Aquatec-Maxcon Pty Ltd v Barwon Region Water Authority (No 2)

[2006] VSC 117

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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

BUILDING CASES LIST

No. 7091 of 2000

AQUATEC-MAXCON PTY LTD (ACN 002 250 482)	Plaintiff
v
BARWON REGION WATER AUTHORITY	Defendant

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATES OF HEARING:	17-21, 24-27 October, 2-4, 7-11, 14-17, 21-25, 28-30 November, 1-2, 5-9, 12-15 December 2005
DATE OF JUDGMENT:	31 March 2006
CASE MAY BE CITED AS:	Aquatec-Maxcon Pty Ltd v Barwon Region Water Authority (No. 2)
MEDIUM NEUTRAL CITATION:	[2006] VSC 117

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Building Contracts – defective design – liability under design and construct contract – continuing duty of design engineer.

Contract – novation – construction of deed of novation – whether release of existing liability for defective design.

Estoppel – conventional estoppel – whether assumed state of fact – whether assumed construction of deed of novation.

Tort – negligence – commercial construction project – succession of contracts - whether duty of care owed by designer to parties higher in the contractual hierarchy - duty of care owed by designer to parties lower in the contractual hierarchy.

Practice And Procedure – whether underground sewerage tank a building – whether a building action – whether parties jointly or severally liable in damages – apportionment of judgment to reflect responsibility for the loss of the plaintiff.

Building Act 1993 ss. 129, 131.

APPEARANCES:	Counsel	Solicitors
For Aquatec-Maxcon Pty Ltd (Aquatec)	Mr R J Manly SC and Mr Bernard Carr	Gadens Lawyers
For Barwon Region Water Authority (Barwon)	Mr E N Magee QC, Mr Peter H Clarke and Dr Jennifer Beard	Harwood Andrews
For Nacap Pty Ltd (Minson Nacap)	Mr T J Margetts and Ms Suzanne Kirton	Moray & Agnew
For MWH Pty Ltd (Montgomery Watson)	Mr D S Levin QC, Mr I H Percy and Ms Georgina Costello	Monahan + Rowell
For Wynton Stone Australia Pty Ltd (Wynton Stone) and for Mr Sloggett	Mr J H Gobbo QC and Mr David J O’Callaghan SC	Deacons

There was no appearance for ACN 007 015 965 Pty Ltd (in liq) (Fisher Stewart)

For JJP Geotechnical Engineering Pty Ltd (Barrett Fuller)	Mr John R Dixon	Phillips Fox
For Taylor Thomson Whitting Pty Ltd (TTW)	Ms L Chan	Minter Ellison

TABLE OF CONTENTS

INTRODUCTION

THE PROCEEDING

Procedural Matters

The Aquatec Claims

The Barwon Claims

The Aquatec Claims Over

The Minson Nacap Claims

The Montgomery Watson Claims

The Wynton Stone Claims

The Barrett Fuller Claims

The TTW Claims

Quantum of Damages

THE EXPERT EVIDENCE

Apollo Bay

Lorne

THE CONTRACT CLAIMS

Under the Barwon-Aquatec Head Contract

Under the Aquatec - Minson Nacap Sub-contract

Under the Minson Nacap - Montgomery Watson Design Services Agreement

Under the Montgomery Watson - Wynton Stone Sub-consultancy Agreement

The scope of geotechnical works

The Barrett Fuller component

The Wynton Stone contractual obligation

Wynton Stone Breaches of contract

Groundwater

Embankment stability

The Deed of Novation

Conditional release

Misleading and deceptive conduct

The release of liability in tort

Estoppel

Under the Barrett Fuller Contract

Under the TTW Contract

Conventional Estoppel

Anshun Estoppel

Under the TTW - Wynton Stone Deed of Indemnity

THE NEGLIGENCE CLAIMS

The Barwon Negligence Claims

The Aquatec Negligence Claims

Claim Against Montgomery Watson

Claim Against Wynton Stone

Claim Against Barrett Fuller

Claim Against Fisher Stewart

Claim Against TTW

The Minson Nacap Negligence Claims

Claims Against Wynton Stone

Claims Against Barrett Fuller

Claims Against Fisher Stewart

Claims Against TTW

The Montgomery Watson Negligence Claims

The Wynton Stone Negligence Claims

The Barrett Fuller Negligence Claims

The TTW Negligence Claims

THE WYNTON STONE TRADE PRACTICES CLAIM

THE SECTION 131 APPORTIONMENT CLAIMS

The Application of Section 131

The scope of s. 131

The Barwon s. 131 Claim

The Aquatec s. 131 Claim

The Minson Nacap s.131 claim

The Montgomery Watson s. 131 Claim

The Wynton Stone s. 131 Claim

The TTW s. 131 Claim

THE CONTRIBUTION CLAIM

CONCLUSIONS

HIS HONOUR:

INTRODUCTION

1. Sometime prior to 1996 the authorities responsible for the provision of sewerage in the Colac and Otway regions determined to construct two sewerage treatment plants, one at Lorne and one at Apollo Bay in the State of Victoria.  By 1996 the successor in title to these authorities was the firstnamed defendant, Barwon Region Water Authority (“Barwon”).[1]  Barwon accordingly retained a firm of consulting engineers, the fifth defendant by counterclaim, Fisher Stewart Pty Ltd (“Fisher Stewart”)[2].  In due course, tenders were called from contractors for the design and construction of the plants.  The successful tenderer was the plaintiff, Aquatec-Maxcon Pty Ltd (“Aquatec”), which on 24 March 1997 entered into a contract with Barwon to carry out the design, construction, and commissioning of the plants for $6,426,847.  This head contract incorporated as general conditions the standard form Design and Construct Contract AS 4300-1998, subject to certain modifications.

   [1]Then called Otway Region Water Authority. 

   [2]The company has since gone into voluntary members winding up and has changed its name to ACN 007 015 965 Pty Ltd (in liquidation).  I shall, nevertheless, continue to refer to the company as Fisher Stewart.

1. In fact, the particular expertise of Aquatec lay in the mechanical aspects of the proposed plants.  In the preparation of its successful tender it was assisted by an engineering construction contractor, the second defendant by counterclaim, Nacap Australia Pty Ltd (“Minson Nacap”),[3] and by a civil design engineer, the third defendant by counterclaim, MWH Australia Pty Ltd (“Montgomery Watson”).[4]  Upon the winning of the contract, Aquatec entered into a back-to-back sub-contract with Minson Nacap on or about 5 March 1997 whereby Minson Nacap undertook the design and construction of the civil works associated with the project.  This sub-contract incorporated the standard form general conditions of sub-contract for Design and Construct, AS 4303-1995, with similar modifications.  Minson Nacap, in turn, sub-let the design of the civil and structural works, including hydraulics and architectural aspects, to Montgomery Watson by a design services agreement entered into about the same time.

   [3]Then called Minson Constructions Pty Ltd.  The name of this company was later changed to Minson Nacap Pty Ltd and I shall refer to it under this name which was used generally in this proceeding.

   [4]This company, which was called Montgomery Watson Australia Pty Ltd at the time of the project has undergone name changes since that date.  I shall refer to it by its then current name.

1. But Montgomery Watson did not carry out the whole of this design work itself.  On or about 4 April 1997 it engaged a sub-consultant design engineer, the fourth defendant by counterclaim, Wynton Stone Australia Pty Ltd (“Wynton Stone”) to perform certain design work with respect to the structural parts of the work.[5]  The architectural design was also sub-let to a firm of architects.  The principal of Wynton Stone at the time was the third party, Clifford Alfred Matthew Sloggett.

   [5]There is a dispute about the scope of works the subject of this agreement to which I shall return. 

1. Under the terms of the head contact Aquatec undertook responsibility for the investigation of the geotechnical aspects of the sites and their suitability for the structures to be erected on them.  This was part of the work sub-let to Minson Nacap and in turn to Montgomery Watson.  Certain geotechnical investigation was entrusted to a firm of geotechnical engineers, the fifthnamed defendant by counterclaim, JJP Geotechnical Engineering Pty Ltd[6] (“Barrett Fuller”).  There is an issue as to whether Barrett Fuller was engaged by Wynton Stone or by Montgomery Watson and as to the scope of work it was engaged to perform.  For reasons which will appear, I am satisfied that Barrett Fuller was in fact engaged by Wynton Stone.[7]

   [6]This company then carried on its business under the firm name Barrett Fuller Partners and I shall refer to it as such.

   [7]See para [174] below.

1. The project was to be performed in three stages:  the first stage was the design phase;  the second the construction phase and the third the commissioning phase.  The design phase was, under the terms of the head contract, to be completed within 12 weeks of the start date in January 1997, the construction phase to achieve practical completion by 12 December 1997, and the commissioning phase by March 1998. 

1. On 6 May 1997, shortly after the completion of the design phase, Mr Sloggett became employed by another engineering company, the seventhnamed defendant by counterclaim, Taylor Thomson Whitting Pty Ltd (“TTW”) taking the Barwon sewerage treatment plants contract with him.  He continued to work on the project, but as an employee of TTW.  I conclude also that after this date Barrett Fuller was retained by TTW. 

1. In October and November 1997 cracking appeared in the aerator tanks comprising part of the Apollo Bay plant.  In February 1998 cracking also appeared in the tanks at Lorne.  As a consequence of these failures and of the investigations which were undertaken following them, Barwon, on 8 July 1998, pursuant to cl. 44.6 of the head contract, took the civil work from Aquatec and engaged another contractor, Concrete Construction Group Ltd, to perform the remedial and other necessary work to complete the civil work.  

1. The Minson Nacap sub-contract was terminated about the same time and, in turn, the contracts which depended on it were terminated:  the Montgomery Watson design services agreement, the Montgomery Watson sub-consulting agreement with TTW, and the retainer of Barrett Fuller.  When the civil work was completed Aquatec returned to the project to complete the electrical and mechanical work and to undertake the stage three commissioning.  Stage two achieved practical completion on 16 December 1998 and stage three on 13 December 1999.  On 23 January 2001, following the expiry of the 12 month defects liability period, the superintendent issued to Aquatec his sixteenth and final certificate.

1. Against this background, two proceedings have been commenced in the Court.

·Proceeding No. 5083 of 2000, in which Minson Nacap sued Aquatec for moneys payable pursuant to a number of certificates and some uncertified progress claims.  To this claim Aquatec filed a counterclaim alleging defective work.  In April 2001, this proceeding was stayed on the basis that the issues raised in it might conveniently be dealt with in this proceeding. 

·This proceeding, No. 7091 of 2000, in which Aquatec sues Barwon for about $1.5M as money due under certificate 16.

1. The claim of Aquatec in this proceeding provoked a counterclaim by Barwon which seeks the sum payable under the same certificate 16.  Included in this certificate were a number of items which the superintendent had deducted from the value of the work completed.  These items included expenses incurred by Barwon as a consequence of the failure of the tanks in October and November 1997.  These and other less significant deductions had the consequence that, by certificate 16, the superintendent certified that $3,686,484, the sum claimed by Barwon in its counterclaim, was due from Aquatec to Barwon. 

1. In general terms, the responsibility for and causes and financial consequences of the failure of the tanks represented the principal areas of dispute at this trial.  But this was not so much a dispute between Barwon and Aquatec because, under the head contract, Aquatec had assumed responsibility for both the design and the construction of the works.  Nor was there very much dispute on this matter between Aquatec and Minson Nacap, for Minson Nacap, too, had a design and construct obligation with respect to the civil and structural works of which the tanks were a part. 

1. Following a conclave of the engineering consultants engaged by the parties, there was general agreement that the cause of the failure was a design error.  The designer failed to make provision sufficient to protect the works from hydrostatic pressure bearing upon the unfilled aerator tanks both at Apollo Bay and Lorne.  This pressure, caused the base and sloping side slabs to crack at Apollo Bay and the sloping side slabs to crack at Lorne.  All of Aquatec, Minson Nacap and Montgomery Watson accepted this finding and the consequence of it, that each of them was in breach of the design obligation owed under its contract with the next party up the contractual chain. 

1. The design engineer, Montgomery Watson, sought to pass this responsibility to Wynton Stone whose Mr Sloggett was the engineer who attended to the design and to TTW for design work after Mr Sloggett transferred to TTW in May 1997.  And all of the design engineers sought to pass the responsibility to Barrett Fuller who carried out certain geotechnical investigations in February 1997.  

1. In summary, the contractual arrangements between the participants in the project were as follows:

Barwon

 

Head contract - design and construct of all works.

 

Aquatec

 

 

Sub consultancy agreement for structural design.

 

  

Wynton Stone (to 6 May 1997)	TTW (after 6 May 1997)
		Novation

 

Barrett Fuller

 

 

THE PROCEEDING

Procedural Matters

1. The proceeding is procedurally, and otherwise, very complex - far more complex than the fairly straightforward contractual hierarchy would warrant.  The pleadings, not including separately delivered particulars and schedules, run to over 750 pages.  In the course of the opening, counsel for Barwon informed me that I would not be greatly assisted by them.  I was told that many of the pleaded claims were no longer pressed and that the issues in the case would emerge as the trial proceeded.  This view was supported by most of the other parties.  With some misgivings, I was content to proceed on that basis until it soon became apparent that, in a case of this complexity, such a course was leading to a failure on the part of the parties to address the issues in an organised and disciplined way.  Moreover, it made it difficult for me as trial judge to understand the significance of the considerable volume of evidence that was presented, particularly in the early days of the trial, and impossible for me to rule on matters of relevance and to know what was to be dealt with in my judgment.  Accordingly, I began to encourage the parties to focus on their pleaded allegations and responses so as to expose the questions in issue.  I told them that I would determine this case only upon the issues which emerged from the pleadings and, even then, only on those issues which were pressed in final address.  This had the consequence that there were frequent amendments even involving substantial shifting of positions, and this continued up to the closing days of the evidence.  Even so, as will be seen, the pleadings generally lacked the rigour which might be expected in a proceeding in this Court.  This has meant that much evidence was not focused on issues and that, in this judgment, I have had to unravel arguments which I venture to describe as woolly and to pursue a number of issues which ultimately were of no significance.

1. As might be expected, each of the parties makes claims in contract against the party with whom it had an agreement in the contractual hierarchy. The claims contain numerous alleged shortcomings in the design and, in some cases, the construction of the tanks. These claims were bolstered, if that be the correct expression, by the regrettably familiar practice as presenting the same allegations as breaches of duty of care and as misleading and deceptive conduct. As will be seen, these alternative claims, after provoking an enormous amount of cost and effort in their formulation, in the formulation of responses to them, and in the preparation and presentation of evidence with respect to them, were abandoned or not pressed by the time of final addresses. As is so often the case, the presentation of these alternative claims, where the contractual remedy was clearly appropriate and available, seems to have served no purpose other than to complicate the proceeding and to inflate the enormous costs which the unfortunate parties have been required to bear. There were also claims for contribution between all defendants pursuant to s. 23B of the Wrongs Act 1958.

1. The procedural complexity attending the proceeding and, I suspect, a cause for great difficulty in achieving a commercial settlement of these disputes, has been, to a very large extent, the consequence of the suggested operation of the apportionment of liability provisions of s. 131 of the Building Act 1993. I shall turn to this legislation in some detail in due course. In general terms, the Court must, in a proceeding to which the section applies, give against each defendant who is found to be jointly or severally liable to a plaintiff for damages, judgment only for such proportion of the total amount of damages as the Court thinks just and equitable having regard to the extent of that defendant’s responsibility for the loss and damage of the plaintiff.

1. The plaintiff in this proceeding is not the proprietor, Barwon, but the head contractor, Aquatec.  Its claim is brought for the unpaid balance of the certified value of its work.  In fact, certificate 16 is a hybrid certificate.  In it, the superintendent valued the cost of completing the works which had been taken from Aquatec and debited Aquatec with this cost pursuant to cl. 44.6 of the AS 4300 general conditions.  He also gave a final certificate under cl. 42.6.  In its claim, Aquatec, until a very recent amendment, sought to enforce part only of this certificate, leaving to one side the very substantial debit items under cl. 44.6.  It quickly became apparent that this claim was of no substance and counsel for Aquatec has accepted this.  The focus then shifted to the Barwon counterclaim. 

1. As I have mentioned, the Barwon counterclaim is brought against Aquatec only.  In it, Barwon seeks $3,686,464 plus interest being the amount certified to be payable under certificate 16.  This claim is not a claim for damages.  Following the issue of this certificate, each of Aquatec and Barwon gave notice of dispute under cl. 42.6 and 47 of the AS 4300 general conditions.  The giving of these notices, it is said by Aquatec, denies the certificate finality under either of cll. 42.6 or 44.6, so that Barwon seeks, in the alternative, that I revisit the content of the certificate so as to determine the amount owing to Barwon under the head contract.  Again, this is not a claim for damages.  In a very recent amendment,[8] however, it does seek, in the further alternative, damages for Aquatec’s breaches of its head contract.  The breaches alleged are the defective design work. 

   [8]Amended counterclaim filed 22 November 2005.

1. And so, Aquatec, wishing to rely upon s. 131 as defendant to the Barwon counterclaim, had no other defendant to the Barwon counterclaim with which to share any apportionment of liability under that section. Moreover, it had to address the fact that Barwon did not wish to pursue any other party alleging joint or several liability with Aquatec. These apparently insuperable obstacles were sought to be overcome when, on 16 March 2000, Aquatec as defendant to the Barwon counterclaim, joined Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller and Fisher Stewart as defendants to counterclaim[9].  TTW was joined as a further defendant to the counterclaim by order of 7 February 2003.  Barwon, however, maintained and still maintains its position that it does not wish to sue these added defendants and seeks no relief against them. 

   [9]In accordance with decision of the Court of Appeal in Boral Resources (Vic) Pty Ltd v Robak Engineering and Construction Pty Ltd [1999] 2 VR 507.

1. I interpolate at this stage that, having achieved the joinder, Aquatec thereafter exhibited some ambivalence towards its s. 131 claim. On day 10 of the proceeding, its counsel informed me that the claim was no longer pressed; on day 13 they told me that they repented this decision and that the claim was still alive. Finally, having settled certain issues with Barwon they told me that the claim was abandoned. Counsel for TTW exhibited a similar ambivalence but, finally, on day 16 she accepted that its apportionment claim should go forward. The ambivalence with respect to this claim exhibited by counsel for Minson Nacap was of a different order. Having made the claim in its pleadings, counsel contended in final address that s. 131 had no application but, in the alternative, that their client would accept its benefit with respect to the Aquatec claim if the statutory provision were available.

1. In accordance with the practice laid down in Wimmera Mallee Rural Water Authority v FCH Consulting Pty Ltd,[10] the original defendant was required to plead out the claims which it asserts might be brought by Barwon as counterclaimant against each of the added defendants in order to establish their liability to Barwon in damages and also to allege the matters relied upon by it as showing the responsibility of those defendants for Barwon’s loss. Aquatec then contended that each other of them was in breach of a duty of care owed to Barwon and that Barwon thereby suffered loss and damage so that Barwon was entitled, notwithstanding that it makes no such allegation and seeks no such relief, to an award of damages against them jointly or severally. The consequence of this and of the application of s. 131 was, they contended, that Barwon should not have judgment against Aquatec for the full amount of its loss, as it contends, but rather, that loss should be apportioned in the judgment of the Court between all or some of the defendants in accordance with their responsibility for that loss. By way of response, each of the added defendants filed a defence to this Aquatec pleading and itself filed a pleading against each other defendant asserting an entitlement to apportionment against those others.

   [10][2000] VSC 102 at [22].

1. The matter is then rendered more complicated by the fact that there are claims for damages further down the contractual hierarchy: Aquatec sues Minson Nacap for damages, Minson Nacap sues Montgomery Watson for damages, and Montgomery Watson, in turn, sues Wynton Stone for damages. Each of these claims has provoked a claim for apportionment pursuant to s. 131 by those parties which stand or have been added as defendants to the claim. To this complication I shall return later.

1. Furthermore, each of the defendants, in case s. 131 has no application, seeks contribution against each other defendant pursuant to s. 23B of the Wrongs Act. 

1. I mention finally that, TTW sues Mr Sloggett, as third party, alleging that he has agreed to indemnify TTW against losses of the kind which it would incur if it suffered judgment at the hands of any party in this proceeding and satisfies that judgment. 

1. I now turn to the detailed positions of the parties in these pleadings.  This is not an easy task as the pleadings are numerous, voluminous, repetitive and of bewildering complexity.  I shall content myself at this stage with identifying the causes of action and thereby, in broad terms, the issues for determination.

The Aquatec Claims

1. Aquatec is the plaintiff in this proceeding against Barwon.  By an amendment to its statement of claim filed by leave on Day 24 of the trial[11] it recast its claims substantially.  It then alleged that, for some unspecified reason, the final certificate should be set aside and the Court should so declare.  Further it sought that the Court assess the damages of Barwon (not Aquatec) arising from the remedial civil works which it (Barwon) undertook, from the completion by Aquatec of the work which was taken out of Aquatec’s hands, and for interest.  As I have mentioned, all of this has fallen away.  No relief is now sought against Barwon in this part of the proceeding.

   [11]Second further amended statement of claim filed 22 November 2005.

The Barwon Claims

1. It is not easy to analyse the Barwon claims.  This is not wholly due to their complexity, but rather because its position has shifted many times since the delivery of the last counterclaim filed on 2 May 2001 following the joinder of the defendants to counterclaim (other than TTW) by Aquatec.  Its current pleading was filed on 22 November 2005.[12] Although this claim has been overtaken by events, at least insofar as it concerns Aquatec, it is necessary that I identify the claims made in it, for those are relied upon by those defendants to counterclaim seeking s. 131 relief.

   [12]Amended counterclaim.

1. Barwon sued Aquatec as the sole defendant to its counterclaim.  Upon Aquatec’s application on 16 March 2001, there were joined as further defendants Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart.  On 7 February 2003, TTW was added to the proceedings.

1. As counsel on its behalf told me on many occasions, Barwon seeks no relief against any of the defendants to counterclaim other than Aquatec.  This said, there is, however, the following puzzling paragraph of its counterclaim:

“29E.Barwon does not claim any relief against Minson, Montgomery Watson, Wynton Stone, JJP, Fisher and/or TTW additional to the relief sought against Minson, Montgomery Watson, Wynton Stone, JJP, Fisher and/or TTW consequent upon the joinder of those parties as Defendants to Barwon’s Counterclaim pursuant to the Order made by Mr Justice Byrne on 16 March 2001.”

1. Its claim against Aquatec is primarily for $3,686,464 due under certificate 16.  Alternatively, if Aquatec’s contention that this certificate has no finality is accepted, it alleges against Aquatec numerous breaches of the head contract.  These breaches include, of course, defective work, both design and construction, incomplete work, late completion and failure of the plant to achieve the performance requirements of the specification.[13]  It then alleges loss and damage and seeks damages. 

   [13]Paragraph 45 of amended counterclaim filed 22 November 2005.

1. These claims and the Aquatec claims against Barwon have been settled in terms that provide for Aquatec submitting to judgment in favour of Barwon the sum of $2,924,557.[14]

   [14]See para [87] below.

The Aquatec Claims Over

1. Having received the very substantial counterclaim from Barwon to which it had no real defence except as to quantum, Aquatec then brought claims over against Minson Nacap and the other defendants to counterclaim which it had joined. 

1. These claims were made in three filed court documents.

(a)In its statement of claim[15] against Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW, Aquatec, as defendant to the Barwon counterclaim sought against those parties an apportionment of its liability to Barwon pursuant to s. 131.[16]  In their final address I was formally advised by counsel for Aquatec that this claim was not pursued.

(b)By notice of contribution in short form, Aquatec sought against those same defendants contribution pursuant to s. 23B of the Wrongs Act.  This claim, too, was not pressed. 

(c)By counterclaim filed in response to the counterclaim of Minson Nacap, it seeks against Minson Nacap damages for breaches of the sub-contract. 

[15]Amended statement of claim filed 21 February 2003.

[16]With some misgivings, I proceed upon the unchallenged assumption that these parties are co-defendants to the Aquatec claim.

1. Minson Nacap admits the breach of the sub-contract and most of the damages claimed.  It disputes only causation with respect to the claim for damages for interest payable by Aquatec to Barwon Water.  This, then, is the first issue between these parties. 

1. The remaining issue arises from the contention of Minson Nacap that it is entitled to apportionment in respect of its liability to pay the damages to Aquatec which it accepts liability to pay.  This matter is more conveniently dealt with as part of the Minson Nacap claims.

The Minson Nacap Claims

1. The claims made by Minson Nacap in this proceeding are contained in four court documents: 

(1)       Statement of claim against Aquatec.[17]

(2)       Statement of claim against Montgomery Watson.[18]

(3)       Notice of contribution claim against all other defendants.[19]

(4)Statement of claim against Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW who were joined as further defendants to the Aquatec claim against Minson Nacap for the purpose of Minson Nacap seeking orders pursuant to s. 131.[20]

[17]Amended statement of claim filed 26 August 2004.

[18]Third amended statement of claim filed 29 November 2005.

[19]Notice of claim filed 31 May 2004. 

[20]Statement of claim filed 4 March 2004.  Again, I proceed on the basis that this joinder in fact occurred.

1. The statement of claim against Aquatec, court document (1), is a fairly typical building case claim brought by a sub-contractor against its contractor employer.  In it Minson Nacap pursues the claims for sums payable under certificates 10 and 11 and, with respect to certificates, 13, 14 and 15 which showed a balance payable to Aquatec, it says that the certificates were issued late with the consequence that, in each case, the amount of the progress claim was payable by Aquatec.[21]  Progress certificate 12 was a negative certificate.  Next, Minson Nacap alleges a breach by Aquatec of its obligations under cl. 23 of AS 4303-1995 to ensure that the superintendent would act honestly, timeously and would arrive at a reasonable measure or value of the work.  In this way, Minson Nacap seeks to reopen certificate 12.  Individual components of this certificate and the later uncertified progress claims are then the subject of separate claims.  These are claims in respect of unpaid variations under cl. 40, claims for extensions of time under cl. 35.5, claims for delay and disruption costs under cl. 36, and claims for acceleration costs under cl. 33.1.  Furthermore, in various ways, Minson Nacap seeks damages for Aquatec’s wrongful conversion into cash of the performance bond which it provided to Aquatec and for its receipt of the proceeds of the bond.  Finally, Minson Nacap asserts that the termination of the sub-contract by Aquatec on 9 July 1998 was ineffective and amounted to a repudiation by Aquatec of the sub-contract which repudiation Minson Nacap accepted on 13 July 1998.  As a consequence, it seeks damages or quantum meruit relief.  The response of Aquatec to these claims, is contained in its defence and counterclaim.[22]  As may be expected, it denies most of the Minson Nacap claims and alleges that Minson Nacap failed to exercise due care and skill in the performance of its work in breach of its contractual duties and its tortious duty of care.  Its counterclaim claim for damages represents the value of most of the claims alleged against it by Barwon. 

   [21]Paragraphs 8, 8A.

   [22]Second further amended defence and counterclaim to the Minson Nacap statement of claim filed 13 October 2005. 

1. The second court document contains fairly conventional claims against Montgomery Watson as the party next down the contractual chain.  Minson Nacap alleges that Montgomery Watson is in breach of its design obligations under the design services agreement and that, as a consequence, Minson Nacap has incurred liability to Aquatec.  It seeks damages.  Montgomery Watson now admits liability for the design breaches of contract and accepts most, but not all, of the components of the Minson Nacap damages claim.

1. In the third court document, Minson Nacap seeks contribution from all other defendants pursuant to s. 23B of the Wrongs Act 1958. This document, which is in the short form without any detail, is nevertheless a very complex document. The essential features of this statutory cause of action are as follows:

(a)The plaintiff has suffered loss. 

(b)The loss is a consequence of the wrongful act of the party which seeks contribution.

(c)The persons from whom contribution is sought have also been guilty of wrongful acts towards the plaintiff.

(d)These acts have caused or contributed to the same loss as in (a).

1. The notice alleges that each of Barwon, Aquatec and Montgomery Watson has made claims against Minson Nacap alleging loss.  I interpolate that this is certainly not the case with respect to Barwon.[23]  What is then alleged is that each of these three claimants has claimed against the other defendants that their wrongful acts caused loss and that this loss is the same loss as is alleged against Minson Nacap.  This apparently simple document, therefore, makes three different claims for contribution.

   [23]The notice alleges that Barwon in the Aquatec statement of claim of 21 February 2003 makes claims against Minson Nacap.  This is not correct and cannot be correct.

1. The fourth and final Minson Nacap court document makes the s. 131 claims. The document is entitled, and in paragraph 1 asserts, that its objective is to make Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW co-defendants with Minson Nacap to the Aquatec counterclaim against Minson Nacap dated 19 February 2002. This was, of course, to attract the jurisdiction of the Court under s. 131 which is available only for defendants to a claim. These parties, with Minson Nacap, are already defendants to Barwon’s claim and most of them are third parties to the claims against Montgomery Watson. I do not pause to consider whether and, if so, how this is may be so, for the parties are content to by-pass these essentially procedural matters.

1. The structure of the Minson Nacap s. 131 statement of claim is to allege against each of Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW that it is in breach of a duty of care owed to Aquatec, as a consequence of which Aquatec will suffer loss and damage. It is then asserted that if Minson Nacap, too, is found liable to Aquatec, Minson Nacap is entitled to the benefit of the s. 131 apportionment.

1. The defences to this pleading join issue.  Furthermore, Montgomery Watson[24] and Barrett Fuller allege that the damages to which Aquatec may be entitled should be reduced by reason of its contributory negligence.  Finally, Wynton Stone and TTW plead the Statute of Limitations. 

   [24]This contention was not pressed in final address.

The Montgomery Watson Claims

1. The claims of Montgomery Watson are contained in one court document which is described as a statement of claim in third party proceedings to the Barwon counterclaim.[25] In it, Montgomery Watson seeks apportionment under s. 131 against third parties, Aquatec, Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW. It seeks to enforce against Wynton Stone an indemnity contained in its sub-consultancy agreement with Montgomery Watson. It also claims against Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW contribution pursuant to s. 23B of the Wrongs Act.  These alternative claims for contribution and apportionment are rendered somewhat more complicated by reason of the fact that they are themselves put on a number of alternative bases.

(a)On the basis that Barwon is in the position of a plaintiff seeking damages or relief for loss caused by the wrongdoing of Aquatec, Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart, and TTW, as well as the wrongdoing of Montgomery Watson, and that each of them, as well as Montgomery Watson, is liable to Barwon for having caused this loss, counsel for Montgomery Watson accepted in their final address that this claim could not succeed given the fact that Barwon obtained no order for damages against Aquatec.  I need therefore say nothing further about it.

(b)On the basis that Aquatec is in the position of a plaintiff seeking damages or relief against Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW as well as against Montgomery Watson and that each of them as well as Montgomery Watson is liable to Aquatec for its claimed loss.

(c)On the basis that Minson Nacap is in the position of a plaintiff seeking damages or relief against Aquatec, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW as well as against Montgomery Watson and that each of them as well as Montgomery Watson is liable to Minson Nacap for its claimed loss.

These claims involve a number of considerations, including the duty of care owed by each of these parties to Barwon, to Aquatec and to Minson Nacap and the various breaches of those duties.  There are also in the pleadings allegations that Minson Nacap,[26] Barrett Fuller[27] and Fisher Stewart[28] breached duties of care owed to Montgomery Watson but no loss or damage is alleged and no relief was sought.

[25]Fifth amended statement of claim filed on 8 December 2005.

[26]Paragraph 24.

[27]Paragraph 42.

[28]Paragraph 47

1. It will be recalled that Montgomery Watson in April 1997 sub-let the structural part of its design work to Wynton Stone and that this contract passed to TTW under the deed of novation of 6 May 1997.  In fact, Wynton Stone had already performed work on the project prior to the April agreement[29] and had performed work extra to this agreement.[30]  Montgomery Watson alleges against Wynton Stone that there was an implied term of its initial retainer[31] and of its April agreement[32] that it would perform its duties with due care.  It is then said that Wynton Stone is in breach of this implied term of the April agreement[33] but not the earlier retainer.  No loss is alleged.  Damages are sought in the prayer for relief.

   [29]Paragraph 31U.

   [30]Paragraph 33B.

   [31]Paragraph 31B.

   [32]Paragraph 33.

   [33]Paragraph 36.

1. The April agreement is said also to contain an indemnity by Wynton Stone to hold Montgomery Watson harmless against the claims of third parties.[34]  Montgomery Watson sets up this indemnity in the event that any party obtains relief against it.[35]

   [34]Paragraph 33A.

   [35]Paragraph 37B.

1. The deed of novation entered into between Montgomery Watson, Wynton Stone and TTW is said to contain a warranty by Wynton Stone that its work prior to 6 May 1997 had been performed in accordance with the April agreement.[36]  It is then said that if the claims against Montgomery Watson are made out, Wynton Stone is in breach of its warranty and that loss and damage will be suffered by Montgomery Watson.[37]

   [36]Paragraph 33F(d), 33I.

   [37]Paragraph 33K.

1. Finally, Montgomery Watson alleges that TTW owed to it a tortious duty to perform its work with due skill and care[38] and that it breached this duty.[39]  The loss alleged is the prospect that Montgomery Watson would be obliged to make payment of damages to Minson Nacap.[40]

   [38]Paragraph 34A, 34B and 35.

   [39]Paragraph 36.

   [40]Paragraph 36.

1. Wynton Stone, in its defence[41], puts these allegations in issue and sets up the release provisions of the deed of novation in answer to the claims against it.  The reply of Montgomery Watson[42] is itself a very complicated document.  Incidentally, it includes a counterclaim to the Wynton Stone defence to the Montgomery Watson third party statement of claim.  In its reply, Montgomery Watson seeks to avoid the impact of the release by contending in the alternative:

(a)the release was conditional upon the performance by Wynton Stone of the warranty contained in the deed of novation and that this warranty was not fulfilled;

(b)the unfulfilled warranty constitutes misleading and deceptive conduct;

(c)Wynton Stone made representations to the effect that, notwithstanding the novation to TTW, it, Wynton Stone, remained responsible for the design of the tanks and would be responsible for professional indemnity insurance.  The repudiation of these representations constitutes misleading and deceptive conduct;

(d)Wynton Stone is estopped from denying the truth of these representations;

(e)it is inequitable for Wynton Stone to rely upon the release.

[41]Defence filed 18 March 2004.

[42]Amended reply filed 2 September 2005

1. In its rejoinder dated 21 September 2005 Wynton Stone joins issue with these allegations and puts in issue the allegation that Montgomery Watson was induced by any representation or circumstance to act to its detriment. 

1. I return now to the Montgomery Watson statement of claim and, in particular, to its claims against TTW.  Similar claims are made against this party in respect of its involvement in the project after 6 May 1997 as are made against Wynton Stone.  The claims against it are that it was in breach of its tortious duty of care owed to Montgomery Watson and in breach of the April agreement made between Montgomery Watson and Wynton Stone, which agreement was assigned or novated to TTW under the deed of novation.[43]  Although no loss and damage is alleged in the pleading, Montgomery Watson again seeks no damages in its prayer for relief.

   [43]Paragraphs 33, 33G, 34A, 35, 36.

1. It is convenient to mention at this point that, in answer to claims made against it, Montgomery Watson relies against TTW upon the indemnity contained in cl. 5.1 of its sub-consultancy agreement on the basis that this indemnity obligation has passed to TTW by the operation of the deed of novation.[44]

   [44]Paragraph 37B.

1. Finally, Montgomery Watson makes claims against Barrett Fuller.  Its position is that Barrett Fuller was retained by Wynton Stone so that no claim is put in contract.  It alleges against Barrett Fuller a breach of duty of care owed to it[45] but no loss or damage is alleged and no damages are sought.  Its claim against this part is for apportionment on the basis that Barrett Fuller was in breach of duties owed to Barwon, Aquatec, Minson Nacap and Wynton Stone.[46]

[45]Paragraph 42.

[46]Paragraph 42.

The Wynton Stone Claims

1. Wynton Stone makes no less than eight claims or groups of claims in its statement of claim addressed to its co-defendants[47]:

   [47]Fourth further amended statement of claim filed by leave granted on 9 December 2005.

(1)Section 131 claims. What is here alleged is that each of Minson Nacap,[48] Montgomery Watson,[49] Barrett Fuller,[50] and Fisher Stewart,[51] owed Barwon a duty of care which duty was breached if any of the works were defective. Accordingly, if Wynton Stone is liable to Barwon each of those defendants is liable to share the loss with Wynton Stone pursuant to s. 131.[52]  This claim was not pressed in final address.

[48]Paragraph 10.

[49]Paragraph 15.

[50]Paragraph 20.

[51]Paragraph 27.

[52]Paragraph 43.

(2)There appears to be a like s. 131 claim made with respect to the liability of Wynton Stone and those defendants to Aquatec and to Minson Nacap and to Montgomery Watson. But there are no allegations of duty to support this. I was told by counsel for Wynton Stone that their client was content to adopt the allegations as to this made by its co-defendants.

(3)In paragraphs 22 and 23 it is said that Barrett Fuller owed to Wynton Stone a duty of care and that it breached this duty. Consequent loss to Wynton Stone is alleged but no relief is sought. I was told in final address that this was not a cause of action; it merely provided a basis for s. 131 apportionment. As will appear, this cannot provide a basis for such a claim.

(4)Against Fisher Stewart there is an allegation that it breached its duty of care owed to Barwon or a term of its retainer by Barwon.[53]  Loss to Barwon is alleged in paragraph 34, but the plea goes no further and no relief is sought.  In final address this allegation was not pressed.

[53]Paragraphs 25, 26, 32 and 33.

(5)A further allegation against Fisher Stewart is that of misleading and deceptive conduct inasmuch as it failed to disclose, presumably to Wynton Stone, the contents of the 1995 MPA Williams report and a Sinclair Knight Merz  report dated April 1995 regarding geotechnical aspects of the Apollo Bay site.[54]  Wynton Stone then seeks damages pursuant to Trade Practices Act 1974 s. 82(1).[55]

[54]Paragraph 35.

[55]Paragraph 37.

(6)Against TTW, Wynton Stone claims an indemnity for losses of Barwon payable by Wynton Stone for the work performed by Wynton Stone which work passed to TTW under the deed of novation.[56]

[56]Paragraph 42.

The response of TTW to the claims made against it is another obscure document.[57]  It repeats by reference a number of paragraphs apparently contained in an early defence dated 18 November 2003.  It is not clear what these mean.  It then makes some denials and, in paragraphs 5 to 11, sets out a mass of evidence which is said to raise an estoppel against Wynton Stone which would prevent it denying that the legal effect of the deed of novation was that:

“(a)the design responsibility for the Lorne and Apollo Bay Sewerage Treatment Plant rests entirely with Wynton [Stone];

(b)TTW’s role in relation to the Lorne and Apollo Bay Sewerage Treatment Plant was one of inspections at the request of either Minson [Nacap] or Montgomery [Watson] to ensure compliance with design documentation;  and

(c)TTW does not bear any liability arising from the design of the Lorne and Apollo Bay Sewerage Treatment Plant.”

The facts which are said to give rise to this estoppel are that Mr Sloggett, as a director of Wynton Stone, took the position that this was the effect of the deed of novation and that, in reliance upon this, TTW failed to notify its professional indemnity insurers and thereby lost the benefit of its policy. 

[57]Further amended defence filed 25 November 2005.

1. I return to the Wynton Stone statement of claim, and come now to the seventh group of claims.  In paragraph 42A it is said that TTW owed a duty of care to Wynton Stone to perform its work with due care.  Then it is said that, if Wynton Stone is liable to any other party, then TTW will have breached these duties.  No loss is alleged and no relief is sought. 

1. Paragraph 42B alleges foreseeability in TTW of loss, not only to Wynton Stone, but also to Barwon.  This, then, is the basis for apportionment against TTW in the case of the Barwon claim.  This may, therefore, be seen as an extension of the first claims mentioned in paragraph [55] above.

1. Finally, in paragraph 44, Wynton Stone seeks contribution against “any other party” where loss has been suffered by Barwon, Aquatec, Minson Nacap and/or Montgomery Watson.  This claim is nowhere pleaded out.  I was informed by counsel in final address that in this claim, too, Wynton Stone was content to rely upon the issues raised in the other pleadings.

The Barrett Fuller Claims

1. Barrett Fuller, the geotechnical engineer, seeks apportionment from the other defendants to Barwon’s counterclaim pursuant to the Building Act s. 131. In its statement of claim[58] against those parties it pleads that Aquatec owed a duty of care to Barwon[59] and that it breached that duty.[60] In short form, it alleges that all of Minson Nacap, Montgomery Watson, Wynton Stone and TTW also owed Barwon a duty of care and that they breached those duties. It then seeks an apportionment of any damages for which it may be liable to Barwon pursuant to s. 131.[61]  It then alleges that there should be a similar apportionment in case it is liable in damages to Minson Nacap[62] or to Wynton Stone[63].  

   [58]Further amended statement of claim dated 12 December 2003.

   [59]Paragraphs 4 and 5.

   [60]Paragraphs 6 and 7A.

   [61]Paragraph 9.

   [62]Paragraph 10.

   [63]Paragraph 11.

1. The defences to this statement of claim join issue but, in addition, Montgomery Watson alleges[64] that, if it breached any duty to Barwon, Aquatec or Minson Nacap, then the loss suffered by such party was caused or contributed to by the negligence of Barrett Fuller.[65] It is not altogether clear what this plea is directed to, given that the allegations against Montgomery Watson are part of the Barrett Fuller s. 131 claim. There are also in this pleading suggestions that Barrett Fuller seeks contribution from Aquatec in respect of its liability to Barwon[66] but no such relief is sought in the prayer for relief. 

   [64]Defence 17 February 2004.

   [65]Paragraph 8B.

   [66]Paragraph 2E, 7.

The TTW Claims

1. By its statement of claim[67] TTW seeks against all of its co-defendants to counterclaim, contribution pursuant to the Wrongs Act s. 23B and apportionment pursuant to the Building Act s. 131. It also seeks other relief.

   [67]Amended statement of claim filed 14 November 2005.

1. The s. 131 claims of TTW share the complications of those made by its co-defendants to the Barwon counterclaim. They presuppose that TTW is jointly or severally liable for damages in favour of Barwon, Minson Nacap or Montgomery Watson. TTW seeks an apportionment of its liability to Barwon from Aquatec[68], Minson Nacap[69], Montgomery Watson[70], Wynton Stone[71], Barrett Fuller[72] and Fisher Stewart[73], an apportionment of its liability to Minson Nacap from Montgomery Watson[74], Wynton Stone[75], Barrett Fuller[76] and Fisher Stewart[77] and an apportionment of its liability to Montgomery Watson from Aquatec[78], Minson Nacap[79], Wynton Stone[80], Barrett Fuller[81] and Fisher Stewart[82].  No apportionment is sought in respect of any claim made by Minson Nacap against Montgomery Watson. 

   [68]Paragraph 33.

   [69]Paragraph 34.

   [70]Paragraph 35(a).

   [71]Paragraph 32(a).

   [72]Paragraph 36(a).

   [73]Paragraph 37(a).

   [74]Paragraph 35(b).

   [75]Paragraph 32(b).

   [76]Paragraph 36(b).

   [77]Paragraph 37(b).

   [78]Paragraph 33(b).

   [79]Paragraph 34(b).

   [80]Paragraph 32(c).

   [81]Paragraph 36(c).

   [82]Paragraph 37(c).

1. Its claim for contribution under the Wrongs Act also presupposes liability in TTW in favour of Barwon and Minson Nacap, none of which is included in any pleading of those parties, and in favour of Montgomery Watson.  As with the apportionment claims, contribution is not sought in each case against all co-defendants to counterclaim.  In the case of the Barwon claim, contribution is sought from Aquatec, Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller and Fisher Stewart;  in the case of the Minson Nacap claim, contribution is sought against Montgomery Watson, Wynton Stone, Barrett Fuller and Fisher Stewart;  and, in the case of the Montgomery Watson claim, contribution is sought from Aquatec, Minson Nacap, Wynton Stone, Barrett Fuller and Fisher Stewart.

1. Against Wynton Stone, TTW seeks further relief[83] under a deed of indemnity executed in early May 1997 at the time of the deed of novation.  It is alleged that, by reason of its terms, Wynton Stone is obliged to indemnify TTW against all claims against it including its cost of resisting those claims.[84]  It was agreed that the quantification of those legal costs could not be undertaken at this trial.  They must await a later day.

   [83]Paragraph 24-31.

   [84]Paragraph 31.

1. Further claims by TTW are made against Barrett Fuller for breach of contract and negligence.  It is said that, following a slip in the embankment at Apollo Bay in May 1997 and another slip in July 1997, TTW retained Barrett Fuller to provide advice and that the advice given was in breach of its contractual obligations.[85]  As a consequence of which, TTW suffered loss and damage.[86]  The same matters are alleged to constitute a breach of a tortious duty of care.[87]  In a separate notice,[88] TTW seeks contribution in general terms against all of its co-defendants to counterclaim. 

   [85]Paragraphs 40Z, 40ZA.

   [86]Paragraph 40ZB.

   [87]Paragraph 40ZE.

   [88]Notice of contribution filed 27 May 2004.

1. TTW has also joined its former employee, Mr Sloggett, as a third party.  In its third party statement of claim[89] it seeks relief against him and Wynton Stone under the terms of an indemnity which, it is said, he, together with Wynton Stone, gave in May 1997.  Mr Sloggett in his defence[90] joins issue and relies on s. 66 of the Insurance Contracts Act 1984.[91]

   [89]Endorsed on third party notice dated 3 October 2003.

   [90]Amended defence dated 28 May 2004.

   [91]Paragraph 22.

Quantum of Damages

1. No order for a separate trial as to the quantum of damages was made and in the case of the claims by Barwon against Aquatec, that by Aquatec and that by Minson Nacap against Montgomery Watson against Minson Nacap, evidence and argument as to those matters was led.  It was, however, generally accepted that quantum otherwise should stand over for the further argument and in some cases for further evidence.  This was because the complexity of the liability issues meant that there was a very great number of possible scenarios for the assessment of damages.  I will follow that course.

THE EXPERT EVIDENCE

1. It is convenient that I record at this stage a peculiarity of some of the evidence adduced from the experts.  These witnesses were, without exception, highly qualified persons in the fields of structural and geotechnical engineering.  Their opinions upon matters within their disciplines were of great assistance.  In this case, where there was an issue as to the scope of work entrusted to many of the parties, the experts were often asked, without objection, questions which were directed to this issue which, for the most part, was a matter of evaluating the evidence of communications passing between those involved in the project.  Accepting that the experts could properly give evidence of the practices of their professions, I have not acted upon their observations and understanding of matters which are essentially issues for the Court.

1. Following the failure of the tanks in late 1997 and early 1998 and the commencement of this litigation, all of the parties engaged expert consultants to advise them as to structural and geotechnical aspects of the failure.  On 15 and 16 February 2005 in accordance with the direction of Osborn J made on 30 September 2004 the experts met in a conclave chaired by an engineer, Geoffrey Markham.  They produced a joint report setting out the points upon which they were in agreement and this was exhibit 71.  Those attending the conclave were the following structural engineers, William Charles Thomas, Leonard Kelman Stevens, Colin Fraser Duffield, Brendan Joseph Corcoran, James Gordon Forbes and Arthur William Maltby.  The geotechnical engineers were Anthony Bruce Phillips, Ian William Johnston, Max Ervin, Brian Charles Chandler, Andrew Francis Shirley and Gary Robert Mostyn.  Notwithstanding that the Markham report records that on most, if not all, of the technical issues with which I am concerned, those participating in the conclave were in agreement, all of these experts and others also gave evidence at the trial.  In addition, evidence was called from John Phillip Piper, a geotechnical engineer whose firm was retained by Barwon in 1998 to investigate the failures and to make recommendations with respect to remediation. 

1. It should be noted that most of these consultants were retained after the litigation was commenced and at a time when the tanks had been rectified.  Only Mr Piper and Mr Ervin of the geotechnical engineers actually inspected the tanks at the time of failure.  Of the structural engineers only Professor Stevens, Mr Duffield and Mr Corcoran had the advantage of an inspection of the tanks in their failed condition.[92]

   [92]Structural response to Q. 5.

1. At each site the layout of the various tanks comprising the sewerage treatment plant was similar.  There was, at each site, a series of tanks set in the ground of which the largest were the aerator tanks of which there were two placed side-by-side.  These aerator tanks were separated by an earthen bank or berm about 3m wide at the top.  The tanks were trapezoidal in section:   the walls along the length of each tank sloped away from the base at an angle of 45 degrees.  Each of the tanks was very substantial:  their overall dimensions were, at Lorne, 66.5m long, and 17.7m wide with a 10m wide floor at the base and inclined slabs 3.35m high;  and at Apollo Bay 51.5m long, and 14.9m wide at the top with a 7m wide floor at the base and sloping slabs 3.45m and 4.45m high.  Each of them was set, or substantially set, below natural ground level and lined with reinforced concrete 125 mm thick.  At each site, the natural ground was sloping so that the central berm and the downhill embankment had to be built up with compacted fill. 

1. Although there was no unanimity among the experts upon this, I accept the evidence that the concrete wall slabs of these tanks were, for structural purposes, little more than a liner.  They provided no significant support for the earthen embankments and, in fact, depended upon the embankments for support.[93]  The stability of these embankments depended upon their own mass, configuration and composition.  The embankments, therefore, had to be designed and constructed to stand for their design life, that is, 80 years.  During the times when one or both of the tanks were empty, the embankments had to be able to resist lateral pressure from the soil without the support afforded to them by the load of the fluid within the tank.  So too, the concrete floor performed no real structural function.[94]  When the tanks were full this meant that the ground underneath the slabs had to have sufficient strength to support the weight of the fluid in the tank.  Where one or both of them was empty, the design had to cater for upward pressures which might be caused by any hydrostatic pressure or from soil heave. 

   [93]Geotechnical response to Q. 2(a).

   [94]Geotechnical response to Q. 2(a).

1. The tanks at both sites failed.  Again, there was no controversy about this or about its cause.

Apollo Bay

1. At Apollo Bay in early October 1997, Christopher Davis, the Minson Nacap project manager, observed “some longitudinal cracks (along tank line) developing centre of the base slabs (3 No.) SW end of the North aeration tank”.  These three slabs in the weeks that followed suffered more cracking and bowing and a similar occurrence occurred in the south tank.  Mr Davis reported this to Mr Sloggett by fax on 12 November 1997.  The failures at this location were described by the structural experts in the conclave report as follows:

“•Cracking, water infiltration and uplifting of floor slabs at western end of north aeration tank.

•Minor cracking and infiltration to floor slabs at western end of southern aeration tank.

•Opening of joints in the vertical walls to the aeration tanks and the balance tanks.

•Tilting of the retaining wall to the earth fill between the aeration tanks and the balance tank.

•Vertical cracks and misalignment in the vertical section of the side walls to the aeration tank.[95] “

[95]Structural response to Q. 5(a).

1. The opinion of the experts, which I accept, was that the failure of the tanks at Apollo Bay was caused by external hydrostatic pressure from groundwater beneath the floor slabs.[96] 

   [96]Structural and geotechnical response to Q. 2.

1. The opinion of Mr Piper, which was reflected in the evidence of most of the geotechnical experts, was that the most likely source of this groundwater was a confined aquifer running generally down the hill in a south-easterly direction with a phreatic head higher than the base slabs of the tank.

1. Some of the experts were of opinion that the floor slabs were also subject to heave by reason of the expansion of the cohesive clays underlying them which had come into contact with the groundwater, but it was accepted by them that this was a less significant factor.

1. The designer of the tanks had sought to address these pressures in two ways.  First, by providing a cut-off drain on the north or uphill side of the tanks to remove the groundwater from the vicinity of the tanks and, second, by the provision of two pressure relief valves on the floor of each tank.  These were to relieve the pressure by permitting the groundwater to run into the empty tank when the pressure became dangerously high.

1. The opinion of the geotechnical experts was that, while the cut-off drain was effective to reduce the level of the phreatic surface of the groundwater in the vicinity of the drain, it was insufficient to protect the structure from an upward flow of groundwater.

1. The opinion of the majority was also that the pressure relief valves were of little benefit since there was no provision for an adequate drainage path for the water under pressure to arrive at the valves.

1. The experts accepted that the design of the tanks at both sites failed to make adequate provision for the hydrostatic pressures present in the soil by either providing relief of the probable pressure or by providing sufficient structural strength to resist them.[97]  Accordingly, each of the parties with a contractual responsibility for design, Aquatec, Minson Nacap and Montgomery Watson, accepted that they were in breach of contract.

   [97]Geotechnical response to Q. 6.

1. The structural engineers also noted that, in some areas, the thickness of the concrete was less than specified and that there appeared to have been some malfunction in the jointing between the slabs which was responsible for some leakage.  They observed also that the reinforcement in some locations appeared to have been misplaced and that there was some misalignment in the walls.[98]  Neither they nor the geotechnical experts, however, considered that any of these construction matters was a probable cause of the failure.[99]

   [98]Structural response to Q. 8.

   [99]Geotechnical and structural response to Q. 9.

1. The geotechnical experts were also critical of the earthworks.  They were of opinion that it was unlikely that they complied with the specification[100] but they did not think that this was a cause of the tank failure.[101]  In his report, Professor Stevens accepts the analysis of the others which led to the conclusion of the long-term stability of the embankments was uncertain but that this was likely to be a problem only where the tanks, or one of them, was empty for a period of time.  While this was a matter of concern, and one which showed that the designer had failed to satisfy the accepted factor of safety, it was not suggested that this was a cause of the observed failure. 

   [100]Geotechnical response to Q. 8(a).

   [101]Geotechnical response to Q. 9.

Lorne

1. The failure of the Lorne tanks was also due to external water pressure.  Peter Meyer, the superintendent’s representative on site, reported on 29 January 1998 that the tanks which had been filled since 19 December 1997 were leaking.  On 18 February 1998, after the northern tank had been emptied, Mr Meyer observed cracking in the concrete walls and floor.  This cracking was in the central embankment with a single crack on the northern wall.  Water was also seen to be seeping through the joints.  This cracking became worse over the next week or so and water was seen to weep through the cracks.

1. The opinion of the experts was that this failure was due to the presence of water in the embankments.  The soil at this site was more sandy than that at Apollo Bay, but there was clay present.  The experts all agreed that this water applied hydrostatic pressure to the sloping embankments which comprised part of the tanks.  As at Apollo Bay, the design of the tanks and of the embankments did not cater for these pressures.[102]  The source of the water was, at this site, not natural groundwater but, rather, that which came from the fluid which had seeped from the tanks themselves, probably the southern tank.  This seepage permeated the berm and, when the northern tank was empty, the resultant pressure to the embankment of that tank could not be resisted.  The stability analysis of the embankments conducted by Mr Piper showed an insufficient factor of safety when one tank was full and the other empty.  Accordingly, the parties with design responsibility, Aquatec, Minson Nacap and Montgomery Watson, again accepted that they were in breach of contract. 

   [102]Geotechnical response to Q. 7(b).

THE CONTRACT CLAIMS

1. As I have mentioned, the claims in contract made by the contracting parties, at least down to Montgomery Watson, were not challenged, except as to quantum.

Under the Barwon-Aquatec Head Contract

1. The claims between Barwon and Aquatec have been subsequently compromised:  Aquatec has accepted liability in the sum of $2,924,557.  In summary, the sum is made up as follows: 

Item	Settlement
1.	Cost of Remedial Civil Works	3,588,696
2.	Cost of Completion (Mech/Elec) 2.1      Professional Costs 2.2      Other 2.3      Administration 2.4      Non-compliance with performance specifications	820,000
3.	Interest on negative certificates 13, 14 and 15
4.	Less balance for Head Contract work unpaid	(1,614,971)
5.	Less Performance Bond encashed	(321,375)
2,924,557

Insofar as they are concerned with this settlement, the other defendants to counterclaim accept item 1 as representing a fair assessment of Barwon’s entitlement and Aquatec’s liability under the head contract for the cost of remedying or completing the civil works.

1. When pressed as to the nature of this settlement and the consent judgment to be given, whether it represented an award of damages or an award of a liquidated sum, I was told only that the parties had agreed that this sum should be paid.  I was told that, when I deliver my reasons for judgment in this matter, Barwon would seek judgment in the agreed sum plus statutory interest which is presently $1,636,466 to 14 December 2005.  I was not told whether an order for costs would be sought by consent or otherwise. 

1. I record at this point, for it was raised later in the context of the s 131 claims, that, insofar as this statutory interest is sought under s. 60 of the Supreme Court Act 1986, it is correctly described as damages in the nature of interest.[103]  This component of the judgment which may be entered against Aquatec is, therefore, technically a judgment in damages. 

   [103]Compare Supreme Court Act 1986 s 58.

1. Barwon’s claims against Aquatec, including that for an award of damages for breach of contract, were not pressed further. It seeks no relief from any other party. In particular, it now seeks no apportionment pursuant to s. 131.

Under the Aquatec - Minson Nacap Sub-contract

1. As I have mentioned, Minson Nacap accepts that it is in breach of its design obligations under its sub-contract with Aquatec.[104]  But not all of the sums agreed between Barwon and Aquatec concern the defects to the civil works which are the subject of this sub-contract.  Furthermore, Aquatec alleges loss and damage which falls outside the settlement with Barwon.  The quantum of damages sought by Aquatec against Minson Nacap is set out below:

   [104]This acceptance was no more specific than this.

1.     Aquatec liability for Barwon’s cost of remedial civil works.

3,588,696

2.     Interest paid by Aquatec on negative certificates No 13, 14 and 15

452,207

3.     Aquatec consequential losses

450,000

4.     Uncompleted civil works

100,000

5.     Statutory interest payable by Aquatec to Barwon

1,636,466

6,227,369

6.     Statutory interest payable by Minson Nacap to Aquatec

(to 14/12/05)

994,401

7,221,770

1. Minson Nacap now accepts items 1, 3 and 4 and the quantum of item 2.  The principal point of issue here is the causal relationship between items 2, 5 and 6 and the breaches of contract which are now conceded. 

1. Aquatec says in support of items 2 and 5 that its obligation to pay interest on the certificates and on the amount due to Barwon arose only because of the failure of the tanks and its aftermath.  It will be recalled that the three certificates were negative certificates because of the deductions made to the value of work completed on account of the defects.  It might be said, too, that if Aquatec had paid those certificates, as it was obliged to under the head contract, these payments would have been recoverable from Minson Nacap for its breaches.  Minson Nacap’s response is simply that Aquatec should have made the payments due under the certificates.  Why, it asks, should it bear Aquatec’s costs incurred by reason of Aquatec’s own breach of contract?  To my mind, this is a powerful argument.  The fact that it suited Aquatec not to make payments due under its head contract is not a consequence of the breach by Minson Nacap.  Item 2 is disallowed.

1. The position with respect to the statutory interest on the amount of the agreed judgment stands in a different position.  Unlike its contractual right to payment of the sums certified, Barwon’s entitlement to payment of the $2,924,557 depends upon the agreement which has only recently been achieved.  The amount of interest on judgment therefore is a loss to Aquatec which is a consequence of the breaches of the sub-contract by Minson Nacap.  I will allow item 5.

1. Item 6 is for statutory interest on the amount of the proposed judgment pursuant to the Supreme Court Act 1986. Nothing was put against this item in principle. I will hear counsel further as to it and as to quantum.

1. As between Aquatec and Minson Nacap, there is also a seventh item.  Aquatec has failed to pay to Minson Nacap $1,015,304 being the amount unpaid for its work under the sub-contract.  The amount is agreed as is the obligation in Aquatec to pay or to give credit for it.  Statutory interest on this sum is said to be $673,866 as at 15 December 2005.  The claim of Minson Nacap to this sum was included in the stayed proceeding No. 5083 of 2000. 

1. Aquatec’s other claims against Minson Nacap were not pressed. It did not press its claims for damages against any other party. Nor did Minson Nacap advance any submission in support of a contention that its liability to Aquatec should be the subject of apportionment pursuant to s. 131, reserving its position if it should eventuate that apportionment was required. It did, however, maintain its Wrongs Act contribution claims.

1. The consequence of this is that I am satisfied that Aquatec is entitled to an award of damages against Minson Nacap in the sum of $6,769,563 (subject to confirmation of the accuracy of the quantum of items 5 and 6).  Aquatec is also entitled to damages by way of interest from the date of commencement of this proceeding.  I am also satisfied that Minson Nacap is entitled to judgment against Aquatec in the sum of $1,015,304 plus damages by way of interest.

1. For the purpose of the s. 131 claims, there remains the question whether these liabilities should be set off so that the judgment should be awarded to Aquatec for the net figure or whether two judgments should be awarded and one of them apportioned pursuant to s. 131. There was little said about this in final submissions; the affected parties being content to stand this matter over until my decision on the fundamental issues has been given. I will adopt this course.

Under the Minson Nacap - Montgomery Watson Design Services Agreement

1. At the commencement of this trial, counsel for Montgomery Watson announced that their client accepted that it was in breach of its design obligations under the design services agreement with Minson Nacap.[105]  In final address counsel for Montgomery Watson clarified this by accepting that, in its design of the tanks, their client had failed to comply with the requirements of AS 3735-1991, AS 3600-1988 and BS 8007-1987, so that it was in breach of cl. C 1.12 of the specification.[106]  On day 28 Minson Nacap responded to this by amending its pleading against Montgomery Watson by deleting all claims other than its claims against Montgomery Watson for breach of contract.  The question which then remained was that of assessing the resultant damages.

   [105]The concession was no more specific than this.

   [106]A third amended statement of claim filed 25 November 2005 paragraph 9(e).

1. As might be supposed, Minson Nacap sought to pass to Montgomery Watson all of the damages which it is required to pay to Aquatec.  These total $6,327,369.  Damages of Minson Nacap sought against Montgomery Watson are the following:

1.	Its liability to pay Aquatec the cost of Barwon’s remedial civil works	$3,588,696
2.	Its liability to pay to Aquatec interest on negative certificates 13, 14 and 15	$452,207
3.	Its liability to pay to Aquatec its consequential losses	$450,000
4.	Its liability to pay to Aquatec statutory interest which Aquatec is to pay to Barwon	$1,636,466
5.	Its liability to pay to Aquatec statutory interest on the total amount of the judgment which is to be given against Minson Nacap in favour of Aquatec (to 14 December 2005)	$994,401
6.	The amount which Aquatec has not paid to Minson Nacap under its sub-contract if this be not recoverable from Aquatec	$1,015,304
7.	Statutory interest on item 6	$673,546
8.	Minson Nacap’s own cost of investigating the failures	$100,000
9.	Minson Nacap’s legal costs of defending the Aquatec claim on an indemnity basis

Montgomery Watson accepts items 1 and 8.  As to the remainder, it contends that the items do not flow from the breaches and their quantum is not admitted.  Montgomery Watson also relies upon a term in its design services agreement which restricts its liability to the direct costs of its breach.

1. This provision is in the following terms, so far as are here relevant.  In this agreement Montgomery Watson is defined as the consultant and Minson Nacap as the client.

“5.1Direct and Indirect Loss

The liability of the Consultant..., howsoever arising, whether out of the performance or non-performance of the Services, whether under the law of contract, tort or otherwise, shall be limited to the cost of rectifying the works comprising the Project and any direct losses or costs suffered by the Client under the contract in relation to the Services provided… 

The Consultant… shall be liable to the Client for any direct losses or costs suffered by the Client in relation to the Services provided.”

1. The expression “direct loss” is one which is frequently encountered in commercial documents.  It is evidently inserted to limit the damages which the defaulting party is exposed to by reason of its breach.  In every case, the starting point must be a conclusion that the loss in question has been caused by the default and is sufficiently proximate to the default to be the subject of an award of compensation, as a matter of law.  The limitation then operates to remove from the award those losses which are not direct.  Having looked at the cases to which I have been referred, I respectfully adopt the formulation of Ryan J in GEC Alsthom Australia Ltd v City of Sunshine[107] that the enquiry is whether the losses or, in this case, the costs, flow naturally from the default.  This enquiry must have regard, not only to the terms of the document as a whole, but also to the work to be performed and the nature of the default.  In short, it approximates the test which is found in the first limb of Hadley v Baxendale.[108]

   [107]Unreported, Federal Court 20 February 1996, BC 9600288 at p 54.

   [108]See Robertson Group (Constructions) Ltd v Amey Miller (Edinburgh) Joint Venture [2005] BLR 491 at 493 [7]-[8], per Lord Drummond Young.

1. The design consultancy agreement is an agreement whereby Montgomery Watson undertook to perform design and associated work for the project as part of a team, which team, included Aquatec and Minson Nacap.  Its contract, however, was with the construction contractor, Minson Nacap, which is the client for the purposes of the agreement.  The agreement, in cl 2, imposes performance obligations on Montgomery Watson.  To this is added, by the second paragraph of cl. 5.1, a liability in Montgomery Watson to Minson Nacap for “any direct costs or losses” suffered by Minson Nacap in relation to the services provided.  The limitation presently under consideration, which is found in the first paragraph of this clause, uses similar terminology.  The liability of Montgomery Watson is limited to two heads of loss and damage suffered by Minson Nacap:  the cost of rectification and any direct losses or costs suffered by Minson Nacap under the contract in relation to the services provided.  The use of the words “in relation to” in both paragraphs indicates that the connection between the losses and the costs and the services and the defaults is not to be construed narrowly.  The losses and costs must, nonetheless, flow directly from the default.

1. In this case, the default of Montgomery Watson as conceded, is in non-specific terms.  I must therefore ask myself in respect of each of the suggested heads of damage, other than rectification cost, whether it flowed directly from this default.

1. Item 2, the interest on negative certificates number 13, 14 and 15, must fail, if only because I have not found Minson Nacap liable to meet this Aquatec expense.  At the present level, the item must be disallowed for the further reason that it is too remote from the breaches of contract by Montgomery Watson to satisfy the causation requirement for such a claim.  It satisfies neither of the limbs of Hadley v Baxendale.  I find, too, that it is not a direct loss or cost of Minson Nacap within the meaning of cl. 5.1 of the design services agreement because its occurrence depended upon the decision of Aquatec not to comply with its contractual obligation to pay the sums certified under the head contract.

1. Item 3 is the amount of $450,000 which Minson Nacap has agreed to pay to Aquatec as its loss consequent on the failures and upon the decision of Barwon to take the civil works out of the head contract.  Montgomery Watson accepts that Aquatec incurred these costs as a consequence of having to maintain a presence on site while the remediation work was decided upon and carried out.  Counsel for Montgomery Watson then said that their client accepted this item, provided it was a direct loss or cost.  I find that it is a loss of Minson Nacap flowing directly from the Montgomery Watson default.  As a consequence of this default, Minson Nacap was exposed under the sub-contract to meet these expenses of Aquatec.

1. Item 4 concerns Aquatec’s interest obligation in favour of Barwon for which Minson Nacap must indemnify Aquatec.  I have concluded that Aquatec is entitled to include this item in its damages claim against Minson Nacap.  For the same reason, I would include it in the damages payable by Montgomery Watson.  It is a direct loss in the hands of Minson Nacap.

1. Item 5 represents the statutory interest which Minson Nacap will be required to pay to Aquatec.  This interest represents compensation to Aquatec for having to stand out of the money to which it is now entitled.  In part, this will pass to Barwon for it, too, has a claim for statutory interest upon the settlement sum.  It may be said that this compensation for late payment does not flow directly from the Montgomery Watson default.  Nevertheless, in the context of this case, where every party until very recently was denying liability, this expense is properly to be seen as flowing directly from the default.

1. Items 6 and 7 may be shortly dealt with.  Whether Aquatec has lawfully or otherwise withheld money otherwise due under its sub-contract with Minson Nacap has nothing to do with Montgomery Watson.  As between those parties, I have determined that the two items[109] are to be paid or brought to credit by Aquatec.  It is therefore not a loss suffered by Minson Nacap.

   [109]The subject of determination of the amount of interest.

“To reform aspects of the law relating to legal liability in relation to building matters.”[207]

Part 9 of the Act deals with liability in three divisions, the second of which is entitled “Limitation of Liability”.  In this division was[208] found ss. 131, 132 and 133 which were in the following terms:

“131.   Limitations on liability of persons jointly or severally liable

(1)After determining an award of damages in a building action, the court must give judgment against each defendant to that action who is found to be jointly or severally liable for damages for such proportion of the total amount of damages as the court considers to be just and equitable having regard to the extent of that defendant’s responsibility for the loss or damage.

(2)Despite any Act or rule of law to the contrary, the liability for damages of a person found to be jointly or severally liable for damages in a building action is limited to the amount for which judgment is given against that person by the court.

[207]This was amended in 1996 to include, as the subject of the intended reform, also plumbing matters.

[208]These sections were repealed as from 1 January 2004 by the Wrongs and Limitations of Actions Acts (Insurance Reform) Act 2003.

132.Rights to contribution

Despite anything to the contrary in the Wrongs Act 1958, a person found to be jointly or severally liable for damages in a building action cannot be required to contribute to the damages apportioned to any other person in the same action or to indemnify any such other person in respect of those damages.

133.Operation of Wrongs Act 1958

Except as provided in section 132, nothing in this Division affects the operation of Part IV of the Wrongs Act 1958.”

1. These provisions had the effect, where they applied, of changing the common law whereby a person, D1, jointly liable with another, D2, was subject to judgment for the full amount of the damages caused as a result. If the plaintiff recovered payment from D1, then the only recourse of D1 was to seek contribution from D2 under s. 23B of the Wrongs Act.  The evident intent of these sections was to render D1 and D2 each liable only for that part of the plaintiff’s loss for which each was responsible.  The common law principle did not, of course, apply where two defendants were severally liable, for in such a case, each would be liable for the damages which flowed from its own wrongful act.  Nevertheless, the intent of the legislation appears to be that, even in such a case, the Court should make an assessment of the responsibility of those defendants and to give judgment accordingly. 

1. And so, in the present case, it is contended on behalf of Minson Nacap, as defendant to the claims of Aquatec, that it should not be liable to suffer judgment in favour of Aquatec for the total amount of Aquatec’s loss;  this loss should be apportioned, according to their responsibility for it, between Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW. 

1. And Montgomery Watson, as defendant to the claim of Minson Nacap, also contends that the loss of Minson Nacap should be apportioned, according to their responsibility for it, between it, Montgomery Watson, Aquatec, Wynton Stone, Barrett Fuller, Fisher Stewart, and TTW.  A like contention is also made by Wynton Stone in respect of the loss of Montgomery Watson for which it, Wynton Stone, may be liable.

The Application of Section 131

1. It has become apparent in the course of this trial that there are great difficulties in construing this legislation as well as difficulties in its application.  It was contended before me on behalf of Barwon and Aquatec, and even Minson Nacap, that, as a matter of construction, the statute has no application to this case so that apportionment should not occur.  Counsel for Montgomery Watson and Wynton Stone, on the other hand, argued, that the provisions do apply.  I should add that counsel for Minson Nacap said that, if the sections do apply to this case, contrary to their primary submission, their client would gratefully accept the benefits which they might confer upon it. 

1. The arguments as to the applicability of s. 131 essentially came down to the question whether this proceeding or, more correctly, each of the claims within this proceeding for which apportionment were sought, is a “building action”. This expression is defined in s. 129 as follows:

“129.   Definitions

In this Division –

‘building action’ means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work; 

‘building work’ includes the design, inspection and issuing of a permit in respect of building work.”

It is convenient also to set out at this stage other relevant definitions in s 3 of the Act which definitions relate to the statute generally.

“’building’ includes structure, temporary building, temporary structure and any part of a building or structure.”

‘building work’ means work for or in connection with the construction, demolition or removal of a building.”

1. The first issue is whether the tanks here in question are a building so that their design and construction is building work within the meaning of s. 129 . Counsel for Barwon who presented argument upon this point, notwithstanding that Aquatec accepted sole liability for the amount which Barwon now seeks against it, submitted that the meaning of “building” in the Building Act must be determined in the light of the provisions of the statute as a whole.  They contended, first, that a building in this statute must be a structure for the construction of which a building permit is required under s. 16.  They pointed out that Part 9 Division 2 deals not only with the apportionment of liability, but also creates a new limitations period for building actions.  By s. 134 such an action cannot be brought more than 10 years after the issue of the occupancy permit in respect of the building work or, where no such permit is issued, after the date of the issue of the certificate of final inspection of the building work.  In each case, time runs from the date of a stipulated event which, under the Act, depends upon the issue of a building permit.  Aquatec supported this submission.  The primary position of Minson Nacap was also to support it.

1. It was put that, where a building permit is obtained under s. 16, the permit must specify whether an occupancy permit is required.[209]  Where it is required, it will be issued and time for the purposes of s. 134 runs from the date of its issue.  Where it is not required, the relevant building surveyor must issue a certificate of final inspection.[210]  In such a case, time, for the purposes of s. 134, runs from the date of its issue.  In either of the stipulated events, the starting point is the building permit.  The section does not make provision for the running of time where the litigation concerns work for which neither an occupancy permit nor a certificate of final inspection is required to be issued.  It was put that the rejection of this submission would have the consequence that, for a building action relating to building work for which s. 16 did not require a permit, there would be no limitations period under s. 134, for neither of the trigger events would occur.  This, it was said, was a consequence which Parliament could not have intended.  Accordingly, it was put, if no building permit for work is required, then the work cannot be building work for the purposes of s. 134, and a proceeding arising out of such work cannot be a building action.

   [209]Section 21.

   [210]Section 38.

1. The response to this offered on behalf of Montgomery Watson and, presumably, Wynton Stone, was that the words of the definition of building action in s. 129 should be given their full and ordinary meaning; “building work” should not be read down by reference to the permit provisions of s. 16. Litigation in building actions would be subject to the new s. 134 limitation period, where an occupancy permit or certificate of final inspection was issued, and, if not, the ordinary limitations period prescribed in the Limitations of Actions Act 1958 would apply.  The consequence of this, it would seem, would be that, for limitations purposes, there would be the following classification of proceedings –

(a) building actions within the meaning of s. 129, to which s. 134 applied;

(b)building actions within the meaning of s. 129, to which s. 134 did not apply; and

(c)litigation which does not fall within the definition of building action.

In the case of proceedings described in part (b) and part (c) above, the general limitation periods contained in the Limitations of Actions Act would continue to apply.  There is also a fourth possibility: 

(d)building actions within the meaning of s. 129 but where, for some reason, neither an occupancy permit nor a certificate of final inspection was in fact issued.

1. I am not in this proceeding concerned to reach any conclusions as to the application of various limitation periods to legislation of this kind and I do not do so.

1. The submission put on behalf of Barwon and others was that Parliament could not have intended such a complicated limitations regime.  The simple answer they offered was, as I have mentioned, that s. 134, and indeed the whole of Division 2, applied only to litigation concerning building work for which a permit was, under s. 16, required.  This work essentially concerned the construction, demolition or removal of habitable buildings.  Liability for damages in litigation concerning other building work fell to be determined otherwise than under Division 2.

1. This construction, it was pointed out by counsel on behalf of Montgomery Watson and Wynton Stone, raises its own difficulties. Under s. 16 a permit is required for all building work as defined in s. 3 other than that exempted. I was referred to the Building Regulations 1994 where these exemptions are set out in reg 1.6. It was first put in reliance upon this regulation that, since the works there described had to be exempted, it must follow that, without that exemption, they would be included in the definition of building in s. 3. And since these exemptions included all manner of non-habitable works, it must be that the s. 3 definition of building cannot be limited to habitable works. Second, it was argued that the application of s. 16 to works was a very uncertain and unsatisfactory basis for identifying the application of Division 2 because the regulations were liable to and have been the subject of frequent change. In these circumstances, as at what stage in the litigation is the status of the building to be addressed? Is it when judgment is given, when the claim is brought or, perhaps when the cause of action arose?

1. Counsel for Barwon tendered in evidence the building permit applications for the plants which are the subject of this litigation.  These applications are for a permit for the plant rooms only and not for the tanks.  Counsel informed me that this was because the tanks were not seen by Barwon or, it would seem, by the municipal surveyor as buildings.  This is, of course, an indication as to how the legislative regime is understood by those who participate in it;  it is not determinative.

1. I now return to the place where I must start – the text of the statute.  The definition of “building” in s. 3 is an inclusive one.  In its ordinary sense, the word refers to structures which are enclosed and which accommodate or are used by people.  In the Macquarie Dictionary it is defined as “things which are built or constructed”.  The definition in the Oxford English Dictionary is in these terms:  “that which is built;  a structure, edifice: now a structure of the nature of a house built where it is to stand”.  The statutory enlargement in s. 3 extends the meaning to include a “structure”.  Nearly 40 years ago in O’Brien v Shire of Rosedale[211], Gillard J identified three characteristics which are associated with a structure in popular usage.  First, it is the product of the assembly of a number of component parts to produce some thing which is different from those parts and which is of practical value.  Second, this thing is commonly attached to the land on which it is erected, but this is not a necessary characteristic.  Third, it has a degree of permanence.  I have been referred by counsel for Wynton Stone to a number of other authorities as to the meaning of these terms.  While some of them depend upon their statutory context, none would gainsay the analysis of Gillard J which I respectfully adopt.  Indeed, they include cases which have concluded that the word “structure” covers a 4m high reinforced concrete wall.[212]  It follows, then, that the tanks here in question are structures and therefore fall within the definition of building in s. 3.

   [211][1969] VR 112 at 116-7.

   [212]Ulmarra Council v Clarence River County Council (1998) 101 LGERA 374.

1. I have not overlooked the fact that in Boral Resources (Vic) Pty Ltd v Robak Engineering and Constructions Pty Ltd[213] the structures which were said to be defective were a municipal swimming pool and an elevated water storage tank.  No point appears to have been taken that these were not buildings, and I do not take the silence of the Court of Appeal on this matter as a factor to be considered here.

   [213][1999] 2 VR 507.

1. I was referred, also, to the decision of this Court in Australian Rail Track Corporation Ltd v Leighton Contractors Pty Ltd[214]. This case concerned an application by a defendant to join other defendants to the plaintiff’s proceeding. The proceeding was an unusual candidate for characterisation as a building action. The plaintiffs as owners of a railway track sued Leighton who was constructing a viaduct over the railway, alleging negligence when a beam collapsed blocking the track for some eight days. They said that, as a consequence, they suffered economic loss. Leighton sought to join as defendants for the purposes of a s. 131 apportionment, those parties who had an involvement in the construction project and whose negligence, Leighton contended, made them also liable for the plaintiff’s loss. Bongiorno J refused the joinder on the basis that s. 131 had no application. His Honour reached this conclusion for three independent reasons: the viaduct was not a building within the meaning of s. 3[215] so that its construction was not building work within the meaning of s. 3 or s. 129; second, the claim by the plaintiffs, who were only incidentally or indirectly affected by the works could not be characterised as a building action, for it was not a dispute between a building owner and a building practitioner inter se[216]; and, third, it was by no means clear that the collapse of part of the construction whilst unfinished fell within the expression “defective building work” in the definition of building action in s. 129[217].

   [214][2003] VSC 189.

   [215][2003] VSC 189 at [15].

   [216][2003] VSC 189 at [22].

   [217][2003] VSC 189 at [24].

1. It is his Honour’s first reason which is of present interest.  Counsel for the plaintiff had pressed his Honour with a statement appearing in the Explanatory Memorandum to the statute, when it was but a bill, as reflecting the intention of the drafter.  This passage, which was directed to cl. 3, the definition provision, was in these terms:

“The definition of building is not intended to include structures which are not in the nature of buildings such as railway viaducts and roads.”

This passage was repeated by the Minister in his second reading speech.  His Honour felt constrained by this to conclude that the road overpass was equally not a building within the meaning of s. 3.

1. The difficulty with this, for my purposes, is that the words of the statute do not reflect this intention;  rather the contrary.  The scheme of the definition is to start with the word “building” and then to state that it includes other things of which one is “structure”.  In ordinary usage, “structure” has a wider meaning than “building”.  The express inclusion of “structure” within the statutory meaning of building must therefore serve to enlarge the meaning of “building”.  The observation in the Explanatory Memorandum inverts this:  it says that the word “structure” is to be read down so that it is limited by the word “building”.  To put the matter another way, in normal speech, every building falls within the meaning of structure.  To read down structure in the definition so that it has no wider meaning than building, has the consequence that the word “structure” contributes nothing to the definition at all. 

1. I conclude, therefore, that, if the tanks presently in question fall within the meaning of structure, as I think they do, then they are buildings.

1. The second matter as to the applicability of s. 131, but a matter which was only of a peripheral issue in this case, is whether the present claim is one for damages as is a requirement of the definition of building action in s 129. While it is common enough in building cases for the claimant to seek an award of damages for breach of contract or for breach of some statutory or other legal obligation, it is frequently the case that the claim is otherwise, for example, a money claim. In this case, the primary claim of Barwon against Aquatec, as originally pleaded, was for the sum payable under certificate 16. Then a further claim was added for damages for breach of contract. This further claim is a claim which falls within the definition of building actions. The settlement, then, poses difficulties for the application of the statute because, under its terms, judgment will be given, if at all, for an agreed sum. I was not told whether this represented a compromise of the money claim or of the damages claim. It would therefore seem that, prior to entering this judgment I will not have determined to make an award of damages against Aquatec. Accordingly, s 131 can have no application. It may be thought surprising that the parties’ settlement could in this way avoid the policy underlying s 131, but it will be recalled that, under the settlement Aquatec is assuming sole liability to pay the amount agreed. It may be supposed, that if Aquatec is content that this be so, the defendants which it joined to share that liability cannot complain that this removes from them the risk that each might have to bear its own share of this sum.

1. It is, however, clear enough that the claim of Aquatec against Minson Nacap seeking damages for breach of contract, where the breach alleged was its performance of defective work, including design work, falls within the statutory definition of building action.  So, too, does the claim of Minson Nacap against Montgomery Watson and the claim of Montgomery Watson against Wynton Stone.

The scope of s. 131

1. It is convenient at the outset to examine generally the meaning and operation of s. 131 as it might affect the various claims for apportionment in this proceeding. It has a number of features, some of which raise difficulties which I must address.

(1)The section presupposes the existence of a party seeking a judgment in damages.  This is because the joint or several liability of the defendants must be a liability towards someone.  This person will normally be the plaintiff in the building action or a counterclaimant.  For convenience I shall refer to this party as the plaintiff (P).

(2)The Court of Appeal in Boral Resources (Vic) Pty Ltd v Robak Engineering and Constructions Pty Ltd[218] rejected a submission that an apportionment order might be made between a defendant (D1) to P’s claim and a third party. I do not read the judgments in that case to preclude the application of the statutory regime where a defendant sues a number of third parties, for in such a case the third parties are in truth defendants to the defendant’s claim. Although the definition of “building action” in s. 129 mentions only counterclaims in addition to actions, it would be difficult to suppose that Parliament intended that the redress would be so limited. If, as in the present case, a defendant to counterclaim sought against multiple third parties damages for loss or damage arising out of defective building work, it would defeat the purpose of the legislation if the old rule continued to apply so that each of the third parties was liable for the full amount of the damages awarded. Nor is it realistic to assume that this difficulty could be overcome by the defendant to counterclaim bringing a fresh action against the third parties who would then be defendants to this new action. In most cases the apportionment legislation confers no benefit on the plaintiff. It is unlikely, then, that a defendant to counterclaim would willingly expose itself to the risks attending apportionment and be ready to incur the extra costs of commencing a separate proceeding. I construe the word “defendant” in s. 131 as referring to any party who is a respondent to a claim in respect of which an award of damages in a building action is to be made. This construction is consistent with the views of Batt JA in the Boral case[219].

[218][1999] 2 VR 507.

[219]At [10].

(3)Section 131 presupposes that P has suffered loss and damage. The proof of this will normally be a precondition to the determination of the Court to make an award of damages. Furthermore, the section requires the Court to determine the responsibility of D2 and other co-defendants which are jointly or severally liable with D1 in damages. I shall refer to this co-defendant or these co-defendants collectively as D2. I infer that the loss or damage of P which underlies the liability of D2 is the same loss or damage which is the basis of the proposed award of damages which is to be made in favour of P against D1.

(4)In this case the claims for apportionment are essentially contingent;  most of the plaintiffs below Barwon in the contractual hierarchy will have suffered loss and damage only when and to the extent that judgment is against it at the suit of a plaintiff superior in the hierarchy and, further, that it has satisfied that judgment.  For the most part, each of these plaintiffs sues the party below it in the hierarchy (D1), alleging breach of contract.  D1, in turn, alleges against D2 that it is liable to P in negligence.  But P’s cause of action in negligence against D2 is not complete until loss and damage has been suffered by P so that, strictly speaking, D2 is not yet jointly or severally liable to P in damages.[220]  I do not understand any party to have taken this point in this trial.  This circle, however, might be broken by adopting the practical solution, as is done in contribution claims where such a claim may be made by a defendant who is only at risk of suffering loss and damage against a third party.[221]

[220]Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VR 484

[221]Port of Melbourne Authority v Anshun (1981) 147 CLR 589 at 595, per Gibbs CJ, Mason, Aickin JJ; Australian Mutual Provident Society v GEC Diesels Australia Ltd [1989] VR 407 at 410, per Young CJ, Marks, Ormiston JJ.

(5)A further consequence of the fact that, in this case, the claims for apportionment are made in an hierarchical context, is that each must be determined in turn.  This follows from the fact that the quantum of the judgment in damages which I may determine to award to P at each level will reflect the amount of the loss and damage suffered by P.  This amount will, perhaps, include the quantum of the judgment awarded against P in its character as D1 or D2 in an earlier determination in this proceeding. 

(6)The joint or several liability of the multiple defendants which is the foundation of the statutory provision is in each case, or collectively, a liability found by the Court against them in favour of P for the damages which the Court has determined to award to P.  There is no requirement in the section that there be otherwise any commonality in these liabilities.

(7)The task of the Court in determining responsibility under s. 131(1) is similar to that of the Court awarding contribution under s. 24(2) of the Wrongs Act or assessing contributory negligence under s. 26(1)(b) of the Wrongs Act.  This follows from the similarity of the verbiage of the sections. 

(8)Notwithstanding that the terms of the statute direct the Court to give judgment against D1 and D2 in accordance with its responsibility, the Court is so acting in the conventional environment of adversary civil litigation.  Accordingly, if no party seeks such an apportionment order it is not for the Court to intervene in order to make one.  It may be that the provision in this regard is different under the South Australian equivalent.[222] Normally, it will be P who moves for judgment. Under s. 131 it would seem that D1 who is at risk of suffering judgment for the full amount of P’s claim might also pursue D2 seeking an order under s. 131. It will indicate its intention to do so by giving notice under R 11.15 to D2 together with a pleading setting out the facts upon which it relies. D2 may join issue in its defence or allege facts which minimise its own responsibility for P’s loss and damage. There would in the ordinary course be no need for D2 itself to file a statement of claim seeking apportionment against D1 or other co-defendants. This is because the allegations which D2 might make with a view to fastening responsibility upon D1 or any other co-defendant will normally appear in the pleading of D1 and in D2’s own defence to that pleading. Where P seeks no judgment for damages against a particular defendant and where no defendant against whom such a judgment by P is to be given seeks apportionment against that defendant, then judgment should be given for that defendant.[223] 

[222]See NBD Bank v South Italy Tiling SA [1997] SADC 3596.

[223]Boral Resources (Vic) Pty Ltd v Robak Engineering and Construction Pty Ltd [1999] 2 VR 507 at 511, per Batt JA.

(9)A matter of particular difficulty is the application of the apportionment regime in a contractual environment such as the present. The legislation, in its original form is based upon the work of the Australian Uniform Building Regulations Co-ordinating Council in 1991. The council published model provisions for building regulatory legislation of which ss. 180 and 181 are evidently the progenitors of the Victorian ss. 131 and 132. These model sections together with s. 179 are in the following terms.

“179(1)Sections 180-183 apply to an action of tort (including an action for damages for breach of statutory duty) for damages for economic loss and rectification costs resulting from defective construction of building work or other work carried out under this Act. 

(2)Sections 180-183 do not affect any right to recover damages for death or personal or bodily injury resulting from defective construction.

180(1)After determining an award of damages in an action, a court is to apportion the total amount of the damages between all persons who are found in that action to be jointly or severally liable for those damages, having regard to the extent of each person’s responsibility for the damage.

(2)The liability for damages of a person found to be jointly or severally liable for damages in an action is limited to the amount apportioned to the person by the court.

181(1)A person found to be jointly or severally liable for damages in an action cannot be required to contribute to the damages apportioned to any other person in the same action or to indemnify any such other person.

(2)A person found to be jointly or severally liable for damages in an action may recover contribution from any other tortfeasor not a party to the action who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise.

(3)A person is not entitled to recover contribution under this section from any person entitled to be indemnified by the person in respect of the liability for which the contribution is sought.”

It will be seen that the model legislation was concerned, like the contribution legislation in most jurisdictions then in force, only with liability in tort.[224]  The statutes based on this model which were enacted in South Australia,[225] New South Wales,[226] and ACT[227] as well as s 131 of the Victorian Act are not so limited. In a case such as the present, the legislative apportionment regime must address the commercial decision of the parties to a building project to apportion the risk and consequent liability for defective work in a particular way – a way which may not reflect their responsibility as it appears in the litigation which may follow. The purpose of agreeing to the apportionment of risk and liability at contract stage is to avoid, as far as possible, the difficulties which cases such as the present have raised.

[224]This has been retained in the Building Act 1996 (N.T) s 154 sub-s 1.

[225]Development Act 1993(SA) s 72, but the provision is in rather different terms from the model legislation or the Victorian legislation.

[226]Environmental Planning and Assessment Act 1979 S 109ZJ.

[227]Construction Practitioners Registration Act 1988 ACT s 26(1)

1. I turn now to each of the s. 131 claims identifying each by the name of the plaintiff.

The Barwon s. 131 Claim

1. Only Wynton Stone pressed this claim. In final address even this party conceded that the statutory apportionment regime had no application to the Barwon claim. I therefore put this s. 131 claim as pleaded, to one side.

The Aquatec s. 131 Claim

1. The Aquatec claim against Minson Nacap is, as I have concluded, a building action.  It is a claim brought by Aquatec in contract for damages for loss occasioned by defective design work for which Minson Nacap alone was contractually responsible.  Aquatec sought relief against no other party.  Minson Nacap, which accepts the justice of this claim as well as much of the measure of damages, now seeks to share its liability with Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW on the basis that each of them is in breach of a duty of care owed to Aquatec and that, accordingly, each is jointly or severally liable to Aquatec for those damages.

1. Minson Nacap’s primary position, as I have mentioned, was to accept sole liability for these damages and to seek to pass to Montgomery Watson as the party contractually responsible for the design work. For this reason its claim under s. 131 was put in the alternative and it was pressed with somewhat less enthusiasm than the s. 131 claims of those parties which followed.

1. The essence of the claim, however, was that the co-defendants were also liable to Aquatec in damages in the building action.  In this case, this liability was put in negligence, that is, that each of Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW were in breach of a duty of care owed to Aquatec.  I have concluded that none of these parties other than TTW owed Aquatec a duty of care [228] and that TTW was not in breach of duty[229] are fatal to this s. 131 claim which must therefore be rejected.

   [228]See paras [277],[283],[289], [296] and [302] above.

   [229]See para [303] above.

The Minson Nacap s.131 claim

1. The claim brought by Minson Nacap is a building action within the meaning of s 139.  In its current manifestation it is a claim in damages for breach of contract brought by Minson Nacap against Montgomery Watson alone.  Montgomery Watson admits liability for breach of contract and has agreed to the quantification of much of the claim against it.  I have provisionally determined upon an award of damages in favour of Minson Nacap against Montgomery Watson in the sum of $4,186,312.[230]

   [230]See para [113] above.

1. Montgomery Watson seeks apportionment of these damages between itself and Aquatec, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW.  These five parties are described in the Montgomery Watson pleading as having been joined as third parties by Montgomery Watson in its capacity as third defendant to the Barwon counter-claim.  Montgomery Watson contends that each of these third parties owes a duty of care to Minson Nacap and that each is in breach of that duty whereby Minson Nacap has or is liable to suffer the same loss and damage as it does from the tortious acts of the third parties from the breach of contract by Montgomery Watson.  Insofar as it may be found liable in damages to Minson Nacap, Barrett Fuller seeks apportionment against Montgomery Watson, Wynton Stone, Fisher Stewart and TTW.[231]

   [231]Barrett Fuller statement of claim 1 July 2003, paragraph 10

1. The first difficulty arises from the constitution of the s 131 claim from a procedural point of view. The current structure of the litigation for present purposes is as follows: Barwon is counter-claimant against Aquatec. Aquatec as defendant to the Barwon counterclaim has joined five defendants including Minson Nacap and Montgomery Watson. Aquatec has sued Minson Nacap which in turn has brought in as co-defendants Montgomery Watson, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW. Minson Nacap has filed a statement of claim against Montgomery Watson alone. At this point, then, Montgomery Watson is one of six defendants to the Barwon counterclaim and one of six defendants to the Aquatec claim and the sole defendant to the Minson Nacap claim. It has made claims against Aquatec, Minson Nacap, Wynton Stone, Barrett Fuller, Fisher Stewart and TTW as third parties. In its third party statement of claim it is said that these parties are third parties to each of the Barwon claim, the Aquatec claim and the Minson Nacap claim. Since they are all defendants to the Barwon claim and the Aquatec claim, apportionment is procedurally available without their having been joined as third parties. Since they are not defendants to the Minson Nacap claim, apportionment is procedurally not available and this difficulty is not overcome by adding them as third parties. But there is a further procedural difficulty in this claim. This arises because Minson Nacap brings its action for damages against Montgomery Watson, not as a plaintiff against the defendant, but as a defendant against a co-defendant pursuant to R. 11.15. In these circumstances, it is difficult to see how Montgomery Watson could treat as co-defendants, for the purposes of s. 131, the five parties against whom apportionment is sought. In any event, these difficulties have been resolved by the acceptance by all relevant parties that no point be taken at these essentially procedural matter. I am content to proceed on that basis.

1. I have concluded that none of Aquatec, Wynton Stone, Barrett Fuller, Fisher Stewart or TTW is liable to Minson Nacap in damages for negligence. No other basis for liability is contended for. I will not therefore order apportionment pursuant to s. 131 in this claim brought by Minson Nacap.

The Montgomery Watson s. 131 Claim

1. I would not award damages against Wynton Stone for breach of its sub-consultancy agreement with Montgomery Watson for its liability has been released by the deed of novation. Montgomery Watson has, however, been successful in its breach of warranty claim. This claim is a building action for it concerns defective building work. The judgment which I have determined to award in favour of Montgomery Watson against Wynton Stone is one for damages so that the pre-conditions for the application of s. 131 have been satisfied. Wynton Stone then seeks apportionment of this judgment against Minson Nacap, Barrett Fuller and Fisher Stewart, but it makes no allegation against them of liability to Montgomery Watson. I was told that it was content to adopt the allegations of other parties[232] but none of its co-third parties, except TTW, makes an allegation that any of the co-third parties is liable in damages to Montgomery Watson.  I concluded that none of Minson Nacap, Barrett Fuller or Fisher Stewart is liable in negligence to Montgomery Watson.[233] There was no other basis for any of them to be liable to Montgomery Watson in damages. I will not therefore make an apportionment order pursuant to s. 131.

   [232]See para [55] above.

   [233]See paras [322]-[324] above.

The Wynton Stone s. 131 Claim

1. The claim by Wynton Stone is a building action and I have determined to award judgment for damages in favour of Wynton Stone against Barrett Fuller. Accordingly, the preconditions to the application of s. 131 have been satisfied. Barrett Fuller seeks apportionment of this judgment against Minson Nacap, Montgomery Watson, Fisher Stewart and TTW.[234] The grounds for this are said to have been set forth in the further pleadings of the other parties. In none of these pleadings is it contended that any of those parties are liable to Wynton Stone in damages. I therefore do not find that any of those parties is liable to Wynton Stone in damages. I will not make an apportionment order in this claim pursuant to s.131.

   [234]Statement of claim, paragraph 11.

The TTW s. 131 Claim

1. I have found that TTW has assumed the liability of Wynton Stone for its defective design executed before the deed of novation. Accordingly, I have determined to make an award of damages in favour of Montgomery Watson against TTW. Since the Montgomery Watson claim is a building action, the preconditions for the application of s. 131 have been satisfied.

1. TTW then seeks apportionment of this judgment against Aquatec, Minson Nacap, Barrett Fuller and Fisher Stewart. I do not find any of these parties is liable to Montgomery Watson in damages. Accordingly, I will not make a s. 131 apportionment order in this claim.

THE CONTRIBUTION CLAIM

1. Each of the parties against whom judgment is to be given seeks contribution against other parties. The parties seeking contribution are Aquatec, Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller and TTW. Each of these contribution claims depends upon the party seeking contribution establishing that the proposed contributor is itself liable to the party in whose favour the judgment is to be given. These last-mentioned parties are respectively Barwon, Aquatec, Minson Nacap, Montgomery Watson, Wynton Stone and, again, Montgomery Watson. The requirement in s. 23B that there be liability to the party in whose favour judgment is to be given, is not identical to the requirement in s. 131 that D2 be found liable to P in damages. Nevertheless, my conclusions that the allegations of liability by D2 to P in each of the apportionment claims in this case carry with them a conclusion which is fatal to each of the contribution claims. In short, I am not satisfied that in any of the contribution claims any of the suggested contributors is liable to the party in whose favour judgment is to be given.

1. This is, of course, not to say that in each case the burden of satisfying the judgments which I give against Aquatec, Minson Nacap, Montgomery Watson, Wynton Stone, Barrett Fuller and TTW will necessarily remain with the party against whom the judgment is to be given.  This is because each of them has a claim over against a further party which includes as part of the damages the amount of that judgment.

CONCLUSIONS

1. The conclusions which I have arrived at are complicated.  The contract claims by Barwon, [235] Aquatec, [236] Minson Nacap[237] and Wynton Stone[238] have been successful.  The damages claims in negligence, the contribution claims and the apportionment claims have not been made out.  The TTW claim under the Deed of Indemnity against Wynton Stone and Mr Sloggett have been established.[239]  I will hear counsel in due course as to the orders which ought to be made to give effect to my conclusions, as to the remaining issues as to quantum and as to costs.

   [235]See para [87] above.

   [236]See para [91] above.

   [237]See para [100] above.

   [238]See para [238] above.

   [239]See para [262] above.

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