Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd
[2017] QSC 85
•19 May 2017
SUPREME COURT OF QUEENSLAND
CITATION:
Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85
PARTIES:
CIVIL MINING & CONSTRUCTION PTY LTD
(ABN 18 102 557 175)(plaintiff)
v
WIGGINS ISLAND COAL EXPORT TERMINAL PTY LTD (ABN 20 131 210 038)
(defendant)FILE NO/S:
No BS6050/13
DIVISION:
Trial
PROCEEDING:
Trial
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
19 May 2017
DELIVERED AT:
Brisbane
HEARING DATES:
23, 24, 25, 26, 27, 30 and 31 May 2016
1, 2, 3, 6, 7, 8, 9, 10, 13, 14, 15, 16 and 17 June 2016
8, 9, 11, 15, 16, 17, 18, 19, 29, 30 and 31 August 2016
26, 27, 28, 29 and 30 September 2016; Plaintiff’s Post Hearing Written Submissions filed 10 October 2016; Corrigenda to the Plaintiff’s and Defendant’s Written Submissions filed 8 December 2016JUDGE:
Flanagan J
ORDER:
I will hear the parties further as to final orders and further directions including in respect of:
(a) The quantification of the Delay Claim (Variation 17);
(b) WICET’s Counterclaim as to the Delay Claim (Variation 17);
(c) The Bank Guarantee;
(d) The quantification of the final certificate; and
(e) Interests and costs.
CATCHWORDS:
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – where the plaintiff was a Queensland-based construction company – where the defendant was involved in the business of constructing coal and export facilities – where the plaintiff was a contractor of the defendant – where the plaintiff and defendant entered into a bulk earthworks contract for a package of construction works – where the plaintiff engaged subcontractors to carry out certain construction works – where variations and directions affected the contract works – where practical completion was delayed – where the contract works were varied – whether the plaintiff was overpaid as a result of variations and delay to the contract works
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – SETTLEMENT OF DISPUTES – where dispute arose in relation to a bulk earthworks project – where certain claims were already the subject of statutory adjudication process – whether the plaintiff was required to repay the defendant any amount that the defendant already paid to the plaintiff – where the defendant counterclaimed
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – DETERMINATION OF COSTS where variations and directions affected the contract works – where the defendant counterclaimed – where the defendant alleged overpayments to the plaintiff under the contract works – where the defendant claimed liquidated damages – whether terms of contractual construction entitle the plaintiff to additional payments for delay – whether the plaintiff was entitled to additional payments for variations to the contract works – whether the defendant was entitled to claw back any amounts already paid under the contract
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – GENERAL – where variations and directions affected the contract works – where the contract works were ultimately different to those contemplated under the contract– where the contract works were varied – whether the plaintiff was entitled to amounts already paid for works which the plaintiff did not complete – whether the plaintiff was entitled to additional amounts to those initially contemplated under the contract - whether the defendant was entitled to claw back any amounts already paid under the contract as a result of the variations
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – REMUNERATION – CERTIFICATES – FINALITY OF CERTIFICATE - Construction and effect of final certificates issued under General Conditions of AS2124 – where the parties issued its final certificate, obliging the plaintiff to pay the defendant $12,269,507.88 with respect to its claimed progress payment — where the defendant claims the amount of the final certificate less the items otherwise the subject of these proceedings – where the plaintiff served notice of dispute under contract with respect to final certificate – whether the plaintiff was overpaid under the contract as a result of amounts re-valued in the final certificate
CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLTEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where adjudication decision made in favour of the plaintiff under Building and Construction Industry Payments Act 2004 (Qld) — whether the defendant is entitled to recover amounts the plaintiff successfully claimed through statutory adjudication
Building and Construction Industry Payments Act 2004 (Qld)
Coastal Protection and Management Act 1995 (Qld)
Competition and Consumer Act 2010 (Cth), Schedule 2
Fisheries Act 1994 (Qld)
Queensland Building and Construction Commission Act 1991 (Qld)
Queensland Building and Construction Commission Regulation 2003 (Qld)
Queensland Building Services Authority Act 1991 (Qld), s 67V
Sustainable Planning Act 2009 (Qld)Alstom Limited v Yogokawa Australia Pty Ltd & Anor (No 7) [2012] SASC 49, cited
Alucraft Pty Ltd (in liq) v Grocon Ltd (Unreported, Supreme Court of Victoria, Smith J, 22 July 1993 – 15 February 1994, 22 April 1994), distinguished
Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99, cited
Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345, cited
Chaplin v Hicks [1911] 2 KB 786, distinguished
City Inn v Shepherd Construction Limited (2008) 24 Const LJ 590, cited
CMA Assets Pty Ltd v John Holland Pty Ltd (No 6) [2015] WASC 217, cited
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, cited
Collins v The Queen (1975) 133 CLR 120, cited
Commonwealth of Australia v Verwayen (1990) 170 CLR 394, cited
Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QSC 179, cited
Cooke v Commissioner for Taxation (2002) 51 ATR 223, cited
Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1163, cited
Currie v Dempsey (1967) 69 SR (NSW) 116, cited
Danidale Pty Ltd v Abigroup Contractors Pty Ltd [2007] VSC 391, cited
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, cited
Donnison v The Employers’ Accident and Live Stock Insurance Co Ltd (1897) 24 R 681, cited
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, cited
Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99, cited
Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) (2013) 29 BCL 19, cited
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, cited
Eric Preston Pty Ltd v Euroz Securities Ltd (2011) 274 ALR 705, cited
Hawker Noyes Pty Ltd v New South Wales Egg Corporation (Unreported, Supreme Court of New South Wales, Brownie J, 11 November 1988), distinguished
Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2000] BLR 247, cited
Industrial Installations & Relocations Pty Ltd v Leiner Davis Gelatin International Ltd (Unreported, Supreme Court of Victoria, Rolfe J, 5 May 1998), cited
Jones v Dunkel (1959) 101 CLR 298, distinguished
Macdonald v Longbottom (1860) El. & El. 977; 120 E.R. 1177, cited
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, cited
Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QCA 329, applied
Monadelphous Engineering Pty Ltd & Muhibbah Construction Pty Ltd trading as Monadelphous Muhibbah Marine v Wiggins Island Coal Export Terminal Pty Ltd [2015] QSC 160, cited
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, applied
Murphy v R (1989) 167 CLR 94, cited
North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595, cited
Nosic v Zurich Australian Life Insurance Ltd [1997] 1 Qd R 67, cited
Paino v Paino [2005] NSWSC 1313, cited
Penvidic Contracting Co Ltd v International Nickel Co of Canada Ltd [1976] 1 SCR 267, cited
Prenn v Simmonds [1971] 1 WLR 1381; [1971] 3 All ER 237, cited
Skilled Group Ltd v CSR Viridian Pty Ltd & Anor [2012] VSC 290, distinguished
Stockland (Constructors) Pty Ltd v Darryl I Coombs Pty Ltd [2004] NSWSC 323, distinguished
Thiess Watkins White Construction Ltd v Commonwealth (1992) 14 BCL 61, cited
Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253, distinguished
Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862, cited
Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604
WMC Resources Ltd v Leighton Contractors Pty Ltd [1999] WASCA 10, distinguished
Yorkshire Water Authority v Sir Alfred McAlpine & Son (Northern) Limited (1985) 32 BLR 114, distinguishedCOUNSEL:
B D O’Donnell QC with S J Webster for the plaintiff
D Kelly QC with J J Baartz and M G Lyons for the defendant
SOLICITORS:
Thomson Geer for the plaintiff
Corrs Chambers Westgarth for the defendant
Introduction
Issues
Relevant Terms of the Contract
CMC’s primary lay witnesses
(a) Ben Vance
(b) Manish Pancholi
(c) John Henderson
(d) Matthew Grey
(e) Veronika Haber
(f) James Barry
WICET’s primary lay witnesses
(a) Andre Miroshnikoff
(b) David Enright
(c) Scott Karandrews
Jones v Dunkel inferences
Approach to findings of fact
CMC’s challenge to the expertise of Mr Abbott
CMC’s challenge to the expertise of Mr Tsipis
Earthworks Claim (Variation 141)
(a) The Nature of the Claim
(b) The Delay Events
(i) Directions – Delay to Commencement
(ii) Directions – Delay to the Construction of the Haul Road
(iii) Directions – Cultural Heritage and Flora
(iv) Directions - Soft Spot and Tertiary Bund
(v) Direction – Truck Bogging (Stop Work Direction)
CMC’s Contractual Basis for the Earthworks Claim
Measurement of the Delay
Quantum
The GPN Borrow Pit (alternative claim)
Piling claim (Variation 142)
Direction 1 – Beales Creek waterway barrier permit
Direction 2 – Non-conformance report 01 (NCR01)
Direction 3 – Postponement of Rail Receival Piling Works
Direction 4 – Suspension Direction
Direction 5 – Suspension due to Specification Uncertainty
Direction 6 – Stop Work Direction
Direction 7 – Piling Hammer Claim
Quantum – Piling Claim
(i) Quantum – Directions 1 - 6
(ii) Quantum – Piling Hammer Claim
Pyealy Creek Bebo Arch Claim (Variation 103)
(a) Factual Findings
(b) The Variation Claim
Item 9 – Drop Structure
Item 11 – Blinding Layer under Bebo Arch footings
Item 12 – Concrete Class 40Mpa/20 in Bebo Arch footings
Item 14 – Supply and install Bebo Arch sections
Item 15 – Concrete class 40Mpa/20 in Bebo Arch wingwalls
Item 16 – Supply and install a spandrel
Item 17 – Concrete Class 32 MPa/20 in spoon drain
Item 18 – Guardrail with beam
Quantum total for Bebo Arch Variation 103
Delay Claim (Variation 17)
Issue 1: Qualifying cause of delay
(i) Delay Event 10 – Financier consent delay
(ii) Delay Event 11 – Flood damage delay
Expert evidence
Issue 2: Methodology and programs
Methodology
Programs
Issue 3: Critical Path Analysis
Surcharge settlement
Delay Event 1 – Beales Creek Permit Delay
Delay Event 2 – Rail Receival Permit
Delay Event 3 – NCR 01
Delay Events 4 and 5
Delay Event 6 – Stop Work Direction
Delay Event 7 – Hammer Direction
Delay Event 8 – Pyealy Creek Bebo Arch redesign delay
Delay Event 9 – Bebo Arch additional work delay
Delay Event 10 – Financier Consent
Delay Event 11 – Flood Damage Delay
Issue 4: Concurrent Delays
Issue 5: Other non-compliances with clause 35.5
Findings of fact for Issue 5
Waiver
Quantum – Delay Claim
Environmental Management Claim (Variation 90)
Geolon 600 Claim (Variation 63)
Bank Guarantee
Interest
Interest under the Contract
Interest under the QBCC Act
(a) Pavement works for the Rail Receival Bulk Earthworks Package
(b) Pavement Works for the Rail Receival Access Road
(c) Pavement Works for the Overland Conveyor Platform package
(d) Fauna Bridges
WICET’s Counterclaim
(a) Adjudication Fees and Interest
(b) OLC Claim (Variation 30)
Final Certificate and Scott Schedule
WICET’s Primary Claim
The Alternative Claim to Re-valuation
Cell 1 – Variation 65: 104 Raise the Bunds
Cell 12 – Variation 56 – Additional Topsoil Quantities
Cell 13 – V32 PVMi5 GC08 Scope Transfer OLC works – Variation 32
Cell 14 – 075 PVN 578 Rail Receival Basins on Hold – Variation 51
Cell 15 – Filling Reclamation Bunds Area C – Item 89
Cell 17 – Granular Material OC South – Ch 0 to Ch 3803 – Item 94
Cell 18 – 124 Quantity Increase in Piling – Variation 75
Cells 21 and 24 – Bridge Abutment Protection – Type 4 Abutment B – Item 66 and Abutment A – Item 65
Cell 25 – 079 Additional Pavement Testing – Variation 54
Cell 32 – 028 Ground Surface Treatment Omitted Item – Variation 45
Other omitted items
Cells 3 to 11
Cell 20 – 004 Dynamic Testing of Piles
Cell 27 – 029 Supply and Install Expansion Joint
Cell 52 – 072 Bearing Pedestals
Cell 54 – 131 Omitted Item – Evaporation Compound
Lack of Evidence – Cells 39, 41, 47, 50, 60, 61 and 62
Cells 39 and 41 – OC Access Roads – Items 114 and 119
Cell 47 – 002 Bridge Work Design
Cell 50 – Item 91 – Clay Liner
Cell 60 – Variation 77
Cell 61 – Variation 43
Other Items
Cell 16 – Variation 62 – 099 Piling Specification Change
Cell 22 – 101 Reclamation C Drop Board Structure – Variation 63
Cells 23, 26 and 35 – 074 Fencing Drawing Amendment Cost – Variation 50 – Items 122 and 123
Cell 28 – Item 87 Exc-box-out for pavements
Cell 34 – 083 Drainage Blanket on OLC and Rec C
Cell 94 – Granular Material
Cell 97 – Item 81
Conclusion – Final Certificate and Scott Schedule
Disposition
Annexure “A”
Relevant General Conditions and Schedules
C-3 Contract Price Schedules
C-4 Rates for Pricing Variations
Appendix F2
Introduction
[1]This case concerns a dispute between the defendant, Wiggins Island Coal Export Terminal Pty Ltd (WICET) as principal and the plaintiff, Civil Mining & Construction Pty Ltd (CMC) as contractor arising from a bulk earthworks contract performed between September 2011 and March 2013 near Gladstone in Queensland.
[2]CMC is a Queensland-based construction company which builds earthworks, roads, bridges and drainage works.
[3]WICET carried on a business principally involved in the construction of a new coal export facility located at Golding Point as part of the Port of Gladstone.[1] The facility is known as the Wiggins Island Coal Export Terminal.
[1] Eighth Further Amended Statement of Claim, [2](b); Further Amended Defence and Counterclaim, [1].
[4]On 7 September 2011 CMC entered into a contract (the Contract) with WICET for the performance of a package of construction works south of Hanson Road titled “GC09 Bulk Earthworks and Civil Works (South of Hanson Road)” (the GC09 Project).
[5]CMC’s construction package was for, inter alia, the construction of the following elements of the GC09 Project:
(a)the Reclamation C Bunds, being large earthen bunds designed to drain dredged spoil through three ponds before being released into the Calliope River (Reclamation C Bunds);
(b)the Overland Conveyor, being the earthworks component of the flat conveyor platform from the Rail Receival area to Hanson Road (OLC);
(c)Beales Creek Bridge, being a piled bridge over Beales Creek for the OLC (Beales Creek Bridge);
(d)Pyealy Creek Bebo Arch, being a concrete culvert over Pyealy Creek for the OLC (Pyealy Creek Bebo Arch);
(e) earthworks and road works at the Rail Receival Platform and Reid Road; and
(f)the Rail Receival Overpass, being a piled bridge over the rail line for traffic from Reid Road (Rail Receival Bridge),
(together, the Contract Works).
[6]CMC’s work under the GC09 Project was one of more than 20 packages of work that WICET was seeking to have completed by various contractors.[2] The GC09 Project was among the first substantial packages of work to commence.[3]
[2] T16-36, lines 24-29.
[3] T23-17, lines 37-42; T23-25, lines 5-13.
[7]The firm Worley Parsons was engaged by WICET to manage the GC09 Project (and other packages) and individuals from it were nominated to act as the Representative of the Principal’s Representative under the terms of the Contract (PRR).[4]
[4] Court Book Vol 2, Contract, Section E – General Conditions of Contract, clause 24, p 32, CMC.508.001.1651 at .1687.
[8]Aurecon Hatch was engaged by WICET to provide the design and ongoing design services for the GC09 Project (and other packages).
[9]In carrying out the Contract Works for the purposes of the GC09 Project CMC engaged subcontractors. CMC’s subcontractor for the earthworks was AE Group. CMC’s piling subcontractor, which performed the piling on the Beales Creek Bridge and the Rail Receival Bridge, was Avopiling.
[10]On 6 October 2011, Worley Parsons provided CMC with a formal notice to proceed with the Contract Works.[5]
[5] Exhibit 2, CMC.503.023.2606 and CMC.503.023.2607.
[11]On 31 October 2011, Worley Parsons approved CMC’s Baseline Program. Both the approved Baseline Program, and the Contract, provided that the Date for Practical Completion was 30 August 2012.[6]
[6] Exhibit 1, CMC.513.002.0055; Exhibit 2, CMC.505.072.6016; General Conditions clause 35.2 and Annexure A, p 4.
[12]On CMC’s case, during the project a series of directions (from WICET via Worley Parsons) and events significantly affected CMC’s progress and changed the character and extent of CMC’s work in carrying out the Contract Works, including:
(a)a direction from WICET to mobilise in relation to bulk earthworks notwithstanding that WICET had failed to obtain a clearing permit sufficient to allow CMC to construct haul roads to access the Reclamation C Bunds;
(b)the removal of a substantial quantity of material from the part of the borrow pit (the GPN Borrow Pit) from which CMC was to source fill for the construction of the Reclamation C Bunds;
(c)a series of directions from WICET which altered and prolonged CMC’s work in constructing the Reclamation C Bunds;
(d)a direction to mobilise from WICET in relation to piling activities in circumstances where WICET had failed to obtain a waterway barrier permit necessary for the construction of the piling pad at Beales Creek, which was a prerequisite for the piling work;
(e)a series of directions from WICET which restricted and varied the piling work being carried out on the Site; and
(f)a complete redesign of the Pyealy Creek Bebo Arch due to the fact that the drawings issued to CMC failed to match existing site conditions.
[13]As a result of the abovementioned issues, inter alia, CMC ultimately achieved Practical Completion on 26 March 2013. The last activity finished was the Pyealy Creek Bebo Arch.[7]
[7] T11-56, lines 24-26.
Issues
[14]CMC claims about $14.5 million arising from four major claims:
(a)a claim for variations and directions which affected the bulk earthworks on the Reclamation C Bunds, in the sum of $5,889,858.89 (the Earthworks Claim also referred to as Variation 141);
(b)a claim for variations and directions which affected the piling works for the Beales Creek Bridge and the Rail Receival Bridge, in the sum of $1,636,316 (the Piling Claim also referred to as Variation 142);
(c)a claim for variations to the design of the Pyealy Creek Bebo Arch, in the sum of $1,371,249 (the Pyealy Creek Bebo Arch Claim also referred to as Variation 103);
(d)a claim for delay costs for the works as a whole (the Delay Claim also referred to as Variation 17).
[15]There are also two smaller, discrete, claims in respect of which CMC claims about $310,000 (approximately half of which remains in dispute) as variation costs relating to increased environmental management (the Environmental Management Claim) and a change from the installation of Geolon 400 to the installation of Geolon 600 (the Geolon 600 Claim). CMC also has an alternative claim for payment of damages for additional costs incurred in relation to a latent condition or misrepresentation, concerning the GPN Borrow Pit (the GPN Borrow Pit Claim). This claim is an alternative claim to the Earthworks Claim.
[16]WICET itself has brought a counterclaim for $12.5 million including:
(a) alleged overpayments made to CMC under the Building and Construction Industry Payments Act 2004 (Qld) (the BCIP Act);
(b) liquidated damages (which is relevant to the Delay Claim); and
(c)repayment of amounts WICET alleges it overpaid CMC under the Contract which have been re-valued in the Final Certificate (the Final Certificate Claim).
[17]I consider CMC’s claims in the following order:
(a) Earthworks Claim (Variation 141);
(b) Alternative Claim (GPN Borrow Pit);
(c) Piling Claim (Variation 142);
(d) Pyealy Creek Bebo Arch Claim (Variation 103);
(e) Delay Claim (Variation 17) including WICET’s claim for liquidated damages;
(f) Minor claims:
(i) Environmental Management Claim (Variation 90);
(ii) Geolon 600 Claim (Variation 63); and
(g) Interest and bank guarantee.
[18]Because the issues in relation to each of these claims are numerous they are best identified when dealing with the individual claim. Similarly, any relevant findings of fact are also dealt with in respect of each claim. The starting point however, for a consideration of both the claims of CMC and WICET, is the relevant terms of the contract.
Relevant Terms of the Contract
[19]The Contract comprises the following parts:[8]
(a) a formal instrument of agreement;
(b) modified AS2124-1992 General Conditions of Contract (the General Conditions);
(c) Section C – Contract Schedules;[9]
(d)Section F – Special Conditions of Contract (including numerous lengthy appendices); and
(e)Section D – Scope of Work (including appendices which comprised Contract Drawings, Specifications (Aurecon Hatch), Scope of Works, 3D Model, Department of Main Roads Drawings and Department of Main Roads Specifications).
[8] Exhibit 2A, Court Book, Vols 2-6.
[9] Exhibit 2, CMC.508.001.1786.
The Contract is lengthy and is found in Volumes 2 to 6 of the Court Book. The General Conditions are based on the standard AS2124 provisions. The parties did, however, agree on relevant variations to some of the standard provisions, including clause 36 which deals with delay or disruption costs.
[20]The parties differ as to the proper construction of numerous contractual clauses. In identifying in this section of the judgment the relevant clauses of the contract I highlight, on a preliminary basis only, the primary construction issues. I resolve these issues when dealing with the individual claim. The Contract is a commercial contract. It should therefore be construed in accordance with the principles identified by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd.[10] A number of the relevant clauses and schedules are lengthy and have therefore been incorporated into this judgment as Annexure A.
[10] (2015) 256 CLR 104 at 47-51 and 116-117.
[21]The formal instrument of agreement, in clause 5.1, states an order of precedence for the various contractual parts. This order of precedence follows the order of the parts identified in [19] above. Clause 5.2 of the formal instrument of agreement refers to the order of precedence in the following terms:
“Without limiting any part of the General Conditions of Contract, if there is any ambiguity, conflict, discrepancy or inconsistency between the documents comprising the Contract, the order of precedence listed in Clause 5.1 above applies.”
[22]Clause 3 of the formal instrument of agreement deals with payment of the contract sum:
“Subject to the Contractor properly performing its obligations under the Contract, the Principal shall pay the Contractor the Contract Sum in accordance with the Payment Schedule which appears in Section C of the Contract.”
The term “Contract Sum” is defined in the General Conditions to mean –
“where the Principal accepted a lump sum, the lump sum;
(a) where the Principal accepted a lump sum, the lump sum;
(b) where the Principal accepted rates, the sum ascertained by calculating the products of the rates and the corresponding quantities in the Bill of Quantities or Schedule of Rates;
(c) where the Principal accepted a lump sum and rates, the aggregate of the sums referred to in paragraphs (a) and (b),
including provisional sums but excluding any additions or deductions which may be required to be made under the Contract.”
[23]The term “Payment Schedule” in clause 3 of the formal instrument of agreement is not a defined term in the General Conditions.
[24]Section C contains contract schedules.[11] C-3 is the contract price schedule. C-3.1 contains a summary of the Contract Sum. C-3.2 identifies lump sum prices and C-3.3 contains the schedule of rates. C-3.4 deals with provisional sums. Schedule C-3 is set out in Annexure A.
[11] CMC.508.001.1783; Court Book Vol 3, tabs 5.1 and 5.2.
[25]Clause 33 of the General Conditions deals with the progress and programming of the works. Clause 33.1 provides that the Contractor shall not suspend the progress of the whole or any part of the work except where the suspension is directed or approved by the Principal’s Representative under clause 34. Clause 33.1 relevantly provides that if compliance with the direction causes the Contractor to incur more or less cost than otherwise would have been incurred had the Contractor not been given the direction, the difference shall be valued under clause 40.5.
[26]Clause 33.2 concerns the construction program. Clause 33.2 provides that a “construction program” is a statement in writing showing the dates by which, or the times within which, the various stages or parts of the work under the Contract are to be executed or completed. Clause 33.2 requires the Contractor to furnish to the Principal’s Representative a construction program within the time and in the form specified in the Special Conditions of Contract at Appendix F2 and to revise the construction program as specified in those Special Conditions. Clause 2.2 of the Special Conditions contained in Appendix F2 requires the Contractor’s program to be developed using Critical Path Method and presented on a time-scaled bar chart fully continuous in logic that clearly highlights the critical path(s) throughout the network. Pursuant to clause 2.5 of Appendix F2, CMC submitted a construction program that was approved as suitable by WICET. This program became the Baseline Program. Clause 2.5 provides that it is the Baseline Program against which actual time performance will be measured and further, that no changes would be made to the Baseline Program without the prior agreement, in writing, of the Principal’s Representative. It is common ground that there was only one Baseline Program approved by WICET and no revised Baseline Program was ever approved by WICET.[12]
[12] T32-6, lines 26-31.
[27]Clause 34 of the General Conditions deals with suspension of the works. Clause 34.1(b) provides that if the Principal’s Representative considers that the suspension of the whole or part of the work under the Contract is necessary for the protection or safety of any person or property, the Principal’s Representative shall direct the Contractor to suspend the progress of the whole or part of the work under the Contract for such time as the Principal’s Representative thinks fit. Clause 34.4 deals with the cost of such a suspension. Any cost incurred by the Contractor by reason of a suspension under clause 34.1 or 34.2 is borne by the Contractor. However, if the suspension is due to an act or omission of the Principal, the Principal’s Representative or an employee, consultant or agent of the Principal and the suspension causes the Contractor to incur more or less cost than otherwise would have been incurred but for the suspension, the difference shall be valued under clause 40.5. This wording is similar to clause 33.1, which also provides that if the Contractor has incurred more or less cost than otherwise would have been incurred had the Contractor not been given the relevant direction, the difference is also valued under clause 40.5.
[28]Clause 35 of the General Conditions deals with the time for commencement and Practical Completion. Clause 35.2, when read with Schedule C-5 “Key Dates”,[13] identifies the date for Practical Completion as 30 August 2012.
[13] CMC.508.001.1594; Court Book Vol 3, tab 5.4.
[29]Clause 35.5 concerns extensions of time for Practical Completion. Clause 35.5 provides that if the Contractor is or will be delayed in reaching Practical Completion by one of the causes identified in (a) or (b), then it is entitled to give the Principal’s Representative a written claim within 28 days after the delay occurs, seeking an extension of time for Practical Completion. The causes include delays caused by the Principal or the Principal’s Representative and an increase in actual quantities of work being greater than the quantities determined by reference to the upper limit of accuracy stated in the annexure. The annexure identifies the limits of accuracy applying to quantities for which the Principal accepted a rate or rates (clause 3.3(a)) as being an upper limit of 20% and a lower of 20%.[14] Another cause identified by clause 35.5(b)(iv) is a variation directed under clause 40 of the General Conditions. There are, however, limitations to CMC’s ability to claim an extension of time. First, the cause of the delay must be a cause listed in the fourth paragraph of clause 35.5. Further, CMC is required to demonstrate that the activities delayed are on the critical path in the construction program referred to in clause 33.2. A further restriction is that where more than one event causes concurrent delays in achieving Practical Completion and the cause of at least one of those events but not all of them, is not a cause referred to in the fourth paragraph then to the extent that the delays are concurrent, CMC is not entitled to an extension of time for Practical Completion. Clause 35.6 is the liquidated damages clause. Clause 35.7, when read with the annexure, places a limit on liquidated damages of 10% of the Contract Sum. The full text of clause 35 is set out at Annexure A.
[14] CMC.508.001.1746.
[30]Clause 36 concerns delay or disruption costs. It is contingent on the Contractor having been granted an extension of time under clause 35.5 for any delay caused by an event listed in clause 35.5(b)(i), relevantly delays caused by the Principal or the Principal’s Representative or agent. The Principal is required to pay to the Contractor “such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay and for on-Site overheads attributable to the delay valued by the Principal’s Representative under Clause 40.5”. The Principal’s Representative’s valuation is required to exclude any off‑Site overheads or profit. The term “Direct Costs” is defined in clause 2 to mean costs that are reasonably and necessarily incurred by the Contractor and which do not include any profit, loss of profit or off-Site overheads. The full text of clause 36 is set out in Annexure A.
[31]Clause 40 deals with variations. Clause 40.1 identifies variations to the work as including directions by the Principal Representative to the Contractor to either increase, decrease or omit any part of the work under the Contract or to change the character or quality of any material or work or to execute additional work. Clause 40.3 provides that unless the Principal’s Representative and the Contractor agree upon the price for a variation, the variation directed or approved by the Principal’s Representative under clause 40.1 shall be valued under clause 40.5. Clause 40.5 is not only the basis for valuing a variation; it is also the clause referred to in clauses 33.1, 34.4 and 36. It is an important provision in the determination of the present dispute:
“40.5 Valuation
Where the Contract provides that a valuation shall be made under Clause 40.5, the Principal shall pay or allow the Contractor or the Contractor shall pay or allow the Principal as the case may require, an amount ascertained by the Principal’s Representative as follows–
(a) if the Contract prescribes specific rates or prices to be applied in determining the value, those rates or prices shall be used;
(b) if Clause 40.5(a) does not apply, the rates or prices in a Priced Bill of Quantities or Schedule of Rates shall be used to the extent that it is reasonable to use them;
(c) to the extent that neither Clause 40.5(a) or 40.5(b) apply, reasonable rates or prices shall be used in any valuation made by the Principal’s Representative;
(d) in determining the deduction to be made for work which is taken out of the Contract, the deduction shall include a reasonable amount for profit and overheads;
(e) if the valuation is of an increase or decrease in a fee or charge or is a new fee or charge under Clause 14.3, the value shall be the actual increase or decrease or the actual amount of the new fee or charge without the regard to overheads or profit;
(f) if the valuation relates to extra costs incurred by the Contractor for delay or disruption, the valuation shall include a reasonable amount for overheads but shall not include profit or loss of profit;
(g) if Clause 11(b) applies, the percentage referred to in Clause 11(b) shall be used for valuing the Contractor’s profit and attendance; and
(h) daywork shall be valued in accordance with Clause 41.”
[32]The term in clause 40.5(b) “Schedule of Rates” is defined in clause 2 of the General Conditions to mean:
“any schedule included in the Contract which, in respect of any section or item of work to be carried out, shows the rates or respective rates of payment for the execution of that work and which may also include lump sums, provisional sums, other sums, quantities and prices.”
[33]I have already dealt with the Schedule of Rates contained in C-3.[15] There is no dispute between the parties that Schedule C-3 constitutes a “Schedule of Rates”. Schedule C-4 deals with rates for pricing variations.[16] It provides that variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s Representative. Schedule C-4.2 deals with the Daywork Rates. Schedule C-4.2 lists a schedule of Daywork labour rates.[17] Immediately behind this Schedule is a document entitled “Schedule of Daywork, Indirect Personnel and Facilities Rates”. This document gives a rate which is described as “Overall Composite Daily Rate (includes Staff and facilities)” of $38,000 per day.[18] There is a dispute between the parties as to whether Schedule C-4 constitutes a “Schedule of Rates” for the purposes of clause 40.5(b) and in particular Schedule C-4.2. The full text of clause 40, together with relevant extracts from Schedule C-4 are set out in Appendix A. There is a further dispute as to whether the Overall Composite Daily Rate constitutes a contractually prescribed specific rate for the purposes of clause 40.5(a) in valuing a claim for delay and disruption under clause 36.
[15] CMC.508.001.1560.
[16] CMC.508.001.1570.
[17] CMC.508.001.1578.
[18] CMC.508.001.1580.
[34]Clause 41 deals with Dayworks. The full text of clause 41 is set out in Annexure A. The Principal’s Representative may direct that variations under clause 40 shall be carried out as Daywork.
[35]Clause 42 deals with certificates and payments, including in clause 42.8 the Final Certificate. The full text of clause 42 is set out in Annexure A.
[36]There are a number of construction issues that arise for consideration. WICET submits that it is important for the Court to precisely identify whether the delay events for CMC’s Earthworks Claim (Variation 141) should be viewed as variations under clause 40.1, directions under clause 33.1 or suspensions under clause 34. This is because these clauses prescribe different things which are to be valued. This raises for consideration the proper construction of clause 40 and in particular what constitutes a variation for the purposes of clause 40.1. Further, if the delay events for the Earthworks Claim are to fall within clauses 33.1 or 34 rather than 40.1, WICET submits that they should be valued on the basis of cost. CMC however, submits that whether it has incurred more or less cost is a threshold question, not the measure of CMC’s entitlement. Once that threshold question is overcome the valuation, according to CMC, proceeds (similar to a variation) in accordance with the mechanisms set out in clause 40.5. This raises for consideration the proper construction of clauses 33.1 and 34.4 and in particular the words “to incur more or less cost than otherwise would have been incurred” (but for the direction or suspension).
[37]As to clause 36, WICET submits that money claimable under this clause in respect of the Delay Claim (Variation 17) is to be calculated only by reference to cost which would not have been incurred at all, but for the delay. WICET further submits that there must be a causal link between the delay event and cost incurred. CMC’s Delay Claim is only for on-Site overheads it says are attributable to the delay. CMC construes clause 36 to permit these on-Site overheads to be valued by the Principal’s Representative pursuant to clause 40.5. This, according to CMC, would permit the Overall Composite Daily Rate of $38,000 found in Schedule C-4.2 to apply to each day of any extension of time. WICET disputes this contention. WICET also disputes CMC’s submission, that by reference to pre-contractual negotiations, the Overall Composite Daily Rate constitutes an agreed rate of CMC’s on-Site overheads to be used should CMC be granted any extension of time.
[38]These and other contractual construction issues are addressed in more detail in respect of the relevant individual claim.
CMC’s primary lay witnesses
[39]CMC called among other witnesses:
(a) Mr Ben Vance, the Project Manager until September 2012;[19]
(b)Mr Manish Pancholi, the Project Manager from September 2012 until Practical Completion;[20]
(c)Mr John Henderson, the Senior Engineer responsible for the construction of the Beales Creek Bridge and the Rail Receival Bridge;
(d) Mr Matthew Grey, the Senior Engineer responsible for the Pyealy Creek Bebo Arch;
(e)Ms Veronika Haber (Goreva), the engineer with responsibility (under the supervision of Mr Henderson and then Messrs Vance and Pancholi);[21] for the Beales Creek Bridge and Rail Receival Bridge; and
[19] T7-58, lines 9-11.
[20] T16-3, lines 35-47.
[21] T15-14, lines 21-23.
(f) Mr James Barry, CMC’s Project Superintendent.
[40]Apart from Mr Barry all of the primary witnesses called by CMC were engineers who worked on the Project. Apart from Mr Barry, none of CMC’s primary witnesses now work for CMC and none have any financial interest in the outcome of the litigation.[22]
[22] CMC’s Written Closing Submissions, [27].
(a) Ben Vance
[41]Mr Vance was the on-Site Project Manager for CMC from the start of the project until September 2012. He is an experienced earthworks project director and engineer. By the time he took up his post as Project Manager he had some 12 years’ experience in senior roles on construction projects and had a further eight years of experience working as an engineer. He has significant experience in working on projects involving bulk earthworks and the construction of bridges.[23]
[23] CMC’s Written Closing Submissions, [33]; T2-56, lines 37-39; T2-59, lines 30-45; T2-56, lines 20-24.
[42]Mr Vance gave evidence over a period of eight days including being cross-examined for approximately two days. He gave detailed evidence, by reference to contemporaneous documents, as to the progress of the works undertaken by CMC pursuant to the Contract, including the delays and variations the subject of CMC’s claims. I deal with the details of his evidence below in relation to the specific claims. In observing Mr Vance in giving evidence over the course of eight days I formed a favourable view of his credit and considered him an impressive witness. He demonstrated a good recollection of events, which reflected his close involvement in those events.
[43]WICET submits however, that Mr Vance was not a witness of credit and was “an advocate for CMC who was necessarily defensive of a job, the profit margin for which was under continual scrutiny”.[24] Senior counsel for WICET went further in oral submissions suggesting that “some parts of [Mr Vance’s] evidence … are not the answers of an honest witness …”[25]
[24] WICET’s Written Closing Submissions, [21].
[25] T32-41, lines 12-13.
[44]WICET seeks to support these submissions by reference to discrete pieces of Mr Vance’s evidence and certain internal emails, some of which I deal with below. My preliminary observation however, is that there is very little dispute of fact in this case. Whether delays or variations to the GC09 Project were the fault of WICET rather than that of CMC may be largely resolved by reference to contemporaneous documents, uncontested evidence and of course, the relevant terms of the Contract.
[45]In paragraphs 23 to 65 of its written closing submissions, WICET identifies 10 aspects of Mr Vance’s evidence which are said to reflect poorly on his credit. Given that I consider below Mr Vance’s evidence in detail in respect of each relevant claim it is sufficient to deal with three aspects raised by WICET.
[46]The first is in relation to Variation 6 which is not a variation in dispute in the present proceedings. In respect of this variation CMC, by a letter signed by Mr Vance,[26] claimed an additional amount for “Fauna Spotter/Catcher (not Habitat Tree Related)”. This was in circumstances where CMC had in fact included an amount for Fauna Spotters/Catchers in its tender allowance.[27] WICET submits that the following exchange in cross‑examination shows that Mr Vance was “evasive” and “dishonest”:[28]
“You’d already allowed for cost of $17,135 for fauna spotter/catchers, but you were making this claim as if no such allowance had been made?--- The advice from our commercial department was that we’d allowed that in error and that our claim should be based on the – on the contract, which this did not require us to do this.”[29]
“I want to put to you squarely that to the extent that you deleted the reference to the budget allowance of $17,135, that was an act of dishonesty on your part?--- I wouldn't agree with that, and I’ll explain why, if you don’t mind. At the end of the day if we miss something we have no chance of recovering that cost. If we accidentally include something and give that back, there is absolutely no chance that if we fail to include something we should have, like miss a roller out of earthworks, that we will ever recover that cost. So the view taken was that this is a contractual matter, not a matter of exactly what we did or didn’t allow for.”[30]
[26] Exhibit 99, CMC.503.020.7425.
[27] T7-51, lines 18-20.
[28] WICET’s Written Closing Submissions, [27].
[29] T7-52, lines 35-39.
[30] T7-52, line 43 – T7-53, lines 1-3.
[47]In my view, these passages do not support WICET’s submission that Mr Vance was “evasive” and “dishonest”. His evidence was to the effect that even though, in his opinion, CMC had internally allowed for this item, he ultimately deferred to his commercial managers on a question of contractual entitlement.
[48]Another aspect identified by WICET which is said to reflect adversely on Mr Vance’s credit is his response to an email sent by Mr Ahern (an owner of CMC). Mr Ahern’s email was in relation to Variation 104 which concerned raising the Reclamation C Bunds. Whilst work commenced on Variation 104 it was ultimately abandoned. In the relevant email Mr Ahern enquired of Mr Vance: “Surely you and Jamie (Mr Barry) can come up with an option/solution to profiteer immensely out of the situation?”[31] Mr Vance responded: “Working on it; As I said this situation suggests better opportunities than 10%.”[32]
[31] Exhibit 107, CMC.502.027.2218.
[32] Exhibit 107, CMC.502.027.2218.
[49]In cross-examination Mr Vance suggested that his response to Mr Ahern’s email was “fair comment”: “I think that’s a – a fair comment. I mean, we’ve done a lot of day works on this job and made, basically, nothing out of it. This is a variation. You’d hope to do better than that.”[33]
[33] T7-76, lines 25-27.
[50]WICET submits that this evidence reveals that Mr Vance was looking for profit for CMC rather than applying the terms of the Contract.[34] Mr Ahern gave evidence and explained his email which uses the word “profiteering” as follows:
“What did you mean by that email Mr Ahern?--- I meant by – you know, we’re a commercial entity and attempting to increase our profit on a variation because we – well, essentially the project had been – this is at a point in time where the project staff were becoming quite frustrated with the continuous changing and we were being delayed and disrupted and, you know, we work on relatively fine profit margins in relation to the actual activity cost and with – it doesn’t take long for a delay or disruption or change in methodology for our margin to be eroded. So we were attempting to try and claw back some profitability through a change in scope. However, bearing in mind we have a contract, we have schedule rates for each work activity, we have variation rates and day work rates, which we have to abide by, and we’ve got Worley Parsons administering the contract. So the opportunity to profiteer immensely isn’t all that great.”[35]
[34] WICET’s Written Closing Submissions, [37].
[35] T15-77, lines 1-12.
[51]It was suggested to Mr Ahern in cross-examination that his email reveals CMC’s attitude to the whole of the Contract. Mr Ahern rejected this suggestion stating that CMC had suffered a significant loss on the Project.[36]
[36] T15-77, lines 40-43.
[52]The reference to “profiteering” in Mr Ahern’s email may therefore be understood as CMC seeking to increase its profit margin in relation to Variation 104 in order to recoup losses that had already been incurred from delays and disruptions. Mr Ahern’s use of the word “profiteering” in his email and Mr Vance’s response does not, in my view, adversely reflect on Mr Vance’s credit.
[53]WICET also seeks to impugn Mr Vance’s credit by reference to his email response dated 4 December 2012 to Mr McGilvray, who was formulating CMC’s Earthworks Claim.[37] The methodology used by Mr McGilvray to calculate this claim is referred to as “the measured mile”. This methodology requires a consideration of actual production rates. Mr McGilvray, rather than examining production rates over a period of time, sought to use the best week on the project.[38] Mr Vance did not agree with McGilvray’s approach. His responses in cross-examination on this topic rather than reflecting poorly on his credit demonstrate that Mr Vance was willing to make appropriate concessions:
“And I want to put some propositions to you: what the reality – or what’s happening here with this email is that the commercial manager of CMC is telling you, as the project manager, to make adjustments to the claim which have enormous significance in terms of dollars?--- If you look at the date, on the 4th of December I wasn’t the project manager. I agree with the rest of what you’re saying.
And you’re making those adjustments?--- I’ve made that in the spreadsheet and sent it back to him. I disagreed with those adjustments, but it was not my call.
… And I want to suggest to you that this email – your alteration to the figures, in the way you did, is dishonest?--- As I said, I agree it’s the wrong thing to do. But what period you take for the measured mile is probably something people can disagree about. I wouldn't have submitted the claim in that form, but it was not my call at the time. I guess with measured mile you’ve got a choice between a larger claim, or a stronger claim, which has a better basis. Using a shorter period generates a larger claim, but in my opinion it doesn’t represent what happened or the – a fair answer. So I would tend to agree with you that that claim is inflated by what’s been done there.”[39]
[37] CMC.502.020.0348.
[38] T8-31, lines 1-7.
[39] T8-31, lines 40-47; T8-32, lines 19-27.
[54]This was not the only concession made by Mr Vance. As I discuss below in considering the Earthworks Claim, CMC now accept in light of Mr Vance’s evidence, that any period of delay in the construction of the Reclamation C Bunds ceased on or about 18 February 2012. This evidence of Mr Vance which significantly shortened the period of delay claimed by CMC in relation to the Earthworks Claim, was forthcoming in evidence‑in‑chief.[40] Mr Vance made other concessions in cross-examination which included the fact that he was being paid by CMC for his time in giving evidence[41] and further, that while he had no problems with his initial Worley Parsons’ counterpart, Matthew Knowles, Mr Vance’s relationship with Mr Knowles’ replacement, Andre Miroshnikoff, was not good.[42]
[40] T3-50, lines 31-36; T3-62, lines 12-15.
[41] T7-58, lines 37-41.
[42] T7-58, lines 24-31.
[55]Ultimately this case does not rest on an assessment of the credibility of the relevant witnesses. To the extent however that WICET seeks to impugn Mr Vance’s credibility I am not persuaded that I should depart from my initial favourable assessment of Mr Vance’s creditworthiness.
(b) Manish Pancholi
[56]Mr Pancholi was CMC’s Project Manager from September 2012 until March 2013. He is an experienced engineer. I found Mr Pancholi to be an honest and forthright witness. I accept CMC’s submissions that Mr Pancholi’s evidence should be accepted as reliable.[43]
[43] CMC’s Written Closing Submissions, [45].
(c) John Henderson
[57]Mr Henderson was the Senior Engineer responsible for the construction of the Beales Creek Bridge and the Rail Receival Bridge. There was no real challenge to his credibility and I accept his evidence as reliable.
(d) Matthew Grey
[58]Mr Grey was CMC’s Senior Engineer responsible for the Pyealy Creek Bebo Arch. There is no dispute between the parties that the variations to the design of the Pyealy Creek Bebo Arch (Variation 103) constitute a variation under the Contract. The cost of these variations to the design and the time taken to construct the redesigned Pyealy Creek Bebo Arch are however matters of dispute between the parties. Mr Grey was cross-examined in relation to the delay concerning the construction of the redesigned Bebo Arch. I deal with his evidence in this respect when considering the Delay Claim (Variation 17). Having observed Mr Grey, he was in my view, a witness of credit who did not seek to exaggerate any aspect of his evidence. He demonstrated a detailed knowledge of the effect of the redesign of the Bebo Arch on both the delay to and cost of construction.
(e) Veronika Haber
[59]Ms Haber (Goreva) was CMC’s engineer with responsibility (under the supervision of Mr Henderson and then Messrs Vance and Pancholi) for the Beales Creek Bridge and Rail Receival Bridge. Her evidence was primarily relevant to the Piling Claim (Variation 142). Ms Haber impressed me as a witness who gave careful consideration to each question posed. Her answers were direct and to the point. I accept her as both a truthful and reliable witness.
(f) James Barry
[60]Mr Barry who was CMC’s Project Superintendent was also a credible witness. There was no serious challenge to the reliability of his evidence.
WICET’s primary lay witnesses
(a) Andre Miroshnikoff
[61]Mr Miroshnikoff is an experienced Senior Project Engineer/Project Manager.[44] He was employed by Worley Parsons in April 2012 as a package manager for three contracts, namely GC07, GC08 and GC09.[45] Mr Miroshnikoff was not therefore solely involved in the GC09 Project, nor did his involvement cover the first seven months of the GC09 Project from September 2011 to March 2012.[46] He was not located on the GC09 site, although he visited and drove through it with some regularity.[47] Mr Miroshnikoff had an “Inspector/Surveillance Officer”, namely Mr Scott Karandrews.[48] Mr Miroshnikoff reported to the Construction Manager, Mr David Walls.
[44] T17-40, lines 1-40.
[45] T17-42, lines 21-23 and lines 40-42.
[46] CMC’s Written Closing Submissions, [59].
[47] T18-37, line 38 – T18-38, lines 16-17; CMC’s Written Closing Submissions, [59].
[48] T17-43, lines 1-10.
[62]In mid-2013 Mr Miroshnikoff was seconded to WICET and was subsequently employed full time with WICET from about April 2014 to November/December 2015.[49]
[49] T17-41, line 42 – T17-42, lines 8-9.
[63]I accept CMC’s submission that there were significant gaps and errors in Mr Miroshnikoff’s recollection.[50] There are two ready explanations for these deficiencies. First the mere passing of time.[51] The second and more compelling explanation however is that unlike CMC’s witnesses, Mr Miroshnikoff was responsible for three rather than one contract and had a divided focus. Not only were there gaps in his recollection, there were also obvious errors he made in valuing claims and in particular in relation to the Bebo Arch.[52]
[50] CMC’s Written Closing Submissions, [60].
[51] WICET’s Reply Submissions, [34].
[52] T18-68, line 34 – T18-70, line 29; CMC’s Written Closing Submissions, [60](b).
[64]His evidence must be approached with some caution given his limited involvement with the GC09 Project.
(b) David Enright
[65]Mr Enright is presently employed as a project manager and commercial manager with Worley Parsons.[53] He commenced with Worley Parsons as a senior contracts administrator in or around March 2011.[54] He is not an engineer but has a Bachelor of Science in information systems and a Masters degree in business and project management.[55] He was involved in compiling the tender documents and co-ordinating site visits during the tender period.[56]
[53] T16-35, lines 6-7.
[54] T16-35, line 45, T16-36 lines 1-2.
[55] T16-35, lines 10-12.
[56] T16-36, lines 30-40.
[66]Mr Enright’s evidence was limited to discrete topics which included meetings between WICET and CMC representatives in respect of access across Beales Creek and the pre‑tender site visit to the GPN Borrow Pit. He did not have a good recollection of specific discussions that occurred on those occasions.[57] Nor did Mr Enright have a good recollection of what occurred during the site visit on 10 February 2011 in relation to the GPN Borrow Pit.[58] CMC submits that Mr Enright’s inability to recollect specific discussions reflects poorly on his general credit.[59] The fact that Mr Enright did not have a good recollection is, as WICET submits, unsurprising given that the matters in question occurred over five years ago.[60] It remains the case however that Mr Enright’s evidence was of limited assistance.
[57] See for example T16-41, lines 4-10; T16-47, lines 13-17; T16-63, lines 25-32; T16-64, lines 1-17 and T16‑66, lines 30-39.
[58] T17-13, line 39 – T17-14, line 2.
[59] CMC’s Written Closing Submissions, [58].
[60] WICET’s Reply Submissions, [32].
(c) Scott Karandrews
[67]Mr Karandrews has 14 years’ experience working as a superintendent in the construction industry.[61] He is a plumber and drainer by trade.[62] He was employed by Worley Parsons as a client superintendent to oversee the GC09 package of works.[63] In evidence-in-chief he stated that he performed that role from in or about October 2011 to 22 December 2012.[64] He clarified this evidence in cross-examination. He actually commenced with Worley Parsons in July 2011[65] but was on-Site in October 2011.[66] CMC, by reference in part to Mr Karandrews’ clarification of his commencement date with Worley Parsons, submits that his evidence shows a lack of attention to or disregard for detail.[67] I do not accept this submission. I view his answers given in cross-examination as to when he commenced with Worley Parsons as nothing more than an appropriate clarification of his evidence-in-chief.
[61] T21-3, lines 29-30.
[62] T21-3, line 27.
[63] T21-3, lines 45 – T21-4, line 1.
[64] T21-3, lines 42 – T21-4, line 2.
[65] T21-58, line 24.
[66] T21-59, lines 5-7.
[67] CMC’s Written Closing Submissions, [63].
[68]Apart from when he was on leave, Mr Karandrews was on-Site every day.[68] Initially he reported to Matthew Knowles and David Walls and subsequently to Andre Miroshnikoff and Chris Cilliers.[69] Mr Karandrews maintained a hard copy daily diary and subsequently, at Worley Parsons’ request, an electronic diary.[70]
[68] T21-4, lines 10-11.
[69] T21-4, lines 13-15.
[70] T21-4, lines 20-33.
[69]Given that Mr Karandrews was on-Site on a daily basis I had the expectation that he would be able to assist the Court by giving detailed evidence of relevant events. His evidence was however more general in nature.[71] While I accept him as a truthful witness he was, on occasions, unable to recollect important events or conversations. For example, in relation to the delay to CMC’s work at the Reclamation C Bunds arising from a cultural heritage issue, Mr Karandrews’ evidence was as follows:
[71] See for example T21-38, line 10 – T21-39, line 43.
Now, do you recall an issue arising with scar trees giving rise to a cultural heritage issue?--- Yes.
And are you able to say in relation to what area of the site that issue
arose?--- The scar tree?
Yes?--- I can’t recall, sorry.
Do you have – recall having any discussion with any representative of CMC about that issue when it arose?--- Yes. I believe it was Mr Vance.
And today do you have any recollection of that discussion?--- I’m having trouble remembering back that far.
All right. Could I ask if you could be shown WIC.504.030.3408 at 3426. Now, Mr Karandrews, is this an extract of what you refer to as your electronic diary?--- Yes. That’s correct.
And it’s a page of your electronic diary for 9 January 2012?--- Yes.
Would it assist your recollection as to when the cultural heritage issue was resolved to have regard to your electronic diary?--- Yeah.
With your Honour’s leave?
HIS HONOUR: Yes. Thank you.
MR KELLY: I’d ask you, having regard to that extract from your electronic diary, are you able to say to the court when you recall the issue as to what I’ve termed the cultural heritage issue was resolved?--- Yeah. So the cultural heritage issue was resolved that day. So after reading this diary I now understand the area in which we’re talking about. So it was the cultural heritage area that was at access B on the rec C bunds.
Yes. Can I ask you to – I’ve taken you through a period of time with the no‑go zone maps and you’re now familiar with the period of the cultural heritage issue?--- Yep.
In terms of your observations of CMC’s plant and equipment during that period of time of the no-go zone areas and the cultural heritage issue?--- Yep.
How often were you on site during those periods?--- Every day that I was on roster.
And during that period did you observe CMC’s plant on site?--- Yes, I did.
And do you have any particular recollection today of observing CMC’s plant being on standby or not operating during this period?--- I don’t recall it being on standby. I believe the plant was working towards the rec C bunds and also on the overland conveyor corridor.”[72]
[72] T21-17, line 15 – T21-18, line 15; to similar effect see T21-21, lines 20-25.
[70]Mr Karandrews’ difficulties in recollecting conversations that occurred in 2012 is unsurprising. It is the case however that the more detailed recollection of the witnesses called by CMC, such as Mr Vance, Mr Henderson, Mr Grey and Mr Barry, is largely uncontested.
Jones v Dunkel inferences
[71]Both parties submit that the other party has failed to call certain witnesses. For example, WICET submits that CMC’s failure to call Mr Storrier, who was a programmer for CMC during the GC09 Project, gives rise to a Jones v Dunkel inference.[73]
[73] WICET’s Closing Submissions, [73] – [79].
[72]Similarly, CMC submits that as WICET did not call the majority of the senior engineers and employees involved in the GC09 Project and who were directly involved in extensive conversations and written correspondence about which evidence has been given, that the relevant inference should be drawn. That is, the Court should draw the inference that nothing that any of these witnesses had to say would have assisted WICET’s case and, to the extent there is doubt or ambiguity in the evidence, the Court should resolve it against WICET.[74]
[74] CMC’s Written Closing Submissions, [28] and [29]; WICET’s Reply Submissions, [6]-[29].
[73]As WICET correctly submits, no inference may be drawn unless evidence is given of facts requiring an answer. The rule only applies where a party is required to “explain or contradict” something.[75] The evidence of the missing witness must be such that would elucidate a particular matter.[76] Accordingly, rather than seek to apply the inference generally as submitted by CMC, I will have regard to any Jones v Dunkel inference only to the extent that it is necessary for me to make a relevant finding of fact. I would observe however, that WICET’s failure to call a number of senior engineers involved in the GC09 Project and in particular Mr Vance’s counterpart Mr Matthew Knowles, means that much of CMC’s evidence was uncontested and may be accepted. This observation does not require the drawing of any Jones v Dunkel inference, rather it is apparent from WICET’s case as presented.
[75] Jones v Dunkel (1959) 101 CLR 298 at 321; WICET’s Reply Submissions, [9](a).
[76] Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at [169], [248]-[249], [266]; WICET’s Reply Submissions, [9](b).
Approach to findings of fact
[74]Given the thousands of documents tendered and the number of claims, I requested the parties to identify the specific findings of fact sought. CMC, in accordance with this request, has specified the findings of fact which it seeks in its written closing submissions and in Exhibit 429 which is entitled “Findings of Fact Sought by the Plaintiff (Variations 141, 142 and 17)”. As I have already observed, much of the evidence in this case is uncontested. To the extent that WICET takes issue with a particular finding of fact sought by CMC, this is noted in the third column of Exhibit 429.
[75]Where a finding of fact is not disputed and based on my own assessment of the evidence, I have adopted the finding of fact sought by CMC. I refer to my own assessment of the evidence because of WICET’s qualification noted on Exhibit 429, namely that:
“Where a reference to the Defendant’s Submissions is included in the third column, that reference identifies where the Defendant takes issue with the finding sought. Where no such reference is included, it should be taken that the Defendant does not admit the finding sought. Paragraphs within the identified range but which are not referred to in the table below are agreed.”
CMC’s challenge to the expertise of Mr Abbott
[76]Two experts were called to give programming evidence in respect of the delay events relevant both to the Earthworks Claim (Variation 141) and the Delay Claim (Variation 17). Mr Gerard King was called as the expert programming witness for CMC, while Mr Stephen Abbott was called as the expert programming witness for WICET.
[77]These experts gave their evidence concurrently. Prior to the commencement of this concurrent evidence CMC filed written submission[77] challenging Mr Abbott’s expertise. Mr Abbott has produced an expert report on delay dated 2 November 2015, a joint expert report on delay with Mr King dated 28 April 2016, an expert report on earthworks dated 3 February 2016 and a joint expert report with Mr King on earthworks dated 20 May 2016.
[77] CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016.
[78]In response to CMC’s written submissions, WICET filed written submissions dated 15 August 2016 and was granted leave to read and file an affidavit of Mr Abbott sworn 14 August 2016. After conducting a voir dire in which Mr Abbott gave evidence, I ruled that his expertise in programming had been established. I indicated that I would give reasons in my judgment. These are my Reasons.[78]
[78] T24-26, line 45 – T24-27, line 2 and T24-29, lines 1-5.
[79]CMC submits that Mr Abbott does not hold any qualification as an engineer generally or as a programmer specifically. In addition to the absence of a formal qualification of this kind, his CV does not disclose any significant study of, or direct experience in, a programming task. According to CMC what Mr Abbott’s CV discloses is experience in the construction industry, in the roles of carpenter, building foreman, project manager and state building manager. The construction works in which Mr Abbott has had direct experience involved the construction of buildings (as distinct from earthworks, bridges or roads). Most significantly, according to CMC, Mr Abbott’s CV does not identify any or any substantial work in programming.[79] CMC therefore submits, by reference to the relevant authorities, that Mr Abbott has not demonstrated that by reason of specified training, study or experience he has become an expert.[80]
[79] CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016, [8].
[80] CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016, [2], [3], [4] and [6], citing Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 744, Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 at [37], Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) (2013) 29 BCL 19 at [98] and Murphy v R (1989) 167 CLR 94 at 111.
[80]CMC submits that the fact that a person has extensive involvement in aspects of construction does not make them an appropriately qualified expert to give evidence in specific sub-disciplines. CMC relies on the decision of Einstein J in Stockland (Constructors) Pty Ltd v Darryl I Coombs Pty Ltd.[81]His Honour stated at [9] – [11]:
[81] [2004] NSWSC 323.
“There is no doubt that Mr Farrant is, by his training, study and experience, shown to have acquired specialised knowledge in certain areas permitting him to express opinions wholly or substantially based upon that knowledge. In this regard he has acquired specialised knowledge in the following areas:
● quantity surveying expertise;
● the ability to read and understand architectural and building design drawings;
● construction and project management of construction projects including the overseeship of the construction process
● the making of arrangements for consultant specialists to prepare documents;
● the making of arrangements for the calling and letting of tenders.
He has also had an extensive involvement in the programming of construction projects, the budgeting of those projects, site inspections of such projects, contract administration and related activities. This is however essentially the role of an overseer.
…
Mr Farrant is not, however, a programmer with programming expertise in terms of the ability to assess the timing, the logic and methodology of the design and construction processes to be in a position to assess and determine with precision how the various disciplines and the works may be managed to create the ultimate ‘as built’ construction, but his construction and project management experience has permitted him to gain some general knowledge of some of these processes.”
[81]Einstein J identified that Mr Farrant’s evidence purported to address 17 different areas of specialised knowledge. This included programming. His evidence was that he was “involved in the programming of projects”. Einstein J held that the witness was not qualified to express opinions in relation to matters of architecture, engineering, structural steel detailing and programming.[82] As is evident from the discussion below, Mr Abbott’s experience in programming is entirely different to that of the expert considered by his Honour.
[82] At [14] and [15].
[82]Whilst it is true that Mr Abbott does not have any formal qualifications in programming, the evidence reveals that he has extensive experience in the programming of construction projects. He has been involved in the construction industry for 36 years. As a result of that experience he has developed detailed knowledge of the construction process that he uses in the planning and programming of major construction projects. He was first exposed to formal planning and programming software in or about 1990. He has extensively used this programming software.[83] Since 1990 he has provided planning and programming services in relation to major construction projects across Australia.[84] In his affidavit Mr Abbott in paragraphs 7 to 25 details, in a non-exhaustive way, his programming experience from 1989 to the present. This includes the creation of contract programs for major projects and the review and critique of hundreds of construction programs.
[83] Affidavit of Stephen John Abbott sworn 14 August 2016, [5](a), (c) and (d).
[84] Affidavit of Stephen John Abbott sworn 14 August 2016, [5](e).
[83]He has personally provided forensic, planning and programming services on numerous construction projects across Australia in the various sectors of the industry including building construction, civil, mining, rail and oil and gas sectors.[85]
[85] Affidavit of Stephen John Abbott sworn 14 August 2016, [22].
[84]In the voir dire, whilst Mr Abbott accepted that he was not “a specialist programmer”, he stated that the roles he has held in the industry have involved programming as an inherent part of those roles.[86] Mr Abbott’s evidence was that he has the ability or the expertise to compile construction programs and is familiar with the relevant computer software.[87] Mr Abbott’s established expertise therefore falls into a completely different category to that of the expert considered by Einstein J in Stockland.
[86] T24-12, line 32 – T24-13, line 26.
[87] T24-22, line 20 – T24-24, line 16.
[85]I am satisfied from Mr Abbott’s reports, including his joint reports with Mr King, his affidavit sworn 14 August 2016 and his evidence given on the voir dire that he has substantial experience in the programming of construction projects.
[86]CMC also seeks to challenge the admissibility of Mr Abbott’s expert reports on the basis that he was assisted in preparing the reports by a specialised programmer, Mr Wigginton. CMC submits that Mr Wigginton’s involvement leads to the problem identified by Stone J in Cooke v Commissioner for Taxation,[88] namely that it was not possible to tell from the report which parts of it, if any, were prepared solely by the relevant expert. As her Honour noted:
“To be admissible, an expert opinion must be wholly or substantially based on the expert witness’s specialised knowledge. … This requirement clearly cannot be met if it is partly based on the knowledge or opinions of someone else.” (citations omitted).[89]
[88] (2002) 51 ATR 223.
[89] Cooke v Commissioner for Taxation (2002) 51 ATR 223 at [38]; see also Paino v Paino [2005] NSWSC 1313.
[87]CMC’s submission should be rejected. The evidence of Mr Abbott given in the voir dire shows that in the compilation of his expert reports he was involved in instructing Mr Wigginton and reviewed his work.[90] As Mr Abbott supervised and reviewed Mr Wigginton’s programming work for the purpose of compiling the report, coupled with the fact that Mr Abbott has the necessary programming knowledge to review Mr Wigginton’s work, I accept that the opinions expressed in the reports are those of Mr Abbott.
[90] T24-13, lines 33-44; T24-14, lines 10-14; T24-9, lines 35-40.
[88]CMC makes further discrete objections to various paragraphs of Mr Abbott’s reports. On 17 May 2016, CMC delivered objections to the various paragraphs of the reports of Mr Abbott. On 11 August 2016, CMC expanded upon those objections by delivery of written submissions containing a schedule of detailed objections. Those objections constitute Annexure A to CMC’s written closing submissions and are pressed. WICET’s response to those objections constitutes Annexure D to its written closing submissions.[91] Where it is necessary I deal with those specific objections when I come to consider in more detail Mr Abbott’s expert evidence. It may be generally observed however, that to the extent that Mr Abbott bases his opinion on an unproven assumption, instruction or fact, I treat his opinion in that respect as irrelevant.[92]
[91] See CMC’s Written Closing Submissions, [2388]; WICET’s Written Closing Submissions, [2162].
[92] See Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 per Heydon J at [66]; Eric Preston Pty Ltd v Euroz Securities Ltd (2011) 274 ALR 705 at [171]; Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QSC 179 per Martin J at [298] – [301].
CMC’s challenge to the expertise of Mr Tsipis
[89]Mr George Tsipis was called by WICET as its quantum expert. Mr Tsipis produced four reports dated 16 November 2015, 3 December 2015, 18 February 2016 and 16 May 2016 together with a joint expert report on quantum with CMC’s quantum expert, Mr Paul Roberts, dated 18 July 2016.
[90]On 17 May 2016 CMC delivered objections to various paragraphs of the reports of Mr Tsipis. On 16 August 2016, CMC expanded upon those objections by delivery of written submissions with a schedule of detailed objections. Those detailed objections are included at Appendix B of CMC’s closing submissions and are pressed. WICET’s response to the objections to specific paragraphs of Mr Tsipis’ reports are set out in Annexure E to WICET’s written closing submissions.[93] Similar to my approach in relation to the objections to specific paragraphs of Mr Abbott’s reports, I deal with CMC’s objections to Mr Tsipis’ reports when I consider the issue of quantum in relation to each claim. As a preliminary observation, however, where either Mr Tsipis or Mr Roberts as quantum experts express an opinion in relation to the proper construction of the Contract all parties accept that this is a matter for the Court.
[93] CMC’s Written Closing Submissions, [2389]; WICET’s Written Closing Submissions, [2164].
[91]CMC’s primary objection to the admissibility of Mr Tsipis’ reports is that he does not hold any qualifications in the field of quantity surveying (such as Bachelor of Science (Quantity Surveying) or a Bachelor of Applied Science (Quantity Surveying)).[94] On 29 August 2016 I ruled that Mr Tsipis’ reports were admissible.[95] These are my Reasons for that ruling. It may be accepted that quantity surveyors are recognised as having a skill set that relate to contracts and cost, particularly cost estimation and control, on construction projects.[96] This does not mean, however, that a qualified engineer experienced in costing cannot also give a relevant expert opinion. This however would appear to be the basis of CMC’s objection. CMC submits:
“It is accepted that Mr Tsipis is a qualified engineer and has broad experience in the construction industry and in preparing expert reports. But what is required is demonstrated expertise in the specialised field of quantity surveying.”[97]
[94] CMC’s Submissions on Objections to Expert Reports of Mr Tsipis, [4]. The first degree is held by CMC’s expert Mr Roberts and the second degree is held by Mr Tsipis’ assistant, Mr Eric Lien.
[95] T29-37, lines 34-38.
[96] See Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99, affirmed on appeal in (2013) 41 VR 636.
[97] CMC’s Submissions on Objections to Experts Report of Mr Tsipis, [7].
[92]I accept WICET’s submission that the flaw in CMC’s objection is that it assumes that one must be a quantity surveyor in order to express the opinions which Mr Tsipis expresses.
[93]Mr Tsipis is a qualified civil engineer with over 29 years’ experience in the design, procurement and construction of projects located in Australia, New Zealand and Asia. For the last 21 years, he has worked as a consultant to contractors, owners and lawyers in all aspects of contractual claims. This includes the assessment and formulation of variation, delay, prolongation, disruption and acceleration claims and the preparation of expert reports for dispute resolution proceedings including facilitation, mediation, adjudication, arbitration and litigation proceedings.[98]
[98] See Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, Appendix A.
[94]On 29 August 2016 I gave leave to WICET to read an affidavit of Mr Tsipis sworn 17 August 2016.[99] In paragraph 5 of his affidavit Mr Tsipis gives an overview of his qualifications and experience. He refers to being a member of the Australian Cost Engineering Society and the Association for the Advancement of Cost Engineering. From evidence filed by CMC it appears that it is not difficult to obtain such membership.[100] Putting to one side Mr Tsipis’ membership of those organisations, his affidavit details extensive experience as a cost consultant and quantum expert in over 75 matters in the last 20 years. This experience commenced in or about 1986 when he carried out cost assessments while working for Evans Deakin Industries Ltd. In his affidavit Mr Tsipis explains that between 1986 and 1994 he progressed through the roles of assistant site engineer, site engineer, project engineer, project engineer and project manager and project engineer and design manager on a series of significant projects. He explains that during this period he gained:
“… substantial on-site experience in a wide range of building, construction, engineering, mining, infrastructure and civil construction projects, including projects which involved works similar to the works carried out by CMC on the GC-09 works which are the subject of these proceedings, namely, bulk earthworks including the construction of earthen bunds and ponds, concrete foundations, bridgeworks, road construction and drainage works.”[101]
[99] T29-7, lines 22-25.
[100] See Affidavit of Shannon Carl Schwarz filed by leave on 29 August 2016.
[101] Affidavit of George Zaharias Tsipis filed 29 August 2016, [5(d)].
[95]From 1994 to the present Mr Tsipis was a principal at Evans & Peck and then E3 Advisory. In those roles, he has prepared claims for contractors, provided advice in relation to claims and provided independent quantum assessment services.[102] Mr Tsipis explained that his professional qualifications as a registered professional engineer permit him to interpret designs, design changes, changes in materials and quantities and changed construction methodologies.[103] This was emphasised by Mr Tsipis in response to certain questions in cross-examination on the voir dire:
Without limiting the Principal's rights under any other provision of the Contract and notwithstanding the provision of or the issue of certificates by the Principal's Representative under Clause 42.1, the Principal may deduct from any moneys due to the Contractor, including amounts payable under a payment certificate, any debt due from the Contractor to the Principal or any claim which the Principal may have against the Contractor whether or not the debt or claim arises by way of damages, debt, restitution, under the Contract or otherwise.
If the moneys payable to the Contractor are insufficient to discharge the debt or claim the Principal may have recourse to-
(a)retention moneys; and
(b)if retention moneys are insufficient, security provided under Clause 5.2.
Nothing in this Clause shall affect the right of the Principal to recover from the Contractor the whole of the debt or any claim or any balance that remains owing.
42.11 Recourse for Unpaid Moneys
Where, within the time provided by the Contract, a party fails to pay the other party an amount due and payable under the Contract, the other party may, subject to Clause 5.5, have recourse to retention moneys, if any, and, if those moneys are insufficient, then to security under the Contract and any deficiency remaining may be recovered by the other party as a debt due and payable.
C-3 Contract Price Schedules
C-3.1 Summary of Contract Sum
3.1.1The Contract Sum is comprised of fixed lump sum, schedule of rates prices and provisional sums within the Schedule C-3 – “Section C3 Contract Price Schedules”.
3.1.2The Contract Sum includes the price of the whole of the work under the Contract which includes but is not limited to services and other incidentals associated with or necessary for the execution of the work described and the performance of the obligations of the Contractor under the Contract, whether specifically mentioned or not within the Schedule C-3 – “Section C3 Contract Price Schedules”.
3.1.3The Contract Sum is fixed and is not subject to adjustment for rise or fall in costs unless otherwise stated in the Contract.
3.1.4All rates and prices in the Schedule C-3 – “Section C3 Contract Price Schedules” are fixed and are not subject to adjustment for rise and fall in costs unless otherwise stated in the Contract.
3.1.5All rates and prices in the Schedule C-3 – “Section C3 Contract Price Schedules” are in Australian dollars and are exclusive of GST.
3.1.6The Contract Sum breakdown reflects the broad break-up of the Works into recognisable and manageable areas of work for progress monitoring and progress payment purposes. Prior to executing a Contract the Principal and the Contractor shall agree on a final breakdown that may be different in detail from, but will be generally consistent with, the Contract Sum breakdown herein.
3.1.7The methods of measurement for payment are set out in C-3.5.
C-3.2Lump Sum Prices
The Contract Sum includes lump sum items, payment for such items shall be for the amounts shown in the Schedule C-3 – “Section C3 Contract Price Schedules” which comply with and include for the following:
3.2.1The lump sum prices inserted in the Schedule C-3 – “Section C3 Contract Price Schedules” shall be the full inclusive cost of the work described and shall include but are not limited to, the cost of labour, facilities, materials, plant, equipment, tools, transportation, provision of inspection and test reports evidencing the Principal’s Representative’s acceptance of the work, taxes, charges, fees, overhead, profit and all other things necessary to perform the work in accordance with the obligations set forth in the Contract.
3.2.2The breakdown of the work under the Contract in the Schedule C-3 – “Section C3 Contract Price Schedules” consists of work activity items, equipment and parts that form recognisable and manageable portions for assessment purposes.
3.2.3The descriptions of activity items, equipment and parts are intended only as brief descriptions sufficient for identification and are not exhaustive.
3.2.4Minor activity items, equipment or parts not expressly mentioned in the Contract or the Schedule C-3 – “Section C3 Contract Price Schedules”, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the Contract Sum.
3.2.5Each activity item, equipment item, major part or group of related parts shall be individually priced. The costs of individual items against which no prices are stated shall be deemed to be distributed throughout the prices entered for related items of work. Where no activity item is provided, the cost is deemed to be distributed throughout the prices entered for related items of work.
3.2.6The lump sum prices in the Schedule C-3 – “Section C3 Contract Price Schedules” include planning, performing and expediting the works, preparation of all specified programs, charts, schedules and reports of other documents required under the Contract, coordination with others, management of personnel and any other management activity required.
3.2.7Supply and installation of the Contractor’s temporary services shall include electric power, water supply, sewage, ablution, communication and telephone service.
3.2.8Supply and erection of the Contractor’s site facilities shall include, but not limited to, offices, meal rooms, workshops, storage areas, ablution and toilet facilities.
3.2.9Supply, installation and maintenance of construction office facilities for sole use of the Principal or his representatives where specified.
3.2.10Establishment on Site of the Contractor’s personnel, plant and equipment.
3.2.11Maintenance and cleaning of the Site establishment until disestablishment.
3.2.12The fixed lump sum price for Survey in this Schedule C-3 – “Section C3 Contract Price Schedules” includes all labour, materials and equipment required to survey the Works and the Site to complete the Works, including set out of the Works and the documentation of survey.
3.2.13To include for all costs associated with accommodation, R&R and travel for contractor personnel including their subcontractors.
C-3.3Schedule of Rates
The Contract Sum includes schedule of rates items, payment for such items shall be at the rates shown in the Schedule C-3 – “Section C3 Contract Price Schedules” – which comply with and include for the following:
3.3.1The rates inserted in the Schedule C-3 – “Section C3 Contract Price Schedules” shall be the full inclusive cost of the work described and shall be deemed to include but are not limited to, the cost of wages, profit, overheads, all supervision (including foreman and above), insurance, consumables, timekeeping, charges, transportation to and from the Site, transportation around the Site, all clerical and office work, performance of the obligations of the Contractor under the Contract and all incidental costs incurred in performing the work.
3.3.2The rates are fixed and not subject to adjustment for rise or fall in costs, including difficulty of the work or any difference between estimated and actual quantities, unless otherwise stated in the Contract.
3.3.3The quantities in the Schedule C-3 – “Section C3 Contract Price Schedules” are estimated and, for the purpose of payments under the Contract, the quantities shall be measured in accordance with the method of measurement for payment (refer to C-3.5).
3.3.4The descriptions of rate activity items, equipment and parts are intended only as brief descriptions sufficient for identification and are not exhaustive.
3.3.5Minor activity items, equipment, parts and other costs not expressly mentioned in the Contract or the Schedule C-3 – “Section C3 Contract Price Schedules”, including related travel and accommodation, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the rates.
C-3.4Provisional Sum
3.4.1The cost of the amounts marked in the Schedule C-3 – “Section C3 Contract Price Schedules” “Provisional Item, if ordered” are provisional as described below.
3.4.2Where a Work Item Number contains a suffix “P” and the words “Provisional Item, if ordered” appear in the description of the item, the Contractor shall only be entitled to be paid for that work if the Principal’s Representative directed the Contractor in writing to undertake that work. It shall be understood that the work represented by that Work Item may not be required under the Contract. Limits of accuracy do not apply to these Work Items.
3.4.3The Principal may elect to award the work the subject of a “Provisional Item, if ordered” to another contractor.
C-3.5Method of Measurement for Payment
3.5.1For works where the schedule item includes a reference to an item covered by a Main Roads Specification, the method of measurement for the purpose of payment for the work under the Contract shall be in accordance with the prescribed method applicable to that standard item reference.
3.5.2Where works are not covered by a referenced MRS item, the method of measurement for the purpose of payment for the work under the Contract shall be in accordance with Australian Standard AS1181 – 1982 as amended. Departures from AS1181 are listed in Schedule 3.5 – Schedule of Departures from Method of Measurement below.
Schedule 3.5 – Schedule of Departures from Method of Measurement
Item
Specified Departures
1
1.3.9
Table 1.1 – Rounding up of measurements for billing
Amend interval of rounding for lengths less than 10 metres from 1.0 to 0.1 metres
Schedule C-3
Section C-3 Contract Price SchedulesContract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules
Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules"
Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules"
Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules"
Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules"
Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules"
C-4 Rates for Pricing Variations
Where the relevant Specification provides for more than one class or type of the product listed, the Unit Rates table below; Schedule 4.1: Unit Rates shall include rates and descriptions for each class or type.
Variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s representative.
The Contractor shall only be remunerated for work actually performed and approved by the Principal’s Representative. The Contractor shall not be entitled to remuneration for plant stand-by time.
The Contractor shall provide time sheets, payroll records and such other information as the Principal’s Representative may require for verifying the work actually performed by the Contractor.
C-4.1 Unit Rates
The cost of approved variations under the Contract shall be calculated in accordance with Schedule 4.1 – Unit Rates for Variations herein, with particular reference to:
4.1.1The unit rates in this Schedule are the full inclusive cost of the work described including all Contractor’s obligations set forth in the Contract.
4.1.2The unit rates herein are fixed and are not subject to adjustment for rise and fall in costs unless otherwise stated in the Contract.
4.1.3Unless specifically stated otherwise in this Schedule the unit rates shall apply to work that is additional or with increased quantities (outside the upper limits of accuracy stated in the Annexure Part A) and to work that is deleted or with reduced quantities (outside the lower limits of accuracy stated in the Annexure Part A) under the Contract.
Schedule 4.1 Unit Rates for Variations
ITEM
DESCRIPTION
UNIT
RATE
$AUD1
Civil Works
1.1
Excavation/Trenching
Excavation for drains, or trenching for piping or electrical conduit, to depth shown including all permits, excavation, spoil management, barricading and signage
1.1.1
For trench 800 deep
m3
30.00
1.1.2
For trench 1000 deep
m3
25.00
1.1.3
For trench 1200 deep
m3
20.00
ITEM
DESCRIPTION
UNIT
RATE
$AUD1.1.4
For trench greater that 1200 deep
m3
18.00
1.1.5
For drains
m3
16.00
1.2
Backfill
Backfill to excavations including supply and placement of service warning tape, back fill and compaction
1.2.1
General Backfill – from spoiled materials
m3
60.00
1.2.2
Supply and install bedding sand
m3
200.00
2
Concrete Works
2.1
Concrete
Supply, place, finish, strip, cure, dress, inclusive of excavation & backfill, reinforcement and formwork.
2.1.1
0.5 to 1.5 Mpa Flowable Fill
m3
800.00
2.1.2
10 MPa in blinding layer -509 mm min nominal thickness
m3
1,000.00
2.1.3
40 MPa Structural – Foundations
m3
2,800.00
2.1.4
40 MPa Structural – Slab on ground (<200 mm thick)
m3
2,600.00
2.1.5
40 MPa Structural – Suspended slabs
m3
N/A
2.1.6
40 MPa Structural – plints and pedestals
m3
N/A
2.1.7
40 MPa Structural – formed open drains
m3
2,200.00
2.1.8
50 MPa Structural – formed open drains
m3
3,200.00
2.1.9
Spraycrete
m3
1,800.00
2.1.10
50 MPa Non-shrink Cementitious Structural grout
m3
12,000.00
2.1.11
70 MPa High strength grout
m3
12,200.00
3
Steelwork
3.1
Supply and install painted light steelwork (sections 0-30kg/m)
tonne
N/A
3.2
Supply and install painted heavy steelwork (sections 60-90kg/m)
tonne
N/A
3.3
Supply and install painted steelwork (sections 60-90kg/m)
tonne
N/A
3.4
Supply and install painted extra heavy steelwork (sections 90-125kg/m)
tonne
N/A
ITEM
DESCRIPTION
UNIT
RATE
$AUD3.5
Supply and install painted extra heavy steelwork (sections >125kg/m)
tonne
N/A
3.6
Supply and install heavy duty galvanised steelwork
tonne
N/A
3.7
Supply and install painted steel stairs c/w handrails and treads
lineal metre
N/A
3.8
Supply and install handrail system
lineal metre
N/A
3.9
Supply and install heavy duty galvanised gridmesh
tonne
N/A
4
Piling
4.1
Supply sheet piles
m
N/A
4.2
Pitch and drive sheet piles
m
N/A
5
Electrical
5.1
Supply and install – 150mm dia. PVC U/G Conduit, including pullwire
m
70.00
5.2
Supply and install – 100mm dia. PVC U/G Conduit, including pullwire
m
60.00
5.3
Supply and install – 80mm dia. PVC U/G Conduit, including pullwire
m
57.00
5.4
Supply and install – precast electrical/data/communications pulling pit c/w cover
each
2,200.00
C-4.2 Daywork Rates
Daywork sheets for Variations shall be verified and signed on a daily basis by the Principal’s Representative and the responsibility for obtaining the signature rests with the Contractor.
Daywork sheets shall reflect both labour and plant resources, together with any materials and hired resources used by the Contractor.
No additional entries or additional claims will be made on the Daywork sheets after signature thereof.
4.2.1 Labour
● The labour rates specified in Schedule C-4.2 shall be deemed to include (but are not limited to) the cost of wages, Contractor’s profit, overheads, all supervision and management (including foreman and above), use of small tools under AUD 5,000 in value, insurance, consumables, accommodation, construction facilities, timekeeping, charges, transportation to and from the Site, transportation around the Site, all clerical and office work and all incidental costs incurred in performing the work.
● Normal time and overtime shall be as defined in the relevant Site industrial agreement.
4.2.2 Constructional Plant
● The rates for Constructional Plant specified in Schedule C-4.3 are inclusive of driver and operators’ wages, water, oil, fuel, consumable stores, maintenance, spare parts, services, repairs, insurance, overheads, profit and all other things of whatever nature required for the efficient and safe operation of the plant.
● The plant rates set out in Schedule C-4.3 are fixed and are not subject to change for any reason whatsoever including difficulty of the work or any difference between estimated and actual quantities.
● Service books for all equipment may be requested by the Principal’s Representative to verify the state of the equipment.
4.2.1 Materials and Subcontracts
● In calculating the payment due to the Contractor for materials used for Daywork (except for materials for which the cost is included in the Daywork labour rates), only the net quantity actually used for the Daywork shall be measured.
● The Contractor shall be entitled to payment in respect of materials and subcontracts used in Daywork at the actual invoiced cost to the Contractor, including freight to the Site, but excluding any cash or trade discounts, plus a percentage mark-up as shown in Annexure Part A which shall be deemed to cover all costs including, but not limited to the following:
●all off-Site and on-Site administration;
●delivery, handling and storage;
●insurances;
●overheads, profit and margins;
●mark-up of whatsoever nature.
● Unless otherwise agreed, materials required in the performance of the Daywork and which are not otherwise covered by a rate in the Schedule C-4.2 and C-4.3 (whether plant or labour) shall be paid for only in the quantities authorised by the Principal’s Representative.
Schedule C-4.2 – Schedule of Daywork Labour Rates
Working Rate per Hour (A$)
Item
Award Classification
NT
(Normal Time)
NT x 1.5
NT x 2
1
Leading Hand
106.00
147.00
189.00
2
Tradesman
106.00
147.00
189.00
3
Tradesman’s Assistant
102.00
141.00
180.00
4
Labourer
102.00
141.00
180.00
5
Plant Operator
106.00
147.00
189.00
6
Truck Driver
104.00
145.00
186.00
7
Crane Driver
106.00
147.00
189.00
8
Surveyor
197.00
284.00
371.00
9
Surveyor’s Chainman
102.00
141.00
180.00
Schedule of Daywork Indirect Personnel and Facilities Rates
Working Rate per Hour (A$)
Item
Award Classification
Day
1
Construction Manager
2,900.00
2
Project Manager
2,800.00
3
QA/QC Manager
2,250.00
4
Safety/Environmental Manager
1,950.00
5
Senior Project Engineer
2,400.00
6
General Superintendent
2,500.00
7
Site Engineer
1,950.00
8
Foreman
2,250.00
9
Contract Administrator
1,500.00
10
12m x 9m Office Complex
180.00
11
12m x 3m Office
60.00
12
12m x 3m Crib
70.00
13
6m x 3m Ablution Block
110.00
14
Portable Chemical Toilet
28.00
15
Pump Outs
100.00
16
6m x 3m Office Furniture
25.00
17
6m x 3m Crib Furniture
35.00
18
Server
200.00
19
Communications
55.00
20
Office Running Costs
50.00
21
Overall Composite Daily Rate (Includes Staff and facilities)
38,000.00
Schedule C-4.3 – Schedule of Daywork Constructional Plant Rates
Rate per Hour (A$)
(Including Operators)
Item
Plant Description
Working
1.
Scraper (Cat 631) or equivalent
480.00
2.
Bulldozer (Cat D9R) or equivalent
440.00
3.
Bulldozer (Cat D6R) or equivalent
320.00
4.
Excavator (Cat 330) or equivalent
290.00
5.
Excavator (Cat 320) or equivalent
250.00
6.
Road grader (Cat 140) or equivalent
280.00
7.
Front end loader Cat 980
330.00
8.
Front end loader Cat 950
290.00
9.
Dump truck 10 m3
300.00
10.
Articulated dump truck (Moxy 30,000 litre)
300.00
11.
16t vibratory roller or equivalent
200.00
12.
10t vibratory roller or equivalent
180.00
13.
Multi-tyred roller
180.00
14.
Backhoe
190.00
15.
Semi-Trailer 18t
200.00
16.
12t Rigid tipper
180.00
17.
Water cart (16KL)
180.00
18.
Utility (No Driver)
150.00/Day
19.
4x4 Vehicle (No Driver)
190.00/Day
20.
Minibus (No Driver) (12 Seater)
280.00/Day
21.
Crane 16t articulated (or similar)
240.00
22.
Mobile Crane 25T
290.00
23.
Mobile Crane 50T
400.00
Rate per Hour (A$)
(Including Operators)
Item
Plant Description
Working
24.
Elevating Work Platform
250.00/Day
25.
Cherry Picker
330.00/Day
26.
50mm diesel driven concrete pump with hoses
200.00
27.
Concrete pump truck
270.00
28.
Dewatering Pump 50mm including hoses
130.00/Day
29.
Dewatering Pump 75mm including hoses
200.00/Day
30.
Dewatering pump 150mm including hoses
330.00/Day
31.
Mobile Generator 20 KVA
250.00/Day
32.
7.5 KVA Generator
130.00/Day
33.
5 KVA Generator
130.00/Day
34.
400CFM Compressor
500.00/Day
35.
Diesel Welder 400A/AS
N/A
36.
Jackhammer (30 kg)
100.00/Day
37.
Piling rig # 1 ()
1,500.00
38.
Piling rig # 2 ()
1,500.00
Schedule of Plant and Equipment Stand Down Rates
Rate per Hour (A$)
(Including Operators)
Item
Plant Description
Working
1.
Scraper (Cat 631) or equivalent
390.00
2.
Bulldozer (Cat D9R) or equivalent
360.00
3.
Bulldozer (Cat D6R) or equivalent
260.00
4.
Excavator (Cat D4) or equivalent
N/A
5.
Excavator (Cat 330) or equivalent
230.00
6.
Excavator (Cat 320) or equivalent
200.00
7.
Road grader (Cat 140) or equivalent
220.00
8.
Grader (Cat 16) or equivalent
N/A
9.
Front end loader Cat 980
260.00
10.
Front end loader Cat 950
230.00
11.
Dump truck 10 m3
240.00
12.
Articulated dump truck (Moxy 30,000 ltre)
240.00
13.
16t vibratory roller or equivalent
160.00
14.
10t vibratory roller or equivalent
150.00
15.
Multi-tyred roller
150.00
16.
Backhoe
160.00
17.
Semi-Trailer 18t
100.00
18.
12t Rigid tipper
150.00
19.
Water cart (16KL)
150.00
20.
Utility (No Driver)
75.00/Day
21.
4x4 Vehicle (No Driver)
160.00/Day
22.
Minibus (No Driver) (12 Seater)
220.00/Day
23.
Crane 16t articulated (or similar)
190.00
Rate per Hour (A$)
(Including Operators)
Item
Plant Description
Working
24.
Mobile Crane 25T
230.00
25.
Mobile Crane 50T
320.00
26.
Elevating Work Platform
200.00/Day
27.
Cherry Picker
260.00/Day
28.
50mm diesel driven concrete pump with hoses
160.00
29.
Concrete pump truck
210.00
30.
Dewatering Pump 50mm including hoses
100.00/Day
31.
Dewatering Pump 75mm including hoses
160.00/Day
32.
Dewatering Pump 105mm including hoses
260.00/Day
33.
Mobile Generator 20 KVA
200.00/Day
34.
7.5 KVA Generator
100.00/Day
35.
5 KVA Generator
100.00/Day
36.
400CFM Compressor
400.00/Day
37.
Diesel Welder 400A/AS
N/A
38.
Jackhammer (30 kg)
80.00/Day
39.
Piling rig # 1 ()
1,200.00
40.
Piling rig # 2 ()
1,200.00
Appendix F2
2 PLANNING AND PROGRESS REPORTING
2.1 General
Pursuant to General Conditions of Contract Clause 33 the Contractor shall comply with this procedure for planning and progress reporting.
The Contractor shall consider specific JSA work plans when developing the Contractor’s Program such that a correlation can be seen between the two documents. These plans as depicted in the program shall be in accordance with the Contractor’s Safety Management Plan.
2.2 Program Submission
Within 28 days of the Date of Acceptance of the Tender, the Contractor shall prepare and submit its construction program to the Principal’s Representative for direction as to its suitability in accordance with clause 33 of the General Conditions of Contract. Until such time as the Principal’s Representative gives direction that a construction program is suitable the Principal’s Representative may have regard, as necessary, to the program submitted with the Contractor’s Tender.
The Contractor’s program shall be developed using Critical Path Method (CPM) and presented on a time scaled bar chart fully continuous in logic that clearly highlights the critical path(s) throughout the network.
The Contractor’s program shall be submitted in both hard and electronic (native file) copy forms using a computer software package approved by the Principal’s Representative. The only software package accepted is:
●Primavera P6
…
2.5 Baseline Construction Program
The Contractor shall submit a detailed breakdown of the program contained in Schedule C6 in accordance with clause 33.2 of the General Conditions of Contract. Once the Principal’s Representative has reviewed the construction program and gives a direction that it is suitable as a Construction Program, it shall become the Baseline Program against which actual time performance will be measured. No changes shall be made to the Baseline Program without the prior agreement, in writing, of the Principal’s Representative.
No direction as to use or any other comment or direction by the Principal’s Representative as to suitability of or any change to any construction program, revised construction program or short term rolling program submitted by the contractor shall:
●Relieve, limit or exclude any of the Contractor’s liabilities or obligations under the Contract, including, without limitation, its obligation to execute work under the Contract to Practical Completion by the Date for Practical Completion and its responsibility for all planning, scheduling, sequences, methods and techniques necessary for the due performance of its obligations under the Contract;
●Constitute a direction to accelerate, disrupt, prolong or vary any or all or the Contractor’s work under the Contract;
●Constitute the granting of an extension of time for Practical Completion or a determination in relation to any application for an extension of time for Practical Completion; or
●Affect the time for performance by the Principal or Principal’s Representative of any of their obligations or oblige either of them to do anything earlier than is necessary to enable the Contractor to bring the work under the Contract to Practical Completion by the Date for Practical Completion.
The Baseline Program shall show a ‘Key Milestones’ grouping at the top of the Master Contract Report (described below) that shall show key milestones and activities as directed by the Principal’s Representative. These shall generally include, but not limited to:
● Contract Award;
● Mobilisation to Site;
● Delivery to site of key equipment;
● Start of Construction for key trades;
● Completion of construction in major areas;
● Start of pre-commissioning;
● Start of no-load commissioning;
● Start of load commissioning;
● Completion of load commissioning;
● Forecast date for Practical Completion; and
● Contract Date for Practical Completion
2.6 Revisions to the Baseline Program
The Contractor shall review the Baseline Program when any one of the following events occurs:
●progress of the Works falls significantly behind or otherwise departs significantly from that shown in the Baseline Program;
●a contract variation is issued and the Principal’s Representative agrees the variation affects the Contract Date for Practical Completion;
●there is a change in method of working adopted by the Contractor that the Principal’s Representative determines should be reflected in the Baseline Program; or
●the Principal’s Representative directs that the Baseline Program be revised because in the opinion of the Principal’s Representative the Baseline Program does not reflect the actual work patterns of the Contractor.
If any of the events listed above occur, and where agreed with the Principal’s Representative, the Contractor shall submit a revised construction program to the Principal’s Representative for a direction that the revised program is suitable. The Contractor must submit both hard and electronic (native file) copies of the schedule.
Once the Principal’s Representative gives a direction that the revised program is suitable, that program shall be the Revised Baseline Program.
The Revised Baseline Program shall clearly indicate the following:
i)the reason for the revision;
ii)the difference between the Revised Baseline Program and the previous Baseline Program; and
iii)the revision number of the Revised Baseline Program.
The Revised Baseline Program will require a revised manning histogram with an additional data line called ‘reforecast planned progresses added to the progress ‘S curve’.
The Principal’s Representative’s written approval of any revised Baseline Program shall be given prior to the Revised Baseline Program being adopted as the target program for comparative reporting purposes.
Additional detail may be inserted into the Revised Baseline program at the request of either the Contractor or Principal’s Representative. In such cases, the overall start and finish dates of the detail activities shall not vary from the original summary activity(s) which were replaced.
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