(Formerly Sait Inc) v Grieve No. Scgrg-95-29 Judgment No. S6705

[1998] SASC 6705

AUSTRALIAN EDUCATION UNION

(FORMERLY SAIT INC) v GRIEVE

Williams J:

This action involves a claim for damages by a building owner against its architect, alleging that the architect failed properly to carry out the terms of his engagement in 1984 in connection with the removal of sprayed asbestos which had been discovered in the building’s ceiling cavity.

1.  The background to the dispute

The plaintiff is the successor to the body known as the South Australian Institute of Teachers Inc and for many years has owned land at 163A Greenhill Road Parkside which it has used as its administrative headquarters.  The parties are in agreement that in all respects now relevant the plaintiff has succeeded to the rights and obligations of the Institute.  In about 1974 the plaintiff caused a building to be erected on the site.  The western section of this building (called Raggatt House) is single story and includes a hall, projection room, supper room and service areas.  In about April 1984 the plaintiff’s Executive became aware, by chance, that sprayed asbestos had been used under the iron roof decking as an insulating material during the construction of Raggatt House.

The plaintiff was thus faced with an issue of some sensitivity; the plaintiff in the course of its own industrial activities had been seeking the removal of asbestos from schools.  The members of the plaintiff’s Executive were well aware of the perceived danger posed by asbestos contamination, and sought to apply the same policy standards to their own administration as the plaintiff had espoused with regard to public buildings more generally.

1. The basis of the plaintiff’s claim

The plaintiff’s case is that it engaged the defendant as its architect for the purpose of securing the complete removal of asbestos from the ceiling cavity.  The express aim of the plaintiff’s instructions was to ensure that the building should be rendered safe, and that no further work should thereafter be necessary.  Upon the plaintiff’s case, the defendant was to advise as to what should be done and he was to supervise the anticipated work. The defendant was required to prepare a specification of works, take steps to call tenders from builders and then to properly supervise the successful tenderer.  The plaintiff asserts that the clearance of the site which was carried out in 1984/85 under the defendant architect’s supervision was insufficient, and that it was necessary to bring workers back on to the site in 1994 when loose asbestos was discovered in the ceiling.  The plaintiff now seeks to hold the defendant responsible for the work which was left incomplete in 1985.

The plaintiff claims to have undertaken in 1994 (using other contractors) the work necessary to finish the removal which was left incomplete in 1985; the plaintiff claims an entitlement to recover from Mr Grieve the reasonable cost of that work, less any amount that would have been due and payable to the original contractor had that contractor completed the work at the time agreed by the terms of his contract (Mertens v Home Freeholds (1921) 2 KB 526 at 535, 538 and 541-543).

The plaintiff asserts that the proper measure of damages is cost of completion of the works so as to properly achieve the stated aims; the plaintiff asserts that this cost must be assessed at the time when the defects were discovered and rectified (East Ham Corporation v Bernard Sunley & Sons Ltd (1966) AC 406; Bellgrave v Eldridge (1954) 90 CLR 613 and McGregor on Damages (15ed) par1086-1093). The plaintiff claims that the discovery of loose asbestos in January 1994 was a fact entitling the plaintiff to an extension of time under s48 of the Limitations of Actions Act 1936 within which to bring the present action.

The plaintiff’s claim is essentially contractual but there is also a tortious claim upon the basis that the contract creates a relationship giving rise to a common law duty of care (see Hawkins v Clayton (1988) 164 CLR 539 and Bryan v Maloney (1995) 128 ALR 163 at 167).

1. The reaction to the discovery of asbestos

The plaintiff sent sample material to Amdel for inspection and on 12 April 1984 Amdel confirmed that the sample material contained asbestos.  In anticipation of this news the plaintiff’s Executive met and authorised its secretary, Ms Jan Lee to take appropriate protective and remedial steps.  On 11 April 1984 Ms Lee in writing informed the plaintiff’s staff as to what had been discovered.  In so doing (and in future staff consultations) the plaintiff was seeking to act (as it saw it) as a good employer; subsequently an employee, Ms Sue Owens (sometimes called Simon) became involved in a consultative process, but I treat her as being effectively the Occupational Health and Safety Officer appointed to represent the workers’ individual interests in their dealings with the plaintiff as their employer and building owner.  In effect Ms Owens acted as shop steward to represent her co-workers.  I do not consider it to have been proved that she was discharging a function on behalf of the plaintiff, except insofar as it chose to consult and obtain the approval of its employees as a matter of good industrial relations.  (This matter becomes of some importance). 

I doubt whether in 1984 or 1985 anyone in position of authority within the plaintiff’s organisation further addressed the responsibility attaching to Ms Owens.  No doubt she was expected to consider the interests of the workers and had the opportunity (if the need had arisen) to voice her disapproval on their behalf.  Ms Owens was kept informed of the steps being taken to render safe her working environment; whether her concurrence with the architect’s actions should be treated as the approval of the building owner is contentious.  The plaintiff’s Executive wanted to satisfy those who worked within the building; Ms Owens’ appointment ensured continuing staff participation in the decisions for fixing the asbestos problem.

1. The plaintiff’s difficulties

The principal difficulties in the plaintiff’s path may be summarised as follows:

(a)     The plaintiff’s instructions to its architect (the defendant) envisaged that considerations of monetary cost to the plaintiff should be a factor in determining what work should be regarded (acting reasonably) as necessary.

(b)     high and absolute standards (as regards asbestos removal) being advocated within the community in 1984 did not entirely accord with commercial reality at the relevant time.  In particular amongst those charged with influencing working standards (for example the State Government asbestos inspectorate) there was a recognition that the norm in terms of good practice within industry and commerce was not so absolute as always to require complete removal.  The practical difficulties were recognised.  Thus containment of residues in situ was an accepted method of dealing with difficult situations when removal would have been "asking too much".

(c)     the evidentiary trail upon which the plaintiff relies has grown cold and memories have faded.  (There is no element of criticism in this comment).

(d)     The ordinary function of an architect in South Australia is to administer building contracts but an architect (per se) is not a builder.  Putting aside the architect’s function as a designer and as arbitrator, the architect’s work is normally to put in place a building contract with a reporting system as to performance of the building work.  The architect typically has a part to play in the administration of such a reporting system.  (A statement what is "normally" regarded as the ambit of an architect’s responsibility is not to deny, of course, the possibility that some unusual special or unorthodox arrangement may be negotiated in a particular case.)  In the light of the requirements of the Builder’s Licensing Act 1967-1974 the function of an architect should be distinguished from the function of a builder.

(e)     It was normal practice in 1984 for an independent asbestos monitor to be contracted by a building owner to an asbestos removal job with responsibility for deciding (in the light of testing of asbestos dust in the contaminated area) how much work was necessary to establish a safe working environment.  A dust monitor was engaged for this job in 1984.

1. The instructions to the architect and the functions of the architect

Ms Lee met the defendant, a practising architect on or about 18 April 1984 at her office.  On behalf of the plaintiff she sought to engage the defendant as architect with the aim of dealing with the asbestos problem, and she made it clear that the Executive wanted to achieve complete removal of the asbestos.  Mr Grieve disclosed that he had no previous experience with asbestos removal, but agreed to accept the instructions.  The process whereby tenders would be called for the work by the architect and the architect’s responsibility in preparing a specification of the work was discussed.  The architect’s responsibility as an adviser to vet the tenders was identified upon the basis that the tenders would eventually be brought before the plaintiff to make its own decision as to acceptance of any tender.  It was to be Mr Grieve’s responsibility to ensure that any potential tenderers in fact held the relevant licences.

The defendant’s instructions developed during a series of meetings and it would be expecting too much for either Ms Lee or the defendant to be able to say what took place on any particular occasion.  However, I find that Mr Grieve did raise the possibility of removal of the roof as an option.  (One of the eventual tenderers for the building work did propose roof removal.  That tender was not the lowest tender and it was not accepted by the plaintiff).

The Architects Act regulates the conditions under which a person may hold himself out under the title or description of an architect. Nothing in that Act prevents a person from designing and superintending the erection of a building. The Builders Licensing Act 1967-1974 regulates the conditions upon which a person may undertake "building work" (which includes alteration improvement and repair of any building); the Builders Licensing Act specifically authorises the licensing of a registered architect as a builder but nothing in the Builders Licensing Act requires a registered architect to be registered as a builder in order to discharge the function of an architect. (see Builder’s Licensing Act s21(21)).

As was pointed out in Andrew v Cox (1974) 6 SASR 596 at 602-

"...normally a registered architect does not either undertake or carry out the building work...the Act [Builders Licensing Act] does not contemplate that architects generally shall be licensed in order to render services simply as architects...".

An architect’s typical function (as now relevant) involves the administration of contracts.  I am not now concerned with the architect’s design function, nor am I concerned with the responsibility which is sometimes imposed upon an architect as an arbiter.

Arising out of asbestos removal from Raggatt House in 1984-85, a dispute arose between the building owner and builder and the dispute was taken to arbitration; Mr Grieve became a witness in those proceedings.  He was never joined as a party to that dispute.  The builder and the owner in conference (arranged by the architect) eventually decided how much work should be done after the difficulties had been explained.  An arbitrator then decided the extent to which the work required went beyond the original bargain and how much should fairly be paid by the building owner beyond the original contract price.

Whilst the contractual arrangements depend upon the discussions between Mr Grieve and the plaintiff’s representative (Ms Lee), there was nothing in those discussions to suggest that the arrangement was in any way out of the ordinary.  Indeed whether one looks at what passed between the plaintiff and the defendant and the manner in which the parties proceeded I am satisfied that Mr Grieve’s engagement was entirely orthodox.  The parties contracted against a background matrix of facts in which convention and practice in this State cannot be ignored.

Relevantly the defendant was engaged to administer a contract between the plaintiff and a selected builder.  The defendant did not himself undertake responsibility for the building work.  He put in place for the plaintiff a form of contract (based on a standard form) which required a series of certificates to be given to establish performance; the contract contained its own mechanism for the resolution of disputes.  The defendant (as he was required to do) took steps to call tenders and to establish a contractual relationship between the plaintiff and a builder.

The plaintiff’s case is that the defendant undertook a supervisory role.  However, in my view that function remained the responsibility of the builder and with the defendant being required only to administer the contract.  This distinction is well known and discussed in Brooking on Building Contracts: the law and practice relating to building and engineering agreements (1980d (2nd ed)) at 161 par17.1 [(1995) 3rd ed at 211].

1. Factual Summary - 1984 to 1994

(a)     In early April 1984 the plaintiff’s building caretaker came across some suspicious looking material in the ceiling of Raggatt House above the auditorium.

Samples were taken and AMDEL confirmed the presence of asbestos.  The plaintiff’s Executive met on 10 April 1984 to discuss the situation and clerical staff were immediately informed that steps had been put in train to deal with the situation.  There is evidence that white asbestos (Chrysotile) and grey asbestos (Amosite) were to be found on site. 

When Raggatt House was built in the early 1970s it was commonplace to use asbestos for insulation purposes and in this instance asbestos was sprayed on the underside of the fluted iron roofing; there was overspray onto the supporting roof trusses and into the ceiling space generally.  Asbestos had also fallen into the wall cavities.

The defendant first met Ms Lee on about 18 April 1984 when she instructed the defendant as to the plaintiff’s requirement that all asbestos be removed from the ceiling.  Ms Lee’s instructions were given in the course of a series of meetings.  Ms Lee initially made it clear that the plaintiff’s objective was to completely clear the ceiling of the dangerous substance.  However, Ms Lee also made it clear that the plaintiff did not have unlimited funds.  The defendant sought to test the instructions and did so by reference to an extreme possibility.  He asked whether the roof was to be removed but Ms Lee rejected that suggestion as being too extreme.  Ms Lee made it clear that cost was a factor to be considered, but there was no suggestion that the Institute was not prepared to pay for the job to be done properly.  The instructions were developed in discussions to the point where Ms Lee accepted that as much asbestos as possible would be removed and that any residue would be contained in situ.  The defendant (who had been practising as an architect in South Australia since 1978) made known to the plaintiff that this was his first experience with asbestos removal.

(c)     The ceiling of Raggatt House gave rise to very difficult working and inspection conditions.  Some areas were very cramped and sections of the ceiling sloped.  It was apparently possible to lose one’s bearings in the course of an inspection.

Considerations of safety required that a person entering the contaminated area should wear full protective clothing (including a mask and air supply).  The roof cladding was iron.  Although removal of the roof created its own problems in terms of containment of the toxic material, in hindsight removal of the roof would have had advantages.  However, it must be remembered that in 1984 the building was not more than about 15 years old; when renovations were proposed in 1994 the economics of dealing with an ageing 25 year old roof are different from the conditions which faced the parties in 1984.

(d)     The defendant prepared a specification for the requisite work, called for tenders and, under the plaintiff’s direction, let the contract to Consolidated Contractors, a company holding the relevant qualification as an asbestos removal contractor (licensed by the Department of Labour).  The specification provides that the scope of the work

"comprises the complete removal and disposal of all sprayed asbestos material, subsequent spraying of all cleaned surfaces with PVA paint and the replacement of the asbestos with a different material to perform the thermal and acoustic requirements of the building at the following locations...."

The specification required the builder to appoint a "contract supervisor".  The specification incorporated as appendix a code of practice for the safe removal of asbestos.  This document is expressed to be "integral part of the contract."  The specification was prepared on the footing that there would be an independent dust monitor appointed.  The specification contained detailed provisions for monitoring.  The specification is annexed to the statement of claim and I have brought the whole of its terms to account.

Consistent with the plaintiff’s instructions the specification included the following:

"Scope

This code deals with the removal of asbestos-based thermal and acoustic insulation and fireproofing from buildings structures, pipework, boilers, refinery equipment, etc.

The form of asbestos most commonly found in asbestos-based thermal and acoustic insulating materials are white asbestos (chrysotile), grey asbestos (amosite) and blue asbestos (crocidolite).

Blue asbestos has not been in common usage since 1970, but substantial quantities were used before that period.

It should be noted that it is recommended that the practice of sealing deteriorating sprayed asbestos-based material should be considered as a temporary expedient only.  It is not considered to be of permanent value since, in most cases, release of the asbestos fibres is initiated by breakdown of the substrate/sprayed asbestos-based material interface and not to separation at the exposed outer surface.

Sometimes it is not necessary to remove sprayed asbestos-based insulation material.  Where adhesion to the substrate is good and the exposed surface is also in good condition and sufficiently compacted, then sealing with a suitable coating is acceptable (see Appendix B).  Airborne asbestos dust is generated during sealing and full protective measures should be taken as per sections 3.3, 6 and 8.  Sprayed blue asbestos should not be stripped or sealed without consulting the relevant health authority.  Sealing is not recommended for blue asbestos.  A reassessment of the condition of the sealed surface should be made annually.

In this code, the word ‘shall’ indicates a requirement that is to be adopted in order to comply with the code while the word ‘should’ indicates a recommended practice."

"Type of finish required-

For example, where sprayed insulation is concerned, removal may involve scraping down to clean base material or it may be permissible to have a residual asbestos-based layer with a suitable sealant applied (see Appendix B for details).  The latter method is more generally applicable."

"ANNEXURE B - COATINGS

A.  Over sprayed insulation

...To effectively seal asbestos insulation it will generally be necessary to apply several coats of the particular coating chosen.  The first, and possibly all of the coats applied, may need to be diluted so that good penetration of the insulation can be achieved....."

An addendum to the specification provided for an amendment to "Procedures on completion" as follows:

"After completion of asbestos stripping and wash down there shall be an inspection of the removal area prior to any PVA application.  This inspection shall be carried out by the Builder, the Architect, the Monitoring Agent and a Client representative.  The PVA application shall commence only after the Architect’s approval."

The practice in 1984 was that the extent of the work necessary would depend upon the subjective assessment of the monitor.  Witnesses with a knowledge of the industry (including the defendant) agreed on this crucial piece of evidence.  The practice whereby an architect in the course of his administration of the building contract would rely upon the asbestos monitor’s judgment was regarded as appropriate in 1984.  E.I.L. was the company appointed as monitor.

(e)     The work required in removing the asbestos turned out to be much more extensive than Consolidated Contractors had anticipated.  The specification required "complete removal" but this had to be read in the light of the provisions which I have already quoted.  It was not realised by Consolidated Contractors that an adhesive had been added to the asbestos and this made the task of removal more difficult.

(f)     I am satisfied that the manner in which the defendant expressed the specification and established a system of monitoring reflected good practice (as it was applied in 1984) and the terms of the defendant’s engagement.  There was "tension" between (a) the plaintiff’s requirement that there be complete asbestos removal and (b) the need to have proper regard to financial considerations.  I interpret the plaintiff’s instructions as they were developed as requiring that all reasonable efforts should be made to remove asbestos but that (in terms of these instructions) there would come a point at which financial considerations would have to be a factor consistent with safety requirements and practice.

(g)     The contract between the plaintiff and Consolidated Contractors is not in evidence.  However, it is known that the contract was generally in a standard form used by the architectural profession.  There was eventually an arbitration between the building owner and the builder to resolve the amount that the Institute should pay.  The issue appears from the arbitrator’s award and the accompanying reasons.  Consolidated Contractors maintained that the work which it was directed to undertake exceeded the work for which it had tendered.  Consolidated Contractors had been given incomplete information in the course of the tender process as to the way in which the asbestos had been applied with an adhesive which made removal by Consolidated Contractors a particularly onerous task.  No doubt if the plaintiff had insisted upon a more thorough removal then the arbitrator’s award against the plaintiff would have been even higher.

(h)     The defendant as architect charged (by prior agreement) at the rate of $25 per hour for investigation of the problem, preparation of specifications, calling tenders and administrating the contract - including the certification of progress claims in accordance with normal practice.  For 153 hours work his charge was $3825.

1. Consolidated Contractors took the work to the point where it had scraped down all surfaces "as best it could" and then applied PVA to cover and encapsulate the asbestos which remained adhering to the various surfaces within the ceiling.  The extent and standard of work required was generally set by EIL as asbestos monitor but ultimately the extent of the work was determined by discussion between Consolidated Contractors, the plaintiff and the monitor.  The architect "brokered the deal" in obtaining a resolution as to how far Consolidated Contractors should be expected to take its obligation.  In this process Mr Grieve obtained reports from those working on site and relayed to Ms Lee a summary of the difficulties.  The defendant explained to Ms Lee that the asbestos (by reason of the technique and substances used in the original application) was clinging to the surfaces.  A combination of elbow grease, small scrapers, patience and a tolerance to working under extreme conditions (both hot and cramped) were required in order to make progress.  The very fine asbestos fibres were clinging to the nooks and crannies.  The uneven surfaces of the framework defied being scrubbed clean.  Mr Grieve told Ms Lee of the magnitude of the task which was emerging.  He explained that the fluting in the roof covering would have to be "scraped clean with a teaspoon".  Mr Grieve and Ms Owens "suited up" in protective clothing and entered the contaminated area in order to obtain an appreciation of the problem as work progressed.  This inspection was clearly a most difficult and demanding assignment.  There is no evidence that any one else connected with the plaintiff made a full inspection.  Clearly Ms Owens’ activities had some official status although I have been unable to define her position with any precision (see my comments in s3 above).

(j)     In 1986 asbestos was found beneath the floor of the building.  On this occasion the plaintiff dealt with the problem by sealing a trap in the floor after placing a notice below the trap warning of the presence of asbestos.  This incident is relevant to the issues in this case in that it demonstrates how the plaintiff was prepared to take a practical and reasonable approach to the asbestos problem despite the plaintiff’s asbestos policy as declared in 1984 when the ceiling problem was discussed.

(k)     In 1992 the plaintiff took steps with a view to renovating its building.  It engaged Resource Development to undertake a survey; as project manager Resource Development put in place a programme of refurbishment with a timetable running from September 1993 until May 1994.

This work was interrupted by the re-discovery of the residue of asbestos in the Raggatt House ceiling which had been the subject of the defendant’s instructions in 1984.  The refurbishment programme came to a halt when steps were taken in January 1994 to deal with the asbestos in the ceiling.

(l)     The residual ceiling asbestos was in poor condition in 1994 which raised the question as to why it had not been dealt with more effectively in 1984-1985 by Consolidated Contractors.  The plaintiff took advice as to where liability might lie and the defendant was given notice of a claim.

(m)   BJ Insulation was engaged by the plaintiff in 1994 to clear asbestos generally from the site.  A decision was made on this occasion to remove and replace the Raggatt House roof cladding.  This step exposed the amount of asbestos which had been left behind in 1985 - particularly in areas which were extremely difficult to access and work with the roof in place.

MP Laboratories were contracted as the asbestos monitor on this occasion.

(n)     As a result of the expense incurred in asbestos removal in 1994, and the building delays thereby occasioned, the plaintiff instituted this action on 10 January 1995.  The defendant relies upon s35 of the Limitations of Actions Act 1936 but the plaintiff asserts that the claim was made within twelve months of ascertainment of the material facts and seeks an extension of time as appropriate pursuant to s48 of the Limitations of Actions Act.

1. Summary of witnesses

The witnesses were as follows:

1. Ms Jan Lee who was General Secretary of the plaintiff at the time of the defendant’s engagement by her on behalf of the plaintiff.

Ms Lee, a teacher by profession became involved in the affairs of the Institute of Teachers in the late 1970s.  She became the Institute’s General Secretary in 1983 - a full time salaried position.  She impressed me as an honourable person who put her responsibility to give a true account of her recollections ahead of the interests of the Institute.  However, she frankly acknowledged that she was a teacher and not a business person, and she looked to the President of the Institute for guidance concerning the problem with asbestos removal in Raggatt House.

Ms Lee gave evidence which represents the high water mark of the plaintiff’s case as regards the defendant’s role (T299-300)

A.     "We were seeking his professional advice about, in the first place, the extent of the problem, the steps that might be taken to remedy the problem and we then instructed him to draw up the specifications, oversee the tendering process, advise us about which of the tenders might be acceptable and then to supervise on a day-to-day basis the work carried out by the contractor.

Q.     Did all that take place in the meeting of April 1984.

A.     To the best of my recollection, yes."

That statement represents Ms Lee’s expectations.  My task has been to determine what in fact were the terms of the architect’s oral engagement; after all this time neither Ms Lee nor Mr Grieve can be expected to recall the circumstances with clarity.

1. Ms Michelle Nichol who worked for MP Laboratories, a company whose business was that of occupational hygienists - interested particularly in asbestos related problems in buildings. 

Ms Nicol was not an occupational hygienist but was an asbestos counter.  She had experience in airborne asbestos monitoring and the procedures for sampling and evaluating the extent of asbestos within the confines of a building so as to establish the level of contamination.  I would describe her as being trained as a technician with some very limited theoretical knowledge to the level necessary to enable her to carry out her function.  In essence her work involved the pumping of air at a controlled rate through a membrane filter for a set period of time and then counting (with the aid of a microscope) the number of airborne asbestos particles thus collected.  Her work also involves the maintenance of logs as to sampling results. 

MPL was brought onto the site by BJ Insulation in January 1994 to monitor asbestos levels in the air.  Ms Nichol was able to give evidence of the state of Raggatt House ceiling when she inspected it.  Her observations become the subject of a written report dated February 1994 to Resource Development.  She identified the presence of a whitish coloured material which was treated by her as Chrysotile asbestos.

She was able to explain her evidence by reference to a videotape.  Ms Nicol was able to give useful evidence as to her own observations on site and as the air pollution testing.  I do not consider that she had the experience or knowledge to be able in a meaningful way to relate her observations back to what may have occurred since 1985.  Her cross-examination commences with an explanation of her qualifications and her evidence should be assessed subject to the significant limitations thereby disclosed.  She was not in a position to give evidence of relevant standards in 1984 or 1985.

1. Mr GJ Rahlf who was an estimator with BJ Insulation, a company established by his father and carrying on the business of asbestos removal.  He was the job supervisor when BJ Insulation removed asbestos in 1994 from Raggatt House.  He was aged 28 when he gave evidence and had started working in the business of asbestos removal 10 years earlier. 

Mr Rahlf took the video which he supplied to Ms Nicol.  His evidence complements that of Ms Nicol as to conditions in 1994 but does not advance the case as to the detailed condition of the building in 1985.  Mr Rahlf has experience in removing asbestos and he has experience in estimating costs associated with such work.  His qualifications are insufficient to enable him (in any useful way) to relate his observations back to the position at the conclusion of the work by Consolidated Contractors in 1985.

1. Mr JC McCombe who had been General Secretary of the Institute of Teachers in 1994 and who had worked for the organisation since 1982. 

In January 1994 Mr McCombe attended a conference with a representative of Resource Development, a representative of the Department of Labour (Mr Gray) and a representative of BJ Insulation.  Following this meeting Mr McCombe instructed the Institute’s solicitors with a view to ascertaining whether the Institute had any remedy - "remembering that we had already contracted to have asbestos removed somewhere like 10 years before"  [T332].  He put the defendant upon notice.

1. Mr JR Major who succeeded Mr McCombe as General Secretary of the Institute in June 1994.  His evidence was of a formal nature.

1. Mr P Cave an employee of Resource Development who gave the history of his firm’s involvement in a project on behalf of the Institute of Teachers with instructions to provide an assessment of Raggatt House as to its compliance with the Building Code.

The assessment was required for the purpose of proposed refurbishment of the building.  He referred (in a passing reference) to the task of an architect as being to "design and oversee" - to be distinguished from the function of the builder and project manager.  He outlined the steps taken as from about September 1992 by Resource Development in anticipation of letting a refurbishment contract.

He referred to a proposed timetable of works to commence in September 1993 and finishing in about the end of May 1994. 

Refurbishment of the single storey Raggatt House was to be undertaken together with staged refurbishment of an adjoining multi-storey building - Macghey House.

Mr Cave gave evidence of the discovery of asbestos in Raggatt House during the course of refurbishment leading to an instruction to BJ Insulation (confirmed in writing on 15 January 1994) to provide a report and video.  Mr Cave gave evidence as to the costs associated with the asbestos removal in 1994 and the cost of delays thereby occasioned in the refurbishment programme.  Mr Cave’s cross-examination dealt with practice as regards asbestos removal.  This evidence tended to demonstrate that there was nothing untoward in the defendant’s manner of dealing with the asbestos problem in 1984.

Mr Cave confirmed the difficulties (mentioned in the MP Laboratories report) of inspection within the ceiling cavity.  His cross-examination also highlighted the difficulties in removing the asbestos in the ceiling without removing the roof.  However, it is significant that even in 1994 that option was considered and costed.

1. Mr DJ Bee who was the caretaker of the Teachers Institute premises including Raggatt House from 1983 to 1990. 

Mr Bee gave evidence of the chance finding of asbestos in the ceiling cavity in April 1984 when he was seeking to trace a problem with a microphone cable (associated with a sound amplification system).

About a fortnight after the asbestos had been removed in February 1985 Mr Bee (for his own satisfaction) used a torch to look through a ceiling access hole whilst standing on a ladder.  He saw that the ceiling had been "scraped off".

In my view this inspection has no official standing on behalf of the plaintiff.  In May 1986 Mr Bee found asbestos under the auditorium floor.  His report  led to the area being sealed and signposted.  Under cross-examination he was able to recall the difficulties encountered in 1984-5 with the removal of asbestos from the ceiling.  It was necessary to employ people of small stature to get into the cavity.

I do not regard Mr Bee in terms of his status as having anything more than the authority of a caretaker on behalf of the plaintiff.

1. Mr R Hall an architect who on behalf of the plaintiff gave evidence as an expert based on written reports made by him in August 1995 and May 1996. 

Mr Hall’s evidence should be considered together with the evidence of the defendant’s expert Mr Haddrick.  Mr Hall obtained his architectural qualification as a Bachelor of Engineering (Arch) in 1956.  His impressive professional affiliations are set out in an appendix to his first report.  When cross-examination had been completed his evidence substantially mirrored the evidence which subsequently came from Mr Haddrick.

1. Mr J Chanbell is a qualified Quantity Surveyor.  He reported upon his estimated cost of removal of Raggatt House roof expressed in terms of the costs of 1984/85.

1. Ms SK Rice an accountant employed by the plaintiff provided financial information assembled from the records of the plaintiff.  These figures provide the basis of some of the plaintiff’s calculation of damage alleged to have been suffered.

1. Mr HK Goatham was Assistant Chief Inspector with the Department of Labour in 1978 when he was told that there was an asbestos problem with the State Library.  He was then required to acquire an expertise in asbestos removal management; literally he had to learn on the job.  He retired in 1992 as assistant head of the asbestos section of Department of Labour. 

His evidence is valuable because he has seen the development of practices relating to asbestos from the time when the problem was first recognised.  He had experience (as the first in the world) with the technique (as used on the State Library) of sealing a contaminated area with plastic sheeting and then monitoring the asbestos fibre content of the air as gathered in fan fed filters.  This work was of a pioneering nature and the experience has been used as the basis for standards relating to asbestos removal.  Mr Goatham assisted in writing a Code of Practice introduced in 1981 as a result of three years experience.  He was consulted by the defendant in 1984 in relation to the Raggatt House problem.  He discussed the available options with Mr Grieve and he recounted these options in his evidence.  He outlined the advantages and disadvantages of complete asbestos removal versus containment.

The expense of complete removal compared with the cheaper method of scraping the surface and then spraying with PVA paint to lock loose fibres was considered.  Mr Goatham mentioned to Ms Lee the advantages of removing the roof.  However, he also said that this was not necessary as the asbestos was in good condition.  He gave the following evidence in cross-examination: [T581-583]

"Q.    I suggest that you went to a meeting on the site at Greenhill Road, with both the architect and the secretary, or a representative of the owner of the building.

A.     I certainly met them when I went in there for the original first removal.

Q.     This is the occasion when you said you met the architect in the carpark.

A.     Yes.

Q.     I suggest that on that occasion you pointed out to the, not just the architect, but the building owner, that the asbestos was in good condition.

A.     Yes.

Q.     I suggest that you said it was not necessary to remove it.

A.     That’s right.  It was in a very stable condition. 

Q.     But the owner made it clear that they wanted to do something about the asbestos.

A.     Yes.

Q.     I suggest to you that at that same meeting, you mentioned that the preferred way, as far as you were concerned, was to remove the roof and replace it.

A.     Yes.

Q.     I suggest to you that it was the owner on that occasion who said they didn’t want to incur that cost.

A.     I can’t remember who said it, but that was my advice, to remove the roof.

HIS HONOUR

Q.     Now what year is this we are discussing, where you gave that advice to remove the roof.

A.     When I went down there, the first time, and I think it was 1984.

MR LUNN:

Yes, that is as I understand the occasion we discussed.

XXN

Q.     This is the first time you went to the building.

A.     Yes.

Q.     It is your recollection, as I understand it, that you had been called there by the architect.

A.     That’s right.

Q.     For a discussion, and it is before you met the contractor’s representative.

A.     Yes, I wouldn’t have known which contractor would have got the job.

Q.     I suggest that you said that if the roof was not to be removed and something was to be done, then there was a [sic] option that the asbestos could be scraped off.

A.     Yes.
......
Q.     Does it accord with your recollection, that it was EIL who were the asbestos monitoring firm.

A.     I can’t remember who did the monitoring.

Q.     I suggest to you that it was the standard practice, at the time, for the asbestos monitors to do the final inspection of the job.

A.     This is what we always recommended to building owners."
(emphasis added).

1. Mr AL Gray is an Inspector with the Department of Labour and has held this position since 1991 (dealing with asbestos removal).  He started work in the relevant area in 1981 in the employ of AMDEL with responsibility for air monitoring.

Mr Gray’s evidence in cross-examination as to some flexibility in standards is significant: [T622]

"Q.    But I thought the standard that you set was that once you can see asbestos it has to come off, isn’t that always the case.

A.     In most cases that would be the case, yes.

Q.     Are there exceptions.

A.     There may be exceptions where, for instance, there are areas that are virtually impossible to get to, you may have other areas where to remove the asbestos you may have to remove part of a wall.  In some cases that is sealed with PVA until demolition or other remedial work is carried out.

Q.     You say that then it is a subjective assessment by the inspector as to whether that work needs to be carried out according to the particular circumstances.

A.     Basically that’s correct."

Mr Gray described his part as Government inspector of the Raggatt House asbestos removal in 1994.  It is significant that the relevant inspection procedures were often based upon an examination of the air monitoring results rather than by physical inspection on site (see T600-602).  The departmental policy was that Government would not inspect an area after asbestos removal but recommended that an independent authority carry out this work [T605].

Mr Gray was asked to view the video taken by BJ Insulation and he expressed the view upon the basis of that review that the job done in 1984/85 was insufficient (T605).  However Mr Gray pointed out that in 1984 inspection was done by contractors (T613).

The Construction Safety Regulations and other relevant regulations under the Industrial Safety Health and Welfare Act 1972 were introduced through this witness on exhibit P81.  The witness had no familiarity with the regulations and the plaintiff’s case was not expressed to depend thereon.  However the regulations do appear to be consistent with the practice as described in evidence.

1. The defendant Mr Grieve gave evidence.  He qualified in 1972 with a Degree of Bachelor of Science in Architecture from University of New South Wales and obtained Honors in 1975: he became registered as an architect in South Australia in 1978 and entered private practice concentrating on domestic and medium size commercial work.  He gave evidence regarding the Raggatt House asbestos removal from his own memory which was to some extent stimulated by reference to his notes.

He gave evidence (T644) as to the involvement of Sue Owens in the project:

"A.     My understanding was that Sue would be the, well Sue was nominated, I believe, by SAIT, as the officer who would be dealing with the day to day business of the building contract from the client’s position."

I have dealt with the uncertainties as to Ms Owens’ position but it is important to record the defendant’s view as to how she fitted  into the picture.  It is significant that the correspondence shows that Mr Grieve sent the draft specifications to the plaintiff for approval in anticipation of Ms Owens seeing them.  (Again I refer to my comments regarding Ms Owens’ status as mentioned in s3 hereof).

In my view the defendant was an honest witness who was being asked to recall details of events which had made no lasting impression upon his memory.  Upon my assessment the defendant was sometimes embarrassed by his inability to recall details and he was then inclined to agree with a proposition as to what he thought must have been the case when in fact his memory - understandably - was lacking.  Of course, his memory was to some extent refreshed by questions addressed in cross-examination.  I have proceeded upon the basis that the defendant’s evidence must be approached with caution, but it is no reflection upon the integrity of the defendant that I make such a comment.  The plaintiff’s counsel places greater store upon the defendant’s answers than do I.  When Mr Grieve stated (as he did on many occasions) that he could not remember, I consider that his answer was a truthful one which I have generally accepted in preference to answers elicited when he was pressed.  I have looked to the other evidence (including the documents) before accepting Mr Grieve’s evidence which I consider to be generally fair and accurate although lacking in precision.  I make this comment despite the note of caution which I have sounded.

There is one aspect of Mr Grieve’s evidence which deserves comment.

In the course of the defendant’s cross-examination Mr Grieve acknowledged having signed a written statement (exhibit P84) which was prepared by the plaintiff’s solicitors recording a statement expressed to have been "taken on 26 August 1985".  It appears to have been prepared in support of the plaintiff’s position in relation to the dispute with Consolidated Contractors which eventually went to arbitration.  The typewritten statement on p7 says:

"I supervised the work of Consolidated irregularly.  I went into the roof space with them on several occasions."

Mr Grieve was cross-examined as to his understanding of an architect as the administrator of a building contract as opposed to the supervisor of building work.  He confirmed his understanding of the architect’s role in administering the contract.  He was unable to explain why (as now relevant) he had not altered the statement (prepared in draft by a solicitor) where it refers to his supervision of work.

There is nothing to suggest that Mr Grieve’s attention was specifically directed to the critical question when he signed the document.  Mr Grieve noted that this loose use of language is not uncommon and in the circumstances I would not draw any conclusion adverse to the defendant from it - bearing in mind that he did not prepare the document.

1. Mr PD Haddrick gave evidence as an expert.  He obtained his qualification in Architecture in 1953 and has been a registered architect in South Australia until 1996.  His extensive qualifications appear in exhibit D86.

He has had extensive experience with asbestos removal from major Adelaide buildings and he displayed a good working knowledge of practice as regards asbestos clearance.  He gave evidence as to the role of an asbestos monitor and he confirmed Mr Hall’s evidence as to how an architect might properly rely upon the assessment of an asbestos monitor.

Mr Haddrick also explained the general structure of the form of contract used by Mr Grieve when Consolidated Contractors were engaged.  The edition 5B standard form used by the Royal Australian Institute of Architects and the Master Builders Association of Australia was adopted to meet the circumstances of the case.  The actual contract was not in evidence and the standard form was modified.  The evidence is sufficient for me to obtain an appreciation of the general thrust and structure of the building contract for the purpose of gaining an understanding of Mr Grieve’s role.

Mr Haddrick explained the function of an architect against the background of this type of contract and he confirmed the statement by Brooking on Building Contracts:

"Building contracts, other than those concerned with minor works, usually provide for their administration by the architect who designed the building.  It used to be said that in the course of administering the building agreement, the architect supervised construction, but in recent years architects have tended to blanche at this description of their role, and have been at pains to describe their function as that of making periodic inspections on the basis that supervision is the concern of the builder."

I accept and rely upon Mr Haddrick’s evidence in its entirety.  He was an impressive witness.

1. The effect of Addendum 1 to the defendant’s specification

The plaintiff bases an argument upon the inclusion of the addendum to the specification (quoted above) which sets out "procedures on completion".  The plaintiff asserts that a particular responsibility was imposed upon the defendant as architect as the application of PVA could only commence "after the Architect’s approval".  It seems to me that this addendum was no more than a mechanism which regulated when the builder could proceed with particular work.  The specification anticipated that the builder would be required to be available for an inspection.  It was to the architect that the builder was required to look for permission to proceed after the inspection.

Having regard to the status of the monitoring agent in the overall arrangement and its associated responsibility I see nothing of particular significance in the way in which the specification has been drawn (expressed as it was so as to make the architect the conduit to communicate the contractual approval for the purposes of the builder’s contract with the owner).  The separate responsibilities of the monitor and the architect are to be found in the terms of their own separate engagements to the plaintiff.  The architect did not profess a particular expertise in relation to asbestos.  He put in place arrangements whereby the owner (in accordance with practice) would rely upon the independent monitor.  The terms of the addendum to the specification are consistent with the recognition of the architect’s role as an administrator of the building contract.

The role of Ms Sue Owens during the inspection process is equivocal.  I have already concluded that she was originally involved in essence as shop steward or representative of the office workers who had to operate out of the contaminated building.  It is probable that the plaintiff was concerned to carry through the asbestos removal to the satisfaction of its own staff.  It is consistent with such an attitude and policy that the plaintiff should involve Ms Owens in the inspection process as work progressed.  Whether the plaintiff’s actions amounted to a common sense exercise in industrial relations or whether the plaintiff appointed Ms Owens as its representative for the purpose of approving the work I cannot decide.  It is implicit in the plaintiff’s conduct of the arbitration that it approved of the work.  It is clear from the terms of the arbitration between builder and plaintiff that the only issue was the extent of the work for which the builder should be entitled to an extra allowance.  No doubt, Ms Owens played a part in approving the work but whether her attitude simply influenced the plaintiff to approve the work as being sufficient or whether she exercised some delegated authority cannot now be determined.  It fell to Ms Owens’ lot to observe what had been done and she considered that what the builder had done was reasonable.  She consulted with the builder and she donned protective clothing and inspected in order to get an appreciation of the situation.

Counsel for the plaintiff put questions to the defendant with respect to the addendum for the purpose of obtaining from him an acknowledgement of his responsibilities as he saw them.  I refer to my observations as to the defendant as a witness.  I have made my own analysis of the significance of the addendum.  I do not think that the answers pressed upon the defendant in cross-examination help me to determine his contractual responsibilities.  I have had regard to his answers but his recollections are really so imperfect that a broader perspective is necessary to understand the workings of the contractual arrangements.  These arrangements were consistent with what was to be expected of an architect in 1984.  The defendant put in place a set of contract documents to deal with a situation which was new to him.  However the problem was within his capacity as an architect and he applied normal principles for putting in place an arrangement which relied heavily upon the monitor.  That was consistent with the practice at that time.  The defendant prepared the documentation and then carried through his instructions in accordance with professional standards.

The defendant did not decide how much work should be done.  He drew a specification in appropriate terms.  The asbestos monitor reported as to job progress.  The builder also reported (complaining as to the difficulties).  The plaintiff was then involved in the final decision as to how far to proceed.

The defendant did not decide how much work should be done.  He drew a specification in appropriate terms.  The asbestos monitor (by examining the dust samples) indicated the extent of cleaning required as the job progressed.  The plaintiff was involved in this decision.  The arbitrator then decided what amount was fairly recoverable by Consolidated Contractors as an extra payment

1. Conclusion

At the end of the day there is a great deal in this case which is not in dispute.  The 1984 contract for asbestos removal was for removal and containment in accordance with the specification and Ms Lee acknowledged that she had the opportunity to check this document.  It is not a matter of dispute that complete removal of asbestos in a situation such as Raggatt House is really not possible without complete demolition of the building.  The accepted practice in 1984-85 was that there should be removal so far as possible and containment of any residue and that the work to be undertaken should be the subject of inspection by an independent monitor whose subjective assessment would be accepted.  The extent of work to be undertaken in 1984 was the subject of evaluation before a specification was prepared and Ms Lee did make the decision that the roof should not come off.  This was a reasonable and business-like decision at that time and the architect should not be criticised if (as was the case) he did not press the client to undertake further work at that stage.  Ultimately the amount of work undertaken became a matter of negotiation between the plaintiff and Consolidated Contractors.  The defendant architect did rely upon the asbestos monitor and that reliance was in accordance with proper practice.

The plaintiff relies upon the observations made in 1994 in support of its contention that the work in 1984-85 was not properly carried through.  The evidence does not take account of what may have happened over a period of nine years as a result of the breaking down of the material.  Differential expansion and contraction of the materials seems to be a likely cause of the loose material found in 1994 although other possibilities were not excluded.  The conditions in the ceiling were extreme and Mr Hall explained how this could occur (see T517-518).  A representative of EIL or Mr Fusco (who was the foreman of Consolidated Contractors) would be those who could be expected to know the condition of the job upon completion in 1985.

The plaintiff’s case depended upon establishing that the plaintiff’s instructions to the defendant required complete removal of asbestos; in the circumstances those instructions cannot be interpreted literally; the plaintiff had the opportunity and responsibility to make the ultimate decision as to how far the work should be taken bearing in mind the cost factor and standards of reasonableness.  Interests of safety required that the pollution be reduced to very low levels.  Ms Owens was instructed upon the significance of the dust monitor’s log and how it should be read.  Complete removal could only be achieved by demolition in this case and those involved in the decision making in 1985 clearly recognised this in endeavouring to work out what work was reasonably necessary.

The plaintiff’s case wrongly casts the defendant in the role of a building supervisor and fails to recognise his true role as an administrator.  Upon the whole of the evidence I am satisfied that the engagement which the defendant accepted was an entirely conventional one in accordance with South Australian practice.  I regard it as being entirely consistent with the practice of the time that the architect in his administration of the contract should place reliance on the assessment of the asbestos monitor.

Closing submissions were delivered in writing and counsel then spoke to the written argument.  Issue was joined between counsel upon a large number of points but at the end of the day I consider that the defendant had a satisfactory answer to each and every point.

Whether the plaintiff’s claim be expressed in contract or tortious terms, I consider that no breach of duty has been made out.  The defendant was not required to ensure complete removal of asbestos.

The extent of asbestos removal and the treatment of residue corresponded with the plaintiff’s instructions and the standard which the plaintiff was eventually prepared to accept.  The architect was not the building supervisor and he did not guarantee the result in return for the modest fee which he charged.

In my opinion the plaintiff has failed to make out its case and the claim will be dismissed.