McKimmie Jamieson and Partners (Aust) Pty Ltd v Entact Clough Pty Ltd - [2000] WADC 45

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: McKIMMIE JAMIESON & PARTNERS (AUST) PTY LTD -v- ENTACT CLOUGH PTY LTD [2000] WADC 45

CORAM: KENNEDY DCJ

HEARD: 26 AND 28 AUGUST 1998, 1, 2, 3 FEBRUARY AND 6, 7, 8, 9 SEPTEMBER 1999.

DELIVERED : 17 FEBRUARY 2000

FILE NO/S: CIV 369 of 1995

BETWEEN: McKIMMIE JAMIESON & PARTNERS (AUST) PTY LTD
Plaintiff
AND
ENTACT CLOUGH PTY LTD
Defendant

Catchwords:

Contract - Performance - Refusal to pay - Turns on own facts.

Legislation:

Nil

Result:

Judgment for the plaintiff in the sum of $68,643.08. Defendant's counterclaim dismissed.

Representation:

Counsel:

Plaintiff: Mr J Birman
Defendant: Mr D Stone

Solicitors:

Plaintiff: Williams & Hughes
Defendant: Birman & Ride

Case(s) referred to in judgment(s):

Jones v Dunkel (1958) 101 CLR 298

Case(s) also cited:

Amann Aviation Pty Ltd v Commonwealth of Australia (1988) 100 ALR 267
Gauci v FCt (1975) 135 CLR 81
Sargent v ASL Developments Ltd (1974) 131 CLR 634
Shepherd& Ors v Noyes Bros Pty Ltd (1985) ATPR 40-588
Steinberg v FCt (1975) 134 CLR 640
Wardley Australia Ltd & Anor v Slate of Western Australia (1972) 175 CLR 514

KENNEDY DCJ: The plaintiff, a firm of surveyors, sues the defendant, a firm of civil engineers, for the sum of $68,000 said to be the outstanding balance due for work done and services rendered.
From April 1993 to August 1997 Australian Construction Services (ACS), a division of the Commonwealth Department of Administrative Services, was responsible for approximately $100m of building works on Christmas Island (the Island). The work involved the upgrade of infrastructure, mainly alterations and additions to government property. Part of the work was tendered out to the private sector and ACS was a consultant and the superintendent of works.
The defendants had contracts on the Island worth about $20m but what these reasons are concerned with is what is referred to as Package 2. This involved the installation of water and sewerage infrastructure to replace that which was not up to mainland standards including the installation of a new sewerage treatment plant. ACS's contract with the defendant for this started out at $8.7m, dropped to $8m and finished up being $9m.
The contract required the defendant to employ licensed surveyors and they eventually employed the plaintiff, who had the only licensed surveyor's office on the Island.
On 23 March 1993 the plaintiff submitted a fee estimate to the defendant: Exhibit 1(28):

"5.1 RESIDENTIAL SEWER RETICULATION

5.1.1        SETOUT  $15,300.00
5.1.2        AS-CONSTRUCTED                  $30,150.00
5.1.3        MANHOLE CHECKS                 $ 2,240.00              $ 47,690.00

5.2 RESIDENTIAL WATER RETICULATION

5.2.1 SETOUT $15,300.00
5.2.2 AS-CONSTRUCTED $32,400.00 $ 47,700.00

5.3 SMITH'S POINT - DRUMSITE SEWER AND WATER MAIN

5.3.1 PRELIMINARY PIPELINE
AND LINE DRAWING $ 4,500.00

5.3.2 SETOUT $11,640.00
5.3.3 AS-CONSTRUCTED $ 9,520.00 $ 25,660.00

5.4 SMITH'S POINT - SEWER FARM

5.4.1        SETOUT  $ 2,240.00
5.4.2        AS-CONSTRUCTED                  $ 4,260.00               $   6,500.00
TOTAL ESTIMATE    $127,500.00

6.0 HOURLY RATES

For work outside the Tender Specifications or other works required during the construction period, the following hourly rates will apply:-
LICENSED SURVEYOR  $60.00 PER HOUR
FIELD ASSISTANT  $30.00 PER HOUR
COMPUTER OPERATOR  $60.00 PER HOUR"

The defendant's managing director, Kevin Joseph Luttrell, said that he considered the fee estimate excessive and he did not use it in the preparation of his estimates for ACS. The defendants were awarded the contract for Package 2 on 28 April 1993. Thereafter ACS revised and reduced the amount of work that was to be done and the defendant's estimate was reduced by about 10 per cent and they asked the plaintiff for a revised figure also. On 18 May 1993 the plaintiff provided a revised figure of $114,630 made up as follows:
"Sewer Works   $ 41,590.00
Water Reticulation  $ 42,480.00
Smith's Point Drumsite Mains  $ 24,160.00
Sewer Farm   $    6,500.00
Total:$114,630.00"
The hourly rates remained the same.
On 19 May 1993 the defendant faxed the plaintiff confirmation of the agreement between them:
"To carry out work to Christmas Island initially at hourly rates as your quote 23/3/93 Item 6.
Lump sum fees for setout/as-const to be reassessed after commencement of works."
Mr Luttrell said that they did not accept the fee estimate because they thought it was too high and they made their own estimate for the purpose of the tender. He thought the figures were too high on the basis of the estimate of the hours required to do the task and the hourly rate that would have been appropriate and he did not believe this amount of hours was necessary to do the project. If they were successful in getting the job then they intended to negotiate a lower price or a different payment structure with the plaintiffs. Mr Luttrell said that this is frequently done in these matters but one would have thought it would be very difficult once you are captive to a particular group to get them to reduce their fees. In any event, there is no evidence that there was ever any attempt to come to a lump sum fee or to make any different arrangement in relation to the fee structure.
The contract the plaintiff and the defendant entered into was said to be for 10 months, that the work would begin in about July 1993 and would be completed by March 1994. Very broadly the work involved the plaintiff setting out the lines for the defendant to dig trenches, then surveying what had been constructed, then preparing detailed as-constructed plans.
The work on the Island was being done for the plaintiff by one Russell David Payne, a licensed surveyor who now has a private practice on the Island, but in 1993 and 1994 was the plaintiff's branch manager on the island. He had been a licensed surveyor since 1981, been involved in surveying for about 28 years and lived on the Island for about eight years as at 28 August 1998. He in fact first went to the island in 1985, 1986 and 1987 on individual trips when he was working for the Commonwealth Government and the purpose then was to establish the Christmas Island Cadastral Surveying Grid, that is the grid on which the boundaries are based. When he made his estimate of the fees for the defendant the only information he had was that contained in the specifications. After the defendants were awarded the contract and made the contract with the plaintiff, Payne made it his business to find out what were the requirements for the as-constructed drawings. As a result of Payne's enquiries ACS wrote to the defendant on 13 November 1993, that is, after the contract had started, advising what was required and Payne said that in his original document he had not made allowances for as-constructed drawings of this degree of complexity. The preparation of such drawings in the metropolitan area is not a particularly difficult matter because there is a straight forward system to be used, but there is no such system on the Island and preparation of such drawings there is a very different matter from preparing them in the metropolitan area.
By 28 February 1994 the plaintiff had billed the defendant $101,052.72 by which time the defendant had become concerned about the cost of surveying and asked for an estimate of the future cost.    On 9 March 1994 in a handwritten letter Mr Payne said:
"This forecast is based on our current operation level and projections to an end of construction phase at the end of May 1994.
March            1994               $27,000
April             1994               $27,000
May               1994               $22,000
June 1994      1994               $ 8,000
Total  $84,000.
As construction winds down in May we will begin preparation of some 26 as-constructed plans.
June will see the completion of the as-constructed plans and some minor field works."
By June 1994 the defendant says that 98 per cent of the work, for which they had contracted with the plaintiff to do survey work, had been completed and they commenced to ask for the as-constructed drawings. They wanted these drawings because ACS wanted them to enable ACS to do other work. Furthermore, by this time the defendant was suspicious of the plaintiff and wanted the drawings to make sure that the work was being done. The defendant was obliged to provide the drawings at practical completion, which, as it transpired, was not until May 1995. However, understandably, they wished to please their major client who wanted the drawings and since the defendant says it had been told that it was a simple matter to produce these drawings, they wanted them at that time, further they contend that their practical completion date had nothing to do with the work the plaintiff was doing.
Between about August 1994 and December 1994 the relationship between the plaintiff and the defendant completely broke down over these drawings, connected as they were also to the defendant's conviction that the plaintiff was overcharging.
Surveyors produce a final set of as-constructed drawings because they are what is used in the future by anyone wishing to access whatever it is that has been built. Plainly that final set cannot be done until construction has been completed and surveyors bear a heavy responsibility for the state of those drawings. In this case the defendant wanted the drawings in whatever state they were in, as long as they were up to date. Payne agreed that by August 1994 the defendant wanted them to hand over plans whatever the state of construction and the plans could have on them notations that the missing information was not yet ready.
In early September 1994 in an internal fax from Andrew McDavitt of the defendant he said, inter alia:
"Makjap now have two additional staff in their office compiling E.C. as-cons for Package 2 and have stated that they have to date produced some five off complete drawings for the sewerage reticulation only. This is of an as yet indeterminate number in total. It is estimated realistically by Makjap on C.I. that it will take some three weeks to complete the Package 2 as-con drawings to required standard."
Meanwhile back in Perth Mr Alan Smythe, the managing director of the plaintiff, noted that its 1 July 1994 invoice for $10,485 has not been paid and on 8 September 1994 he wrote to complain saying, inter alia:
"The above account is a progress account for work undertaken by our personnel in June. The preparation of as-constructed drawings is proceeding, however, at this stage the documentation is still incomplete because of construction not yet being completed, and as-constructed field surveys are still being undertaken.
…
…
However, as this project is nearing completion we will undertake to complete the as-constructed surveys as soon as possible and deliver the documentation to your office within seven days of completion of construction."
On 20 September 1994 the plaintiff transmitted to the defendant eight preliminary plans for its information purposes only.
On 28 September 1994 Mr Hay, an employee of the defendant on the Island, sent a fax to Mr Payne asking for a breakdown of the drawings still outstanding with dates when they would be issued and complaining that they had been promised this summary on several occasions.
On 11 October 1994, after further discussion with Payne, Hay faxed the defendant's senior project officer, Duncan Walker as follows:
"Russell Payne advises that all as-constructed drawings will be completed by Friday 21 October. He states that last week he personally spent no time on the preparation of as-constructed drawings, because he had to do external work to make some money, since they had not been paid by Entact Clough since June.
He states that the as-constructed drawings will not be handed over until final payment is made."
On 17 October 1994 Payne faxed the defendant stating that the as-constructed plans would be completed by 18 October, delivered to the defendant's Perth office by 31 October and delivered to the island on 2 November, 1994.
On 7 November there was a meeting in Perth between Messrs Smythe, Walker and Luttrell. This meeting was described by everyone who was there as acrimonious. Smythe took along some drawings which he himself conceded were in no way complete but it was to demonstrate that work was being done in relation to the matter. Walker and Luttrell say that the drawings were grossly inadequate; Smythe says that they barely spoke about or looked at the drawings, they were only interested in rejecting them.
On the same day after the meeting, Walker faxed Smythe stating his version of the events. It amounted to complaints about the value of the invoices, that they had been constantly told by Payne that the charges were inclusive of a significant amount of preparatory work for the production of as-constructed drawings and, "This work was stated to include the punching in of all relevant data to computer." Furthermore they were repeatedly assured that the drawings would be ready in a few weeks time. He requested a complete breakdown of all invoices, then said:
"Makjap are to carry out no further works until this matter is satisfactorily resolved."
That last direction, issued on 7 November 1994 does not appear to have gone anywhere in the sense that I was never told for how long it lasted; I was never told if it was withdrawn and it appears to be just one more in the bad tempered exchanges between these people.
On 9 November 1994 Smythe wrote to the defendants complaining about the outstanding accounts and said:
"Your comment that the drawings are still substantially incomplete is not correct. Of a total of 25 drawings, 21 have been completed. The remaining four drawings have been plotted and only require labelling and dimensioning. These can be completed at short notice once you give the go ahead to recommence work."
Earlier in his letter Smythe had talked about a breakdown in the relationship between the plaintiff and the defendant once Walker had gone to the island in place of Searle, to whom I will refer later.
On 10 November 1994 Walker answered Smythe's letter, accused the plaintiff of "a flagrant attempt to 'double dip' for this work" and denied a breakdown in the relationship on the Island. In that same fax Walker offers $10,000 to get the drawings and to complete payment to the plaintiff.
On 11 November 1994 Smythe replied and rejected the offer of $10,000 and disagreed with many of the things that had been said by Walker and also included a list of construction work done after 31 August 1994 that required field work by the plaintiff.
On 14 November 1994 Payne wrote, to Ian Nelligan who was the construction manager of ACS, and said:
"For your information Entact Clough Pty Ltd has instructed McKimmie Jamieson & Partners P/L to cease work on the Stage 2 as-constructed plans. This order was effective from 10.00 am Monday 7 November 1994."
Nelligan then sent a copy of that fax to the defendants and asked for information.
The result of that was that on 14 November 1994 Walker again faxed Smythe and said that they would pay $10,000 immediately the as-constructed drawings were received at their office and they could argue later about the balance.
On 18 November 1994 the drawings were delivered. These were the drawings that were promised for 31 October 1994. At the same time the plaintiff offered to settle their outstanding account for $38,000 which was a 10 per cent discount over the period of the project, and offered that there would be no further charge for the work in progress, which was approximately $12,000.
On 25 November 1994 the defendant sent to the plaintiff a list of errors in the preliminary plans that had been sent to them and on 16 December 1994 the plaintiff issued Revision 1 of the drawings which were delivered to the defendant, who in turn delivered them to ACS.
Prior to Revision 1 being delivered by the plaintiff on 16 December 1994 and unbeknown to the plaintiff the defendant had received from Adrian Hordyk, senior civil engineer with ACS, a list of errors that he had found when he checked the preliminary drawings which, as I have said, were originally delivered to the defendant on 18 November 1994 and apparently transmitted to ACS on 25 November 1994.
Revision 1 drawings were also sent to Hordyk and in a fax of 11 January 1995 to Nelligan (which fax was conveyed to McDavitt on 12 January 1995) Hordyk said:
"On 25 November 1994 we received in this office a set of as-constructed drawings from Andrew McDavitt, which we checked and found that the contractor had not checked the drawings himself. The accuracy of the as-constructed rests with the contractor. We responded on 2 December 1994 …
In that fax it was advised that we would make available the marked-up drawings to Entact Clough to expedite completion. The marked-up drawings were never picked up and are still here.
On 21 December 1994 we received four sets of water and sewer as-constructed drawings … A preliminary check shows that there are still many errors in the document. Please advise Entact Clough that the drawings as presented will not be looked at in details by ACS until they have incorporated our previous comments."
It was not sent to the plaintiff and in fact no list of errors was sent to the plaintiff after 25 November 1994 until 19 April 1995.
In the meantime two things happened. On 15 February 1995 the writ in these proceedings was issued and on 21 March 1995 Walker from the defendant faxed the plaintiff confirming receipt of the as-constructed drawings in December, that is, Revision 1 and told them that they had found a number of inaccuracies and omissions but they had sent the drawings to ACS and then said"
"As you are aware, these drawings are required prior to the issue of a certificate of practical completion.
To date we have not received confirmation from ACS that these drawings, in their present form, satisfy the contract requirements, nor have we received practical completion.
Should Entact Clough incur liquidated damages as a result of these drawings being received late or rejected by ACS, all such costs will be recovered from yourselves.
All costs, including any additional survey costs necessary to correct inadequacies identified by ACS will be to your account."
This should of course be read with the knowledge that prior to the plaintiff preparing and forwarding Revision 1, the preliminary drawings, which had been delivered by the plaintiff to the defendant on 18 November 1994, had been reviewed and errors had been found by ACS but ACS's list of those errors had not been sent to the plaintiff.
It was not until 19 April 1995 that Walker faxed the plaintiff and said:
"Further to our advice of 21/3/95 we now have confirmation from ACS that the as-constructed drawings as submitted by McKimmie Jamieson are not acceptable." (Emphasis added by plaintiffs.)
At that time he sent a list of errors.
When this discrepancy was drawn to Mr Walker's attention during the course of his evidence he said that there were drawings going in all directions at all times and various people making comments on them and he had delegated this work to McDavitt. Furthermore, the relationship between the plaintiff and the defendant had completely broken down by that time.
It transpires that at some stage the defendant had decided to get the drawings completed by another organisation and those drawings, referred to as the "CAD Plans", were produced on 24 April 1995. It is about those plans that the plaintiff in this action is taking copyright action against the defendant or others in the Federal Court.
To complete the chronology it was not until 9 May 1995 that practical completion between the defendant and ACS was granted and on 9 June 1995 the plaintiff sent to the defendant Revision 2 of their plans.

Now turning to the accounts, overall the plaintiff billed the defendant $243,828 which the defendant wants contrasted with the May revised estimate of $114,000. The defendant is prepared to allow $34,985 for variations, giving a total of $148,985 and the rest (that is to say, $94,843) is overcharge, although the defendant has paid all but $78,000 of it and the plaintiff concedes $10,000, so it is all but $68,000.
There is a fallacy in the limit to the variations the defendant is prepared to allow in that since this was an hourly based contract it was not necessary for the plaintiff to submit additions and variations. It was only necessary for it to do the work and charge on an hourly rate and I have no doubt that there were very many additions and alterations within the charges: that was Payne's evidence and I accept it without hesitation.
So far as the variations accepted are concerned, the only reason that they can be isolated as variations is that two of them are related to new work that can be isolated, that is to say, $6,060 for Telecom trenching and $3,925 for hospital surveys. As to the third item it was necessary for the defendants to make a submission to ACS for increased money for the defendants and they required the plaintiffs to explain their additional charges and therefore that was itemised as well, but otherwise variations and additions were not itemised.
In addition to those items it was pointed out to me that the defence contracted to lay 20,000 metres of pipe and in fact laid 23,300 and there was other additional work to which I will refer shortly. Payne said, and I accept, that much of the work was done in a piecemeal fashion and that has the disadvantage that rather than set up and be able to do a lot of work all at the one time, a great deal of time is taken in set-up, and there are more set-ups than usual. It seems to me that the defendant did its work careless of the fact that the plaintiff was on an hourly rate.
In addition to the variations conceded by the defence the extra 3,000 metres of pipe and the piecemeal fashion in which some of the work was done, Payne said that in his original document he had not made allowances for as-constructed drawings of the degree of complexity that it transpired were needed. It was not until November 1993 when he went searching for information that he discovered the degree of complexity of the drawings that were required. He further said that construction took longer than he had been told. This matter is in dispute and I will refer to it again later, but Payne said that even if they did the same amount of work, if they do it over a longer period of time it simply costs more money because there are more times where it is necessary to go to a particular job; there are more set-ups and things of that nature and each time that has to happen it costs money. Additional work that he could recall was the supervision of a construction of a road into the sand and aggregate plant, a volume survey for excavating phosphate, the set-out of a road boundary into the sand and aggregate plant, three dimensional bends for the pipeline, three dimensional anchor blocks on the pipeline from Smith's Point Drum Site, to level and provide profile sketches of sewer trenches for blasting, set out areas for clearing trench roots, survey the stockpile area for the mobile gantry and set out implant supports between drum site and settlement.
Finally, the defendant demanded drawings that were not as-constructed but construction-so-far and Payne's evidence was that this adds to the expense.
In addition to that of course, there is the hourly rate, and it is well known that to cost a job on an hourly rate almost invariably costs more than a lump sum job. That is why most people insist on a fixed price contract.
In his evidence, Payne said that as far as he was concerned, he never performed any work which was not required or was unnecessary and the work that he performed was performed with the knowledge of the defendant's personnel and performed in a reasonable and proper fashion. I accept Payne's evidence in that regard.
As part of its case the plaintiff called Mr John Searle, who is now project manager employed by another company not relevant to our proceedings. He was in fact employed by Clough Engineering Group for about 12 or 13 years and then in April 1993 transferred to work for the defendant. (Clough Engineering owned two-thirds of the defendant and Luttrell owns one-third.) Searle worked on the island from April 1993 to July 1994. He commenced as superintendent for the defendant and ended up as project manager. The defendant also had a surveyor on the island, a Mr Ken Ram, however, he was not licensed and it had a foreman plumber, Mr Peter Baldy.
Searle agreed with Payne that there was an initial problem in that the setting out of lines in the plans provided by ACS turned out to be wrong - they went through buildings and large trees that the environmental people did not want removed, they ran into a railway line, there was a heritage brick wall around sections of the Island and the line was too close to that for the equipment that the defendant had on the island. There were changes in the alignments and Payne re-drew plans and gave them to Searle, who then put them to ACS for approval. Once they were approved the lines were re-set. Initially some of the areas were done twice and had to be taken up and re-done.
Exhibit 2 is a series of volumes of invoices with their supporting documents which the plaintiff supplied to the defendant. Searle would receive the invoice and the explanatory sheet; he would check the hours were correct and he was able to check that because, generally speaking, he, Ram or Baldy worked with someone from the plaintiff and the hours were very similar. That method of checking was followed in respect of each invoice he received while he was on the island. Once he found them to be in order he would "OK them to be paid" and send them to Perth. During the course of his evidence his attention was drawn to Tabulator 27 of Exhibit 2 where there is an account rendered on 1 July 1994, that is, 12 months into the contract and it is about a fortnight before he left the Island, and he agreed that he would have processed and passed that for payment in the usual way.
Apart from checking and comparing the plaintiff's time sheets with the defendant's, he was on site two or three times a day himself, so he had a very good idea of what was happening. He agreed that there were suggestions within the defendant that the plaintiff was over-servicing and they asked him for further details, which he obtained from the plaintiff and he was satisfied with the information he was given, and satisfied that he had correctly certified invoices for payment.
When Searle left, Walker was on the Island for a period of time and then his role was taken over by Hay and McDavitt, who are both civil engineers. The chain man Ram is now in Queensland and no longer works for the defendant. McDavitt is also in Queensland and Hay is in Indonesia and I think that I was told that Hay continues to work for the defendant. In any event, the defendant is not indigent and one would have thought it would not have been difficult for it to get these people to attend at Court. Certainly no explanation was given to suggest that that was not possible. The failure by a party to give evidence or to call a witness, which failure is not explained, may lead to an inference that the witness' evidence would not assist the party's case. It cannot lead to an inference that the witness would give evidence damaging to the case of the party who omitted to give the evidence or to call the witness, however, evidence which might have been contradicted by a witness within the power of the defendant can be more readily accepted if the defendant fails to call that person or to give an explanation for their absence: Jones v Dunkel (1958) 101 CLR 298. These are witnesses that I would have expected the defendant to call and no explanation was given for why they were not called, other than the fact that they are not in Western Australia.
As can be seen from the first page of these reasons, this hearing extended over a 12 month period. Days were lost in the first period because of the defendant; days were lost in the second period because of the plaintiff and no doubt the fact that the Court was unable to accommodate the parties is caused by the state of our own lists. One of the results of this delay is that, it is quite obvious, over a period of time, the parties did more research into the matter and what issues were significant, shifted slightly over the period of the hearing and what was being emphasised when the first witnesses gave their evidence is not necessarily what was being emphasised by the end of the case. Finally, in the final address, Mr Birman for the defendant, said:
"Your Honour, we have what in my submission is the issue in dispute and that is, to what extent the plaintiff's time recorded and charged to the defendant for the as-constructed drawings exceeds the time that could reasonably be charged by a competent surveyor, adopting best professional practise."
This represents a subtle shift in what the parties were arguing about. There was no suggestion at first that there should be a concentration on the as-constructed drawings, it was that the overall account was too high. In the very early stages, it appeared to me, that a large part of the argument was going to be about the time when construction was completed. While that remained an issue, after Payne's evidence more than during it the issue developed into the issue that the defendant had wanted the plaintiff to produce plans even if construction were not finished. I agree that Payne was asked about both but why he could not produce partly done plans was not the emphasis during the course of his evidence.
So far as the completion of construction is concerned, I accept that the evidence shows that the defendant had completed 98 per cent of the pipeline by 30 June. However, Payne's evidence is that at that stage he had surveyed 87 per cent of the pipeline and no-one suggested to me that for the surveyor to be 11 per cent behind the builder was unreasonable. Furthermore, there was work for Payne to do aside from the 11 per cent of pipe line. Obviously as-constructed surveys for the preparation of as-constructed plans, cannot be done until the builder has done the construction. In an annexure in a fax from Smythe to Walker of 11 November 1994 there is a list of works which Payne says were completed after 31 August 1994. Walker disputed that some of that work was done at that time but I am satisfied that there was a large amount of work still to be done and it is not possible for me to go through every item and make findings about that.
I refer to Exhibit 10:68A, which is an internal fax from McDavitt, undated, but is an answer to another internal fax of 5 September 1994, and at that point, that is some time in September on the Island itself the plaintiff was telling the defendant there was another two weeks of work to be done in a particular area, plus additional work in relation to sewer connections and odd jobs. Baldy apparently decided that they did not require them "as of today for such work". I am not quite sure what that refers to, whether it refers to all work or just the sewer connections, that is, the house connections. In any event, it is clear that they were doing work at that time. The sewer connections refer to a dispute about property connections and Payne said it was agreed with Baldy that because of certain difficulties on the job they would return at the end of the project when the sewer connections were actually connected up and survey them at that time. Baldy was not called to contradict this evidence and there is no doubt that Payne did what he says was agreed. Insofar as this matter was referred to in the fax to which I have just referred, it says:
"Evidently Makjap took instructions from an EC sub-contractor in the field not to locate sewer junctions, the junctions were buried, not located and now Makjap is out on an hourly rate for each and every connection.
Any one argument as to actions in the field and reasoning thereof put forward by EC or Makjap can be followed by endless counter arguments based on endless verbal instructions and agreements by ACS, EC, EC subbies and Makjap. All to work to drawings which were of poor content."
The drawings there referred to are the drawings provided on the Island in the first place.
According to the accounts the amount of $23,763.03 (attributed in Exhibit G to as-constructed plans) in the 13th December 1994 invoice contained 18 days of field work: T288.
It follows that I reject the defence submission that when the plaintiff incurred charges after June 1994 it could only have done so if it lost data or had failed to do the survey work properly before. Construction was continuing, the plaintiff could not have surveyed buried work and the defendant had too many people in the area to enable that to be done surreptitiously. If no field work was done in that time or the work was repetitious I am sure I would have heard from the people on the ground.
In returning to the question set for me by Mr Birman about the as-constructed drawings, some witness assessment is necessary.
The witnesses are all professional men and I have no doubt at all as to the absolute integrity of each and every one of them. They were all truthful, although the least reliable was Walker. He is not an untruthful person but is so convinced of the rightness of his cause that on a few occasions he exaggerated or made sweeping generalisations regardless of the strength of his information and on a couple of occasions I think he was ignoring the obvious. So far as the suggestion in the letter from Smythe that the relationship between the plaintiff and the defendant had broken down on the Island after Walker went to the Island and Walker's denial of that, I accept that the relationship would have broken down. No doubt Mr Walker is an extremely talented engineer but he does not appear to me to have a high level of diplomatic skills: during the course of his evidence he gratuitously informed the Court that Adrian Hordyk, ACS's senior engineer, was an incompetent buffoon and that his opinion of Hordyk was well known. At the same time, the plaintiff did not handle this matter as well as it should have. It is abundantly clear that the defendant was asking for drawings, in whatever state they were in, from about July 1994, but it was not until 18 November 1994 that the first set of plans was delivered to them. As I have already said, the defendant wanted these drawings because their very good client wanted the drawings to enable that client to do other work and also, because of the high level of the accounts of the plaintiff. There was some suggestion that they needed the drawings for practical completion, but that was a red herring because practical completion was not achieved until May 1995. The sewerage treatment plant was doubled in size (that did not affect anything that the plaintiff had to do) and that was the reason for most of the delay in practical completion.
So far as the plaintiff producing plans of construction-so-far before it did, it is my finding that the defendant's complaints were justified in the sense of seeking the plans or an adequate reason why they were not getting the plans. As it transpires, probably there was an adequate reason why they did not get the construction-so-far plans but they were never told that. They may not have accepted it had they been told it, but they at least should have been told. It was not until Smythe was giving evidence on the second set of hearing dates that it came out in his evidence that while the best practise is to put the data into the computer for the purpose of the drawings from the very beginning, Payne's time sheets indicated that he had no time available to make data input into the computer until June 1994. Later Walker agreed that there is nothing in the invoices for as-constructed drawings prior to June 1994 in relation to Package 2.
Given the trouble between these people Smythe should have worked out the reason for delay before he did. I accept that there was and is a reluctance by surveyors to produce drawings before completion of construction but once the client made it emphatically clear that that is what it wanted, it at least should have been told why it could not happen. I note also that during the course of his evidence Walker said words to the effect that surveyors are always reluctant to produce these drawings and one assumes that is because of the heavy responsibility on them and one also assumes that Walker has had trouble getting drawings out of surveyors in the past.
While in certain circumstances the failure might sound in damages, there is no damage here, but is there proof in this situation that the defendant was overcharged? Nothing was recorded in the invoices before June 1994 for this data input and no doubt it had to be done and it had to be charged for, so can it make any difference whether it is done before June 1994 or after June 1994 so far as the cost of it is concerned? The defendant answers that question "yes" and says that one of the ways in which Payne defended his high interim billing was by saying the bills included the cost of drawings and that he said that to both Walker and Luttrell. In Luttrell's evidence starting at T669 he said:
"But he explained to me in his office how he records the data in the field on return to the office - and I am presuming here, on return to the office each day, but I can't recall him saying that - but on return to the office the data is entered into his system in his office. It is digitally processed in the software system. He had the Forsythe software system and as a result of that data stored on file, the as-constructed drawings can then be plotted on an instant basis when all the data has been completely collected and recorded.
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Did he tell you anything about the production of as-constructed drawings at that meeting? --- In the context that I was complaining to him at the increasing cost of surveying bills, I was assured that one of the main reasons the bills were higher than I might have otherwise expected, is that they contained all the elements of as-constructed survey work done to date; that is, the recording of data and that the benefit of recording it progressively and entering into progressively is that at the end of the job, you literally press a button and out come the drawings. I understand that's simplistic. When you press the button for plotting those, you still have to label the drawings but it was the expression used to me at the time, that these costs incurred progressively include the costs of as-constructed surveys and the entering of as-constructed data.
Did you accept that explanation for the bills that had been rendered to that point? --- I did, but I didn't feel totally comfortable. I asked my - I directed my project staff to keep a close control over the work done and the invoices received."
In his evidence Walker said that Payne had also told him that the bills included data input.
In Payne's evidence he said that he used a field book to record data and that because of the nature of the work and the way it was being done it really was not possible to make proper use of the semi-total station that had been referred to in the estimate and there was no secret about that because they could see him working and anyone would be able to see that he was using the field book. There was a piecemeal approach to the job and it was all over the place and he had to keep track of records that he would have to refer to at the end and the end turned out to be in about 18 months away but he did not know at the beginning that it was going to be that long. He gathered his as-constructed survey information as quickly and efficiently as it was practical to do and that meant not using the semi-total station and computer files. He said he could not recall telling Luttrell that the survey bills did not relate solely to the set-out charges but also involved a significant component of as-constructed charges, but in any event that statement is correct. The bills at that stage would have contained both set-out and as-constructed but what he would be referring to if he referred to it was as-constructed surveys. The as-constructed surveys started on the second day of the project, while he was setting out lines in some places at the same time he was doing as-constructed surveys in other places because it was essential that pipe work be picked up before it was buried. The invoices make it very clear that the as-constructed being referred to is as-constructed surveys and not as-constructed drawings. The first time a code was set up in the accounts for as-constructed drawings was in May 1994 and that code was .35. He could not recall Walker complaining about as-constructed plans in April 1994, nor did he recall saying to Walker that the survey fees were high because they included charges for both survey and data input to the computer necessary for the preparation of the as-constructed drawings. He denied telling Walker that he was collecting the data electronically as the works were being constructed sending the electronic data by modem to Perth for the production of drawings and that it would literally be "a matter of pressing a button". What they were doing was collating the field data, putting it into the graphics section of their programme, making sure the line work and technical information was correct then transmitting it to the draughtsman in Perth who would make up the plan on his computer.

It is my finding that Walker and Luttrell had misunderstood what Payne was telling them and he was not telling them that he was doing anything in relation to the drawings per se prior to June 1994 for the simple reason that it would be no use telling them that because there was nothing in the accounts about it in relation to Package 2. However, he was not being as frank with them as he should have been or perhaps as careful as he should have been in the sense that I do find he was giving them to understand that the reason the accounts were as high as they were related to extra work now and that this would be reflected later on when the drawings would be produced quickly and gave them to understand that the costs then would not be as great. He was wrong about all of these matters.
Again, this could well have sounded in damages. I envisage that if he had told them the absolute truth then it may be that they could have got some other surveyor to do the work more cheaply. As it turns out Walker did have the matter referred to two other surveyors and determined not to transfer the matter to another surveyor so that he did not lose his opportunity to do that. I do not believe of course that they could have got this work done more cheaply.
Simply because Payne was giving them information about the accounts which was not completely reliable reflects on Payne it does not mean that the work that was actually done and charged for was not done or was not necessary. It is my finding that the work was done and that it was necessary.
I believe I have dealt with every argument that the defendants have put up in an endeavour to have me draw an inference that the work was not done, not done properly, was done twice or that there was some explanation for the state of these accounts other than the fact that that they have been charged on an hourly rate for the hours that have actually been done and done properly. There is no inference that can be drawn from any of the information that I have that they have been charged for any work being done twice, any work being done inefficiently or any work that has not been done. What happened was that Payne did not enter the data at the end of each day, which is apparently the ideal practise. According to Smythe, Payne did not have time given the amount of work that he was doing in field surveys and setting out. Even if he did have time and did not do it, it had to be done at some time and it had to be charged for and they have not been charged for any work that was not done.
I note also that the defence called no surveyor and gave no explanation for that. The defendant confined itself to arguing that all it needed from surveyors it had from the plaintiff. I do not agree with that. What the defendant sought to take from the surveyors was evidence of best practise in relation to entering the data from time to time and in relation to production of drawings after the surveys are finished. I have already found that there was a delay in inputting data but that no damage flowed from that and I accept Payne's evidence that after completion of construction it takes two weeks to a month to produce the drawings and that is usually done with the co-operation of the builders, which of course had broken down here.
It should also be remembered that in the criticisms I have made of the plaintiff I am referring to the construction-so-far drawings and Payne's earlier explanation as to cost. I am not referring to the as-constructed drawings. They could not be completed until construction was complete and that was not until very late in 1994. The as-constructed drawings Revision 1 were delivered 16 December 1994. It is also necessary to be mindful that usually such drawings are a product of co-operation between builder and surveyor and without that co-operation extra difficulties are caused.
I confirm my findings that all of the work that has been charged for was done, that it was all required and none of it was duplicated. Accordingly, the plaintiff is entitled to the outstanding balance due to them.
I was of course, told about the plaintiff's willingness to settle for a lesser sum. There may be occasions when that has an evidentiary value in the sense of showing that the plaintiffs themselves thought the work was less than they had charged, but I have no evidence that that is the case and that is not the inference that I draw, rather the inference I draw from that is that they were willing to settle this matter to dispose of it and as a preference to taking legal action. Furthermore, if the plaintiff decided for reasons of goodwill to charge less then that is their choice but it is certainly not something about which I can make a finding, nor can I force them to vary the agreement to continue to hold that offer open when it has been rejected by the defence.
There leaves the matter of the counter-claim by the defendant because it says that it had to go elsewhere to get the drawings done properly. I reject that. At the same time I can understand why the defendant became so exasperated that it did go elsewhere because they were not getting an adequate explanation for why there was a delay in producing the construction-so-far drawings. The fact that the plaintiff did not produce those drawings was not only exasperating but could have (although I have rejected it) gone to the issue of whether the work was being done properly and efficiently and therefore whether they were being overcharged. However, as I have said, so far as producing the as-constructed drawings is concerned surveyors cannot be expected to produce as-constructed drawings until construction is complete and in this case the field work was not complete until late November and in that sense the true as-constructed drawings were not late.
I repeat though, one can understand the defendant becoming frustrated at what they perceived was a delay in producing what could have been produced and a failure to provide an adequate explanation and on that basis it is not hard to understand why the defendant would go elsewhere to get their second set of drawings done, at the same time it could not sound in damages. It could not sound in damages firstly because, as I have already said, the surveys were not finished until November and secondly because after that period of time no doubt because of their frustration with the plaintiff, the defendant did not provide them with the Hordyk information. It is a fair inference that by the time the defendant provided the plaintiff with the Hordyk corrections the defendant had already instructed the CAD Centre to prepare drawings.
For these reasons the plaintiff is entitled to an award in the sum of $68,643.08, being the sum outstanding and the defendant's cross-claim is dismissed.