Construction Engineering (Aust) Pty Ltd v Adams Consulting Engineering Pty Ltd (Ruling No 2) - [2016] VSC 209

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

S CI 2012 02389

CONSTRUCTION ENGINEERING (AUST) PTY LTD	Plaintiff
v
ADAMS CONSULTING ENGINEERING PTY LTD	Defendant

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26 APRIL 2016
DATE OF JUDGMENT:	26 APRIL 2016
CASE MAY BE CITED AS:	Construction Engineering (Aust) Pty Ltd v Adams Consulting Engineering Pty Ltd (Ruling No 2)
MEDIUM NEUTRAL CITATION:	[2016] VSC 209

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PRACTICE AND PROCEDURE – Whether the Court best assisted by an assessor or special referee – Reference by the Court to a special referee – Observations on the operation of Order 50 of the Supreme Court (General Civil Procedure) Rules 2015 – Reference opposed – Referee not appointed – Appointment of assessor opposed – Function of assessor – Assessor appointed – Supreme Court Act 1986 (Vic), s 77 – Civil Procedure Act 2010 (Vic), s 65M.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M G Roberts QC with Mr L J Connolly	Gadens Lawyers
For the First Defendant	Mr R J Manly QC with Mr M H Whitten SC	Colin Biggers & Paisley

HIS HONOUR:

This case involved the upgrading of a substantial shopping complex in East Burwood on the corner of Burwood Highway and Blackburn Road in Melbourne (the “Project”).

The plaintiff, Construction Engineering (Aust) Pty Ltd (“CEA”), is the design and construct head contractor on the Project.

The defendant, Adams Consulting Engineers Pty Ltd (“Adams”), is a structural engineer. It was initially engaged pursuant to a consultancy agreement (the “Consultancy Agreement”) by the principal, Heathridge. The Consultancy Agreement was subsequently novated to the plaintiff, CEA.

In essence, CEA's claims in this proceeding against Adams are that there was a substantial cost overrun suffered by CEA on the Project and this was caused by alleged defects in two tranches of structural engineering drawings produced by Adams, namely:

(a) the design and construct head contract tender drawings prepared by Adams for the principal (the “first tranche of drawings”); and

(b) the drawings prepared by Adams and used by CEA for subcontractors to tender for works on the Project following its appointment as the design and construct head contractor (the “second tranche of drawings”).

CEA's claims against Adams are pleaded in contract, in negligence and on the basis of alleged misleading and deceptive conduct. The loss and damage claimed under each cause of action is essentially the same. The claimed loss is based on the cost overrun suffered on subcontracts for the particular work, additional material required and the cost of delay allegedly occasioned by that work.

The quantum of CEA's claim is for approximately $575,000 arising from the first tranche of drawings. The quantum of CEA's claim arising from the second tranche of drawings is approximately $3.875m.

An examination of the plaintiff's further amended statement of claim dated
15 October 2014 reveals a number of issues for determination of the Court. The Court has prepared a statement of issues in…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] VSC 209
Decision Date: 26 APRIL 2016

CaseChat Overview and Summary

In this case, Construction Engineering (Aust) Pty Ltd sought to recover costs from Adams Consulting Engineering Pty Ltd. The matter was before the Supreme Court of Victoria, where the primary dispute concerned the method of determining the costs, particularly whether an assessor or a special referee should be appointed under the Civil Procedure Act 2010 (Vic) to assist the Court.

The legal issues centred on the discretion of the Court to refer the matter to a special referee or an assessor under the Civil Procedure Act and the relevant procedural rules, specifically Order 50 of the Supreme Court (General Civil Procedure) Rules 2015. The Court was required to decide whether the matter was suitable for an assessor or a special referee, considering the complexity of the cost assessment and the opposition from both parties to the appointment of a special referee.

The Court ultimately determined that an assessor was more appropriate for this matter due to the complexity and specific expertise required in cost assessment. The Court noted that a special referee might be necessary for more complex technical issues, but an assessor was sufficient for the present case. The Court rejected the notion that the case was purely about costs, as it involved significant technical considerations. Consequently, an assessor was appointed to assist the Court in determining the costs. The Court also observed that the function of an assessor is to provide expert assistance rather than make a final decision on the matter.

The Court made orders for the appointment of an assessor to assist in determining the costs and outlined the terms of reference for the assessor. The parties were required to file statements of their respective positions and evidence with the assessor, who would then provide a report to the Court.

Orders