Bowen v Stavroulakis

[2020] NSWDC 20

District Court

New South Wales

Medium Neutral Citation:	Bowen v Stavroulakis [2020] NSWDC 20
Hearing dates:	10 – 12 February 2020, 14 February 2020
Date of orders:	21 February 2020
Decision date:	21 February 2020
Jurisdiction:	Civil
Before:	Abadee DCJ
Decision:	See paragraph 208
Catchwords:	NEGLIGENCE – builder’s negligence – excavation work affecting neighbouring property – content of duty of care – whether private cause of action available for breach of statutory duty – breach of duty   DAMAGES – causation – proper scope of rectification works – quantum – contributory negligence – apportionment of responsibility where owner delegates work to builder
Legislation Cited:	Civil Liability Act 2002 (NSW) Conveyancing Act 1919 (NSW) Environment Planning and Assessment Regulation 2000 (NSW) Environmental Planning and Assessment Act 1979 (NSW) Evidence Act 1995 (NSW)
Cases Cited:	Anderson v MacKellar County Council (1968) 69 SR (NSW) 444 Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Ors [2006] NSWCA 3 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 Evans v Balog [1976] 1 NSWLR 36 Gagner Pty Ltd v Canturi Corporation Pty Ltd (2009) 262 ALR 691 Llavero v Shearer [2014] NSWSC 1336 Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 Mailey v Sutherland Shire Council [2017] NSWCA 343 New South Wales v Fahy (2007) 232 CLR 486 Perpetual Trustee Company Ltd v CTC Group Pty Ltd (No.2) [2013] NSWCA 58 Piling Contractors (Qld) Pty Ltd v Prynew Pty Ltd [2008] NSWSC 118 Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALR 529 Rahme v Benjamin & Khoury Pty Ltd [2019] NSWCA 211 Reinhold v NSW Lotteries Corporation [2008] NSWSC 5 Rennie Golledge Pty Ltd v Ballard (2012) 82 NSWLR 231 The Owners – SP 30791 v Southern Cross Constructions (ACT) Pty Ltd (in liq) [2019] NSWSC 440 Tsu v Nemeth & Anor [2012] NSWCA 29 Vairy v Wyong Shire Council (2005) 223 CLR 422 Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463
Category:	Principal judgment
Parties:	Ms CM Bowen Mr LA Bowen Mr G Stavroulakis Ms N Stavroulakis
Representation:	Counsel: Mr A Paterson for the Plaintiffs Mr M Sheldon for the Defendants   Solicitors: JPG Lawyers Kydon Segal Lawyers
File Number(s):	2018/307675
Publication restriction:	Nil

Judgment

INTRODUCTION

The Pleadings

1. The plaintiffs (‘the Bowens’) are brother and sister. They and the defendants (‘the Stavroulakises’) own adjoining land in Torrington Road, Maroubra. The properties are located not far from Maroubra Beach. In 2014, excavation works were carried out on the Stravroulakises’ property (47 Torrington Road) as part of a redevelopment. The Stavroulakises constructed a new two storey dwelling. The excavations occurred principally in 2014. This was before the Bowens had purchased their property (49 Torrington Road), which occurred in 2015. Further excavations works occurred in relation to a boundary retaining wall in late 2016 or early 2017.

2. The Bowens’ property was about 80 or 90 years’ old. At the front of the house, there is a sunroom which sits on sandstone footings. At the time they purchased their property, there was a downpipe which discharged stormwater directly onto the sandstone footing on the north-western corner of the veranda/sunroom to the Bowens’ property.

3. In early June 2017 there was a period of exceptionally heavy rain in Sydney [1] . On 6 June 2017, about three years after the (initial) excavation works on the Stavroulakises’ land had occurred, the Bowens noticed a water leak in the ground floor front sunroom of the property. Ms Clare Bowen inspected the boundary wall to the front yard and found that the soil running behind the front boundary retaining wall had subsided; and that the sandstone footing in the north-western corner of the had ground started to collapse. She observed cracks to the west wall of the veranda and a crack to the bottom eastern end of the enclosed veranda front wall.

   1. Evidence (Exhibit 2) suggested it was the third wettest June on record.

4. The Bowens allege that in the course of engaging in the excavation works, builders for the Stavroulakises removed support provided to their land; resulting in significant subsistence in the soil, the collapse of a sandstone footing and other damage to the veranda. By this proceeding, the Bowens seek damages in negligence for the damage to their property. In this regard, the Bowens rely upon the statutory duty of s 177 of the Conveyancing Act1919 (NSW). They also rely upon what they contend is an action for breach of statutory duty said to arise from the Environmental Planning and Assessment Act1979 (NSW) (‘EPA Act’) and the Environment Planning and Assessment Regulation 2000 (NSW) (‘EPA Regulations’).

5. The Stavroulakises deny that anything done or omitted during the excavations caused damage to the Bowens’ property. They also positively assert that damage sustained by the Bowens was the result of a downpipe on the Bowens’ property which had discharged stormwater into a hole adjacent to the footing in the northwest corner of their land. They say that this washed away the soil underneath the footing. The Stavroulakises contend that their duty of care was not breached. Further, they say that it is the Bowens who are wholly responsible for the damage to their property and invoke the statutory defence of contributory fault in s 5S of the Civil Liability Act 2002 (NSW). The Stavroulakises also say that such liability as they may have should be apportioned (under s 34 of the Civil Liability Act) on account of the involvement of the building firm, Koukos Constructions or its principal Mr Koukos.

Elaboration of Issues

6. In the course of their Counsel’s respective openings, the parties’ contentions were refined.

7. The Bowens’ position was that the excavation works on the Stavroulakises’ property involved excavation of 400 cubic metres of soil. Initially they were carried out by Mr George Stavroulakis, however it is common ground that, in the events that occurred, the excavation and renovation works were undertaken by Mr Koukos at the behest of the Stavroulakises. One issue in the proceeding was the extent of responsibility of Mr Koukos having regard to the circumstance that it was contemplated that Mr Stavroulakis would carry out the works.

8. In 2014, a dilapidation report obtained for the Stavroulakises indicated (inter alia) cracking in the sandstone footing blocks to the western wall and front wall for the Bowens’ property. The parties rely upon this circumstance for different purposes: for the Bowens, it suggested that the Stavroulakises were on notice of an incipient problem; for the Stavroulakises, the Bowens were similarly on notice of a problem which they could have resolved in the period between the time they purchased their home to the time when the water they discovered and collapse of the sandstone blockwork about which they complain became apparent in 2017.

9. The Stavroulakises do not dispute the existence of a duty owed to the Bowens. But there was dispute as to the sources and content of that duty. The Bowens contend, firstly (and in paraphrase), that s 177 of the Conveyancing Act gave rise to a duty of care to take reasonable steps. Secondly, relying upon case-law authority, they say that there was a duty of strict liability to erect sufficient support. Such duty, it was said, was sourced in environmental controls. The Stavroulakises accept that a duty of care could arise, but only to exercise reasonable care. To the extent that there was authority which posited a private cause of action in the nature of strict liability in failing to provide support, such authority was wrong and should not be followed.

10. There was no dispute that shoring was not provided, and, in support of their first action, the Bowens say this evidenced negligence. The Stavroulakises dispute that there was any requirement for shoring in the circumstances.

11. The Stavroulakises did not dispute that the Bowens suffered physical damage to their veranda, but the parties are in issue as to whether any breach of duty (be it one of strict liability or reasonable care) caused that damage. The Bowens identify the cause of the damage as being a lack of shoring. They say that providing shoring was a requirement of the conditions for development consent and planning controls. The Stavroulakises dispute that there was any such requirement in the particular circumstances. Moreover, even if there was such a requirement, the failure to have adequate shoring did not cause the damage. The damage was caused entirely by the presence of a downpipe attached to a wall on what was a nearly 80 year old dwelling. Relying upon expert engineering evidence, because of the composition of and volume of sand upon the bedrock, they say it was not possible for the excavations to have caused the cracking. This contention involved a concept of the ‘zone of influence’ which will be elaborated below.

12. The parties differ on the damages that should be awarded, based on the required works for rectification. First, the Stavroulakises say that many of the items that the Bowens contend should be attended to – underpinning, helifix bars and demolition of the walls and rebuilding – are not required to put the Bowens in the position that they would have been in but for their alleged breach of duty, but effectively amount to an improvement of their property from the date that they purchased it. Secondly, and because of a difference in the suggested rectification works, there is a consequential difference in the amount of costs.

13. The Stavroulakises then contend that if, which they deny, the Bowens can establish liability, then their liability should be reduced on two additional bases. First, the Stavroulakises say that the Bowens did not exercise reasonable care to protect their own interests. In this regard, they say that the Bowens had knowledge (actual or constructive) of the location of the downpipe. In this respect they cite the concession from Mr Magro (in his expert opinion in reply) that the downpipe ‘may’ have contributed to localised damage (although Mr Magro went on to say it was not the cause of overall damage to the entire structure) and they rely upon the fact that in October 2017 the Bowens did arrange for the alteration of the downpipe. This circumstance, the Stavroulakises say, is an admission that they should have made that alteration earlier than they did.

14. Secondly, the Stavroulakises contend that, in defence to the claim in negligence Mr Koukos is a concurrent wrongdoer. As indicated, Mr Koukos had been engaged by Mr Stavroulakis. Although the Bowens had no formal relationship with him, the Stavroulakises say that Mr Koukos was the real builder. He was an experienced builder, he was solely in charge of the work and it was Mr Koukos to whom the Bowens turned once damage became apparent to them.

15. I understood the parties as identifying the following issues for determination:

1. whether it was probable that the excavation works caused the damage to the Bowens’ property;

2. whether the omission to provide shoring caused the damage to the Bowens’ property;

3. whether the damage was entirely caused by the stormwater from the downpipe on the north-western corner of the veranda;

4. whether it was negligent to carry out the excavation without shoring;

5. the appropriate scope of rectification works;

6. the quantum of costs for rectification works;

7. whether the Bowens failed to take reasonable steps to protect their own interests by not moving the downward pipe away from the building sooner than they did; and

8. whether Mr Koukos is a concurrent wrongdoer and, if so, whether any liability in the Stavroulakises should justly and equitably be reduced because of it.

FACTUAL BACKGROUND

16. The following facts were established by the pleadings, or were agreed at trial [2] :

    2. Principally, Exhibit G.

1. the Stavroulakises’ property was officially [3] identified as primarily consisting of sandy soil;

   3. That is, in a Waste Management Plan annexed to the construction certificate lodged with Randwick City Council.

2. in 2004, the Stavroulakises brought a development application to demolish the existing building on their land and construct a new two story dwelling on that land;

3. in March 2006, Randwick City Council granted development consent for the demolition of the existing building and construction of the two story dwelling with the garage;

4. such development consent was conditional, relevantly, upon:

1. all excavations and backfilling associated with the direction or demolition of a building must be executed safely in accordance with (a) appropriate professional standards and (b) such excavations were to be properly guarded and supported so as to prevent them from being dangerous to life, property or buildings;

2. compliance with regulations, including relevantly Reg 98E(1) of the EPA Regulations, which posited that if a development involves an excavation extending below the level of the base of the footings of a building, structure or work … on adjoining land, the person having the benefit of the development consent must at his or her own expense: (a) protect and support the building, structure or work from possible damage; and (b) where necessary, underpinned the building, structure or work to prevent any such damage.

5. a construction certificate was lodged with Randwick City Council on 6 October 2011. This identified George Stavroulakis as the owner builder for the development. A requirement for the construction certificate was put in the same terms as the condition to development consent referred to in (d)(i) above;

6. it was expected that approximately 400 m³ of sandy soil would be removed as part of the excavation of the basement;

7. the construction certificate was issued by Council on 22 March 2012. George Stavroulakis was recorded as the owner builder;

8. between March 2013 and 2014, Mr Stavroulakis arranged for the demolition of the building on his land;

9. over a four-day period in March 2014, Mr Stavroulakis and Mr Koukos, a licensed builder, removed topsoil and building defects with rock;

10. on 30 June 2014, Mr Kaparas, a structural engineer, inspected the Bowens’ property for the purpose of preparing a dilapidation report. On or about 15 July 2014, Mr Kaparas prepared the dilapidation report for the Bowens’ property. The dilapidation report relevantly identified:

“Western Path

•   Cracks on the concrete path between the external wall and the boundary paling fence

Western Wall and Front Wall

•   Diagonal crack under sill to bedroom

•   Diagonal crack under sill of front sunroom.

•   Pointing to sandstone footing blocks is cracking.”

11. between July 2014 and August 2014, excavation works occurred on the Stavroulakises’ property. Koukos Constructions performed these works;

12. in July and August 2014, Koukos Constructions invoiced the defendants for the first and second progress payments;

13. in August 2014, 240.6mm rain fell during the month;

14. in September – October 2014, Koukos Constructions invoiced the defendants for the third and fourth progress payments;

15. in April 2015, 400.6mm fain fell during the month (including 114.6mm on 21 April and 105mm on 22 April);

16. on 15 August 2015, the Bowens entered into a contract to purchase their property. Completion occurred in November 2015. At the time, a downpipe drain was located next to concrete footing on the north western corner of the veranda. Prior to the purchase, the Bowens made no enquiries of the need to repair any part of the property from any or all of the vendors, the vendors’ agent, or the author of the dilapidation report, Messrs Peter Carter & Associates;

17. in November 2015, ‘street view’ photographs were downloaded from Google showing views of the Stavroulakises’ property. No retaining walls were visible;

18. in January 2016, 277.9mm of rain fell during the month;

19. in June 2016, 301.6mm rain fell during the month (including 102mm on 5 June);

20. in 2017, a retaining wall was built between the two properties;

21. on or about 6 June 2017, the Bowens noticed a water leak in the ground floor front sunroom of their property. Ms Bowen inspected the property and noticed a collapse of the sandstone footing to the north-western corner of the veranda and a crack to the bottom eastern end of the veranda front wall;

22. on 15 June 2017, Mr Stavroulakis paid Mr Koukos the sum of $27,500 in relation to laying of the concrete driveway and building the boundary retaining wall;

23. later that month, or in early July 2017, the Bowens obtained the dilapidation report;

24. in early July 2017, workers (apparently employed by the builder, Mr Koukos) appeared in the Bowens’ front yard; apparently engaging in backfilling areas of land where the soil had subsided;

25. in October 2017, the Bowens arranged for the alteration of the downpipe, in such way that it extended further across the front lawn away from the north-western corner of the sunroom;

26. this alteration occurred prior to the Bowens’ engineering expert, Mr Magro, providing his first report in late November 2017 [4] , after his inspection on 20 November. The Bowens first showed the Magro report to the defendants on 19 January 2018;

27. () in January 2018, the Bowens arranged for contractors to paint the house and install gutters and downpipes;

28. () in February 2019, Mr Magro was engaged as the Bowens’ independent expert. In March 2019, he inspected the property for a second time;

29. () in April 2019, Mr Capaldi, the Bowens’ building consultant, inspected the property; and

30. () in June 2019, Mr Gleeson, the Stavroulakis’ engineer, inspected the property for the first time. He inspected it again in July 2019.

4. Mr Magro was subsequently retained to provide independent expert opinion evidence and prepared two reports, dated 19 March 2019 and 30 September 2019 (the latter being in reply to the engineering evidence of the Stavroulakises’ expert, Mr Gleeson).

CAUSATION

17. The question of causation generally is potentially dispositive in this proceeding. I will deal with it first.

The Evidence

18. The plaintiffs relied upon the evidence of Mr Magro. The defendants relied upon the evidence of Mr Gleeson. Both are engineers. Regrettably, these experts did not engage in a conclave prior to giving evidence. Nothing was placed before the Court to indicate that the issues arising from their respective reports had narrowed in any way. This explains the procedural course adopted at the trial whereby the experts separately gave their evidence in the parties' respective cases; rather than in the conventional 'hot tub' procedure usually deployed for experts in the same field of expertise in proceedings in this Court. This carried the consequence that the Court was deprived of the valuable opportunity to assess each expert giving evidence side by side. It also meant that where, as sometimes occurred, arguments or evidence of an expert were not challenged in cross-examination, the arguments were not completely debated; effectively requiring the Court to consider them for itself. This happened on both sides.

Mr Magro’s Opinion

19. Mr Magro styles himself as a consulting civil and structural engineer. He received the degree of Bachelor of Engineering (Honours) from the NSW Institute of Technology and is a member of the Institution of Engineers Australia. He established his own firm nearly 30 years ago and overall has 35 years of experience in temporary works for major construction companies. He has had 10 years of experience designing retaining wall structures.

20. I noted that Mr Magro had provided an opinion prior to being engaged as an independent expert; a circumstance which Counsel for the Stavroulakises emphasised on the question of whether I should prefer to his evidence over Mr Gleeson’s evidence. He essentially adhered in his report prepared for this proceeding to the views earlier expressed and it is convenient to refer to his report dated 19 March 2019. That report was prepared on the basis of his inspections both in November 2017 and 18 March 2019.

19. The methodology deployed by Mr Magro consisted of his conducting a visual external inspection and comparing it with the condition of the residence, as disclosed in the dilapidation report that had been prepared by Messrs Peter Carters & Associates, as well as his perusal of the approved architectural and structural drawings; the latter of which had been prepared by a different firm, McRae Civil & Structural Pty Ltd.

20. In his report of 19 March 2019, Mr Magro annexed the photos he had taken when he conducted his original inspection in November 2017; as well as some additional photographs.

21. Mr Magro’ observations were:

1. that the sandstone footing in the north-west corner of the veranda had collapsed;

2. vertical and diagonal cracks to the west wall of the veranda;

3. vertical crack to the bottom eastern end of the veranda front wall;

4. subsidence behind the new boundary retaining wall;

5. the retaining walls, along the west boundary of the Bowens’ land, were different to those shown on the engineering drawing sheet (number 3 of 4): it was of a masonry constructed similar to the typical fence detail with 350 piers and 230 mm infill walls, instead of 110 mm (as depicted in the additional photos to this report not included in Mr Magro’s earlier report of November 2017); and

6. the planter retaining wall along the driveway was of low height; likely to be of 230 mm brickwork and not reinforced block work, as shown in a structural drawing (sheet 3 of 4, Section F9).

24. On the basis of his visual inspection and reading of the dilapidation report, Mr Magro opined that the north-west corner of the veranda had subsided and instigated the cracking which he had observed. He also opined - and this was not disputed - that no structural shoring had been used to support and contain the embankment in its natural state so as to prevent any subsidence. Mr Magro considered that the only effective way to support the embankment and retain the in situ condition, for excavation, was to use contiguous reinforced concrete piling; as had been used for the construction of the garage wall adjacent to the sunroom. Mr Magro thought that, given that the wall was built on the boundary, such shoring would have needed to be on the Bowens’ land.

25. The absence of shoring to contain the embankment prior to the excavation, in Mr Magro’s view, caused the embankment to subside and the observable damage. He also added that the erosion behind the wall also indicated that it had not been properly backfilled and that that may cause ongoing subsidence.

26. Mr Magro responded to the substance of the Stavroulakises’ defence, concerning the significance of the downpipe. This, as he acknowledged in his report, effectively discharged on the lawn; which was different to the position it was in at the time of the Bowens’ complaints in June 2017. Mr Magro did not consider that the downpipe caused the subsidence although, in his report in reply, accepted the possibility that the downpipe discharged stormwater which may have contributed at least to the localised damage. Mr Magro noted that the subsidence had occurred only since the embankment was excavated; with the damage extending along the western wall and across the front wall from the north-western corner.

27. Mr Magro was challenged as to his credentials in cross-examination. This was the first time he had been retained to prepare independent expert opinion. That meant that by the time he was engaged he had already expressed views that in November 2017 which, unsurprisingly, he adhered to in his main report. Those views of November 2017 were not developed with the requirements of the expert witness code of conduct in mind. Nevertheless, Mr Magro indicated that even with the benefit of the expert witness code of conduct, the views of November 2017 were not altered.

28. Mr Magro accepted, unsurprisingly, that it is preferable to form opinions about damage to property at the time of the damage was said to have occurred. Here, that meant that Mr Magro’s initial views in November 2017 were expressed at least four months after the damage. There was a further disadvantage, so it was put to him, that by November 2017 the downpipe had already been moved. This did not perturb Mr Magro: although he acknowledged that the location of the downpipe prior to October or November 2017 may have explained the ‘localised’ damage, but it could not explain the damage over the bigger area.

29. Mr Magro accepted that he had assumed that the excavation had occurred in sandy soil. He said he was familiar with Mr Gleeson’s opinion that it was impossible to excavate in a way that affected the Bowens’ land. This was not an argument that he had directly responded to in the report that he prepared in reply to Mr Gleeson’s evidence. He did not turn his mind to it. He did not personally measure the depth of the excavation; although he said he did not need to. Mr Magro indicated that he did look at the soils and found that there was 470 mm of sand over the bedrock.

30. I will return to Mr Magro’s opinions upon rectification works later in these reasons.

Mr Capaldi’s Opinion

31. Mr Capaldi is a home building consultant. He has been involved in the construction industry for over 30 years and has professional memberships with (amongst others) the Housing Industry Association, the Master Builders Association and the Australian Society of Building Consultants. He prepared a report in May 2019 following his inspection of the Bowens’ property on 18 April 2019. The report comprised different parts. The first main part was an opinion as to the causation of the damage to the Bowens’ land. A later part deals with the costs of rectification works, which I will deal with later in these reasons.

32. In so far as his opinion was directed towards the issue of causation, Mr Capaldi’s conclusion was that the cracking and movement that was visible to the property was consistent with subsidence of the foundation material below the footings of the building.

33. Mr Capaldi said that he had measured the vertical distance from the sandstone footing of the sunroom to the lowest part of the Stavroulakises’ retaining wall. This was a distance of 1700mm. He also measured the horizontal distance from the sandstone reporting of the sunroom to the retaining wall as 930 mm.

34. Mr Capaldi acknowledged that he was not a structural engineer but alluded to an extract from a publication issued by ‘Safe Work Australia’ (2012) setting out the expectations of owners prior to undertaking excavations lower than adjoining properties. He accepted in cross-examination that he was not personally in a position to make an assessment as to whether excavation could affect the stability of the structure or an appropriate ground support system that could be designed. These were matters more suitable for an engineer.

35. Mr Capaldi narrated instances of cracking from various places during his site inspection. He noted that he had not been given internal access to the sunroom. He observed movement and subsidence in the sandstone footings to the north-west corner of the sunroom; movements to the external west wall of the sunroom; cracking to the west wall of the sunroom; cracking to the slab of the sunroom and water stain to the ceiling of the sunroom. These observations were not identified in the dilapidation report. The inferred that the cracking and movement was not visible at the time of the inspection which produced the dilapidation report.

36. Mr Capaldi was not challenged on the accuracy of his observations on this subject in his primary report in cross-examination.

37. Mr Capaldi also prepared a supplementary report, following his further inspection on 22 July 2019. During this inspection he hand excavated two locations to the north elevation of the building. Having done so, he found that as there was sandy soil between the rock shelf (foundation) and the sandstone blocks (footing), any disturbance would lead to either subsidence or movement of the sandy soil. That would result in a differential settlement of the footings and cause cracking and movement as to the structure bearing on the footings. With this in mind, he opined that the cracking and movement that was visible on site, as detailed in his early report, was due to the neighbouring excavation, rock excavation and vibration.

38. Mr Capaldi responded to Mr Gleeson’s thesis that the downpipe dispersed near the footings at the north-western corner of the building had caused the cracking and subsidence. Mr Capaldi, consistently with Mr Magro, considered that this would be a very minor contributing factor, if any influence at all; likely to result in only minor local damage. This was because the building had been standing to some 80 years and that was only after the adjoining excavation that extensive cracking and movement occurred to the north-west corner of the subject building.

39. Mr Capaldi was not challenged on these observations.

Mr Stavroulakis’ lay evidence

40. Much of what Mr Stavroulakis deposed to in his affidavit was uncontroversial and has been picked up in the chronological narrative referred to earlier in these reasons.

41. What was a focus of his cross-examination was his evidence that in March 2014, he attended the site on his land with Mr Koukos, with a large metal pole. He said that they hammered the pole into the ground to test where the soil stopped and where the rock commenced. He deposed to recalling that, on most occasions, and in most sections of the site, the pole got stuck after being inserted into the ground at about 300 mm. He deposed to observing that on most areas of the site the ground was solid rock covered by 300 mm soil. On only very few occasions did the pole go further into the ground than about 300 mm. He added that once the perimeter was tested, Mr Koukos operated a small excavator to scrape away the topsoil. There were a number of places where the topsoil went a little deeper but Mr Koukos’ bricklayers filled in those gaps with the rock which was situated under the old foundations.

42. Mr Koukos was not called to give evidence for the defendants and Mr Stavroulakis’ only explanation for his absence was that the claim was brought personally against him.

43. Mr Stavroulakis also indicated, under cross-examination, that he made his last payment for Mr Koukos’ services in about June 2017. This was after Mr Koukos had helped him to construct the retaining wall. This involves the removal of soil at about the date that the wall was built. Mr Stavroulakis thought it was built towards the end of 2016 (though the parties, by their legal representatives agreed that it occurred at some time in 2017).

44. During cross-examination, Mr Stavroulakis was questioned as to whether employees associated with Mr Koukos (‘Gary’ and ‘Charlie’) who, it appears, visited the Bowens in late June 2017 after they complained to Mr Stavroulakis, were incapacitated in giving evidence. They were not.

Mr Gleeson’s opinion

45. Mr Gleeson styles himself as a Chartered Professional Civil, Structural and Remedial Business Services and Building Consultant. He is a registered professional engineer and licensed builder and obtained a Bachelor Degree in Engineering (with Honours) from the University of Technology. He has had 30 years in the engineering, building and construction industry. He includes within the description of his particular experience, the diagnosis of housing defects and required methods of rectification.

46. Mr Gleeson inspected the Bowens’ property on 18 June and 11 July 2019, virtually 2 years after the damage allegedly caused by the excavations had been first identified. He observed, amongst other things that: sandstone blocks had moved towards the front elevation by about 50mm with one sandstone block (adjacent to the block on the right corner) being split with 75mm of the face removed; and that the sandstone footing block in the north west corner of the veranda had collapsed downward to the front elevation side.

47. In response to Mr Magro’s report, Mr Gleeson said that based upon the retention of the upper level of sand (300mm) on the Stavroulakis’ property, by way of existing sandstone footing blocks and rock around 300mm below ground level, and the ‘zone of influence’ in 300mm of sand with a distance of the new wall being 2.1m, it would not have been possible that any excavation of the Stavroulakis property could affect the Bowens’ property. That is, the zone of influence for the footing at the Bowens’ property exceeded the possibility of damage to the footing from the excavation works at the Stavroulakises’ place because at these levels rock exists.

48. It was put to Mr Gleeson in cross-examination that the sand reached a depth potentially as much as 470mm before the bedrock was reached. He did not dispute this, but said that the level fluctuated.

49. The concept of a ‘zone of influence’ is picked up in the National Building Code. A diagram illustrating how it works was in evidence [5] . As I understood it, its purpose, or at least one of its purposes, is to measure the effect of stress imposed upon soil by a loading imposed during excavation. The basic concept is that there is a distance from an adjoining house, measured by both height and length of certain variables, within which builders should not be engaged in excavation. Those variables are the level of sand and rock. If excavation occurs within the zone of influence, it is likely to effect the adjoining home. If it does not, it is unlikely to. Mr Gleeson’s position is that the excavations in 2014 and 2016-17 took place outside the zone of influence.

    5. Exhibit 1.

50. Mr Gleeson was closely examined on this topic in cross-examination. A diagram drawn by the Bowens’ Counsel [6] set out various proposed distances; many of which Mr Gleeson assented to. Thus Mr Gleeson:

    6. Exhibit M.

• agreed that the distance between the Bowens’ house and the Stavroulakises’ house was 2.1m;

• agreed that the distance between the property line and the Stavroulakises’ house was 1.2m;

• agreed that the distance between the (new) boundary retaining wall and the plaintiff’s house was 930mm (but only for front elevation);

• did not agree (but did not dispute) that the vertical distance from the sandstone footing of the Bowen’s sunroom to the lowest part of the Stavroulakises’ planter retaining wall was 1.7m [7] ;

• considered that the width of the boundary retaining wall was 230mm;

• considered that the width of the excavation behind the retaining wall was between 200-300mm (subject to a qualification that the excavation was restrained by shoring);

• thought that the distance between the bedrock and soil surface would vary; and

• agreed that the distance between the plaintiff’s house and the point of excavation for the retaining wall was 630-730mm.

  7. Counsel for the Stavroulakises’ later submitted that Messrs Magro and Gleeson agreed that the starting point is from the bottom of the existing footing, which was 200mm below surface level, or perhaps more. It was submitted that the most favourable figure for the Bowens’ case was 1.5m.

51. I note that Counsel for the Stavroulakises later submitted that the Court can accept the measurements identified in the first, second, third, fourth (subject to the qualification noted above) and fifth dot points.

52. Mr Gleeson acknowledged subsidence of the cladding but argued that there was no evidence of damage to the footing. The cause of the cladding detachment was attributable to sand erosion.

53. Mr Gleeson observed that the footpath directly adjacent to the front right-side corner at the Bowens’ property had not moved. Had excavation work at the Stavroulakis properly affected this location, the footpath would have been expected to subside, but it did not. Further, he noted that the dilapidation report upon which Mr Magro relied indicated pre-existing damage to the sandstone blocks.

54. Mr Gleeson attempted to do more than simply refute Mr Magro’s opinion. He put forward his own explanation. This was that the side block on the supporting soil had been eroded by the discharge of roof water onto the soil below the block. In the process of moving downwards towards the front side, this block put pressure on the adjoining block causing the splitting in the block. Mr Gleeson noted that George Sravroulakis showed him a video of a void created under the footing which he regarded as being related to erosion of the sand soil at the location of the footing.

55. It does not appear that Mr Gleeson was referred to the observations of Mr Capaldi from his inspection. At any rate, that report is not referred to in his evidence.

Mr Magro’s Report of 30 September 2019

56. This report was prepared partly as a supplementary report, based upon a new inspection of the Bowens’ property, and partly in reply to Mr Gleeson’s opinion.

57. Mr Magro undertook a further inspection of the property on 22 July 2019, in the company of Mr Capaldi. This was to confirm the depth to the bedrock as well as to reassess the impact of the bulk rock excavation on the Stavroulakises’ property upon the Bowens’ property.

58. Mr Magro noted that the dilapidation report omitted reference to the external vertical and diagonal cracking to the west wall of the veranda or to the vertical crack to the bottom eastern end of the veranda front wall.

59. Under cross-examination Mr Magro rejected the proposition put to him that, essentially, he had merely compared his visual inspection with what was contained in the dilapidation report and inferred that if a problem or defect had not been identified in the latter, it could be said to have resulted from the excavation works. Mr Magro referred to damage at the eastern end of the front wall.

60. In this report, Mr Magro acknowledged that he had not had the benefit of the photos that were referred to by Mr Gleeson in order to try to establish how deep the sand was below the surface and, having done so, Mr Magro revised his assumption about the sandy soil as influenced by his reading of the development application.

61. Mr Magro noted that Mr Capaldi dug two holes adjacent to the footings in an attempt to ascertain the depth of the sand below the surface. He now considered that there was up to 470mm of sand below the surface, above the bedrock – not the 300mm level generally identified by Mr Stavroulakis and adopted by Mr Gleeson. There was also approximately 110mm of sand below the underside of the sandstone blocks above the bedrock.

62. In his supplementary report, Mr Magro did not engage with Mr Gleeson’s application of engineering principles; or, at least, with the latter’s analysis of the ‘zone of influence’.

63. Mr Magro did, however, confront Mr Gleeson’s evidence about the downpipe. Mr Magro accepted that discharge from the downpipe may have contributed to localised damage observed to the sandstone blocks at the north-eastern corner but this was within 800 mm from the downpipe. The discharge did not, he considered, explain the subsidence and the damage found to the western and northern walls; where there was no discharge of water.

64. He annexed some additional photographs, not contained in his earlier report, which indicated cracking at the extremes of the walls were wider towards the top of the structure. This, in his view, evidenced subsiding in the general area of the north-west corner of the land.

65. He also considered that the extensive rock excavation had contributed to the consolidation and spread of the founding 110 mm of sand under the footing. This caused densification of the sand foundation, settlement and aggravated cracking to the external walls. Where sand was only in a partly restrained state, it could loosen, particularly as vibrations from the excavation were occurring and this led to settlement. Vibration will also contribute to the densification and settlement of the sound foundation.

66. Mr Magro also considered that the existing front retaining walls to the Bowens’ property were clearly failing and leaning towards the footpath. He considered that they would fail under normal soil retaining parameters. They were not structurally sound to retain the embankment over the longer term.

The Parties’ Submissions

The Bowens’ Submissions

67. The Bowens invited me to make the following findings which set the context for the debate:

1. the relevant measurements of distances [8] were those identified in paragraph 30, above;

   8. As represented in Exhibit M.

2. there has been, since the issue of the dilapidation report:

1. significant foundation movement over the foundations under the front and western wall of the sunroom;

2. movement of the sandstone blocks;

3. subsidence of the footpath beside the western wall;

4. diagonal cracking on the western wall of the sunroom (measuring up to 5.5mm);

5. separation of the control joint, between the sunroom and the main house wall and outward rotation and settlement of the western wall; and

6. a crack at the western end of the front sunroom wall.

3. Up to 2014, there had been only limited shoring (identified by Mr Stavroulakis at paragraph 28 of his affidavit). Nothing was done in respect to the building of the boundary retaining wall, or otherwise, shoring the side of the excavation between the front of the Stavroulakises’ house and the footpath until late 2016 or early 2017.

4. The boundary retaining wall, between the Bowens’ land and the Stavroulakises’ land was constructed by the Koukos Constructions employees, ‘Gary’ and ‘Charlie’ in late 2016 or early 2017. The persons who built the retaining wall, being ‘Gary’ and ‘Charlie’ – employees of Mr Koukos – were not called to give evidence. This followed further excavation including the use of a handheld jack hammer. Mr Stavroulakis’ affidavit was silent about the excavation that occurred in late 2016 or early 2017.

5. There were no plans for the construction of the boundary retaining wall.

68. The Bowens cite the uncontroverted evidence of Mr Magro about the effect of vibrations in loosening densification and settlement of the sand foundation. This did not take into account use of the jackhammer in connection with the excavation in 2016-17.

69. They submit that Mr Gleeson’s ‘zone of influence’ evidence is inapplicable:

1. the ratio for sand (1:2) applied only to ‘normal’ conditions. Here it was not established what was normal. Circumstances occurred which were not normal, including the discharge from the downpipe and vibrations from the jack-hammering;

2. the distances reflected in the measurements indicate that excavation did occur within the zone of influence (assuming that model was applicable); and

3. contrary to what was put to him, Mr Magro did consider the issue, at least effectively: he referred to the natural angle of repose of sand (‘2’ horizontal and ‘1’ vertical).

70. They submit that Mr Gleeson’s hypothesis that the damage was solely caused by the downpipe should not be accepted because:

1. the Court should prefer Mr Magro’s opinion that it could only have caused a peeling off of the front face of one of the sandstone blocks;

2. given the age of the house, if this the sole cause, it would have been expected that damage of the kind sustained would have materialized much earlier than it did;

3. the proximity of the claimed damage to the excavation work conducted in late 2016 or early 2017; and

4. a reason for preferring the evidence of Mr Magro is that various assumptions underlying Mr Gleeson’s opinions were not established or were not consistent with the evidence; including that:   

1. the building works were completed by December 2015;

2. only two sandstone blocks had moved and the foundations under those blocks had not moved;

3. sandstone footings were placed around the perimeter of the Stavroulakises’ property, supposedly to support the Bowens’ land;

4. the side footpath had not subsided;

5. the 2014 dilapidation report showed pre-existing damage to the sandstone blocks;

6. there was no evidence of diagonal cracking on the right wall;

7. the bedrock was only 300mm below ground level; and

8. the excavation occurred 2.1 metres away.

The Stavroulakises’ Submissions

71. Counsel for the Stavroulakises submitted that the Bowens carry the onus of proof on all factual issues relating to causation[9] . It was submitted that this onus was not discharged.

    9. Civil Liability Act 2002 (NSW), s 5E.

72. First, it was submitted that I should accept Mr Gleeson’s evidence that the damaged footing and walls sits outside the ‘zone of influence’ of excavation on the Stavroulakises’ land. On the premise that the depth of the sand on their land was between 300 – 470mm, the zone of influence for the excavation of that sand could only affect an adjoining property at a distance of between 60cm and 94cm [10] . The affected footing and wall was 2.1m away. Accordingly, so it was said, engineering principles meant that the excavation on the Stavroulakises’ land could not have caused the damage.

    10. Reliance is placed here on the ratio of 2:1 for sand contained in the National Building Code of Australia, Vol 2, Table 3.1.1.1 (Exhibit 1). The 2019 edition of this publication was in evidence. There was no dispute that in the relevant sense, it was no different in 2014.

73. In his closing submissions, Counsel for the Stavroulakises noted that there were, in fact, three events, or scenarios. Two of those were in 2014. The first was the excavation in August 2014 being at the closest point to the Bowens’ property. It was said that zone of influence was 669mm. The excavation occurred well outside that figure, being (at worst for the defendants) 1570mm – that is about 1.5 metres.

74. The second was another excavation occurring at about the same time as the first, being the excavation of 1 metre of soil for the Stavroulakises’ driveway. Here the zone of influence was 1.6 metres. The excavation occurred at about 2.1m; being about 400mm outside the zone of influence.

75. The third was the excavation in late 2016 or early 2017. This was the only one that partly occurred on the Bowens’ property; and involved the scraping of topsoil in order to build a retaining wall. Here the zone of influence was 540mm. The excavation occurred (at worst for the defendants) outside that zone, being 630mm. The margin (that, is the distance between the zone and where the excavation occurred) here was smaller than that of the first two events, but Counsel for the Stavroulakises noted that his analysis was very conservative – that is, it deployed assumptions most favourable to the Bowens. He also submitted that the Bowens called no evidence (lay or expert) into the Bowens land after the excavation occurred to dispute the calculations. Further, unlike the first two events in 2014 (where the land remained unsupported), for this particular excavation, there was minimal opportunity for the soil to move since a retaining wall was inserted into wet soil.

76. In response to the plaintiffs’ written submissions regarding the zone of influence analysis, Counsel for the Stavroulakises emphasised, perhaps more so in relation to the 2014 excavation works than the 2017 excavation, that this was not a ‘marginal’ case where the excavations occurred very close to the zone of influence; they were well outside. To the extent that the Bowens questioned the condition of the sand or suggested that the sand conditions were abnormal, they did not explain why or how. He submitted that, in relation to the 2014 works, there was no immediate collapse.

77. Secondly, it was submitted that the Bowens did not prove the state of their property prior to the excavation works. To the extent that they rely upon the dilapidation report of July 2014, that report may have manifested some pre-existing damage to the property prior to the excavations. The Stavroulakises say that the Bowens did not call the author of the report and that the report was less than comprehensive. The Court should not, without more information, infer that if there was some item of damage to the property omitted from the report, and that item of damage only manifested itself after the excavation works, then it was the excavation works that caused that damage. Counsel submitted that, at its highest, what was established in 2017 was an exacerbation of damage to the building that was already manifest in the dilapidation report.

78. Thirdly, it was submitted that the Bowens did not explain how and why the cracking occurred two years after the excavation works; rather than simply asserting the temporal connection between the excavation works and the damage. They did not, for example, obtain evidence from a geotechnical expert to explain soil movement.

79. In this regard, the Stavroulakises contend that the most obvious and preferred explanation was that it was an aged property which deteriorated over time and such deterioration was accelerated over time (including by the heavy rain of early June 2014). They raise the question why it took the period of two years before damage caused by the excavation works damaged the Bowens’ property.

80. Fourthly, the Court should accept other aspects of Mr Gleeson’s opinion; including (a) his hypothesis that it was the discharge of stormwater from the downpipe which caused the damage to the footing; and (b) there was no subsidence evident on the footpath (between the Stavroulakises’ property and the veranda) or the length of the Bowens’ house. Such damage and alternative areas of the property would have been expected. Finally (c) damage to the Bowens’ front fence was generally indicative of a cause being one of water flow and not subsidence.

81. Fifthly, it was submitted that Ms Bowen had disclosed in cross-examination that contact had been made with a structural engineer to provide an opinion, which was to the effect that the excavation did not cause the damage. The Bowens did not call that, or any other engineer.

82. Sixthly, and in response to the plaintiffs’ written submissions that vibrations from the works were not taken into account, Counsel submitted that this was a piece of speculation from Mr Magro, but that he did not explain how they may affect soil movement. There was no evidence of vibrations from the incumbent owners (in 2014) and Mr Bowen, who resided in the property in 2017, was not called to give evidence to talk of vibrations. Counsel said that Mr Gleeson denied that vibrations could have had effect. In relation to the 2017 works, Mr Stavroulakis had indicated that only a handheld jackhammer was used. Mr Gleeson considered that this was unlikely to cause vibrations.

Bowens’ Submissions In Reply

83. In relation to Counsel for the Stavroulakis’ ‘zone of influence’ analysis, the Bowens’ Counsel did not dispute the analysis in the first of the 2014 excavations. Counsel took issue with the second of the excavations and the excavation in 2017.

84. As to the second of the 2014 excavations, Counsel disputed that the excavation occurred outside the zone of influence. By reference to a photograph in evidence [11] , Counsel invited me to find that the excavation extended beyond the side boundary of the Stavroulakises’ house.

    11. Exhibit A (Tab 3, p 227).

85. As to the excavation in 2017, Counsel proposed a variation to one of the variables, being the depth of the excavation. Instead of the activity of merely scraping the topsoil to a depth down to 470mm, Counsel for the Bowens say that Mr Stavroulakis’ evidence was such that, as occurred in the second of the 2014 excavations, excavation occurred to a depth of 1m. If that is so, it was submitted, this significantly altered the zone of influence from the Stavroulakises’ figure of 540mm, to 1.6m. On the (agreed) basis that the works were within a range of 630mm to 830mm, this fell well within the zone of influence.

Determination

Preference for Experts

86. I thought Mr Magro gave his evidence honestly. But a risk that sometimes occurs when parties commission investigating experts to provide expert opinions in proceedings that are later commenced is that they tend to adhere to views even when presented with new information that they did not have at the time they conducted their investigation. That is partly a matter of confirmation bias. Here, Mr Magro adhered to views from his report in November 2017, notwithstanding his acceptance that at least one of his initial assumptions (the depth of the sand) was wrong and notwithstanding the circumstance that, through no fault of his own, he was not aware, at that time, that the downpipe had been moved. This does not represent an insuperable obstacle to acceptance of his views, and it was to his credit that he acknowledged that an earlier assumption was wrong but the circumstances mean that his final opinions, to the extent that they adhere to earlier views formed on the basis of erroneous assumptions or incomplete information, need to be scrutinised with particular care. On the other hand, in comparison with Mr Gleeson, Mr Magro’s inspections had the advantage of being more contemporaneous with when it was said that the damage had occurred.

87. Mr Gleeson presented as a knowledgeable witness, although at times he was combative and argumentative in cross-examination; and he took it upon himself to question the reality of assumptions he was asked to make. This suggested to me a strong conviction in the correctness of his opinions and reluctance to reconsider them, in the face of countervailing factual assumptions. I considered that he also engaged in acts of advocacy for the defendants by his frequent repetition of opinions in certain instances even if they were not necessarily responsive to the questions raised of him. This having been said, I was impressed by the strength of Mr Gleeson’s competence and the conviction with which he answered the questions raised of him.

88. On the basis of the evidence before me, and their presentations, I considered that Mr Gleeson was more technically proficient than Mr Magro but, by the same token, Mr Magro was able to present his opinions at a more practical level, taking into account a broader range of data and was able to explain in a comprehensible fashion his observations during his inspection. Generally, however, I was more persuaded by Mr Gleeson, whose views were attended by greater rigour than Mr Magro; and where there is a material conflict between the two experts, I would be inclined to prefer the views of Mr Gleeson.

89. As I have indicated, I thought that Mr Capaldi was honest and reliable. He did not profess to have any greater expertise than that which he possessed. He also explained his observations from his inspection in a clear fashion.

Jones v Dunkel Inference?

90. Separately, I note that I am not prepared to draw a Jones v Dunkel inference against the Stavroulakises on account of their failure to call evidence from the effective builder, Mr Koukos or his employees. Whether or not they could have been called to give evidence on what examinations they did or how they went about their work, because of their potential status as concurrent wrongdoers (as to which see below), the Stavroulakises’ interests were in conflict with the Koukos’ interests and explains – if explanation was necessary – why persons associated with Koukos would not be called by them. I note that in view of the notice in the Defence that Mr Koukos was a concurrent wrongdoer, it was open to the Bowens to join him (or his corporate entity) as a defendant. Had they done so, it would doubtless have been expected that a fulsome account would have been provided as to what Mr Koukos and his employees did.

Essential Findings on Causation

91. I am not persuaded that the excavations caused the damage to the Bowens’ property.

92. First, I do not consider that Mr Gleeson was shaken in his view that the zone of influence was such as to make it impossible for any of the excavations to cause the damage. In my view, this is the single most important objective indicator. Subject to his point as to whether these were ‘normal’ conditions, Counsel for the Bowens did not disagree with this. Mr Magro did not seek to rebut the analysis. (Mr Capaldi did not seek to rebut it either, but that reflected a sensible appreciation on his part that he was not qualified to do so). The way in which the evidence unfurled meant that many of the matters that were put to Mr Gleeson to challenge his views on this topic were not based upon matters that had been referred to in the reports of either Mr Magro or Mr Capaldi. They were, in the main, propositions which had no independent basis in the evidence once the propositions were rejected by Mr Gleeson (as the preponderance of the propositions were).

93. I am not persuaded that the zone of influence is rendered analysis inapplicable because of the prospect of water flowing onto the affected area. Mr Magro, when he had the opportunity to do so, did not provide such explanation. Moreover, it was not fairly put to Mr Gleeson under cross-examination that this factor negated his reliance upon his analysis.

94. I accept the calculations contained in Figure B appended to the written submissions of Counsel for the Stavroulakises, Mr Sheldon, as they relate to the two excavations in 2014, which mean that the excavations fell outside the zone of influence. In particular, I am unable to infer from my observation of the photograph to which my attention was drawn that the second of the excavations in 2014 extended beyond the boundary of the Stavroulakis’ house. After judgement was reserved, the Bowens were granted leave to respond to Mr Sheldon’s figures. The Bowens argued that there was an excavation on the Stavroulakises’ property of 1m of sand. I agree with Mr Sheldon’s submissions that there was only between 300 and 400mm at this location.

95. As to the excavation in 2017, I am similarly not satisfied that the evidence sustains the finding that the excavation went to the depth of 1 metre. This goes beyond the measurements of Mr Capaldi, who had found it was about 470mm deep at this point. Nor do I accept that Mr Stavroulakis’ evidence about the scraping of the rock was controverted. In finding this, I accept that it was unfortunate, if not unsatisfactory, that Mr Stavroulakis’ evidence about the extent of this excavation essentially tumbled out when he gave evidence – it was not referred to in his affidavit. But there was no secret that an excavation had occurred subsequent to the excavations in 2014, even if there was an issue as to when it occurred. It is possible that the Court’s coercive processes might have been brought to bear to ascertain the circumstances in which the excavation occurred.

96. But even if it was, I accept the submission on behalf of the Stavroulakises that given the purpose of the excavation and the insertion of a retaining wall, there was no real opportunity for movement.

97. Secondly, whilst I find that there was evidence of damage to the Bowens property in 2017 which was not apparent in the dilapidation report, I do not accept that the comparison is conclusive, or even sufficient, for the inference that damage was sustained as a result of the excavations in 2014 and 2016-2017. To a large degree, that is how Mr Magro and Mr Capaldi reasoned. They said they saw things which were not apparent in the 2014 dilapidation report. This reasoning may have the superficial attraction of drawing upon common sense, but the reasoning was only tenuously the product of special engineering (and/or building consultant) expertise being brought to bear to the issues at hand. Counsel for the Stavroulakises characterised what had occurred as being an exacerbation of pre-existing damage. Counsel for the Bowens did not generally disagree with that characterisation. The parties advanced competing hypotheses as to how the damage occurred and both centred upon damage to the footings to the veranda. They agree that there was damage to the footings under the veranda. It can be inferred that damage to the footings may result in damage to other parts of the Bowens’ property, which was not necessarily referred to in the dilapidation report, but the issue that remains is what caused the damage to the footings. On that question, the Bowens carry the onus of proof. Put another way, it was not obvious to me that the damage that only emerged after the 2014 dilapidation report was unconnected to the damage to the footings.

186. Given the parties agree that the nature of any private action for breach of statutory duty is one of strict liability, I would have considered that the action for breach of statutory duty is not an apportionable claim and would not have been subject to any reduction.

187. The claim for damages based upon breach of the duty of care under s 177 of the Conveyancing Act does contain as an element of the action an absence of reasonable care. That being so, it is an apportionable claim.

Was Koukos a concurrent wrongdoer?

191. It is necessary, for the purposes of s 34(2) of the Civil Liability Act, for the Stavroulakises’ not only to establish that Mr Koukos’ conduct caused the same loss and damage (which could be independently of their own conduct) but also that Mr Koukos committed some legal wrong against the Bowens.

192. Mr Koukos had no contract with the Bowens. The Stavroulakises need to establish that he was negligent towards them. That requires, amongst other things, the existence of a duty of care from Mr Koukos to the Bowens.

193. Although the Stavroulakises owed a non-delegable duty of care to the Bowens, that does not preclude the Court from finding that Mr Koukos also enjoyed a duty of care. It would be a surprising result if he did not. The terms of s 177 of the Conveyancing Act do not preclude the finding that a duty of care was also owed by the builder, whose content or scope was in the same terms as the owner. I did not understand Counsel for the Bowens to dispute that the same duty could not have been owed by Mr Koukos notwithstanding the nomenclature which saw George Stavroulakis identified as the Builder. To hold otherwise would frustrate the legislative purpose. In Llavero, the contractor engaged by the home owners was regarded as a concurrent wrongdoer.

194. There is no doubt that Mr Koukos, who owed a duty, performed the excavation works. On the premise that damage was sustained by the Bowens’ property as a result of those works, that was the same damage sustained as a result of the Stavroulakises’ breach of their non-delegable duty of care.

195. I would have found that Mr Koukos is a concurrent wrongdoer.

Apportionment

196. Mr Koukos was not joined as a defendant, as he (or perhaps his firm) could have been, by the Bowens. The legislation contemplates that when assessing a defendant’s proportionate responsibility, the Court is required to take into account the conduct of other concurrent wrongdoers despite the fact that they are not parties to the proceeding [28] .

     28. Sections 35(3) and (4).

197. A practical difficulty consequent from the decision of the plaintiff not to join Mr Koukos is that, other than the evidence of Mr Stavroulakis, the Court was not fully apprised of all the circumstances that led to Mr Koukos’ involvement. In circumstances where they stand to obtain the benefit of the statutory defence (or limitation of liability) in my view, the onus is on the Stavroulakises’ to detail the full extent of his involvement (noting also that Mr Stavroulakis was in a naturally superior position to depose to that involvement when compared to the Bowens).

198. The Stavroulakises emphasise the following facts in support of a heavy allocation of responsibility towards Mr Koukos for any damage caused by the excavation:

1. he was an experienced licensed builder;

2. Mr Stavroulakis engaged Mr Koukos to perform the excavations;

3. Mr Koukos undertook the works without being subject to the control of Mr Stavroulakis;

4. Mr Koukos performed and was paid for the works; and

5. Mr Koukos constructed the (retaining) wall in late 2016 (as Mr Stavroulakis recalled) or 2017.

199. Mr Stavroulakis was not cross-examined on these matters; although I note that Counsel for the Bowens invited me to draw a Jones v Dunkel inference arising from the Stavroulakises’ decision not to call Mr Koukos. I rejected this point earlier in these reasons.

200. The Stavroulakises also referred to a circumstance, alluded to in Mr Stavroulakis’ affidavit (paragraphs 42-43), that Mr Koukos, without Mr Stavroulakis making request, sent employees to the site after the Bowens made complaint. It was submitted that this was an admission of responsibility by Mr Koukos. I reject that submission. Mr Koukos was not a party to this proceeding, so the provisions in Part 3.4 of the Evidence Act 1995 (NSW) are not engaged [29] . Even if an admission was made, it would not bind the Bowens. Ms Bowen’s evidence, in this regard, did not indicate the circumstances in which Mr Koukos, or his employees, attended the premises. The topic was not explored with her when she was cross-examined.

     29. See the Dictionary definition of ‘admission’. No objection was taken to the evidence as (implied) hearsay.

201. Mr Stavroulakis accepted in cross-examination that the documentation with the Council clearly indicated that he was the owner builder and that he did not take steps to later disclose that works were carried out by Mr Koukos. He said he did not understand that there was a need to disclose.

202. The Stavroulakises submitted the only connection that Mr Stavroulakis had to the damage (such as it was) was his status as the land owner and that his liability only arise because of the non-delegable duty of care he owed. That being so, they submitted that the responsibility should be apportioned to Mr Koukos at a level of about 50%.

203. The Bowens submit that Mr Koukos retained control. For example, he arranged the inspection of the roof frame by the certifier on 12 January 2016 notwithstanding that the work was done by Mr Koukos. He also continued to engage other tradesmen. There was no evidence to indicate that Mr Koukos assumed responsibility for statutory obligations which rested upon Mr Stavroulakis. There was nothing to suggest that Mr Stavroulakis did anything to counsel Mr Koukos affecting the Bowens’ property.

204. The principles by which liability should be apportioned amongst concurrent wrongdoers are still being developed by the Courts. Although there is no perfect assimilation with the old principles for apportionment for contributory negligence, it has generally been accepted that the principal factors are: (a) the causative impact of the actions of the wrongdoers; and (b) the culpability of the wrongdoers. Arguably, a relevant consideration to the latter is the extent to which one (or more) of the wrongdoers was able to prevent the loss from happening in comparison to other wrongdoers[30] . Counsel for the Bowens referred me to the proportions of responsibility found in Llavero but accepted that each case turns on its own facts.

     30. Yates v Mobile Marine Repairs Pty Ltd [2007] NSWSC 1463 per Palmer J at [97].

205. In my view, there is no question that it was Mr Koukos’ activities which had a more significant causal impact than Mr Stavroulakis. On the other hand, I would have regarded Mr Stavroulakis as more culpable. He continued to retain a certain level of involvement. He did nothing to indicate to the certifying authority as to who was doing the works. There was nothing to suggest what, if anything he did to assist Mr Koukos to undertake the works, when to the outside world, he appeared to be the builder.

206. After discounting the damages award for the contributory negligence by 10%, I would have apportioned responsibility to the Stavroulakises at 50%.

ORDERS

207. In summary, I find as follows:

1. I am not persuaded that the plaintiffs have proven that conduct by or on behalf of the defendants on their land caused the plaintiffs to sustain the damage to their property that they allege;

2. the defendants were in breach of their duty of care in relation to the excavation works by failing to provide protective measures as outlined in these reasons;

3. I would have found that:

1. the scope of the rectifications is as found by Mr Magro;

2. the quantum of costs of rectifications is as found by Mr Capaldi;

3. the damages recoverable by the Bowens would have been reduced by 10%; and

4. in the action in negligence the Stavroulakises’ were only responsible for paying 50% of the damages. There would have been no reduction in the action for breach of statutory duty.

208. I make the following orders:

1. Verdict and Judgment for the defendants;

2. the plaintiffs are to pay the defendants’ costs;

3. liberty to apply within 14 days is granted in the event that any application to vary the costs order is made; and

4. exhibits may be returned within 28 days.

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Endnotes

Decision last updated: 21 February 2020