McDougall v JSA Consulting Engineers Pty Ltd
[2025] TASSC 41
•3 September 2025
[2025] TASSC 41
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | McDougall v JSA Consulting Engineers Pty Ltd [2025] TASSC 41 |
| PARTIES: | McDOUGALL, Campbell Sydney |
| v | |
| JSA CONSULTING ENGINEERS PTY LTD | |
| (ACN 165 277 681) | |
| FILE NO: | 844/2019 |
| DELIVERED ON: | 3 September 2025 |
| DELIVERED AT: | Hobart |
| HEARING DATES: | 15, 19, 22 – 26, 29 – 31 July; 1, 15 August 2024 |
| Written submissions: 9, 30 October; 6 November 2024 | |
| JUDGMENT OF: | Porter AJ |
| CATCHWORDS: |
Torts – Negligence – Pure economic loss – Particular cases of economic loss – Defective buildings - Damages – Assessment of damages in tort – Property loss – Heads of loss – Economic loss generally – Renovations of residence including addition of second floor level – Original footings inadequate to carry additional load – Resultant subsidence and cracking – Defendant negligent in failing to adequately assess existing footings in prevailing soil conditions and to advise of the need for underpinning – Finding that cause of damage was insufficiency of existing footings.
Aust Dig Torts [1207]
Damages – Assessment of damages in tort – Property loss – Heads of loss – Economic loss generally – Renovations of residence including addition of second floor level – Original footings inadequate to carry additional load – Resultant subsidence and cracking – Internal defects to the structure – Loss suffered is accordingly pure economic loss – Damages to be reduced by amount plaintiff would have spent on underpinning had the problem been identified at the time of the renovations.
Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16, 216 CLR 515 followed.
Auburn Municipal Council v ARC Engineering Pty Ltd [1973] 1 NSWLR 513, Bevan Investments Limited v
Blackhall and Struthers (No 2) [1978] 2 NZLR 97, De Pasquale Bros Pty Ltd v Cavanagh Biggs & Partners
Pty Ltd [1999] QSC 171, [2000] 2 Qd R 461; applied.
Aust Dig Damages [1083]
Damages – Assessment of damages in tort – Property loss – Particular interests – Interests in land or buildings – Generally – Renovations of residence including addition of significant second floor level – Measure of damages agreed to be costs of restoration – Where significant differences in scope and costs of methods of restoration proposed by each party – Method adopted has to be reasonable – Defendant's proposal would leave plaintiff with a doubtful remedy and a real risk of further and increasing damage.
Bellgrove v Eldridge (1954) 90 CLR 613 followed.
Kirkby v Coote [2006] QCA 61, Metricon Homes Pty Ltd v Softle [2016] VSCA 60, 49 VR 746; applied.
Aust Dig Damages [1089]
REPRESENTATION:
Counsel:
Plaintiff: P Jackson SC, A Vince Defendant: A Mills, C Groves
Solicitors:
Plaintiff: Murdoch Clarke Defendant: Dobson Mitchell Allport
| Judgment Number: | [2025] TASSC 41 |
| Number of paragraphs: | 226 |
Serial No 41/2025 File No 844/2019
CAMPBELL SYDNEY McDOUGALL v JSA CONSULTING ENGINEERS PTY LTD
(ACN 165 277 681)
| REASONS FOR JUDGMENT | PORTER AJ 3 SEPTEMBER 2025 |
| Introduction |
1 This is an action for damages. It is about a house at Woodbridge, bought in 2010 by Campbell McDougall and his wife Linda McDougall, into which they moved in February 2011. The house was built in 1983. Once renovated, it was intended to be a "retirement home" for the couple. The renovations involved alterations and extensions to the existing lower-level footprint but, more significantly, construction of an extended upper level containing a study, sunroom, living space, bedroom and separate bathroom. At the time of purchase, the house had an upper level but of much lesser dimensions than the one proposed, and one which could properly be described as a loft or attic. The new upper storey brought a substantial increase in the floor area to that which existed before.
2 The house is, very generally, a rectangular shape and is orientated on a northwest/southeast line but for convenience was mostly referred to in the trial as being on a north/south line. The renovations started in March 2013 and were completed in November of that year. In February 2014, a crack appeared in the brickwork near the front door. Since then, damage by cracking has progressively spread and worsened, inside and out. This cracking is at various points in the house, mainly on the lower level and particularly at the southern end. There is common ground that movement in at least part of the house has occurred through its existing footings, but none in relation to whether those footings were adequate for the purposes of the renovations nor, it seems whether movement is continuing.
3 Sadly, Mrs McDougall passed away in April 2024. She was a plaintiff in these proceedings, but her name has been removed from the action's title. As Mrs McDougall was involved in relevant events, there are times in these reasons where I will, as appropriate to the context, refer to "the plaintiffs" or to her by name. References to "the plaintiff" are to Mr McDougall.
4 The original plans for the renovations were drawn by an architect in November 2012. The architect contacted Matthew Horsham who was a principal in the business known as JSA Consulting Engineers conducted by the defendant company. As a structural engineer, Mr Horsham was engaged to provide engineering design services for the renovation. He was to assist the architect in preparing "a set of working drawings" as he put it in evidence. Ultimately, the architect did not carry on with the project and Mr Horsham arranged for a building designer to complete the plans to building permit standard.
5 Parts of the quotation which was provided to the plaintiffs by the defendant refer to "Consultation on engineering design during the development of the building application documentation" and "Design footings, timber and steel framing, bracing, lintels and roof modifications." It is common ground that Mr Horsham provided engineering input and approved, from his perspective, the plans submitted to the council for a building permit in February 2013. He had carried out at least one site inspection by that time, and thereafter a few more before completion and the lodgement of the relevant documents with the council.
6 Primarily, it is the suitability of the footings of the original building to the extent shown by the designer's drawings and as revealed by such inspections as were carried out by Mr Horsham which is at the heart of the dispute. Only two additional strip footings which related to a dining room on the eastern side and kitchen on the northern end were to be added in the renovation process. Some pad footings were added which related to extensions to a deck. The plaintiff's case is that the footings for the whole
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of the renovated house were inadequate to support the new upper level. In short summary, he alleges the defendant is liable for Mr Horsham's negligence in failing to adequately investigate the dimensions of the existing footings and failing to carry out a sufficient investigation of the whole of the site.
7 The defendant's position is that there was no breach of duty in that Mr. Horsham exercised the care and skill required of him in the circumstances. Further, in essence, the defendant says the movement is caused by the presence of a tree which was removed in 2015, and by excessive moisture levels in the soil at the southern end with varying causes. More broadly, the defendant's expert evidence is that irrespective of the added level and associated renovations, the house would have subsided and suffered similar damage in any event. It follows that negligence, including the scope of the duty of care and any breach of that duty, and causation are in dispute. A further issue is the best method of rectification. There is expert evidence on both sides of the arguments. The damage by subsidence and cracking is very substantial with damages claimed in the order of $1.5 million. In addition to the evidence of quite a few experts and a plethora of reports, plans, and photographs, I have had the benefit of a view of the house and surrounds.
The state of the house before the renovations
8 Russell Kingston, a forensic structural engineer called by the defendant, takes the view that in support of the notion that the house would have suffered the same damage in any event given the prevailing ground conditions, there is evidence of movement in the house causing cracking before the renovations began. Both John Bryant, the owner who sold the property to the plaintiffs, and Eric Bound, a builder who provided to the plaintiffs a building inspection report, gave evidence. Mr Bound's report is dated 6 November 2010. It contains notes as to each room, other areas of the house and the exterior. Among other things, Mr Bound noted minor cracking to a cornice above cupboards in the kitchen, minor cracking to the walls on the landing and rumpus room and minor cracking to some external brickwork.
9 In his evidence, Mr Bound was shown photographs of cracking in two internal areas more at the northern end of the house and asked whether the cracking shown was the sort he would describe as minor such as was seen at the time of his inspection. He said this was definitely not the case. He explained minor cracking would be up to a millimetre and would usually be at sheet joints whether they be on the one plane or in a corner. What is shown in one photograph is actually ripping apart of the plaster sheet as opposed to a joint cracking. He said, "That simply indicates an amazing amount of movement for that to open".
10 Mr Bound inspected the house on 21 June 2024 which was the first time he had been there since his report in November 2011. He walked around the whole house. He said he saw a significant amount of cracking and tearing of plaster work. When asked whether what he saw as comparable to what he saw in November 2011 he said that it was a totally different scenario. To illustrate, he said he questioned himself as to whether it was really the same house. The difference was so pronounced he was shocked.
11 John Bryant bought the house in 1991. Having spent some 44 years in the building industry as a builder and architectural designer, he retired in 2011. The plaintiffs bought the property from him. In 2004 he designed and built himself an extension of the northern end of the house. That was constructed on a concrete slab. He said that during the time he owned and occupied the house, there was no evidence that it had suffered or was suffering structural damage of some kind. He saw no damage to plaster work or any specific signs of movement in the house. As to the outside of the building, he did not notice any signs of movement, cracking or breaking in the brick work. He thought that the brick work in the house was of very good quality.
12 He inspected the house when he purchased it and took note of the brickwork. He thought it was a very well-built work: "I was most satisfied that the brick work was sound as was the rest of the house." As to the mortar he said that it was fine and explained that there may be variations in colour and texture
3 No 41/2025
of mortar which can depend on a number of factors. There was no need to repoint any of the brick work
during his occupancy, nor carry out any remedial work to any part of the building.13 In cross-examination Mr Bryant was taken to some much more recent photographs of various cracks in the house. Without exception he said there were no such cracks when he lived there, nor did he have to repair any. Mr Bryant was then taken to some specific aspects. Some of the matters raised came from the Bound report while others came from the report of Russell Kingston, a forensic structural engineer called by the defendant. The first thing was mesh in the brickwork at around the south-eastern corner. Mr Bryant said that he did not put it there and would not have known if it was there because the brick work was intact. (This mesh was later explained by Mr McDougall who said that he put it there to stop vermin getting in.) As to photographs showing small sections of slightly different coloured mortar from surrounding parts, Mr Bryant said that he was not responsible. Next, he said that he was not aware of what is now an internal crack from the area of the door from the sunroom to the veranda and had not repaired any crack.
14 In relation to some cracking to the cornice above the kitchen cupboards, he said that it would surprise him if it were present, as he had put the kitchen in, but he was not aware of it. Nor was he aware of the door to the veranda catching on the door sill as it was opened. He agreed that it was possible that there were "twisting" wardrobe doors. He said a 16 mm gap between the wall and the window architrave in the downstairs bathroom was remedied by replacing a couple of "missing" wind moulds. He said he regarded the Bound report as being about fairly minor issues, and he did as much as he could to satisfy the points. The only external cracking he saw was at each side of the front door where the bricks were vertically laid, and any cracking would have been minor and in the mortar, he was able to identify that cracking in a more recent photograph.
15 Mr McDougall said that when he inspected the property, he did not see anything that led him to think that it had undergone substantial repairs of any kind at some stage. He saw no problems with the brickwork, or any internal damage apart from what was noted by Mr Bound. He saw no signs of movement or subsidence in or of the building. He said that between when they moved in and the start of the renovations, they did not carry out any alterations to the exterior of the building; in particular, the brick work. He did not notice any signs of damage deterioration or failure in any of the exterior brick work, either the bricks or the mortar. He was taken through more recent photographs and confirmed that there was nothing of that type evident when they moved in.
16 In cross-examination, Mr McDougall agreed that when they moved into the house, he was satisfied that most of the issues identified by Mr Bound had been resolved. He was not challenged about his observations of the building before the renovations were carried out. Peter Holmes, a structural engineer called by the plaintiff, said the Bound report mentioned minor cosmetic issues that needed to be addressed. He said he saw nothing in it to raise any concern about building movement; "I am seeing quite the opposite; [the] building is in need of some TLC, some maintenance."
17 Mr Horsham gave evidence. He said that on 24 October 2012 he went to the property with the architect, Craig Meredith, and met the plaintiffs. He carried out an inspection of the property, principally to look at the health of the house. He understood that the house was about 25 years old, and he was looking for tell-tale signs which can include cracks in ceilings, uneven floors and that type of thing. He found the inside of the dwelling to be in very good condition. He said he had "a pretty good eye at spotting stress in houses." That was principally what he was looking for. He said it is typically shown up in the ceilings of most rooms with cracks in the plaster, and he could not spot anything; it was in very good condition.
18 One of his concerns was with the weight of the building and what was carrying the load. Because of that he was particularly interested to look for whether the building had articulation in the masonry, which is built into allow a building to move as foundations move, and brick is brittle. The articulation is a 10 mm gap which effectively acts as a flexibile joint. He did not find articulation. He
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was also looking for telltale signs of stress in the building, adding that it "very, very hard to hide stress in masonry because … it is very brittle, and so the slightest of movements – you will see stress develop in one way or another". He inspected the entire perimeter of the building and took a series of photographs. He described a high level of scrutiny to the brick wall work in order to detect movement and said apart from some unusual discolouring on some brick, "the house was in remarkably good condition for its age."
The defendant's expert, Mr Kingston, gave evidence of an inspection of the property over two days in April 2024. A lengthy written report constituted much of his evidence-in -chief. Notwithstanding what Mr Horsham said he saw in 2012, Mr Kingston says his reported measurements and observations show settlement of the building at the southern end before completion of the renovations, and also "previous repairs". As to the suggested settlement before completion, in the order in which they appear in the report, Mr Kingston notes the following.
(a) A "built-in horizontal misalignment" between the top of the gallery west wall cupboards[1] and the ceiling, the distances being 78 mm at the northern end and 110 mm at the southern end. (b) Horizontal misalignment of the downstairs bathroom/bedroom doorway (bathroom side) where the top of the architrave to the cornice on the western side is lower by 8 mm than the other side, said to be "consistent with the floor having relative settlement towards the west and a new horizontal ceiling having been installed."; (c) Compared to the upper floor levels, the lower floor levels generally have a greater fall to the south, starting approximately in the midline of the building, with the lower floor levels falling by 60 mm compared to 40 mm for the upper floor levels. [1] The gallery is an upstairs hallway which runs on the western side from about the centre of the residence due south.
20 As to evidence of previous repairs, again in the order in which they appear in the report, Mr Kingston notes the following.
(a)
The reopening of a previous repair above the window in the eastern wall of the lower-level bathroom. Photographs show a crack running at an angle from the point near the right corner of the window to the cornice.
(b)
"Mesh within re-opening of previous crack repairs." This is identified in two separate areas of the laundry/store area at the southern end of the building, and in the lightwell, also at the southern end. Photographs show a form of white or light-coloured mesh behind and in cracks in plasterboard.
(c)
Areas of lighter and darker mortar in the brickwork at the southern end of the house, the properties of which indicate the lighter coloured mortar is newer "and may be associated with previous repairs." In light of what Mr Kingston says in an earlier part of the report, the reference to the southern end includes a reference to the "Store eastern wall." In that part of the report, he says the lighter mortar is "most likely a previous repair." [My emphasis]
(d)
A "previous mortar repair" in the north-eastern corner brickwork of the downstairs bedroom on south-eastern side of the building; "[T]he owner was not aware of this crack having been repaired since his purchase, therefore it has been pre-existing to 2010."
(e)
The extent of internal distress within the south end of the house is not consistent with the extent of brickwork distress, "suggesting that previous internal repairs may have been carried out."
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21 The plaintiff objected to the admissibility of this "previous repair" evidence. The grounds included relevance and a failure to satisfy the requirements of s 79(1) of the Evidence Act 2000.[2] After submissions were made, it was agreed the evidence be taken provisionally. The evidence referred to in pars [19](a), (b) and (e), can be quickly dealt with. The plaintiff did not object to Mr Kingston's expertise as a structural engineer, specialising in forensic work. The relevant parts of the report outline what he saw with cross-references to photographs he took at the time of his inspection. I am satisfied that his opinions in relation to previous repairs, are wholly or substantially based on his specialised knowledge, as that requirement is explained in Dasreef Limited v Hawchar [2011] HCA 21, 243 CLR 588 and Honeysett v The Queen [2014] HCA 29, 253 CLR 122. Parts of the report that relate to the matters referred to in pars 19(a), (b) and (e) are arguably quite sparse in terms of reasoning sufficient to show that the opinion was properly based, but greater clarity emerged in oral evidence. Those expressions of opinion will be admitted. Weight is a separate consideration.
[2] 79 Exception: opinion based on specialised knowledge
22 As to pars [19](c) and (d), the grounds of objection to the evidence about the lighter brick mortar colour and the likelihood of repairs include relevance, as well as the requirement in the second limb of s 79(1). During his inspection, Mr Kingston was able to observe and photograph differences in mortar colour in three small areas of the southern end of the building. The photographs speak for themselves in any event. He had samples taken of mortar from cracks in some places, as well as drill dust samples. It is his opinion that the differences between samples evidence previous repairs is the subject of the dispute.
23 The argument arises because Mr Kingston's opinion that the lighter mortar colour is evidence of previous brickwork repairs is based on the testing of the mortar samples, carried out by an independent organisation, CMET Technology Pty Ltd, Corrosion Materials & Testing Consultants. The CMET report is attached to Mr Kingston's report, but it is separately in evidence by agreement which means that resort does not need to be had to s 60 of the Evidence Act as to the facts or data contained in it. The suggested issues relate to the terms of the CMET report and Mr Kingston's adoption or interpretation of it.
24 Mortar samples were taken from stepped cracks and drilled holes from and in two separate areas: the downstairs laundry west wall and the downstairs bathroom eastern wall. These became samples A and B respectively, with B described by CMET as "light coloured." Samples of dark and lighter mortar, C and D respectively, were taken from an area of the eastern wall of the store where there is presently no cracking. CMET determined that crack samples A and B were of a similar age, and concluded they had been open for a significant period, estimated to be in the range of five to ten years. It was possible sample B was a different mortar to A. CMET's analysis as to mortar age indicated the lighter coloured mortar in D was a relatively newer mortar than in C, "possibly used to repair cracks in the brickwork." Further, the mortar in B is similar to that in D, and that in A is similar to that in C.
25 From this, Mr Kingston has concluded that the lighter mortar in D from the Store eastern wall is most likely a previous repair. Although not stated by Mr Kingston, the obvious inference from the CMET results is that, as the properties of sample B are similar to those of D, the crack in the bathroom eastern wall had previously appeared but had been repaired and had since reopened.
26 Mr Kingston also stated that lighter coloured mortar in an area of the north-eastern corner of a downstairs bedroom is evidence of a previous repair. No explanation is offered and there is no reference to the CMET results. It may be he has adopted the results for other areas and applied it to this area. The
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evidence is objected to, but for reasons which will shortly appear, other evidence satisfies me that there
was a repair, but it was one necessitated by the renovation works.27 The objections are essentially to Mr Kingston's evidence, not so much the CMET report. Given that the report is in evidence, the stated facts and opinions are available and can be assessed subject to other evidence. That the CMET report puts previous repairs as possibilities does not affect admissibility: Langmaid v Dobsons Vegetable Machinery Pty Ltd [2014] TASSC 6, 24 Tas R 18 at [24] and the cases cited. The issue is one of weight. To the extent that Mr Kingston advances the opinions as to previous repairs as his own, they appear to be based on the CMET report, and in strict terms, his evidence would be inadmissible as not complying with either limb of s 79(1) of the Evidence Act. To the extent that he has adopted, advanced and exaggerated CMET conclusions, as he has done in relation to the Store eastern wall, the evidence is inadmissible.
28 In argument, Mr Groves for the defendant suggested that all Mr Kingston was offering was that repairs of some description might have been, or had been, made with the reason "to obscure to be identified". It was suggested that if there was work by which original mortar was replaced by newer mortar, that was a proper use of the word "repair". This is a little odd because Mr Kingston's opinion about the cause of subsidence includes reference to the probability of distress having occurred before the plaintiff's purchase in 2010, "with previous repairs having been made" before then. In closing, the defendant submitted that Mr Kingston's opinion about the primary cause of the structural distress – the presence of water in clay soils – was not reliant on the issue of previous repairs but was bolstered by it. It is quite clear to me that the subject evidence was being offered to suggest repairs to cracking caused by movement in the building before the renovations.
29 The plaintiff also argues that the evidence about the age of the stepped cracks is irrelevant because of the stated range of five to ten years which only takes things back to April 2014, some six months after the completion of the renovations. I am not persuaded that there is such a bright line of delineation that would compel the view that the evidence is irrelevant. It is really a question of weight.
30 As to the effect of the evidence itself, I have just mentioned the ultimate context of these matters; that is, the defendant's advanced primary cause of the structural distress is not reliant on the issue of previous repairs but is bolstered by it. Mr Kingston was cross-examined about several of the items. Many of his answers, or his manner of answering, were reflective of his evidence in cross- examination generally, and cause me to have reservations about the cogency of his views. To my mind, Mr Kingston had great difficulty in responding directly, or in any meaningful responsive way, to many questions and was often reluctant to make concessions about obvious points. I will need to again refer to this later.
31 I turn to the par [18](a) matter. The evidence of Mr McDougall about the gallery cupboards is that they are in two sections, one a little longer than the other, and which has been stepped further out. That is because there was a new wall put in behind that section, whereas the shorter cupboard section has the old wall behind it. That shorter cupboard section is to the south. Photographs show that the section measured by Mr Kingston in the longer cupboard. Mr McDougall said that not long before the trial commenced, he measured the other section in the same way Mr Kingston had the longer part – from each end of the relevant section to the ceiling – and could find no discrepancy at all. His photographs show the floor level behind each cupboard section as being generally the same.
32 Other measurements taken by Mr Kingston in this area have some relevance. In the renovations a new roof ridge beam was installed extending to a point approximately above the southern end of the cupboard measured by Mr McDougall. Mr Kingston assumed that it had been installed horizontally, and his measurements show a slight elevation of the south of 2 mm. If there was a previously sloping floor and a horizontal underside of the ceiling, it would explain the horizontal misalignment. However, the original ridge beam to the southern end of the house drops to 16 mm at its southern end point. Mr Kingston's measurements show a drop of 12 mm in the upper floor level from a point about halfway
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along the total cupboard storage area to its end, with then a further drop to 40 mm at the end of the house. That seems to be evidenced by cracking between the southern end of the cupboard and the adjacent wall.
33 Mr Kingston said that he would not disagree with the proposition that some portion of his measured drop of 16 mm would have occurred since the renovations. In my assessment, the fall of 12 mm in floor level does not correlate with the approximate 30 mm cupboard to ceiling differential, and Mr McDougall's unchallenged measurements of the southern cupboard section remain unexplained. Mr Holmes's view is that the probable cause of the differential is that the wall at that point is not parallel with the ridge beam, the possibility of which Mr Kingston conceded. The general question of different floor levels in this area – par [18](c) – was largely visited in the exchange about the gallery cupboards. I do not believe this issue has any real significance given the state of the evidence.
34 As to the similar "misalignment" issue relating to a downstairs bedroom doorway referred to in [18](b), I do not find this to be of any consequence. The disparity from one end of the top of the architrave to the other is only 8 mm, and Mr Kingston's observation that there is a drop in the floor level to the west, explicitly assumes a new ceiling was installed at that point, something about which there is no evidence. There is nothing to suggest that any discrepancy had not been present since 1983. I should also observe that there are in fact three horizontal surfaces at play, a discrepancy at each of which or any combination could explain the differential. There is the top of the architrave itself, the cornice attached to the wall/ceiling joint, and the plasterboard no doubt attached to the ceiling battens. Photographs also reveal a crack running from the "lower" top of the architrave on the left at an upward angle from the corner.
35 I turn to par [19](a), the suggested previous repair of a crack in the eastern wall of the downstairs bathroom as shown in photographs taken by Mr Kingston. In cross-examination, he said he would not be surprised to learn that the crack in fact extended downwards to the left to the floor level, running behind a hand basin on that wall. He said that he did not note the crack to that extent and did not take photographs of that part. He agreed the crack was not the opening of a join in the plaster sheets but what he seemed to prefer to call a "distress crack", rather than a "tear" but in any case, agreed with the proposition that it was "a horizontal movement apart of the plaster sheet, [an] opening up of the plaster sheet." His explanation as to why the crack he observed suggested a previous repair is that close examination showed an outer jagged edge to the plaster work and wallpaper, but behind which was a smooth or even line in the inner edge. There is no evidence of loose plaster in the crack suggestive of patching.
36 Mr Kingston started to explain what the smooth line represents but interrupted himself to say that normally plaster fails and becomes jagged but when there is a smooth line behind the face of the actual crack, "like a knife has gone through it", that is evidence of previous repair. In the end, despite requests to explain why that is evidence of previous repair, no clear answer emerged that I could detect. In that state of uncertainty, it is not possible to take anything from this suggestion of previous repair.
37 The exchanges on this issue led to the broader issue of Mr Kingston's observations as referred to in par [19](e), inconsistency of cracking, internal to external. The discussion was focused on the particular crack, but the evidence is relevant to the general proposition. As I understand it, Mr Kingston's opinion as to previous repairs is based in part on the fact the internal cracking was much less than the adjacent external brick cracking. It was put to him that the greater movement in the brickwork was explicable on the basis that that was not tied to any structure, whereas plaster sheeting was nailed and glued to the studs. Mr Kingston acknowledged that it "could be the case" that the plaster, when it begins to tear apart, is inevitably not going to move as much as the unrestrained brickwork.
38 That brings me to par [19](b) issue; the presence of mesh in plaster cracks suggesting previous repairs. There are several photographs in evidence which relate to the three different areas. Each photograph shows cracking on horizontal or vertical lines. In cross-examination, Mr Kingston was taken
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through the suggested ordinary plaster boarding progress. He agreed that plaster sheets have recessed edges to form butt jointing. He agreed that adhesive plastering tape is then run along the joint with jointing plaster applied over the joint to make the surface level which, when hardened, is sanded. He agreed that if the joint cracked open, one would see the mesh. When it was put to him this is what the photograph show, he replied, "Potentially. I mean, it – well, where I was – if you look at the external photos 27 and 28, I think they are. … [They show] horizontal settlement of the brickwork on the other side of that particular crack … ."
39 When pressed as to why the presence of mesh was evidence of a previous repair, and what that had to do with the brickwork outside, he said that it was almost in the same location and that they were reflective type cracks. Mr Jackson suggested this was not surprising as the building was moving in that area, Mr Kingston's response to which was that he could not be certain the crack was within a joint. At that time the focus was on a particular photograph but showing similar things to the others. The following exchange occurred:
"That's a joint in the plaster sheets, isn't it?......You'd have to measure it from the floor. Generally they're about 1.2, but it could well be, it could well be. I'm not just saying it's not, yes."
40 The end result of this is that, having regard to what the photographs show of the linear nature of the relevant cracks, taken along with the other evidence earlier outlined, I am satisfied that these areas are not areas of previous repairs in plaster.
41 I have already dealt with the par [19](c) issue in some detail. The evidence can be put no higher than the possibility of a previous repair. The cause of any previous repair is speculation. Mr Holmes was asked in cross-examination about areas of lighter and darker mortar on the downstairs bathroom eastern wall in respect of which, as noted above, the asserted inference is of a previous repaired brickwork crack, since re-opened. Mr Holmes agreed with the proposition that differences in mortar colour are suggestive of repair but explained that the reason for the repair can be many fold, and that it did not necessarily signify movement. He explained that the quality of mortar varies dramatically, and that it is not uncommon for repairs to be carried out because the mortar has eroded; re-pointing is done to prevent damage occurring to the brickwork. He pointed out that repointing is repair.
42 He further explained that the crux of the matter was whether in an area of suggested repair, the joints in the brickwork were relevantly even. He said he did not see anything at the time of his inspection in 2017 that suggested joint width was different. He saw very substantial cracking in discrete areas, "but nothing sprang out that we were looking at something that had extensive repairs carried out to it. Whilst there may be different coloured mortar does not necessarily reflect any serious damage had occurred to the property in the past."
43 Lastly, as to Mr Kingston's opinions in these respects, there is par [19](d), being the alleged previous mortar repair in the north-eastern corner brickwork of the downstairs bedroom on the southern- eastern side. This area is just the under a fixed canopy over a box bay window. As noted, he says Mr McDougall told him that he was not aware of the crack having been repaired since his purchase, Mr Kingston therefore concluding that it pre-existed 2010. Mr McDougall was cross-examined about what he had told Mr Kingston. He said it was not correct to say that he was not aware of the repair until Mr Kingston pointed it out to him. He said there had been a discussion about different colours in the mortar, but he was fully aware that this area had been re-bricked. He said he did not recall making the comment, "when I knew it had been repaired."
44 Mr McDougall had explained in his evidence-in-chief what had happened in the area. He said the renovation required demolition of the roof above the particular area and removal of the bricks to allow the insertion of a large laminated veneer lumber beam (LVL) which he said was actually a "double beam". Above where that beam now is, there was originally a veranda roof. To facilitate renovations
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in that area, brickwork had to be removed and replaced. In Mr Kingston's cross examination, he was shown a photograph of the wall in question taken by Mr Horsham during his inspection in October 2013. Mr Kingston agreed that differences in mortar colour were not discernible. He agreed it seemed there had been a lot of work done on and around the wall in question, including the removal of an old bay window. After being taken through the details of the likely reconstruction works, he was asked about the need for mortar repairs being necessary because the brickwork had been knocked. Despite the question, Mr Kingston said he thought it would be probably unlikely that the brickwork in would have collapsed but when the question was put again, he conceded that something could have caused it to crack.
45 Generally, I found Mr McDougall's evidence to be persuasive. Although there is a lot at stake for him, he did not appear to be inclined to exaggerate, and he made concessions where appropriate, quickly acknowledging possible deficiencies in his recollection. I am not satisfied that he told Mr Kingston that he did not know of the repair of the brick work in the relevant area, and I am not satisfied, to the degree the court is being asked to infer previous repairs due to cracked brickwork caused by movement of the building, that the different mortar colour is evidence of a pre-2013 repair of a distress crack.
46 On the whole of the evidence, I am satisfied the house was performing satisfactorily, if it can be put that way, at the time the renovations were commenced. As with most houses, settling and some minor cracking appears over time. Although it might be said that a house as purchased by the plaintiffs had been "patched and painted" for the purposes of sale, I am satisfied that nothing significant had then emerged in terms of significant movement of the building causing distress and damage.
The retainer and the duty of care
47 The relevant events unfolded as follows. The plaintiffs engaged Mr Meredith as architect. He drew up a set of plans which was finalised with input from the plaintiffs. Mr Meredith asked Mr Horsham to become involved. They went to the site around 24 October 2012 at which time Mr Horsham carried out the inspection referred to earlier. Mr Meredith's drawings were the subject of an application for a development application granted in December 2012. Around that time, he became unable to continue. Further plans needed to be drawn for which Mr Horsham's engineering advice and detail were required. Mr. Horsham suggested getting a builder designer rather than architect, and recommended Greg Tilley. The plaintiff recalls a discussion with Mr Horsham about Mr Tilley's engagement. Ultimately it was the drawings prepared by Mr Tilley and certified by Mr Horsham on 6 February 2013 which were the subject of an application for building and plumbing permits.
48 In evidence is a quotation from the defendant dated 21 November 2012. I have already referred to two items noted as being part of the scope of works.[3] In addition, the scope of the work included the provision of hand sketches and markups to be documented by the architect and the preparation of documentation for submission to the council. In cross-examination the plaintiff said he would have contacted Mr Horsham to agree to the costing; he could not remember whether it was by phone or email.
[3] "Consultation on engineering design during the development of the building application documentation". "Design footings, timber and steel framing, bracing, lintels and roof modifications."
49 Mr Horsham's evidence was that he provided the quotation after his initial inspection. He said that in it, he described what his "active scope of works" was intended to be and the cost. That cost was $1,850 plus GST. At the foot of the document is a recommendation that the client engage the firm to carry out structural inspections during the build, which are charged at $150 plus GST per visit. The document goes on to say that JSA typically inspect the footings and slab preparation, and reports are provided for the council or building surveyor, via email to the builder and client.
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50 Mr Horsham said he did not hear anything for about three or four weeks after sending the quotation to the plaintiffs before Mr Meredith rang to say he was indisposed for four weeks. It was then that Mr Tilley was contacted. However, in later evidence he said he got a phone call from the plaintiff which related to his engagement, and in which the plaintiff said in effect, "Get on with it." That generally accords with the plaintiff's evidence. Mr Horsham also spoke to a building surveyor he had recommended to the plaintiffs, and arranged a site visit with Mr Tilley in January 2013. Mr Horsham said his initial responsibility was to assess and review the structural design shown on the Tilley drawings. He explained that he was to certify the structural components while the building surveyor was to certify the architectural documents.
51 Although coming later in time, there are further documents which shed light on the scope of the retainer. There is invoice dated 8 February 2013 from the defendant to the plaintiffs, two items of which are "Structural Design Review, Sketches & Certification – $1,850" and "Professional consulting services – $450". There is a later invoice dated 13 November 2013 for $247.50 which contains two items: "Mandatory Structural Inspection … 27-6-2013 – $175.00" and "Form 55 – Inspections – $50.00". There is an inspection report from Mr Horsham dated 27 June 2013, in evidence but which the plaintiff said he did not see. That refers to "Inspection of footing preparation for decks and kitchen extension" and "Inspection of steel & timber framing for lower and upper storey".
52 A Form 55 is a "Certificate of specialist or other person (building work)". The purpose of the form is, as may be expected, to certify specific aspects of building work, and is an important part of building permit application process. There are two in evidence, the first dated 6 February 2013, the second 13 November 2013. The "Certificate type" in the first one is described as "Structural" with "Structural inspection" appearing in the second. Relevant documents are noted in the first as certified design drawings for the plaintiffs by Greg Tilley dated 4 February 2013 and certified by the engineer on 6 February 2013. The second refers to "Inspection records dated 27-6-2013".
The duty of care and its scope
53 The pleaded case is that the defendant was retained by Mr Meredith, but the defendant accepts that the evidence shows otherwise. I find that the plaintiffs directly engaged the defendant. The next thing is that this is a claim for economic loss as distinct from, and not consequent on ordinary damage to property: Bryan v Maloney (1995) 182 CLR 609 at 617-618; Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16, 216 CLR 515 at [19]-[20], Makawe Pty Ltd v Randwick City Council [2009] NSWCA 412 at [128] and De Pasquale Bros Pty Ltd v Cavanagh Biggs & Partners Pty Ltd [1999] QSC 171, [2000] 2 Qd R 461 at [54].[4] The defendant accepts it had a duty of care in respect of such loss – foreseeability of injury is accepted – and there is agreement as to how that duty is to be broadly expressed. Based on cases such as Voli v Inglewood Shire Council (1963) 110 CLR 74 per Windeyer J at 84 and Brickhill v Cooke [1984] 3 NSWLR 396 at 399, the duty is formulated as one to exercise such care as would be shown by a reasonably competent and ordinarily skilled and qualified engineer retained for the purpose in hand.
[4] See the comprehensive discussion by Shanahan CJ in Valleve Holdings Pty Ltd v Shepperd [2025] TASSC 28 at [95]-[131].
54 However, there is a marked divergence in relation to the scope of the duty. The defendant's case is that the duty is further confined and only extended as far as the performance of the services the subject of the contract; that is, the duty was one only with respect to the tasks contracted to be done and performed for the extension. The defendant says it does not seek to ignore the existing footings because "inevitably, they have to be taken into account", but argues it was not engaged to redesign the dwelling as a whole nor carry out a building superintendent/project supervisor type role. It is said that the task was to provide input adequate for the extension, and the reference in the quotation to designing footings has to be restricted to those few footings supporting the extension. Accordingly, there was no obligation
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to redesign the existing footings and, "... any duty of the defendant was limited to understanding and accommodating the capacity of the existing footings, as situated within the soils identified by a reasonably conducted investigation, for the [designed] extension."
55 In closing submissions, the defendant did not argue the point in any greater detail and the plaintiff seemed to precede on the assumption that the duty was of the broader scope. There is no reason to think other than the proper approach to the issue is the same as would be taken in relation to the existence of a duty of care in an economic loss case. That question was recently the subject of consideration by the High Court in Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25, 98 ALJR 946. There, at [33] of the plurality judgment, the criterion of assumed responsibility was confirmed as a basis for the existence of a duty of care notwithstanding criticism that had been made of the term. Further "salient features"[5], the presence of which may indicate a duty, were discussed at [38] and following. Actual or constructive knowledge of a risk to a person or class of persons of the particular type of economic loss that eventuated and the magnitude of the economic loss that risk entails, strengthens the case for the finding of the duty of care.
[5] A phrase used by Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge "Willemstad" (1976) 136 CLR 529 at
56 Another matter that has been identified is a plaintiff's vulnerability to the type of economic loss that eventuated. A mere likelihood of suffering economic loss if reasonable care is not taken will not amount to vulnerability, but the point is the plaintiff's inability to protect themselves that eventuated as a consequence of a defendant's carelessness, either entirely or in a way that would cast the consequence of loss on the defendant. Reliance was not separately considered in Mallonland, but it may be seen as part of the concept of an assumption of responsibility although absence of reliance is not necessarily fatal to the establishment of a duty of care: HXA v Surrey County Council [2024] 1 WLR 335 at [90], [108]. Reliance may be taken as established where there is a relationship between a professional person and the client: Pullen v Gutteridge Haskins & Davey Pty Ltd [1993] 1 VR 27 at 39-40.
57 The plaintiff's case relies on the existence of a duty arising in the context of an undertaking to engineer an extensive range of alterations, not only to the main part of the existing building at ground level, but more significantly it might be thought, to the addition to the existing structure. That structure amounts to a much bigger second level – with bath, glass shower partitions, tiling etc – in place of a very lightly constructed partitioning of an attic. The plaintiff says it is impossible to ignore the overall purpose and effect of the renovation project that was undertaken. The plans show that the expanded upper level increased the floor space of that level by about 62 per cent. In his evidence-in-chief Mr Horsham described the new upper level as a "storey", but in cross-examination he very strongly disagreed with calling it such, but I note that Mr Kingston seemed quite comfortable in continually referring to it as a 'storey'.
58 For those reasons, I need to look at Mr Horsham's evidence. He said that Mr Meredith had done quite a detailed section in his development drawings which was useful because he had done the hard work to assist him, as a structural engineer, to work out what Mr Meredith's intention was. In the preliminary discussion with the plaintiff, Mr Horsham advised he would be assisting Mr Meredith "to put together a set of working drawings from which the project could be built" [My emphasis]. More particularly, he later said that, although with some reluctance because he assumed the building surveyor had carried out his own inspections, he completed the Form 55 certificate dated 13 November 2013 which referred to an inspection and report dated 27 June 2013. He said, "I didn't do this lightly, but I was satisfied with what I had seen that I could give the building surveyor some comfort that "I was satisfied the works were fit for purpose" [My emphasis].
In addition, there is the evidence I have already mentioned; that is, Mr Horsham said that one of his concerns was with the weight of the building and what was carrying the load. Obviously, that
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concern would be carried forward into the advice and design input he assumed responsibility for and chose to give. Mr Horsham gave evidence of a site visit in March 2013, during which he had the opportunity to inspect a part of the existing footing on the eastern side. He said he told the plaintiff that the footing was a suitable depth and was sitting in good material; "I was quite clear on this, I said in this area I was satisfied that we wouldn't require to do any additional works to those footings." Further still, in cross-examination Mr Horsham agreed that the request to inspect demolition, footing preparation etc set out in the Form 55 of 6 February 2013, was prompted by the design of the building and its height.
60 On one view, the broader scope of the duty might well have arisen simply because of the language in the quotation. That describes consultation on engineering design generally and is not confined. "Designing" is not confined to the footings but covers timber and steel framing, which was to occur in both upstairs and downstairs, and roof modifications. The whole of the extensions and additions would accordingly be encompassed. In any event, it is clear, and I find, that on the evidence the defendant, through Mr Horsham, assumed responsibility for giving advice and design work for, and to enable, the renovations as an entire exercise; to draw plans "from which the project could be built." In that respect, there was reliance by the plaintiffs. It is not at all clear to me quite what counsel for the defendant intended by the concession that the existing footings had to be "taken into account".
61 The defendant knew or ought to have known of the risk of internal distress to the building with consequent economic loss if the completed renovation works were "not fit for purpose." To the extent it is necessary to go further, in the circumstances of the respective positions of the plaintiff's and the defendant, the plaintiffs were vulnerable to the type of loss suffered.
62 As the focus is on the adequacy of the footings of the building as a whole, it might pay to note that in Woolcock Street Investments Pty Ltd v CDJ Capitals Pty Ltd (above) at [76], McHugh J observed that courts "have long held that engineers engaged in connection with the design of a building have a duty to examine the site to see whether the nature of the sub-soil is adequate for the proposed building". Inextricably allied to that is the question of design. It is not a large step at all from the design of a new building to that for an upper level on an existing building. Of course, questions of the scope of a duty of care and are not to be judged with the benefit of hindsight having regard to the outcome. All things considered, I hold that the scope of the defendant's duty extended to consideration of the suitability and sufficiency of the existing footings, and to carry out such examinations and investigations, including soil investigations as may reasonably have been required, to ensure they "would be up to the task" as it was put. And if not, to determine what work might be needed to achieve that and advise accordingly.
AS 2870-2011 – Residential slabs and footings
63 The 2013 alterations and additions to the property were the subject of the provisions of the Building Act 2000. Section 55 of that Act provided that building works was to comply with the Building Code of Australia (BCA), in addition to the Act's provisions. The BCA is to be found within the National Construction Code. Under the BCA, Australian Standard 2870-2011 (the Standard) is an "acceptable construction manual". Compliance is necessary unless the proposed works are based solely on performance solutions. The defendant places heavy reliance on the Standard in its argument about breach of duty. It is best to explore it now.
64 The stated objective of the Standard is to specify performance criteria and specific designs for footing systems for foundation conditions commonly found in Australia and to provide guidance on the design of footing systems by engineering principles. Clause 1.8.25 provides that a "footing system" is "a general term used to refer to slabs, footings, piers, and pile systems that transfer load form superstructure to the foundation." Section 2.2 deals with "Methods for Site Classification". Clause 2.2.2 provides that site classification based on identification of the soil profile is to include one or more of specified methods. Relevantly, cl 2.2.2(b) refers to "Identification of the soil profile and interpretation of the current performance of existing buildings" and continues:
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"The soil profile shall be confirmed by inspection of soil from a bore hole(s) or other excavational sampling method in accordance with Clauses 2.4.3 and 2.4.4. Interpretation of the performance of existing residential footing systems within the region that are not less than 10 years and are founded on a similar soil profile shall be in accordance with Table 2.2. …".
65 Table 2.2 deals with "Classification of normal sites by the interpretation of footing performance of existing buildings". It does so by reference to the degree of damage to existing walls. In the case of masonry veneer, which this building is, site classifications may be 'S', 'M', 'H1', 'H2' or 'E'. In this case it is not contentious that the site classification for the property is 'M'; that is, moderately reactive clay or silt which may experience moderate ground movement from moisture changes. Clause 2.4 deals with "Site Investigation Requirements". Clause 2.4.5(a) provides that the determination of adequate bearing strength is to be considered on the basis the design bearing capacity of foundation level is to be not less than 100 kPa for strip and pad footings. A footnote to clause 2.4.5 provides that determination of bearing capacity is to consider the weakest state of the foundation under normal site conditions, with local knowledge to be used where available.
66 The subject matter of Section 3 of AS 2870 is "Standard Designs". Clause 3.1 is entitled "Selection of footing systems". There is some debate about the application of cl 3.1.5 – "Design for outbuildings and extensions to dwellings" which provides that the footing system design given in the section "shall be used for outbuildings and extensions". An "extension" is defined in cl 1.8.19 to be an "Additional construction abutting an existing building." In any event, cl 3.1.5 goes on to provide that footings of similar proportions and details to those used in an existing building on the same allotment may be used, provided the performance of the existing building has been satisfactory over at least 10 years after construction and there are no unusual moisture conditions. By cl 3.3, in the case of site classification class "M", footings for masonry veneer structures are to be 500 mm deep by 300 mm wide with the top of the footing to be 500 mm below finished ground surface level.
67 The Standard has a commentary section which provides explanations for the operation of various clauses. That for cl 3.1 contains a table of typical applied bearing pressures under strip footings. For a single storey masonry veneer building, it is 50 kPa; for a double storey it is 65 kPa.
Work done by Mr Horsham
68 There is no dispute about the fact that Mr Horsham inspected the property in late October 2012, as I have previously outlined. Further, although Mr McDougall seemed uncertain about whether it was June or July 2013, there is little doubt that on or near 27 June 2013, Mr Horsham inspected the ongoing renovations leading to the previously mentioned written report bearing that date. However, there is no consensus between the plaintiff and Mr Horsham as to the timing or circumstances of any other site visits or inspections between when the demolition commenced on 1 March 2013 and the completion of the project. At the heart of things is Mr Horsham's evidence that on two occasions he was able to inspect existing perimeter footings, with a particular opportunity on the first occasion to assess soil type. It is not so much the timing of these inspections which is an issue, but rather the question of what he inspected or saw, or was able to inspect and see, and what conclusions could reasonably be drawn. That said, credibility does have a role to play and questions of timing and how the visits were characterised by Mr Horsham have relevance to that issue.
69 I will start with Mr Horsham's evidence as to starting on the project and how he approached his tasks. Some of his evidence does not easily bear summarisation; it is best set out and left unedited. Having described his inspection of the house in October 2012 and his conclusions as to its integrity, his evidence-in-chief continued as follows:
"Did you have any discussion with Mr McDougall at this time about the assessment of
ground conditions and footings?......I did. I did. There was discussion – I might stray
for a moment. Architects are terrible about discussing the cost of a project with a client,
and typically I raise the question about what the intended budget was. The reason I do14 No 41/2025
that is to assist me in scoping what my fee structure's going to be, because as a guidance, I – I charge typically a percentage. And because it's an existing house and the extension was predominantly in the centre of the house, the areas were covered with decks. And I made a comment that I thought the foundations were in good condition given that the house was 25 years old, and that I could see no visible stress, aka movement in the masonry. But I did say that you've always got to consider a contingency, because until I actually see the foundations myself, we've just got to assume that they may need some work. And then there was a discussion about what that work may entail, and I said, 'Well, it's – it's typically – there's a few methods available, but typically it's a process called underpinning, where you may be strengthening the footing.' But I said that it's difficult to predict the cost of underpinning because you have to be careful that you don't underpin one section of the house because you can actually cause more damage, and typically when underpinning is done it's the entire house, because you're trying to stabilise the entire strip footing. And then a – I can't remember if I offered it or if it was asked. I said, 'Look, if worse' – I said, 'Worst-case scenario, it might cost, like, an extra hundred thousand dollars'".
70 He said that conversation did not end very well, but no further detail was given. Mr Horsham was asked whether he had arranged a soil test. He said he did not at that time because he "was not engaged." After describing at some length the course of events leading to Mr Tilley taking over from Mr Meredith, Mr Horsham was asked about the visit to the property in January 2013 with Mr Tilley. Mr Horsham said he had arranged that with Mrs McDougall. He and Mr Tilley went to the property, but he could not recall who was actually there at the time.
71 Mr Horsham was asked whether he again inspected the property when he went to the site with Mr Tilley, and then whether he made any assessment or classification of the soil and its bearing capacity. His answers to these questions were very lengthy and discursive.[6] He referred to the "Code" instead of the Standard as such, but the intent was plain. What can be gleaned is as follows. He had a copy of a geological plan which gave him an understanding of the underlying geology. From that, and his inspection of the area, he knew he was dealing with soils and not rock. He said he had 25 years of data by way of the house, with the Code providing for making an assessment of how the existing foundation has performed and what that equates to in soil reactivity. This seems to be a reference to cl 2.2.2(b) despite the reference to soil reactivity[7], and although that clause refers to the performance of existing residential footing systems within the region that are founded on a similar soil profile. Having assessed the condition of the house and with the benefit of the geological plan, he assessed the site as class 'M'. (As earlier noted, that classification is not in dispute.)
[6] Transcript pp 680 line 12 to 682 line14.
[7] Classification based on soil reactivity appears in cl 2.1.2 and includes class 'A' which relates to such things as rock sites with little or no ground movement from moisture changes.
72 Mr Horsham was then asked whether he designed or reviewed the plans with a bearing capacity in mind. The following exchange occurred:
" So, at that stage, we're – I'm still sort of – I'm still mid-January. The actual foundation
design happened a week or two later. Did you want me to lead to that or –Yes?......Yep, okay. So, again you have to keep in mind that AS 2870 was developed I believe in the mid-'80s, refined a few times, but in effect, it's – it's taking actually an economic view of foundation design. And there's some interesting commentary inside it, but in effect, it – engineers are like this. They put a – an economic cost to the country of – you know, why don't we just design every house with two metre deep footings? So, we don't do that, and in effect, what AS 2870 allows you to do is to design alterations based on some sections in the Code. So, I think it's – there's a clause – so – so my point is, the Code is written for new houses primarily, and there's a tiny little paragraph which is quite common with the Code, all the good stuff's hidden. But there is a tiny paragraph, I think it's clause 3.1.5 in the 2011 version that says:
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For alterations and additions, that for a clad-framed house or extension to a dwelling –
I should correct myself:
For a clad-framed –
You know, what does clad-framed mean? Clad-framed means lightweight construction. Weatherboards over timber. Highly flexible. For a clad-framed extension, you can actually take the soil classification back a step. So, if you've said it's an M, if you're doing a clad framed structure, you can actually say it's an S. Now, that's in clause 3.1.5. Now, it also says for masonry veneer extensions. And I'm sure there's been great debate over whether this is a single or a two-storey or whatever, but principally, AS 2870 says this is for the design of class 1 dwellings. Class 1 dwellings being residential. You can also use it for sheds and extensions. But principally, it helps the design. It helps the designer because again, keep in mind, I'm a specialist. I'm a structural engineer, a lot of people don't realise this, but AS 2870 can be used by a lot of different building practitioners. So a lot of people don't realise this, but you don't actually need an engineer to design your foundation if it's M class or less. So why is that relevant? Because there's some juicy stuff in the Code that possibly only engineers understand, and there's some stuff for the lay person. So typically, that Code is deemed to satisfy. So deemed to satisfy footing and slab design for residences. Now, drawing to your question on bearing capacity. So a Code is meant to make the process of design two things, in my opinion. Efficient and standardised. Efficient and standardised. So the Code actually tells you in its commentary. So the cool thing with the Code is you've got the standard and then you've got commentary. And in the 2011 version they've put the two together. So the commentary gives you some assistance to understand it, but the actual Code tells you that these designs are based on certain bearing capacities. So there's a little table in the – in the commentary that says if you've got clad framed, if you've got brick veneer, or if you've got full masonry, double masonry, you – they give you numbers in kilopascals, so pressure, as to what you would anticipate those footings brick veneer it might be, say, 50 kPa. If it's double storey, it will bear about 65.[8] Now, being able to withstand. So in effectively [sic], it says, you know, for a single storey
[8] This would be a reference to the commentary on cl 3.1 of the Standard as referred to in [65] above.
let's just be clear on this. The Standard actually tells you that these are the weights that you're going to get with a full storey, two-storey house. So this is two levels of – of brick veneer. It states that you'd expect to get about 65 kPa. Now, why is that relevant? Because you know that, for a – the Code also tells you that for a slab on ground – and slabs typically are used where you've got softer material. So we use slabs to distribute force, distribute pressure, and –
Perhaps if I can just interrupt you there?......Yep.
We're not dealing with a slab here?......Yes.
What – what bearing capacity did you – ?......Yes.
– prescribe for this – ?......Okay.
– this project?......I almost got there. So a slab allows you to design for 50 kPa, and it say, however, if you're doing footings, so isolated footings, and they assume that – or the Code, again, to make it simple, states everything's 300 millimetres wide. So based – these – these likely bearing capacities based on a 300 mil wide footing. And they – and it states that you – you need to – that you – you can't put them in anything less than 100 kPa[9].
[9] This would be a reference to the Standard, clause 2.4.5 set out in par [64] above.
Right. And is that the – the number that you used?......Yes, it is. And you know that because of the condition of the property." [Emphasis added]
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73 Mr Horsham went on to explain that the Code says that what is to be expected in terms of loading on a strip footing for that type of building and based on his assessment that the house was in fairly good condition after 25 years, he "made the call" that the bearing capacity in the area, without seeing the footings at the design time, was achieving that.
74 The following seems to have been involved in the approach to design. Mr Horsham first had recourse to cl 3.1 .5 – Design for extensions to dwellings – which enables the use of footings of similar proportions and details to those used in an existing building on the same allotment, provided there has been satisfactory performance over at least 10 years and there are no unusual moisture conditions. That led to the commentary to cl 3.1 which gives 65 kPa as the typical applied bearing pressure under strip footings for a double storey. The exercise then went back to clause 2.4.5(a) which prescribes a design bearing capacity at foundation level of not less than 100 kPa for strip and pad footings. Mr Horsham used that minimum figure. The statement that this bearing capacity was used or prescribed for "this project" is ambiguous. It might mean the design of the new footings, or it could relate to an assessment of footings for the whole of the existing structure. Counsel for the defendant did not explore the matter further but went on to lead evidence about site inspections. I will return to this point.
75 The evidence about Mr Horsham's inspections of the original footings is as follows. In evidence-in-chief he said that he became aware that work had commenced around 13 March 2013 when he was driving to Woodbridge and saw a tarpaulin on the roof of the house. That indicated to him that demolition was under way, and he needed to see that part of the works. He went there the next day. Both the builder and the plaintiff were there. A section of the deck on the eastern side had been removed which gave him an opportunity to look at the existing footing at that location. The builder took a spade, the footing was relatively close to the ground, and he dragged the material away. Mr Horsham saw it was relatively loamy material at the top "getting stiffer" and he was able to see firsthand the concrete strip footing at that point.
76 When asked whether he tested the soils in any way, he did not directly respond, but said he was in close proximity to the ground and could tell by the way the material was being removed that it was extremely hard. He used his experience and visualisation to see that there was no moisture; it was very, very dry, having a gravelly clay consistency. He thought it was good material and explained why the house, being the age it was, was in good condition.
77 Mr Horsham also said Mr McDougall was digging a hole in preparation for a pad footing. He asked Mr McDougall how hard the ground was and was told it was "very hard". He told Mr McDougall that the footing he inspected was at a suitable depth and was sitting in good material: "In this area, I was quite – quite clear on this, I said in this area, I was satisfied that we wouldn't require [sic] to do any additional works to those footings.".
78 The next visit was said to be a formal inspection on 27 June 2013. Some things were discussed with the builder. After that there was a visit in mid-July when he was invited back for a further look at things. Mr Horsham said he saw footings on the north-west side associated with the kitchen extension. He took photographs but the SIM card malfunctioned. He described the condition of the soil as excellent. It was dry with sandy loam on the top, the same gravelly clay type of material that had been seen on the eastern side. The next visit after that was in November 2013 after the plaintiff rang him and said the building surveyor wanted a final inspection. Mr Horsham said that this did not make him very happy as he thought the surveyor had been carrying out his own inspections. After consideration he issued the last Form 55 certificate.
79 Before cross-examination about visits and inspections, questions were asked about some preliminary matters. First, Mr Horsham denied that he knew Mr Tilley was not aware of the footings
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that existed under the original structure[10], but agreed that although Mr Meredith's plans show detail of the footing locations, they were shown as just having a nominal depth. He agreed that where Mr Meredith's drawings have references to footings, there is the notation "to structural engineers design".
[10] All depictions of and reference to existing footings on Mr Tilley's drawings are noted to be "assumed". There are also notes on his drawings that he had not been able to get on site to take measurements. Those drawings are dated 4 February 2013.
80 Mr Horsham was reminded of the quotation which indicated structural inspections would be carried out and was asked whether it was correct that he had only ever provided one inspection report; that dated 27 June 2013. Mr Horsham disagreed, saying the Form 55 certification "was a cover-all document". He was asked about other reports and said that "The other three inspection reports [sic]…weren't inspections. The very first visit to site, for example, was just a preliminary, effectively talk to Mr McDougall and the builder. That wasn't an inspection, as such." There followed this exchange:
"The March inspection was. In fact, it was an inspection you specifically requested
permission to make?......That's not correct.Oh, I'm sorry. I thought you told me you were driving past the property, saw a tarp up there, rang Mr McDougall and asked if you could come and inspect it, and he said, 'Fine', and you did so the next day. Wasn't that your evidence?......I don't agree with
you – your terminology. You're implying it was an inspection. It effectively was a visit to site to meet the builder and the client and to assess how far they had got. That wasn't an inspection."
81 Mr Horsham said he thought there were two visits in July, a couple of weeks apart, which he was happy to call site inspections. No report was produced from either; he said it was in the "cover-all" Form 55. He took photographs on both inspections in July but lost them sometime in between July and November in that year, although he did not lose the June ones. There was no other record made of the July visits.
82 Mr Horsham was then taken to the entry "Footings and concrete padding inspection 27-6-2013" in the Form 55 certificate dated 13 November 2013. He did not agree he was intending to certify to an inspection of footings and concrete pads on that date but said "[I]t's implying that it's in reference to the report [sic]", the report being the one of 27 June. He was asked what he was intending to convey when he wrote those words. He said it was just to say that he done the report, not certifying the carrying out of those inspections, but "referencing the document"; it referenced "the report of the same date, or at least the photographs within that report".
83 I confess to having difficulty following his evidence. The report refers to "Inspection of footing preparation for decks and kitchen extension." Mr Horsham was asked as to when he inspected footing preparation for the decks. His reply was that it was earlier than, or in a different timeframe to, the kitchen. The question was put again. He said it would have been in two time periods, one in March and one in July. When asked about inspecting footing preparation for decks in March, he said that it refers to the "deck column" being the one he described as Mr McDougall preparing, and about the soil on which Mr McDougall commented.
84 Mr Horsham agreed that his request noted in the first Form 55 in February 2013 for an inspection of demolition, footing preparing and framing was, as evident from the document, prompted by building design and height. He confirmed the demolition was underway when he went to the site in March. He did not inspect the demolition because he repeated that it was not a request for him to inspect the demolition, it was him introducing himself to the builder. He also agreed that although driving past
18 No 41/2025
on the previous day and seeing the tarpaulin on the roof raised some concerns, he did not in fact inspect
any demolition when he went. He said, "It wasn't an inspection".85 When asked what he actually did on 14 March, Mr Horsham said "So this project required good communication between myself and the builder." He was asked again what he actually did, to which he replied that a strip footing was exposed with the builder's assistance. This was one relating to the dining room extension. When pressed about whether that was actually in March, he said he could not honestly say that it was on that day; it was sometime between 14 March and 27 June, that he could not categorically say that he went back at some time in that period. He could not give a date as to when it was, he thought the builder scraped away some dirt from the existing footings. Some cavilling about the nature of the March visit continued. When referred to the note about periodic inspections in the second Form 55, Mr Horsham conceded that it included the March visit. Later however, he repeated his assertion that he did not go there at that time to inspect demolition progress and did not do that when he was there. The purpose of the visit was to introduce himself to the builder.
86 During questioning, the reference to the builder scraping away dirt changed to an assertion that the builder dug a hole to expose the footing. Mr Horsham said that he was satisfied that the hole that was dug gave sufficient information to verify "at that point in the house" that the ground material had good bearing capacity. He did not get the builder to dig another hole somewhere else around the building perimeter because that was to be at the time when the footing for the kitchen extension was to be prepared. On the visit when he saw the footing for the kitchen extension a hole had been dug, effectively he agreed, under the point where existing French doors opened onto the sunroom that Mr Bryant had built. Mr Horsham said he was not aware that it had been built in 2004.
87 It is clear from the cross-examination on the contemporary photographs that the hole which Mr Horsham was then looking at was one dug down beside the concrete slab for the sunroom extension. When it was suggested to him that it would say nothing about the existing footings of the house, Mr Horsham said the point was that he was looking for bearing capacity; material "that your're founded into." When the question was pressed, he said that he could understand the point, adding that you could not exclude the newer part of the building as part of the works. However, he agreed the sunroom was largely unaffected by the new renovations in terms of the additional loading.
88 Following on from the cross-examination about what Mr Horsham actually looked at, he was asked questions about what he did not do. In the context of the inspection of the point next to the sunroom, he disagreed with the proposition that a more productive location to examine the existing footings would have been at the other end of the building. This disagreement was based on the fact that there were no additional loads being put over that area. He disagreed with the contrary view expressed by Mr Holmes. He said that in terms of a percentage of what was there, the addition of greater structure elements was relatively small. Going back to the inspection of the edge of the 2004 slab, Mr Horsham said that he had seen the column preparation which was only a few metres away, he could see the footing at the dining at the extension and was satisfied that he did not need to see anything further.
89 As to the inspection of the footing near the dining room extension, he said that he saw that it was 300 mm deep and found it in the gravelly clay material. He said that it was not necessarily the case that the new footings to be installed had to be at least 450 mm deep under the Standard. The following exchange occurred:
"Class M requires for masonry veneer a depth of 500 and a width of 300, doesn't
it?......Yes.
Yep?......You're – you're referencing the table here? Yes.
If you'd been building this house in 2013, to the design – to the 1983 design, you'd – those are the footings you'd require, aren't they? Once you were satisfied of the class M site?......No, that's not correct.
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Why is it incorrect, Mr Horsham?......Well, in this – if you look at the elevation of the – did you call it a living room, dining room? Are we agreed – a living room that it's – there's no – there's no masonry at the top of it.
184 The defendant's primary position is that the De Pasquale approach be adopted. On this approach, although the defendant would suggest that there is no, or no sufficient, evidence of the cost of what would reasonably have been recommended by way of underpinning and carried out in 2013, it would presumably be less than the present cost, and as the plaintiff have had their use of whatever sum that was, the present cost of underpinning is not allowable. As an alternative approach, the defendant submits the award of damages be confined to the difference between the 2013 and the 2014 costs. Of course, the precise scope of the work required in 2013 has not been identified nor costed.
185 To further both submissions, the present cost of underpinning has to be established as far as possible. The immediate difficulty is that Mr O'Halloran's suggested method, although described as "underpinning", bears no relationship to what the evidence suggests would likely have been done in 2013. Nor does Mr Reid's proposal assist in any direct comparable way because of the very limited
38 No 41/2025
scope of underpinning of a strip footing in two specific locations on the south-western corner, as
previously discussed.186 In any event, as to the primary submission Mr Groves submits the underpinning/stabilisation costs of the plaintiff's proposal should not be allowed if the plaintiff's proposed rectification scenario is permitted. He then proceeded to "deconstruct" the O'Halloran quotation and suggests the removal of three items each which contain reference to underpinning, the total of which is $490,050. Of the O'Halloran quotation, that leaves $26,950 for "Jacking and supporting of structure on underpins" which the defendant concedes is allowable on the basis it reflects the additional cost caused by the delay in now doing the underpinning works, "and because the building has in effect moved and that requires correction."
187 The defendant's argument was said to need extending a little further. That is to exclude from an award of damages any sum in respect of external works needed to facilitate the underpinning which would have not been necessary in 2013, but which needed to be done now. Reference was made to six items in Mr Hawkins' assessment all of which appear under a heading describing detachment and demolition of external timber decks to enable the excavation, jacking and underpinning. The total figure excluding GST is $33,154. Further, the disallowance exercise is said to include the removal and reinstatement of soft land scaping and vegetation, and the excavation of garden areas and landscaping to expose external brick courses and sub-floor masonry. Further still, the defendant says that if consultants' fees claimed as part of the total are in fact to be awarded, the percentage amount of the total claim needs to be adjusted to reflect the removal of those items. There was some further argument against the need for a head contractor with consequential superimposed percentages and the like, which I do not need to detail.
188 Having undertaken that exercise, the defendant's submission was that a reasonable alternative to attempting to disentangle present underpinning costs may simply be to adopt Mr Reid's proposal for rectification. It was submitted that as an alternative it simply recognises the strategy as an appropriate award as a way of addressing the question of how to deal with the 2013 underpinning costs as against what is now required. As stated above, the defendant's alternative to the De Pasquale approach is to confine the award of damages to the difference in underpinning costs between those of 2013 and of the present. That of course requires some estimate to be made of the cost of what reasonably would have been done in 2013 and the present costs; with the latter figure having the same problems I have identified.
189 As a matter of general principle, where loss of some sort has been established the law does not permit difficulties of quantifying the loss to defeat the remedy it provides. A court must do the best it can in light of the evidence, but that must be sufficient to justify the approach taken; it cannot make something out of nothing: see for instance RSPCA (Victoria) v Holdsworth [2015] VSCA 243 at [33] citing Fink v Fink (1946) 74 CLR 127 at 142.
190 As to what may well have been involved in underpinning in 2013, Mr Holmes provided an explanation of the mechanics. He said that at least one remedy would be to excavate next to the existing footings and "undermine" them in order to carry out underpinning. That would involve "going in underneath the footing, down until you reach a more suitable material to found the footing on", the concrete then being poured underneath to bring it up to the underside of the existing footing. An alternative is to "enlarge the footprint" of the footings by extending the sides of the footing, using additional concrete to achieve a larger footprint, and that may extend under the footing itself.
191 As noted by the plaintiff's counsel, the only evidence of any cost comes from Mr Horsham. The relevant passage is set out in [68] above. It will be recalled that this was evidence from Mr Horsham as to what he said to the plaintiff in October 2012, the essence of which was that until he inspected the foundations, it had to be assumed they may need some work. He said that he mentioned a few methods – which I note seem to be consistent with Mr Holmes' evidence – and advised that it was difficult to
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predict the cost of underpinning. He then offered to the plaintiff a worst case scenario of an extra
$100,000.192 Of course, that is evidence of what Mr Horsham said he said. But it can be taken as reflecting his view. I think it can reasonably be inferred he was not being flippant and that it was not an unrealistic figure. There was no reason for him to give an inaccurate estimate, and good reason to do otherwise.
193 For the plaintiff, Mr Vince suggested that some assistance could be provided by looking at Mr Reid's estimate of the cost of an underpinning in his scope of works. Mr Reid's proposed method also seems to be in line with what Mr Holmes described. An isolated item in Mr Reid's estimate for "concrete peers and footings including some underpinning" is $25,400. (There may be some additional costs because the allowance for demolition of about $48,800 includes "foundation brickwork and footings removal.") The problem is to apply those figures to the strip footings of the house as may have been done in 2013.
194 I think it can reasonably be concluded that in his estimate Mr Horsham contemplated all strip footings, and that is what probably would have been done given what is now known. A very rough estimate and a crude guide, based on expanding the area and method of Mr Reid''s proposed work to all strip footings (excluding external decks etc and the sunroom) and using the plans as a guide, is a present cost of $200,000.[17] That would have to be discounted by CPI and additional building cost increases.
[17] That is reached by doubling the cost of $25,000 for the designated area at the south to extend it to the western side and multiplying by four to reflect the greater house area as derived from the plans.
195 Mr Horsham's evidence is the only evidence that bears directly on the issue. The plaintiff bears the onus of establish his true loss, and despite the plaintiff's general criticism of this evidence, I see no alternative but to adopt Mr Horsham's figure. I think it represents the best alternative in order to get closest to the principle to be applied. The plaintiff's loss has to be reduced by the amount that would have paid for underpinning in 2013. The alternatives suggest by the defendant do not involve true comparisons to what work would reasonably have been done in 2013 and are much more imprecise. It is really a question of doing the best that can be done on the evidence. On the evidence of what was ultimately discovered, it is reasonable to adopt the "worst case scenario" figure of $100,000.
196 The next question relates to the use of the money that would have been expended in 2013. In De Pasquale, the current cost of the work which ought to have taken place much earlier was a known amount – $23,000 – although there was no evidence of the 1986 cost, said to be "presumably less than present cost." In taking the approach he did, it can be fairly said Chesterman J approached the issue using a fairly broad brush. The plaintiff in that case was said to have had the benefit of something less than $23,000 for a 14 year period, there then, his Honour found, probably being no reason not to deduct the present cost. In that case, the plaintiff was a company that owned a commercial building being part of a retail/commercial complex. It might be assumed the amount that ought to have been expended was put to use in at least managing the building for its business interests.
197 In the present case, there are competing contingencies with no firm or clear basis in the evidence. The plaintiffs were retired and renovating the house to enjoy that retirement. In evidence, the plaintiff said they had a "fairly loose" budget for the renovations. Arguably, those things might suggest there was no need to borrow heavily or at all. The plaintiffs may have spent all, some or none of the amount that would have been paid out, and conversely, invested all, some or none. There is a range of possibilities, but I think a reduction greater that the cost itself is warranted. The average RBA cash rate from March 2012 to the present– to which I have been effectively forced to go – is 1.935 per cent. Admittedly not the most accurate calculation but applying that rate to the sum of $100,000 on a compound basis from 12 March 2013 to the present gives an amount of $27,065. Doing the best I can in this situation, I will adopt a very broad brush and reduce the plaintiff damages by $120,000.
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The mode of rectification
198 The defendant's criticisms of Mr O'Halloran's method are based on the general proposition that it is an unreasonable approach. The defendant points out that Mr O'Halloran accepted that an option would be to underpin the areas of obvious subsidence, (Mr Reid's proposal). The defendant relied on the Tasmanian Guide to Standard Tolerances (the Guide). That contemplates some floor differentials across broad areas of a house. The witness conceded that a difference in level of some within 40 mm across a 10 metre space was an acceptable tolerance and quite normal.[18]
[18] Mr O'Halloran said, "… if it's over a very short distance it is a severe outer level. And most places I look at have got that, that’s why we are here. So at the end of the day, to be satisfied with something that's that far out as a solution is not really acceptable, especially if it could move more in the future, which it has shown [it] has done now."
199 Further criticisms were that Mr O'Halloran said that normally underpinning of the type he suggested would not immediately be adopted, but there would be some progressive activity, and that he was focused on achieving certainty without previous attempts at remediation and to stop all future movement even though it ought to be expected from the footings of the existing house, and to achieve something that would be better than what would be accepted. As to the last point, Mr O'Halloran's evidence was that that sometimes there were differentials in floor levels but that he often achieved better results than could be expected. Notwithstanding that, in reliance on Mr Florent's evidence, the defendant submits that the 'O'Halloran' approach to stabilisation and rectification has no regard to the degree of tolerances recognised by the Guide, or by the Standard.
200 What Mr Florent actually said was that in his reports he had mentioned the categories of cracking with reference to Table C1 in the Standard. He agreed that the table was a fair approach to whether or not something should be cracked and filled, as against being stripped out and redone. But, he said, one needs to take into account the notes to the table. In that table there are Damage categories. Relevantly, the lower range is Categories 0 and 1, respectively described as "Negligible" and "Very slight" cracks of less than 1 mm and which need no repair. Mr Florent said this is cracking that can be expected and monitored, but (on his interpretation) minor cracking can be upgraded to a greater level if there is a lot of it in one area.
201 It is argued that Mr O'Halloran's method will result in rectification for which the defendant is not responsible. They include remedying inadequacy of the original footings, the pour subfloor ventilation (noted by Mr O'Halloran) and removing an inherent susceptibility to differential footings movement. There is also inclusion of two rooms but only so as to avoid a "moisture trap", those rooms being deficient only in the floor ventilation sense. Mr O'Halloran originally said two rooms could be salvaged in a floor ventilation sense because they would retain timber floors but if the slabs were included elsewhere, those rooms would be isolated and became a moisture trap in themselves; he saw no real benefit in leaving those rooms with timber flooring.
202 The defendant also says that Mr O'Halloran made his recommendations based on the soil conditions identified by Mr Cromer in 2017, and which no longer represented the soil conditions as were identified by Dr Griffioen. As to that, I have already set out the differences. To the extent they are significant, there is nothing at all to suggest that Dr Griffioen's findings represent the permanent state of the building site.
203 As to the "windfall" items, the plaintiff says the sub-floor ventilation did not give rise to any issue before 2013 and but for the defendant's negligence that would still be the case. Rectification works must be compliant, and Mr Florent says that if timber floors were replaced, the floor would probably need improved sub-floor ventilation to meet regulatory requirements. Further, in Mr O'Halloran's view there is no general benefit in having timber flooring on floor joists because the cost would be very similar if not cheaper as far as his proposal was concerned. The plaintiff submits that Mr O'Halloran's
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method may get close to completely level flooring but, as noted above, it may not. If the floors were out of level before the renovations, about which there is no evidence, it is less likely that Mr O'Halloran's work would remedy that.
204 The plaintiff's essential criticism of Mr Reid's alternative proposal is that it is based on the proposition that the house is not still moving and has not done so since 2020. He did, however, acknowledge evidence of movement by way of the ceiling crack in the kitchen. When taken through comparative photographs over the relevant period, he acknowledged some differences as shown from them, but maintained his view he did not think there was any evidence of movement of any significance. He agreed that any crack opening up more recently would be a symptom of movement in the house. A little later in his evidence, when talking about his proposals for the southern end of the house, he repeated his view that the remainder of the house was not moving, apart from the sign of movement being the crack in the kitchen.
205 The plaintiff makes the further point that as established in his evidence, Mr Reid's proposal pre- supposes a firm base for his piers at 2.5 m which should be contrasted with Mr O'Halloran's uncontested findings on 15 October 2021 of very soft soil through the first four to five meters with a sufficient depth for his purposes of 12 metres.[19] The plaintiff argues that underpinning is to be employed as to the solution to fix the defects, particularly given the evidence of ongoing movement, it would be inappropriate to underpin only part of the property. As to this, there is Mr O'Halloran's evidence who said that if unsecured parts of the property were still moving, they would just keep on doing that. Indeed, Mr Horsham himself had said one needs to be careful not to underpin one section of the house, because more damage could be caused than if you underpinned the entirety. Mr Holmes's evidence about the varying rates of movement throughout the house and uneven subsidence is relevant to this discussion.
[19] Mr O'Halloran's report says, "It was determined that there was approved bearing strata at 14 metres. This was a judgment call made based upon what was found at 12 metres but in my experience, the installation set witnessed at 12 metres would have been adequate to support the underpins in any event."
206 In his report Mr Florent confirmed this view of things by saying that underpinning sections only of the entire structure can and often does result in further differential movement, as the new underpinned areas are then founded on and supported by different bearing capacity foundation material to non- underpinned areas. He explained this in his evidence:
"[T]he problem with underpinning one section of a building and not the other, what you’re actually doing is providing support to that section of the building which is being underpinned, it’s now getting support on a different foundation with likely different bearing capacities to the rest of the building. So you will now get differential movement again, because the section that you underpin may well be stiffer than the section that you haven’t and then you will get new cracking and movement in locations that you probably didn’t have up until this point in time."
207 As earlier established, the mode of rectification must be one that is reasonable to adopt to make good the damage. What counts as making good the damage needs to be understood in the context of its purpose. "That purpose is ascertaining what the work is that is necessary to undo the consequences of the tort having been committed. The only interest of the defendant that bears on the question of whether rectification is reasonable is a financial one… .": Gagner at [105].
208 In terms of the approach to the question of reasonableness, I need to look again at Bellgrove. An argument existed as to the reasonable method of remediation, not dissimilar to the one in the present case. Bellgrove concerned defectively built foundations because of significant departure from the specifications, resulting in "grave instability" of the building. The choices were between demolition and re-erection, or piecemeal replacement of the foundations, with expert opinion to the effect that if any
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underpinning should be decided on, the whole of the foundation should be replaced; any other form of
under-pinning was regarded as useless: see 619-620.209 The trial judge had allowed for the cost of demolition and re-erection. The Court said not only did it think the trial judge's conclusion was justified, but after reading the evidence and considering the submissions, it was satisfied that underpinning by the piecemeal replacement of the foundations "would, at the very best constitute but a doubtful remedy."
210 The Court said, "To give to the respondent the cost of the doubtful remedy would by no means adequately compensate her." Of significance is the Court's observation in response to the argument that if the owner retained the present judgment and it was satisfied, she may or may not demolish the existing house and rebuild, in which case, it was said she would still have a house together with the cost of erecting another one. At 620, their Honours said that "this circumstance is quite immaterial and is but one variation of a feature which so often presents itself in the assessment of damages in cases where they must be assessed once and for all". [My emphasis]
Bellgrove was considered in Tabcorp Holdings v Bowen Investments Pty Ltd [2009] HCA 8, 236 CLR 272. At [17], French CJ, Gummow, Heydon Crennan and Kiefel JJ referred to an example given in Bellgrove at 618, of what might be said to be unreasonable. From that example the Court concluded that "the test of 'unreasonableness' is only to be satisfied by fairly exceptional circumstances."
212 There are three cases from intermediate appellate courts not cited by counsel and which provide authoritative guidance as to the reasonableness test. The first is Kirkby v Coote [2006] QCA 61. The appeal was brought in respect of an action for damages in tort for loss caused by the collapse of some inadequate footings of a house. Other footings had not failed. The trial judge found that the residual threat posed by the remaining adequate footings was real; that is, although there was no certainty as to its magnitude there was a risk that movement of the remaining footings would occur in the future in the event of the clay soil becoming saturated. The trial judge concluded the only reasonable way to rectify the defects was to underpin the whole of the house, and not just part of it as the defendant's had contended, or to demolish it and rebuild. It was common ground that underpinning would be more expensive than demolition and reconstruction. The trial judge assessed damages on the latter basis.
213 Keane JA, with whom Williams JA agreed, discussed Bellgrove at some length. At [52], his Honour said that in speaking of the reluctance of the law to confine a plaintiff to a doubtful remedy, the High Court was contrasting the case before it, with one where it is clear that expenditure imposed on the defendant is disproportionate to any benefit to the plaintiff in terms of the vindication of the plaintiff's rights to recover its actual loss from the defendant. Extracts from his Honour's reasons are as follows:
"[52] … In this case, the damage as recovered by the respondents are not disproportionate to the benefit to the respondents in terms of the respondents' entitlement to have a house structure which will be, as it should have been, free from risk to its stability as far as its foundations are concerned. It is only by this level of expenditure that the respondents can now achieve a structure which is as stable as it would have been had it not been for the negligence of the first appellant.
[53] It should be noted here that the researches of counsel for both sides have been unable to identify any case in which it has been held to be unreasonable for a plaintiff to recover the costs of demolition and reconstruction where the defendant's defective work has affected the stability of a house structure. This suggests that the courts will be slow to characterise as unreasonable the position of a plaintiff who is unwilling to 'live with' the risk of the serious consequences which may result from sub-standard work which affects the stability of a structure. …
…
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[58] In the present case, one is not concerned with the breach of duty which results only in aesthetic disappointment. The service negligently rendered by the appellants to the respondents has not left the respondents with a 'perfectly serviceable' house. [Such a] house is one which is effectively free of risk of slipping. The respondents' house is a house which is affected by a degree of instability which would not have been present had the first appellant properly discharged his duty.
[59] As the High Court emphasised in … Bellgrove … because the respondents' damages are assessed 'once and for all', the law must be astute to ensure that the measure of damages accurately reflects the restoration of the respondents to the position they would have been in had the appellants not failed in their duties. The respondents should recover the amount of damages necessary to enable them to own a house free of risk so far as its stability was concerned." [Emphasis added]
214 The next case is Metricon Homes Pty Ltd v Softle [2016] VSCA 60, 49 VR 746. The principal issue in that case was the test on an application for leave to appeal to the Court of Appeal from a decision of the Victorian Civil and Administrative Tribunal. That Tribunal had dealt with a claim concerning a defective footing system leading to structural damage to a house. The issue of rectification arose in the context of whether leave to appeal should be granted. At [239], Robson AJA, with whom Warren CJ and Tate JA agreed on the issue, noted the Tribunal had adopted the reasons of Keane JA in Kirkby; that is, "risk of future damage need not be such that there is a likely or probable risk of further damage to the structure, but rather it is sufficient to compensate the owner on the basis of demolition and reconstructions where there is a real risk of damage to the structure in the future". [Emphasis added] At [245], Robson AJA concluded that as the Tribunal found there was a real risk that unacceptable damage would happen again in the future, it can be reasonably inferred that the Tribunal "applied the real risk of damage test adopted in Kirkby", which reasoning showed the Tribunal had applied the correct test.
215 The third case is that of Owners SP 92450 v JKN Para 1 Pty Ltd [2023] NSWCA 114 and can be briefly mentioned. This was a case about a building but with non-compliant cladding. An issue was whether the cost of replacement cladding was the appropriate measure of damages, subsumed within which was a question of proof of the absence of alternative solutions. At [74]-[77], Gleeson JA, White and Basten JJA agreeing, referred with apparent approval to those parts of the judgments of Keane JA in Kirkby, and of Robson JA in Metricon which I have identified above. In my view, these cases are significant for the crystallisation of the "real risk of damage" test in the context of the 'once and for all' rule, following on from Bellgrove.
216 The plaintiff's claim for rectification works is about approximately $1.31 million, which includes Mr O'Halloran's quotation of $517,000. The total cost includes Mr Florent's scope of works. He described the list as "generic in nature" due to the need for formal redesign and approvals in line with statutory requirements. In essence the scope encompasses all necessary demolition of external walls and decks, and internal joinery and fixtures, some of which is to enable Mr O'Halloran to gain access for his pinning and slab work. There is also complete restitution and repairs after that slab work is finished, including installation of windows etc, and general repairs and re–painting. There are some additional items to be added, including a contingency for possible damage to the concrete driveway, and escalation costs before the project can continue. There are further costs such as accommodation and storage which arise on either proposal but are substantially greater in the case of the plaintiffs.
217 Mr Reid's proposal is costed by him at about $354,400 which includes a 15 per cent "overhead and profit allowance." Of course, the costings relate to two completely different proposals. The plaintiff called Christopher Hawkins, a quantity surveyor, to comment on the various costings. Mr Hawkins is highly qualified in his field, and I found him to be an impressive and knowledgeable witness. On his analysis, Mr Reid's proposal would more likely be in the order of $487,000. A component of the difference is opposing views about the need for architectural/designer input, as against proceeding on
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existing drawings. Mr Hawkins says that in his experience, it is unlikely that an architect or a designer
would be content simply to work off the earlier plans.218 Another item is the cost of the head contractor as allowed for by Mr Hawkins, as against "site supervision". Mr Hawkins' view is that for works of this nature he would typically expect to see a head contractor. That person would coordinate Mr O'Halloran and builders and associated trades, with an overview of the entire process and management of issues arising. Having heard from both witnesses, with respect, I prefer the evidence of Mr Hawkins particularly given his high levels of skill in this area.
219 The difference in costings is very substantial and it is on that basis that I return to the primary question of the reasonableness of the methodology. Because of the cost difference I have given this question particularly close consideration relying on the authorities referred to above. I have found that movement in the house is continuing, and I do not accept that movement caused by the renovations is confined to the southern end. Those findings are of weighty import in the present debate. On the basis on the evidence of Mr Holmes, Mr Florent and Mr O'Halloran, all of whose evidence I accept, I am satisfied that Mr Reid's proposal does not represent a satisfactory approach. I do not think that demolition of the southern end, partial underpinning and restitution of that area – along with an uncertain extent of floor jacking to the north of the relevant area – pose any form of reasonable solution.
220 To do what Mr Reid suggests gives rise to a probability that further movement and consequential damage will occur, or at the very least there is a substantial risk of that occurring. Underpinning in one area can, in fact, exacerbate the problem in others. Mr Reid's solution is, in my respectful view, clearly "a doubtful remedy". I am satisfied that it would leave a real risk that the problem would not be rectified and a real risk of further and continuing damage. I am satisfied the plaintiff's proposal is a reasonable one in all of the circumstances.
Quantification
221 Subject to the reduction for the 2013 underpinning costs, the plaintiff should be awarded the sum of $1,402,800, which is made up of Mr O'Halloran's quotation, Mr Hawkins' estimate of the proposed scope of works and all incidental costs, the contingency amount of $10,000 in respect of potential driveway damage, and a six per cent escalation in costs as outlined by Mr Hawkins. This is an allowance for increased costs in a period of 12 months before the project can be commenced. Before work can commence the relevant personnel have to be contracted and availability issues would arise. Drawings would be required, and necessary approvals would have to be obtained. Mr Hawkins was not cross-examined about this, and I am satisfied the escalation cost is reasonable. Building permit fees of $212 are claimed in accordance with Mr Florent's evidence and I will allow that sum.[20]
[20] Mr Reid disagreed with the need for a permit but said he would defer to the opinion of a building surveyor.
222 There are additional costs totalling $35,136, the quantum of which is agreed. Those costs are the costs of accommodation for the plaintiff while the work is being carried out, furniture removal and storage, and onsite storage. In round terms the total to this point is therefore $1,438,150.
223 There are two additional damages claims. The first is for the costs of having the cause of the cracking and subsidence investigated before the action was commenced and apparently not in anticipation of it. The investigations include those done by Mr Holmes, the surveyor, plumbers and Mr Cromer. The total is $20,556.60. Mr McDougall gave evidence about incurring these expenses and was not cross-examined about them. They were not addressed by either party in closing submissions. I would be inclined to allow the sum as claimed as being within the scope of foreseeable loss caused by the defendant's negligence, with no countervailing disentitling considerations. In round terms, the total figure to this point is $1, 458,710.
45 No 41/2025
224 The second claim is for $150,000. This was advanced in the plaintiff's written closing submissions as referable to "the potential of the works taking 12 months." The claim was not addressed by the defendant in closing. The plaintiff relies on Mr. Florent's evidence about the potential duration. That is indeed what Mr Florent said but there is no evidence as to how the sum claim is arrived at. I would not be inclined to include this sum for that reason. However, as to both claims I will provide an opportunity for the parties to be heard further.
225 Lastly, there is a claim for pre-judgment interest pursuant to s 35A of the Supreme Court Civil Procedure Act 1932. With the plaintiff's acquiescence, Mr Groves asked that if the plaintiff succeeds, I reserve this for further submissions, thus allowing time for the reasons to be considered. Section 35A requires any order for pre-judgment interest be made "when making a judgment requiring the payment of an amount of money." (I assume "when making a judgment" means ordering the entry of judgment.) An order for interest cannot be made after judgment although under the section, interest that is allowed is distinct from the judgment amount and requires a separate order: Dann v Port Sorell Bowls Club Inc (No 2) [2020] TASSC 53 at [60], [62].
226 I will adopt the same course as did Wood J in similar circumstances in Dann v Port Sorell Bowls Club Inc [2020] TASSC 47 at [339]-[340]. So as to accommodate the parties' position, and also to permit the parties to be heard about the items referred to in the preceding paragraph if that is sought, I will simply indicate that, as I am presently minded, the plaintiff is entitled to an award of $1,338,710, being $1,458,710 less the sum of $120,000.
(1) If a person has specialised knowledge based on the person's training, study or experience, the opinion rule
does not apply to evidence of an opinion of that person that is wholly or substantially based on that
knowledge.
0
1
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