Conduit Advertising Pty Ltd v Anderson - [2010] FMCA 962

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CONDUIT ADVERTISING PTY LTD & ANOR v ANDERSON & ANOR

[2010] FMCA 962

TRADE PRACTICES – Alleged misleading and deceptive conduct – site earthworks – whether representations made.

CONTRACT – Alleged breach of written contract for site earthworks – whether breach occurred.

NEGLIGENCE – Alleged negligence in carrying out of site earthworks – whether breach of admitted duty.

WORDS AND PHRASES – “supervision”.

Fair Trading Act 1985 (WA), s.10
Trade Practices Act 1974 (Cth), ss.4(2), 52

Florida Hotels Pty Limited v Mayo & Anor (1965) 113 CLR 588
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Sheldon v McBeath [1993] Aust Torts Reports 81-209

J D Heydon, Cross on Evidence (Seventh Australian Edition) (Chatswood: LexisNexis Butterworths, 2004)
The Concise Oxford Dictionary of Current English (Seventh Edition) (Oxford: Clarendon Press, 1984)

First Applicant:

CONDUIT ADVERTISING PTY LTD

Second Applicant:

ROBERT AUGUSTE

First Respondent:

ANDREW BURT ANDERSON

Second Respondent:

ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST

File Number:

PEG 154 of 2008

Judgment of:

Lucev FM

Hearing dates:

12, 14 May 2009

Date of Last Submission:

14 May 2009

Delivered at:

Perth

Delivered on:

10 December 2010

REPRESENTATION

Counsel for the Applicant:

Mr. A Rumsley

Solicitors for the Applicant:

Alan Rumsley Commercial Disputes Lawyer

Counsel for the Respondents:

Mr. G Cobby

Solicitors for the Respondents:

Robert Grayden Legal

ORDERS

The application be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 154 of 2008

CONDUIT ADVERTISING PTY LTD

First Applicant

ROBERT AUGUSTE

Second Applicant

And

ANDREW BURT ANDERSON

First Respondent

ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST

Second Respondent

REASONS FOR JUDGMENT

Introduction

This matter involves a dispute between:
a)the two applicants:
i)Conduit Advertising Pty Ltd,[1] a company; and
ii)Conduit Advertising’s Director, Mr Auguste, who has been involved in developing properties for both commercial and residential sites since 1987; and
b)the two respondents:
i)Anderson Earthmoving Pty Ltd,[2] a company in the business of conducting bulk earthworks, often on land that is being prepared for development; and
ii)Anderson Earthmoving’s Director, Mr Anderson, who has 35 years experience in the earthmoving industry.[3]
[1] “Conduit Advertising”.
[2] “Anderson Earthmoving”.
[3] Except where it is specifically necessary to refer to the directors individually or to designate that the corporate entities are being referred to, the Court will refer to the parties as Conduit Advertising and Anderson Earthmoving respectively.
In 2005-2006 Conduit Advertising engaged Anderson Earthmoving to carry out work on a residential development site in Wattle Grove.[4] Conduit Advertising now asserts that:
a)it was misled and deceived by Anderson Earthmoving in relation to what it was that Anderson Earthmoving would do by way of that work; and
b)in the alternative, that Anderson Earthmoving breached a written agreement that was entered into with Conduit Advertising.[5]
[4] 20 Hardey East Road, Wattle Grove, being lot 123 on diagram 10537 and the whole of the land contained in certificate of title volume 1144 and folio 582 (“the Site”).
[5] “Project Trade Contract”.
Mr Auguste, as owner of the Site, asserts that Anderson Earthmoving owed him a duty of care to carry out the works in a proper and skilful manner taking all reasonable care, and that that duty of care was breached by Anderson Earthmoving, who performed the work negligently.

Application

Conduit Advertising seeks:
a)damages for alleged misleading and deceptive conduct by Anderson Earthmoving, in breach of s.52 of the Trade Practices Act 1974 (Cth),[6] alternatively, s.10 of the Fair Trading Act 1985 (WA);[7] and
b)further and in the alternative, damages for breach of the Project Trade Contract entered into by the corporate entities Conduit Advertising and Anderson Earthmoving on or about 20 February 2006.
[6] “TP Act”.
[7] “FT Act”.
Conduit Advertising and Mr Auguste seek damages for Anderson Earthmoving’s allegedly negligent performance of work on the Site.

Issues for determination

Essentially, the issues requiring determination in this matter fall into three categories:
a)trade practices;
b)contract; and
c)negligence,
as set out hereunder.

Trade practices

The trade practices issues are as follows:
a)were the alleged written and oral representations made to Conduit Advertising by Anderson Earthmoving?
b)if there were representations made, in what terms were they made?
c)did Conduit Advertising rely on the representations to enter into the Project Trade Contract?
d)if there were representations made, were they made as to future matters?
e)was Anderson Earthmoving engaged in trade or commerce?
f)if there were representations made, did they constitute misleading or deceptive conduct? and
g)did Conduit Advertising suffer loss and damage as a result of any misleading and deceptive conduct?

Contract

The contract issues relate to whether Anderson Earthmoving breached the Project Trade Contract. Those issues are:
a)was there a breach of clause 1(a) of the Project Trade Contract because the work was incomplete? and
b)was there a breach of clause 4 of the Project Trade Contract?

Negligence

The negligence issues are as follows:
a)did Anderson Earthmoving breach the admitted duty of care owed to Mr Auguste to carry out the earthworks on the Site in a proper and skilful manner, taking all reasonable care to ensure that the Site was not damaged and that any materials used on the Site were free from defects or contamination? and
b)whether loss was suffered by Conduit Advertising and Mr Auguste if the admitted duty of care was breached, and if so, how damages are to be assessed, and the quantum of damages.

The Site

Before dealing with the issues for determination it is convenient to set out the nature of the Site. The Site, which is approximately 1.6 hectares in size, is located on Hardey East Road in the south-eastern Perth suburb of Wattle Grove. Prior to Conduit Advertising’s proposed residential sub-division of the Site with associated roads, services and public open space areas, it was described as having gently sloping topography and as being vegetated with grasses covering the Site, but with three large concrete slabs, understood to be associated with former chicken sheds, covering a significant part of the Site. It appears the Site drops approximately 1 metre from its north-eastern edge to its south-western corner. In very broad terms, the Site was overlain with white/light grey sand to a depth of approximately 1 metre, below which there was a further metre of yellow clay sand with an increase of clay content with depth. Ground water inflow was encountered in test pits at the Site at various depths from 1.1 metres to 1.8 metres.[8]
[8] Affidavit of Robert Auguste, sworn 3 March 2009 (“Mr Auguste’s March 2009 Affidavit”), Annexures RA1 (being a Coffey Geosciences Pty Ltd (“Coffey”) report on geotechnical investigation of 18 August 2004 (“Coffey August 2004 Report”) and Annexure RA2 (being a letter to Conduit Advertising from Gervase Purich, Director, Structerre Consulting Group (“Structerre”), dated 21 August 2005 (“Structerre August 2005 Letter”).
Beyond the above observations, it will be necessary to comment on certain aspects of the Site and its condition as they arise in considering the issues set out below.

Trade practices claim

The alleged representations

Conduit Advertising alleges that the following representations were made at a meeting between Mr Auguste and Mr Anderson at the Site in or about January or February 2006,[9] namely, that Anderson Earthmoving would do the following:
[9] “the Representations Meeting”.
a)carry out earthworks on the Site to prepare the land for a 25 lot residential subdivision, with roads and public open space;
b)remove three long concrete pads on the Site and outbuildings;
c)remove septic tanks and backfill and compact with clean sand;
d)remove all trees and topsoil and any other building materials or rubbish from the Site;
e)stockpile the topsoil and concrete to be re-used for road base;
f)remove any rubbish to the tip;
g)dig out clean virgin sand from the public open space to be used for fill for the proposed house pads;
h)place topsoil from a development site on Nicholson Road, Canning Vale in the pit in the public open space;
i)complete the earthworks in accordance with standard practice and to the requirements of Structerre Engineers, the project engineer; and
j)ensure that the work was carried out and supervised by Mr Anderson personally.[10]
[10] Statement of Claim, para.5 (“the Representations”).
Anderson Earthmoving admits that:
a)the Representations Meeting took place; and
b)a basic Site plan subdivision was provided,
but otherwise denies that the Representations were made at the Representations Meeting.[11]
[11] Defence, para.6.

Matters for consideration

In dealing with the alleged Representations it is first necessary to consider whether the Representations were made at the Representations Meeting in the terms alleged by Conduit Advertising.

The Representations Meeting

As to the Representations Meeting Mr Auguste gave affidavit evidence that:
a)he and Mr Anderson met at the Site to discuss earthworks required on the Site to prepare it for a 25 lot residential subdivision, including roads and public open space;
b)he told Mr Anderson that he was to prepare the Site for future construction of 25 residential lots;
c)he showed Mr Anderson a subdivision plan with 2 roads, 25 residential lots and public open space, with one road separating the public open space from the residential lots and the other road separating 2 existing houses and 10 new lots on the north west corner of the Site, from 13 new lots on the south west corner of the Site.
d)the Site:
i)had two brick and tile houses on it adjacent to Hardey East Road, both with septic tanks, and some minor sheds or outbuildings;
ii)had three long concrete slabs at the rear from poultry sheds that had previously been on the Site; and
iii)was otherwise substantially clear, save for a number of trees;
e)he said to Mr Anderson that the required earthworks on the Site included removing the septic tanks, backfilling them with clean sand and compacting them;
f)he gave Mr Anderson a copy of plans with septic tank locations;
g)he said that the work required removing all trees, vegetation and any building material or rubbish on the Site and taking them to the rubbish tip;
h)he said that a contractor was going to lift and crush the three long concrete pads on the Site to be reused for road base, and that Mr Anderson was to stockpile the crushed concrete until it was ready to be used under the two roads to be constructed;
i)he said that the Coffey August 2004 Report and Structerre August 2005 Letter indicated that the public open space contained clean sand, which Mr Anderson was to dig out and stockpile until it was to be used for building up the levels for the house pads in the sub-division, creating a “borrow pit” in the public open space;
j)he said that from the Coffey August 2004 Report and Structerre August 2005 Letter, and the inspection of the Site by Mr Anderson and himself, it seemed that the Site:
i)did not have surface layers of clay that needed removing; and
ii)was sand that was mostly clear of naturally occurring organic matter, uncontrolled fill and tyres or car parts,
and that Mr Anderson agreed as much;
k)he said that if Mr Anderson did find any of those materials they should be removed and any soft areas should be excavated then backfilled and proof rolled to a minimum of 6 blows compaction and that the added sand was to be compacted at 300mm levels;
l)he said that Mr Anderson could bring the excess clay and sand material from a site on Nicholson Road, Canning Vale and put it in the “borrow pit”;
m)he said that all work was to be carried out or supervised by Mr Anderson personally;
n)both he and Mr Anderson walked across and inspected the Site together, and that Mr Anderson said that he would carry out the work as required and would personally supervise the work;
o)he relied on Mr Anderson’s agreement to carry out the work as they had discussed, and without Mr Anderson’s agreement to do so, he would not have proceeded any further; and
p)as to the Coffey August 2004 Report and Structerre August 2005 Letter, Mr Auguste gave affidavit evidence that:
i)he told Mr Anderson that he would be using the same engineers as he had on his previous projects, namely Structerre;
ii)he told Mr Anderson that his work was to be done as set out in the Coffey August 2004 Report and Structerre August 2005 Letter provided to him, or as Structerre directed;
iii)he gave Mr Anderson a copy of the Structerre August 2005 Letter and the Coffey August 2004 Report; and
iv)the Coffey August 2004 Report and the Structerre August 2005 Letter required that the earthworks be carried out in accordance with the principles set out in AS3798-1996, the Australian Standard Guideline on earthworks for commercial and residential developments, which applied at the relevant time.
Mr Auguste was cross-examined on the Representations Meeting as follows:
Now, you met with Mr Anderson at the site in January 2006? – Yes.
What did you say to Mr Anderson then? – I don’t recall.
You don’t remember? – Whenever I asked Andy Anderson to attend a site, I asked him to dig holes and have a look and see what the state of the ground is.
No more than that? – I can’t remember.
Mr Auguste, you swore an affidavit on 3 March 2009, that’s that 200 odd page document that Mr Rumsley’s just taken you to? – Yes.
When you swore that affidavit, do you remember what you said to Mr Anderson? Don’t read the affidavit, just answer my question? – Can you repeat the question, please?
When you swore your affidavit on 3 March 2009, could you remember what you said to Mr Anderson in January 2006? – At that particular time of swearing it, I remembered it, yes.
You could remember it. But you can’t remember it today? – Well, to be honest with you, I’m a little puzzled by your questioning.
Well, I don’t mind whether you’re puzzled, Mr Auguste, I only want you to answer my questions. Can you remember today what you said in January 2006 to Mr Anderson? – I asked him to examine the site for me.
Did you say anything else to him? – I may have, I don’t recall.[12]
[12] Transcript, pages 23-24.
As to the Representations Meeting, Mr Anderson’s affidavit evidence was that:
a)he attended the Representations Meeting with Mr Auguste on Site;
b)Mr Auguste did not have any expertise in bulk earthworks and so he did not prescribe how Mr Anderson should carry out the earthworks, except in the most general of ways, and therefore the purpose of the Meeting was to discuss what could and could not be done, rather than what Mr Auguste required to be done;
c)Mr Auguste did not provide him with a plan showing the location of the septic tanks;
d)Mr Auguste asked Mr Anderson’s advice as to what he could do with the concrete slabs, and Mr Anderson:
i)suggested that Mr Auguste crush up the concrete to use as road base, or otherwise dump it;
ii)told Mr Auguste he could not handle that aspect of the work; and
iii)said the crushed concrete should be stockpiled;
e)Mr Auguste said that he wanted to stockpile the trees on the Site to burn at the appropriate time with a permit, along with other trees carted in from the Canning Vale site;
f)Mr Auguste said that he wanted to strip the public open space to allow a borrow pit to be dug, and that clean fill from the borrow pit would be used as fill and the overburden and other rubbish would be buried in the borrow pit;
g)he did not have a complete plan of the Site or proposed work, only an A4 plan sent to him by Mr Pujianto on 13 October 2005;[13] and
h)he did not recall any conversation in which Mr Auguste made statements concerning:
i)the fact that it seemed that the Site did not have surface layers of clay that needed removing; or
ii)that if Mr Anderson did find any of those materials they should be removed and any soft areas should be excavated then backfilled and proof rolled to a minimum of 6 blows compaction and that the added sand was to be compacted at 300mm levels.[14]
[13] Affidavit of Andrew Burt Anderson, sworn 20 March 2009 (“Mr Anderson’s March 2009 Affidavit”), Annexure ABA4.
[14] Mr Auguste’s March 2009 Affidavit at paras.23-24; and see para.15(j) and (k) above.
Mr Anderson was not cross-examined on what occurred at the Representations Meeting.
When the alleged Representations are examined it can be seen that there appears to be only one express alleged Representation, namely that Mr Anderson said that he would carry out the work as required or would personally supervise the work. The remainder of the purported Representations were in fact in the nature of discussions with Mr Anderson, about what Mr Auguste thought might need to be done, and were not in the nature of Representations, either expressly or by silence, by Mr Anderson to do particular things. In any event, based on Mr Auguste’s cross-examination, which is set out above, and the essence of which is that he recalled nothing of what was said, or of any alleged Representations made by Mr Anderson, it is very difficult to place any, or any significant, weight on the affidavit evidence of Mr Auguste. The Court therefore prefers the evidence of Mr Anderson, upon which he was not cross-examined, in relation to the alleged Representations. Mr Anderson’s evidence indicates that the Representations Meeting was a discussion about what might be done in terms of work on the Site. It was a discussion which was clearly exploratory in nature, and consisted of Mr Anderson being asked to examine the Site by Mr Auguste.[15] In the Court’s view there were therefore no Representations concerning what work would be done by Anderson Earthmoving, and save for a Representation which can be implied from Mr Anderson’s belief in Mr Auguste’s lack of expertise in earthworks, that any work to ultimately be performed would be carried out or be personally supervised by Mr Anderson, no Representations as alleged by Conduit Advertising were made.
[15] Transcript, page 24.
As to supervision, the Representation that Mr Anderson would personally supervise the work was complied with by Mr Anderson. Although he was not constantly present, he did personally supervise any work carried out on Site by Anderson Earthmoving.
To “supervise” is to “oversee, superintend execution or performance of … work of (person)”.[16] To “oversee” is to “superintend (workers, doing of work, etc.)”.[17] To “superintend” is to “have the management (of), arrange and inspect working (of)”.[18]
[16] The Concise Oxford Dictionary of Current English (Seventh Edition) (Oxford: Clarendon Press, 1984) p.1072 (“Concise Oxford Dictionary”).
[17] Concise Oxford Dictionary, p.731.
[18] Concise Oxford Dictionary, p.1071.
Supervision does not therefore require the constant physical presence of the supervisor, but rather requires the supervisor to “attend to supervise the work whenever and so often as its progress required … supervision.”[19] It is therefore within the bounds of supervision to supervise by managing, arranging and inspecting work,[20] which, on the evidence, is what Mr Anderson did in relation to work on the Site.
[19] Florida Hotels Pty Limited v Mayo & Anor (1965) 113 CLR 588 at 592 per Barwick CJ. Although a case about the duty of professional architects to supervise building construction, the principle with respect to the nature of supervision applies here.
[20] Sheldon v McBeath [1993] Aust Torts Reports 81-209 where an architect’s contractual obligation of supervision of the construction from commencement to completion and handover entailed a duty to inspect footings which had been constructed, and which enured from commencement to handover: per Priestly JA at 62,072 (with whom Mahoney JA agreed at 62,071).

It is reasonable in the circumstances of the generalised representation that Mr Anderson would personally supervise the work, to expect that supervision does not require constant on-site presence. Therefore, the Representation made by Mr Anderson that he would personally supervise work on the Site was fulfilled, and was not misleading or deceptive.

Conclusion – Representations and Trade Practices Claim

The Court therefore concludes that Conduit Advertising’s Trade Practices Claim fails because there were no Representations (save as to supervision), and, therefore, no conduct[21] which was misleading or deceptive as alleged by Conduit Advertising. As to supervision, the Representation made was not misleading or deceptive. The same conclusions follow insofar as claims are made under the FT Act.

Project Trade Contract

[21] As defined in s.4(2) of the TP Act.

Allegations

Conduit Advertising alleges that in carrying out work under the Project Trade Contract, Anderson Earthmoving:
a)lifted the lids of septic tanks, filled them with sand, and did not remove them; and
b)deposited material, other than clean sand fill, on the southern part of the Site, the material including PVC pipes, tree roots, wood and organic material, building material, concrete, bricks, tiles, limestone, rubble, gravel, laterite and clay lumps.[22]
[22] Statement of Claim, para.9.
Anderson Earthmoving says that it carried out work on the Site in accordance with instructions from Conduit Advertising and/or its agent, Mr Pujianto, and that the work was carried out to Conduit Advertising’s satisfaction.[23] Anderson Earthmoving also says that it was a term of the scope of the earthworks under the Project Trade Contract that it would fill and compact septic tanks to permit building work, and it therefore admits that a septic tank located by Anderson Earthmoving was filled with sand and compacted, and further says that that work was carried out to the satisfaction of Conduit Advertising.[24]
[23] Defence, para.10.
[24] Defence, para.11.
In relation to the fill material that Anderson Earthmoving deposited on the Site, other than clean fill, it was either:
a)supplied; or
b)directed to be deposited,
by Conduit Advertising and/or Mr Pujianto.[25]
[25] Defence, para.12.
Anderson Earthmoving denies breaching any of the terms of the Project Trade Contract above and says that Conduit Advertising and/or Mr Pujianto, on behalf of Conduit Advertising, directed Anderson Earthmoving:
a)to use all materials supplied by Conduit Advertising to complete the work; and
b)which of those materials supplied by Conduit Advertising had to be used when completing different sections of the work.[26]
[26] Defence, para.13.

Terms of the Project Trade Contract - generally

The Project Trade Contract was signed by Mr Auguste and Mr Anderson, with a start date of 20 February 2006.
Conduit Advertising claims that the material terms of the Project Trade Contract were:
Scope of the Trade Works: Bulk earthworks – rubbish removal, site clean up, level up to engineer requirement.
1 TRADE WORKS
(a)The trade contractor must carry out and complete the Trade Works:
(i)to the reasonable satisfaction of the principal contractor;
(ii)in accordance with the plans, the specifications and the law; and …
(c)the trade contractor must supply everything necessary to carry out the Trade Works.
4. WARRANTIES
The trade contractor warrants that:
(i)the Trade Works will be carried out in a proper and skilful manner;
(ii)materials supplied by it will be available, new and free of defects; and …[27]
[27] Mr Auguste’s March 2009 Affidavit, Annexure RA4.
Conduit Advertising claims that Anderson Earthmoving breached clauses 1(a) and 4 of the Project Trade Contract in the course of carrying out the work and that Anderson Earthmoving’s conduct in breach of the Project Trade Contract was a cause of loss or damage suffered by Conduit Advertising.[28]
[28] Statement of Claim, paras.20-21.
Anderson Earthmoving claims that the following was also a material term of the Project Trade Contract:
17. ADMINISTRATION
The trade contractor or its representative must:
…
(ii) observe all directions given by the principal contractor under this trade contract; and …[29]
[29] Mr Auguste’s March 2009 Affidavit, Annexure RA4.

Terms of the Project Trade Contract – payment

The Project Trade Contract provides, in relation to progress payments that:
An amount due is to be paid within 30 [number entered by the parties] days after the trade contractor [Anderson Earthmoving] gives the principal contractor [Conduit Advertising] written notice that the stage is complete.
Next to progress payments, Mr Anderson wrote:
Will have to be progressive.
The Project Trade Contract provides in the pre-printed form for “Progress Payments” to be paid by stage/date.
The evidence is that the contract was signed with the term “Will have to be progressive” included.[30]
[30] Mr Anderson’s March 2009 Affidavit, para.35.
That payments were progressive is consistent with the evidence of payment being made progressively upon Conduit Advertising being invoiced.[31]
[31] See for example Annexures ABA15, 20, 21, 24, 27, 32 and 36 to Mr Anderson’s March 2009 Affidavit.

Septic tank removal

As to the removal of the septic tanks, Mr Auguste’s affidavit evidence was as follows:
a)in about January 2007 he discovered that Anderson Earthmoving had removed the lids from the septic tanks for one of the houses and filled them in, and the septic tanks for the other house had not been dealt with at all;
b)his instructions to Mr Anderson were for both sets of septic tanks to be removed and back-filled, as required by the Shire of Kalamunda;
c)that he asked Mainline Water and Drainage[32] to remove the septic tanks, backfill and compact them, which they did; and
d)that he believed a reasonable estimate of the cost for removing the septic tanks to be $1,000, based on a review of the time costs charged by Mainline.
[32] “Mainline”.
Cross-examined at hearing, Mr Auguste gave the following evidence:
“…Let’s move onto the septic tanks, Mr Auguste. How many tanks do you say weren’t removed by Mr Anderson? --- We located one that he didn’t remove.
So there was one he didn’t take out? --- Yes.
Only the one? --- I only identified one by accident.
How did you identify it? --- When Mr Mason was putting the sewer into the house, he located the septic tank.
So Mr Mason found the septic tank? --- Yes.
Not you? --- Not me, I don’t operate a machine.
How often were you on site? --- Probably once a week.
In December 2006, how often were you on site? --- Well, I don’t recall.
But you were probably there once a week. Did that change at any time, or is it always once a week? --- I go there periodically, I have quite a few jobs going, and I can’t recall specifically.
Did Mr Mason give you an invoice in relation to taking out the septic tank? --- No.
Have you ever paid Mr Mason anything for taking out that one septic tank? --- Yes.
Without there being an invoice? --- The work involved was not isolated to that septic tank. It was part and parcel of the other work he was doing.
So you just received an invoice for all of the work that he did? --- Mr Mason rendered periodic invoices, at different stages of his job.
Well, you see, I don’t know that, Mr Auguste, because they haven’t been annexed to your affidavit. But he gave you a number of invoices? --- Yes.
Did he – and he didn’t separately invoice you for taking out the septic tank? --- No.”[33]
[33] Transcript, page 24.
In relation to the septic tanks, Mr Anderson’s affidavit evidence was that:
a)Anderson Earthmoving did remove four septic tanks and three leech drains;
b)one septic tank which had not been decommissioned had wiring travelling across the top of it, and because of this wiring the septic tank lid could not be removed until the wiring had been redirected;
c)the wiring had not been redirected by the time that Anderson Earthmoving left the Site in December 2006, and had Anderson Earthmoving completed the work this septic tank would have been removed;
d)the area with this septic tank had been proof-rolled and the tank did not collapse, suggesting that it was filled with sand;
e)by way of facsimile dated 15 March 2006,[34] Mr Pujianto, who was an employee of Mr Auguste:[35]
[34] Mr Anderson’s March 2009 Affidavit, Annexure ABA19 (“15 March 2006 Facsimile”).
[35] Transcript, page 73.
i)told Anderson Earthmoving that work on the north section would be done in two stages; and
ii)said that:
“We will connect the sewer and decommission the septic”;
f)to decommission the septic tanks would involve locating them and, as far as Mr Anderson was aware, the septic tanks were not located by the time Anderson Earthmoving left the Site;
g)in May 2006, prior to commencing work on the road, he told Mr Auguste and Mr Pujianto that he could not locate the septic tanks with a 20 tonne roller, and that it was their responsibility to decommission the tanks so that Anderson Earthmoving could remove them, and suggested that they would need to engage a plumber to find them;
h)Mr Auguste was aware that he had not been able to locate the septic tanks;
i)he asked for a plan showing the location of the septic tanks, and as far as he knew they were never located or decommissioned; and
j)at the time of leaving the Site, Anderson Earthmoving had not yet completed work within the boundaries of the houses on Site, but if the septic tanks had been located by Anderson Earthmoving they would have been removed at the appropriate stage of the work, as four of them had been, and Mr Auguste would have been charged for their removal.
Mr Anderson was not cross-examined concerning the septic tank removal. There was nothing incredible or unconvincing warranting rejection of, or doubt about, Mr Anderson’s evidence concerning the septic tanks, and, in the circumstances, it would be unfair not to accept the evidence.[36] Furthermore, and in any event, Mr Auguste’s evidence:
a)revealed conflict between his affidavit evidence and his oral evidence, especially as to how many septic tanks were removed, namely:
i)his affidavit evidence that “the septic tanks” for the second house had not been dealt with at all;[37] and
ii)his oral evidence that there was only “one …[septic tank] …that he didn’t remove” (with this evidence that there was only one septic tank not removed corroborating Mr Anderson’s evidence that there was a septic tank that had not been removed);[38]
b)revealed that he only went to the Site “periodically,” – “[p]robably once a week”,[39] and there is no evidence, apart from what he was told by Mr Mason who was operating machinery, that he had any direct involvement in the septic tank issue.
[36] See, generally, J D Heydon, Cross on Evidence (Seventh Australian Edition) (Chatswood: LexisNexis Butterworths, 2004) para.17460, especially at page 543.
[37] See para.37(a) above.
[38] Transcript, page 24.
[39] Transcript, page 24.
In the circumstances, Mr Anderson’s evidence as to the removal of the septic tanks is to be preferred to that of Mr Auguste.

Conclusion – septic tanks

The Court concludes on the evidence that:
a)decommissioning was a pre-requisite to removal of the septic tanks;[40]
b)it was the responsibility of Conduit Advertising to locate and decommission the septic tanks in preparation for their removal;
c)there was one septic tank located by Anderson Earthmoving that had electric wiring running across it which had not been removed and had not been decommissioned;
d)there was no, or insufficient, evidence on which to find that there were septic tanks which had not been removed (except for the septic tank with wiring referred to above); and
e)if there were any septic tanks which had not been removed (in addition to the septic tank with wiring referred to above) they had not been located and decommissioned by Conduit Advertising; decommissioning being the responsibility of Conduit Advertising, and a pre-requisite to removal.
[40] Mr Auguste’s March 2009 Affidavit, Annexure RA11.
In the above circumstances there was no breach of contract by Anderson Earthmoving because:
a)Anderson Earthmoving did not fail to remove any septic tanks, save for the septic tank with wiring; and
b)the preconditions necessary for the fulfilment of its contractual obligations, namely, decommissioning of any located tanks, had not been met by Conduit Advertising in relation to:
i)the septic tank with the wiring; and
ii)any other septic tanks which had not been removed, if, contrary to the finding above, Anderson Earthmoving did fail to remove some septic tanks.

The mixed fill

As to the mixed fill on the southern part of the Site, Mr Auguste gave affidavit evidence that:
a)in about January 2007, he discovered that the public open space and the area for the proposed lots in the south west corner of the Site had mixed fill materials on them;
b)he commissioned Structerre, who are chartered consulting engineers, to carry out a Site investigation in January and February 2007 and produce a report;
c)Structerre produced a short one and a half page report dated 16 February 2007,[41] prepared by a geotechnical engineer, Santiago Abueva Jr;[42]
d)on 12 April 2007, Mr Pujianto sent a facsimile to Anderson Earthmoving, attaching the Structerre February 2007 Report; and
e)he wrote to Anderson Earthmoving, on receiving a claim for payment from them, advising of his estimate of the amount of mixed fill material that needed to be removed from the Site.
[41] “Stucterre February 2007 Report”; Mr Auguste’s March 2009 Affidavit, Annexure RA12.
[42] “Mr Abueva”.
In cross-examination, Mr Auguste:
a)said that:
i)he commissioned the Structerre February 2007 Report as part of his standard practice; and
ii)the Shire of Kalamunda had closed the Site in December 2006 due to the condition of the public open space, because the material that Mr Auguste had instructed Anderson Earthmoving to import from the Canning Vale site was unsuitable, as indicated in the following extract from the transcript:
The shire had closed the site in December 2006, hadn’t they?---Yes.
That was because of the condition of the public open space ---Yes.
Because the material that you’d instructed to be imported from Canning Vale was unsuitable?---Yes.[43]
b)claimed that he could not recollect:
i)any further details on the condition of the Site from January 2007; or
ii)whether or not he had raised the issues in the Structerre February 2007 Report with Anderson Earthmoving prior to Mr Pujianto sending it to Anderson Earthmoving on 12 April 2007.[44]
[43] Transcript, pages 30-31.
[44] Transcript, pages 31-33.
As to the remedial work on the southern part of the Site, and the removal of uncontrolled fill, Mr Auguste deposed that:
a)by 3 July 2007, Mr Anderson had not started doing the remedial work he had agreed to at a meeting in June 2007 involving Mr Auguste, Mr Anderson, and Mr Purich, an employee of Structerre;[45]
b)he instructed Mainline to strip the southern part of the Site and by 17 July 2007 they had finished stockpiling the fill;
c)he engaged Ronald Baker, a civil design consultant, to attend the Site and report on the fill material as it was being stripped;
d)he wrote to Anderson Earthmoving on 17 July 2007, asking them to remove the stockpiled material starting from 18 July 2007, which Mr Anderson refused to do;
e)Mainline removed the uncontrolled fill to landfill sites, using trucks subcontracted by Empire Special Projects;[46]
f)as fill was being removed, some of the stormwater pipes were damaged;
g)he arranged for Empire to deliver controlled fill to replace that which had been removed; and
h)he engaged Road Maintenance Australia to spread and compact the controlled fill.
[45] “June 2007 Meeting”.
[46] “Empire”.
Mr Anderson gave affidavit evidence that:
a)the condition of the Site was that:
i)in early November 2006, Anderson Earthmoving was requested to commence work on the south section, or Stage 2, which work was to clean up areas of the Site in readiness for the plumber, and at that stage:
A Stage 2 had not been stripped and still had grass on it;
Bthe procedure involved required that the grass and overburden be stripped from the area and either dumped or stockpiled for dumping;
Cin this case most of the overburden and rubbish on the Site was to be buried in the borrow pit on the public open space; and
ii)by 4 December 2006:
AStage 2 had been stripped of vegetation in readiness for proof rolling but that the proof rolling had not yet occurred and the uncontrolled fill had not yet been removed;[47]
[47] Mr Anderson’s March 2009 Affidavit, paras.77, 78 and 83.
Bpipe work on this stage was started after the area had been stripped of vegetation, but before it had been proof rolled or passed by an engineer; and
CMr Auguste and Mr Pujianto were aware that the area was not ready, and that Mr Pujianto asked Mr Anderson to cover the pipe work that was above the ground to protect it from damage, which was done.[48]
[48] Mr Anderson’s March 2009 Affidavit, para.84.
b)he received a facsimile from Mr Auguste on 9 May 2007 alleging that the work completed on the south section was unsuitable;
c)the work had not been completed and a strip of temporary fill was supporting a road on the Site;
d)Mr Abueva had tested the shoulder of the road which consisted of material placed to support the road, which material would be removed later when that part of the Site was to be filled and compacted;
e)in the June 2007 Meeting:
i)Mr Purich agreed that tests completed by Mr Abueva had been done in the shoulder of the road and that they should have been done towards the centre of the Site; and
ii)it was agreed that clean fill would replace the existing temporary fill that was supporting the road;
f)Mr Auguste agreed that there had been a misunderstanding and requested that Mr Anderson return to the Site;
g)Mr Anderson said that he would not return to the Site until he had been paid, as invoiced payment was seven or eight months in arrears; and
h)Mr Auguste wrote a letter to Mr Anderson on 6 June 2007 in which Mr Auguste:
i)confirmed that there had been a misunderstanding as to the standard of the fill;
ii)withdrew his comments and apologised for any discomfort he had caused; and
iii)wrote that he would discuss “the financial side of this with” Mr Anderson “in due course”. [49]
[49] Mr Anderson’s March 2009 Affidavit, para.98 and Annexure ABA45.
In relation to the mixed fill, Mr Anderson gave affidavit evidence that:
a)any contaminated material came from either the Site itself, or from the Canning Vale site on the instruction of Mr Auguste and with the approval of the engineers;
b)Mr Auguste had arranged for a small amount of material to be brought onto the Site at night by another contractor;
c)Anderson Earthmoving brought six loads of sand onto the Site to use as fill. It was 98% clean sand with a minimal amount of reticulation piping in it that would have been removed prior to spreading that sand;
d)there was a significant amount of rubbish and debris which was in the uncontrolled fill that would have been removed had Anderson Earthmoving completed the work;
e)Anderson Earthmoving had already collected a ten cubic metre truck load of rocks, timber, roots, rubble and other debris from the area; and
f)the photographs included in the report of Mr Baker showed the sort of material that would have been found in the uncontrolled fill and which would have been removed had Anderson Earthmoving completed the work.[50]
[50] Mr Anderson’s March 2009 Affidavit, paras.103-108.

To the extent that there is any conflict between the evidence of Mr Auguste and Mr Anderson in relation to the mixed fill, the Court prefers the evidence of Mr Anderson. Mr Anderson was on Site more often than Mr Auguste, who was only there periodically, or at best, once a week. Further, Mr Auguste has no specific recollection of the condition of the Site from January 2007 onwards. Mr Anderson evidenced better knowledge of the condition of the Site until the time that he finished work on the Site in December 2006 by the giving of specific, detailed evidence as to what Anderson Earthmoving had done, and what had occurred, on Site. By contrast, and necessarily perhaps because of his more general and periodic involvement, Mr Auguste’s evidence lacked specificity and was affected by his inability to recall significant detail.
Evidence as to the state of the Site as at February 2007 is contained in the Structerre February 2007 Report. The purpose of the Structerre February 2007 Report was:
“…to assess the type and extent of the mixed-fill materials in the Public Open Space (POS) or proposed Woodlupine Brook Park Land and the adjacent lots as shown in the site plan…”
The investigation work was carried out on 18 January 2006 and 14 February 2007, and was said to consist of:
“…7 machine/hand auger boreholes to a depth of 1.60m for tactile investigation of the sublayers and soil profiling…”
It is said that the borehole locations are shown on a site plan attached to the Structerre February 2007 Report.
The results of the investigation and its conclusions and recommendations are set out in the Structerre February 2007 Report as follows:
“2. Results of the Investigation
Based on the results of the investigation, the POS and the adjacent lots are presently overlain with mixed-fill materials containing sand, clay lumps, gravel, limestone rubbles, fragments of building materials (up to 60mm) and organic materials, and underlain with natural sand (Bassendean) materials to a depth of 1.20m. No ground water was encountered within 1600mm from the existing ground levels.
3. Conclusions & Recommendations
The POS site and the adjacent lots in its current state are classified as CLASS “P” in accordance to AS2870: 1996, Residential Slabs and Footings, because of the presence of mixed-fill and unsuitable materials throughout the area.
However, the site classification could be upgraded to CLASS “S”, by compacting the existing mixed-fill and unsuitable materials using HIEDYC deep-compaction method or similar deep-compaction method using square impact roller, and construct 600mm thick flexible raft made of engineer-controlled sand and geosynthetic. The raft could be located at a suitable depth within 1000mm from the finished ground level. The deep-compaction method and the raft will be able to support two-storey building without undue differential settlements due to the presence of the compacted mixed-fill materials. After the ground improvement, it is recommended that the strength and compressibility of the site will be tested by using Plate Bearing or standard compaction tests. It is also recommended that the ground improvement and compaction tests shall be carried out by a specialist organisation experienced in this kind of ground improvement and geomechanics. However, this option is possible only if the mixed-fill materials are not contaminated with asbestos building materials, otherwise further ground investigation to determine the extent of contamination due to the presence of asbestos materials is recommended.”
In cross-examination of Mr Abueva, a preliminary report prepared by him dated 31 January 2007 was tendered into evidence.[51]
[51] Exhibit R1 (“Structerre January 2007 Report”).
In the Structerre January 2007 Report, the field investigation was said to consist of 3 hand auger boreholes.
In the Structerre February 2007 Report, the field investigation was said to consist of 7 machine/hand auger boreholes. Under cross-examination, Mr Abueva admitted that he could not remember if he drilled all of the auger boreholes himself, or whether he personally saw the holes drilled.[52] In relation to the mapped locations of the boreholes[53] Mr Abueva admitted that:
a)he was unaware of the precise location of the boreholes;[54]
b)the “location” of the boreholes on the map had been approximated, and had been “measured” by pacing;[55] and
c)the map was not to scale.[56]
[52] Transcript, page 15.
[53] Exhibit R1; Structerre February 2007 Report.
[54] Transcript, page 15.
[55] Transcript, pages 13 and 16.
[56] Transcript, page 14.
In re-examination, Mr Abueva said that when on Site, a copy of the Site plan is there, and either he or a technician approximate the location of the boreholes based on the existing Site boundaries.[57]
[57] Transcript, page 16.
Mr Baker gave affidavit evidence as follows:[58]
a)he is a civil consultant, having more than 20 years experience providing consulting services to property developers, engineers and builders;
b)in July 2007, at Mr Auguste’s request, he attended the Site to inspect and report on the state of fill material as it was being stripped and stockpiled; and
c)when at the Site, he observed material on the southern part of the Site and took photographs of material included in the fill that was indicative of that part of the Site.
[58] Mr Baker’s Affidavit, sworn 3 March 2009.
In cross-examination, Mr Baker said that he was on Site on 10 July 2007 for 20-30 minutes, but that:
a)he was not there during the stripping;
b)he inspected the stockpile; and
c)there had been work carried out that day, before he was there.[59]
[59] Transcript, page 18.
Mr Baker’s evidence is of no assistance to the Court as he is unable to give evidence as to the state of the Site as it was left by Anderson Earthmoving, given that:
a)he came to the Site seven months after Anderson Earthmoving had last performed work on the Site in December 2006; and
b)other work had been performed on the Site prior to his attending Site on 10 July 2007, including work earlier that day.
Mr Purich’s affidavit evidence[60] was that:
a)he is a Consulting Chartered Engineer;
b)he has worked as a Consulting Engineer in relation to residential and commercial developments and civil engineering projects for approximately 30 years; and
c)in June 2007 he wrote to Mr Auguste in relation to remedial work required to upgrade part of the Site from a Class P to a Class S area.
For similar reasons to Mr Baker, the evidence of Mr Purich as to the state of the site in 2007 is of limited assistance to the Court.
[60] Mr Purich’s Affidavit, sworn 11 March 2009.
Mr McDonald, a demolition contractor, gave affidavit evidence, on which he was not cross-examined, that:[61]
[61] Mr McDonald’s Affidavit, sworn 4 March 2009.
a)in mid 2006, Mr Auguste requested him to demolish two brick and tile houses at the Site, 20A and 20B;
b)he removed the following:
i)the rear verandah attached to 20B;
ii)the rear garage of 20A;
iii)all of the trees along the side and rear of 20B;
iv)all trees between 20A and 20B; and
v)13 palm trees from the front of 20A and 20B.
c)he loaded all material from the demolished buildings into his tipper truck and took it off-site to a landfill site;
d)all trees, stumps and roots were taken off-site to a green waste site; and
e)he did not carry out any other work on the Site.
Mr McDonald’s evidence is of limited relevance as he is unable to give evidence as to the state of the Site as it was left by Anderson Earthmoving in December 2006.

Conclusions re fill and repudiation

The evidence establishes that:
a)it was a term of the Project Trade Contract that payment would be made progressively upon the tender of an invoice by Anderson Earthmoving;
b)payments had been made progressively by Conduit Advertising until the tendering of an invoice dated 6 December 2006, which was not paid upon;
c)Anderson Earthmoving thereafter refused to provide services to Conduit Advertising, and:
i)the Site was closed by the Shire of Kalamunda at about the same time; and
ii)although there is a dispute about precisely when Anderson Earthmoving ceased to provide services, and accepted the repudiation by Conduit Advertising consequent upon non-payment of the 6 December 2006 invoice, it is clear that the repudiation was accepted by Anderson Earthmoving at some time in December 2006 or early January 2007; and
d)Conduit Advertising did not ever pay on the 6 December 2006 invoice.
In those circumstances, Anderson Earthmoving has established repudiation of the contract by Conduit Advertising from sometime in December 2006 or January 2007. It follows that there was no obligation on Anderson Earthmoving to complete the works on Site.[62]
[62] McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477 per Dixon J.
With respect to the mixed fill the Court concludes that:
a)at the time work ceased on the Site in December 2006, Anderson Earthmoving’s work was not complete, but had Anderson Earthmoving completed the work in the normal course the fill complained of by Conduit Advertising would have been removed, particularly that used for the road shoulder and covering pipes;
b)the evidence of the borehole tests in the Structerre February 2007 Report cannot be relied upon, Conduit Advertising having failed to establish that the boreholes were not drilled in the shoulder of the road, which, as it has said above, was incomplete work which would have been removed, and replaced with clean fill, had Anderson Earthmoving completed the work in the normal course;
c)to the extent that there was uncontrolled fill in the public open space, it had been placed there at the direction of Conduit Advertising, and in particular at the instruction of Mr Auguste,[63] and Anderson Earthmoving was obliged to comply with that direction by reason of clause 17(ii) of the Project Trade Contract; and
d)following the closure of the Site and the refusal of Conduit Advertising to pay on an invoice dated 6 December 2006, Anderson Earthmoving carried out no further work at the Site.
[63] See para.45(a)(ii) above.
In the circumstances, there had been no breach of the Project Trade Contract by Anderson Earthmoving at the time the work finished in December 2006. Subsequently, there was no breach because, by reason of its refusal to pay on the 6 December 2006 invoice, Conduit Advertising repudiated the Project Trade Contract and Anderson Earthmoving was entitled to provide no further services under the Project Trade Contract. With respect to the fill in the public open space, there was no breach of the Project Trade Contract because Anderson Earthmoving was complying with directions given by Conduit Advertising under clause 17(ii) of the Project Trade Contract, but was also using materials supplied by Conduit Advertising, and not by it, hence there was no breach of clause 4(ii) of the Project Trade Contract.

Negligence

Mr Auguste claims that Anderson Earthmoving owed him a duty, as owner of the Site, to carry out the work on the Site in a proper and skilful manner, taking all reasonable care to ensure that the Site was not damaged and that any materials used on the Site were free from defects or contamination. It is argued that Anderson Earthmoving has breached that duty in the course of carrying out the work and that this breach was a cause of loss or damage suffered by Conduit Advertising and Mr Anderson.
Anderson Earthmoving admits that it owed a duty to Mr Auguste as described in the paragraph above, but says that to the extent Anderson Earthmoving used contaminated or defective materials, such materials:
a)were supplied by Conduit Advertising; and
b)were used at the direction of Conduit Advertising.
It follows from the conclusions made with respect to the fill used on the Site which are set out above,[64] that to the extent that there were any contaminated or defective materials on Site, they were either supplied by Conduit Advertising or used at its direction. Insofar as any fill supplied by Anderson Earthmoving, in particular the fill used on the road shoulders and to cover pipes, contained foreign materials, those materials would have been removed prior to completion of the works by Anderson Earthmoving. There would have therefore been no loss or damage suffered by Conduit Advertising in that event. Any loss or damage alleged to have been suffered by Conduit Advertising by having to remove those materials subsequent to the cessation of work by Anderson Earthmoving on Site was a consequence of the repudiation of the Project Trade Contract by Conduit Advertising, and not a consequence of any negligence by Anderson Earthmoving.
[64] See paras.64-65 above.
In the above circumstances, the negligence claim fails because there was no breach of any duty of care by Anderson Earthmoving.

Conclusion and orders

The Court has concluded that:
a)save as to the representation as to supervision, which was not misleading or deceptive in any event, the Trade Practices Claim has failed because there were no Representations, and, therefore, no misleading and deceptive conduct as alleged by Conduit Advertising;
b)the Contract Claim has failed because there was no breach of the Project Trade Contract by Anderson Earthmoving; and
c)the Negligence Claim has failed because there was no breach of any duty of care by Anderson Earthmoving.
It follows that the application must be dismissed, and there will be an order accordingly.
The Court will hear the parties as to costs.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Lucev FM

Date: 10 December 2010