Aust Educ Union (Formerly Sait Inc) v Grieve No. Scgrg-95-29

AUST EDUC UNION (FORMERLY SAIT INC) v GRIEVE
[2000] SASC 381

WILLIAMS J

1. The requirements of the Full Court’s order

On 4 June 1998, I dismissed the claim of the plaintiff for damages based upon an allegation that the defendant had failed properly to carry out the terms of his engagement as architect in connection with the removal of asbestos from the plaintiff’s building. By order dated 13 May 1999, the Full Court allowed an appeal against my decision and quashed my order of dismissal of the claim; the Full Court ordered that, subject to the grant of an extension of time for commencement of the proceedings pursuant to the Limitations of Actions Act 1936 (SA) (“The Act”) the plaintiff recover damages to be assessed. The matter has been referred back to me by the Full Court for further hearing of the issues arising under The Act and, (subject to the resolution thereof in favour of the plaintiff), the assessment of the damages payable by the defendant.
The essence of the Full Court’s decision which I am required to apply is as follows:
(1)... The defendant failed to make a personal inspection of work:
(a).... following the removal of asbestos and before the application of PVA
and
(b)... at the conclusion of the job.
The defendant failed to detect that the extent of asbestos removal and the extent of PVA treatment was inadequate. If Mr Grieve had detected these deficiencies he should have given directions to the asbestos contractor to undertake remedial work.
(2)... That by failing to inspect at the two critical stages abovementioned and by failing to give the consequential directions the defendant was liable (either in breach of contract or in negligence) in failing to ensure that the extent of the removal of the asbestos was “as complete as could practically be achieved” and that the affected areas were thereafter “adequately and completely sealed off with PVA paint”.
My decision of 4 June 1998 in favour of the architect was reached upon the basis that he was entitled to rely upon the assessment of another expert, in this instance, the independent asbestos monitor who had been contracted to the job, but the Full Court’s decision required that the plaintiff personally undertake an inspection upon the two critical occasions.
It is common ground between counsel for present purposes, that it is unnecessary to separately consider the two inspections which were required. If the architect had inspected on either occasion, then the need for further work would have been apparent. However, the failure to spray adequately with PVA paint would only have been apparent at the conclusion of the job.
The application of the Limitations of Actions Act

On 14 January 1994, the plaintiff became aware of the existence of loose asbestos in the ceiling cavity of Raggatt House; the present proceedings were commenced on 10 January 1995, that is within 12 months of the ascertainment by the plaintiff of what is claimed to be a “material fact” for the purposes of s 48 of the Act.
Upon the footing of the decision of the Full Court, the ascertainment of this information by the plaintiff should be regarded as sufficient to entitle the plaintiff to an extension of time for the commencement of these proceedings which would otherwise have expired in about 1991 in accordance with s 35 of the Act. In reaching this conclusion I have regard to the principle discussed in Sola Optical Australia Pty Ltd v Mills [1987] 163 CLR 628. The decision in that case was recently applied by this Court in Pomeroy v Thwaites Witham Pty Ltd (2000) 76 SASR 184.
Applying the Full Court’s decision in the present case, it seems to me that the plaintiff became aware of something untoward in January 1994; the plaintiff thereupon became first aware of facts affecting its right to bring this action. In the absence of that information the plaintiff would have no reason to suspect that the job had not been finished in 1985 by Consolidated Contractors to a standard required by the contract, and that a quantity of asbestos (apparently accessible in the ceiling), and arguably excessive in content had been left in situ and without being adequately sprayed with PVA.
I treat the plaintiff as being on notice of the arbitrator’s summary of events as recorded in the reasons for the award handed down on 28 July 1986 (exhibit P48). However, it was not on notice of the state in which the works had been actually left as above described.
I am satisfied in all the circumstances of the case that it is just to grant the plaintiff an extension of time to allow these proceedings to be brought. There should be an order accordingly.
Assessment of Damages

East Ham Corporation v Bernard Sunley & Sons Ltd [1966] AC 406 contains statements of principle. At 434 Lord Cohen said:
“There remains the question whether damages should be assessed by reference to the cost of building works at or shortly after the date of the breaches of contract alleged, which for convenience the parties have agreed to take as May, 1954, or the cost of building works in 1960 and 1961 when the claimants actually carried out the investigations and remedial works which they allege to have been necessary. As all your Lordships are agreed that the latter is the correct date I can state my reasons for concurring in this conclusion quite shortly. Dealing with this subject, the learned editors of Hudson’s Building and Engineering Contracts, 8th ed. (1959) say at page 319 that there are in fact three possible bases of assessing damages, namely, (a) the cost of reinstatement; (b) the difference in cost to the builder of the actual work done and work specified; or (c) the diminution in value of the work due to the breach of contract. They go on:
“There is no doubt that wherever it is reasonable for the employer to insist upon reinstatement....”

at 445 Lord Upjohn said:

“Where the cost of reinstatement is the proper measure of damages it necessarily follows as a matter of common sense that in the ordinary case the cost must be assessed at the time when the defect is discovered and put right, and it is not suggested here that the building owner unreasonably delayed the work of repair after discovery of the defect. So prima facie the damages ought to be assessed as the actual cost of repair in 1960...”

In Bellgrove v Eldridge (1953-54) 90 CLR 613 at 618 the High Court in its joint judgment said:
“But the work necessary to remedy defects in a building and so produce conformity with the plans and specifications may, and frequently will, require the removal or demolition of some part of the structure. And it is obvious that the necessary remedial work may call for the removal or demolition of a more or less substantial part of the building. Indeed - and such was held to be the position in the present case - there may well be cases where the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in its place. In none of these cases is anything more done than that work which is required to achieve conformity and the cost of the work, whether it be necessary to replace only a small part, or a substantial part, or, indeed, the whole of the building is, subject to the qualification which we have already mentioned and to which we shall refer, together with any appropriate consequential damages, the extent of the building owner’s loss.
The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt....”
The plaintiff is entitled to be put in the same position, as far as damages can do it, as it would have been in had the wrong not been committed. The cause of action, (whether in contract or in tort), accrued for all practical purposes at much the same time. No one has suggested that assessing damages in contract or in tort would produce a different outcome.
The normal measure of damages in such a case is the reasonable cost of reinstatement at the time that the defects were discovered. However, if the cost of remedying the defect is disproportionate to the end to be attained, the damages fall to be measured by the value of the building in proper condition less its value as it stands. Neither side has suggested that damages should be assessed in this lastmentioned way. In Bellgrove v Eldridge, the High Court referred also to the recovery of “appropriate consequential damages” as part of the building owner’s loss. Consequential losses may include loss of use of the building whilst the defects are being made good. In the present case, there is no such claim, but there is a claim for delay costs associated with another project. In principle these consequential losses will be recoverable (see McGregor on Damages (15th ed) (1988) pars 1091-1093).
In the ordinary course, if the plaintiff had confined itself only to remedying the defect in a reasonable manner in 1994, there would now have been little scope for argument. It did not do so. Instead it entered upon a project of considerable magnitude which went far beyond the end which was to be attained in 1984-1985; the extent of work undertaken in 1994, and its cost was quite disproportionate to the remedial work which was reasonably required. That is not a criticism of the plaintiff’s decision. However, the fact is, that the plaintiff made a policy decision in 1994 which was different from that made in 1984, when considerations of cost imposed a constraint upon the work which the plaintiff was prepared to authorise. In the result, the very substantial expenditure in 1994 does not provide me with much assistance in my search for evidence by which to measure the damage. I reach the conclusion as to the extent of the 1994 work and its cost after making due allowance for the fact that there is an expensive environmental infrastructure which needs to be established before even a comparatively small job is undertaken. My conclusion is based upon the fact that the ambit of the work required in 1994, went considerably beyond the scope of work which was reasonably required in 1985 and left undone. There was some asbestos debris which ought to have been removed in 1985 but left in situ. There was also, (apparently on the Full Court’s finding), some friable material such as the tufts observed on the air conditioning which ought to have been removed on the final clean in 1985. This is much more limited than the work for which BJ Insulation quoted on 18 January 1994 (Quote A/363), and as better described in letter dated 27 January 1994 from BJ Insulation to Department of Industrial Affairs. It is to be noted that this work proceeded upon the basis of removal and replacing of roof decking etc “...in lieu of cleaning existing roof materials to the otherwise required state” - see quote A/363 Exhibit P15.
The relevant information as to labour costs upon which I am prepared to rely is more closely related to the date of the breach in 1985, than the date of its discovery in 1994. In view of the attitude of the parties as to interest rates and their application, I consider that an assessment of damages as at the date of the breach, (together with interest thereafter), will provide the fairest assessment of damage which can be made on the limited material which is available to me. However, a further allowance in favour of the plaintiff must be made in respect of any cost which might reasonably be incurred in 1994, which would not have been applicable in 1985-86. The plaintiff is also entitled to any consequential costs, (eg for delay of other projects or temporary relocation costs), which might have been incurred as a result of the discovery made in 1994.
In section 5 of these reasons in the ruling therein mentioned, I dealt with an application to re-open evidence. The plaintiff was not prepared to make earlier witnesses available for further cross-examination. The application to re-open was unsuccessful and the plaintiff will have to bear the consequences associated with the state of the evidence. The real issue between the parties is that the plaintiff is looking to recover some substantial costs for delays in 1994, and it is seeking to treat as reasonable, extensive remedial work undertaken in 1994. As later appears both those issues will be decided against the plaintiff. The parties have shown no interest in providing me with actuarial material which would help me fill the gap as regards changing values of money between 1985 and 1994.
The paucity of available information has lead me to interpolate from that which is available as to costs at different times. The substantial costs are labour costs and I have reasonably reliable information as to these costs in 1985. I have no comparable figures for 1994. I consider that the margin for error in my assessment will be reduced by using known figures. I have reduced all costs to the value of money in 1985 as a matter of convenience, (although the ultimate task is as stated by Lord Upjohn). I know for example that a dust monitor in 1994 actually cost $1 575 - to do work which I assess to be more extensive that would have been required for the purpose of making good in 1985-86. Therefore, if I allow $800 for the further monitor’s fee as at the date of breach, then interest at 10 per cent (which I have allowed) will not disadvantage the plaintiff; by 1994 the fee which I have allowed will have grown with interest to a similar amount as was actually expanded in 1994. My approach may be unorthodox, but in my opinion it produces a fair result in the circumstances of this case when I have such limited material. However, it is necessary to bear in mind, that the object of the exercise is to compensate the plaintiff for reinstatement in 1994 - including any “delay costs” which might then have been reasonably incurred. If I observe the principle as stated by Lord Upjohn, it does not matter whether I work in the money of 1994 or 1985, so long as at the end of the day, the plaintiff is fairly compensated for the reasonable cost of reinstatement after discovery of the true position in 1994.
The work in question would be:
“remove excess asbestos and as necessary, any associated adhesive and spray properly with PVA so as to “contain” the remaining asbestos.”
By reason of the defendant’s default, Consolidated Contractors was paid for an unfinished job. Consolidated Contractors dismantled the protective infrastructure, (which is necessary for any work involving asbestos), and then left the job.
Consolidated Contractors undertook its work in accordance with the standard RAIA - MBFA Contract Edition 5B. The contract was not in evidence. A notice of Practical Completion was issued by the defendant as at 14 February 1985, (P35) without a supporting inspection and without the procedures set out in the Addendum to the specification (“Procedures on completion”) having been observed.
It now appears that when Consolidated Contractors left the job, the work area still needed to be properly and methodically vacuumed. The haphazard spraying needed to be redone. Arguably, there were still at least some tufts of asbestos which needed to be scraped before the job was washed down. It is debatable as to whether Consolidated Contractors was obliged to apply any more “elbow grease” to the work except as an extra. The point had been reached in 1985 where further removal involving any substantial physical labour would necessarily require the removal of the “associated adhesive”. It seems to me, that Consolidated Contractors was entitled to maintain, (as was the arbitrator’s decision), that adhesive removal was not part of its lump sum contract. However, it was required properly to clean up the works and properly “contain” the residue. The observations made in 1994 only enable me to say very broadly what further work was required in order to leave the premises in a tradesman-like fashion in accordance with the contract. The plaintiff would argue that there were areas, (other than those which were genuinely inaccessible), where Mr Grieve should have been much more demanding of Consolidated Contractors. As I have already observed, if he had so required, then this would have been reflected in a further claim for “extras” by Consolidated Contractors. It is not possible at this distance, to quantify work involving hard “elbow grease”, which should have been removed by Consolidated Contractors without being treated as an extra. It is not possible to differentiate between the removal of asbestos, and removal of its associated adhesive. It is the presence of adhesive which gave rise to the claim for an “extra”. I do not see how Consolidated Contractors, (or any other contractor called in for further work), could remove the asbestos without the hard work involved in removing the glue. There is no detailed evidence as to how the sprayed asbestos and adhesive were applied in conjunction with each other.
The plaintiff has paid Consolidated Contractors for a job which has been left unfinished as a result of the default of the defendant. In my opinion, the plaintiff is entitled as against the defendant, to the cost of bringing workers back to finish the job. The plaintiff made payment in 1985 and it is convenient that the damages should be assessed as at that date (in 1985 dollars). I assess the remedial work required as being relatively small, but it would be necessary to set up a sealed environment within a plastic bubble to enable work to proceed with the appropriate government licence. It would be necessary for this infrastructure to be subject to a satisfactory smoke test before work proceeds. An asbestos monitor would have to be engaged. The hazardous and specialised nature of the work would justify architectural supervision of a new specification which was prepared professionally. A final inspection by the architect would be appropriate, but this would not be at Mr Grieve’s cost. He only charged for time spent on the job and the plaintiff must expect to pay the proper cost of the architect’s final inspection. As the problem has remained undiscovered until 1994, the work would have to be done to the more recent government requirements, (including licence fees), rather than those which applied some ten years earlier.
I assess the further work to be comparatively unattractive in a commercial sense to an asbestos remover. It is a small job without much room for profit except by reference to a margin on the labour costs. I consider that a contractor would expect to be well paid in order to make the job worthwhile.
I will assume that a team comprising a foreperson supervising three workers engaged for an eight hour day would take about one week to set up the job, and about three days to dismantle the works. I will allow a total of ten days for these tasks representing 320 hours (ie 4 x 8 x 10). There is no evidence as to the extent of the further remedial work required, but I would allow the team four days (ie 4 x 8 x 4 = 128 hours) to clean up and spray. I have allowed for some lost time included in this whilst the team awaits the necessary inspections. This represents a total of 448 hours for the team of four (4 x 8 x 14) to carry out the task. I consider that it is necessary to select a rate of payment which would make the job sufficiently attractive to a contractor in the industry. I apply my general knowledge of the cost of labour over the years, including the practices of the building industry in terms of charging direct costs plus a percentage. I have decided that $30 per hour in 1985 would provide a contractor with an appropriate margin of profit. (I note that the defendant was charging the plaintiff $25 per hour for his services, and I note that in exhibit P31 Consolidated Contractors were suggesting “$29.50 per hour as normal time for day work). I have not applied the figures set out on pp 7 and 8 of exhibit D48, (being the reasons for the arbitrator’s award of 28 July 1986), although I have studied the arbitrator’s approach with interest and used those figures as a check. I was particularly interested to note that the arbitrator (p 8 of exhibit P48) made “estimated allowances for final clean (48 hours) and PVA spray (12 hours”). This figure of 60 hours (48 plus 12) compares with 128 hours which I have allowed. Of course, the work which the arbitrator envisaged is not necessarily the same as that which I have in mind. I note that Mr Chantrell was prepared to adopt $23.58 per hour as fixed by the arbitrator as reasonable in 1995, (see report 29 May 1996 in exhibit P76), and this is of some comfort. I have taken note also that $28.95 per hour was apparently the “call out” rate for labour allowed by the Department of Housing and Construction. The figure as to time involved in making good is important because it does show how long other works might have been delayed in 1994, if only the reasonable work of a remedial nature was undertaken in cleaning up and spraying asbestos with PVA. I have noted the cost of a dust monitor in 1994 and the costs applicable in 1994 to establish an asbestos register (see table below). Exhibit D46 shows the amount of time spent by the defendant in 1986 with respect to the underfloor asbestos problem when he conferred with government officers and prepared tender documents. He then spent 86 hours at a charge out rate of $25 per hour. In 1984-1985 Mr Grieve’s total charges were $3 825. These figures are of interest but they are in respect of a different job. I note that Mr Rahlf gave an estimate of time for bubbling up and dismantling the equipment, (approximately one week and three days respectively). However, his estimate does not disclose how many workers this would involve and I do not know how many days there are in Mr Rahlf’s week as he described it. (I note that as shown in the records summarised in P48 at least four workers were on site according to the daily reports. Sometimes there were between six and twelve workers on site in 1984-85). I have assumed four people for the purpose of my calculations. In making this assumption, I have made my assessment as to the amount of work likely to be involved based on matters of general knowledge and experience.

Counsel for the defendant has submitted that the evidence is insufficient to enable an assessment to be made. Difficult as it is, I consider that I should do the best with what is available.
Nevertheless, it is true that the material before me is scarcely sufficient to enable me to make an assessment. Counsel has reminded me that I am not entitled to speculate. I have before me some building plans and description of the building and a general description of the work required. I have chosen a team of four persons as being what I consider likely to be most efficient. I have chosen to be conservative in my estimating to ensure that the defendant is not called upon to pay a greater amount than is fair. To the extent that the evidence falls short, the plaintiff (who bears the onus of proof), will have to bear the consequence.
I have decided that there should be an award of $20 000 (after the relevant amounts are reduced back to 1985 values). Broadly speaking I would allow the following:
Labour costs (448 hrs @ $30)  $13440
Monitor’s allowance  800
Provision for architect
(including supervision)                  2500
Balance as provision for sundries-PVC
spray, cartage & disposal costs and
government fees etc      3260
  $20000
In addition to this amount I would allow the plaintiff a lump sum of $30 000 (being 10 per cent interest per annum for 15 years on $20 000) to represent the changing value of money and interest over approximately fifteen years. Therefore, judgment should be entered for a total of $50 000. The plaintiff is entitled to be paid in accordance with the cost in 1994 of making good in light of the information which it had recently uncovered. There is a question of the changing value of money and of the interest to which the plaintiff should be entitled. Upon my intimation to the parties that I was proposing to assess the damages by reference to 1985 values, the parties have agreed that it would be appropriate to use an interest rate of 10 per cent for the period 1985 - 2000 and to multiply the amount of the assessment by 2 1/2 in order to reach a final lump sum.
In addition to the basic amount of $20 000, the plaintiff would be entitled to any consequential costs associated with remedial works. For example, some staff might need to be relocated. To enable these consequential costs to be assessed, one would need to know the reasonable time involved. I do not consider that I have sufficient information to assess any damages for disruption to the plaintiff’s operations by reason of remedial work.
On 4 October 2000, (having prepared these reasons), I called counsel together and gave them an intimation as to how I was proposing to approach the assessment of damages. I suggested that they might wish to obtain an actuary’s expression of opinion as to the changing value of money at 1985, 1994 and today. Counsel declined the invitation. Ideally, the supply of information as to the cost in 1994 of doing the job which I have described would have made the assessment of damages a simple task. The task undertaken by the plaintiff in 1994 went far beyond what was reasonable to recover from Mr Grieve. The large lump sum figures as to the work actually done in 1994 do not assist my assessment.
The plaintiff’s approach to damages

The plaintiff claims to be entitled to the cost of reworking the asbestos removal in 1994 by using a different method than was adopted in 1985. It is a much more thorough and costly method than previously used - involving the removal and replacement of the roof itself. This had the result of facilitating access to some areas. A deliberate decision was made by the plaintiff in 1984 not to remove the roof and I do not consider that the defendant can now be criticised in respect of a decision which, in a commercial exercise, balanced costs as against effectiveness.
The effect of the plaintiff’s method of assessing damages is to treat the work as having to be redone in 1994. The distinction is to be drawn between a process of reworking of the original contract, (in a different way and to a higher standard), and a process of tidying up the earlier work so as properly to contain the residue of asbestos.
The plaintiff’s alternative methods of assessing damages are as set out in par 22 of the statement of claim (“SC 22”). In par 22(1) and (2) the plaintiff (in one alternative) claims $288 302 plus interest, being the further works which were said to be necessary in 1994. Alternatively in par 22.4 the plaintiff seeks to recover $124 280, (being the amount paid to Consolidated Contractors) plus interest. The approach identified in par 22(1) and (2) was varied in the course of final submissions on 14 August 2000.
A summary of the ways in which the plaintiff formulates its claims is contained in the following table:

SC22.1 & 2	SC22.4	14/8/00 Submission
BJ Insulation	$223,349.30	$184,120.00
MP Laboratories	$1,575.00	$1,575.00
Asbestos register	$2,600.00
GW & CA O’Connor Pty Ltd	$25,593.00	$3,480.00 plus $22,613.00
Redesign Fee Resource Development	$3,200.00	$3,200.00
Resource Development Fee	$25,000.00	$20,000.00
Other extra costs	$9,585.00
KD Engineering	$3,700.00
Boffa & Russo	$2,405.00
Interest Deprived	Bank Interest
Consolidated Payments	$124,280.00
Unearned Interest	$57,107.51 plus $47,197.94
TOTAL	$288,302.30 Plus interest	$237,091.40

The amount of $184 120 can be identified from exhibit P15 as a quote given by BJ Insulation on 18 January 1994 for asbestos removal. It is part of a total quote of $221 740; the difference between these two amounts is $37 620. With that information, the figures mentioned below will speak for themselves. It is to be observed that the quote includes the cost of air monitoring. Nevertheless, in its letter of 11 February 1994 to the plaintiff, (exhibit P17) the monitor’s fee has been charged in addition to the amount quoted on 18 January 1994. The amount of $1 575 for MP Laboratories “independent survey” may in fact be some further charge, but the case has been conducted upon the assumption that it is the relevant monitor’s fee.
The plaintiff paid Consolidated Contractors $80 903 as the original lump sum contract price together with $33 919 as an extra payment awarded by the arbitrator - in all $114 822 plus a further sum of $9 457 by way of interest awarded by the arbitrator making a total of $124 279. It is this amount (identifiable in the above table as $124 280) which the plaintiff seeks to recover as wasted expenditure.
The original quote of Consolidated Contractors (namely $80 903) is to be compared with the quote of Air Flow Systems (namely $169 000) after ignoring in each case a contingency allowance which is irrelevant. As Air Flow Systems quoted in full knowledge of the required work, (by virtue of an inspection and access to documents), the plaintiff suggests that $169 000 represents the reasonable cost of doing the work in 1984-1985. This must mean, (if the submission be accepted), that the plaintiff struck a particularly advantageous bargain with Consolidated Contractors if it were able to secure an agreement for a proper job at the price of $114 822. The plaintiff relies upon the difference of about $54 178 (between $169 000 and $114 822) as some evidence as to what the cost of completing the work in 1985 ought to have been. The fact that Air Flow Systems was prepared to do the job for a particular price does not mean that its price was necessarily reasonable. However, I have had some regard to these figures as a check against my own assessment. I consider that in view of the other quotes received in 1984, it is unlikely that I have awarded the plaintiff too much. Another problem with the approach suggested by the plaintiff, is that the amount of work left undone by Consolidated Contractors may be fortuitous. The associated labour cost lacks any nexus with the amount of any estimate made before the job was started in 1984. It is drawing a long bow to link the cost of making good with either Consolidated Contractors’ contract or the quote of Air Flow. In another exercise, the plaintiff has sought to rely upon the arbitrator’s assessment of the extras (alongside the contract price of Consolidated Contractors) in its search for proof of the reasonable cost of finishing the job. I have found the arguments unconvincing.
In 1994, the plaintiff paid $271 485 to BJ Insulation via Resource Development. The details appear on exhibits P68 and P69. The agreement appears at exhibit P37 which contains a schedule detailing a total price of $271 485. Of this amount $38 070 is attributable directly to the cost of underfloor asbestos removal, leaving a balance of $233 415. This latter amount can itself be broken down into the following components with respect to the roof - asbestos removal $184 120, re-roofing ($37 620)and insulation ($9 075) (in all $46 695) and the asbestos register fee $2 600. In the interests of simplicity, I have not brought to account a discount of 3 per cent which BJ Insulation allowed on its own fees for prompt payment. The fees of the asbestos monitor in 1994 were $1 575. By way of supervising the 1994 work, Resource Development charged $25 000 which the plaintiff suggests is justifiable as a percentage of the supervised work or on a time basis. It includes the supervision of removal of underfloor asbestos found in 1986. The plaintiff attributes only $20 000 to the work above the ceiling upon the basis of the cost of removal of the underfloor asbestos as a proportion of the total job.
In addition to these costs, the plaintiff claims delay costs (for monies paid to KD Engineering and Boffa and Russo), and redesign costs ($3 200 charged by Resource Development) associated with the redevelopment project upon which it had intended to embark in 1994 at the time when the asbestos was discovered in the ceiling. There was also some additional reinstatement work required by GW & CA O’Connor Pty Ltd as a result of elements of the building being opened up to gain access to the asbestos; $22 613 is claimed for this work in addition to O’Connor’s claim for delay ($3 480).
The plaintiff’s counsel, in the course of his address provided me with a table which provides the source material to support these lastmentioned claims. I reproduce it as a convenient reference to the evidence:

Cost	Topic	Evidence
$ 1,575	To MP Laboratories for monitoring	T.378
$20,000	To Resources Development (being a reduction from the actual cost of $25,000 charged by that company for the extra work associated with the removal of the asbestos	T.378 & 450-452
$ 3,480	To GW & CA O’Connor Pty Ltd	T.379
$ 3,700	To KD Engineering	T.380
$ 2,405	To Boffa & Russo	T.380
$22,613	To GW & CA O’Connor Pty Ltd for reinstatement works after the asbestos was removed	T.382
$ 3,200	To Resource Development for re-design fees	T.483
$56,973

I make findings that these costs were actually incurred although I do not allow them as items of damage. In addition, the plaintiff seeks an allowance for the removal and replacement of roof - $37 000 (T.445), scraping down, vacuuming and removal of material from site and cost of establishing and dismantling the plastic “bubble” and decontamination. I have found that $37 620 was actually paid. The plaintiff has not supplied me with figures upon which I can estimate the other costs which I have just mentioned. (I have covered this gap in the evidence in my own way as hereinbefore mentioned leading to my estimate of $20 000).
It may thus be seen that in effect the plaintiff claims to treat as worthless the work undertaken in 1984-1985.
In my opinion, the plaintiff’s approach to the assessment of damages is not a fair one. The asbestos problem was attacked in a different and more thorough way in 1994 than ten years earlier. The roof was taken off and the building opened up as necessary as exemplified by the work of GW & CA O’Connor Pty Ltd in reinstatement. As I have already observed, a policy decision was made in 1984 based on considerations of cost. A different policy decision was adopted in 1994 which facilitated, (but at considerable cost), a much more thorough approach than could have reasonably been required or expected in 1984-85. It is arguable that a better course in 1984 might have been to leave the asbestos untouched and to inspect it periodically for deterioration.
That latter course would not have satisfied the plaintiff’s philosophical objectives as formulated in 1984. The same criticism could be made of the remedial action taken in 1994, if one gives effect literally to the plaintiff’s aims in light of the evidence of Mr Hall.
In the cross-examination of Mr Hall the following exchange is recorded at T508:
“Q.... Do you agree that complete removal of asbestos from a site where asbestos has been sprayed, as in this case, is impossible.
A.I’d agree, yes.”
It is always a matter of degree as to the extent to which the asbestos should be removed having regard to the cost involved. Complete removal of asbestos would involve demolition of the building. In the language of the Full Court, the standard to be achieved was “removal of the asbestos as complete as could practically be achieved”. What it was that was “reasonably practical to remove”, was dependent upon the extent to which the building was opened up or demolished, (which cannot be divorced from the question as to what the owner was prepared to pay - or in the case of demolition - accept as a capital loss). A policy decision was made in 1984 that the roof was not to be removed and that is an important factor in deciding what ought to be expected of the contractor in 1985. I note that by letter dated 31 May 1994 (exhibit P19), the late Mr BF Rahlf reported the removal of the “visible asbestos insulation”, but warned that if changes are made to the structure, asbestos “may be discovered during demolition of cavity walls etc.”
In my opinion, the work undertaken in 1994 should be regarded as new work additional to the work of 1984, and not a reworking of it, except to the extent of the making good for which I have provided in my own assessment of damages.
Mr Chantrell made a report to Mr Hall dated 29 May 1996 (see exhibit P76 appendix). Mr Chantrell observes that removal of the roof was probably the most efficient method of doing the work required in 1984, although two tenderers (Consolidated Contractors and MJ Way) provided for access by removal of the ceiling. The task which Consolidated Contractors undertook should be considered against the background facts as outlined by Mr Hall in his report dated 11 June 1996 (exhibit P76):
“The application of asbestos in the roof-space at the SAIT building was obviously liberal and done in such a way that spraying devices used in the application were allowed to distribute the material into many otherwise inaccessible locations, cracks, holes, wall cavities, ledges and the like. This would mean that when subsequent removal was attempted, such inaccessibility would have prevented workmen from physically stripping the asbestos from the surface to which it was adhering or on to which it had fallen or been sprayed, including that occurring as a result of over-spray. While “total removal” would be inferred from documents, this would not be possible without additional work, neither specified nor allowed for in the removal contract.
Many of the spaces where residual asbestos was observed occur where operators could not reasonably crawl, much less work freely. Such, without limiting the examples to the following, include the flutes in metal roof decking where such pass over the top flanges of beams or timber roof members or where the roof slopes to meet external walls and the tops of such beams, roof members or walls. There are a number of other such locations.
The only way such spaces could have been reached in a reasonable manner would have been to have removed the obstruction; in most cases this would be the roof decking itself, or in some instances ceiling panels, to give access from below to ceiling spaces with clearances too small for asbestos removal activity. Thus specifications should have allowed for removal of roof decking (either partial or completely if the latter had been a more practical requirement) and replacement. Once the roofing had been removed it could have been treated either on-site or off-site if desired for removal of asbestos on its underside. It is more likely that it would have been dumped and new roofing provided owing to the risk of incomplete removal of asbestos or damage to the decking in the removal (of the roof or of the asbestos adhering to it). The roofing was by this date some 10-15 years old; some may have so deteriorated in this time as to require replacement in any case, after removal from the roof.
Thus it is reasonable to state that fixing of new roofing should have been specified.”
The defendant drew the specifications in accordance with his instructions. The case against Mr Grieve has never been put upon the basis that he should have expressed the specifications differently. The plaintiff chose an option having regard to financial considerations in terms of what was reasonable. The task undertaken in 1994 (apparently requiring considerable reinstatement work as exemplified by GW & CA O’Connor Pty Ltd’s account), achieved a result which was different from that which Consolidated Contractors could have reasonably have been expected to accomplish. As I have already observed, an even better result could have been expected if the building had been demolished.
The plaintiff’s argument has been put to me on the basis that the plaintiff was entitled to expect all asbestos removal except that which could only be scraped off with a teaspoon (a reference to a remark of the defendant concerning the flutes in the metal roof decking). As Mr Hall‘s report shows, there were many places in this odd shaped roof structure where contractors could not reasonably be expected to reach.
I make a finding that in relation to the contractual arrangements which were in place in 1984 - 1985, it would not be reasonable (by way of remedial work), to do all the work which was carried out in 1994. Except to the extent that these costs are reflected in my own assessment (eg monitor’s fee), the work undertaken in 1994 was not a necessary or reasonable cost to achieve the result required by the 1984 -1985 contractual arrangements.
The extensive work undertaken in 1994 does not provide a basis for assessing the cost of making good the more limited work left undone in 1984-1985.
The plaintiff claims that by reason of the discovery of asbestos in 1994, its (then) current works programme being undertaken by Resource Development was disrupted. The plaintiff claims against Mr Grieve the associated costs as appears from the table set out above. In my view, the plaintiff was on notice ever since 1986 that the building contained asbestos both in the ceiling cavity and under the floor. I consider that it was incumbent upon the plaintiff to bring that fact to the notice of those who might afterwards be called upon to work on the building. I consider that the delay and redesign costs are not damages which flow from Mr Grieve’s breach of his obligation to inspect. However, I find that these costs were in fact incurred.
If contrary to my opinion the plaintiff is entitled to claim for delays, I am not satisfied that the actual period of the delay is something for which Mr Grieve should be responsible having regard to the extensive work being undertaken. Beyond the bare outline given by Mr Cove, I do not know the details of the delay costs and how they were calculated. The plaintiff is required to demonstrate how the actual time of any reasonable remedial work led to and justified particular costs. This has not been shown on the evidence.

The plaintiff also claims that in 1985, it lost the opportunity to present a better case to the arbitrator than would have been the case if the defendant had made the requisite inspections and reported thereon. I do not know what (as now relevant) was before the arbitrator with respect to inspections. Mr Grieve told the plaintiff’s solicitors on 26 August 1985 that he supervised the work irregularly and went into the roof space on several occasions. I do not know how this was developed in evidence before the arbitrator. The architect was never called upon to give a final certificate. I would need to know a lot more concerning the arbitration to be able to assess in this respect the effect of Mr Grieve’s default.
Application to re-open the evidence

On 20 December 1999 I heard an application by the plaintiff for leave to adduce further evidence. On 4 April 2000 I gave to the parties an intimation that there appeared to be a basis for receiving additional material, and I required the plaintiff to provide details of the proposed new evidence so that I could assess the extent to which each party might be at liberty to supplement its case. On 5 July 2000 (after further hearing the parties), I declined to allow any additional evidence and I gave reasons for my ruling; a copy of that ruling is set out below. In the circumstances disclosed in that ruling I have assessed damages upon the limited evidence which is available.
Ruling delivered on 5 July 2000

The ruling and accompanying reasons were expressed as follows:
“On 20 December 1999 I heard argument on the question as to whether I should give leave for further evidence to be called at trial after the completion of addresses but in light of the decision of the Full Court. (Australian Education Union (SA Branch) v Grieve [1999] SASC 183).
On 4 April 2000 I intimated to the parties that I was favourably disposed to the plaintiff’s application and I directed the plaintiff to deliver a detailed statement of the proposed new evidence which the plaintiff wished to lead. I indicated that I wished to assess the extent to which I should allow the plaintiff to lead the additional material. I also required the plaintiff to provide a calculation of the plaintiff’s damages which on the plaintiff’s case was justified by the new evidence.
The plaintiff complied with my directions and on 29 June 2000 I heard argument as to the future course of this matter.
Having examined in detail the plaintiff’s proposed new material and having given consideration as to how it is to be applied, I am not disposed to allow this particular new evidence to be adduced. I make this ruling accordingly.
There are a number of factors leading me to this conclusion:
(1)... The proposed evidence is of limited value. It may make the task of the plaintiff’s counsel a little easier in terms of providing the plaintiff with some additional material on which to hang an argument. However, in terms of the justice of the case I am not persuaded that any such calculation is likely to be any more realistic than would be the case if the existing evidence is not supplemented. There is a degree of speculation in the proposed exercise.
(2)The plaintiff is not willing to give an undertaking to recall witnesses if required for further cross-examination. This is a significant fact.
(3)... The equilibrium which was established at the close of the last trial will be upset if any re-opening of the evidence is now allowed. I am on notice that the defendant may seek to use the opportunity (quite properly) to close some gaps in cross-examination which were identified in the opinion of the Full Court. I do not see that I would be able to stop this process and there is a real danger that the Full Court’s judgment will be undercut or subverted by the additional evidence. This is a telling factor.
Short of allowing a substantial part of the case to be relitigated, I cannot find a way in which I can do justice to both sides by re-opening the evidence. Very little will be achieved by allowing the further evidence. There is a substantial risk of injustice associated with the proposed procedure.
This is not a case where supplementary evidence could resolve an argument or remove an ambiguity. At best the further evidence will fuel the argument.”
Order

For the abovementioned reasons the orders will be:
1...... That the time within which these proceedings may be brought is extended to 10 January 1995 (being the date upon which the proceedings were instituted).
2.That the plaintiff’s damages be assessed at $50 000 at the date of judgment.

[2000] SASC 381

17 November 2000