Gutteridge Haskins & Davey Pty Ltd v McCutcheon

[1993] HCATrans 65

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M30 of 1992

B e t w e e n -

GUTTERIDGE HASKINS & DAVEY PTY

LTD

Applicant

and

ANDREW McCUTCHEON and THE STATE

OF VICTORIA

Respondents

Office of the Registry

Melbourne No M31 of 1992

B e t w e e n -

GUTTERIDGE HASKINS & DAVEY PTY

LTD

Gutteridge(2)	1	12/3/93
MASON CJ BRENNAN J GAUDRON J

Applicant

and

ANDREW MCCUTCHEON and THE STATE

OF VICTORIA

Respondents

Applications for special leave
to appeal

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 12 MARCH 1993, AT 10.10 AM

Copyright in the High Court of Australia

MR J.L. DWYER, QC: If the Court pleases, I appear with my

learned friend, MR R.J. MANLY, for the applicant in

each matter.	(instructed by Minter Ellison Morris
Fletcher)

MR A.G. UREN, QC: If the Court pleases, I appear with my

learned friend, MR R.E. COOK, for the respondent in

each case. (instructed by J. Gregory)

MASON CJ: Yes, Mr Dwyer.

MR DWYER:  The outline of argument that has been filed

MASON CJ: Yes, we have had the opportunity of reading those

outlines.

MR DWYER: It identifies what are really four separate

questions, although the first two are closely

related. The submission is that both the onus

point and the question of when damage is first
sustained in relation to the limitation of actions

defence are both important questions, and questions

on which special leave should be granted.

It is submitted that in each case the decision of the Full Court is a decision which is not in

accord with well established authority, and it is

submitted that in each case it is important for the

operation of the law of tort in Australia that the

issue be determined and be determined by this

Court.

MASON CJ:	Did the decision turn on the onus point?
Gutteridge(2)	12/3/93
MR DWYER:	It is submitted that it did because the Full

Court expressly referred to the fact when it was analysing the evidence in relation to whether or not damage had occurred prior to 6 April 1981, that

we carried the onus, and it is submitted that had

the onus been the other way, that body of evidence

would not have been able to be disposed of in the

way that the Full Court disposed of it, that is, if

the Full Court had been saying, "Having regard to

this evidence can the plaintiff establish that

damage had not been suffered before 8 April 1981?"

the answer would have been different, in our

submission. In that way, the onus question was at

the heart of the Full Court's decision on the

limitation of actions defence.

We have set out in the outline the very

considerable body of authority which supports the
proposition for which we argue that the onus lay on
the plaintiffs, and it is submitted that the
Full Court ought to have applied that body of

authority and ought not to have departed from it in

the way that it did. As the outline acknowledges,

there have been suggestions in some cases that

perhaps a different rule might be contemplated, but

that did not provide a basis for the Full Court to

depart from that authority. We do rely on the

proposition that in this area of the law, the
proposition that is contained in paragraph 5 on
page 3 of the outline, that in this area of the law
the rules established by precedent are what count;

that the incidence of the legal burden of proof as

is said in Cross on Evidence can only be ·determined

by consulting the precedents and not by considering

a priori from the nature of pleading and such like,

where the incidence of the burden of proof should

lie on a particular question.

BRENNAN J:  Mr Dwyer, could you direct me to the page of the

appeal book in which the Full Court reversed the

onus?

MR DWYER:  The discussion on the issue starts at page 288,

but the particular passage that I have in mind is

in relation to the analysis that the Full Court

does which begins at page 304 of the appeal book,

where the Full Court goes back referring witness by

witness to what their analysis of the evidence was.

It is in the course of that that the Full Court

makes express reference to the fact that we carried

the onus. I am sorry, just for the moment I am

unable to put my finger on the particular passage,

but it is in that part of the judgment. I will

have my junior have a more careful look while I

continue with other matters if I may. It is at

page 303 and at line 9 the court says:

Gutteridge(2) 3 12/3/93

His client bears the onus here and "defects"

means, not some physical damage to the

structure occasioned by the inadequacy of the

footings, but that inadequacy itself.

If I could pass to the question,of when was damage

first sustained, the law which we say should have

been applied is the law as contained in

Cartledge v Jopling and in Pirelli, because we say

that damage in the form of cracking and settlements

had occurred between the opening of the pool in

September 1980 and March 1981 at any rate; and the

six years before the date of commencement of the

action takes us to April 1981.

So it is submitted that the facts of the case

directly raise the question whether the test in

Pirelli should be applied. The Full Court did not

apply the test in Pirelli, but rather applied what

it understood to be the effect of what

Mr Justice Deane had said in Hawkins v Clayton.

But it is our submission that the Full Court

misunderstood what Mr Justice Deane said, and that

Mr Justice Deane was not intending to lay down a

different rule from the rule in Pirelli. That

really turns on an understanding of what

Mr Justice Deane said and intended to say in the

passages which are quoted extensively by the Full

Court.

It is our submission that what

Mr Justice Deane did in those passages was draw a

distinction between two cases. On the one hand you

have the case where due to a latent defect in a

building, on the discovery of that defect the

economic value of the building is affected. This

is a case where the building has not itself
suffered any physical damage, but it becomes known,
for example, that the foundations of the footing
are defective. Once that is known, the value of

the building is reduced and so it is the coming to

case as the occurrence of damage.	light of that fact which can be regarded in such a
That cannot be the case, we submit, where what happens is not simply the finding out of the
existence of defective footings, but what happens
is that the building suffers physical damage
itself, which was the case in Pirelli and which is
the case here. Where the building itself starts to
crack, where parts of the building start to settle and to twist, the plaintiff, as the owner of the
building, plainly suffers real damage when that
starts to happen. Mr Justice Deane in the passages
quoted made allowance for that. He accepted from
what he was saying about the pure loss in value cases, he accepted from that analysis the cases

Gutteridge(2) 4 12/3/93

where there is physical damage to the building.

But the Full Court overlooked that distinction that

Mr Justice Deane had drawn.

The error that the Full Court fell into could

be put this way: they proceeded by establishing a

conceptual category by pushing the case into that
category and by then saying that certain

consequences follow.	The category they established
was the category of economic loss.	The first move

they make is to say, "We should regard this as an

economic loss case"; and the next move is to say,

"Because we regard this as an economic loss case we

therefore apply observations that have been made
about when damage is incurred in economic loss

cases." But to do so is to ignore the actual

facts.	It is to prefer the category or the concept
to what really happened.	We would submit it is

plain beyond argument that damage was suffered when

the building started to crack and when the building

started to settle, and it is in that way that the

Full Court applied, in our submission, an incorrect

analysis. We say it is a matter of the utmost

importance to the operation of the law of tort in

Australia that that matter be corrected, that it be

understood clearly by litigants and by courts that

where physical damage is sustained, the cause of

action is complete from the time that that physical

damage is sustained. So we submit that on that

issue leave ought to be granted.

The third issue was the question of the

finding of negligence which the Full Court made
against our client overturning the decision of the

trial judge that our client had not been negligent.

The trial judge's finding, we say, was based on the

judge's assessment of a considerable body of

evidence and the witnesses who appeared before him,

including a number of experts who were called, and

who said that what our client had done was in

conformity with good engineering practice and had
been properly carried out.	The trial judge

accepted that analysis of what our client had done,

and so the Full Court, in making its finding that

despite that evidence and those findings by the

trial judge, we had been negligent, the Full Court

focused on two particular matters.

The first of them was the Full Court's own

interpretation of Exhibit Cl. Exhibit Cl is

contained in the appeal book at page 384, and I

invite the Court to look at the drawing.

GAUDRON J: It is hard to see that this raises any question

of principle, is it not?

Gutteridge(2) 5 12/3/93

MR DWYER:  The question of principle that it raises is this:

the Full Court, as it were, departed from the trial judge's assessment on the question of negligence by

its own interpretation of this document. It is one

thing to do that in cases where the interpretation

of the document is incontrovertible. It is one

thing to do that in cases where the inferences to

be drawn from the document are plain and

inexorable. But this is not such a document. This

is a document which, in our submission, is highly

ambiguous as to its interpretation; and it is a

document, the interpretation of which by engineers,

had not-been the subject of evidence at the trial.

The trial evidence had not got beyond the plaintiff

who had tendered the document in opening putting it

to one engineering witness and getting statements

from that witness which, in our submission, are

highly equivocal, and which do not bear the

interpretation the Full Court put on them.

The question is not simply: what does the

document mean? The question is: was it negligent

of engineers dealing with the document at the time

to interpret it in a particular way? As to that,

what the Full Court has done is.simply say, "It is

negligent because we interpret it this way and we

regard that as the interpretation which any

competent engineer should have put on the

document." The matter just was not open to be

dealt with in the Full Court in that way, we

submit. The important question of law that that

raises is whether what the Full Court did is within

what is permissible under, for example, Dawson's

case, where the High Court dealt with the drawing

of inferences from documents where that inference is inescapable. But here, the inference, we say,

is not only not inescapable, we say the inference

is wrong, and we say there is simply nothing in the

document to entitle the Full Court to do what they

did.

MASON CJ:	How does that become a special leave point?
MR DWYER:	It becomes a special leave point because the Full

Court ought to have been confined in its approach

to this document. The Full Court has gone beyond
what was said in Dawson's case to be appropriate

to, if you like, an extended question. Dawson's

case says that an intermediate court of appeal may

draw an inference from the face of a document if

that inference is inescapable.	The Full Court has
gone beyond that.	The Full Court has said, "We

draw this inference from the face of this document
because that is our interpretation of the

document." It is not, as it were, a legal document

or a letter which a court may be able to interpret

for itself. It is a drawing containing

Gutteridge(2) 6 12/3/93

information, the issue being:  how was it

appropriate for an engineer to deal with that

information? We say that in approaching the matter

in that way, the Full Court simply went beyond what

it is permissible for an intermediate court of

appeal to do, and we say that is a special leave

point.

The submission at pages 8 and 9 sets out in

detail what we say about that document and why we

say what the Full Court did was wrong. The Court

has the document. The inference that the Full

Court drew was that the measurements as to sinking

that are recorded on Exhibit Cl are to be

interpreted as being measurements relative to

something which was itself sinking and not absolute

measurements, that is, measurements by reference to

some fixed datum. But the problem with Exhibit Cl

is that it just does not tell one which of those

interpretations of the document is correct, and as

we say, it was not appropriately canvassed at the

trial.

The second matter that the Full Court relied

on was what is dealt with in the outline of

submission on page 10 as being the South Melbourne

experience. The Full Court took a view as to the

implications which an engineer ought to have taken

from the South Melbourne experience, and took a

different approach on this question to the trial

judge, that is, the Full Court did not accept the

conclusion which the trial judge made that there

were reasons for differentiating between the site

of these works and the South Melbourne site.

Our submission is that it was not open to the Full Court to deal with this question in the way

that they did - - -

BRENNAN J:  Mr Dwyer, would it be necessary if an appeal

were allowed on this basis for the appellate court

to form its own view about the conclusion reached

by the Full Court?

MR DWYER:  In our submission, it would be that the appellate

court would not need to go beyond the question

whether the Full Court was right or wrong to

approach the matter as the Full Court did.

BRENNAN J:	Why not?
MR DWYER:	Because it would be appropriate, in our

submission, rather than the appellate court

involving itself in determining this question on the material, to remit the matter for retrial on the issue.

Gutteridge(2) 12/3/93

BRENNAN J: Retrial by a single judge?

MR DWYER:  Yes.

BRENNAN J: But it has been tried by a single judge, and

there is an appeal. If you set aside the judgment

of a Full Court you would have to remit it to the

Full Court to rehear, would you not?

MR DWYER:  Unless the Court were persuaded that the points

raised by the Full Court were points which had not

been appropriately canvassed at the trial

itself - - -

BRENNAN J: 

It seems to me that before you could make any of

these points run you would have to take us through
the whole of the evidence in order to appreciate
the significance of the arguments that you put.

MR DWYER: 

We would be confident that it would not be

necessary to do that because - - -

MASON CJ:  You might not do that, but your opponent almost

certainly would be forced into a situation where

that would require us to look at all the evidence.

MR DWYER:  On particular issues it may be necessary to look

at all the evidence.

MASON CJ:  How long did this case last in the Full Court?

MR DWYER: Before the Full Court?

MASON CJ: Yes.

MR DWYER: It was, I think, 12 days from memory.

BRENNAN J: That is a very substantial concession you have

just made, Mr Dwyer.

MASON CJ:	Some might think it is fatal.
MR DWYER:	Could I say this:	that at least some of the time

before the Full Court was taken up with issues

which the Full Court said it was not necessary to

determine and did not determine. They are issues

which are referred to in the judgment, for example,

as to what the future holds for this pool, whether

the design of it is such that it will withstand

future settlements or whether it will not. There

was a considerable analysis of matters of that

kind, and time was spent on other issues in what the trial judge had done which do not find their

way into the decision of the Full Court.

MASON CJ:  Mr Dwyer, it really does emerge, does it not,

that if the case came to the Court on this footing

Gutteridge(2) 8 12/3/93

it would require a great deal of expenditure of the Court's time investigating a matter that really is,

in substance, an issue of fact.

MR DWYER:  On the question of negligence

MASON CJ: Yes.

MR DWYER:  - - - it is difficult to controvert that,

Your Honour. But from the point of view of my

client who - - -

MASON CJ:  I follow that, but that is one of the reasons why

the Court rarely grants special leave where the

substantial issue is an issue of fact.

MR DWYER:  We are conscious of that, Your Honour, but all

that we can say is that the Full Court confined

themselves to particular matters in deciding that

our client was negligent, and the examination of

where the Full Court went wrong, as we say, on

conveniently and quickly dealt with, and we have outlined in the outline of argument how those points arise and how they could be disposed of.

those particular matters is in much smaller compass
than the examination of the whole of the evidence.

From the litigant's point of view the question

of whether the outcome in the Full Court is a
proper one is a matter of the utmost importance,

and this is a case where the professional

reputation of a firm of engineers is very much at

the front line of the decision. They are not just

a local firm, they are a firm that practises

Australia wide, and it is, from their point of

view, very much to be regretted if they cannot have

their contentions dealt with simply because the

issues involved are too extensive.

The fourth point fortunately is one in very

small compass indeed, and that is the Rodger v The

Comptoir D'Escompte de Paris point as to whether or

not it was proper for the Full Court to award

interest on the costs which were ordered to be

repaid. Our point there simply is that the Privy

Council said all those years ago that it could not

be done on the ordering of costs to be repaid that you add interest to them, because it was said then that it has never been known to be done before and

"We can't and won't do it". And there is no

decision since then which says that it can be done.

So the Full Court has simply taken a new approach based on their own view of - - -

GAUDRON J:  Do you say it is outside their rules? Do the

rules provide with respect to interest at all?

Gutteridge(2) 9 12/3/93

MR DWYER:  We understand that the respondents seek to rely

on section 58 of the Supreme Court Act, but that
does not apply to the award of interest on ordering

costs to be repaid. We say it is plain, if you

look at the section, that it does not provide for

it and the rules do not in terms provide for it

either. So it is just a new thing that the Full

Court has done in the face of authority and without

having any authority at all to support what they

have done, in our submission.

GAUDRON J:  And was the matter argued in the Full Court?

MR DWYER:  Very briefly. The matter was only raised at the

time of handing down judgment, that is, when

judgment was taken the Full Court indicated what

they intended to do subject to what counsel might

argue. We submitted to them that they could not

and should not, but they did not depart from the

view that they already formed that that was the

extent of the argument.

The other matter that I should remind the

Court of is the fact that there is, of course, to

be a retrial in any event on the question of

damages because the Full Court has ordered that,

and it was our contention before the Full Court,
and it remains our position, that if there is to be

a retrial it ought to be a retrial on all issues

rather than simply on the question of damages. The Full Court dismissed that contention in a sentence,

simply saying that they felt that that would be

unjust to the plaintiff, but they did not explain

at all or give any reasons for that contention.

It is our submission that if regard is had to

the way in which the issues on which we are said to

have been negligent have been dealt with in this

litigation, there is a a lot to be said for the

contention that justice to the defendants in the

case, justice to the engineers, requires, if there

is to be a retrial, that it be on all issues and

not simply on the question of the assessment of

damages.	They are the submissions, if the Court
pleases.

MASON CJ:	What about the second action?
MR DWYER:	I beg the Court's pardon.  In the second action,

the strongest reason for submitting that leave

ought to be granted in that matter, is that it

ought go together with the first action, that is,

if leave is granted in the first action - - -

GAUDRON J:  Does it not go rather the other way around?

Unless you succeed with respect to the second

Gutteridge(2) 10 12/3/93

action everything you have put with respect to the

first is entirely academic.

MR DWYER:  Yes, that outcome does follow. Turning then to

the second action which has been dealt with very

shortly both at trial and in the Full Court - both

at trial and in the Full Court all the attention

was on the first action and very little attention

was given to the second action. But our

submissions are that there are important questions

that arise in the second action.

The first of them is as to whether the

applicant owed a duty of care in relation to the

question of the respondent's first action becoming

statute barred. The submission there is that an

engineer giving advice as to what is to be done

about faults in a building may be, if he is

negligent in that advice, liable in respect of
damage to the structure that follows from his

advice, or damage which follows from defects in the

advice regarding the engineering matters, but that

the damage of the plaintiff getting out of time in the plaintiff's action is quite a different matter

and is entirely outside the risk, if one can put it

that way, of the advice that the engineer is

giving.

MASON CJ:	Why is that?
MR DWYER:	Because it is not a foreseeable consequence of the engineer giving advice about faults in the
building that the plaintiff will allow its action to get out of time.
BRENNAN J:	What is the purpose of the report?
MR DWYER:	The purpose of the report was to deal with

specific matters that had been raised, that is, the

building owner put together a detailed thing which

was called a "faults statement", and the engineer

went through the faults statement dealing with each

of the matters and saying what was appropriate to

do with that matter that had been raised in the

faults statement.

BRENNAN J:  I suppose one of the things that would be

appropriate to do would be to sue the person

responsible for causing the fault.

MR DWYER:  But engineers do not give advice about matters of

that kind. That is a legal matter. If the advice

had been obtained from a lawyer - - -

BRENNAN J:  It is not unforeseeable by an engineer that that

might happen:

Gutteridge(2) 11 12/3/93

MR DWYER:  It is not the subject on which the engineer is

giving advice. That is really the point. The

engineer is giving advice about the faults in the

structure.

GAUDRON J: Is he giving advice about the cause of the

faults, the source of the faults?

MASON CJ: 

He must be, surely.

MR DWYER: 

The contention is that the engineer's advice

covers the source of the faults if that is what he
is asked to advise on, yes.

GAUDRON J: Well, does that not go the whole distance for

the cause of action?

MR DWYER:  It is submitted not, because the question of

commencing an action is simply outside the

engineer's sphere of competence. He is not giving

advice about the question of when an action must be

commenced.

GAUDRON J: Let us assume that the engineer advises that the

source of the problem is the builder's poor

workmanship, and an action is commenced against the

builder, and at the end of the day it turns out

that the source of the defect is the engineer's own
design fault and the action against him has been
lost, statute barred. It must be within the

general risk involved.

MR DWYER: 

It is submitted not because the engineer is not

in the business of giving advice about taking legal
action let alone when to take legal action, and
what the statutes of limitation are, when time

begins to run and when an action will be statute

barred. That is all entirely outside the
engineer's sphere of competence and the matters on
which the engineer is giving advice.

But that is only part of what we say. We say

also that it was necessary for the respondents to

prove that they relied on the engineer's advice in

waiting until. the time that they did to commence

their action. The submission is that simply no

evidence at all was called that the engineer's

advice was relied on in delaying until April 1987

to commence the action. They just did not call any

evidence at all on that issue.

The third principal matter is

MASON CJ:  Did they have any other advice apart from the

engineer's advice as to source of fault?

Gutteridge(2)	12	12/3/93
MR DWYER:	Yes, they did.	They started to engage

independent advice during 1985, but they did not

commence their proceedings until April 1987. In

the appeal book there is a document of May 1987

which demonstrates that the question of proceedings

against the engineers were being contemplated at

that time. It is at page 507 of the appeal book.

The document is briefing notes for the Minister for

Public Works. The document is undated, but it is

in response to the Minister's request for briefing

notes dated 8 May 1985, so it can be accepted that

it is going to be very soon after that date.	The
second last paragraph on that page says:

In addition, further investigations are

proceeding to ascertain liability, if any, on

the part of the Consultants responsible for

the design and structure.

So the plaintiff was actively investigating that

matter at that stage, but did not commence

proceedings until nearly two years later in

April 1987.

MASON CJ:	What was the date of your client's report?
MR DWYER:	The first report is in August 1982, and the last

report was in 1983. There were four reports

altogether.

The Full Court by a matter of analysis

identified seven months as being the critical

period because they said the action could not have

been statute barred at the earliest until six years

after the building achieved practical completion in

September 1980. So they said, "Well, the earliest

date when an action could have been statute barred

was September 1986." So they say between that date

and when the action was commenced there are seven

months, and so they said that is the critical

period. And they say that they find it

inconceivable that if advice had been given during

1982 and 1983 and by 1984 at the latest, that that

seven month delay still would have been incurred.

That was all supposition because no evidence had been called about the matter. The plaintiff did

not explain what factors had led to its delaying

until April 1987 in order to commence the action,

called no evidence about the matter at all, and in

those circumstances the court ought not to make an

inference favourable to the plaintiff.

MASON CJ:  But did the plaintiff have evidence or advice

which established a cause of action against your

clients in that relevant period of time?

Gutteridge(2) 13 12/3/93

MR DWYER:  We do not know fully what advice the plaintiff

had, but the Full Court was satisfied that by

November 1985 at the latest the plaintiff had

independent engineering advice. But the matter was

not addressed at trial by the plaintiff bringing

forward the evidence which it had as to exactly

when it was advised that our client was negligent.

GAUDRON J:  What submissions were made on behalf of your

client in the light of that absence of evidence?

MR DWYER:  Certainly in the Full Court we submitted that the matter should have been attended to. I am not

certain as to what submissions were made at trial. But certainly, in the Full Court we submitted that

the plaintiff simply had not called any evidence

about these matters, and so had not established

that it relied on our advice in waiting until

April 1987 and that was a critical part of its

action.

The other way in which it could be put is in

terms of causation and whether it can be said that

the advice that we gave in 1982 and 1983 caused the

plaintiff to delay until 1987 in commencing its

action, that is, caused the plaintiff to get out of

time.

BRENNAN J: Well, the question would be whether, if you had

discharged your duty in 1982 and 1983 and revealed

your own negligence, it is more likely than not

that an action against you would have been

commenced within time.

MR DWYER:  Even if that is the question, Your Honour, it is

still up to the plaintiff to call evidence in

support of the presentation of its case on that

issue, and they simply did not. They called no

evidence at all on this issue.

BRENNAN J:	The question is whether or not one inference or another can be drawn, or whether it is a case where
there was simply no evidence.
MR DWYER:	Yes, and we say that there is no reason to draw

the inference that the Full Court chose to draw
that it is inconceivable that they would not have
issued. We say it is as open on consideration of

all of the facts to conclude that it was a

government department that was not particularly

interested in getting galvanized into action and

meandered along without any sense of urgency until

it eventually chose in 1987 to issue.

The fact of delay is, of course, something

that bears very hardly on the engineers and which

affected, it may be thought, the conduct of the

Gutteridge(2) 14 12/3/93

case. Our records had been destroyed in a fire early in 1982 so our computations, for example,

were not available to us when we came to reconsider

the matter in these reports.

The plaintiff had a copy of our computations

but did not make them available to us, then or at

any time until during the trial when they were

discovered to have been locked away in a drawer.

But the result has been that it is now some

12 years since practical completion was achieved on

this building, and we are still in the position

where we are endeavouring to cope with the claim

that is made against us.

MASON CJ:  Now, Mr Dwyer, did not an issue of this kind

arise in Bennett's case, and was it not resolved in

accordance with a view just put to you by

Justice Brennan, ie, if correct advice had been

given, a correct report had been made, then the

inference to be drawn is that the plaintiff would

have brought an action within time?

MR DWYER:  But in Bennett's case the advice was of a very

different kind. In Bennett's case it is advice

from the person who had charge of the relevant

person's affairs.

MASON CJ: It was advice of a very different kind, but did

it not raise the same question of inference in

terms of causation and statute of limitations?

MR DWYER:  A similar question of inference, but the

inference is different, in our submission, where,

on the one hand you have a person whose affairs are

being looked after by the person who is to give the
advice and who, if he had given the correct advice

in Bennett, must have had proceedings instituted.

Whereas here the question is:	"What did this
government department do?"	One just cannot draw an
inference of a similar kind, in our submission.

There is just no basis to say that an inference of

the same kind as in Bennett's case could be drawn
in this case. Certainly the Full Court did not

purport to do so.

GAUDRON J: That is because, is it, the different status of

the people who should have been advised, the

different nature of the advice that was in

contemplation as well?

MR DWYER:	Yes.
GAUDRON J:	And anything else?

MR DWYER: Certainly if one compares the two persons being

advised, they stand very differently. Perhaps the

Gutteridge(2) 15 12/3/93

third factor is that nothing should have been

easier than for the government department to give

evidence of the matter. That is, for the

government department to not have the matter dealt

with by inference but to actually inform the court

as to what the true facts were -

GAUDRON J:  But I suppose the difference, if there is one,

is that in Bennett's case you knew why he had taken

no action. He had been given false and wrong

advice which he would not have received if the duty
had been carried out. You say in this case, we do

not know what it was that caused the delay and how

that can be related back to the advice.

MR DWYER:  Yes, that is entirely a matter for speculation

because the department chose never to give evidence

about the matter. We do know from this memo, for

example, that the matter was being actively
considered as early as about May 1985, and in the

light of that how it could be said that our advice,

back in 1982 and 1983 was causing them not to

commence an action against us, we say, is just not

apparent at all. So we would say that that is

another reason why an inference of the Bennett type

cannot be drawn, because in the face of something

like this memorandum, that at least is revealed as

to how the government department was approaching
the matter, and at that stage, in May 1985, plainly
they have ceased to be relying on our reports in

1982 and 1983 as to the faults and the nature of

them and what should be done about them.

As my learned junior points out we have here

the Public Works Department with its own engineers, some of whom gave evidence in the case. We are not dealing with a lay client who does not understand

how buildings work. We are dealing with the

department of State that, in fact, looks after the construction of buildings in the State of Victoria

and has its own expert staff. Again that is a

circumstance which would mean that an inference of

the Bennett type should not be drawn.

So the submission is that in the second

action, the plaintiff just did not, on the

evidence, make out the action, and so the second

action is bound to fail, in our submission, on the

evidence. And if the second action is bound to

fail then the consequences to the issues in the
first action are not those which were put to me at
the outset of what was submitted about the second
action, that is, if the second action must fail

then the issues in the first action are entirely

live and should be dealt with.

Gutteridge(2)	16	12/3/93
MASON CJ:	I did not quite follow that.	Would you repeat

that again, Mr Dwyer?

MR DWYER:  If the second action must fail, then we go back

to the first action - - -

MASON CJ: Yes, I follow.

MR DWYER:  - - - and then the question whether the first

action is statute barred, for example, is of the

utmost importance.

MASON CJ: Yes. But if, on the other hand, you do not get

special leave in the second action, and the Court

is not willing to grant special leave to take on

the substantial issue of merit in the first action,

then the first two points you raise in the first

action, that is, onus of proof and the Pirelli

point, are academic points.

MR DWYER:  If we do not get leave in the second action?

MASON CJ: Yes.

MR DWYER:  Yes, but, we would submit that we ought get leave

in the second action as a matter of -

MASON CJ: 

I appreciate the arguments you have put, but

again you see, on this question of breach of duty
causation that you term the reliance point which

runs over into the two, it is essentially an issue

of fact.

MR DWYER: 

But the facts are in very short compass as can be

seen from what is said - - -

MASON CJ:  Not within 12-day compass.

MR DWYER: Half a day at the outside, it is submitted. It

is really a very small point, largely because so

little attention was given to the second action at

trial as can be seen from the trial judge's

judgment, and very little more was given in the

Full Court as can be seen from the Full Court's

judgment. The Full Court judgment reveals, it

might be said, the paucity of evidence so that if

one then considers, "Well, what happened at the

trial will need to be brought to the attention of

the High Court to determine the outcome of the

second action", that is in very small compass

indeed.

BRENNAN J:	What would you say about the inference to be drawn from a hypothesis that the defendant had in
1982 and 1983 admitted its liability for the
defects in the building?

Gutteridge(2) 17 12/3/93

MR DWYER: If the defendant had done that?

BRENNAN J: Yes.

MR DWYER:  It is by no means inevitable that the department

would have chosen to sue, the department may well

have preferred to set in course a process of

endeavouring to remedy defects very much, in a

sense, of what was done.

Could I just perhaps make this point: The

advice that was given in 1982 when the settlements

were beginning to be noticed and a measurement
programme had been instituted by the plaintiff in

June 1982, was that that monitoring programme should be continued. So a question then arises as

to when the monitoring had gone on for long enough

for definite conclusions to be drawn as to what the

monitoring of settlements revealed. There is a

document in the appeal book which indicates that from the point of view of the department, it was

only in October 1983 that one was able to draw

meaningful conclusions from the measurements. That

appears in the document that is at page 505 of the
appeal book, where in the second paragraph on that

page it said:

After analysis of several readings taken over

a period of fifteen months a pattern starts to

appear. Only now can any conclusions be made

with any certainty.

Now, that is the department's analysis of how the

reading stood as at October 1983. That is after

the last of the reports.

So, if the advice had been in 1982 and 1983

that we may have been at fault in - - -

BRENNAN J:  Not "may be", "we were at fault".

MR DWYER:  Yes. If the advice had been "we were at fault",

at that stage the consequences of the fault could not have been, perhaps, assessed in the same way, but the consequences are assessed at a later date.

That letter really shows that even if the first

line on that letter had said, "The engineer has

admitted that it was at fault in the design of this

structure, and that that fault has contributed to

some of the matters that have been complained of",

and it had then gone on, it was still only in

October 1983 that in that way the seriousness of

the fault could have been appreciated, and perhaps

even at a much later date.

The other matter of fact that I should draw to

the Court's attention is that the builder was still

Gutteridge(2) 18 12/3/93

on the job. That is, although practical completion

was achieved in September 1980 and the pool was

open to the public in September 1980 and events

started to be held there from then on, the builder

was still there engaged in rectifying matters as

late as 1985. There was an ongoing process of

matters being complained of; matters being
rectified; further matters being complained of;
further matters being rectified and so on, until in
1985 there was the attempt to resolve matters by
the issue of a final certificate.

The final certificate was in contention in the Full Court in relation to whether or not there was

a defence under the contract, and the Full Court

judgment deals with that, but no appeal is sought

in relation to that particular matter. That is, we
do not seek to upset the Full Court's decision in
relation to that certificate or the defence under

were the inferences to be drawn in 1982 and 1983,

the contract which was sought to be based on it.

that this process was going on until 1985. Unless there is anything else that I can assist the Court

with I think that is all that is desired to put.

MASON CJ: Yes, thank you, Mr Dwyer. The Court need not

trouble you, Mr Uren. In the view of the Court the

proposed appeal in the second action turns on an

issue of fact and raises no question of general
principle and is therefore not appropriate for the
grant of special leave. Likewise, in the view of
the Court, the issue of breach of duty in the first

action is one of fact raising no important point of

principle and is also inappropriate for the grant

of special leave.

In these circumstances the onus question and

the Pirelli point in the first action are of

academic interest only.	The interest on costs
question is not one of sufficient importance to

justify the grant of special leave to appeal.

Accordingly, the two applications for special leave

to appeal are refused.

MR UREN:  Would the Court make an order for the costs of the

respondent?

MASON CJ:	You do not oppose that, Mr Dwyer?
MR DWYER:	No.
MASON CJ:	The applications are refused with costs.

AT 11.12 AM THE MATTER WAS ADJOURNED SINE DIE

Gutteridge(2) 19 12/3/93