Eden Constructions (NSW) Pty Limited v Haines

[1992] HCATrans 207

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S144 of 1991

B e t w e e n -

EDEN CONSTRUCTIONS (NSW) PTY

LIMITED

Applicant

and

WILLIAM TREVOR HAINES

Respondent

Application for special leave

to appeal

MASON CJ
BRENNAN J

McHUGH J .

Eden 1 3/8/92

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON MONDAY, 3 AUGUST 1992, AT 2.04 PM

Copyright in the High Court of Australia

MR R.E. DUBLER:  May it please the Court, I appear for the

applicant. (instructed by Myer Boettcher &

Clapham)

MR D. COWAN:	May it please the Court, I appear for the respondent. (instructed by H.K Roberts, Crown
Solicitor's Office (New South Wales))
MR DUBLER:	Your Honours, if I could hand up the applicant's outline of submissions.
The area of law we seek to cover is that of negligent advice, Your Honours, but the issue
itself can be stated as follows, that whether or
not the provision of an expert's report as to site
conditions by a principal - - -
McHUGH J:	Can we just have a look at your submissions for a moment?

MR DUBLER: Certainly, Your Honour.

MASON CJ: Yes.

MR DUBLER:  Yes, thank you, Your Honour. The issue we seek

to raise is that whether it should be the case that

when a principal provides an expert's report as to

site conditions, the principal in this case being

that of the Department of Public Works by its

nominated defendant, provides such an expert's

report to tenderers in circumstances where firstly it can be fairly said that the report at best only

provides an estimate of likely site conditions, those site conditions, in fact, being uncertain

until the work is actually performed and, secondly,

there being limited disclaimer clauses in a

standard form contract, should have the result of

the principal in law not making any representation

upon which a tenderer can rely in an action for

negligent misstatement. Essentially what happened here was that the

applicant tendered for work based upon a survey
which indicated the amount of rock to be removed,

its type and location. The trial judge held that

the survey was inaccurate and that the contractor

had to perform more work than the survey would

indicate. The applicant alleged that the survey

was negligently conducted and compiled. The courts

below however held that in the circumstances of

which I have outlined above, there was no actual

representation made about the rock.

Now we submit that the courts below fell into

error in this regard, that there is still an
actionable representation made, even though the

Eden 2 3/8/92

site report can be described as giving only an

estimate of the conditions and also where the

disclaimer clauses are only limited. That is, they

are not as wide as one could imagine.

McHUGH J: What precisely was the duty of care owed in this

particular case?

MR DUBLER:  The duty of care, we say - well, specifically

not to mislead the tenderer to put in a tender

which it otherwise would not do so.

McHUGH J: Well then, how can you - assuming that what was

conveyed was information - allege that there was a

breach of that duty when special condition 14 said
that the principal does not represent that

information available shows completely the existing

site conditions?

MR DUBLER: Well, Your Honour, we put a lot of store in the

word "completely", that, in fact, it is ambiguous

and, if anything, it allows the tenderer to assume

that the information does give some representation
about the site conditions, but it does not

represent it completely.

BRENNAN J: What was the representation?

MR DUBLER:  The representation were of a number of kind, but

in main, the amount of rock to be removed.

BRENNAN J: What you are saying is that the principal

represented the amount of rock to be removed?

MR DUBLER: Well, we say, Your Honour, that it represented

that the survey gave a reasonable estimate of those

things, that the survey was on a reasonable basis

and, properly conducted, would lead to the estimate

of rock to be removed as stated in the survey.	So
that there was a critical distinction which we

submit that the courts below, with respect, did not

make between a warranty that the rock would be X,

and a warranty - or, if you like, more properly, a

duty of care to be reasonable with respect to the

estimate given of the rock. So that the action for

negligent misstatement, of course, is not an
absolute duty, it is only one to exercise

reasonable care.

BRENNAN J: The first step is that a representation was

made.

MR DUBLER: Yes, Your Honour.

BRENNAN J:  Now, the representation is, "Here is a

reasonable estimate", is that right?

Eden	3/8/92
MR DUBLER: That is what we submit, Your Honour.
BRENNAN J:	"On which you can rely."?
MR DUBLER:	That is so, Your Honour. We submit that the provision of an expert's report - and we put a lot
of store in the fact that it was an expert's
report - would lead one to have some reasonable -
one could reasonably rely upon it, even though its
complete accuracy is not warranted. So that there
is a very big difference in the error of margin.

BRENNAN J: Where do you find the representation that this

is a reasonably compiled report?

MR DUBLER:	That is to be found in the survey drawings themselves, and specifically simply by saying
"Survey by a registered surveyor", that that was
contained in the survey drawings, and hence, any
contractor looking at that would assume naturally
that the survey was conducted properly,
Your Honour, standard proper procedures, and we
allege that it was not.

McHUGH J: But it said it was based, for example, on an

assumed depth of loose material of 1.5 metres.

There was a clause in it which said that it did not

really measure the amount of loose and solid rock
and it had not attempted to measure the separate

quantities in zones 2A and 2B. They were just

disclaiming any responsibility for it, were they

not?

MR DUBLER: With respect, we say that is not the case,

Your Honour, because if that was the case one would

have to ask why was the survey given at all. If it

is to be the case that one could not give any
reliance upon it, then it is virtually worthless

information and at best could only be misleading,

because it certainly did give some indication of

what a contractor could expect.	Now, if it was
truly the case that it was - no representation

whatsoever that could found any reasonable

reliance, then it really should be the position

where it was not provided at all, or a disclaimer

clause that was clear and fair to that effect, that

"This is purely given for you information, use it

at your peril".

Now, the disclaimer clause here was somewhat

quite different to that and far more limited, in

which case we submit that it was reasonable for a

contractor to place some reliance upon it, that if

the principal did wish to disclaim all

responsibility, we say that the law should be and

is that the disclaimer should be in clear terms

that no reliance whatsoever can be placed on it.

Eden 4 3/8/92

The circumstances of a tenderer is very important,

that is, a tenderer often has no other information,

and that was the case here, and that a tenderer has

to either accept the information and put its tender

on it or completely put it to one side, and often has no opportunity or expense available to him to

verify the survey. So that it has a survey; it is

fairly said to only be an estimate, but that survey

is all the tenderer has to go on and so, we submit,

in those circumstances it is reasonable to rely

upon the survey being conducted according to proper

standard procedures.

That is all the wrong that the contractor

wishes to allege, that is the only point of appeal
we wish to make, that we accept the collateral
warranty cannot be made good if the survey does

only give an estimate. However, we say that that

does not relieve liability in tort where there is

still an overriding duty to exercise care with
respect to the estimate or, put simply, that the

estimate itself has to have a reasonable basis;

that if it did not have a reasonable basis, or the

principal was saying that we are not saying it does

have a reasonable basis, that should have been made

clear. We submit that the disclaimer clauses here

were far more limited than that and so it was quite

understandable for the tenderer, having no other

information, to rely upon this survey to the extent

that it was conducted properly.

We submit, Your Honours, that that is nothing

exceptional and is, in fact, consistent with the
development of the law of negligent advice in the
area. And, if I could briefly cite four cases that
support that proposition: firstly the Canadian

decision of Cana Constructions Co Ltd v The Queen.

There the Supreme Court of Canada considered the matter when the Canadian Department of Public Works

gave an estimate of the cost of work which

tenderers had to take into account globally in

their tender. The Supreme Court, at page 424, held

that the trial judge was wrong to say that the

estimate, and it was exactly called an estimate,

was merely a representation, a suggestion, or a

guess. The Supreme Court of Canada held that the

Department knew the information was important; it was the only information tenderers had; knew that

it would be relied upon and hence the Department, even though it was called an estimate, had a duty

to be accurate. And there the Canadian Supreme

Court went on to consider margins of error that one

would expect with an estimate and if one is outside

that margin of error and it is due to negligence,
that there would be liability sheeted home to the

principal.

Eden 3/8/92

And that is all we are alleging here, that the

survey was so improperly conducted as to be outside

the normal bounds of error that one would expect

with an estimate. J & JC Abrams v Ancliffe is a

New Zealand case similarly on estimate, but also

the Court considered the matter in Morrison-Knudsen

v Commonwealth of Australia, but there the

disclaimer clauses were similar to the ones

considered here by the courts below. That case

concerned a site report for Tullamarine Airport.

The Court was only called upon to decide whether

the representations \.n the site report could, in

the light of a disclaimer clauses, still bring

about a cause of action.

The Court held that such a cause of action

could survive the disclaimer clauses. That is, the
disclaimer clauses were not so wide as to suggest

no reliance whatsoever should be placed on the

survey and, in particular, Chief Justice Barwick at

page 267 pointed out the fact that the site report

there was indispensible information. It was

information which the plaintiff had neither the

time nor the opportunity to obtain for itself and

that in those circumstances the relationship

between the party cries out for a duty of care,

even in the face of certain limited disclaimer

clauses.

And the fourth case I wish to cite is the

Texas Tunneling Company v
United States case of referred to at page 267 of Chief Justice Barwick's

judgment. In that case we had the very wide

disclaimer clause, which was essentially to the

effect that no reliance should be placed on this

information at all or, in more exact terms, it was

,that the principal gives this report for

information only.	It is not to be relied upon by
tenderers.

Now, we submit that perhaps, if that

disclaimer clause was made clearly and fairly, that the tenderer would be put at his own risk entirely.

The situation here, Your Honour, was that the

disclaimer clause considered by Mr Justice Samuels

below was simply to the effect that the principal

does not represent that information made available

shows completely the existing site conditions which

almost, in fact, suggests that the principal

expected the tenderer to take some reliance upon

it, but only so far.

That is the point that we wish to make here,

Your Honours, that it is consistent with the case

law to say that where it is an estimate, a

contractor still is able to rely upon the estimate

Eden 6 3/8/92

but only to the bounds of reasonable care. That
the main fight that we say we wish to put and were

unable to was that the survey was so improperly conducted as to mean that the normal margins of

error that one would normally expect from a survey

were not made available to us, that, in effect, we

allege below that it was not a proper survey at all

and, in fact, matters such as the raw data of the

survey was not correctly recorded or plotted, so

that the whole representation from the survey was
totally incorrect, which inevitably led us on to

the bad bargain.

MASON CJ:  I am not sure at the moment precisely what is the

relevant duty of care that you are alleging. Was

it a duty to provide an accurate survey, or was it

a duty generally to provide accurate information,

or was it a duty that you would express in a more

negative form?

MR DUBLER: Well, that last of the two, Your Honour; both of

the last of the two. So that there was a negative

one; a duty not to be misleading, because the

survey was so improperly conducted - - -

MASON CJ: Yes.

MR DUBLER:  But further, a duty to use reasonable care that

the information was accurate or, alternatively, as

I have put it, was reasonable based. So that if

you give an estimate of what one could expect, that

you should have a reasonable ground for it, and

that would be a survey conducted along proper

lines, and that would be what a tenderer would

expect when one sees something that is signed off

by a registered surveyor. So that that is the duty

as we put it; the duty to exercise care to see that

it was accurate; not that it is accurate, but a

'duty of care with respect to providing the

information so that best endeavours are made to see

that it is accurate, or at least, reasonable

endeavours in all the circumstances, to see that it

is accurate. And that, in particular, brings up

the differences perhaps between latent site
conditions and patent site conditions. That here

we say that the survey gave incorrect information,

not only as to latent defects, but as to patent

ones; ones in respect of which a contractor would

accept at face value when one has such a survey.

So that the patent aspects were not correct as

well.

MASON CJ:  Now, can we have a look at the reasons advanced

by Mr Justice Samuels for rejecting the claim so

far as it was based on negligence; on negligent

misstatement or misrepresentation?

Eden 3/8/92

McHUGH J: Just before you do, your argument seems to be

different here today from what is recorded in the

Court of Appeal, is it not?

MR DUBLER: Well, not completely, Your Honour. I do not

accept that completely. It is put at page 94 of

the appeal books, the claim that the plaintiff

raised below, at about point 4:

the plaintiff contended that the respondent

failed to exercise reasonable care in

supplying the information - - -

McHUGH J:  No, but it is the next bit:

which made up the warranties to which

reference has already been made.

MR DUBLER:  Yes, Your Honour, I see that.

McHUGH J: And at page 100, when His Honour is dealing with

that third ground, he says:

the information relied upon was not supplied

on the contract documents -

MR DUBLER:  Yes, Your Honour.

McHUGH J: When I read the judgments below I took it that

the case that had been argued was that the

contractual representations were also the basis of

the negligence action, but you are putting the case

in a different way here today?

MR DUBLER: Well, it is not necessarily a different case

from the way it was run below.

McHUGH J:	I am not putting it against you, I am just trying to understand.
MR DUBLER: Yes, I accept that that is a fair conclusion

from reading the judgments. We say that the

judgments do not fairly put the thrust of the

plaintiff's submissions below and that I think that

would become quite clear if one considers the

particulars of negligence set out at page 94, which

come from paragraph 20 of the statement of claim,

that firstly it is as stated in the paragraph

above. We put the contention that there was a duty

owed to us to exercise reasonable care in supplying

the information and where the acts and omissions

were not simply that the representation in the

survey was ultimately found to be incorrect, but

that the whole basis of the survey proceeded along

faulty lines, so that the normal margin of error

that one would have with a survey was not given to

us, afforded to us, because as alleged there at

Eden 3/8/92

page 94, we always submitted the whole survey was

on an improper basis, that we did not put our case

solely on the basis that they are liable in

negligence because the information turned out to be

incorrect, but because they were imprudent or
improper in the way in which they collected the
survey to begin with, and that results in a very
fundamentally different set of circumstances to a

contractor. It is the result - in fact, to

disclaim that sort of liability really means that

the survey as a whole was virtually worthless, and

that certainly was never fairly put to us.

McHUGH J: Well, can I just take you to two clauses? Can I

take you to 87 of the book to the critical

clause 08.4.2, which supports you:

Based on survey measurements and mathematical

calculations •.... the total quantity of

rock ..... has been determined at 1170 cubic

metres.

For all purposes of the contract, the said total quantity will apply unless it be

challenged by the Contractor.

And then what about, over on page 88, the clause

which starts at line 19:

The Principal has not attempted to measure the

separate quantities •.... it has been assumed

that 1070 cubic metres ..••. is in Zone 2A and

the remainder (100 cubic metres) is in Zone

2B.

MR DUBLER:  Yes. There are two things I want to say to

that, Your Honour. Firstly, in the issue of the

right of challenge is actually dealt with later in

Mr Justice Samuel's judgment at 96 over to 97, and

that, we say, fairly puts the tenderer on notice
that because there is a right of challenge to the

survey, would indicate that the principal does not

have confidence that the survey would indicate

100 per cent accuracy, and that is a fair

conclusion to be drawn from the right of challenge.

However, we say that there is a very obvious

sting in the tail concerned with the right of

challenge and that is that there was only once ever

a right of challenge at one time and that was

before the work was to be commenced. The contract

said, the tenderer - you can have the challenge,

but that is irrespective of whether the tenderer

had discovered the survey was false or not.

Obviously - and further, that if the new survey

turns out not to be greatly different from the

first survey, the tenderer must pay the cost. So,

Eden	3/8/92 quite naturally, we say, the tenderer relied on the first survey to not challenge it, thinking that
most surveys would give the same result, and then
later discovered the survey was wrong and had no
right of challenge and the contract was, even
though called a schedule of rights, was construed
to be a lump sum contract, so it has lost its right
of challenge, is very much in a very bad bargain
when it discovers the survey was improperly
conducted, so that the mere right of challenge
would not lead to a tenderer thinking that "I
cannot rely upon it, because it is only a very
limited right of challenge".

The second issue that Your Honour raised about

the assumption between solid rock and loose rock,

that whilst it says that, the survey drawings which

are not in the appeal books did give an indication

of those amounts, so that even though the contract

said, there nevertheless was a survey

representation which a tenderer would make his own

assumption about, perhaps, based on the survey.	So
the contract says, "The principal makes no

assumption", but nevertheless gives a survey which

does make an assumption, so that forms the basis

for the decision to enter into the contract.

BRENNAN J: What is the representation then on which you

rely? What document contains the representation on

which you rely?

MR DUBLER:  It is quite simply the survey drawings and they are two drawings. The pleadings put in issue -

also other clauses in the contract, but we accept

for the purposes of our appeal in this Court that

they were fairly decided below, against us. So all

that we rely upon are two survey drawings which

gave a representation of outline of rock, volume of

rock and type of rock, and it was set out in a way,

one would expect, of a survey. Now, we say that by

presenting that, that made a representation to us

on a reasonable standard practice for surveyors,	that it was a proper survey or at least was based	and we sought directly to put that in issue and I
accept, Your Honours, from reading the judgment
that that does not appear to have been a great
issue below but, indeed, there were experts called
which put into the issue that very point, that we had our own experts say below that this was not a proper survey and, indeed, raw data was obtained
which indicated that the survey drawings we had
were not even properly based on the raw data
collected by the surveyor.

BRENNAN J:  Have you got a finding anywhere that the

defendant made a representation by giving you those

drawings?

Eden 10 3/8/92

MR DUBLER:  The answer to that is, no, but it is not in

dispute that we got a survey from them. We lost

below because it was construed that the

representation was not one which would ground an

action in negligent misstatement and hence the

courts below did not enter into the issue of

whether the duty of care was breached.

BRENNAN J: What did you plead?

MR DUBLER: It was a duty of care to - - -

BRENNAN J: What did you plead in terms of the

representation?

MR DUBLER:  The representations were pleaded at paragraph 6

of the statement of claim. It was put in these

terms, that the tender documents contained the

following information, that:

There was no more than 1170 cubic metres of

rock -

then further information along the lines that the

rock was of this shape and this line.

BRENNAN J: Just tell us what the pleading was.

MR DUBLER: Certainly:

(b) Zone 2 consisted of the rock shown in the

drawings.

(c) All rock in Zone 2 was below RL 95.2 -

that being a survey plotting -

(d) There was no solid rock in Zone 2 seaward

of chainage 13.5.

(e) The sea floor seaward of chainage 16.7 was

at RL 89.3 and consisted generally of sand and shingle.

The particulars of that information is given as various clauses in the contract and

drawings 82272/26/27. Now, one could be forgiven

for taking the view that based on the way in which

it was pleaded, the information, in that way, that

the case for the plaintiff was that they were

negligent because the survey proved to be

inaccurate, and that is picked up in the judgments

below. In particular, it is stated that the survey

did not indicate that there might be more than

1170 cubic metres, and we did plead it in that

form.

Eden 11 3/8/92

However, we submit that the statement of claim, as it went on, made it clear that it was not

an absolute duty that we were putting upon the the

principal and that in particular paragraph 18 of

the statement of claim was that the department owed to the tenderers a duty to exercise reasonable care that the information was correct. So, we did not

allege an absolute duty, however the representation

I accept, Your Honour, the way it was pleaded, was

in absolute terms. That is the representation was

pleaded that there would be no more than 1170 cubic

metres and other matters of form and size of the

rock.

Now, we submit that whilst that it in the

pleadings the plaintiff was not so limited and that
by putting in issue a duty to exercise reasonable
care carries with it not simply a representation of

absolute accuracy - - -

BRENNAN J:  Am I right in thinking that the defence put in

issue the making of those representations?

MR DUBLER:  In those terms, they did, Your Honour.

BRENNAN J: And they succeeded?

MR DUBLER:  On those terms, yes, they did. We accept that,

Your Honour.

BRENNAN J: Well, you are trying to make a case outside the

pleadings then?

MR DUBLER:  On one view of it, I accept that, Your Honour.

The representations were put in terms of

paragraph 8 of the pleadings in a very narrow way

and, in fact, an identical way to collateral

warranty; in precisely identical way. However, we

submit that read as a whole, the pleadings, and in

particular which only puts a duty of exercise

reasonable care on the defendant, that it was not

so narrowly put. That, in particular, paragraph 8,

as the evidence ran, was in particular put that the

information that there was no more, for example,

than 1170 cubic metres, was reasonably based. Now, that is the additional matter I put in which is not

presently in paragraph 8 of the statement of claim,
but we say that it does arise upon the pleading

that we allege the department owed a duty to

exercise reasonable care with respect to its information and that we should not be solely

limited to paragraph 8; that we pleaded a whole set

of circumstances, particularly simply that

information was given to us that we relied upon it,

we entered into a contract; that gave rise to a

duty of care, and our particulars of negligence,

raised quite clearly as I have stated, that what we

Eden 12 3/8/92

said against the department was not simply that the survey got it wrong, but that the survey miscarried

in the way in which it carried out its function as

a survey from the very start, and that was put in

the particulars of negligence and that was set out

in the expert's evidence.

Now, the way in which the judgments below treated it was simply assuming - and I accept,

obviously based almost entirely on paragraph 8.

They assumed that our claim in negligence was identical to the claim in collateral warranty, and

that was not how the duty of care was pleaded and

it was not the particulars of negligence pleaded, but the judgments below simply treated the matter

as if, because it could not fairly be said that the

survey was purporting to give a complete accuracy,

that therefore the claim in tort must fail.

Now, we say that that properly could have been

laid against us if our duty of care was pleaded in

a way of absolute warranty, but the duty of care

was pleaded in a way simply to exercise reasonable

care, and we say that the judgments below did not

pick up that duty of care and assume simply that

the representations only went to an absolute

warranty of the amount of rock, the type of rock

and the formation of rock.

MASON CJ:  You are referring to the passage at page 100, are

you?

MR DUBLER: Yes, Your Honour. That obviously there

Mr Justice Samuels does not develop the argument on

negligent misstatement, assuming it goes on all

fours with the - - -

MASON CJ:. What His Honour appears to be saying is there was

no representation that the amount of rock was more

than 1170 cubic metres and that is an answer to the

claim in negligence.

MR DUBLER: Yes, Your Honour.
McHUGH J:	But you have got to be precise about the

information and I have some difficulty in getting from you what is the precise information that you

say that you were given. What was the information

that you were given upon which you rely?

MR DUBLER:  The information we were given were two survey

drawings.

McHUGH J: Well, that does not tell you very much. It does

not tell you anything. Is it the statement in

clause 8 that the quantities were based on the

survey measurements and mathematical calculations

Eden 13 3/8/92

and therefore you are relying on the information in

those drawings concerning measurements?

MR DUBLER:  We are relying on the survey being one conducted

in a proper manner which would then lead to an

estimate of rock.

McHUGH J: But it depends what is in the survey, and the

survey itself contains such phrases as "theoretical

bottom profile", "approximate extent of boulder

covered area", and matters of that nature, "cliff

nominally vertical". It seems to indicate that the

survey itself contains statements which indicated

that it was pretty rough and ready, if I can use

that expression.

MR DUBLER: Yes, Your Honour, and I accept that completely,

but that - - -

McHUGH J: Well now, if the information you are given is

that this is a survey which is rough and ready and

we have not measured the quantities of rock

ourselves but based on mathematical calculations we

reach this figure and then, we say, we do not

represent the information shows completely the

existing site conditions, what is there left of the

case after that?

MR DUBLER: Well, we say that what is left is the

representation that the calculation that was made

was one which a reasonable surveyor would make on

that information, so that it has - - -

McHUGH J: What calculation are we talking about,

calculation of what?

MR DUBLER: There is a number but, particularly, the volume

of rock was put in the survey drawing at 1170 cubic
metres, with attendant qualifications, but it was
put squarely on the survey and written on the

survey, "estimated rock 1170 cubic metres".

Similarly the formation of the rock, that is, its

location, its boulder size and matters of that

nature, was also squarely put on the surveys but

again with qualifications.

McHUGH J: Well, supposing the correct amount of rock had

been 1200 cubic metres, would you have had a case

then?

MR DUBLER:  Only if we were able to prove that there was a

want of care or a gross inaccuracy in the surveyor

in preparing those estimates or giving that

information. So, what we are putting is that even

though there are these rough and ready aspects to
the survey's report, a contractor nevertheless can

have a degree of comfort from knowing that a

Eden 14 3/8/92

surveyor has made these calculations, that is, it

would not be put at 1170 cubic metres if that was

not a view that an expert had, albeit based on

limited information.

Now, we alleged below that the limited

information in fact could not have reasonably come

to the conclusion that he made on the surveys, on
the drawings, so that that deprived us from the

comfort that we had in it because the survey did an

estimate and so that it is squarely in the area of

expert advice. An expert can say, "Well I have not

done everything I could have done, but what I have

done has led me to the conclusion X". Now, that

means you can still get some comfort from the fact

that the expert has done some work and has given

you some indication and, in particular, where you

have a tenderer, there is no opportunity to do

anything else; no opportunity to reverify it - can

say, "Well a surveyor has done some of the work,

therefore I will rely upon that to the extent that

it would be a reasonable result of work by an

expert".

Now, we will only succeed if we are able to

show that that surveyor in fact did not perform the

job properly, and his estimate of 1170 cubic rocks

was just so out of what any reasonable surveyor

would do, so that is how we put our case.

Your Honour, if I could briefly point out that

the relevant passages of what leads the court below
to have the conclusion that we should not have been

able to have any comfort from the surveys is at

pages 96 through to 98. Commencing at about 96

point 10, Mr Justice Samuels really makes the

foundation or conclusion from which everything else

flows:

that it is very clear indeed that language was

chosen which was intended to indicate, and

fairly did so, that the amount of rock to be

removed, and its precise disposition, were

essentially uncertain.

His Honour then goes on to give essentially three

reasons why that is so. Firstly, through to the

bottom of page 97, His Honour discusses this right

of challenge, and I have already discussed that

matter with the Court. The second thing that

His Honour relies upon, commencing at page 98

point 5, is the type of words used by the surveyor,

and there there are comments that Mr Justice McHugh

picked up, things such as "theoretical",

"approximate", "approximate based on" et cetera,

and then finally His Honour says that there was a

type of disclaimer clause and His Honour then

Eden 15 3/8/92

concludes that all of that would lead one to come

naturally to the conclusion that the principal was

not warranting the amount of rock that was there.

Now, we accept that, however we say that

simply by a surveyor saying approximate amount of

rock, and simply by a disclaimer clause that says

we do not warrant completely the accuracy of the

information, does not relieve a principal from his

duty to treat us with care with the information he

provides to us, which I have - - -

BRENNAN J:  Your proposition is that when this kind of

procedure is followed there is implicit in this

representation by the principal that the survey has

been conducted with reasonable care and that the

calculations which appear in the documents have

been compiled with reasonable care.

MR DUBLER: Yes, Your Honour.

BRENNAN J: Although, looking at the terms of the documents reproduced in the passages to which you have drawn

our attention, it seems that that is precisely what

was not being represented.

MR DUBLER:  That it was not pleaded? I accept that, Your

Honour.

BRENNAN J: Not, not pleaded; not represented. In other

words, what they were saying in the contract was

that we are not making representations that this

survey has been properly conducted, and we are not

making representations that these calculations have

been reasonably made.

MR DUBLER:  Well, that is the precise issue which we say is

wrong. That is the precise issue where we say that

'the law of negligent misstatement should not be

interpreted in that way. That is, if a principal

indicates fairly that this is only an

approximation, this is only a theoretical

calculation of the amount of rock based on certain

work an expert has done, and also a limited

disclaimer clause, that that means there is, in

effect, no representation.

Now, we submit that that is, in fact, taking the wrong path down the line of the law of

negligent misstatement. That is, that simply,

particularly in the context here where a tenderer

will having nothing else to go by, it does carry

with it a registered surveyor's signature that he

is an expert, having done work which we, as
tenderers, could not have done, does, we submit,

mean that even though the surveyor only gives an

estimate to us, we are entitled to rely upon that

Eden 16 3/8/92

as being properly based because, as I have said

before, that if it were otherwise it would simply

mean that this information was given purely for us

to take, if we wanted to, otherwise that it was

virtually worthless information, that you could not

reasonably rely upon it at all.

One then wonders why was it given to the

tenderer? Obviously, it was meant to influence

them as a basis, at least, for putting their tender

in - they had no other information - that is was

obvious it was going to be relied upon. There was

that close nexus between principal and tenderer

that, sure it was an estimate, but they would have

to still base their tender upon something, and that

is all they were given by the department.

So it would be my submission that to escape

that sort of liability the principal would really

have to make it far clearer than simply using the

words "approximate amount of rock", to fairly

indicate to a tenderer that if you rely upon this

in any way it will be entirely at your own risk.

But that seems to fly in the face of the way in

which tenderers do put in tenders when there is

only that information available to them. It must

be quite obvious from the relationship of the

parties that it will be relied upon.	They are my
submissions, Your Honour.

MASON CJ:  Thank you. The Court need not trouble you,

Mr Cowan.

MR COWAN:  May it please the Court.

MASON CJ: Having regard to the issues raised by the

pleadings in this case and the way in which the

case was evidently conducted in the courts below,

·we are not persuaded that the applicant's prospects

of success in the proposed appeal are sufficiently

strong to warrant the grant of special leave to

appeal. Accordingly, the application for special

leave to appeal is refused.

MR COWAN:  I seek an order for costs.

MASON CJ: You do not oppose that?

MR DUBLER:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 2.50 PM THE MATTER WAS ADJOURNED SINE DIE

Eden 17 3/8/92