K D Land Pty Ltd v Michael Ell & Associates Pty Ltd

NEW SOUTH WALES COURT OF APPEAL

CITATION: K D Land Pty Ltd v Michael Ell & Associates Pty Ltd [2002] NSWCA 370 revised - 19/11/2002

FILE NUMBER(S):
40631/01

HEARING DATE(S): 18/07/02

JUDGMENT DATE: 19/11/2002

PARTIES:
K D Land Pty Ltd (First Appellant)
Souris Holdings Pty Ltd (Second Appellant)
Michael Ell & Associates Pty Ltd (First Respondent)
Noel Pollard (Second Respondent)
Michael Ell (Third Respondent)

JUDGMENT OF: Heydon JA Hodgson JA Davies AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 9207/97

LOWER COURT JUDICIAL OFFICER: Naughton DCJ

COUNSEL:
Mr G B Hall QC/Ms A P Healey (Appellants)
Ms J Oakley (First and Third Respondents)
Mr D R Russell (Second Respondent)

SOLICITORS:
Bryden's Law Office (Appellants)
Phillips Fox (First and Thid Respondents)
McCabe Terrill (Second Respondent)

CATCHWORDS:
Tort - negligence - duty of care - building design and construction - partial collapse of building on plaintiffs' land - during preparation for erection of new structure on plaintiffs' adjacent land - whether engineer advising in relation to erection of new structure owed and breached a relevant duty of care to the plaintiffs - ND

LEGISLATION CITED:

DECISION:
The appeal is dismissed. The appellants are to pay the respondents' costs of the appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40631/01
DC 920797
HEYDON JA
HODGSON JA
DAVIES AJA
19 November 2002

K D LAND PTY LTD & ANOR v
MICHAEL ELL & ASOCIATES PTY LTD & ORS

Tort – negligence – duty of care – building design and construction – partial collapse of building on plaintiffs’ land – during preparation for erection of new structure on plaintiffs’ adjacent land – whether engineer advising in relation to erection of new structure owed and breached a relevant duty of care to the plaintiffs

The first plaintiff owned three adjacent blocks of land subject to the Real Property Act 1900 (NSW). The first plaintiff was a subsidiary of the second plaintiff. Mr Souris controlled both companies.
Mr Souris ran a chicken processing business which he sought to relocate to buildings on or to be erected on the three blocks. The first plaintiff engaged the defendant engineer to prepare construction drawings and to furnish advice in relation to the construction of a building to be constructed on one of the blocks. The defendant prepared such drawings and gave such advice. Mr Souris elected not to follow certain advice. Excavations conducted in preparation for the laying of foundations subsequently resulted in the partial collapse of an existing adjacent building. The plaintiffs unsuccessfully sued the defendant in negligence. They appealed against the finding of no liability.

Held (Heydon JA, Hodgson JA and Davies AJA agreeing), refusing the appeal,
In circumstances where the risk of unsatisfactory construction of the building on 30 Sloane Street was, although perhaps reasonably foreseeable, quite low, where an engineer is asked to prepare construction drawings, where that engineer advises that a geotechnical survey should be obtained, where the client rejects that advice, and where that engineer assumes in good faith and on reasonable, indeed strong, grounds that the actual building work would be carried out by a competent licensed builder, the engineer owes the client no duty to take care in relation to the risk that the work will not be carried out properly on behalf of the client. If it were otherwise, the standard of conduct imposed on the engineer would be extremely onerous: [65].

O R D E R S

The appeal is dismissed.

The appellants are to pay the respondent’s costs of the appeal.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40631/01
DC 9207/97
HEYDON JA
HODGSON JA
DAVIES AJA
19 November 2002

K D LAND PTY LTD & ANOR v
MICHAEL ELL & ASSOCIATES PTY LTD & ORS

Judgment

HEYDON JA: This is an appeal against orders made by Naughton DCJ on 23 July 2001 pursuant to which he gave judgment for the defendants with costs. The oral argument was conducted on 18 July 2002. Directions were given for further submissions to be completed by 24 July 2002. For various reasons, essentially attributable to the plaintiffs, they were not in fact completed until 16 September 2002.
Background
The trial judge described the background as follows. Mr Souris conducted a chicken processing business at 31 Sloane Street, Marrickville. Opposite those premises were 28, 30 and 32 Sloane Street, owned by the first plaintiff, a subsidiary of the second plaintiff, which Mr Souris controlled. He decided to use an existing building on 30 Sloane Street in conjunction with a small building to be erected on 28 Sloane Street and another small building to be erected on 30 Sloane Street so as to permit the chicken processing business to be conducted in the three buildings used together. On 20 July 1995 there was a partial collapse of the factory building at 30 Sloane Street after a footing trench dug for the purposes of erecting the new building on 28 Sloane Street had been excavated.
The trial judge continued:
“The collapse occurred because the footing trench was excavated to a depth below the footings of the adjacent existing building. That building had been ‘under designed’ in that its footings were not deep enough and/or had not been secured by piles or piers taken down to sufficiently firm foundation soil. That was not known by the design engineer for the proposed new building on the adjacent land. Nor was it known by the backhoe operator.
The first plaintiff was the owner of Nos 28, 30 and 32 Sloane Street. The second plaintiff owned all of the shares in the first plaintiff. Mr Souris was the managing director of both companies.
The first defendant was the family company of the fifth defendant, Mr Ell. He was the design engineer who prepared the engineering construction drawings for the proposed new factory building on No 28 Sloane Street. He did so on the instructions of Mr Souris and Mr Vourtzoumis, an architectural draftsman, who had prepared the development and building application plans and seen them through Marrickville Council.
The second defendant was the backhoe operator who excavated the trench. The third and fourth defendants were plant hire companies. The plaintiffs discontinued against the third and fourth defendants on Day 3 of the hearing. It was agreed that the second defendant was an independent contractor who had been engaged by the second plaintiff to excavate the subject footing trench, as well as other ones.”
The trial judge then said:
“In late 1994 Mr Souris orally retained Mr Ell to prepare working engineering construction drawings for the erection of two small factory buildings. One of them was to be on No 28 Sloane Street. The other was to be on No 32. On No 30 there was an existing small factory building. It was about thirty-five years old and was to be retained and used in conjunction with the two new ones on each side of it. No 30 was two storeys high at the front and one storey high at the back.”
The trial judge described the events just before the collapse as follows:
“It was not in dispute that on-site preparatory setting out work was done on 18 July 1995. Both No 28 and No 32 were then vacant land. The location of footing trenches was chalk marked on the ground in anticipation of excavation work commencing next day. The setting out work was arranged by Mr Souris himself. Nor was it in dispute that on 19 July 1995 the footing trenches for No 28 were excavated with a backhoe operated by Mr Pollard. It was also common ground that at some time during the afternoon of 19 July Mr Ell was telephoned and told that the ground at the bottom of the trenches was soft and that he was asked to attend the site to inspect them and advise what to do. The plaintiffs did not adduce evidence as to who it was who made the phone call. Mr Ell said that it was Mr Fardoulis. He was a ‘handyman’ whom Mr Souris had engaged as a foreman to coordinate and oversee the excavation and construction work. Mr Fardoulis was not a licensed builder and had no building qualifications but he had at some undefined time and for some undefined period and in some undefined way worked for his father who was a builder.
It was also common ground that when the footing excavation work on No 28 was completed on 19 July it was at a depth below the bottom of the exposed footings of the existing factory building on No 30. Mr Ell was not told that in the phone call to him on the afternoon of 19 July.
Mr Ell was not immediately available on such short notice to attend the site on 19 July. He agreed to be there early the next morning and was. He was worried by what he saw. It was dangerous for the stability of No 30 that the adjacent trench on No 28 was at a depth below its footings. Mr Ell realised that immediately and advised Mr Fardoulis that concrete piers should be sunk below the trench at 1800 millimetre centres along the adjacent trench, and also along the front trench, and that the trenches be filled with concrete. Excavation of pier holes then commenced. For that work the backhoe was used and, again, Mr Pollard was its operator.
During excavation of the third pier hole the front of the building on No 30 collapsed.”
The case against Mr Ell
Below the appellants will be referred to as “the plaintiffs”, the first and third respondents (who were the first and fifth defendants at the trial) will be referred to as “Mr Ell”, and the second defendant, who is the second respondent, will be referred to as “Mr Pollard”. The name of the handyman engaged by Mr Souris, Mr Fardoulis, is spelt in different ways throughout the appeal books, but it is convenient to adopt the trial judge’s spelling, which he gave in his oral evidence in chief (his affidavit being different).
Key findings
(a) The post 27 September 1994 meeting
The trial judge found that at a meeting after 27 September 1994 between Mr Souris, Mr Ell and Mr Vourtzoumis, an architectural draftsman, Mr Souris agreed to retain Mr Ell to prepare engineering drawings for the two factories which he proposed to have constructed on 28 and 32 Sloane Street. The trial judge rejected Mr Souris’ evidence that he also told Mr Ell that he wanted to retain him to supervise the foundation work and that Mr Ell agreed.
The trial judge found that both Mr Vourtzoumis and Mr Ell:
“believed on reasonable grounds that Mr Ell was going to retain a professional builder to do all of the building work and the preliminary excavation work and to supervise it in the normal manner. Mr Vourtzoumis had recommended two builders to Mr Souris. Their names were Mylonis and Ward. Later on each of those builders telephoned Mr Ell and asked him technical questions about the plans. That reinforced Mr Ell’s belief that Mr Souris was going to have all of the construction and excavation work done by a professional qualified builder.”
The trial judge also found that at this meeting:
“both Mr Vourtzoumis and Mr Ell told Mr Souris that a geotechnical report should be obtained before the engineering drawings were prepared. Both Mr Vourtzoumis and Mr Ell knew that the soil at Marrickville could be soft and problematical for building purposes. They told Mr Souris that and said it was the reason why such a report should be obtained. Mr Souris, who had little or no building experience, asked how much such a report would cost and was told about $1,500. He complained that that was too expensive and he would not agree to commission such a report. It is likely that had a geotechnical report been obtained it would have revealed, as was the fact, that the footings of No 30 were only about 250 to 300 millimetres deep and were in soft peaty ground.
Mr Souris remained adamant in his refusal to commission a geotechnical report. Mr Vourtzoumis therefore insisted that at least some test holes be dug on Nos 28 and 32 to examine the foundation soil before the engineering drawings were prepared. Mr Souris, keen to save money, said that he would arrange that himself, and he did.”
(b) The test holes and the engineering drawings
The trial judge found that after the meeting:
“Mr Ell was later called out by Mr Souris to look at two test holes. They had been dug under Mr Souris’ direction. One was on the centre of No 28 Sloane Street. The other was on the centre of No 32. They showed soft peaty material down to about 500 millimetres and then sand. Sand is an adequate foundation base if firm or compacted to a state of firmness. Mr Ell then prepared the engineering drawings. He made a prominent note on them that the footings had been designed for a load bearing pressure of 150 kilopascals. That meant that the foundation material beneath them had to be capable of withstanding a pressure of that amount. A kilopascal is a unit of pressure equal to 1000 ‘pascals’. A ‘pascal’ is equal to one newton per square metre.
I find that for the subject site conditions that pressure was appropriate and that the note was a sound and obvious instruction to a competent and qualified builder. Mr Souris was not a builder.”
The trial judge then said:
“I find that at all relevant times Mr Ell believed, and had good reason to believe, that the excavation and construction work would be carried out by a competent licensed builder. His drawings, understandably, and reasonably, were necessarily technical and prepared on the basis that they were to be used by a competent licensed builder.
In fact Mr Souris decided to carry out the excavation work as an owner/builder directly hiring and overseeing the relevant labour himself and through a handyman whom he already knew. That was Mr Fardoulis to whom I have already referred. I find that it is, and was at the time, unusual for industrial buildings to be constructed on an owner/builder basis. It is, and was, not unusual for detached dwelling house buildings to be built on that basis but it is, and was [unusual], for factories, even small ones.
I find that in doing the work on an owner/builder basis, employing Mr Fardoulis as a site foreman and supervisor, Mr Souris took on more than he should have and was the author [of] of his own fate. Neither he nor Mr Fardoulis, I find, properly understood the engineering drawings. As I have found, however, those drawings were proper and adequate in all relevant respects. They did not refer to the adjacent existing building No 30 Sloane Street, but they did not have to. The drawings were for buildings on Nos 28 and 32. It is true that on-site footing excavation work had to be carried out cautiously having regard not only to the stability of the two proposed buildings themselves but also to that of the existing one on No 30. But the stability of No 30 was not a matter for which the drawings for Nos 28 and 32 had to make provision.”
(c) Was there a call on 18 July 1995?
The trial judge rejected Mr Souris’ evidence in cross-examination that on 18 July 1995 he telephoned Mr Ell, that he told him that the excavation work was to begin the next day, that Mr Ell said it was in order to do that and dig the trenches, and that Mr Ell could not get there on 19 July but would be there early on 20 July. Instead, the trial judge accepted evidence of Mr Ell which he summarised thus:
“on the afternoon of 19 July 1995 he received a telephone call from Mr Fardoulis saying that the trenches for No 28 had been dug but were soft at the bottom and asking him to come and advise. To that telephone request Mr Ell said that he replied by saying that he would attend the site early the next morning, 20 July 1995. He did so.”
The trial judge also rejected evidence of Mr Fardoulis that he had telephoned Mr Ell on 18 July 1995.
(d) The events of 20 July 1995
The trial judge accepted Mr Ell’s affidavit evidence as to what happened when he arrived at about 8 am on 20 July 1995. In particular, he found that Mr Ell told Mr Fardoulis he had excavated below the level of the footings; that this was dangerous, could lead to the collapse of the buildings and was illegal; and that the footings should be poured as soon as possible and the entire trench should be filled with concrete.
(e) The cause of the collapse
The trial judge found that:
“when Mr Ell first arrived on site on 20 July the relevant damage, which was the undermining of the adjacent footings on No 30, had already occurred and that what he recommended was an acceptable, and probably the best, engineering solution which could be offered under the circumstances. The collapse simply meant that the solution failed. It did not mean that his proposed solution was inappropriate.”
The trial judge then said:
“It was ultimately sought to be said on behalf of the plaintiffs that Mr Ell’s drawings were defective because they did not specifically call for piers. That is to misunderstand the nature of the problem. Piering for No 28 was relevant only to the stability of that building not the one on No 30. What caused the collapse of No 30 was not the potential instability which No 28 would have if not piered, but the instability of No 30 itself. That instability was caused by that building itself having been ‘under designed’ by itself having unsupported strip footings only 250 to 300 millimetres deep in peaty soil. That had nothing to do with the construction drawings for No 28. It was discoverable only by physically digging next to the existing footings so as to be able to actually see part of them. It was not something which should have been noted on the construction drawings for the proposed next door building on No 28. To suggest that it was is to misstate the problem.
It was also ultimately sought to be said on behalf of the plaintiffs that a note should have been placed on Mr Ell’s drawings to the effect that excavation should be stopped at the base of the old footings. Not only was that ex post facto (after the event) rationalisation but it failed to recognise that any competent licensed builder would have known to do that without such a note being added to the drawings. To make such a note was simply to do no more than say that the law had to be complied with, ie that the Building Code and relevant Standard had to be complied with. Any competent builder would, or should, have already known that.
There was no evidence that it was usual practice to have any such suggested note on the drawings. I find that unsurprising. It was not known before the excavation commenced that the footings of No 30 had been ‘under designed’. That was not the fault of Mr Ell. If his and Vourtzoumis’ recommendation for a geotechnical report had been accepted by Mr Souris the potential danger probably would have been discovered and avoided before the drawings were prepared and excavation commenced.
I found both of the above ultimate submissions to be unpersuasive. They misrepresented the problem. Both of them went beyond the pleadings and the particulars and seemed to be no more than tenuous afterthoughts.”
Accordingly the trial judge found no breach of retainer or breach of a duty of care on the part of the first and fifth defendants.
Complaint about failure to allow pleading amendment
On the fourth day of the hearing the plaintiffs sought leave to amend the Statement of Claim. Had leave been granted, the Statement of Claim would have been the sixth Statement of Claim. Ground 18 of the Amended Notice of Appeal was:
“That the Trial Judge erred in refusing the proposed amendment to the pleadings at the stage it was made and when there was no or inadequate evidence of prejudice to the respondents.”
Nothing in the written argument filed before the oral hearing or the oral argument presented during that hearing was directed to supporting that ground of appeal. However, in a document which the plaintiffs were given leave to file after the oral hearing (for purposes which did not include the purpose of supporting Ground 18) the plaintiffs drew attention to Ground 18, said that pleading amendments should be allowed in the absence of prejudice, said that the trial judge misstated the plaintiffs’ case in saying it was “basically one of failing to adequately supervise the job” and said that the trial judge thus erred in saying the amendment raised a “fresh and wider issue”. The plaintiffs then said:
“Given the nature of the case, the Professional Reports already available to the 1st and 3rd Respondents, and the fact that evidence supporting the proposed amendment had already been adduced in Cross-Examination, the Trial Judge made an appellable error when he took into account the period which had elapsed prior to trial ….”

The amendment, if allowed, would have added the following particular of negligence:
“(u) Failing to design or adequately design the footings to be erected on No 28 Sloane Street adjacent to No 30 Sloane Street, and particularly failing to allow for a pier footing system therein.”
The plaintiffs in this Court made no attempt to identify which parts of “the Professional Reports already available to the first and third Respondents” they were referring to, and how those materials supported the allegation. The trial judge referred to one piece of evidence which was not in evidence at the trial, but had been tendered only to support the amendment (Exhibit R). He also referred to another passage which was in evidence at the trial (Exhibit 5A). The former appeared to negate the allegation and the latter did not support it. Further, the plaintiffs in this Court made no attempt to identify “the evidence supporting the proposed amendment [which] had already been adduced in Cross-Examination”.
The application to amend was in fact made immediately after Professor Ansourian, an expert called by the plaintiffs, had answered the last question in re-examination. He said that if he had been in Mr Ell’s shoes and had learned from the holes dug in the centre of the sites that there was black peat down to 500 millimetres:
“the drawing should have shown pier holes, piers under the proposed footing and I would have said, I would have placed a note in the drawing to the effect that excavation should be stopped at the level of the base of the old footing and beyond that pier holes be dug and concrete cast and the footing designed as appearing as a pier and beam system.”
Counsel for Mr Ell then contended that that raised fresh issues and that defective design had not been pleaded. The Court stated that the parties would be kept to the pleadings, and counsel for Mr Ell stated that in that event she did not need to cross-examine Professor Ansourian further. Counsel for the plaintiffs then proposed to seek leave to amend, and sought the amendment in question. The actual amendment sought did not make any reference to the insertion of a note about the level of excavation. The two passages in Exhibit R and Exhibit 5A on which the plaintiffs relied in support of the amendment did not refer to a pier and beam system. The same is true of those parts of the existing Statement of Claim relied on by the plaintiffs at trial, and the somewhat different parts of it relied on by the plaintiffs on appeal, in support of the contention that the amendment was not necessary. The plaintiffs have failed to demonstrate that an amendment was not needed to capture Professor Ansourian’s points. If the amendment proffered was needed for that purpose, it did not entirely carry it out.
In view of the failure of the plaintiffs to offer on appeal submissions in support of Ground 18 which were concrete and not confused, Ground 18 should be rejected.
In addition, even if the trial judge erred in stating the nature of the plaintiffs’ case, counsel for Mr Ell did say to him that she had not been able to get full instructions on the amendment either from Mr Ell or from an independent expert; that she was surprised by the application; that she was not prepared to deal with the allegation; and that it was not possible to deal with it on the fourth day of the trial. It is customary for judges to accept apparently plausible assurances of this kind from respected counsel, and it is not essential that they be specifically supported by evidence. The plaintiffs’ submissions to this Court do not demonstrate that the trial judge was wrong in accepting those assurances from counsel for Mr Ell. The plaintiffs contended that there was no prejudice, but their submissions did not grapple with the points which had been raised by counsel for Mr Ell and accepted by the trial judge.
Complaints about factual findings
Two grounds of appeal complained about the trial judge’s unfavourable assessment of Messrs Souris and Fardoulis as witnesses, and his favourable assessment of Mr Ell.
No written argument was filed before the oral hearing in support of these grounds. When the appeal was called on for oral hearing the plaintiffs relied on further written submissions. Apart from referring to the leading High Court and other cases on the question when an appellate court can and cannot overturn demeanour-based and credit-based findings of a trial judge, all this document said on the present point was:
“The evidence of Mr Ell was inconsistent with

2 Backhoes being on site (Black AB 334P)
As to depth of the trenches (Black AB 340H)
In relation to his meeting with Mr Souris (Black AB 341R)
In relation to contact before 18.07.1995 (Black AB 343L).
…
In this case, a relevant circumstance is the extent to which, in other cases, decisions by this Trial Judge have been reversed. The number of those decisions must impair the general credibility of any Judgement delivered by this Judge, which is challenged, and the Court should examine his findings on credit issues.
…
In this case, the evidence establishes too fragile a base to support the finding that the evidence of Mr Ell was to be preferred to that of Mr Souris.”
26 In oral argument, counsel for the plaintiffs did not direct his submissions to any particular factual finding, but said simply “the evidence given by Mr Souris should have been preferred to the evidence given by Mr Ell where they conflict”. Attacks on credit-based findings can succeed, but not if they are launched in this way.
(a) One backhoe or two

In Mr Ell’s affidavit, he said that when he arrived at 28 Sloane Street at about 8 am on 20 July 1995, “I think there was a backhoe on 32 Sloane Street, however, I am not sure of this.” In his cross-examination at Black 334P-T he said:
“Q. And of course there were two backhoes on the site doing work when you arrived there at 8 o’clock on the morning of the 20th, weren’t there?
A. I don’t remember the two backhoes.
Q. Do you not remember one loading a truck to be taken away to the tip with excavated material?
A. No, I don’t. That’s not to say that it wasn’t there but I don’t remember.
Q. You know that there was another backhoe there which was owned by Mr Pollard, don’t you?
A. I remember vaguely seeing the other backhoe but I don’t remember the first one.”
If there is a difference in this evidence, it is a difference which demonstrates Mr Ell’s honesty and responsibility as a witness, rather than demonstrating a ground why the trial judge should have rejected him on any issue. Further, the question of the number of backhoes was not shown to be other than a wholly marginal and insignificant one.
(b) Depth of trenches
In his affidavit evidence Mr Ell said that on arrival on 20 July 1995 he “saw that a trench had been excavated around the perimeter to a depth which varied between approximately 500 mm to 900 mm.” In cross-examination at 340E-L the following evidence appears:
“Q. I want to suggest to you Mr Ell that as this case has gone along you’ve added to the depth of this trench which was dug alongside number 30 so as to blame others for the collapse of the building and not yourself, what do you say about that?
A. I’d say that’s not true.
Q. Nowhere, I want to suggest to you, along the trench adjacent to number 30 was down to 900 millimetres, that’s just something you’ve invented, what do you say about that?
A. That’s not true.
Q. Are there any photographs that you’ve seen in existence that enables you to scale down to the bottom number 28 trench next to 30 so that you can say that it’s 900 millimetres?
A. No.”
Mr Ell did not depart from his evidence in chief. In argument on the appeal there was no demonstration that it was wrong. In any event, it is common ground that the collapse was caused by the depth of excavation in the trenches, whatever that was. No part of the plaintiffs’ operative arguments on appeal turned on any contention that Mr Ell had exaggerated the depth.
(c) Meeting with Mr Souris during excavations
In the course of cross-examination Mr Ell’s attention was drawn to a statement signed by him dated 14 March 1996. In it he said: “I met Souris during the course of excavations”. Though paragraph 19(i) of the Amended Notice of Appeal appears to assume that by this Mr Ell meant the excavations on 20 July 1995, it is far from clear that this is so. At one point in the cross-examination the following evidence was given:
“Q. See Mr Ell, Mr Souris was there wasn’t he?
A. No, he wasn’t.
Q. I want to suggest to you that what you’ve done in this case is you’ve pretended this: He wasn’t there, do you agree with that?
A. No.
Q. And the reason you’ve done it is because it’s occurred to you that it would be remarkable that any man who was told his building was in imminent danger of collapsing would then drive away to the south coast.
A. Well, that hadn’t occurred to me. But he wasn’t there anyway so.
Q. It would be a remarkable thing for someone to do, wouldn’t it, if he was told, ‘Your building may well fall down, urgent attention is required’, for him to leave?
A. That’s correct, yeah.
Q. You knew he had been to the south coast during the day?
A. No, I didn’t.
Q. You had spoken to Mr Vourtzoumis?
A. I had spoken to Mr Vourtzoumis later in the day.
Q. But long before it came to making statements to people, insurance companies, doing affidavits, you knew that Mr Souris had been down to the south coast at least during some of that day, didn’t you?
A. I knew, I knew Bill told me that afternoon that Mr Bill had been – Mr Souris had been down to the south coast.
Q. I want to suggest to you that in this case you’ve fabricated the position that he was never there -
A. No.
Q. -- to explain what otherwise would have been a problem for you?
A. No, that’s not true.”
At Black 2/341R-S Mr Ell agreed with the cross-examiner’s suggestion that the 14 March 1996 statement about meeting Mr Souris during the course of the excavations was “pretty inconsistent” with his affidavit evidence. Neither the cross-examiner nor counsel for the plaintiffs in submissions to this Court identified which part of Mr Ell’s affidavit evidence reflected the inconsistency. The cross-examiner did not take Mr Ell to any specific portion of his affidavit. Mr Ell’s affidavit did describe Mr Ell’s attendance in late 1994 when exploratory holes were dug: Mr Ell there said he did not meet Mr Souris on site but did speak to him in his factory at 31 Sloane Street. Mr Souris’ first affidavit said he was on site on 20 July 1995; Mr Ell’s affidavit said nothing on the point either way. These controversies are not material. It does not matter whether Mr Souris was on site or at 31 Sloane Street in late 1994, or whether he was on site or not on 20 July 1995. It has not been shown that Mr Ell’s general credit is damaged by any divergence between his out of court statement and his affidavit. Indeed, apart from his admission in cross-examination, it has not been shown that there was a divergence between the out of court statement and any part of his affidavit. His admission, if correct at all, is only correct in relation to what Mr Ell said in cross-examination. The admission is of questionable accuracy since Mr Ell was not asked distinctly to focus on the point of time when the meeting took place. To the cross-examiner the significance of Mr Souris’ presence on the site on 20 July 1995 was apparently that Mr Souris, had he been there, would not have driven away to the south coast if Mr Ell had told Mr Fardoulis that conditions were “dangerous”. Mr Souris said in chief that he was on site when Mr Ell arrived at about 8 am. He gave no evidence that Mr Fardoulis spoke to him. The proposition that Mr Souris attended the site, as he said, and departed is entirely consistent with the proposition that Mr Ell gave a warning to Mr Fardoulis which Mr Fardoulis did not pass on to Mr Souris. The questions whether Mr Ell saw Mr Souris, whether he spoke to Mr Souris, and, if he did, what he said when he spoke to Mr Souris, are immaterial questions. The findings that Mr Ell warned Mr Fardoulis, which are based on pages of detailed reasoning, have not been attacked at all except in a most general way, and have certainly not been successfully attacked. The finding that what Mr Ell told Mr Fardoulis to do was probably the best solution has not been attacked. Though allegations of negligent conduct were made against Mr Ell at the trial in relation to his behaviour on the morning of 20 July 1995, no part of the plaintiffs’ argument on appeal supported those allegations or attempted to overturn the trial judge’s rejection of them. Differences between Mr Ell and other witnesses on whether Mr Souris was present on 20 July 1995 do not impair Mr Ell’s credibility on other issues. Indeed what Mr Ell said to Mr Fardoulis is not material, on the plaintiffs’ case, because on several occasions they made it plain, and said it was “common ground”, that by the time the excavations had been dug to the point they had been when Mr Ell arrived on 20 July 1995, it was inevitable that 30 Sloane Street would fall down.
(d) Contact before 18 July 1995
The plaintiffs’ submissions refer to the following cross-examination:
Q. It’s the case, I want to suggest to you, that you were contacted before the 19th, on the 18th, and you were told that the excavation work was going to commence?
A. No.
Q. Are you sure that you weren’t?
A. That’s right.”
Neither the cross-examiner nor counsel for the plaintiffs in this Court pointed to any reason why that evidence should not be accepted. Mr Souris’ evidence was that there was a call on 18 July, but by itself that it is no reason why the trial judge should not have preferred Mr Ell. The trial judge gave very detailed explanations for why he did prefer Mr Ell.
Thus none of the evidence pointed to by the plaintiffs establishes any reason why the trial judge’s findings adverse to Mr Souris’ credit should be set aside.
(e) Other credit issues
Paragraph 19(ii)-(v) of the Amended Notice of Appeal lists four other matters said to be adverse to Mr Ell’s credit, but no argument was advanced on these matters.
Contrary to the impression given by the plaintiffs’ written submissions, the trial judge gave quite detailed reasons for believing Mr Ell as against Mr Souris on such key questions as whether Mr Ell agreed at a meeting after 27 September 1994 to “supervise the foundation work”, and whether in a telephone conversation on 18 July 1995 Mr Ell told Mr Souris that excavations could commence. Since no attempt was made in the argument presented on behalf of the plaintiffs to demonstrate why these detailed reasons, which were prima facie convincing, did not support the trial judge’s conclusions, it is not necessary to set them out.
Counsel for the plaintiffs expressed a wish to hand up a printout purportedly supporting their contention based on the number of successful appeals which have allegedly been brought against decisions of the trial judge. Each member of the court propounded objections to the validity of the contention. Counsel for the plaintiffs indicated he would consider his position. No further attempt was made to hand up any document. Accordingly, the contention fails for want of empirical support and should be rejected. In any event, the contention that a particular appeal should be allowed by reversing credit-based findings on the basis that the judge who tried the case from which the appeal was brought had been reversed in other cases is radically flawed for these reasons. Each appeal must be examined by reference to its own particular circumstances. It is not a bar to appellate review that a judge is rarely overturned on appeal, and it cannot be a passport to appellate success that a judge is relatively frequently overturned. Mere numbers alone cannot be significant. It would be vital to know why some appeals had succeeded and others had failed. Hence a rational inquiry would call for a detailed examination of all the cases in which appeals had succeeded, all the cases in which appeals had failed, and indeed all the cases in which there had been no appeals – for a high number of successful appeals, even as a number, would mean nothing unless one knew how many cases the judge had decided. It is neither possible nor desirable for intermediate appellate courts to engage in these extensive inquiries. Recurring errors of a particular kind on the part of a particular judge may be a matter for comment, and may stimulate particular scrutiny, but that is not what was argued here.
Contractual duty to supervise the laying of the foundations
A heading in the plaintiffs’ written submissions handed up during the oral argument suggested that there was a contractual duty on Mr Ell to supervise the laying of the foundations. The trial judge rejected this contention on factual grounds and nothing in the trial judge’s findings of fact, challenged or unchallenged, suggests that he was wrong to do so.
Duty to detect errors
The plaintiffs relied on authorities dealing with the duties of architects and engineers in support of the proposition that Mr Ell had been retained to detect errors, including errors in the construction of 30 Sloane Street. These authorities are to be distinguished. In them the court was concerned with architects or engineers who were either retained to give whatever periodical supervision and inspection might have been necessary to ensure that the works were executed in general accordance with the contract, or were in frequent attendance on the site. Here Mr Ell was not retained for periodical inspections. His obligation was to provide engineering drawings. He had no duty to supervise and no duty to inspect unless requested to do so for the purpose of providing certificates to Council. Mr Ell did not have general engineering responsibility for the project. He only visited it twice; and his only visit after excavation began was on 20 July 1995.
The duty to advise
The plaintiffs submitted that when an expert such as Mr Ell agreed to carry out engineering work in relation to proposed buildings for an inexperienced person such as Mr Souris, Mr Ell had a duty to advise of the risks involved in Mr Souris’ plans to build. At different stages the plaintiffs formulated different versions of these duties.
One was said to be a duty to inquire whether the building on 30 Sloane Street had been properly constructed; whether its collapse was likely if it had not been properly constructed; and whether the collapse was likely if it had been. This should be rejected. Mr Ell, an engineer with a limited retainer to draw up engineering drawings for the construction of buildings on 28 and 32 Sloane Street which were to be used by a professional builder, but who had no brief to supervise the construction work, and who had advised that a geotechnical report should be obtained, did not have a duty to consider or advise on the question whether 30 Sloane Street had been designed and constructed according to proper standards.
A related submission was that Mr Ell, on hearing Mr Souris rejecting the advice which he and Mr Vourtzoumis gave that a geotechnical report should be obtained before Mr Ell prepared the engineering drawings, should have explained the reasons why a geotechnical report was needed and the risks that would be run without a geotechnical report – namely the risk of extra expenditure and risk of collapse.
In his affidavit, Mr Ell said the conversation was as follows:
“Bill Vourtzoumis (‘BB’): ‘This is Michael Ell. He is going to draw the structural and hydraulic details for your factory.’
I said: ‘We need a number of things before I can proceed. I will need a geotechnical report, I will need survey levels for the site and I will need a sewerage diagram for the site. I need the survey so that I can carry out the hydraulic drawings. I can’t do those drawings without it. It is a Council requirement.’
Mr Souris said: ‘Alright. What do you need the other things for?’
BB said: ‘I might already have a sewerage diagram.’
I said: ‘I need a geotechnical report because a lot of ground around Marrickville is not very good.’
Mr Souris said: ‘How much would it cost?’
I said: ‘Approximately $1,500.’
Mr Souris said: ‘That’s too much for just digging a hole in the ground. I don’t want to do it.’
I said: ‘You usually end up paying for a geotechnical report whether you get one or not.’
Mr Souris said: ‘I will get someone to dig some holes on site’.”

In cross-examination he said the conversation included the following:
“Q. You tell me now please what’s not in your affidavit using the words that you say occurred about the geotechnical report?
A. Again, it can’t be exact wording, but I said that, ‘You had need to have a geotechnical report.’ He said ‘Why’. I said ‘Because the ground in Marrickville is very, is not very good’. He said ‘All you have to do is dig a hole and you can see what the ground is like’. I said - .
HIS HONOUR: Just a moment.
Q. You said ‘because the ground in Marrickville is not very good’. He said what?
A. I said that detailed material testing is carried out, and also that the experience of the geotechnical engineer assists using his judgment. I also said to him that you really spend the money on a geotechnical report whether you get it or not. I said, ‘By getting a geotechnical report it allows us to assume higher bearing capacity – ‘
HIS HONOUR: It allows --
A. It allows us to use a [higher] bearing capacity which [saves] money.”
In an out of court statement made by Mr Ell on 14 March 1996, he recorded that he told Mr Souris at the first meeting that “it would be useful to have the geotechnical report so that we can ascertain the nature and depth of the footings on the existing building at No 30 Sloane Street.” He then said he could not recall the exact details of the conversation. The statement continued: “If the report is not obtained, then I have to design the footings for the worst case scenario. The worst case scenario will generally involve more expensive footing work such as piles. In retrospect, that was probably the right thing to do.”
The Statement of Claim pleaded as a particular of negligence that Mr Ell had failed to “obtain a proper and adequate GA technical [ie geotechnical] report”. The Defence pleaded that the first plaintiff understood the risk of the building at 30 Sloane Street collapsing, and voluntarily assumed that risk, because of Mr Souris’ refusal to commission a geotechnical report. There was no reply alleging in answer to that allegation in the Defence that in those circumstances Mr Ell should have given a warning about the risks of proceeding without a report. That condition of the pleadings tended to preclude any evidentiary examination of whether a warning about the dangers of proceeding without a geotechnical report was needed or customary or appropriate. The court was not taken to evidence distinctly directed to that question. It would therefore be unjust to conclude that Mr Ell ought to have given fuller reasons than those he actually gave.
The most precise formulation of the plaintiffs’ case was as follows. They submitted that Mr Ell owed a duty of care to the plaintiffs because:
(a)it was reasonably foreseeable that the footings at 30 Sloane Street had been constructed unlawfully, corruptly or negligently, and Mr Ell had seen as one of the purposes of the geotechnical report the need to ascertain the nature and depth of those footings;
(b)Mr Souris was obviously inexpert and did not understand the point of obtaining a geotechnical report;
(c)Mr Ell knew that the ground at the site was very poor;
(d)Mr Ell accepted that since Mr Souris was not proposing to get a geotechnical report, it was his duty to “design the footings for the worst case scenario”;
(e)to design for the worst case scenario entailed the construction of piers resting against the footings of 30 Sloane Street, as Professor Ansourian said he would have done;
(f)Professor Ansourian also gave evidence on the strength of which the plaintiffs submitted that the engineering drawings prepared by Mr Ell should have contained a note that the excavation should be stopped at the level of the base of the footings in 30 Sloane Street. Professor Ansourian was not cross-examined on those items of evidence and was not contradicted on them by any witness called by Mr Ell; and
(g)two of the notes which Mr Ell put on his plans were:
“G4 During construction the structure shall be maintained in a stable condition and no part shall be overstressed.
F1 Footings have been designed for the following bearing pressure: clay 150KPa rock 600KPa. Foundation material shall be approved by the consulting engineer before placing concrete.”
This contemplated the involvement of Mr Ell as engineer after the foundations had been dug and before concrete was placed in them: the plaintiffs submitted that there should have been a note requiring the engineer to be recalled before foundations were dug below the footings of 30 Sloane Street.
It is convenient to consider several distinct factual aspects of these submissions in the first place.
The evidence did not make it plain what Mr Ell meant by “the worst case scenario.” The plaintiffs left the answer to that question in doubt: Mr Ell may have been referring to the risk of buildings to be erected on 28 Sloane Street and 32 Sloane Street collapsing for want of support, or he may have been referring to the risk of 30 Sloane Street collapsing when excavations on the adjoining sites began. Without clear admissions to the latter effect, reliance on the phrase “the worst case scenario” does not assist the argument.
If it is true that it was reasonably foreseeable that the footings at 30 Sloane Street had been poorly constructed for one of the reasons advanced by the plaintiffs, the degree to which it was foreseeable must be at the lower end of the scale. Contrary to the plaintiffs’ submissions, it is not part of general experience that councils are commonly corrupt or incompetent or negligent in relation to the supervision of building construction. There was no evidence to that effect in relation to the Council in question. There is no evidence that Mr Ell actually knew of the risk. There is no evidence that Mr Ell actually knew of any factual matter which should have triggered in him either awareness of the risk or a consciousness that he ought to inquire further. There is no evidence that any danger was apparent to him.
Further, what Mr Ell should have done in relation to the risk of the poor construction of 30 Sloane Street, which was reasonably foreseeable but not at a high level, must be weighed against what was foreseen or reasonably foreseeable in relation to the competence of the persons who were actually to carry out the work.
Mr Ell assumed that the building work would be carried out by competent people. In his statement of 14 March 1996 he said:
“I assumed that the footings on the new buildings would go down beside the footings on the other building. I was not that concerned, however, because an experienced builder would not excavate below the existing footings without letting the consulting engineer know. The building code prohibits excavation below the level of existing footings unless the existing footings are underpinned. I believe that Souris was going to engage a builder to carry out the construction work. I believe that Vourtzoumis had, prior to my first meeting with Souris, advised Souris of the names of some builders that he could approach and get quotes from.
After we designed the structural details I discussed with Vourtzoumis who would be the appropriate builder for this project. We discussed two names, Peter Ward and Peter Mylonis. I am aware that both of those builders subsequently gave quotes to Souris, because both of them rang me to ask questions about the job. For that reason I was under the impression that Souris was building the factories himself as owner builder until the day that the structure on No 30 Sloane Street collapsed on 21 July 1995.”
At Black 2/330I-O he said:
“Q. You see, it’s your excuse, is it not, for the failure to detect the shallow foundations on the adjacent buildings, a geotechnical report was imperative in this case and the client refused to get one, is that right?
A. The client refused to get one, yes.
Q. And such a report was imperative, correct?
A We could do without it as long as we had competent people, which I believed that would be the case.
Q. You mean by that if the backhoe operator picked up your mistakes?
A. No.
Q. What do you mean by it?
A. I mean a competent builder who does some exploratory work prior to commencing and doesn’t go ahead and just dig.”
At Black 2/296P-Y he said:
“Q. Well, if you knew there was going to be no geotechnical report you could have refused to do the job, could you not?
A. That’s correct.
Q. Or you could have said to him: ‘Well, at least I will need holes dug where the foundations are going to go’, couldn’t you? Could you not have said that?
A. I could have said that but I was going to get those holes when the builder arrived on the site which is not an uncommon thing to happen.
Q. So you were going to do some drawings for some foundations which you didn’t even know could be built on the site, is that what you’re telling me?
A. No, it’s not what I’m telling you at all.
Q. To do your foundation drawings you had to know what was underneath where they were going to go, didn’t you?
A. From what I had I had enough to be able to say what the foundations were going to look like. Now whether it was necessary to put piers in or modify the foundations, that’s a matter for something which happens on site at the time when it’s being constructed and whether you get a geotechnical report or not you still have to do that.”
At Black 2/309S-V he said:
“A. What I envisaged that a normal builder would have done is when he discovered the level of the footings, he would have given me a call. I would have come out onto the site. We could have reduced the depth of the footing, put piers at sufficient spacings so that that could be taken care of. To underpin is a pretty expensive exercise and I don’t think it would have been the right thing to do in this case.”
In short, he believed there would be an independent builder because Mr Souris did not say he proposed to operate as an owner/builder; Mr Vourtzoumis recommended two builders, Messrs Mylonis and Ward, to Mr Souris; Mr Ell was rung by persons whom he understood to be builders quoting for the job; Mr Vourtzoumis told him Messrs Mylonis and Ward were going to quote for the job; the proposed buildings were commercial buildings of some value; it would be normal for a builder to be engaged for such a job; and if Mr Souris had intended to act as an owner/builder he, Mr Ell, would expect to be told because it was “a big commitment”.
There was thus ample evidence for the findings of the trial judge, repeated several times, that at all relevant times Mr Ell believed, and had good reason to believe, that the excavation and construction work would be carried out by a competent licensed builder.
Further, the trial judge said he accepted the following evidence of Mr Huggins, a well qualified civil engineer:
“Note F1 stated on the structural Engineer’s design drawings clearly required a minimum bearing pressure of 150kPa on clay soils. Because a geotechnical investigation had not been undertaken to establish required founding levels for the foundations, the Builder in our opinion should have notified the design Engineer that he had been unable to achieve the 150 kPa bearing capacity before excavating below the existing adjoining strip footings and requested further directions before proceeding further. Such a usual and acceptable procedure by the Builder would have alerted the design Engineer to the actual site conditions encountered and would have enabled him to provide details for either a ‘pier and beam’ or ‘underpinning’.
Therefore in our opinion, because the Engineer did not have a supervisory role in the project he did not ignore the requirements of note G4 and F1 on his design drawings. The Builder developer who was solely in charge of the construction process, did not in fact follow usual and acceptable practice.
…
In our view the Builder was responsible for seeking advice and recommendations for achieving an alternative design for the footings prior to de-stabilising the footing by excessive excavation. The Engineer did not have the benefit of a geotechnical report but only two isolated shallow exploratory holes provided by the Owner. Therefore, the Builder needed to ascertain the prevailing site conditions and seek further advice once he realised that the design bearing capacity of 150kPa could not be achieved without a variation to the design drawings (viz: Pier and Beam), without excavating below the existing footings.”
The plaintiffs did not question the trial judge’s acceptance of this evidence.
The trial judge also said:
“I accept Mr Huggins’ evidence that it was usual building industry practice to take care not to excavate below existing footings on adjoining land unless they were founded on rock or otherwise properly underpinned. Underpinning is a slow and expensive procedure. It was too late to underpin No 30 by the time Mr El was summonsed. He was not even told in the phone call from Mr Fardoulis on 19 July 1995 that the existing footings of No 30 had been fully exposed by the adjacent excavation on No 28. All he was told was that the bottoms of the trenches were soft. Mr Ell did not know the depth of the footings on No 30. His recommendation that a geotechnical report be obtained had been refused. The test holes which Mr Souris had dug were two only. They were located in the middle of Nos 28 and 32, not adjacent to the footings of No 30. Mr Ell was not informed, and did not know until 20 July 1995, that Mr Souris was going to do the excavation and building work on an owner/builder basis employing an inexperienced and insufficiently qualified foreman, Mr Fardoulis.
I accept Mr Huggins’ evidence that even if the existing building on No 30 had been braced to prevent side sway the excavation below the existing shallow strip footing on No 30 would still have caused that building to collapse.”
There was evidence from Professor Ansourian that he would expect a building contractor or any person who was carrying out building work who excavated next to 30 Sloane Street and saw shallow footings to stop work and contact an engineer or other suitably qualified person.
In short, the evidence was all one way that a competent licensed builder would not have carried on with the excavation beyond the point at which the base of the footings on 30 Sloane Street was exposed.
That this was good practice was confirmed by Australian Standard 2870-1996. It provided:
“The builder is the person or organization responsible for the construction of the entire building in accordance with the plans and specifications. The builder should be experienced in footing construction and where required by State legislation, should be licensed.”
The “builder” so defined was in substance Mr Souris. Clause 3.1.1.3 provided:
“Excavation adjacent to existing buildings
Excavation work for footings, drainage trenches or other similar works, adjacent to existing buildings can be undertaken provided -
(a)the angle to determine the safe area for excavation is taken from the bottom of the shallowest point of the existing footing in accordance with Figure 3.1.1.2; and
(b)the excavation is within the area defined as being suitable for excavation in Figure 3.1.1.2; and
(c)the slope of the unprotected embankment of the excavation complies with the appropriate soil classification described in Table 3.1.1.1; and
(d)for footing excavation adjacent to existing footings -
(i)the footing is placed as soon as practicable after exposing the existing footing; and
(ii)the existing footing, where on an adjoining property, is completely isolated from the new footing by means of a flexible bond breaker not less than 10 mm thick; and
(e)the adjoining footing is not left exposed at the completion of works.”
The excavation conducted by Mr Fardoulis did not comply with Figure 3.1.1.2.
Given Mr Ell’s belief that the excavation and the construction work would be carried out by a competent licensed builder, it was not reasonably foreseeable that any harm could flow from excavating next to the footings on 30 Sloane Street, because he believed that that builder would stop before the point of danger was reached.
There are the following difficulties in the plaintiffs’ reliance on the two points made in the answer given by Professor Ansourian about the need for an additional note on the plans and the need for a pier and beam system. It was in answer to the last question in re-examination. The question was an extremely general one. It arose because Professor Ansourian informed his legal advisers that something occurred to him during the luncheon adjournment after cross-examination had ceased, re-examination had ceased and he had been released from the witness box and excused. The question gave the parties opposing the plaintiffs no notice of its contents. Professor Ansourian merely said what he would have done: his answer was not expressed in terms of what the good practice of engineers was. As the history described in [21] indicates, the answer, after complaint from counsel for Mr Ell, led counsel for the plaintiffs to seek leave to amend the Statement of Claim. This is an event which, with other indications in the transcript, supports the view that the answer did not reflect the substance of the case which the plaintiffs had up to that point been advancing. Professor Ansourian frankly avowed that his answer was an afterthought. Further, though Professor Ansourian did have four years experience on building sites, that experience had taken place more than thirty years earlier. The warning which Professor Ansourian suggested would have told the competent licensed builder whom Mr Ell expected to be reading the plans no more than he was already obliged by Australian Standard 2870-1996 to do.
Towards the end of the oral argument in relation to the liability of Mr Ell, counsel for the plaintiffs was invited to take the court to specific places where the plaintiffs’ criticisms of Mr Ell had been put to him in cross-examination, and in particular to places where it was put to him that a note should have been placed on the drawings warning against excavation below the footings on 30 Sloane Street. The initial answer of counsel was that Mr Ell had not been cross-examined on that point, but he asked for leave to prepare a document containing the relevant transcript references, if any. When that document was filed, it turned out to be bulky, but it revealed that counsel’s initial answer was correct. For while it analysed the evidence of Mr Ell and the findings of the trial judge by reference to particular topics, the topic of the missing warning was not isolated, for the good reason that there was no reference which could be linked with it. Thus the heart of the primary argument put on appeal had not been put to Mr Ell. While this does not debar the plaintiffs from putting the argument to this Court, the fact that it rests on an answer by Professor Ansourian having the characteristics just described, taken with the fact that it was not put to Mr Ell, greatly diminishes its significance.
So far as the plaintiffs’ arguments rested on Mr Souris’ expertise or the lack of it, it is true that Mr Ell accepted that Mr Souris “certainly doesn’t have a lot of building knowledge”. It is also true that Mr Ell said that “perhaps” Mr Souris had not understood what Mr Ell had said to him. It is, in addition, true that Mr Souris in cross-examination affected a belief that a geotechnical report was the same thing as a sewerage diagram, but the trial judge formed a poor view of his credibility, and that particular answer might well be thought to support that view. Certainly the trial judge made no finding that Mr Souris did not understand what Mr Ell said about why a geotechnical report was needed, and the matters just listed do not establish that the trial judge was wrong in failing to make that finding. The first meeting at which Mr Ell may have made the observations he narrated was a meeting convened by Mr Vourtzoumis, the architectural draftsman engaged by Mr Souris. It was Mr Vourtzoumis who had obtained development consents and building approvals from Mr Souris and who wanted to introduce Mr Ell to Mr Souris with a view to the latter engaging the former to prepare working engineering construction drawings. Mr Ell was entitled to rely on the intervention of the competent licensed builder whom he expected to be engaged to cure any ignorance on Mr Souris’ part.

In circumstances where the risk of unsatisfactory construction of the building on 30 Sloane Street was, although perhaps reasonably foreseeable, quite low, where an engineer is asked to prepare construction drawings, where that engineer advises that a geotechnical survey should be obtained, where the client rejects that advice, and where that engineer assumes in good faith and on reasonable, indeed strong, grounds that the actual building work would be carried out by a competent licensed builder, the engineer owes the client no duty to take care in relation to the risk that the work will not be carried out properly on behalf of the client. If it were otherwise, so that the engineer in preparing the drawings and perhaps in other ways had to guard against the incompetence of whoever it was whose task it was to give effect to the drawings, the standard imposed on the engineer would be extremely onerous. It would be the engineer’s duty to guard against a very wide range of types of incompetence without having any real power or authority to prevent their occurrence. Attempts to fulfil that duty might well be regarded as officious interference. If a warning on the plan was called for in order to guard against the danger of a person carrying out the building work not complying with the specific duties which Australian Standard 2870-1996 already imposed on that person in relation to excavation, a myriad of warnings would be called for to guard against the myriad of other dangers that might arise from all the ways in which builders can be incompetent.
Did the trial judge fail to deal with the plaintiffs’ evidence?
The plaintiffs argued in a document filed by leave after the close of oral argument – though this argument scarcely fell within the scope of the leave granted – that the trial judge never dealt with certain parts of Professor Ansourian’s evidence. They said:
“The Trial Judge never dealt with the evidence of Professor Ansourian that, had a Geo Technical Engineer been retained, he would have determined whether footings designed to rest upon a strength of 150kPa could be achieved without having to underpin the footings of No 30 (Black AB 154 M/T), and the evidence of Professor Ansourian that, if there was no Geo Technical Survey prior to the preparation of the plans, the Engineer would have had to check that the strength of soil was adequate at the level of the base of the footing of No 30 (Black AB 154 X-155C).
Assuming the plans, as drawn by Mr Ell, were prepared on the basis of the test holes actually dug, Professor Ansourian said that the drawings should have included a notation that excavation should be stopped at the level of the base of the old footing (ie of No 30), and if any excavation below that level was required, then pier holes should be dug and cast with concrete, and the footing would then be a pier and beam system (Black AB 176 N).
Professor Ansourian was not cross-examined in relation to the evidence referred to in Paragraphs 3.1 and 3.2, nor was any expert evidence led on behalf of the First and Third Respondents to contradict that evidence given by Professor Ansourian.”
The argument based on the opinions of Professor Ansourian on what a geotechnical engineer could have done and what Mr Ell should have done in the absence of a geotechnical survey lacked force in view of the fact that Mr Ell placed a note on the plans pointing out that the footings had been designed for certain bearing pressures, and stipulating that the foundation material was to be approved by an engineer before concrete was placed. It is also not correct to say that the trial judge failed to deal with Professor Ansourian’s opinions. He did not mention all of them in terms. But he did give reasons at some length for concluding that it was the responsibility of the second plaintiff to proceed with caution once Mr Souris decided to go ahead without a preliminary geotechnical report and without employing a competent licensed builder (which decision he did not tell Mr Ell about). The trial judge also noted that much of Professor Ansourian’s testimony was given on the assumption that Mr Ell was retained to supervise the excavation of the trenches, and that on being “told .. that that assumption was wrong his evidence became favourable to Mr Ell”. Immediately after the cross-examiner made that revelation to Professor Ansourian, he said that if Mr Ell had not been so retained, his responsibilities finished when he submitted his plans. The correctness of the assumption was a vital matter so far as the opinions of Professor Ansourian which were supposedly not dealt with were concerned.
The proposition that the trial judge did not deal with Professor Ansourian’s evidence that the plans should have contained a note forbidding excavation lower than the footings of 30 Sloane Street is incorrect. He dealt with it at length in the passages quoted in [15] above. It is open to the plaintiffs to seek to challenge the reasoning, but it cannot be said, as the plaintiffs said, that the trial judge failed to consider and deal with Professor Ansourian’s last answer in re-examination. What is more, the trial judge’s approach to that answer is convincing for the reasons given in [62] above.
The failure of the plaintiffs to cross-examine Professor Ansourian about his evidence in the last answer in re-examination and to call evidence in answer to it is not surprising in view of the plaintiffs’ perception that a pleading amendment was required and the trial judge’s refusal of leave to make that amendment.
Did the trial judge err as to the scope of the plaintiffs’ case?
At one point the trial judge said:
“As ultimately pressed the plaintiffs’ case against the first and fifth defendants was that the first defendant was in breach of retainer and duty of care, and that the fifth defendant was in breach of duty of care, in failing to properly ‘supervise’ the excavation work, and in failing to take proper steps to save No 30 from collapse after Mr Ell arrived on the site in the early morning of 20 July [1995].”
The plaintiffs denied this and said that they had advanced at the trial the case they maintained on appeal. The plaintiffs did not contend that they were entitled to a new trial on the basis of this alleged misapprehension by the trial judge. In view of the fact that the trial judge made findings relevant to the primary argument advanced by the plaintiffs on appeal and dealt with that argument, it cannot be said either that the plaintiffs are debarred from advancing that argument or that the trial judge failed to consider that argument when it was put to him. On a fair reading of the whole judgment, the trial judge seems to have perceived the primary arguments of the plaintiffs as turning on supervision issues and the issue of what Mr Ell should have done on 20 July 1995; but he also perceived arguments based on the need for a pier system and on the need for a fuller note in the plans as having been advanced and as calling for attention.
Liability of Mr Pollard
The trial judge found that Mr Pollard, the backhoe operator who excavated the trench next to 30 Sloane Street, was not guilty of any breach of contract or breach of a duty of care. The main relevant passages in the trial judge’s reasons for judgment are:
“I find that neither Mr Souris nor Mr Fardoulis relied on Mr Pollard in any relevant way. I find that he simply did what he was told to do by them. There was no evidence of complaint about his work by anyone prior to the filing of the original statement of claim on 1 April 1996.
…
There was no suggestion that Mr Pollard was not paid for excavating the footings or that there was any dispute about his entitlement to payment.
I find that at all relevant times Mr Pollard was under the direction and control of Mr Souris and/or Mr Fardoulis. One or other, or both, of them, I find, told Mr Pollard where to dig, and how deep and how wide. I find that he simply did as he was told. I find that Mr Fardoulis checked Mr Pollard’s digging as it proceeded and told him when to stop. There was no evidence that Mr Pollard was criticised for what he did.
There was no evidence that Mr Ell gave Mr Pollard any instructions. I find that he did not. Nor is it usual practice for a design engineer to instruct a backhoe operator how to do his job. It is the on-site builder who has the duty to instruct the backhoe operator where to dig and how deeply and how wide. Mr Pollard had not been present on the site on 18 July when the footing trench locations were marked out. He did not arrive until he was required for actual excavation work on 19 July 1995.
I find that there were no technical qualifications or licensing requirements for a backhoe operator. As I have already noticed the evidence did not disclose what level of experience and competence was possessed by Mr Pollard. He had not previously worked for Mr Souris or Mr Ell. He was hired on an ad hoc basis through a plant hire service. There was no evidence that he professed any particular level of experience or competence.
An expert building witness for the plaintiffs, Mr Speirs-Ferrari, said that he had never allowed a backhoe operator to excavate trenches next to an existing building. That was not to say, however, that other builders had not done so. In any event, the witness qualified his evidence by saying that it was all right to excavate next to another building if it was known that its footings were adequate. There was no evidence to indicate that Mr Pollard understood that the footings of No 30 were not all right.
The evidence generally of Mr Speirs-Ferrari was of no utility because he admitted that at the request of the plaintiffs’ solicitors he had withdrawn several undisclosed qualifications which had originally been attached to statements made in an earlier version of his written report. In addition, he had not been shown any copy of Mr Ell’s engineering construction drawings prior to giving oral evidence in the witness box. I found him to be an unimpressive witness.
…
I find that in the present case there was insufficient evidence against Mr Pollard to warrant any reasonable and just conclusion against him in the absence of evidence from he himself. Accordingly, I find that his failure to provide an affidavit or to give oral evidence at the hearing is of no adverse significance for his defence.”
Though the Amended Notice of Appeal ranged a little more widely, the only arguments advanced by the plaintiffs in criticism of this reasoning in their written submissions were:
“The Trial Judge did not give adequate reasons for failing to give weight to the evidence of Mr Ell that no competent Back-hoe Operator would excavate below the foundations of an adjacent building (Black 302 J-P) and, as that evidence was unchallenged, should have accepted it, bearing in mind the failure of Mr Pollard to give evidence (C/F101 CLR 298 at 312).
(See also the evidence of Mr Speirs-Ferrari, a Licensed Builder at Black AB 192 N – that evidence was rejected by the Trial Judge at Red AB 88F – but the Trial Judge should have accepted the reason he advanced as a basis for finding negligence against Mr Pollard and against Mr Ell).”
The evidence of Mr Speirs-Ferrari on which the plaintiffs rely is:
“Q. You’ve said you’ve never permitted a backhoe driver to [excavate] along the wall of an existing building directly adjacent to that wall?
A. Yes.”
If the trial judge’s criticisms are sound, the evidence does not support the plaintiffs’ argument. Even if the trial judge’s criticisms are put on one side, Mr Speirs-Ferrari’s evidence does not go far enough to support the plaintiffs’ argument that Mr Pollard was negligent. It follows from Mr Speirs-Ferrari’s practice that he saw it as necessary to prevent backhoe operators from excavating next to existing buildings, and hence that he saw it as necessary for a builder to supervise and control what backhoe operators, uncontrolled, might do. That part of the evidence is supported by what Mr Ell said:
“Q. You would not have expected any competent backhoe driver to have excavated below the foundations of an adjacent building, would you?
A. Nor would I expect a builder to do the same – either.
Q. But I’m asking you about the backhoe driver. No competent backhoe driver would have excavated below the foundations of the building, would he?
A. No.”
In short, the evidence was all one way to the effect that the primary duty of stopping backhoe excavation below the foundation of an adjacent building lay on the builder. The plaintiffs appealed to Mr Ell’s statement that no competent backhoe operator should have done so. The trial judge was not obliged to accept that particular piece of evidence: with respect to Mr Ell, he had an interest of his own to serve in relation to cross-claims in place between himself and Mr Pollard. If the trial judge did not accept it, it would not support any inference which Mr Pollard’s absence from the witness box would enable the court to draw more strongly. There is nothing to suggest that the trial judge did accept that evidence.
The plaintiffs also referred to the following evidence of Professor Ansourian:
“Q. Again from your experience, if excavations commence against another building and the footings are shown on that other building to be shallower than expected, would you expect a building contractor to stop excavation and contact the engineer?
A. I think that’s fair, yes.
Q. You wouldn’t expect the building contractor or the person carrying out the building work to keep on excavating looking for solid ground underneath the foundations without checking with a suitably qualified person?
A. No. In my opinion, if whoever is excavating is clearly seeing that a footing is there and is shallow, then he should not excavate further.”
But that evidence did not relate to backhoe operators. It related to different categories – building contractors and persons carrying out the building work.
In any event, to criticise the trial judge for failing to give reasons for not accepting Mr Ell’s evidence and for not accepting it is to overlook a proposition advanced on behalf of Mr Pollard and supported by the trial judge that Mr Pollard simply did what he was told by Mr Souris and Mr Fardoulis, who supervised him and gave directions about how deep to dig the trenches. For that proposition there was much evidentiary support. Whatever the duties of backhoe operators left to work on their own initiative, it scarcely lies in the mouths of the plaintiffs to complain about the depth to which Mr Pollard was digging the trenches when, to use Mr Souris’ words, they “directed” and “instructed” him to dig them to a particular depth.
Orders
The orders proposed are:
1. The appeal is dismissed.
2. The appellants are to pay the respondents’ costs of the appeal.
HODGSON JA: I agree with Heydon JA.
DAVIES AJA: I agree with Heydon JA.
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LAST UPDATED: 19/11/2002

[2002] NSWCA 370

19 November 2002

Key Legal Topics

Areas of Law

Negligence & Tort

Contract Law

Civil Procedure

Legal Concepts

Duty of Care

Negligence

Expert Evidence

Appeal

Costs

Reliance