Forrester v Island Industries Pty Ltd
[2010] NFSC 1
•16 February 2010
SUPREME COURT OF NORFOLK ISLAND
Forrester v Island Industries Pty Ltd [2010] NFSC 1
Citation: Forrester v Island Industries Pty Ltd [2010] NFSC 1 Parties: JOHN KENNETH FORRESTER v ISLAND INDUSTRIES PTY LTD and JOHN TERENCE BROWN File number(s): SC 4 of 2008 Judge: DOWNES J Date of judgment: 16 February 2010 Catchwords: CONTRACT – breach – agreement to restore quarried land – liquidated damages clause – owners satisfaction test – meaning – implied qualifications – damages – assessment
EVIDENCE – expert evidence – concurrent evidence – conflicting expert opinions.
Cases cited: Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Associated Provincial Picture House, Limited v Wednesbury Corporation [1948] 1 KB 223Date of hearing: 3-5 August 2009; 2-6 November 2009 Place: Norfolk Island and Sydney Division: GENERAL DIVISION Number of paragraphs: 136 Counsel for the Plaintiff: Mr G Lindsay SC Counsel for the Plaintiff: Mr A Lo Surdo Solicitor for the Plaintiff: Mr H Snow Counsel for the First and Second Defendants: Mr G Blake SC Counsel for the First and Second Defendants: Mr P Doyle Gray Counsel for the First and Second Defendants: Ms S Fendekian Solicitor for the First and Second Defendants: Mr J Brown
IN THE SUPREME COURT OF NORFOLK ISLAND
GENERAL DIVISION
SC 4 of 2008
BETWEEN: JOHN KENNETH FORRESTER
PlaintiffAND: ISLAND INDUSTRIES PTY LTD
First DefendantJOHN TERENCE BROWN
Second Defendant
JUDGE:
DOWNES J
DATE:
16 FEBRUARY 2010
PLACE:
NORFOLK ISLAND & SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
John Forrester claims compensation for quarrying on his land without permission. The compensation relates primarily to the remediation of the land. The compensation is claimed under a deed he made with Island Industries Pty. Ltd. and John Brown. They accept that compensation is payable. The question is, how much? I have decided that Mr Forrester’s entitlement is about $175,000 which is significantly less than his claim.
To determine the amount of the compensation I must address the following issues:
1.What obligation to remediate does the deed impose?
2.What remedial works does the deed require in the circumstances that have occurred? Is Mr Forrester entitled to claim for the works considered appropriate by his expert if that is more than is required to reasonably satisfy the obligations under the deed?
3.What right to sue does the deed confer? Is Mr Forrester entitled to be paid the amount assessed by his expert or is he entitled to a reasonable sum determined on the whole of the evidence?
4.What amount of compensation is payable?
BACKGROUND
Mr Forrester is the owner of land adjacent to the cliff top to the south-east of the Cascade Jetty on Norfolk Island. He lives on the land. Land to the west of Mr Forrester’s land and below the cliff top, has for a long time been used as a quarry. The quarry has been operated by Island Industries for many years. From time to time, going back at least to the 1970s, the quarrying activities have extended on to Mr Forrester’s land. This was probably due to ignorance as to where the land boundaries lay and uncertainty as to the extent of Mr Forrester’s holding. However, neither matter affects Mr Forrester’s claim.
Mr Forrester acquired his land in 1983, erecting the first dwelling there almost immediately. The present main house was completed in 1986.
Mr Brown is the principal and controller of Island Industries. He has held this position throughout the period since Mr Forrester acquired his land. There was a time when he was not a director, but it was not suggested that this affected the way I should approach this matter.
It is not easy to see the quarried area from most of Mr Forrester’s land, including that part of the land where buildings have been erected. This land is the plateau above the cliffs. The quarried land is below the cliffs. Although there must have been quarrying on Mr Forrester’s land from time to time between 1983 and 1998 it seems that Mr Forrester was not aware of it.
In March 1999 Mr Forrester first learned that Island Industries might have been quarrying on his land. He made contact with Mr Brown. Coincidentally, Island Industries was about to detonate an explosion in the quarry. Mr Forrester and Mr Brown observed the explosion together. There was undoubtedly a very large blast. At least one piece of rock hit the roof of one of Mr Forrester’s buildings.
It soon became clear that the blast was on Mr Forrester’s land and that much prior blasting had also taken place on his land. There may have been some doubt as to what was the actual seaward boundary of Mr Forrester’s land but, in the way the case was conducted, I need not worry about this. I will proceed on the basis that the seaward boundary of Mr Forrester’s land, as it now is, was always the mean high water mark.
There followed correspondence and dialogue between Mr Forrester and Mr Brown which led to the execution of the deed in June 1999.
THE DEED
The formal part of the deed is less than one page. This is because the governing parts of the deed are attachments. Unusually, they comprise pieces of correspondence, a surveyor’s report and a public notice of apology published by Mr Brown in the “Norfolk Islander” at Mr Forrester’s request. One of the difficulties in this case is construing a deed whose operative provisions are contained in informal documents, particularly a letter written by Mr Brown to Mr Forrester.
The deed was made between Island Industries, Mr Brown (who is described as a “Solicitor and Attorney”, as he is) and Mr Forrester. The deed contains the following recitals:
“Where
1.Island Industries Pty. Limited has carried out various mining and quarrying and ancilliary (sic) activities (“the activities”) on and around the Cascade area.
2.As on 8th March, 1999 and confirmed on 9th March, 1999 John Forrester became aware that the activities were being carried out on his land known as Lot 1d Cascade, Norfolk Island.
3.Mr John Brown is the majority owner and Executive Director of Island Industries Pty. Limited and is authorised to enter into this deed on behalf of Island Industries Pty. Limited and in his own right.
4.The parties have agreed to enter into this deed to set out how the consequences of the activities on Mr John Forrester’s property can be remedied”.
The whole of the formal terms of the deed are as follows:
“The parties agree that the following letters and articles form part of this deed as if fully set out in this deed and incorporated hearin (sic).”
The following documents are then identified:
1.Letters from Mr Forrester to Island Industries and Mr Brown dated 11 March 1999, 15 March 1999 and 12 May 1999;
2.Article in Norfolk Islander of 10 April 1999 (the public notice);
3.Three page report of Don Taylor Associates (the survey report); and
4.Letter from Island Industries and Mr Brown to Mr Forrester dated 1 June 1999.
The fourth document is the most important, as all parties recognised. For convenience, I will refer to its provisions as clauses in the deed. Although in the form of a letter from Mr Brown to Mr Forrester, the letter had its origins in a draft prepared by Mr Forrester which was amended by Mr Brown. Mr Forrester also prepared the draft of the deed.
Because this document is in the form of a letter from Mr Brown and Island Industries to Mr Forrester it mainly contains acknowledgments and promises which represent the important terms of the deed. There is no doubt that Mr Brown freely entered into the deed and no doubt that he not only fully understood it, but that, as a solicitor, he understood the unusual nature of some of its provisions and the extent of the obligations which they imposed. There is no reason why any of the circumstances surrounding the execution of the deed should cause it to be read contra proferentem. Indeed, Mr Brown’s position as wrongdoer (whether innocent or not) and solicitor should rather tend the other way.
The letter includes the following elements:
1.Statements of apology and regret (eg paras 3, 8 and the third last paragraph);
2.Promises to “restore your buildings and property” (eg paras 3, 5, 10, 12, 13A3, 15A1, 15A3, 16, 17 and second last paragraph);
3.Promises that the restoration will be “so you are completely satisfied” (eg para 15A4) and “to a standard which is acceptable to you” (eg paras 3, 10, 15A1 and 16).
The letter contains eleven introductory paragraphs. While I will act on all of them it is appropriate only to set out some parts:
“3…[M]y intention is to genuinely apologise for the intrusion onto your property, for the damage to your buildings caused by our operation and to restore your buildings and property to a standard which is acceptable to you.”
“5…I trust [the Public Notice] will assist the community to know of my clear intention to make good the damage to your buildings and property which has been caused by our operation over many years and to restore the area of your land which we have badly damaged by drilling and blasting.”
“10…As Items 5 to 9 confirm that background I now confirm for and on behalf of Island Industries Pty. Limited and myself undertake to make good all damage to your buildings and property caused by our operation, including blasting and to restore them to a standard which is acceptable to you.”
This part of the letter refers, to some degree, to the extent of the quarrying activities of Island Industries on Mr Forrester’s land. Part of this distinguishes between the time prior to and the time after Mr Forrester acquired his land:
“9…Whilst the intrusion onto your property first occurred prior to your purchase, it is clear that Island Industries also intruded onto your land at various times from approximately 1992 onwards.”
Paragraphs 12 and following “propose … detail to ensure rectification to your buildings and land”. Paragraph 13 is headed “Buildings”, paragraph 14 “Drilling, blasting and then removal of rock from your land”, paragraph 15 “Restoration of your land” and 16 “Surplus soil”.
No claim is made for rectification to buildings. Paragraph 14 contains a suggestion that “5,000 to 10,000 tonnes” of rock was taken, although Mr Brown put it at “no more than 2,000 tonnes.” There is also a suggestion that the figures may be increased because the boundary is to the west of the fence line. A royalty of 90 cents per tonne, which is “the same rate as that which we have paid to the Administration” is referred to. No claim is made in the proceedings, however, for any royalty or compensation for rock taken.
The most important of the detailed provisions, for these proceedings, are accordingly paragraphs 15 and 16. It is to be noted that they repeatedly refer to “restoration”. I will set out parts of these paragraphs:
“15 Restoration of your land:
A1 I reassure you that I fully accept responsibility to restore the north-west area of your land to a standard which is acceptable to you.
A3 We will replace soil on the rock areas from which it has been removed, and plant Norfolk Island pine trees and kikuyu grass appropriately in the area. If necessary, we will temporarily fence the area to exclude cattle. We feel this should be finished as soon as possible and will ensure a water supply that will keep grass and plants alive. We undertake that we will water the grass and planted trees on a weekly basis until they are established and replace grass and trees that do not survive.
A4 We do not take this lightly and assure you that we will seek your comments as this work progresses to enable us to complete the restoration so you are completely satisfied with the end result.
A5 We undertake to complete this restoration by say 7/7/99 and if we require further time will seek your written agreement to an extension of time.”
“16 Surplus soil:
You have discussed with me your suggestion that where spare soil is available, and it made economic sense to us, that we could place this soil on the portion of this north-west corner of your land to raise the area from the altered fence line to whatever level the available soil allows.”
Paragraph 17 is the paragraph which contains the provisions on which this action is founded:
“17 If the building works as described in this letter in Item 13 and the drilling, blasting and removal of rock as described in Item 14 are not paid by certified bank cheque by the times nominated, and the restoration of your land as described in Item 15 including all Items A1 to A5, and also A16 by 7/7/99, then it is agreed that you may appoint an appropriate consultant to assess the value of any outstanding payment, together with the value of the outstanding works, then the parties agree that the amount assessed will be the total of amounts outstanding payable by Island Industries Pty. Limited and John Brown.”
The unnumbered second last paragraph is as follows:
“However, we all learn from our mistakes and I am confident you will be satisfied with our genuine efforts to make good all areas of your land and property which have been adversely affected.”
Mr Forrester’s letter of 11 March 1999 suggested the amount of rock taken was “5-10,000 tons”. It refers to Mr Brown’s confirming that he would engage engineers in connection with the process of restoring and refurbishing Mr Forrester’s property. Other documents incorporated in the deed also refer to restoration. The public notice includes the following:
“The area in which our recent work was carried out is not visible from John’s house, and we appreciate that he thought we were working outside of his property until the afternoon of our blast on Tuesday 9th March 1999. It is now apparent that we have been drilling and blasting on, and removing rock from, John’s land for some time. John is also concerned that the blasting may have caused an amount of damage to his buildings.
We have apologised to Mr Forrester for our intrusion onto his property. John is concerned that the cliff could be unstable, and we will be arranging for an appropriate expert to examine both the cliff and John’s property. We have undertaken to make good any damage caused by our operations including blasting, and to restore them to a standard which is acceptable to him.
We greatly regret the anxiety that our activities have caused to John and again unreservedly apologise to John for any difficulties and damage we have caused.”
The survey report relates to a “Quarry Survey dated 1992 (maybe 1985 also)”. It also refers to “Surveys 1991/92/94 & 98 for Island Industries.” The surveys show areas that had been quarried.
THE PROCEEDINGS
It is an unfortunate aspect of this case that more than ten years after the deed was executed there has still not been adequate remediation of the land. For this delay Mr Brown must bear the largest share of responsibility. Again and again, Mr Forrester wrote and spoke to Mr Brown about his obligations. Some activity took place, but the parties do not rely on that work except by recognising that it is the land in its present state which must be remediated. The overwhelming impression I have from the material before me is that Mr Brown repeatedly failed to perform his obligations although constantly being requested to do so. True, there were some delays for which he was not responsible – a proposal of Mr Forrester and his son, Brad, for the building of a maintenance road as a means of carrying out the remediation - is an example. Nevertheless, I do not doubt that if Mr Brown had produced appropriate plans at an early date and promptly carried out the work provided for in the plans, this litigation was likely to have been avoided. As it is, Mr Forrester commenced these proceedings on 11 November 2008.
Before the proceedings were commenced Mr Forrester, in reliance upon cl 17 of the letter, procured a “Geotechnical Assessment” from a geotechnical engineer, Warren Newell, containing remediation recommendations together with a cost assessment from a building consultant and quantity surveyor, David Wallace, costing the recommended remediation. The costing was $4,270,655. It included $70,885 for construction supervision by an engineer which was added to a basic assessment of $4,199,770. The fees for the reports totalled $20,428.36. On 10 October, 2008, Mr Forrester’s solicitors claimed payment of $4,291,083.36 in accordance with the deed. The sum not having been paid, Mr Forrester commenced these proceedings.
THE EXPERT REMEDIATION EVIDENCE
Mr Forrester sued pursuant to cl 17 of the letter, as incorporated in the deed, relying upon the assessments of Mr Newell and Mr Wallace as jointly constituting the assessment by “an appropriate consultant”. In the alternative, he claimed damages for breach. The defendants did not contend that Mr Forrester was not entitled to appropriate damages, but they did contend that he was not entitled to the more than $4 million claimed as a liquidated sum. Mr Newell and Mr Wallace prepared further reports and gave evidence in the proceedings. It is to be noted that these reduced the final claim (excluding the fees) to $3,640,855, largely because of changes in the works.
THE PLAINTIFF’S EXPERT
Mr Newell’s 2008 assessment deals with a number of matters. Referring to his instructions he said in the assessment:
“The request asked that I specifically consider and comment on the following;
1.The damage, if any, suffered by Mr Forrester’s land… as a consequence of the mining activities… which culminated in the execution of [the] Deed.
2.The stability of the cliff along the western boundary of Mr Forrester’s Land.
3.The options to remediate the damage, if any, suffered by Mr Forrester’s Land as a consequence of the Unauthorised Activity and the cost of each of these options.
4.The recommended option(s) to remediate the damage, if any, suffered by Mr Forrester’s Land as a consequence of the Unauthorised Activity, and the cost of that option(s).”
He set out his conclusions on these four points as follows:
“7.0 Summary of Investigation Questions
My commission required the investigation of four specific questions in relation to damage and remediation of any damage to Mr Forrester’s Land. The material on which my assessment has been made is, in some cases, reported above in the sections relating to documents viewed and sections relating to site observations. The following five sections summaries (sic) the information which is considered central to forming my opinion and answering the five specific questions.”
…
1.“It is my opinion that the blasting, excavation and removal of rock from Mr Forrester’s land does constitute “damage” in that the quarrying operation has impaired the value of the land and diminished the usefulness of the land.”
…
2.“The cliff line along the northern seaward edge of Mr Forrester’s Land, east of the quarried area, is considered to be at its natural stable slope, however it has to be accepted that these slopes are still prone to natural erosions (sic) rates typical of the cliffs around the coastline of Norfolk Island.”
“It is my opinion that the shoreline within the quarried area has to be stabilised with a seawall and the slopes above the shoreline require stabilisation to reduce the degree of erosion and spalling with subsequent loss of usable land and access.”
3.“Based on types of wall and available equipment and materials, as well as taking transportation into account, it is my opinion that gabion wall type structures are best suited to retaining the slopes in this situation.”
4.“Given the material pushed against the quarried cliff face in Mr. Forrester’s Land, and the low degree of compaction, considerable amount of soil will have to be shifted and replaced to achieve a stable foundation on which to commence the gabion wall construction.”
“I recognise that other options may be available, such as anchoring panels into the rock faces behind the proposed walls, but these methods have components of construction that are either not available on Norfolk Island or require plant to be brought to the Island.”
“It is on the above basis that I have recommended the slopes be retained through the use of gabion basket type structures.”
An additional conclusion referred to “the need for fencing along the boundary line and recommends a security type fence to limit access to the quarry area and to reduce the risk of users on Mr Forrester’s land from falling over the quarry face.”
It should be noted that while Mr Newell referred to the deed in identifying his instructions and summarised some of its requirements, he did not describe his task by reference to the role of the consultant described in cl 17.
According to his report, Mr Newell made a detailed assessment of the land based on documents with which he was provided (principally surveys) and on a site investigation in November 2007. He found undoubted evidence of quarrying and arrived at an estimate that “basalt quarried within the Unauthorised Area on Mr Forrester’s Land, would be between 87,000 and 88,000 tonnes.”
Mr Newell’s examination of the required “remediation” (his word) is relatively short. He noted that “some remediation of the slope has taken place in as much as there has been some rock and overburden material bulldozed or pushed up the slope towards the base of the near vertical face … of the quarried area within Mr Forrester’s Land.”
Mr Newell devoted little space to the issue of stability. He referred to it in the section headed “Remediation Carried Out” and in another headed “Stability of Slopes.” He offered the opinion that “For practical access purposes and ease of maintenance the slope would have to be no steeper than thirty degrees.” Part of the slope at its angle of repose, he considered “can not be considered to be stable.” This was partly associated with “the proximity to the ocean and the high probability of storms washing away the base of [the] slope.”
Mr Newell then went on to consider “Remediation Options”. The body of the assessment appears to recommend a sea-wall and, above it, three retaining walls constructed of gabion baskets which are box shaped wire baskets filled with rock. I say “appears” because little of this is set down in the section specified by him as answering the specific questions posed for him. He does refer to “securing the foreshore”. There is reference to “gabion basket type structures”. There are some designs showing a sea-wall and gabion basket walls. In the body of the assessment Mr Newell discussed a diagram showing “Typical sea level Coastal Protection Wall” as “only supplied for illustrative purposes and any coastal protection wall will require specific design.”
Mr Newell’s conclusion appears to be better expressed in an “Executive Summary” at the start of his report, as follows:
“Material placed against the eastern quarried fact of Mr Forrester’s land had been superficially compacted and was at an angle close to that at which it would become unstable. There were remnant blast holes noted in the basalt rock near the eastern limit of the quarried area within Mr Forrester’s land. The remnant blast holes are considered to be evidence that blasting to win basalt rock for supply to the crusher and commercial operations, had taken place well within Mr Forrester’s land.
The current condition of the fill within Mr Forrester’s land, in my opinion, requires stabilisation which I believe can be best achieved by the construction of, firstly, a seawall at the beach level. The seawall should extend to approximately 6 metres above the shore line and be constructed of large boulders. The seawall will reduce the risk of erosion on “soft” material pushed over the edge of the quarried area and onto the shoreline. Above the seawall it is my view that two gabion basket retaining walls be constructed within the area filled with soft soil to both retain the slopes and re-establish former tracks from Mr Forrester’s land to the Youngs Road area near Cascade Bay.
The gabion basket type walls are selected in preference to more rigid structures as this type of wall has an in-built flexibility that will allow some settlement on softer bearing. A more rigid structure would require extensive earthworks to form a foundation and as such there is limited room in which to excavate the soft material and allow safe work areas for foundation construction.
A summary of the different components of the remedial work which, in my opinion, is required to be undertaken, is as follows:
•Seawall – Based on approximately 120 metres length and up to 6 metres high.
•Gabion Basket Walls – Based on approximately 200 metres of wall at an average height of 6 metres high.
•Rock – Approximately 2600 cubic metres of rock will be required to fill the Gabion baskets.
•Fencing – Approx 274 metres for 2.0m height (security type).”
The analysis of the requirements for remediation is not linked by Mr Newell with the terms of the deed and does not contain related reasoning of the kind I would expect. The opinions relating to stability are broadly in the form of conclusions and there are no calculations or other geotechnical analysis supporting the conclusions.
Mr Newell prepared a further report of 11 June 2009 concerning the chronological development of the quarrying on Mr Forrester’s land. It states that the “earlier report relates to remediation as a result of mining carried out since about 1987.” The report estimates the rock moved between 1992 and 1999 at 4737m3 or 11, 370 tonnes. The report states that Mr Newell’s “previous conclusions and recommendations remain unchanged”. It is to be noted that at the hearing none of the parties placed emphasis on the time and state of the land to which the remediation was to be directed. This is no doubt because of the difficulty of identifying the state of the land at precise times and because the remediation work required would not vary significantly depending on the time to which it was to relate. I agree that this is so. The remediation will be the same whatever is the time to which it is directed.
THE DEFENDANTS’ EXPERT
The defendants’ expert on remediation at the hearing, Terrence Short, had qualifications in agricultural science with expertise in rehabilitation of disturbed land and particularly mine rehabilitation.
Mr Short disagreed with Mr Newell’s proposal for remediation and did so on five “general rehabilitation objectives” as follows:
“1.Safety – Rehabilitation outcomes are safe for humans and wildlife (QLD EPA, 2007);
2.Non-polluting – Rehabilitation is non-polluting with no adverse environmental effects outside approved areas (NSW DPI, 2006; QLD EPA, 2007);
3.Stable landforms – Rehabilitation provides stable and permanent landforms (NSW DPI, 2006; QLD EPA, 2007);
4.Useful – Rehabilitation enables affected land to become useful (NSW DPI, 2006, QLD EPA, 2007);
5.Low construction and maintenance costs – Construction of landforms is cost-effective, with landforms designed to minimise the cost of construction and minimise the costs of long term maintenance (Mulligan, 2006) and rehabilitation does not have maintenance requirements greater than the surrounding land (NSW DPI, 2006).”
Mr Short found Mr Newell’s proposal wanting under a number of these categories. However, these tests may not accord with the obligations created by the deed. Cost and usefulness are not tests arising from the deed. However, from my reading of the text of the report Mr Short criticised Mr Newell’s proposal on three relevant bases. First, the engineering structures were inappropriate. Secondly, the best remediation result could be achieved by landscaping. Thirdly, the proposal did not meet all the requirements of good “rehabilitation” (his word). This third test brings in most of his five objectives.
Mr Short considered a number of alternatives. One of these was to do nothing. It is to be noted that he considered that doing nothing “results in a condition… that is most similar to the condition of the site before commencement of quarrying activities undertaken by Island Industries in 1998 and 1999”. He did, however, select one rehabilitation method as the “most appropriate method to rehabilitate the site”. This proposal involved:
• “Removal of the existing access track because it is unsafe: see Table 4.1;
•Installation of surface drains on the cliff top and/or upper slope of the landform, to control rainfall runoff and erosion from the Site;
•Smoothing of the landform such that it is neat, tidy and aesthetically pleasing;
•Soft landscaping to include the planting of Norfolk Island pine tree seedlings at a density agreed with the landholder to provide a pleasing aesthetic result;
•Installation and maintenance of an irrigation system to promote the growth and establishment of the transplanted tree seedlings;
•Fencing as required to prevent indiscriminate access to the Site by people and livestock.”
Mr Newell prepared a short reply to Mr Short’s report in an affidavit of 31 July 2009. The reply mainly contained an assertion that Mr Forrester’s land was “not a mine or quarry site” and commented on the timing of the quarrying. Mr Newell confirmed his prior recommendations.
THE HEARING ON NORFOLK ISLAND
At the commencement of the hearing on Norfolk Island the parties suggested that Mr Newell and Mr Short should meet to discuss their differences and that their evidence should be heard concurrently. This proposal was in accordance with a practice employed in some courts and tribunals and particularly the Administrative Appeals Tribunal, where I have used it in a number of cases. I initially expressed some concerns about the proposal because of the different expert backgrounds of Mr Newell and Mr Short. However, the parties continued to suggest the course and I agreed.
During the first morning of the hearing Mr Newell and Mr Short met at the site and discussed the remediation issues. In the afternoon I undertook a view of the site in company with Mr Newell and Mr Short together with the parties and their representatives.
WAS AGREEMENT REACHED ON REMEDIATION?
At the beginning of the second day of the hearing I was informed by counsel for the defendants that the experts had reached complete agreement on the remediation issues the previous evening in accordance with a document and a rough plan. Mr Newell had said that he wanted to look at the document overnight. Counsel for the plaintiff took the view that there had been no agreement and informed me that Mr Newell had recorded his position in another document. All three documents were put into evidence. The document containing the alleged agreement (Exhibit C) (I will call it the joint document), is as follows:
“Agreements:
Shoreline Protection:
1.There is a zone of active erosion at the toe of the existing landform, and this is eroding natural or in situ soil. Left unprotected continued erosion may affect the stability of the upper slope of the landform.
2.Shoreline erosion protection is required and this can take the form of a ‘coastal protection rock work’ which is a layer of stones approximately 2m thick, 3m elevation for a total distance of approx 80 metres. To be blended into the existing rocky shoreline. Profile to be achieved is similar to that which exists on west side of Cascade Jetty (in front of car park). Geofabric to be placed between rock fill and soil. The volume of rock required is estimated at 1200 m3.’
Landform:
3.A smoothed and landscaped landform featuring a flat area (approx 20 x 5 m) constructed with gabion baskets, with the cliff top – flat area – shoreline connected via a pedestrian walkway.
4.Strategic planting of low shrubs on steeper section and NI [Norfolk Island] pines on other areas, kikuyu grass to be sown over all.
Safety:
5.Gabion tank wall to demarcate drop zone and separate people from this hazard.
6.Fence along boundary line approx 60m with gate.
7.Have not addressed fencing of areas outside of “site” ie above vertical faces in quarry and other areas on cliff.”
The rough plan (Exhibit D) shows the remediation provided for in the alleged agreed document. The document prepared by Mr Newell (Exhibit E) contained items 1, 2, 5, 6 & 7 from the joint document and the entry “I agree” over Mr Newell’s signature. There was a different entry for “Landform”. It reads:
“3/ Landform:
As a result of our joint consultation Mr Short has proposed and I (Warren Newell) am prepared to consider (subject to engineering modelling) another landform using re-contouring and gabion baskets to form useful areas:
This is:-
· A smoothed and landscaped area featuring a flat area (20 x 5) connected to the cliff top and shore line via a pedestrian walkway
· Strategic planting of low shrubs on steeper sections and NI pines on other areas, with kikuyu grass to be sown over all of the area.
I, Warren Newell, am unable to agree with the proposal in the absence of an engineering solution to the steep slope near the old cliff face and circled on the attached sketch (Page 3)
This area requires terraced or basket support to improve stability and surface erosion.”
The document was accompanied by a plan which identifies the north-east portion of the quarried land as “Area of Stability Concern.” This area is circled. This is the land at its angle of repose. It is shown on the plan as “Steep Slope ~ 35º”. The north-west part of the quarried land is shown as “Overall slope about 25º”.
It is significant to note that Mr Newell’s document appears to have accepted the form of rock work proposed in the joint document. In evidence, Mr Newell volunteered to me: “…[I]t is agreed that there has to be some protection of the foreshore area and we have agreed on a rock protection of that foreshore area.”
The following exchange occurred between Mr Newell and me:
“HIS HONOUR: So is this the position, that broadly speaking, you have, in a sense, reached agreement with Mr Short as to what should be done and that this will involve some gabion basket walls but in slightly different or different positions to those you originally proposed and maybe not as extensive?
MR NEWELL: Yes, your Honour.
HIS HONOUR: But you do have some remaining concern, notwithstanding the broad agreement that you’ve reached, about the issue of stability of the bank that is at an angle of repose?
MR NEWELL: Yes, your Honour.
HIS HONOUR: Broadly speaking, would this be a way of describing it: it is at a sort of balance point so far as safety is concerned and you think that the balance needs to tip down a bit more to provide a kind of room for risk factors to intervene or something of that sort?
MR NEWELL: Yes, your Honour.
HIS HONOUR: Without taking you to the detail of it right at the moment, do the drawings in the document that I’ve now made exhibit D roughly set out the matters on which agreement has been reached.
MR NEWELL: Yes, roughly, your Honour.”
It is worth noting that the gabion walls proposed in the joint document and shown on the rough plan are not associated with the area of Mr Newell’s concern, but are on the 25 degree slope. The apparent purpose for the walls emerged as a proposal of Mr Short and Mr Newell to create what was called by Mr Short “a flat area – picnic area” to enhance the usefulness of the site. This is consistent with the format of the general objectives which guided Mr Short.
The initial questions of the experts, who sat together in the witness box, were asked by me. This was the agreed procedure for the concurrent evidence. Mr Lindsay SC, for the plaintiff, then asked both experts questions. This included the following questions and answers of Mr Newell:
“MR LINDSAY: The concerns you have about the area marked as “steep slope” on sheet 3 of 3, can we take it then that those concerns would be fully addressed from an engineering point of view if there were terraced walls in that area?
MR NEWELL: Yes.
MR LINDSAY: So is a bottom line of your concern the absence of those terraced walls in the steep slope area that is marked on sheet 3 of 3 and the comparable area marked on exhibit D?
MR NEWELL: Yes.
MR LINDSAY: And that’s something that you have said you would want to do some engineering modelling or testing on before you expressed a further specific opinion relating to the area marked as “area of stability concern, steep slope”?
MR NEWELL: Yes.”
Mr Blake SC, for the defendants, then asked both experts some questions. Mr Newell agreed that the coastal protection rock work in the joint document was “slightly different in design” to his proposal. He agreed it would not be as high and “would look something like the rock mulch or rocky area to the west of the area” marked on the rough plan. He added “to the west of the Cascade Jetty is the reference that Mr Short and I have made.”
Mr Newell agreed that the “portion of the slope towards the foreshore [which] is 25 degrees is stable … without any engineering solutions.” He also agreed that the picnic area structure was “not necessary for the stability of the slope.” Mr Newell then gave the following evidence about the stability issue:
“MR BLAKE: On this diagram is the section “38 degrees slope”, and you gave some evidence about that this morning. You would agree with me that one way of managing the risk of slope instability is to reduce the slope angle?
MR NEWELL: That’s correct.
MR BLAKE: And if, for example, in that area marked “38 degrees slope”, its angle was reduced, say, from 38 per cent to 25 per cent, you would be satisfied as to the stability of that slope, if that were to happen?
MR NEWELL: Yes, that’s correct.
MR BLAKE: And you would be satisfied of the stability of a slope without any engineering solution?
MR NEWELL: Yes.
MR BLAKE: And one way of achieving that would be to remove some soil from the top of the 38 degree slope area and to flatten out the slope?
MR NEWELL: Yes, that’s correct. It would have to tie in with the foreshore and – yes, but generally, material could be removed to reduce that slope back to- it might be 30 degrees, 28, but some grade less than that.
MR BLAKE: And would you be happy with a 30 degree slope, that that would be stable without any engineering solution?
MR NEWELL: I’d be happy with 30 degrees.
MR BLAKE: And if this plan were altered so that the area of 38 degrees slope was altered to a 30 degree slope, in your view, that would be stable?
MR NEWELL: Yes. May I just qualify that: as long as we proceeded with the planting and grassing and that sort of thing.”
There is further evidence to the same effect. Mr Blake then asked Mr Short if the steep slope could be altered to a 30 degree slope. He said it could. So did Mr Newell.
At that point it seemed that agreement had been reached between the experts as to the work to be carried out. There was discussion in the hearing of the preparation of a specification jointly between Mr Newell and Mr Short. Mr Short said he believed they could work together to prepare a specification. Mr Newell said: “I think we can work together there.” Both experts agreed they could “flesh out a concept drawing that would make sense to a quantity surveyor or equivalent to determine quantities and costs”.
NORFOLK ISLAND HEARING ADJOURNED
The matter was listed the following day to enable the giving of any further evidence on Norfolk Island, but, when the parties informed me that they did not wish to call any further evidence from Norfolk Island witnesses, I adjourned the matter for further hearing in Sydney. The case was always to be adjourned to Sydney for further evidence, including evidence from quantity surveyors. However, three more days had been set aside for further hearing on Norfolk Island and there was no reason why the hearing should not have continued on Norfolk Island to enable the evidence of Mr Newell and Mr Short to be concluded. Some special case would have been required to be made out to warrant an adjournment to procure further evidence. The reason the matter was adjourned was so that the subject of the apparent agreement could be put into the form of an agreed specification. However, this was not to happen. There was not even an attempt to do this. The reluctance was on the part of Mr Newell.
FURTHER HEARING IN SYDNEY
It is unfortunate that the process of experts meeting together to seek to reach agreement and to give their evidence concurrently, a major object of which is to reduce the time and cost of a case, has, in this case, undoubtedly increased the time and cost.
I heard evidence and submissions in Sydney over a further five days. A further report was provided by Mr Newell dated 14 September 2009 which was dealt with in further reports of Mr Short of 8 October 2009 and 30 October 2009. The defendants objected to the further report of Mr Newell but I decided that the best course was to admit it.
MR SHORT’S SPECIFICATION BASED ON EXPERTS NORFOLK ISLAND DISCUSSIONS
In the absence of any jointly prepared specifications, Mr Short prepared a further report, dated 24 August 2009. The report set out specifications which Mr Short considered to carry into effect the proposal recorded in the joint document including the proposal that all slopes should not exceed 30 degrees. The proposal became known as “Option 7”.
PLAINTIFF’S EXPERT’S FURTHER REPORT
The further report of Mr Newell was dated 14 September 2009. It reviewed the conclusions in Mr Short’s report and the proposal as specified in Mr Short’s recent report.
In an introduction Mr Newell said:
“Given that proposals to date are concept plans, engineering approval can not be given until an adopted design has been rigorously reviewed and supported by sound engineering concepts and judgement.”
Having repeated that neither his original option, nor the option considered during the hearing, had been “fully assessed from an engineering point of view”, Mr Newell identified three matters indicating “the need for changes to the proposed Option 7”. They were:
“Availability of more accurate survey data in the shoreline area and to some extent on the site slopes. A detailed survey particularly of the shoreline area has been carried out and the contour plans developed are appended. (Appendix C).”
“Consideration of sea and wind conditions and the impact of those conditions on the shoreline. This consideration has been met through the data obtained from weather records collected on Norfolk Island by the Australian Government Bureau of Meteorology, which would have been the normal process in carrying out an engineering review of a structure of proposal on this site.”
“Consideration of internationally recognised design standards and recommendations and their application to the proposed structures contained in Proposed Option 7.”
It is not suggested that this material would not have been available at the time Mr Newell prepared his original report. It does not address matters specific to Option 7. It is accordingly only because the matter was adjourned before the evidence of Messrs Newell and Short concluded, and then to enable specifications recording apparent agreement to be prepared, that an opportunity to present this evidence arose.
A particular criticism made of Option 7 by Mr Newell was that “the base plan does not extend to levels lower than the 5.0 metre contour line.” He recognised that this comment applied also to his own original plan. However, the rock work proposed by Mr Short in his report of August 2009 appears to commence at RL-1 and the proposed works appear to affect all the land to the top of the rock work a little above RL-3. Even if the base plan used by Mr Short did not extend below RL-5 I find that Mr Short’s specifications extend below that. In any event, it will clearly replicate the extent of the rock work to the west of the jetty whatever its base level is. The rock work as proposed in Option 7 was also criticised by Mr Newell as not addressing sufficient wave height.
Mr Newell also criticised the rock work as not having been “subjected to Engineering Design review.” This was a constant theme of his evidence although, as he recognised, the criticism was also applicable to his proposal upon which Mr Forrester’s claim for more than $4 million was based.
It is to be noticed that the expressed criticisms in Mr Newell’s September 2009 report largely address the rock work which, during the hearing on Norfolk Island, he had accepted, on oath, to be adequate.
In reviewing his own original report Mr Newell proposed to vary it by excluding work which had been proposed for adjacent land not owned by Mr Forrester.
The analysis in the report of the three matters indicating a need to change Option 7 is quite short. The improved survey information was gleaned from a report prepared by Coffey Mining Pty Ltd on 7 August 2009. In addition to defining the boundaries for Mr Forrester’s land it apparently addressed tide levels. It was apparently prepared by reference to tide levels confined to the date of the report. Mean high water level was determined to be 1.6 metres. Wave height calculations were then made by reference to the US Army Corps of Engineers “Coastal Engineering Manual” 2008. The maximum height of waves to reach the shore in Cascade Bay was calculated to be 3.75 metres in height.
The last matter covered in Mr Newell’s report purports to address: “Modified Option 7 – Design to meet Environmental impacts and stability criteria.” It appears to contain Mr Newell’s final recommendation. This is much closer to his original proposal, which is called Option A. The section begins as follows:
“Both Option A and Option 7 have been conceptual plans based on observed conditions and material on the site. Having agreed with a concept it is necessary to then apply engineering design principles and subject a concept to engineering analysis. Preliminary engineering calculations indicating that insufficient engineering design has been applied to Option 7 and to a lesser extent Option A. The steps outlined in section 3 have been taken and as a result plans encompassing the new survey information and engineering principles have been applied to the concepts, thus allowing Engineering sign off that meets ongoing performance expectations. It is foolish to adopt a superficial approach that will not meet performance expectations and be subjected to high maintenance costs and possible ongoing litigation when failure occurs.”
The proposal recommended incorporates a much more substantial rock wall than described in Exhibits C and D. This makes slopes above of less than 30 degrees impossible:
“The alignment of the wall then impacts into the available area to maintain stable slopes of less than 30 degrees (as agreed) and thus some gabions(sic) walls will be required.”
This part of the report, indeed virtually all of the report, is written in the form of conclusions. The passage just quoted is an example. No reasoning which could be evaluated has been exposed. This is surprising, given Mr Newell’s constantly repeated requirement for “engineering analysis”. The report may contain engineering conclusions, but it does not contain engineering analysis. There is, for example, no analysis of what size and shape of gabion walls will be required and no calculations linked to such an analysis. There was no analysis of how a mean high water mark was arrived at or how a wave height of 3.75 metres was determined other than in the most general, and conclusionary, of terms. The inadequacies of this approach were clearly exposed in cross-examination. Based on the observations of Heydon J in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 733-734, much of the evidence would be inadmissible. This is even more surprising as the need for the gabion walls appears to be tied to the larger rock wall proposed when Mr Newell had said of the lower rock wall, on oath, “we have agreed on a rock protection”.
DEFENDANTS’ EXPERT’S RESPONSE
Mr Short prepared a report in response dated 30 October 2009. This report criticised Mr Newell’s final proposal. In particular, it said that the US Army Manual, on which Mr Newell relied, was not a recognised design standard or guidelines. In addition, he criticised its applicability. He also criticised the Coffey report as not relevantly expert. Mr Short repeated his earlier criticism of Mr Newell’s original proposal as not the most appropriate form of remediation. He repeated his criticism that gabion baskets were both inappropriate and unnecessary.
In response to Mr Newell’s criticism of prior reports, including his own, being concept plans, Mr Short replied that Mr Newell’s own final proposals are “inadequate and unsound”. He rejected the criticism that Option 7 is unsatisfactory because it is only at “concept level” by stating that all plans prepared and before the court were only at concept level, that that does not mean they cannot be the subject of “consideration or calculation” and that “It is commonplace to make option selection and cost estimating decisions based on concept level plans…”. My own opinion is that all of Mr Newell’s proposals are at a lower level of completeness in design than those of Mr Short. To the extent to which they may all have inadequacies, they represent the material which the parties have put before the court and I must do the best I can with what I have.
ASSESSMENT OF THE REMEDIATION EXPERTS
Mr Newell was cross-examined on his final report by Mr Blake on behalf of the defendants. The cross-examination placed particular emphasis on the three matters which Mr Short said indicated a need for change. They were the availability of more accurate survey data, consideration of sea and wind conditions and internationally recognised design standards.
The cross-examination clearly pointed to many defects in the material relied upon as new and important. Mr Newell accepted that the calculation of mean high water line at 1.6 metres was directly related to the height of sea wall he reconsidered. He made the same concession for the calculations of a wave height at 3.75 metres. Both these conclusions were significantly challenged because of the adequacy of the material on which they were based. Mr Newell’s calculations of rock shelf levels were also challenged. These matters all emerged from the new material. I am bound to say I found the material quite unsatisfactory to found the precise conclusions which were drawn from it.
Although I see no point in setting out extracts from the transcript in these reasons I found the evidence given by Mr Newell under cross-examination in Sydney by Mr Blake to be quite unsatisfactory. In particular, it pointed up inadequacies in the material relied upon by Mr Newell to determine the condition of the rock shelf over which waves would break, the level of mean high water, the level of wave height and the use of the US Army Manual. Not only did the cross-examination point up these inadequacies but I did not think Mr Newell was very effective in his responses. He did not always seem sure of how his figures were calculated and on at least two occasions said he would need to check.
I generally found the evidence of Mr Newell to be much less satisfactory than the evidence of Mr Short. Mr Newell’s solutions required very substantial engineering works in circumstances in which I could not find any persuasive reasoning requiring them. It is fair to say that I did not find any real reasoning at all. Rather, the engineering proposals were supported by conclusion and assertion. I found Mr Newell’s defences of his position, in cross-examination, to be unsatisfactory. His change of position on Norfolk Island to unqualified acceptance of a coastal protection mechanism that was less substantial than his original proposal and then to return to something similar to the original proposal were significant matters. It surprises me that an engineer with the experience of Mr Newell could arrive at a conclusion which was to form the basis for a claim for compensation (which turned out to be a claim for more than $4 million), to change that opinion, without qualification, after a careful site examination and in the course of giving later evidence to return to something close to the original position. These changes alone raise doubts as to the reliability of Mr Newell’s expert evidence. How did he come to express the opinion he did in his evidence on Norfolk Island if there was reason to doubt it? It is to be remembered that his opinion about the coastal protection work when given in his evidence on Norfolk Island was unqualified, although his evidence about gabion basket walls was.
It is not, however, this matter which has mainly caused me to prefer the evidence of Mr Short. It is my general assessment of their evidence overall. I found the explanation of his proposals, and the reasons for them, given by Mr Short, to be more persuasive than those of Mr Newell.
The key to the differences between the two experts is substantially associated with the coastal protection barrier. Mr Newell still accepts that earthworks which reduce all of the slopes below 30 degrees will be satisfactory. It is the more extensive coastal wall that he proposes which will apparently lead to a slope of more than 30 degrees.
The rock work barrier agreed upon during the hearing on Norfolk was to be “blended into the existing shoreline”. It was to have a “profile… similar to that which exists on the west side of Cascade jetty…”. Not only did Mr Newell agree with these words as they appear in Exhibit E but he wrote them out in his own hand in Exhibit E, wrote below “I agree” and then signed and dated the document. He affirmed this intention as to rock work in his evidence.
The view I had with the parties and many photographs in evidence, both included in the reports and separately tendered, show the shore of the bay known as Cascade Bay. The Cascade Jetty bisects the shore about one-third of the distance from the eastern to the western ends of the bay. The area to the west of the jetty has been treated by a rock work barrier. This was part of a Government project to remediate and stabilise the area near the jetty. The wall was apparently constructed primarily by tipping rock over the edge. It is this rock work which it was intended to emulate on the eastern side of the Bay.
Although I will naturally yield to expert opinion in determining the matters before me I must say that the rock wall to the west of the jetty appeared to me to be adequate. It has stood in place for some years since it was constructed. This barrier to the west of the jetty is the kind of wall which Mr Short says is appropriate for construction on Mr Forrester’s land. Against this I now have Mr Newell’s contrary opinion. I find that the material upon which Mr Newell relies is not satisfactory to support his ultimate opinion, as Mr Short claims. I am fortified in this opinion by my general preference for Mr Short’s evidence.
Mr Short was severely criticised on his expertise. It was said that he was not an engineer. It was said that his solution was not an engineering solution but a mining rehabilitation solution and that the area in question was not a mine. I found this attack rather puzzling. The reality is that what is required is mining rehabilitation. The mining might have been illegal, but that does not make it something else. Although the solution proposed by an engineer is not necessarily to be disregarded or discounted, it does not seem to me that the solution proposed by an expert in mining rehabilitation is either. Indeed, it occurs to me that a sensible approach to the problem would be to call in a mining rehabilitation expert first, who would propose a solution and, in the course of preparing a proposal, ask whether it required an engineering component. Such a person might not have the expertise to design the engineering solution, but would have the expertise to know whether it was required – that is, to know whether a solution which did not require sophisticated engineering design would yield a sufficient level of safety and stability. Mr Short not only gave evidence that he had such a level of experience but he said he had been involved with many engineering aspects of rehabilitation works. I accept Mr Short’s evidence and find that his level of expertise was the most appropriate for at least the initial devising of a rehabilitation program for Mr Forrester’s land and, as it turns out, for completing the design as well. The preparation of the specification contained in Mr Short’s October report was well within his expertise, including the specifications for the rock wall.
I find that the specifications prepared by Mr Short, subject to qualifications to be dealt with below, represent the proper remediation, in accordance with the deed, of the damage done by the unlawful mining on Mr Forrester’s land. I find that the proposals of Mr Newell, in all their forms, involve unreasonable and inappropriate work. I find that a rock wall the size and depth of the rock wall proposed by Mr Newell is unnecessary and inappropriate and I find that gabion basket walls are unnecessary and inappropriate.
THE CONSTRUCTION OF THE DEED
The findings I have made relating to the expert evidence do not determine this matter. Mr Forrester has sued on a deed which entitles him to restoration “to a standard which is acceptable to you”. It entitles him, where that obligation was not satisfied by 7 July 1999, to engage a consultant “to assess the value of any outstanding payment, together with the value of any outstanding works” and to sue for “the amount assessed”. The deed imposes no obligation as to the reasonableness of the work. Indeed, by promising restoration “to a standard which is acceptable to you” it sets as the benchmark Mr Forrester’s subjective wishes rather than any objective standard.
There is no doubt that the deed provides in unqualified terms for restoration and that the restoration should be to a standard acceptable to Mr Forrester. “Restoration” literally means putting something back as it was. Neither party sought to give the word this literal meaning. Rather, the parties and their experts suggested that what was required was remediation or rehabilitation. Nevertheless, the use of the word “restore” does show the significance of the burden which Mr Brown was accepting and the extent of the work which he could be required to carry out. In this respect, the use of the word “restore” can be seen as enlarging the obligation to make good to the satisfaction of Mr Forrester and extending the discretion which Mr Forrester had.
Notwithstanding the fact that the deed must be construed in the context of these express provisions it seems to me that the deed does admit to some qualifications. It does not authorise a claim absolutely within Mr Forrester’s discretion. First, the work must be relevant to restoration of the land. It would not permit a requirement for the construction of a boatshed and ramps on the land. Once such a qualification is opened up questions of fact and degree immediately arise. Does the deed permit a requirement for the construction of a picnic area on the land, of the kind included in Exhibit D? I do not think so. Secondly, it seems to me that the deed could not admit an outlandish claim such as the closest engineering response to returning the area to its natural state before any quarrying, including the restoration of all rock. Thirdly, and I think this flows from the first and second limitations, there must be some restraint associated with reasonableness or proportionality. I accept, however, that a tenuous failure of a proposal to be reasonable would not be enough – something akin to the Lord Greene MR test in Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223 at 229-230 would be necessary. This is simply another way of stating what seems to me to be the correct and ultimate test, in accordance with the deed in its context, namely, whether the assessment under cl 17 is based on works contemplated by the deed. Sometimes there will be precise provisions of the deed covering this matter; sometimes, they will depend upon more subtle requirements flowing from context.
Two matters which seem to me to be pertinent are the provisions in the deed for the work to be carried out by 7 July 1999. Clause 15A5 imposes this obligation directly and cl 17 permits action to recover the assessed amount upon failure. Since the deed was executed on 1 June 1999, this contemplates the planning and completion of the works within little more than five weeks. It gives only four months after Mr Forrester first raised concerns with Mr Brown. The quantity surveyor who made the more than $4 million assessment “contacted [Mr] Newell and obtained his opinion of the cost of supervising the work over a ten month period…” and included the amount in his assessment.
The second matter is the way in which the letter of 1 June 1999 approaches the matter. The letter, in cl 15 headed “Restoration of your Land”, incorporated into the deed, requires specific advice from consultants as to any affectation of “your main home and bedroom wing buildings” and “to prevent later damage to the cliff and your property as a result of the quarrying to date”. The letter also promises engineering evaluation whether “our blasting operations could have affected this ‘fragile geotech’ composition of the whole length of the cliff face of your property”. This work would include an examination of the stability of the cliff face to determine whether it was unstable and at risk of collapse or whether some lesser problems existed. No claim of this kind has been made in the proceedings. Indeed, although Mr Short’s proposal contemplates a mechanism to collect falling pieces of rock at the base of the cliff, Mr Newell’s original proposal included no similar provisions.
When cl 15 comes to dealing with actual proposed works, as opposed to the obtaining of advice, it promises to “replace soil on the rock areas from which it has been removed, and plant Norfolk Island pine trees and kikuyu grass appropriately in the area”. Once it is established that there was no risk to the cliff face itself the deed appears to contemplate work of the kind proposed by Mr Short. It does not appear to contemplate engineering investigations other than with respect to the cliff face. It does not contain any reference to retaining walls, nor to a sea wall. It may be worth noting that the promise “to complete the restoration so you are completely satisfied with the end result” appears immediately after the paragraph relating to replacement of soil.
The obligation in cl 17 which gives rise to these proceedings is in terms directly related to cll 15 and 16.
What amounts to restoration of Mr Forrester’s land in accordance with the deed must take these matters into account.
Turning to Mr Newell’s reports, it is important to note that they do not address the terms of cl 17 in any direct way. It is true that the clause is referred to, but Mr Newell appeared more concerned with the specific questions asked of him than with his role which will directly affect parties, whose interests are different to those of his client and who may be required to pay substantial compensation, ultimately assessed at more than $4 million.
It is also important to note that although the deed required “an appropriate consultant” to make the assessment, the role of one consultant has been divided between two. I accept that the deed, properly construed, will permit this, but where two persons are fulfilling the role I would expect that there would be more co-operation between the two than was present here. The assessment of the quantity surveyor, which led to the actual claim, which I will address below, does not contain any reference to the deed.
I must finally note that the work now specified by Mr Newell is less than that specified in his original report. The cost is lower. This may also make it difficult to maintain a claim on the original assessment.
In all these circumstances, and notwithstanding that the deed leaves a wide discretion in determining what claim should be made, to Mr Forrester, I have come to the clear conclusion, based on my findings relating to remediation that the claim made does not fall within cl 17 of the deed.
This conclusion is assisted by reference to matters relating to the construction of the deed but would not change even if those matters which may qualify Mr Forrester’s discretion were not in the deed. In the end it simply seems to me, based on my acceptance of the evidence of Mr Short, that significant elements of the work proposed by Mr Newell, including the extensive sea wall he proposes and the gabion basket walls, are not within the deed because they are not “restoration” of the land, however that word is interpreted.
I am comforted in this conclusion, although I have not based the conclusion on it, by the fact that what Mr Short said in his evidence and in his report, on which I have acted, accords with my own lay assessment of the situation. When I visited the site I saw a cliff and land below the cliff, which, subject to various activity in fits and starts over the last decade, has been in place for quite a few years and is quite well covered with grass and very small vegetation. Many photographs in evidence show this, but convenient examples are the five photographs taken by Mr Short on 14 and 15 May 2009 attached to his affidavit of 2 November 2009. They show the area as I saw it. They also show the area to the west of the Cascade Jetty, including the rock work there, referred to in Exhibit C. Mr Short’s proposal seems to me, as I look back to the visit, to present the most appropriate form of restoration and Mr Newell’s not to be appropriate at all. I do not think aesthetics are relevant to the assessment, but it seems satisfying to me that the appropriate proposal will not result in disproportionate rock walls on different sides of the bay and will not require retaining walls made from gabion baskets (or any retaining walls) to cross the slope below the cliffs on Mr Forrester’s land.
For the above reasons, Mr Forrester must fail in his claim for a liquidated sum assessed in accordance with cl 17 of the deed. He will, however, be entitled to damages for breach of the deed for failing to carry out the appropriate restoration work prior to 7 July 1999 or at all. Indeed, the contrary is not suggested by the defendants. The parties are also agreed that the measure of damages is the cost of carrying out the appropriate restoration work and not the difference in the value of the land which would result from the restoration work.
LAWFULNESS OF PROPOSED REMEDIATION
Before turning to the assessment of the cost of the works there is one further matter with which I must deal. Lesley Bull, an urban planner, gave evidence about whether the various remediation proposals were lawful, either with or without consent from the responsible authority, or unlawful.
Mr Forrester’s land is zoned “rural” under the Norfolk Island Plan 2002. The land is within the defined “coastal environment” (clause 9A). Structures are prohibited within such land unless they are exempted. A coastal protection wall, gabion basket walls, rock within the gabion baskets and security fencing will all be structures. They are not exempt. The result, according to Ms Bull’s evidence is that all the above elements are unlawful and not capable of being approved. If correct, this will render core aspects of Mr Newell’s proposals unlawful. It will even extend to part of Mr Short’s proposals. The gabion basket walls associated with the picnic area and the gabion basket wall to protect from falling rock will both be unlawful.
The evidence before me conveniently sets out the position. Having reviewed the legislation, I agree. Counsel for Mr Forrester challenged the conclusion on three bases. First, the Norfolk Island Plan protects existing lawful uses and there was no evidence on this issue (which was assumed by Ms Bull not to apply). Secondly, the work would be protected as emergency works. Thirdly, the Plan relied upon was not in force in 1999. I will come to these matters.
Because of the findings I have already made this question may only relevantly arise so far as the picnic area and the wall arresting falling rock are concerned. I have found that the picnic area could not amount to restoration under the deed. Had the tentative agreement reached on Norfolk Island been perfected, the issue would not have concerned me. However, in the absence of that step, I must assess damages by reference to the issues. Providing a picnic facility is not restoration of any land when one was not there before. In addition, as unlawful work, it could not be restoration under the deed. There must be an implied term in the deed that restoration work will be lawful. It follows that for this additional reason, the picnic area and the wall to arrest falling rock could not be proper restoration under the deed. I also note that the policy of the Norfolk Island Plan must be to exclude most structures from the coastline.
Although the lawfulness issue relates only to the picnic area and the wall to arrest falling rock I find that all the structures identified above are unlawful and outside the scope of the deed for this additional reason.
So far as the offending structures proposed by Mr Short are concerned, nothing can be done to substitute for the picnic area, which is not within the deed in any event. However, a fence less than 1.8 metres can be erected without consent and could be substituted for the wall arresting falling rock. Fences of this kind are part of the nearby Government project.
I therefore find that the items identified will be unlawful and outside the terms of the deed unless there are existing lawful use protections. Counsel for Mr Forrester submitted that in the absence of material negativing lawful existing use I should not have regard to the argument of unlawfulness. I do not agree. This does not seem to me to be a question of onus. I must deal with the question on the evidence before me. The evidence of the use of the land before me does not suggest any lawful use of quarrying or mining. There is evidence that the Norfolk Island Government purported to authorise some quarrying by Island Industries to remove rock thought to be dangerous. That does not seem to me to be enough to make the use lawful. Moreover, that use was quarrying. Building sea walls and retaining walls is arguably quite a different use. I accordingly find, on the evidence before me, that the structures proposed are not permitted as part of a lawful existing use. This is, however, a finding on the evidence before me and not a finding at large.
It was also said on behalf of Mr Forrester that the Newell proposals would be lawful without consent as “emergency works”. I reject this suggestion.
That leaves the question of whether the Norfolk Island Plan applies. I am assessing damages by reference to work not yet carried out based on evidence of what is appropriate now and on what it would cost now. These proceedings were commenced long after the Norfolk Island Plan came into effect. Damages should compensate the plaintiff in a manner which would now permit him to undertake the appropriate remediation. In any event, the parties conducted the whole of the case on this basis. What is appropriate remediation should, for all purposes, as all parties generally recognised, be based on what is the proper remediation now. In any event, I note that the plaintiff’s representatives took no steps to put what it says is the correct planning provisions before the court. I find that the planning provisions relied upon do apply.
While the above analysis is not relevant to the wider question of what restoration is appropriate it does affect Mr Short’s proposal. I find that it should be assessed without the gabion basket walls forming the picnic area and with a fence less than 1.8 metres in height substituted for the gabion basket wall intended to arrest falling rock.
DAMAGES
I turn finally to the assessment of damages. I find that, on the evidence, the only proposal for restoration of Mr Forrester’s land which satisfies cl 17 of the letter incorporated in the deed is Mr Short’s final proposal excluding the picnic area and associated walls together with the wall to arrest falling rock, but replacing that with a fence less than 1.8 metres. Because no other proposal before me satisfies cl 17, this must become the basis for assessment of damage.
The task of assessment, however, does raise further issues. Two experts were called. Mr David Wallace was called by Mr Forrester. He is a quantity surveyor who made the assessment upon which Mr Forrester sued. Mr John Meredith, also a quantity surveyor, was called by the defendants. Surprisingly, the methods proposed by these gentlemen for carrying out the work yielded substantially different results. Much of this was the result of different methods which the experts said needed to be utilised to carry out the work. The methods proposed by Mr Wallace were much more costly than those proposed by Mr Meredith.
There are, in addition, two matters of detail I must address. The first is the cost of rock. The second matter, which is associated, is whether an offer by the defendant to supply some rock at an advantageous price should be used in the calculation.
Beginning with the overall issue, I must say that I was more impressed by the evidence of Mr Meredith than Mr Wallace. A judge is faced with a particularly difficult task when experts disagree and their disagreement relates to the subject matter of their expertise. There were, of course, no real issues of credit – which only makes the task more difficult. In many areas Messrs Wallace and Meredith were very co-operative. They gave their evidence concurrently. They met and discussed their evidence on a number of occasions. They produced a number of joint documents to assist me. Unfortunately, these documents did not tend to lead to agreement but merely to identifying, by reference to the different possibilities that were before me, where the differences led in terms of assessing the damages. It was, then, difficult for me to decide where the expert truth lay.
Some of the differences between Mr Meredith and Mr Wallace related to the methods of calculation they used and some related to the way the work would be carried out.
Under Mr Short’s proposal, which I have found to be the appropriate means for restoration, the bulk of the work is building the rock work in similar form to the rock work to the west of the jetty and reshaping the slope below the cliff and above the rock work so that, at no point, does the slope exceed 30 degrees.
In attempting to fulfil the difficult task of seeing where the best methods lay between Mr Meredith and Mr Wallace, I was impressed with the level of Mr Meredith’s knowledge and experience. His description of a more efficient method of carrying out the work than Mr Wallace would allow seemed convincing to me. Much of the dispute related to the actual number of metres particular equipment could work in a day. The speed of access and egress of trucks was relevant. Doing the best I can with the material I prefer the evidence of Mr Meredith. I propose to use his calculations. I have come to the same conclusion relating to the calculation of the cost of construction of the rock work where Mr Meredith and Mr Wallace adopted different methods. Again, I found Mr Meredith to be more persuasive in what is a very difficult area for a judge.
I accordingly propose to use Mr Meredith’s calculations to assist me to assess the damages.
I will return to these matters, but, first, I need to give attention to the cost of the rock. I do not think that I should take into account the defendants’ offer of cheap rock at $10 per tonne. Although made under oath the offer might not be adhered to. It was made on conditions. They might not be capable of being complied with. In any event, Island Industries may be the only source of rock and if it is sold at the price upon which I subsequently act the net result for the defendants may be the same as was represented by the offer because of the increased profit. I am conscious of the fact that Mr Forrester will not be compelled to use any judgment monies paid to him to restore the land, so that this evening out might not occur, but that does not seem to me to be a matter I should take into account in assessing damages.
Having decided that the offer of cheap rock should not be taken into account in determining price I turn to the alternatives. The second amount is $45 per tonne. This is a price calculated by Mr Meredith from published government prices and his knowledge of transport costs. The third amount is $131 per tonne. This is a price quoted to Mr Wallace on the telephone by an earthworks contractor and confirmed by email. Whoever supplies the rock, its ultimate source may be stockpiles held by Island Industries. Neither of the prices remaining for consideration are satisfactory. The first suffers from the problem that it is based on the theoretical calculation of what could be done and not on any actual price for supply. The prices used to make the calculation are also open to doubt. The published price was not verified and I cannot know that it is available today. The calculated cost of transport was not precisely calculated nor taken from a quotation for the actual work. The second suffers from the problem that it was a casual quotation given over the telephone even though confirmed by email and not a proper quotation given in a competitive environment.
Against these criticisms it is worth noting that the whole of the calculations made by both Mr Meredith and Mr Wallace are calculations based on their experience as quantity surveyors. They are not based on actual quotations for work. To explain the way I have assessed the competing alternatives some further detail is required.
The figure of $45 was proposed by Mr Meredith as representing the amount of $35 to cover the royalty payable to the Norfolk Island Government, together with $10 for handling and transport. This latter figure appears to have been calculated on the basis that rock was already stockpiled in the quarry or nearby There was really no evidence on how the rate of $10 was calculated although Mr Meredith said that it was generous.
The $35 figure was arrived at by Mr Meredith from a price schedule published by the Norfolk Island Government in the Government Gazette published on 2 April 2004:
“3. PURCHASE PRICE
3.1You will be advised of the agreed purchase price of the rock based on the following price schedule:
Screened Rock $48.25 per tonne Unsorted Rock (unscreened) $43.45 per tonne 100mm scalpings (unscreened) $28.95 per tonne -25mm scalpings (non-conforming) $20.00 per tonne 3.2You must pay the purchase price in full by cash, bank cheque or bank guarantee before removing any rock from the portion 5a stockpile site. Payment may be made at the Accounts Section, Administration offices, Kingston.”
This calculation creates a number of problems:
1.The source of the purchase price, being dated April 2004, is out of date.
2.The purchase price provision leaves a wide discretion to the Government in calculation of the price.
3.The price is for material belonging to the Government, whereas the suggestion is that the best available material is owned by Island Industries.
4.The calculation of $35 as some kind of average approximation from the range of prices shown is very rough and ready.
Apart from the inherent uncertainties involved in the calculation there is the problem that one of the defendants may be able to influence the price. There accordingly arises similar issues to those which surrounded the $10 offer.
The only acceptable approach seems to me to be to do my best to arrive at a commercial price. The evidence suggests that there is at least the possibility that rock might be sourced other than from Island Industries and that would seem potentially to provide a competitive commercial price. There is no reason to think that Island Industries would do other than charge the best price it could for the supply of rock if it has no obligation to sell at the low price offered and that price would seem to be a price close to the price quoted by a competitor.
It follows that the price for rock should be a reasonable commercial price for the island. Island Industries has tendered no evidence on this topic. The best evidence before me is the evidence of Mr Wallace as to enquiries he made which yielded $131.
The earthwork contractor which provided the price was BC Excavations, a business associated with Mr Brendon Christian. In an email dated 30 July 2008 Mr Christian wrote to Mr Wallace that “[t]he price of rock on Norfolk Island is at present $131.00 per ton and generally weighs about 2.25 ton per cubic meter for gabion rock.” This quotation and the telephone conversation which preceded it, is the sole evidence supporting the $131 figure. In his evidence, after referring to the email, Mr Wallace said:
“I then went to Island Industries at that same time and got a range rate, which $131 was part of. So there was no lower rate, but there were some higher rates… I ended up using the 131 as being an available rate, because Mr Christian confirmed it.”
Later in evidence Mr Wallace said that the price was for “the supply of rock delivered to site”.
Although this evidence is unsatisfactory it is really in no worse position than much of the evidence on cost and I propose to act on it as the best evidence of the commercial cost for rock for use in the rock work to be associated with the remediation.
I have decided that the appropriate method of remediation is the method described in Mr Short’s Option 7 without adjustment in accordance with Mr Newell’s proposal. I will call it Short Option 7 and I will call Mr Newell’s final proposal based on Option 7, Newell Option 7. I have further decided that the work should not include either the picnic area or its associated gabion basket walls because they are inappropriate, because they would not be within the requirements of the deed and because they would be unlawful. I have also decided that it should not include the gabion basket wall to arrest falling rock but that a fence lower than 1.8 metres, which will be lawful without consent, should be substituted. The fence will contribute a very small amount towards the overall cost.
When I come to the detail of the evidence of the quantity surveyors I need only deal with their evidence relating to Short Option 7. Nevertheless, this evidence again raised issues which are not easy to resolve because the evidence of the two experts differs significantly and I have little material to enable me to assess the evidence. There was, for example, little cross-examination of Messrs Wallace and Meredith calculated to expose issues relating to the reliability of their evidence.
The great difference between the approaches of these two experts can be illustrated by reference to their final estimates of the cost of the work required for Mr Newell’s original proposal as reviewed in these proceedings. If $131 per tonne is taken as the cost of rock the estimate of Mr Wallace is a total cost of $3,640,855 and of Mr Meredith is $2,711,840. When I turn to Short Option 7, which is the remediation work I have found to be appropriate, the amounts are much less but the differences between the two are greater.
Notwithstanding the differences between them, Mr Wallace and Mr Meredith were co-operative with one another and with the court in giving their evidence. They went to a great deal of trouble to prepare schedules identifying their costs in a way which would permit comparison. By the conclusion of the hearing these documents were probably in their final form, although it is fair to say they underwent significant change during the hearing to correct errors and make them more meaningful. Nevertheless, it has been agreed that I should not finalise my calculations of the damages without giving the parties an opportunity to check them. It would, in any event, be inappropriate to finally dispose of this matter without hearing the parties further because they should have an opportunity to make submissions as to costs.
With these reservations I note that Mr Wallace’s final calculation of the remediation work under Short Option 7 is $831,500 when a cash price of $131 per tonne for rock is used. The method employed by Mr Wallace to arrive at this calculation is determined by reference to quantity. Using this method of calculation, Mr Meredith arrives at a cost of $440,710. However, while Mr Meredith considers that quantity is the appropriate measure by which to calculate the costs of the more extensive work involved in Mr Newell’s original proposal and Newell Option 7, he considers that time is the better measure for the works involved in Short Option 7. Calculating the cost for Short Option 7 in this fashion, Mr Meredith arrives at a cost of $384,876. Mr Wallace has not made a calculation in accordance with time.
In his report of 29 October 2009 Mr Meredith justified his approach in the following way:
“68.I conclude that the differences between Mr Wallace and myself in the calculation of the fair and reasonable cost of constructing the Option 7 Works are entirely due to differences in:
(a)Assumed work method, and
(b)Assumed rates.
69. As for work method:
(a) Mr Wallace has adopted a work method calculated by quantity.
(b) I have adopted a work method calculated by time.
(c)I have personal experience of calculating the fair and reasonable cost of constructing the same, and similar, works, adopting first, a work method calculated by quantity, and second, a work method calculated by time.
(d)I have personal experiences of comparing the 2 sets of calculations with later, actual incurred costs.
(e)In my experience, to assume a work method calculated by quantity in respect of works on a scale comparable to the Reviewed Option A Works and comparable to the Modified Option 7. Works leads to a more accurate determination, but on a scale comparable to the Option 7 Works leads to a less accurate determination of costs.
(f)In my experience, to assume a work method calculated by time in respect of works on a scale comparable to the Reviewed Option A Works and comparable to the Modified Option 7 Works leads to a less accurate determination, but on a scale comparable to the Option 7 Works leads to a more accurate determination of costs.
(g)In my opinion, Mr Wallace has assumed a work method for the Option 7 Works that leads to a less accurate determination of costs.
70.As for rates:
(a)The reasons why I relied upon the rates that I used is set out in my 1st Affidavit, 2nd Affidavit and this affidavit.
(b)In contrast, Mr Wallace gives no reasons in either his 1st Report or his 2nd Report why he relied upon the rates that he used.
71.Accordingly, I cannot comment on differences in assumed rates between Mr Wallace and myself” [original emphasis]
There was some discussion of the respective methods of Mr Wallace and Mr Meredith while they were giving their evidence.
A significant element in Mr Wallace’s calculations was a productivity allowance covering 500 square metres per 8 hour day under the heading “Clear Site and Vegetation”. Mr Wallace explained this in evidence as follows:
“MR LINDSAY: Now, I’ve been asked to ask you to explain where you got the figure of 500 square metres, per 80-hour day from, so I ask you to just explain that figure.
MR WALLACE: Yes. The site that we’re talking about, which most people here have visited, not me, I visited it by Google Earth and the photographs that are contained in the Newell report. I have been to Norfolk Island and I am aware, having climbed the escarpment on several occasions. The $2.50 is an expression of the use of an excavator machine, which was referred to by Mr Meredith and used by me in these explanations, as a traxcavator. A traxcavator can be a machine with just a flat blade on the front of it, or it can be a machine with a grab bucket. Some people call them drots when you get to that sort of finessing of it. Anyhow, this is a small machine that can actually travel on reasonable slopes, but the greater the slope the less work it can do, just purely because it gets to go – starts travelling too quickly.
In this particular exercise we have a sloping site. We have a quarry site where Newell refers to overburden that’s been piled up around the place and is evident in the photographs. We have reasonable gradients in some areas, but we have very steep gradients in other areas, as I referred to before. The exercise that this site established – sorry – this clear site and vegetation is going through, is that it’s actually pushing aside and preparing areas to be able to grab topsoil for a start, and stockpile the topsoil on site and in fact stockpile the topsoil where it’s pushed up into a mound, and left on site. It’s also taking away the grass and any other rubbish that’s around the site, I mean, as in scrubby type material. It’s essentially the words “clear site” have been interpreted here as being this might be a virgin site with lots of bushes on it and so, therefore, we get a tractor in there or quite often done with two tractors and a chain and you just pull it across the site and you clear it. That’s what you can do for 63 cents or you can get a traxcavator working flat out, at three kilometres an hour, running backwards and forwards all day.
I, having some 45 years of experience, have never seen a traxcavator working flat out at three kilometres an hour all day anywhere, and what I allowed for was what I believed at the time would be a reasonable workload that the traxcavator would get through having to go in, pick up the mound of material in some areas, put it on the back of a truck, take some of the grass away on the back of the truck. These are all activities that take time and so in my assessment I said he’d be hard pressed to get through 500 square metres.”
After explaining that he saw “the job as being a different type of job” to Mr Wallace “as… a relatively simple earthmoving exercise… [not] ‘heavy civil engineering’” and then explaining what he meant by that, Mr Meredith went on to encapsulate what his view was of an estimate of 500 square metres a day as follows:
“MR BLAKE: Thank you, Mr Meredith. Now, with your response, I’m just wondering, could I take you item number 1 and can you explain to his Honour, what your response is, and where you disagree with Mr Wallace and why, please?
MR MEREDITH: Mr Wallace uses exactly the same machinery, right? He includes a truck in it, right, to operate simultaneously. He then calculates to get 500 square metres a day. If I take it from a slightly different perspective, but let’s assume that the traxcavator bucket is probably about two metres wide, now, you can either use a traxcavator as a bulldozer and push. They have what is called a “clean shell bucket,” it’s a bucket that can either pick up material as a front end loader or you raise it and you can use it as a scraper to push material. If that operates at, you know, about three kilometres an hour, right then effectively in an hour you can clear roughly 6000 square metres with one push. But let’s assume you’ve got to do three pushes, right, to get what you’re going to move out of it, then we’re down to 1000 square metres a day – a 1000 square metre an hour, which is – and I’ve related that down, said, well, let’s bring it down beneath that and assume we can get about 150 square metres in an hour, and, look, putting this in some sort of perspective, this room we’re in is probably 50 square metres, so I’m going to assume we can clear about three times the size of this room in an hour.
HIS HONOUR: Well, you heard what Mr Wallace said this morning, about his concerns about that. Do you want to say anything about those concerns, why he’s wrong?
MR MEREDITH: Look, the – I don’t see that the 30 degree slope is an adverse slope. If you said to me that it’s a 50 degree slope, or a 60 degree slope, I would say, we’ve got a major problem, you can’t use traxcavators in that sort of location, right. I’m assuming at the moment that we’re doing any bulk excavation as part of the excavation quantity. We’re not doing that as a site clearance, because this says we’re going to remove some vegetation. The vegetation is very light, a bit of grass, there might be a few very small shrubs, but there are no major pine trees that have got to come down or anything like that. I think what you’re going to do is move the material, put it in a spoil heap. Usually what you want to do is do that, so any grass or anything like that rots away, right, and that you’re then left up then with any topsoil. That topsoil can then be respread around. But I see that you’re going to do it in small areas. You’re not going to clear all 5000 square metres in one operation; you’re going to do it bit by bit. So I look to – to get 500 square metres a day is very very low levels of productivity.”
The passages quoted form only a small section of the concurrent evidence given by Mr Wallace and Mr Meredith but they seem to illustrate the nature of the evidence before me. That evidence compares assessments of quantities which had very little support through the original reports, but received a little more justification through subsequent reports such as the section from Mr Meredith’s report set out above, together with oral evidence of the kind just quoted.
I have found the evidence of Mr Meredith to be more persuasive than that of Mr Wallace. His written evidence provides better support for his approach than does the written evidence of Mr Wallace. Mr Meredith’s oral evidence provided more reasoning to support his conclusions than did the evidence of Mr Wallace. I found Mr Meredith’s explanations to be more satisfactory than Mr Wallace’s. They seemed to me to be more credible. In particular, I thought that Mr Meredith was more convincing when describing the work that could be achieved in given times. His evidence, for example, that the basic earthmoving works would proceed more quickly than allowed by Mr Wallace was convincing.
I accordingly find that the methods and calculations put forward by Mr Meredith are more satisfactory than those put forward by Mr Wallace. I propose to act on Mr Meredith’s evidence in preference to Mr Wallace’s on all aspects of the calculation of damages except that I find that the correct basis for calculating the cost of rock is at the rate of $131 per tonne.
Having chosen the method to be employed and having chosen Mr Short’s estimates I do not need to make any detailed calculation. This is because the parties are agreed on what the competing figures are even though they only support one of them. Accordingly, I need only to select the total from the figure calculated by Mr Meredith and incorporated in an exhibit (Exhibit J) agreed to record the figures for each expert. A break-up of the figure I am relying on can be found in the exhibit. I have decided that the costs of Short Option 7 should be calculated by reference to Mr Meredith’s time based method and not Mr Wallace’s quantity based method. The agreed figures show that the total amount for full Short Option 7 is $384,876. However, that figure includes the gabion basket walls forming a picnic area and the gabion basket wall below the cliffs. These should be deleted for reasons already given. Omitting these items reduces the amount of $384,876 to $167,650. To that should be added the cost of a fence less than 1.8 metres high to restrain falling rock. That should not substantially change the amount.
I accordingly propose to enter a verdict and judgment for the plaintiff in a sum of approximately $175,000. However, I will delay taking that step to enable the parties to consider matters I have left open in these reasons. If agreement on a figure can be reached I will enter judgment for that amount without hearing further argument. Such agreement will not preclude a challenge on appeal to any aspect of the substance of my reasons. I will hear the parties on costs.
I certify that the preceding One Hundred and Thirty-Six (136) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Downes. Associate: [Sgd]
Dated: 16 February 2010