Geoghegan v Wood; Wood v Geoghegan

[2025] NSWSC 586

Supreme Court

New South Wales

Medium Neutral Citation:

Geoghegan v Wood; Wood v Geoghegan [2025] NSWSC 586

Hearing dates:

26 May – 28 May 2025

Date of orders:

10 June 2025

Decision date:

10 June 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Williams J

Decision:

See determination at paragraphs [79]-[80].

Catchwords:

BUILDING AND CONSTRUCTION – Damages – where admitted defects in structural design prepared by the second and third defendant engineers for the plaintiff’s home – where breach of general law duty of care admitted by engineers – where it is common ground that additional wind bracing is necessary and reasonable to rectify the structural defects – where the design for the additional bracing is agreed – where scope of works required to implement that design is disputed – where the reasonable cost of undertaking the rectification works is disputed – quantum of damages – no question of principle.

Legislation Cited:

Design and Building Practitioners Act 2020 (NSW), s 37

Home Building Act 1989 (NSW), pt 2C

Cases Cited:

Ippolito v Cesco [2020] NSWSC 561

Texts Cited:

N/A

Category:

Principal judgment

Parties:

2022/387503
Natalie Ann Geoghegan (Plaintiff)
Daniel Edward Wood (First Defendant)
Gregory Knight (Second Defendant)
Sara Amanda Viale (Third Defendant)

2022/387510
Daniel Edward Wood (Plaintiff)
Natalie Ann Geoghegan (Defendant)

Representation:

2022/387503
Counsel:
Mr J Foley (Plaintiff)
Mr M Maconachie (First Defendant)
Mr T W Marskell (Second and Third Defendants)

Solicitors:
Lewis Denley (Plaintiff)
Priest Legal (First Defendant)
Barry Nilsson (Second and Third Defendants)

2022/387510
Counsel:
Mr M Maconachie (Plaintiff)
Mr J Foley (Defendant)

Solicitors:
Priest Legal (Plaintiff)
Lewis Denley (Defendant)

File Number(s):

2022/387503; 2022/387510

Publication restriction:

N/A

JUDGMENT

Introduction

1. The plaintiff is the owner of property at 24 Bundella Avenue, Lake Cathie, New South Wales.

2. These proceedings arise out of the construction of a residential home on the property which commenced in late 2018.

3. King & Campbell Pty Ltd prepared the architectural plans for the residence.

4. King & Campbell Pty Ltd is not a party to these proceedings.

5. The second and third defendants, trading in partnership as Alan Taylor & Associates Consulting Civil and Structural Engineers, prepared a structural engineering design for the residence to be built in accordance with the architectural plans.

6. The first defendant, Mr Daniel Wood, entered into a contract with the plaintiff on 1 August 2018 for the construction of the residence in accordance with those plans on a cost-plus basis.

7. The plaintiff sued Mr Wood for allegedly defective building works, claiming damages for breaches of statutory warranties implied in the building contract pursuant to Part 2C of the Home Building Act 1989 (NSW), breaches of express contractual warranties in the same terms, and breaches of a duty owed by Mr Wood to the plaintiff pursuant to s 37 of the Design and Building Practitioners Act 2020 (NSW) and at general law to exercise reasonable care to avoid economic loss caused by defects in or relating to the residence for which Mr Wood did the construction work, or otherwise arising from the construction work done by Mr Wood.

8. By the time the final hearing commenced, all substantive issues between the plaintiff and Mr Wood had been resolved on terms noted by the Court at the request of those parties that the plaintiff is entitled to judgment against Mr Wood in the sum of $75,000, and that the plaintiff is entitled to an order requiring Mr Wood to deliver to the plaintiff a quantity of bricks. Questions concerning the costs of the proceedings as between the plaintiff and Mr Wood, and the plaintiff’s claim for interest on costs, remain to be resolved. The Court was requested by those parties not to enter judgment against Mr Wood until those questions are resolved, noting that the question of costs as between the plaintiff and Mr Wood should be considered when the Court is in a position to consider the costs of the proceedings as a whole after determining the plaintiff’s claims against the second and third defendants.

9. The plaintiff sued the second and third defendants (the engineers) for alleged structural defects resulting from their design of the first floor and ground floor wind bracing for the residence, claiming damages for inter alia breach of a general law duty of care owed by the engineers to the plaintiff.

10. By the time the hearing commenced, the engineers had admitted that their structural design was defective in respect of the first floor and ground floor wind bracing, and that this constituted a breach of their general law duty of care. It was common ground between the plaintiff and the engineers that those defects were required to be rectified, and that the rectification was to be undertaken in accordance with a bracing design prepared by Mr Dylan Pearce (a structural engineer on whose expert evidence the plaintiff relied). There is no dispute that the plaintiff is entitled to an award of damages reflecting the Court’s assessment of the cost to the plaintiff of undertaking those rectification works. By the conclusion of the hearing, it was common ground that the damages should also include the cost to the plaintiff of obtaining alternative accommodation for the duration of the rectification works, removing her furniture from the residence, and storing it off-site for the duration of those works.

11. The likely cost of the rectification works was the subject of evidence given by certified quantity surveyors Mr Robert Madden (called by the plaintiff) and Mr Stephen Bolt (called by the engineers). By the conclusion of the hearing, concessions made by the plaintiff during closing submissions had reduced her total damages claim from $513,371.27 to $475,109.46 (including GST). Concessions made by the engineers during closing submissions reduced the disputed aspects of the claim to seven items.

12. The total difference between Mr Madden’s cost estimates and Mr Bolt’s cost estimates in respect of the disputed seven items is $108,703.28. The total potential reduction to the plaintiff’s damages claim if Mr Bolt’s estimates are preferred in respect of all seven items, after taking into account the flow-on effects to the calculation of the builder’s profit margin, the allowance for contingencies, and GST, is $157,837.16.

13. The differences of opinion between Mr Bolt and Mr Madden in respect of three out of seven of the disputed items arise from their fundamentally different perceptions of the scope of works required to be undertaken in order to rectify the admitted structural defects.

Scope of works

14. The residence is a two-storey home. The front of the home, which the expert witnesses describe as the eastern elevation, faces onto Bundella Avenue.

15. The ground floor comprises a garage, a family room which flows from the front through the rear of the ground floor and is adjacent to the garage, a bedroom adjacent to the family room (described in the architectural plans and in the bracing design as bedroom 4), an internal staircase leading to the first floor which is located behind bedroom 4, and a laundry located behind the internal staircase at the rear of the ground floor. The garage door providing access to the garage, and double glass sliding doors providing access directly into the family room, are at the front of the home facing onto Bundella Avenue.

16. The first floor comprises a dining room, living room, and bedroom (bedroom 1), at the front of each of which are glass sliding doors or floor-to ceiling windows facing onto a timber deck which looks out onto Bundella Avenue. The deck has an external staircase leading down to the front lawn. There are two further bedrooms and a bathroom located behind the dining room at the rear of the first floor (bedrooms 2 and 3). The living room at the front of the first floor flows into a kitchen at the rear, adjacent to the landing for the internal staircase. A pantry is located behind that landing at the rear of the first floor.

17. The exterior of the home, to the extent that it is not comprised of glass doors and windows, is masonry veneer on the ground floor and timber weatherboard cladding on the first floor.

18. The home is constructed across most of the width of the block of land. Photographic evidence of the front of the home taken from Bundella Avenue shows very little distance between the home and the residences constructed on the neighbouring properties on each side at 22 and 26 Bundella Avenue.

19. As I have already mentioned, the plaintiff relied on the expert evidence of structural engineer Mr Dylan Pearce. The engineers relied on the expert evidence of structural engineer Mr Mark Manning.

20. Mr Pearce prepared a report on 10 October 2022 in which he identified the defective bracing that is now admitted by the engineers and set out a scope of works to remedy those structural defects together with defective items of building work that were previously the subject of dispute between the plaintiff and the builder (but are no longer disputed).

21. The sections of Mr Pearce’s report that set out the scope of works for the rectification of the defective bracing are Section 10.1 (entitled “Preliminaries”), Section 10.5 (entitled “First Floor Bracing”) and Section 10.6 (entitled “Ground Floor Bracing”).

22. Mr Pearce made the following statement at the beginning of each of Sections 10.5 and 10.6 (emphasis added):

“It was noted that significant redesign of the bracing system is required, including architectural changes to the layout and construction details of the existing Residence. The following scope of works is subject to a final detailed design being completed for the entire bracing system. The following details of new bracing elements is based on preliminary design without consideration of the interplay with other elements and are considered reasonable for constructions cost estimating purposes.”

23. The preliminary design referred to in Mr Pearce’s report was not in evidence.

24. On 4 September 2024, Mr Pearce issued a bracing design for the residence which was described as being issued for pricing purposes. That design was not in evidence.

25. On 8 May 2025, Mr Pearce issued revision A of that bracing design. Revision A states that it amended the design issued on 4 September 2024 by omitting one Powertruss structural steel brace panel.

26. All references to the bracing design in these reasons are references to revision A, which was in evidence and to which Mr Madden and Mr Bolt referred extensively throughout their evidence given concurrently during the hearing. [1]

    1. Exhibit 17.

27. Mr Pearce and Mr Manning conferred to discuss their respective reports and produced a joint report recording those discussions in the form of a table which they described as intended to identify any areas of agreement and to identify and give reasons for any areas of disagreement between them. In relation to bracing, the table identifies the sections of Mr Pearce’s report and the sections of Mr Manning’s report that are relevant to the proposed rectification, and records their agreement that the installation of additional bracing elements as identified in revision A of Mr Pearce’s bracing design was an appropriate means of rectifying the structural defects if the existing size and locations of windows and doors within the residence was to be maintained (as the plaintiff and the engineers now agree they should be). The relevant sections of Mr Pearce’s report identified in the table in the expert engineers’ joint report include Sections 10.5 and 10.6.

28. The bracing design, as understood by Mr Madden and Mr Bolt, provides for the creation of a two-storey structural steel portal frame system at the front of the home spanning part of the width of the eastern elevation and extending vertically from the concrete slab on the ground floor up through the first floor to the roof level of the home. This is shown in the bracing design as involving the installation of three 400 Power Truss structural steel braces (marked as PT1, PT2 and PT3) on the ground floor beneath an existing structural steel beam located between the ground and first floors (SB1), the installation of two 200 PFC steel columns (C4 and C5) in the first floor immediately above PT1 and PT2, which are connected by a new structural steel beam (B3) to be installed horizontally between C4 and C5. Each of the three Power Truss braces (PT1, PT2 and PT3) weighs approximately 200 kilograms and is 2.7 metres in height. They are to be installed on the internal side of the external masonry on the ground floor eastern elevation in the vicinity of the glass sliding doors through which the family room opens onto a small paved area leading to the front lawn and Bundella Avenue. They are to be installed into the concrete slab on the ground floor. The steel columns C4 and C5, which are to be installed on the first floor above PT1 and PT2, each weigh between about 60 and 70 kilograms. There is no evidence of the weight of structural beam B3 which is to be installed between C4 and C5, but Mr Madden and Mr Bolt agreed that it would be something less than 200 kilograms. The load taken by B3, C4 and C5 is transferred to SB1, to which C4 and C5 are connected by new bracing to be installed. That load is then transferred through PT1 and PT2, which are to be connected to SB1 at the top and which have their footings in the concrete slab.

29. The bracing design, as understood by Mr Madden and Mr Bolt, also involves the installation of three 600 Power Truss structural steel braces (marked as PT5, PT6 and PT7) on the internal side of the external masonry wall that is part of the laundry at the rear of the ground floor of the home.

30. Finally, Mr Madden and Mr Bolt agree that the bracing design requires the installation of nine additional brace panels in internal and external walls on the first floor of the home, each of which will at least require the removal of internal boarding. In Mr Madden’s view, installation of the panels that are to be installed in external walls will also require the removal of the external weatherboard cladding, which will then need to be replaced.

31. The bracing design is plainly not a substitute for a scope of works. It does not purport to depict the scope of the whole of the works required to implement the bracing design. For example, it contains no express specifications about whether or to what extent it will be necessary to remove existing external masonry and timber weatherboard cladding on the residence in order to install the steel columns, beams and bracing panels in accordance with the bracing design, and to replace or reinstate that masonry or cladding after those installations have been completed. As Mr Madden explained in the course of his evidence given concurrently with Mr Bolt, the bracing design is for the purpose of interpreting the bracing works required. No demolition plans or architectural elevations for the project have been developed to date.

32. The scope of work in Sections 10.5 and 10.6 of Mr Pearce’s report includes the following:

1. on the ground floor, removal of “the brickwork to the eastern elevation of the Residence to allow for installation of a 3 bay – 2 storey structural steel portal frame, comprised of 300 PFC columns and beams”; [2]

2. on the first floor, demolition of “the wall framework and external brickwork along the eastern elevation of the Residence”; [3]

3. in relation to the ground floor and the first floor, manufacture, supply and installation of “a 3 bay – 2 storey structural steel portal frame system from ground floor slab level to roof level, comprising ~ 50 lin m of 300 PFC (4 columns and 2 beams) with rigid bolted intersection connections and baseplates (subject to final detailed design) across the full width of the eastern front elevation”; [4] and

4. on the ground floor, installation of wall frames to be connected to structural steel brace panels/portal frame. [5]

   2. Exhibit 7, paragraph 322(g).

   3. Exhibit 7, paragraph 300.

   4. Exhibit 7, paragraphs 303 and 325.

   5. Exhibit 7, paragraph 326.

33. In relation to (2) above, it is common ground that the exterior of the first floor is entirely timber weatherboard cladding and that all external brickwork or masonry is on the ground floor of the residence. The reference to external brickwork in Mr Pearce’s scope of works for the first floor appears to have been an error.

34. As I have already mentioned, the joint report of Mr Pearce and Mr Manning referred to Sections 10.5 and 10.6 of Mr Pearce’s report as included in the material to which they had referred in agreeing upon Mr Pearce’s bracing design as an appropriate approach to the rectification of the structural defects. The joint report contained no indication that Mr Pearce and/or Mr Manning considered that the bracing design, which was prepared after Mr Pearce wrote the scope of works in Sections 10.5 and 10.6 of his report, had changed that scope of works in any material respect.

35. In conferring and in preparing their joint report concerning the estimated costs of the rectification works (the QS joint report), Mr Madden and Mr Bolt approached the estimating task in fundamentally different ways.

36. Mr Madden regarded the bracing design as showing the design for the structural bracing only. He did not see any reason why the bracing design would require a change to the scope of works described in Sections 10.5 and 10.6 of Mr Pearce’s report. Mr Madden therefore paid close regard to that scope of works, which he read in conjunction with the bracing design, and prepared his costings by reference to each element of that scope set out in Sections 10.5 and 10.6 of Mr Pearce’s report. Accordingly, Mr Madden allowed for the demolition of the external masonry on the whole of the eastern elevation of the ground floor of the home prior to the installation of the structural steel portal frame system, as specified in Sections 10.5 and 10.6 of Mr Pearce’s report. Mr Madden gave evidence that he had calculated, by measuring from the plans for the property, that this would involve the removal of 104m² of masonry. Later in his evidence, Mr Madden corrected this to say that the 104m² of masonry that he had costed to be removed included the whole of the ground floor eastern elevation and also the laundry wall at the rear of the ground floor of the home where PT5, PT6 and PT7 are to be installed according to the bracing design.

37. By contrast, Mr Bolt took the view that the scope of works described in Sections 10.5 and 10.6 of Mr Pearce’s report had been superseded by the bracing design, and that any demolition of or disturbance to the existing parts of the home would be shown in the bracing design. Mr Bolt considered that the additional bracing elements depicted on the bracing design, which I have described above, did not require any disturbance at all to the exterior walls of the home because each additional bracing panel was to be installed on the internal side of the exterior wall and that the workers would carry the new structural steel bracing panels, columns and beams inside the house through the glass sliding doors leading from the front lawn into the family room, manoeuvre them inside the house, and install each of them into the position shown in the bracing design after removing the internal wall panels and linings to expose the internal side of the exterior walls and rolling back the carpet and floor linings to expose the concrete slab on the ground floor, without any disturbance to any exterior walls. Accordingly, in Mr Bolt’s view, the rectification works did not require the removal of any of the exterior masonry on the eastern elevation of the ground floor, with the possible exception of two columns on either side of the garage door (marked as C1 and C2 on the bracing design). Mr Bolt initially gave evidence that the masonry on C1 and C2 would need to be removed, and said that he had allowed for this in his costings. Mr Bolt later acknowledged that he had made no allowance for that in his costings, before ultimately expressing uncertainty about whether the bracing design called for any work at all relating to C1 and C2 (the steel columns of which are marked on the bracing design as existing features of the home).

33. Mr Madden disagreed with Mr Bolt’s conception of undertaking the structural rectification works without any disturbance to the exterior walls of the home. Mr Madden considered that Sections 10.5 and 10.6 of Mr Pearce’s report dictated the scope of the works that he was required to cost, adding that it was also consistent with his own experience of the way in which structural works of this nature would be carried out that the whole of the exterior masonry on the eastern elevation of the home would need to be removed to allow for access to the installation locations for the new structural steel braces, columns and beams and to allow for the handling and manoeuvring of those elements.

34. Despite being cognisant of that difference in their respective approaches, neither Mr Madden nor Mr Bolt called for any clarification from the structural engineering experts concerning the scope of works before completing the QS joint report.

35. The evidence provides no support for Mr Bolt’s view that the scope of works specified by Mr Pearce in Sections 10.5 and 10.6 of his report had been superseded by the bracing design. The joint report of the structural engineers gives no such indication. The key element of the structural rectification work insofar as it pertains to the eastern elevation of the home affected by the dispute between the quantity surveyors about the removal or non-removal of external masonry is the two-storey structural steel portal frame system to be installed from slab level to roof level that is described in Sections 10.5 and 10.6 of Mr Pearce’s report and depicted in the bracing design. Mr Bolt strayed beyond his expertise as a quantity surveyor in preparing his costings based on his own perception of the scope of work that would be required to implement the bracing design, which was far more limited than Mr Pearce’s scope of work in Sections 10.5 and 10.6 of his report. As I have already mentioned, Mr Pearce and Mr Manning referred to Mr Pearce’s scope of work in their joint report without any qualifying or limiting comment.

36. I reject the submission made by counsel for the engineers to the effect that Mr Pearce’s observation in his report referred to at [22] above means that his scope of works set out in the report is wholly superseded by the subsequent bracing design and that, conversely, the bracing design is rendered redundant if one pays any regard to the scope of work in Sections 10.5 and 10.6 of Mr Pearce’s report. Mr Pearce’s observation in his report referred to at [22] above is merely an acknowledgement that the scope of works may change once a bracing design was prepared. As I have said above, there is no evidence that the preparation of the bracing design that was in evidence changed the scope of works.

The disputed items

42. The disputed items are:

1. Mr Madden’s allowance of $8,000 for architectural fees and $15,000 for engineering plans preliminary to an application for development consent for the rectification works; [6]

   6. Exhibit 16, p 1.

2. Mr Madden’s allowance of $36,000 for a site foreman and $30,000 for a general foreman for an estimated three-month duration of the works; [7]

   7. Exhibit 16, p 1.

3. Mr Madden’s allowance of $10,500 for dilapidation reports in respect of the property and the two neighbouring properties (three reports at $3,500 each) prior to the commencement of the works; [8]

4. Mr Madden’s allowance for the demolition of 104m² of existing masonry veneer walls on the ground floor of the residence at an estimated cost of $3,977.27; [9]

5. Mr Madden’s allowance for the reconstruction of those masonry veneer walls after completion of the structural rectification works at an estimated cost of $21,226.01; [10]

6. Mr Madden’s allowance for the removal and replacement of established plants at an estimated cost of $15,000; [11] and

7. the cost of contract works insurance and contract works public liability insurance. [12]

   8. Exhibit 16, p 1.

   9. Exhibit 16, p 8.

   10. Exhibit 16, p 9

   11. Exhibit 16, p 3.

   12. Exhibit 16, p 1.

43. Those disputed items fall to be considered in the context of determining the quantum of damages to be awarded in favour of the plaintiff for the engineers’ admitted breach of their duty of care in circumstances where the residence is the plaintiff’s home, it is not structurally sound unless and until the defects are rectified, it is common ground that rectification is both necessary and reasonable, and the bracing design represents the agreed approach to rectification.

44. As the plaintiff submitted, the question for the Court to determine is: what amount will the plaintiff reasonably have to pay to rectify the admitted structural defects? In the normal course, the plaintiff could be expected to put that work out to tender. Indeed, Mr Bolt gave evidence that he expected that this would occur in this case. The Court therefore looks to how a reasonable builder would be likely to price the work. While the evidence of Mr Madden and Mr Bolt is of assistance in answering that question, it tends to suggest that there is a degree of precision in assessing the damages to which the plaintiff is entitled, which does not exist in reality. [13]

    13. Ippolito v Cesco [2020] NSWSC 561 at [79].

45. I generally place greater weight on the evidence of Mr Madden than on the evidence of Mr Bolt. In giving evidence in relation to many issues that arose during the hearing, and which were the subject of dispute between the parties at the time, Mr Bolt displayed a propensity to take robust positions in relation to matters that either fell outside his expertise as a quantity surveyor, or that he had not considered in detail, or both. The evidence that he gave in support of those positions was very often inconsistent with other evidence that he gave later during his testimony. It suffices to refer to the following examples.

46. Despite acknowledging that the rectification works were designed to make structurally sound a residence that is presently structurally unsound, Mr Bolt gave evidence that, in his opinion, “it’s not necessary to, you know, go for development approval because all you’re doing is enhancing the existing internal bracing” and “we’re not actually changing the development from the point of view of gaining development approval”. Mr Bolt had not taken into account whether the works would involve departures from the structural engineering drawings that had been submitted for development approval for the construction of the residence in 2018 because “[a]s a quantity surveyor, I don’t want to delve into engineering practices”. Mr Bolt had no regard to the Environmental Planning and Assessment Act 1979 (NSW) and said that he was “not familiar with” “the particulars of the Act” and that he could not see “why that impacts on my assessment of the costs”. Upon being reminded that it impacted on his assessment of the costs because he had disputed Mr Madden’s allowances for the costs of obtaining development consent for the rectification works, Mr Bolt asserted that he had included the 5% contingency allowance in his costings to accommodate the possibility that development consent may be required, and other contingencies. He accepted that this may result in the whole of the contingency being exhausted before the works had even commenced. In closing submissions, counsel for the engineers abandoned the contention that the structural rectification works did not require development consent.

47. In the course of explaining his reasons for disputing Mr Madden’s allowance for the cost of a general foreman and site foreman, Mr Bolt gave evidence that the project would not require “two full-time people to watch maybe a couple of guys working”. Mr Bolt then clarified that “[y]ou might have two people plus a general labourer clearing rubbish out as they work away” but said that “four people would be too many”. When challenged about the notion that two workers plus one general labourer to clear rubbish would suffice for this significant structural remediation to a home, Mr Bolt said: “I think I’m possibly struggling with the word ‘significant’. … I wouldn’t consider it to be significant.” Only moments earlier, the plaintiff’s counsel had asked Mr Bolt whether he accepted that “these works involve relatively significant structural remedial works to a home”. Mr Bolt had answered: “Yeah, absolutely”.

48. In giving evidence concurrently with Mr Madden about the dimensions and weight of the structural bracing elements to be installed in the home in accordance with the bracing design, Mr Bolt initially described the three Power Truss frames (PT1, PT2 and PT3) weighing approximately 200 kilograms each as “very lightweight” and said that “[t]wo guys could carry it on their shoulders and walk straight through”. When challenged to describe how two workers could lift and manoeuvre a 200 kilogram steel frame, Mr Bolt began to gradually retreat from that assertion, accepting a need for three people to handle those frames on site, which he contended would be achievable if the delivery of each frame could be coordinated with the timing of its installation so that the delivery vehicle would use its low loader or forklift to place the individual frame straight onto a flat wheelbarrow which the three workers would then roll inside the home and manually manoeuvre it into an upright position and install it. In the course of explaining his reasons for disputing Mr Madden’s costing for a general foreman in addition to a site foreman, Mr Bolt had earlier given evidence that, as Mr Pearce had identified the additional structural steel elements to be installed in the home, the foreman would simply need to identify a supplier and then “[y]ou would obviously get it delivered in one delivery”. Mr Bolt ultimately landed on the position that he “can’t really comment on how many people it’s going to take.”

49. As I have explained at [35]-[41], Mr Bolt strayed beyond his expertise by substituting his own view of the scope of works, based on his review of the bracing design, for the scope of works articulated in Sections 10.5 and 10.6 of Mr Pearce’s report. Mr Bolt appears to have misread the bracing design insofar as his evidence suggested that it called for the installation of new structural steel elements at C1 and C2, and gave inconsistent evidence about whether or not he had costed ground floor masonry demolition that he said may be necessary for structural work that he read the bracing design as requiring at C1 and C2.

50. I now turn to each of the seven disputed items.

Disputed item (1): Architectural and engineering fees

51. In the QS joint report, Mr Madden allows $8,000 for architectural fees and $15,000 for engineering fees as part of the “preliminaries”. Mr Bolt makes no allowance for architectural or engineering fees preliminary to the commencement of the structural rectification works.

52. Mr Madden’s allowance for these fees is consistent with Mr Pearce’s scope of work for “Preliminaries” in Section 10.1 of his report, which includes: [14]

“Allow to prepare documentation suitable for obtaining any required development consent, construction certificate, occupation certificate and any other permits or approvals.”

14. Exhibit 7, paragraph 263.

53. In closing submissions, the engineers abandoned their contention that the structural rectification works did not require development consent. [15]

    15. See [46] above.

54. As the plaintiff submitted, Mr Pearce’s bracing design would not be sufficient, without more, to support a development application. The bracing design is revision A of a design that was expressly prepared for costing purposes only. The general notes in the bracing design expressly contemplate that there will be drawings and specifications prepared by architects and other consultants, and states that the bracing design must be read together with those drawings and specifications. I infer that Mr Pearce is likely to be required to review those drawings and specifications to ensure that they are consistent with the bracing design before the suite of designs, drawings and specifications is submitted to the relevant consent authority as part of the development application. I reject the engineers’ submission that the bracing design is sufficiently developed for the purposes of a development application, and that there is no evidence establishing any reason why an architect would be involved in a development application. I accept that the damages assessment should incorporate an allowance for architectural and engineering fees.

55. Mr Madden made an allowance of $8,000 for the architectural fees and $15,000 for the engineering fees. He did not arrive at those amounts by attempting a time-based calculation for the architect and the engineer. I prefer Mr Madden’s estimates, based on his expertise as a quantity surveyor, to the alternative figures suggested by counsel for the engineers of $4,000 and $2,000 respectively. Those alternative figures did not emanate from Mr Bolt and there is no evidentiary basis for them.

56. For those reasons, Mr Madden’s estimated costs of $8,000 for architectural fees and $15,000 for engineering fees should be included in the quantum of damages awarded in favour of the plaintiff against the engineers. That amount is included in the total damages of $475,109.46 claimed by the plaintiff.

Disputed item (2): Site foreman and general foreman

57. In the QS joint report, Mr Madden allows $36,000 for a site foreman at a rate of $12,000 per month, and $30,000 for a general foreman at a rate of $10,000 per month. Mr Bolt allows $30,000 for a site foreman at $15,000 per month on the basis that the works will take two months rather than three months, and makes no allowance for a general foreman.

58. Mr Madden allowed for the works to be undertaken over a period of three months, including approximately one month to obtain development consent and undertake planning and preliminary works, and two months to undertake the physical works after development consent is granted. Mr Bolt’s costings allowed for two months on the basis that development consent would not be required, but accepted that three months would be appropriate if development consent were required. As I have explained at [46] above, the engineers no longer contend that development consent will not be required.

59. Mr Madden gave evidence that, during the first month, the general foreman would be acting as a project manager and would be responsible for undertaking all of the work necessary to apply for and obtain development consent, including procuring further designs for the works necessary for that application. At the same time, the site foreman would be procuring construction materials and attending to works necessary to establish the site. During the second and third months in which Mr Madden assumes that construction would be underway, the general foreman would continue to act as a project manager and would liaise with the plaintiff, deal with suppliers, quantify costs, quantify any variations, and co-ordinate the tradespeople on site, while the site foreman would attend to construction related activities such as monitoring occupational health and safety, monitoring the progress of the works, and keeping all necessary records.

60. Mr Bolt did not dispute that any of the tasks described above would need to be performed (save for tasks relating to obtaining development consent), but disagreed that a site foreman would be required for the whole of the first month. In Mr Bolt’s view, a whole month would not be required for the procurement of materials and establishment of the site before works could proceed. In relation to the second and third months, Mr Bolt considered that all of the tasks could be performed by one foreman, who would only have to “watch maybe a couple of guys working”, as referred to at [47] above.

61. Mr Madden’s evidence about the nature of the tasks to be allocated to the site foreman during the first month, in which no construction activity is taking place and the general foreman is attending to all tasks associated with obtaining development consent, was given in very general terms. I am not persuaded by that evidence that it is necessary to engage a site foreman in addition to a general foreman, during that first month. I accept Mr Bolt’s evidence that this would not be necessary. Indeed, it seems to me to be inherently improbable that a month would be devoted to tasks in preparation to carry out works for which development consent has not yet been obtained.

62. I otherwise accept Mr Madden’s evidence allowing for a general foreman and site foreman for the second and third months. I reject Mr Bolt’s evidence to the contrary, which was riddled with inconsistencies as I have explained at [47]-[48] above.

63. For those reasons, the amount to be included in the assessment of the plaintiff’s damages in respect of foremen will be the amount estimated by Mr Madden but reduced by $12,000. The resulting reduction to the quantum of damages, after taking into account the flow-on effects to the calculations of the builder’s profit margin, contingencies and GST is $17,424.

Disputed item (3): Dilapidation reports

64. In the QS joint report, Mr Madden allows $3,500 for a dilapidation report to be prepared for the plaintiff’s property and for each of the neighbouring properties at 22 and 26 Bundella Avenue, being a total estimated cost of $10,500 for the three reports. Mr Bolt makes no allowance for any dilapidation reports on the basis that it would be sufficient for the foreman to take photographs of the condition of the home, and the neighbouring properties immediately before the commencement of works and to maintain a photographic record of the works as they progressed. Mr Bolt contended that this would provide sufficient protection for the builder in the event of any subsequent complaint that the works had caused damage either to the home or to one of the neighbouring properties. Mr Bolt considered that the risk of damage to the neighbouring properties was negligible.

65. I accept the plaintiff’s submission that a reasonable builder, acting prudently, would be likely to obtain detailed dilapidation reports in relation to the home and each of the neighbouring properties in order to mitigate the risk of subsequent claims. I accept Mr Bolt’s evidence that the risk of damage to the neighbouring properties is less than would arise from a project involving excavation. However, the proximity of the home to the dwellings constructed on each of the neighbouring properties and the manner in which the heavy steel structures are required to be manoeuvred in order to be installed in the home is not without risk of damage those neighbouring dwellings. I accept the plaintiff’s submission that a reasonable builder would be likely to price in the cost of mitigating that risk by obtaining dilapidation reports, rather than taking the risk. The cost of dilapidation reports for the three properties should therefore be included in the assessment of the plaintiff’s damages.

66. As to the amount to be allowed for each dilapidation report, I accept Mr Madden’s evidence that fees for such reports are not charged at an hourly rate but as a fixed fee per report. It was not submitted on behalf of the engineers that, in the event that Mr Madden’s approach was accepted, his estimate of the fixed fee should be reduced in assessing damages.

67. Accordingly, I accept the plaintiff’s submission that Mr Madden’s estimated costs of $10,500 for dilapidation reports should be included in the quantum of damages awarded in favour of the plaintiff against the engineers. That amount is included in the total damages of $475,109.46 sought by the plaintiff.

Disputed items (4) and (5): Removal and reconstruction of ground floor masonry veneer walls

68. In the QS joint report, Mr Madden allowed:

1. $3,977.27 for the demolition of 104m² existing masonry veneer walls on the ground floor of the residence, calculated at a rate of $33.40 per square metre with a mark-up of 15%; and

1. $21,226.01 for the reconstruction of 104m² masonry veneer walls on the ground floor of the residence after completion of the rectification works, calculated at a rate of $178.25 per square metre with a mark-up of 15%.

69. Mr Bolt made no allowance in the QS joint report for the removal of existing masonry veneer walls and the subsequent reconstruction of those walls on the ground floor of the residence.

70. I prefer Mr Madden’s approach because it is broadly consistent with Mr Pearce’s scope of works for the reasons explained at [35]-[41] above. Moreover, Mr Bolt’s evidence referred to at [47] and [48] underscores the inherent probability that the exterior masonry on the eastern elevation of the home will need to be removed to allow for access to the installation locations for the new structural steel braces, columns and beams and to allow for the handling and manoeuvring of those elements, as Mr Madden stated in the course of his concurrent evidence with Mr Bolt. [16]

    16. See [38] above.

71. Mr Madden may have departed from that scope slightly in allowing for the removal of the external masonry from the rear laundry wall, but there is no evidence that would allow me to assess any such departure in quantitative terms. [17] Any attempt to do so would be to descend to a level of mathematical precision that is antithetical to the task of assessing the plaintiff’s damages and inconsistent with the approach outlined at [44] above.

    17. See [36] above.

72. Accordingly, I accept the plaintiff’s submission that Mr Madden’s estimated costs of $3,977.27 for the demolition of 104m² of existing external ground floor masonry veneer walls and $21,226.01 for the reconstruction of those walls should be included in the quantum of damages awarded in favour of the plaintiff against the engineers. That amount is included in the total damages of $475,109.46 sought by the plaintiff.

Disputed item (6): Removal and replacement of established plants

73. In the QS joint report, Mr Madden allowed $15,000 and Mr Bolt allowed nothing for the removal and replacement of established plants.

74. This difference between them arises from Mr Madden’s conception of the works as involving demolition of external masonry on the ground floor east elevation of the home, in front of which lies an established garden and lawn, and Mr Bolt’s conception of the works as involving no demolition of any external masonry. Mr Bolt accepted during the course of his concurrent evidence with Mr Madden that if, contrary to his view, external masonry was to be demolished, then an allowance of between $2,500 and $5,000 should be made for the cost of removal and replacement of plants.

75. Since I have accepted Mr Madden’s approach of costing the rectification works as including the demolition and replacement of 104m² of existing external ground floor masonry veneer walls, I accept Mr Madden’s approach of allowing for the removal and replacement of plants. I prefer Mr Madden’s evidence to Mr Bolt’s evidence in relation to the appropriate allowance for that task for the reasons explained at [45]-[49] above. Mr Madden’s allowance of $15,000 is included in the total damages of $475,109.46 sought by the plaintiff against the engineers.

Disputed item (7): Contract works insurance and contract works public liability insurance

76. It is common ground between the plaintiff and the engineers that the estimated cost of these insurances is derived from the estimated total costs of the works.

77. In the QS joint report, Mr Madden allowed $5,250 and Mr Bolt allowed $3,500 for contract works insurance, while Mr Madden allowed $1,000 and Mr Bolt allowed $750 for contract works public liability insurance.

78. Mr Madden estimated the costs of the insurances at a time when he had estimated the total costs of the works at $466,701.16. At the commencement of the hearing, Mr Madden’s estimated total costs increased to $513,371.27 to include a contingency which he had previously overlooked. [18] By the conclusion of the hearing, the plaintiff had made concessions which reduced this to $475,109.46. As a result of my decision in relation to disputed item 2 above, the total cost of the works to be reflected in the award of damages in favour of the plaintiff against the engineers has been further reduced to $457,685.46. [19] That sum is so close to the basis for Mr Madden’s original estimate on which his insurance cost estimates in the QS joint report were based that no reduction of the insurance costs is warranted for the purpose of assessing the plaintiff’s damages in accordance with the approach outlined at [44] above.

    18. Exhibit 12.

    19. See [63] above.

Conclusion and orders

79. For all of the foregoing reasons, I conclude that judgment should be entered against the second and third defendants in favour of the plaintiff in the sum of $457,685.46. However, I will delay making an order to that effect and entering judgment for a period of approximately 14 days to allow the parties time to consider these reasons and satisfy themselves that there is no material inaccuracy in my calculations.

80. The matter will be listed at a time to be fixed within that period for the purpose of determining all outstanding questions between all parties concerning the plaintiff’s claims for costs and interest on costs, entering judgment and orders against the first defendant and against the second and third defendants in accordance with these reasons, and dismissing the first defendant’s cross-claim as indicated in the first defendant’s submissions filed in advance of the hearing.

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Endnotes

Decision last updated: 10 June 2025