the DPWS undertook its work and the limited time within which the [appellant] had to undertake work to enable a tender to be submitted, which was approximately six weeks, SMEC had no alternative but to rely on the information provided to it from DPWS by the [appellant].”He also said:“… an engineering company in the position of SMEC is entitled to assume that [the geological] investigations were done to allow a reasonable interpretation of the rock contour levels so that estimates of the quantity of material to be excavated can be made. In relation to this project SMEC made that assumption.… he said that there was nothing in the documentation provided to SMEC, which indicated that the rock level interpreted by DPWS was not an appropriate interpretation of its depth …”

Decision

Reasons for decision

Once that is accepted, it follows that the trial judge’s discretion miscarried in adopting this part of the report.Conclusion For the reasons I have given, I consider that the trial judge erred in the exercise of his discretion in ordering that the Report be adopted in respect of the three issues with which I have been dealing. There were two other issues on the appeal. One related to estoppel. The other related to damages. As to estoppel the trial judge failed to deal with a finding by the Referee that the appellant was estopped from bringing a claim under the Trade Practices Act or the Fair Trading Act, because of a disclaimer the appellant had signed. Both parties agreed this was an error and that the matter should be remitted for determination. As to damages, there is a dispute between the parties as to the proper approach to the assessment. Both parties agreed that if the reference was otherwise to be remitted for redetermination then it was appropriate for that to also be remitted without the need for this Court to deal with it. It seems to me that in the circumstances, the following orders should be made:1. Appeal allowed.2.Set aside the orders made by the trial judge on 23 July 2003.3.Order that the Referee’s Report be rejected.4.Remit the matter to the trial judge for rehearing. 5.The respondent is to pay the appellant’s costs of the appeal.6.The costs of the hearing before the trial judge are to abide the outcome of the rehearing. IPP JA: I agree with Beazley JA. TOBIAS JA: I agree with Beazley JA.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.