Michael Davies Associates Pty Limited v Auburn Council - [2007] NSWSC 877

No judgment structure available for this case.

CITATION: Michael Davies Associates Pty Limited v Auburn Council [2007] NSWSC 877

HEARING DATE(S): 10, 11, 12, 16, 17, 18, 19, 23, 24, 26, 30 April 2007 and 1, 2, 7 May 2007

JUDGMENT DATE :
14 August 2007

JURISDICTION: Equity Division
Technology & Construction List

JUDGMENT OF: Bergin J

DECISION: Plaintiff entitled to judgment. Defendant's cross-claim is dismissed.

CATCHWORDS: [CONTRACT] - Claims by plaintiff for outstanding fees for provision of architectural services to the defendants - Claim by defendants in cross-claim that plaintiff was in breach of retainer and that it was negligent in the provision of its services - [MISLEADING OR DECEPTIVE CONDUCT] - Claim by defendants in cross-claim that plaintiff's conduct was misleading or deceptive - Whether alleged representations made - If made, whether false

LEGISLATION CITED: Civil Procedure Act 2005
Trade Practices Act 1974 (Cth)

CASES CITED: Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523
Karedis Enterprises Pty Limited v Antoniou (1995) 59 FCR 35
Keen Mar Corp Pty Limited v Labrador Park Shopping Centre Pty Limited (1988) ATPR 40-853
Minister for Natural Resources v New South Wales Aboriginal Land Council & Anor (1987) 9 NSWLR 154
Wardley Australia Limited v Western Australia (1992) 175 CLR 514
Wormald Engineering Pty Limited v Resources Conservations Co International (1988) 8 BCL 158

PARTIES: Michael Davies Associates Pty Limited - Plaintiff
Auburn Council - First Defendant
The State of New South Wales - Second Defendant

FILE NUMBER(S): SC 55013/2004

COUNSEL: JB Simpkins SC - Plaintiff
ID Faulkner SC / HJA Neal - Defendants

SOLICITORS: Colin Biggers & Paisley - Plaintiff
Matthews Folbigg - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

BERGIN J

14 AUGUST 2007

55013/04 MICHAEL DAVIES ASSOCIATES PTY LIMITED TRADING AS MICHAEL DAVIES ASSOCIATES v AUBURN COUNCIL & ANOR

Introduction

1 The plaintiff, Michael Davies Associates Pty Limited t/as Michael Davies Associates, Architects and Design Managers, seeks from the first defendant, Auburn Council (the Council) and the second defendant, the State of New South Wales on behalf of the New South Wales Police Service, damages for unpaid fees for architectural and design services in respect of the redevelopment of the Auburn Civic Centre located at the corner of Queen Street and Susan Street, Auburn (the Project). Alternatively the plaintiff seeks a quantum meruit in respect of its services. The defendants, by cross-claim, seek damages from the plaintiff for alleged breach of retainer, negligence in the provision of professional services and misleading or deceptive conduct in breach of the Trade Practices Act 1974 (Cth) (TPA). I shall refer to this as the “Council’s Cross-Claim”.

2 The Council and the second defendant proceeded with the Project as a joint venture which included locating the Auburn Local Area Police Command, the Council’s administrative offices and community facilities including a town hall, council chamber and library in the redeveloped Civic Centre. The Police Service wished to be in occupation in time for the Olympic Games, specifically by March 2000, and this deadline was an important factor in driving the Project.

Consultancy Brief

3 On 28 July 1998 a “Pre-Tender” Meeting for the Project was held at the Council’s offices. Those present at the meeting included the various consultants who had received the Council’s Consultancy Brief for the Project, one of whom was a member of the plaintiff’s firm, Vanessa Kragh. The Consultancy Brief for the Project included concept plans that had been prepared by a firm of architects, Swalwell Schwager Architects (SS) for the “preferred concept (option 2A)”. The stated purpose of the Consultancy Brief was to “outline the criteria for the Joint Venture to engage appropriately qualified and experienced consultant/s to prepare and deliver a fully costed quality design incorporating Council’s preferred concept (option 2A)”. The Consultancy Brief referred to the target date of March 2000 and that “therefore” the procurement method was to be a “Design, Novate, Construct” method. The alternatives that were put forward were: (a) design up to the Development Application (DA) stage; and (b) design up to the DA stage and novate to the construction tenderer.

4 Each tenderer was required to include within their tender an itemised fee statement in respect of developing the Project designed to a DA stage in respect of alternative (a); and developing the Project designed to DA stage and through to the novation and construction design documentation stage in respect of alternative (b). Each tenderer was also required to include the following:

(d) Preliminary design concept developed up from preferred concept 2A, identifying potential staging, indicative total project cost of each stage and separate cost estimates of Council/Police/Share facilities.

(e) Optional consideration of the provision of possible alternative concepts which the tenderer believes will better satisfy the stated objectives of this brief developed to the level identified in 5.1(a) above.

5 Paragraphs 6 and 7 of the Consultancy Brief were in the following terms:

6. PURPOSE FOR WHICH THE SUBMISSION IS TO BE USED

I. The submission documentation will become the property of the Joint Venture.

II. The project design will be used for obtaining Development Consent for the project.

III. The Joint Venture will at this stage determine whether to progress to the novation stage as part of this commission or to commission the project design solution to Development Application Stage only.

IV. In keeping with the principles of transparency and open government, information contained within the submissions may be reported in a public forum.

7. TIME FRAME

I. The successful Consultant is expected to provide a detailed program to achieve the Joint Venture objectives of a project delivery date of March 2000, for commissioning of at least the NSW Police Service and Council Administration building components, specifically identifying the Development Application lodgement date and the nominal construction certificate issue date.

6 The construction costs were discussed at the Pre-Tender Meeting and the Council officers reported that a figure of $14.7 million had been given to the Council for Option 2A. The Council officers advised the meeting that from an indicative costing point of view the Council had considered an option for construction cost of $14.7 million and was prepared to go along with that. They also reported that it was understood that the figure may be higher and that if that was so, it would need further consideration. The consultants were advised that the closing date for tenders was 19 August 1998.

7 The plaintiff’s letter to the various professionals from which it sought prices for services referred to a “fixed lump sum fee” broken down into two components, one for the production of the DA and the other for “documentation services”. On 10 August 1998, the quantity surveying firm, DG Jones & Partners Pty Limited (DG Jones), submitted a fee proposal for quantity surveying services to the plaintiff. That proposal was as follows:

Preparation of preliminary cost estimate from design concept drawings	$2,500.00
Cost Planning services during design development, up to completion of DA documentation	$15,000.00
Cost Planning services after novation to builder, up to completion of construction design documentation	$22,000.00
Total fee	$39,500.00

Plaintiff’s Professional Services Proposal (PSP) – 19 August 1998

8 On 19 August 1998 the plaintiff submitted a Professional Services Proposal (PSP) to the Council. The Overview section of that document referred to the plaintiff’s concern that the Council may not have had comprehensive advice and that it was locked into a very demanding programme to deliver the Project by early 2000, “hence the proposed delivery method about which we also have serious misgivings”. It advised that the plaintiff had developed and rationalised the preferred Option 2A “to make a workable and cost effective solution not previously envisaged” and had developed “a further bold option appropriately termed MDA Option 2000” (“Option 2000”). It claimed that Option 2000 involved the complete demolition of all existing buildings and the construction of purpose made facilities to take the Council well into the 21st century. It also claimed that Option 2000 was simpler than the alternatives and would provide the Council with a modern facility.

9 The PSP included the following in respect of the scope of services for option (a) – design up to the DA:

Preliminary Services

· Reviewing the Brief including Budget and Programme Requirements

· Space Schematics/Flow Diagrams

· Consultation with Authorities

· Advising on Method of Building Procurement

· Engagement of Consultants

· Site Analysis

· Detailed Off-Site Services Studies

· Environmental Studies and Reports

Design/Development Application Services

· Consultation with Authorities

· Site Master Planning

· Building Design Services including Coordinating and Integrating Consultants’ Services

· Estimate and Programme

· Presentations to Client and/or Nominees

· Preparation of Development Application Documents including Drawings, Room Data Sheets, Accommodation Schedules, Updated Design Brief and Performance Specification for the building, building services and fit out works

· Preparation of Estimate and Programme

· Presentations to Client and/or Nominees

10 The PSP also included the scope of services for option (b) – developing the project to DA stage and through to the novation and construction design documentation stage. That option included the same services referred to above with the addition of the following:

Contract Documentation/Building Application Services

· Consultation with Authorities

· Documentation consisting of the preparation of documents based on approved Development Application Documents Setting out the Detailed Building Construction Requirements.

· Special Materials and Construction Research

· Preparation of Building Application Documents

· Preparation of Estimate and Programme

11 The PSP also included a fee proposal for the two options with reference to the estimate of the cost of the Project of $13.7 million. The fee proposal for option (a) was $189,800 as a “fixed lump sum” and for option (b) $639,600 as a “fixed lump sum”. Each of those proposals included the following:

Plus authorised variation fees for increased or protracted work, variations in the Scope of Services, variations to the approved design, disbursements and the like in accordance with the attached Terms and Conditions and on a time charge basis as set out below.

12 The “time charge basis” ranged from $50 per hour for clerical/secretarial staff to $150 per hour for principal architects. The Terms and Conditions that were attached included the following:

16. MDA’s liability to you in respect of the project shall be limited to the cost of rectifying the works, the subject of the Professional Services Proposal or $300,000, whichever is the lesser.

Construction Management with Guaranteed Maximum Price - GMP

13 On 26 August 1998 the plaintiff responded to some questions posed by Mr Ray Brownlee, the Operations Manager of the Council, in respect of the plaintiff’s then current commitments and its specialist consultants. That letter advised that the plaintiff had the “capacity to commence design immediately and to follow with contract documentation”. It also included the following:

3. Programme

The dates shown on the programme included in our Professional Services Proposal are potentially realistic but will require a very great amount of co-operation from all the stakeholders.

construction management, with a guaranteed maximum price

14 This appears to be the first time that the construction management method with a guaranteed maximum price (GMP) was mentioned to the Council by the plaintiff.

15 It is apparent that a meeting took place on 27 August 1998 between the Council and the plaintiff at which Alan James, a consultant project manager to the Council, requested the plaintiff to give some estimate of the “gross bottom line” costs associated with the project that had been excluded from DG Jones’ estimate. The plaintiff responded to that request on 28 August 1998 advising that in addition to what was contained in the PSP the Council should allow for $10,000 for two sessions of value management, $5,000 for geotechnical investigation and $10,000 for a library consultant, if required. DG Jones’ fit out costs were provided for both alternatives Option 2A and Option 2000, being $2,960,000 and $2,815,000 respectively. The plaintiff advised that the Council was better placed to assess the likely real costs of Council fees and/or contributions and finance or land costs.

16 On 1 September 1998 Mr Brownlee met with Mr Michael Davies, the managing director and principal architect of the plaintiff, at the plaintiff’s offices. On 2 September 1998 DG Jones wrote to the plaintiff advising that they had been informed that the plaintiff was preparing a programme based on “Construction Management procurement” and requested a copy as soon as possible to assist it in revising its fee proposal.

Plaintiff retained – 3 September 1998

17 On 3 September 1998 Mr Brownlee wrote to the plaintiff in the following terms:

Thank you for your proposal to supply design services for the first stage of the project.

Council is pleased to advise that it has selected your proposal as the successful submission and looks forward to working with you to ensure the project proceeds to the next stage of the process.

As tentatively indicated to you at the meeting held in your office on September 1, 1998, Council is endeavouring to arrange a meeting of all Councillors and senior staff to be held at Auburn on September 16, 1998 at 5.00pm to discuss in detail the alternative proposals.

Councillor Workshop – 15 September 1998

18 Mr Davies gave a presentation to the Councillors and staff of the Council on 15 September 1998. The Bottom Line Cost Comparison Table produced by the plaintiff for the Council was part of an overhead presentation. That Table was as follows:

BOTTOM LINE COST COMPARISON

ITEM	ORIGINAL OPTION 2A	MDA OPTION 2A	MDA OPTION 2000
Building Works
Demolition	$415,000	$296,685	$380,685
Administration Building	included	$5,281,000	$4,732,000
Multipurpose Community Centre	included	$1,200,000	$1,200,000
Auburn Library	included	$2,317,250	$2,317,250
Retail/Commercial	not applicable	$356,000	$356,000
NSW Police Service	included	$2,750,600	$3,441,600
External Works	$451,000	$256,295	$341,740
Contingency	$1,974,892	$622,892	$638,464
Total Building Works	$15,791,000	$13,080,722	$13,407,739
Escalation (Aug 98 to Mar 99)	$1,894,920	$457,826	$469,271
Car Park	$2,000,000	$3,521,071	$3,080,937
Fitout Works	$2,063,000	$2,960,000	$2,815,000
Professional Fees	$2,172,381	$640,000	$640,000
Temporary Accommodation and Relocation Costs	$500,000	$500,000	$500,000
TOTAL	$24,421,301	$21,159,619	$20,912,947

Council Meeting – 16 September 1998

19 A report for the Council meeting of 16 September 1998 referred to the timeframe of March 2000 for the development and that it was “imperative” that Council complete the design and documentation of Stage 1 of the Project “in order for detailed costings to be obtained and a report presented to Council for final determination”. That report noted that the plaintiff needed a direction on which option to develop further and included the following:

A Councillor Workshop on the Civic Precinct Redevelopment was conducted on September 15, 1998. The purpose of the meeting was for the successful tenderer for the design and documentation of Stage 1 of the project, Michael Davies Associates, to discuss the different options available to Council and for Councillors to make comments and debate these options.

…

At the Councillor Workshop, the concept of possible staging of the project was introduced. The question of staging the project has two-sides; firstly the ability to remove or defer components of the overall scheme will lower the initial capital costs of the project and secondly, deferring components now, may lead to increased costs for those components at some time in the future. Decisions of possible staging of the project, do not need to be determined at this time, as more detailed costings will be obtained at the completion of Stage 1. A report will then be presented to Council for determination.

Given this timeframe, it is imperative that Council complete the design and documentation of Stage 1 of the Civic Precinct Redevelopment, in order for detailed costings to be obtained and a report presented to Council for final determination. To complete Stage 1, the architect Michael Davies Associates needs a direction on which option to develop further.

Based on the information supplied in this report and attachments concerning the limitation of MDA Option 2A, the potential contractual variations in constructing adjacent to and on the existing Administration Building and the indicative cost comparisons of both options, it is recommended that Council endorse MDA Option 2000 and that the balance of Stage 1 of the project proceed accordingly.

20 The Council resolved at its meeting on 16 September 1998 that: “Council endorse the principles of MDA Option 2000 for the completion of Stage 1 of the Civic Precinct Redevelopment project”.

Expression of Interest

21 On 23 September 1998 Mr Davies attended a “value management workshop” with representatives of the Council and Police Service. It was during that meeting that Mr Davies drafted a proposed advertisement to be published by the Council calling for expressions of interest. The advertisement that was published in the press was in the following terms:

Expression of Interest
CONSTRUCTION MANGER

Auburn Council and the NSW Police Service are progressing the proposal for the possible co-location of Council’s administration facilities and the Auburn Local Area Police Command on the site of the existing Council facilities at Susan Street, Auburn. Council is also considering the construction of a new central library, community facilities and a multistorey car park on the site, possibly as subsequent stages. The total project cost is likely to be around $15 million.

Council has selected Michael Davies Associates as architects and design managers for the facility. Design is currently under way. Council now wishes to appoint a construction manager to undertake the management of the construction works on a cost-plus-fixed-fee basis with guaranteed maximum price. Work is expected to commence on-site in January 1999 and the facilities are to be operational by March 2000.

An information package setting out expression of interest submission requirements and incorporating returnable schedules is available to potential registrants … Registrations of interest should be … placed in the Tender Box … prior to 2.00pm on Friday November 20, 1998.

22 The information package for the expressions of interest referred to in the advertisement included the following:

The following criteria are likely to be considered in Council’s evaluation of Registrants and submissions should address the items set out. Registrants are however encouraged to provide information in any format which best illustrates their suitability:

· Proposed contractual arrangements and details of construction management services provided

· Details of applicability of ‘Guaranteed Maximum Price’ (GMP), for example, is there a share of savings proposed? If so, on what basis? Under what circumstances will the GMP be varied?

· Details of specific construction management experience and referees for same.

23 Mr Davies was cross-examined about the wording of the advertisement and the reference to the total project cost of “around $15 million”. He gave evidence that the figure was provided by him and was used for “commercial reasons” (tr 45). In re-examination Mr Davies explained what he meant by “commercial reasons” as follows (tr 107-108):

If you tell a contractor that a project is going to cost $20 million, it's very likely that the lowest tender will be $20 million or thereabouts. If you tell them on the other hand that it is $15 million, then you will probably get a price somewhere between 15 and 20 million dollars, in that example.

24 On 23 October 1998 the plaintiff received the Council’s official purchase order dated 20 October 1998 that requested the plaintiff to supply “professional service & architectural services as per proposal dated 19/08/98”. The order value was $189,800.00.

Draft Updated Estimate

25 On 23 November 1998 DG Jones sent to the plaintiff a “draft updated estimate” advising that Mr James wanted a copy for a Council meeting on 24 November 1998. That updated estimate referred to a total preliminary cost of $24,307,326.00. On 24 November 1998 Mr James asked Mr Davies to prepare a presentation document similar to the “original” but based on the latest drawings. Mr James advised that he would have a quantity surveyor’s estimate to go with that presentation.

Austin Australia Pty Ltd expression of interest

26 Austin Australia Pty Ltd (Austin) submitted its expression of interest under cover of a letter dated 24 November 1998. Included with that letter was a document which included the following:

3.0 CONTRACTUAL ARRANGEMENTS/CM SERVICES

We understand that the Council’s preferred project delivery approach involves the appointment of a Construction Manager on a cost-plus-fixed-fee basis, with a Guaranteed Maximum Price for the construction of the new Facilities.

Under a Construction Management Approach, the activities Austin Australia would be undertaking will include the following:

1. Monitor Design and Review Buildability Issues.
2. Prepare construction scheduling.
3. Prepare budget cost estimate.
4. Organise sub-contractors’ and suppliers’ tender packages.
5. Evaluate and recommend subcontractors and suppliers for Council’s approval.
6. Organise regular site meetings.
7. Provide additional detail drawings which may be required.
8. Monitor and control construction program.
9. Monitor and control construction cost.
10. Using Council’s Design Consultants, assess progress claims and recommend payment.
11. Provide architectural and engineering inspections and quality control.
12. Monthly written report to Council.
13. Provide final inspections and prepare defects lists.
14. Obtain certification of building on completion.

27 On 25 November 1998 Mr Davies attended a meeting with Mr Brownlee and Mr James and a representative of the Police Service at the Council offices. At this meeting the preferred tenderers were selected for the tendering process.

DA Estimate Cost Summary

28 On 25 November 1998 DG Jones wrote directly to the Council and provided their “suggested scope of Quantity Surveying services … based on the proposed Construction Management form of delivery” that included: the Sketch Design Stage; the Design Development Stage; the Contact Documentation Stage; and the Construction Stage. That letter advised that DG Jones would submit its fee proposal “in due course”. DG Jones also provided on 26 November 1998 a “DA Estimate Cost Summary” in the following terms:

Ref	Element	% Job	Cost/m2	Total ($)
1	Police Building	17.2	221.84	4,003,592
2	Administration Building	23.1	298.22	5,381,944
3	Multi-use Community Building	7.9	102.53	1,850,295
4	Library	13.5	173.81	3,136,750
5	Multi-storey Carpark Building	16.9	218.28	3,939,212
6	Fitout	10.9	140.65	2,538,266
7	Professional Fees	2.7	35.46	640,000
8	Temporary Accommodation & Relocation	2.1	27.71	500,000
9	Contingency @ 5%	4.7	60.92	1,099,503
10	Escalation – Nov 98 to March 99	1.0	12.79	230,896
TOTAL	100	$ 1,292	$ 23,320,458
Gross Floor Area	18,047	m2

Interim Fee Proposal – 1 December 1998

29 On 1 December 1998 the plaintiff wrote to Mr James in the following terms:

Further to our various discussions we would like to confirm that we are proceeding with tender documentation for demolition work and construction management services.

In addition to this and as you are aware we have prepared an expression of interest package, and advised and attended meetings in relation to selection of the construction management tenders. This work has been necessitated by Council’s programme objectives and is not included in either Option a or Option b of our Professional Services Proposal dated 19 August 1998. MDA have also provided advice and assistance in connection with the proposed strata title subdivision. As you are also aware, Council staff have provided some assistance with reviewing of the brief and whilst it was not done as we would have done it, it has nonetheless saved us time at this stage of the project.

With your agreement it would be our intention to offset the benefit provided by Council with the work we have done in relation to the preparation of the expression of interest package, consultation and assessment of expressions of interest, and advice on strata title subdivision.

The preparation of the tender documentation for demolition work and construction management services will, unless you instruct otherwise, be charged for on a time basis in accordance with our Professional Service Proposal. However if Council proceeds beyond the Development Application Stage the fee will be absorbed in the next Stage (Option b).

Report to Council for meeting 2 December 1998

30 Mr Brownlee prepared a Report for the Council Meeting on 2 December 1998 about a week prior to the Meeting (tr 173). It included the following:

SUMMARY:

This report details the outline costs and debt servicing arrangements for the Civic Precinct Redevelopment project. It provides an overview of the master plan, relocation strategies, staging options and details of expressions of interest for the selective tendering of a construction manager to construct the project.

REPORT:

…

04/02/98

…

Council agreed in principal ( sic ) to proceed with the project subject to Council’s final determination to detailed plans, costings and funding strategies and on the understanding that any additional costs associated with funding the project not be sourced from current budget allocations for services and in effect be cost neutral.

…

20/05/98 …

Council endorses Concept Option 2A as the preferred Option for the Auburn Civic Precinct Development and expressions of interest for the design and construction be sought.

The General Manager seeks expressions of interest for financing options for funding the proposal and that an application be made to the Department of Local Government for the raising of the loan.

…

02/09/98

Council accepted the tender of Michael Davies Pty Ltd for Stage 1 of the design and documentation for the Auburn Civic Precinct Redevelopment. In addition the police contribution for these works was 50% of the costs.

16/09/98

A workshop was held with Councillors and Councils Architect Michael Davies on 15 September 1998, to discuss the different options available to Council.

Council resolved at its meeting of 16 September 1998 to endorse the principles of MDA Option 2000 for the completion of Stage 1 of the Civic Precinct Redevelopment project. MDA Option 2000 includes demolishing all existing structures and building new ones.

07/10/98

…

The current status of the project is that Development Application for the Civic Precinct Redevelopment Project has been lodged, advertised and assessed by independent consultant Laidlaw Sheridan Partners. If Council resolves to approve the development application and the recommendations in this report the next stages are as follows:

31 This Report referred to the need to note two parameters that would have an impact on the Project. The first was the New South Wales Police Service’s requirement to occupy their building by March 2000. The second was the proposed multi-storey carpark which required negotiations with adjoining property owners. As to the first matter the Report included the following:

This requirement of the Police Service has facilitated the need to employ a procurement method of Construction Management to achieve this objective. Construction Management involves the engagement of a construction manager who will tender for a number of work packages, such as demolition, concreting, electrical, mechanical, etc. The advantage of this method is that it will achieve the construction timeframe while continually testing the market for each work package to ensure the most competitive prices are achieved.

32 The Report also included the following:

Costs

Council has employed the services of the Quantity Surveyors D.G. Jones Pty Ltd to determine the costings on the different components of the “worked up” Development Application drawings.

The costings provided by the Quantity Surveyors are the best available information at this time. Only when tenders are called and received will Council know the final bottom line cost. In saying that, its ( sic ) is felt the submitted figures shown below are a realistic reflection on the costings of each component.

Item	Costs
Police Service Building	$4,003,592
Council Administration Building	$5,376,944
Library	$3,136,750
Community Centre	$1,850,295
Contingency	$1,579,503
Escalation Costs	$ 235,896
Fitout Works	$2,538,266
Professional Fees	$ 640,000
Relocation	$ 500,000
Total	$19,861,246

The costings for the demolition of the existing carpark and reconstruction of a new multi-storey carpark is $3,939,212. As discussed it is proposed to defer this component of the works, until legal impediments are resolved.

33 The Report recommended that the Council proceed to call selective tenders for the Project from six preferred tenderers including Austin.

Council Meeting 2 December 1998

34 The proceedings at the Council Meeting on 2 December 1998 are controversial. On the one hand the Council claims that Mr Davies gave a presentation and represented that, “the GMP is like a lump sum tender. It gives the Council surety that the costs will not go above $16.9 million”. On the other hand the plaintiff claims that no such presentation or representation was made at this meeting. As there is quite a deal of evidence to analyse in respect of the competing claims in relation to this Meeting I will deal with this topic later in the judgment.

Development approval

35 The Development Application for the Project was approved at the Council Meeting on 2 December 1998. That approval included the following:

Approved Plans

Meeting - 3 December 1998

36 On 3 December 1998 Mr Davies attended a meeting with Mr Brownlee, Mr James and Robert Smith of the Police Service. Mr Davies recalled that at this meeting he spent considerable time discussing the layouts of the NSW Police areas of the Project. Mr Brownlee’s affidavit evidence of 26 July 2006 in relation to this meeting included a claim that the following conversation took place:

Brownlee: Michael, as you know, Council has resolved to undertake the Civic Precinct Project as the construction budget has increased to the $16.9 million. We need to agree on a fee.

Davies: You are here to screw me now aren’t you?

Brownlee: I don’t think so. I propose that we pro rata your fees from the $13.7 million to the $16.9 million. This appears to be the fairest way.

Davies: That’s fine.

37 Mr Davies denied that a conversation in these terms occurred at this meeting and gave evidence that there was no discussion of fees at this meeting (tr 61).

38 The Invitation to Tender for Construction Management Services dated 14 December 1998 that was issued by the Council included the following:

The Principal requires a competent and experienced Construction Manager for the effective and economic completion of the project to the required quality, scope and function, on time and within the Budget.

…

The Principal anticipates the cost for the works to be managed as described above will be $17,000,000 (Seventeen million dollars).

…

It is a fundamental requirement of the Principal that completion of the Police Service and Council Administration components of the project be achieved by 9 February 2000.

It is anticipated the successful Construction Manager will be appointed on 2 February 1999 and that work on the site will commence on or about 4 February 1999.

…

The tenders are to be submitted in two parts on two different dates as follows:

Part A: Submission of Procedural Material
Part B: Submission of Financial Proposal

…

The assessment criteria to be adopted for determination of the successful tenderer will be as follows:

Part A Proposed contractual arrangements (to be reviewed by Council’s legal advisers)
Capability of site and office staff
Management systems and methodology
Perceived attitude and enthusiasm for the project
Outline Plans

Part B Tender Price(s)

DOCUMENTS

Documentation supplied previously entitled “Expression of Interest – Information Package” is relevant to this Invitation excepting that the drawings provided at the time have been superseded.

· Tender Form Part A (Returnable)

· Tender Form Part B (Returnable)

· Architectural Drawings numbered 9809 DA01 to 9809 DA09 inclusive and 9809 DA11

· Demolition Drawing 9809 DW01

· Specification

· Survey drawings

· Asbestos Report (for information only)

· Various drawings of existing buildings on the site (for information only)

· Drawings of the existing car park structure adjacent the site (for information only)

· Notice of Determination of Development Application

· NSW Police Service Building Code 1998 (Numbered copy: must be returned with tender)

Not attached, but also forming part of this Invitation to Tender is the Expression of Interest Package previously provided.

…

NATURE OF AGREEMENT

It is proposed that the Construction Manager will co ordinate and manage construction of the work and all construction related contracts.

It is not intended that the Construction Manager will carry out any construction work.

If the Construction Manager considers such action essential, then prior approval of the Project Manager must be obtained.

The Project Manager will administer the Agreement between the Principal and the Construction Manager. Tenderers are to submit their proposed form of contract as part of Tender Part A.

· Purpose-written document

· Master Builders’ Association CM1

· NSW Department of Public Works and Services Construction Management Agreement

· AS2124-1992 with Special Conditions

· Insurances to be provided

· Liquidated and Ascertained Damages

· Hours of work

· Delays and Extensions of time

· Guaranteed Maximum Price

· Variations

· Retention and Security

· Progress payments of fees to Construction Manager

· Dispute resolution

· Default and insolvency

· Defects Liability Period

39 The Invitation to Tender included a section headed “Tender Part B” in which the following appeared:

Financial Proposal

Tender a fixed lump sum price (not subject to cost adjustment) and time for completion for the Demolition works not including site establishment. The Principal will accept a price for demolition works from the successful Construction Manager only.
Tender a fixed lump sum (not subject to cost adjustment) for Preliminaries including site establishment, together with a percentage to be applied to any authorised increase in the Guaranteed Maximum Price.

Tender a range of Guaranteed Maximum Prices for a range of shares of savings.

The Principal does not require the total of the trade package cost estimates, the demolition price, the construction management fee and the price for preliminaries to equal the Guaranteed Maximum Price, however the cost of the risk implicit in the figures submitted will be considered in selecting the successful Construction Manager.

40 The Tender Form, drafted by Mr Davies, that was sent out with the Invitation to Tender included the following:

Schedule of Guaranteed Maximum Price/Share of Savings

I/we hereby tender the following guaranteed maximum price (GMP) for the works including demolition, preliminaries and construction management services. I/we guarantee that the total cost of the works will not under any circumstances (other than delays or substantial variations initiated by the Principal) exceed the sums set out below. The savings achieved below the GMP will be shared in the proportion set out below for the combinations selected by the Principal.

SHARE OF SAVINGS	GUARANTEED MAXIMUM PRICE ($)
Principal	Construction Manager
Nil	100%
25%	75%
50%	50%
75%	25%
100%	Nil

Revised date for practical completion

41 On 21 December 1998 Mr James wrote to Mr Davies requesting him to advise the six construction manager tenderers that the revised date for practical completion of the police building was 1 June 2000 and that the original March 2000 date no longer applied. Mr James asked Mr Davies to give precedence to the internal layout of the police building and suggested that the dollar component on that item may have to be reduced. Mr James advised that he would discuss the matter with Mr Davies by phone. Mr Davies gave evidence in his affidavit of 23 November 2006 that shortly after receiving this letter he telephoned Mr James and a discussion in the following terms took place:

Davies: Now that the Police can wait until 1 June 2000, there is no need to go down the construction management path. We could use the time to fully document the Project and then call traditional tenders.

James: No, Ray [Brownlee] prefers the flexibility of the construction management methodology. The Police can actually wait until 18 June 2000. Tell the tenderers of this revised date.

Davies: Okay.

42 Although Mr Davies’ affidavit suggested that the conversation in these terms occurred with Mr James, Mr Brownlee accepted in cross-examination that a conversation in similar terms occurred between himself and Mr Davies. That evidence was as follows (tr 168-169):

Q. 21 December 1998. The requirement of the New South Wales Police Service altered from being one which was apparently an early February date, to one which was apparently an early June date?
A. Yes.

Q. It was in that context, wasn’t it, that there was then a conversation between yourself and Mr Davies about whether, having regard to that development, the council wouldn’t be better advised to actually complete the plans and specifications before contracting for the project?
A. Yes.

Q. It was on about 21 December 1998, wasn’t it, that Mr Davies said to you that given that the police could wait until 1 June 2000, there was no need to go down the construction management path?
A. Yes.

Q. He said to you, didn’t he, that the time could be used to fully document the project and then call for additional tenders?
A. He may have. I can’t deny that.

Q. You can recall at least this much, can’t you, that very shortly after the New South Wales Police Service apparently revised its requirement as to completion, Mr Davies said to you, “It would be better for the council to actually finish the design before contracting”?
A. Yes. There was words “better for the council”, I remember the conversation raising – saying we should change the method.

Q. One thing that you did understand was that Mr Davies was making a recommendation to you that instead of going down the construction management contract with a GMP path, the council, now that it had more time, ought to go back to completing the design and calling for additional tenders?
A. Yes.

Q. You rejected the recommendation?
A. Yes.

Q. You rejected that recommendation because you were concerned about the political implications of going back to the council, isn’t that right?
A. Yes.

Notices to Tenderers

43 On 22 December 1998 the plaintiff issued Notice to Tenderers Number 1 advising, inter alia, that the closing date for the Part A tender had been extended to 2pm on Friday 15 January 1999 and that the date for practical completion of the project had been extended to 18 June 2000.

44 On 13 January 1999 the plaintiff issued Notice to Tenderers Number 4 (with the incorrect header of 13 December 1999) reminding tenderers of the closing date of 15 January 1999 for Part A tenders. That Notice also enclosed “additional (further developed) design documentation” and advised that an Outline Project Specification would be sent by courier or facsimile on 18 January 1999. It also advised that the documentation did not yet include details in relation to the fitout works and stated:

45 On 20 January 1999 the plaintiff issued Notice to Tenderers Number 5 in which the following appeared:

Tenderers are to extend the table on the Tender Form Part B Page 1 as required to accommodate the number of trade contracts proposed.

The Estimated Trade Contract Price for Fitout Works is $2,568,502.00.

draft

Tenders too high

46 The tenders received by 22 January 1999 were between $18.5 million and $23.6 million. Sometime between 23 January 1999 and 27 January 1999 Mr Davies received a telephone call from Mr James who advised him that:

The tenders are all too high. We need to find some savings to bring the cost of the Project down. Please call Barclay Mowlem and Fletchers and ask them to come in for a meeting on 27 January 1999 together with a list of suggested savings.

Meeting – 27 January 1999

47 Mr Davies gave evidence that on 27 January 1999 he attended a meeting with Mr Brownlee, Ms Rosser and Mr James and Mr Smith of the New South Wales Police Service at the Council’s temporary location. During the course of that meeting Mr Davies claimed that Mr James informed Mr Davies that, “Ray wants to bring the price of the Project down to $17 million. We need to find savings to achieve this”. Mr Davies gave evidence that this was the first time that he had been informed that the cost of the works for the project “had to be managed for $17 million”.

48 Mr Smith's file note of this meeting recorded that its purpose was "to discuss potential deletions from the proposed project to reduce the cost to the project budget of $M17.0". It was also noted that in discussions with two of the tenderers, it had been suggested that changes to the scope of works could produce savings of approximately $2 million. A meeting was arranged for 29 January 1999 to review the construction management tenders.

GMP document – 29 January 1999

49 Following the meeting on 27 January 1999, Mr Davies prepared the following document dated 29 January 1999 (the 29 January document):

GUARANTEED MAXIMUM PRICE

The Invitation to Tender states that the cost of the works to be managed is anticipated to be $17 million. The work is stated to include demolition and fitout of Council’s Administration Building and the Police Local Area Command.

This figure was deliberately understated by MDA for commercial reasons and is therefore of no relevance to the tender assessment.

At its meeting on 2 December 1998, Council adopted the costs set out below (report page 5).

Item	Costs
Police Service Building	$4,003,592
Council Administration Building	$5,376,944
Library	$3,136,750
Community Centre	$1,850,295
Contingency	$1,579,503
Escalation Costs	$ 235,896
Fitout Works	$2,538,266
Professional Fees	$ 640,000
Relocation	$ 500,000
Total	$19,861,246

· Preliminaries (fixed)

· Demolition (fixed)

· Trade Contract Costs (including fitout unless stated otherwise)

· Construction Management Fees (fixed)

· Contingency (eg. Refer BM Culley tender page 1 attached)

· Escalation to Completion

50 Mr Davies gave evidence that he prepared the 29 January document because he did not understand why the costs of the works “had to be managed for $17 million” when, as he understood it, the Council’s budget (leaving aside allowances for professional fees and relocation) was $18,721,246. He also claimed that he was concerned that the quality and integrity of the design that he had prepared for the Project would be unnecessarily compromised if the cost of the works was to be limited to $17 million.

Meeting 29 January 1999

51 Mr Davies gave evidence that it was on about 29 January 1999 that he attended a meeting with Mr Brownlee and Mr James. Mr Brownlee agreed that a couple of days after Australia Day 1999 he attended such a meeting. Mr Davies’ version of a conversation at that meeting, as set out in his affidavit sworn on 23 November 2006 was as follows:

Davies: Alan tells me that you want to manage the costs of the works for $17 million.

52 Mr Davies claimed that it was at this stage of the conversation that he handed to Mr Brownlee and Mr James a copy of the 29 January document. Mr Davies’ evidence was that the conversation continued as follows:

Davies: I don’t know where you are getting $17 million from. I know the Invitation to Tender refers to $17 million, but I deliberately understated this figure for commercial reasons. At Council’s meeting on 2 December 1998 it resolved to adopt a budget of $19,861,246.00. If you take out professional fees and relocation costs the budget is $18,721,246. This is the figure you should be aiming for. Now you want to change it to $17 million?

Brownlee: Council’s budget is $17 million. You are including contingency in your calculations. The contingency is for items such as latent conditions and should not be included.

Davies: You have to allow contingency in the budget for things like escalation and design development. You know that we have not done full documentation and the design still needs further development. Most of the tenderers have allowed for this risk, hence the difference between the GMP and the estimated construction cost.

Brownlee: I want the project to be brought down to $17 million.

Davies: Well, if you want to do that, the building is going to suffer. Quality will be compromised. I suggest that you first speak with BuildCorp, who are the lowest tenderer, about suggested savings before you make any drastic decisions on what needs to be taken out.

53 Mr Brownlee’s version of the conversation at this meeting as set out in his affidavit of 26 July 2006 was as follows:

Brownlee: We have to find savings and make changes to bring the project down to $16.9 million otherwise it will not proceed.

Davies: You’ve got a $1.8 million contingency, you can use that.

54 In a further affidavit sworn on 22 February 2007 Mr Brownlee denied that he had any discussion at the meeting on 29 January 1999 as claimed by Mr Davies. He claimed that the first time he became aware that Mr Davies contended that he had understated the figure for commercial reasons was when he read Mr Davies’ affidavit. He also claimed that the first time he “viewed” the 29 January document was when he read Mr Davies’ affidavit.

Meeting - 1 February 1999

55 On 1 February 1999 Mr Davies provided a copy of a table entitled “Assessment of Construction Management Tenders” to a group that he referred to as the “Tender Assessment Panel” which included Messrs Brownlee and James and Ms Rosser from the Council and Mr Smith of the NSW Police Service. He claimed that when he gave that document to the Panel he said:

I have done an analysis of the tenders received and broken them down into their various components. The assessment down the bottom of the table gives the subtotal of the fixed fees for each tenderer and the total of the fixed fees and estimated trade costs – the estimated construction costs. The top half of the table details the various GMP’s offered by the tenderers depending on the share of savings. The difference between the estimated construction cost and the GMP represents the risk. Once the project is complete, the difference between the final GMP and the actual construction cost is the amount to be shared between the construction manager and the Council depending on the share of savings agreed.

56 The File Note of that meeting records that one of the tenderers, Buildcorp Australia Pty Ltd, was present and explained its methodology of undertaking the project and discussed the possible changes that could be implemented to ensure the costs of the project would be "within the allocation". The File Note records that "Post Tender Instruction to be issued to all Tenderers" and that tenders were to close at 4 p.m. on 10 February 1999.

Post Tender Notices

57 On 3 February 1999 the plaintiff issued Post-Tender Notice No 1 which included the following:

Council’s Tender Evaluation Committee met on 27 and 29 January 1999 and determined not to accept any tender and to make significant modifications to the design in order to reduce the Guaranteed Maximum Price to within the budget approved by Council and indicated in the Invitation to Tender issued previously.

58 That Post-Tender Notice advised that the documentation was being revised and updated with the intention of re-issuing the Tender Invitation on 5 February 1999. It was noted that due to “programme constraints” it was necessary that the Council receive the revised tenders by 10 February 1999.

59 On 5 February 1999 the plaintiff issued Post Tender Notice Number 2 (with the incorrect header of 5 November 1999) which included the following:

Further to Post Tender Notice Number 1 we attach revised documentation containing variations intended to significantly to reduce the cost and hence the Guaranteed Maximum Price of the Project.

60 This Notice enclosed “additional (substantially amended) design documentation” and reminded tenderers that the revised “Part B Tender” had to be submitted by 10 February 1999.

61 On 9 February 1999 the plaintiff issued Post Tender Notice Number 3 attaching the Revised Tender Form, Further detailed schedule of amendments to documentation and a Revised Returnable Checklist of Inclusions. That Notice also included the following:

consider

the following additional potential savings provided same are reflected in the Guaranteed Maximum Price(s):

· Delete Level 1 concrete floor slab, substitute bitumen paving.

· Modification or deletion of roof over atrium. The latter would require waterproofing of walkways.

62 The Revised Tender Form included the following:

Schedule of Guaranteed Maximum Prices/Share of Savings

I/We hereby tender the following guaranteed maximum price (GMP) for the works including demolition, preliminaries, trade contracts, fitout works and construction management services. I/We guarantee that the total cost of the works will not under any circumstances (other than delays or substantial variations initiated by the Principal) exceed the sums set out below. The savings achieved below the GMP will be shared in the proportion set out below for the combinations selected by the Principal.

Share of Savings	Guaranteed Maximum Price ($)
Principal	Construction Manager
Nil	100%
50%	50%

The guaranteed maximum price may be reduced by the following items:

1. Deletion entirely of water feature including pumps, pump room, concrete profiling, trench, lining, etc.

($ )

(deduction in words)

2. Deletion entirely of all planting troughs in atrium and civic spine including concrete profiling below floor level. Planters to be elevation as walls above floor level.

($ )

(deduction in words)

3. Deletion entirely of (modified) sun control/covered way frame in civic spine including attachments to building, etc.

($ )

(deduction in words)

4. Modification of curtain walling as specified to comprise insulated steel framed spandrels faced with Vitrapanel or similar and aluminium framed powdercoated windows and shopfront systems configured as shown on the drawings in lieu.

($ )

Austin’s Revised Tender – 10 February 1999

63 On 10 February 1999 Austin submitted its revised Part B tender with a covering letter that included the following:

Austin also offers an Alternative Guaranteed Maximum Price Proposal of $16,900,000 as itemised below .

…

Our clear understanding of the concept of a GMP is that the Principal need not allow any contingency as the only “variable” for the Principal is in fact for Savings as any cost overruns are borne by the Construction Manager.

As itemised on the attached Tender Form(s), our conforming Offer to Council provides a Guaranteed Maximum Price of $18,650,000. However, Austin is fully aware of Council’s objective to achieve the desired Facilities for $17 million and hence our alternative Offer.

We feel the existing Michael Davis ( sic ) Associates’ design has significant merit and any agreed deletions from the project scope of work at this time should not prevent their re-introduction at a later stage. Under the Austin construction management approach, any monies which accrue either out of savings during the course of construction or from other sources to which the Principal may have access, can be utilised to reinstate the elements deleted from the original design. To ensure this can happen at no cost “penalty”, our offer includes the necessary services connections, structural provisions etc. for the re-introduction of these elements.

Having reviewed the re-issued design documents, we believe there are a number of areas in which cost savings could be achieved whilst not jeopardising the function, quality and presentation of the completed buildings.

Some of these issues have been nominated in the re-issued Tender Form, however, we believe there are additional design aspects worthy of re-consideration.

One such area of saving involves the reduction of the rear (eastern) portion of the Atrium which would include associated modification to the lift location, fire egress, sprinklers etc (whilst always complying with the BCA).

Tender Amounts
1. Demolition	$426,300
2. Preliminaries	$2,303,300
4. CM Fee	$647,500
Trade Contract	$15,272,900
$18,650,000
Principal Identified Reductions
(Nos 1-4 incl)	($1,276,000)
Reduced Atrium & Associate Work	($424,000)
Miscellaneous Design Savings	($50,000)
Austin GMP (based on a 50/50
share of savings with the Principal)	$16,900,000

64 Austin’s revised Tender Form included the following:

Share of Savings	Guaranteed Maximum Price ($)
Principal	Construction Manager
Nil	100%	not required
50%	50%	$18,650,000
* Alternative as per Tender Letter	$16,900,000

The guaranteed maximum price may be reduced by the following items:

1. Deletion entirely of water feature including pumps, pump room, concrete profiling, trench, lining, etc.

One hundred and fifty thousand dollars ($ 150,000 )

(deduction in words)

2. Deletion entirely of all planting troughs in atrium and civic spine including concrete profiling below floor level. Planters to be elevation as walls above floor level.

Thirty-two thousand dollars ($ 32,000 )

(deduction in words)

One hundred and ninety-one thousand dollars($ 191,000 )

(deduction in words)

4. Modification of curtain walling as specified to comprise insulated steel framed spandrels faced with Vitrapanel or similar and aluminium framed powdercoated windows and shopfront systems configured as shown on the drawings in lieu.

Nine hundred and three thousand dollars ($ 903,000 )

(deduction in words)

Other Revised Tenders

65 The revised tenders submitted to the Council included one from Hansen Yuncken Pty Limited whose covering letter included the statement, "Hansen Yuncken recognizes that the Council has a fixed budget expenditure of $17.0 million". That letter also recorded the opinion that, "the current design as represented, whilst enhancing civic design qualities and having undergone some changes, is still presently unable to meet the budget constraints."

66 The covering letter from Barclay Mowlem Construction Limited, referred to Council's "budget target" without specific mention of a figure. That letter indicated that its GMP was based upon "the final design being firmed up" within its estimated trade contracts price. The letters from the other tenderers did not refer to the Council's budget.

Meeting – 11 February 1999

67 Mr Davies prepared a document entitled "Assessment of Resubmitted Construction Management Tenders" which set out in tabular form the GMPs offered by each of the tenderers in their revised tenders, ranging from $15.20 million to $19.39 million. Mr Davies attended a meeting with Mr Brownlee and Mr James of the Council, Mr Smith of NSW Police and representatives of Austin at the Council's new temporary location on 11 February 1999. Mr Davies claimed in his affidavit evidence of 23 November 2006 that he provided the tabular assessment to Messrs Brownlee, James and Smith and said (apparently in the absence of the Austin representatives):

Here is my analysis of the revised tenders received. I think Austin's price is contrived. Austin's price allows for no risk at all and is in complete contrast to its first tender. Further, Austin's proposal to delete the sprinklers is flawed. If the sprinklers are deleted, the atrium left will not comply with the BCA which I think will lead to its eventual abandonment because of the significant cost of a fire engineered solution.

68 Mr Brownlee in his affidavit of 26 July 2006 denied that Mr Davies said anything about extra design fees for the deletion of the sprinklers at this meeting, however Mr Davies affidavit did not specifically make such a claim.

Austin Letter - 16 February 1999

69 On 16 February 1999 Austin wrote to the Council referring to its meeting at the Council offices on 11 February 1999 and confirming that it "would consider a further alternative method of project delivery, being a Lump Sum Contract with savings and cost sharing arrangements". That letter also included the following clause 23:

To this end, Austin would enter into a Lump Sum Contract with Council under AS2124 for the sum of $17,000,000 (Seventeen million dollars) based on the $16,900,000 in our proposal of 10th February plus $100,000 to cover the increased Insurance requirements and Administration, and we enclose a draft of the appropriate AS2124 Schedules.

70 The Schedules enclosed with that letter included the following clause 23:

Council requires that the total cost of the project not exceed $16,900,000.00 and Austin undertakes to deliver the project for that sum provided that the design is modified and finalised by Council's Consultants (in conjunction with Austin) to match Council's total Construction budget sum, all as set out in Austin's letter of 10th February 1999 including attachments (copy attached).

71 Part B of those Schedules included paragraph 3 which provided that clause 23 as extracted above, amended to read $17 million instead of $16.9 million, had been added to AS2124-1986.

Progress Claim – 17 February 1999

72 On 17 February 1999, the plaintiff submitted “Contract Progress Claim No CPC05” which was in the following terms:

To professional services rendered in connection with the above project in accordance with our Professional Services Proposal dated 19 August 1998, your acceptance thereof dated 3 September 1998, as set out in our letter dated 1 December 1998, and as follows:

Tendering/Construction Services

Architectural and Multidisciplinary Engineering Services

Interim claim pending finalisation of fees $30,000

73 Mr Brownlee approved the payment of this fee on 18 February 1999.

Further Meetings

74 Mr Davies gave affidavit evidence by reference to his diary of a number of meetings with representatives of the Council throughout February 1999. However he was unable to recall the detail of the discussion at those meetings. Mr Davies claimed that in the week prior to 2 March 1999 in a telephone discussion Mr James said that to him, "Ray has asked that I get a revised proposal from you which should be based on the revised cost of $17 million".

Advice on form of Contract

75 In early February 1999 Mr Brownlee and Mr James met with Abbott Tout, solicitors, who drafted various amendments to the standard CM1 Contract for the development of the Project. One of the matters on which the solicitors requested information in a letter dated 15 February 1999 to the Council (Ex B) was as follows:

We note from Austin's letter of 10 February 1999 that the cost savings identified at the end of the letter which brought back the price from $18,650,000.00 to $16,900,000.00, whilst identified at the end of the letter, have not been reflected in the estimated trade contract amounts which, when added to the preliminaries etc total the higher amount.

This raises again the issue discussed at our meeting. It seems to us that it is more than likely that some of the trade contracts will be in excess of the nominated amounts and some will be less. In the end, it is the total price upon which Council and the Police Service have agreed to proceed and it seems to us therefore that Council should not concern itself with how the total is reached, but rather just with the total.

76 There is no suggestion that Mr Davies or the plaintiff had any involvement in the drafting of the contract that was ultimately entered into between the Council and Austin. However in its various claims against the plaintiff, the Council relies upon the documentation that was annexed to the Austin Contract that included the Tender Form Part B document drafted by the plaintiff.

Professional Services Proposal – 2 March 1999

77 On 2 March 1999 the plaintiff submitted to the Council a Professional Services Proposal (PSP) of that date which contained a fee proposal including the following:

Estimate of Cost
$17,000,000

Fees
The fees shall be a fixed lump sum of $1,000,000 (one million dollars only) as follows:

NSW Police Service Building $274,000
Council Administration Building $380,000
Library and Community Centre $346,000

The fees applicable to the various stages of the work as follows:

Schematic Design $166,700

Design Development $166,700

Contract Documentation $444,400

Construction Services $222,200

78 The covering letter submitting that PSP was in the following terms:

We refer to our various discussions and in particular to our Professional Services Proposal dated 19 August 1998.

As you are aware the Professional Services Proposal does not now reflect the value of the building to be constructed, the services that are to be provided, nor the procurement method initially intended by Council. Accordingly and at your request we now provide a new Professional Services Proposal which in general terms is based on the original PSP excepting that:

1. The Quantity Surveyor is to be employed directly by Council except for the development application stage which has been completed and which is our responsibility;
2. The original fee proposal was based on an estimated cost of $13,700,000 which you have instructed should now be increased to $17,000,000;
3. The building is now to be procured by construction management methods and the services required are therefore more detailed than required on the “design, novate, construct” method originally intended, where documentation detail would be determined by the contractor to suit its purposes.
4. You now require partial construction services, however the maintenance of contract financial records, negotiation and management of variations, issuing of payment certificates, etc, will be carried out by you in conjunction with the Quantity Surveyor.

As you are aware, services are usually provided in stages and the total fee is proportioned according to stages as follows:

Schematic Design 15%
Design Documentation 15%
Contract Documentation 40%
Construction Services 30%

Total 100%

The original Professional Services Proposal was based on a scope of services, as follows:

Schematic Design Stage 15%
Design Development Stage 15%
Partial Documentation to DA Stage 5%

Total (Option a) 35%

Contract Documentation Stage 32%

Total (Options a and b) 67%

We have assessed the break-up now proposed as being:

Schematic Design 15%
Design Development 15%
Contract Documentation 40%
Construction Services 20%

Total 90%

The scope of services anticipated in this latter break-up is in accordance with our documentation previously marked up by you and specifically excludes financial/contract administration of the works. This Scope of Services is detailed in the revised Professional Services Proposal.

The total fee proposed for Options a and b, less the Quantity Surveyor’s fee for contract documentation was $600,100 (ie, $639,600 - $39,500). As set out above, this represented 67% of total services based on an estimated cost of $13,700,000. This is the equivalent of a basic gross fee of 6.54% of the cost of the works for full architectural and engineering services.

In accordance with Clause 3 of the Terms and Conditions, and proportioning this fee to the new scope (90%) and the new estimated cost ($17,000,000) results in a total fee of $1,000,276, say $1,000,000 (less of course fees previously paid for DA services (Option a)). This is also the equivalent of a basis gross fee of 6.54% of the cost of the works for full architectural and engineering services.

You will probably see this as follows:

Total fee Options a and b Scope $639,600
Less Quantity Surveyor’s fee for Contract
Documentation stage $ 39,500
$600,100

(600,100/13.7x17) - $600,100= $144,550

Plus original fee $600,100
Total revised fee (Option b Scope) $744,650
Add for additional Construction Stage Services
required as set out above (90% of basic
service rather than 67%
included originally) ($744,650/67x90)-$744,650 = $255,626

Therefore, total revised fee $1,000,276
(say) $1,000,000

Less progress payments received or approved
for payment $219,800

Therefore balance of revised fee remaining $780,200

As we have discussed, a percentage fee from the RAIA fee guide is based on a sliding scale and would diminish marginally as the cost increases. The difference between a project value of $13,700,000 and $17,000,000 would be a reduction of about 0.15% of cost (ie, about $25,000), however, we would be entitled to charge an additional amount for packaging the documentation to suit procurement by construction management and for interior design services. As we have previously advised, we have simply written one off against the others.

The fees applicable to the various elements of the work based on the estimates approved by Council on 2 December 1998 would be as follows:

Police Service Building $274,000
Council Administration Building $380,000
Library and Community Centre $346,000

The fees applicable to the various stages of the work are as follows:

Schematic Design $166,700
Design Development $166,700
Contract Documentation $444,400
Construction Services $222,200

The revised formal Professional Services Proposal reflecting these amendments is attached.

Please note that since the project value has already increased by more than the 5% threshold, any further increases in cost would result in our fees being pro-rata-ed concurrently with the increase.

Council Meeting - 17 March 1999

79 The Minutes of the Council Meeting held on 17 March 1999 are not in evidence. However a report prepared by Mr Brownlee for that meeting contains a recommended resolution that the Council accept the Austin tender for the GMP of $16.9 million. That report stated that all of the tenders submitted were "in excess of Council's budget of $16,905,847". This is the first time that any document referred to the Council's "budget" being $16,905,847. It is apparent that at this Meeting the Council resolved to accept Austin's tender.

Meeting – 18 March 1999

80 On 18 March 1999 Mr Davies attended the meeting with Mr Brownlee and Mr James at which he said to Mr James, "can you please indicate which construction stage services you would like us to provide by marking-up these documents?" Mr Davies then handed a “Scope of Services” to Mr James and observed him marking up that document.

Austin Contract

81 On 22 March 1999 the Council entered into a Construction Management Contract with Austin. That Contract included the following:

1. Definitions and Interpretations

…

“Consultant” – includes the Architect, Engineer, Surveyor and other persons (as appropriate) employed by the Principal to design the Works and to prepare the Drawings and Specifications.

…

“Drawings and Specifications” – are those documents including Bills of Quantity (if any) produced by the Consultants.

“Estimated Total Cost of the Works” – that figure provided to the Principal by the Construction Manager pursuant to either or both of sub-clauses 3(e) and 6(p).

“Final Completion”

…

“ Revised Estimated Total Cost of the Works” – that figure which reflects the revised and updated projected end Cost of the Works provided by the Construction Manager to the Principal from time to time pursuant to clauses 6(q) or 14(c)

…

“Works” – the work required to construct the project set out and detailed in the Drawings and Specifications prepared by the Consultant.

…

Refer also to SCC Clause 23.1

2. Construction Manager Appointed Principal’s Agent.

The Principal hereby appoints the Construction Manager the agent of the Principal for the purpose of providing construction management services for the completion of the Works . The construction management services are to be provided by the Construction Manager as stated in this Contract.

3 Pre-construction Duties of the Construction Manager

The Construction Manager (as part of his pre-construction duties) shall -

(a) consult as necessary, with the Consultant in order to advise and make recommendations to the Project Team , for construction purposes, on -

(i) the advantageous use of the site;
(ii) selection of materials and their availability;
(iii) building techniques and equipment;
(iv) construction technique;
(v) construction time;
(vi) alternative designs or materials;
(vii) preliminary budgets;
(viii) possible economies, and
(ix) labour and industrial relations,

(b) develop a preliminary construction programme following detailed studies with all members of the Project Team ;

(c) review and monitor the preliminary construction programme during the pre-construction stage of this Contract;

(d) prepare a preliminary budget estimate based on the Drawings and Specifications ;

(e) continue to review the budget estimates as the development of the Drawings and Specifications proceeds and, when they are completed, prepare a final cost estimate (to be called the Estimated Total Cost of the Works ) for approval by the Principal;

(f) advise the Principal if it appears, to the Construction Manager , that the budgeted target for the Works will not be met and suggest ways, if possible, of overcoming any budgetary excess;

(g) make recommendations to the other members of the Project Team regarding the division of work in the Drawings and Specifications so as to facilitate the calling of tenders;

(h) examine and advise on the suitability and expertise of proposed Trade Contractors ; and

(i) analyse all tenders received and recommend to the Principal which Trade Contractor , if any, should be awarded a Trade Contract .

…

5. Principal’s Warranties

The Principal hereby warrants that-

(a) the Construction Manager shall not be liable for -

…

(iii) the design of the Works .

…

Refer also to SCC Clause 23.3

6. Construction Duties of the Construction Manager

At an agreed time, the Construction Manager shall organise commencement of the Works and, in consultation with the Principal , co-ordinate construction of the Works by the Trade Contractors so as to achieve Final Completion in accordance with the terms of this Contract

The Construction Manager must -

…

(p) furnish to the Principal for the Principal’s approval the Estimated Total Cost of the Works ; based upon those Drawings and Specifications that are completed;

(q) if required by the Principal furnish to the Principal but not more than once per month, an updated cost plan showing -

Revised Estimated Total Cost

Works

…

(r) institute a system of cost control and revise the approved budget to provide for changes to the Works as they occur;

…

(v) refer to the Consultant all questions for interpretation of the Drawings and Specifications and any other documents produced by the Consultant;

279 Mr Faulkner submitted that it was far more difficult to explain why four independent witnesses would come to Court and give sworn evidence that Mr Davies made the alleged presentation and statement and all be mistaken. He submitted that it is glaringly improbable that they could all be mistaken. Although Mr Faulkner described these witnesses as “independent”, each had a significant role within the Council at the time of the events. Both Mr Brownlee and Ms Rosser still work within local government, however Mr Keegan and Mr Saddick are no longer involved in local government and to that extent they are presently independent. I apprehend that Mr Faulkner’s use of the term "independent" was to suggest that the witnesses are no longer employed by, or have an association with, the Council. It must be remembered that these witnesses for the Council did not provide affidavit evidence of what allegedly occurred at the Council Meeting until at least seven years after it occurred. It must also be remembered that the witnesses were reliant upon their recollections unaided by any minute, record or other form of document referring to the alleged presentation or statement.

280 When the Council filed its Cross-Claim on 14 May 2004 it claimed that Mr Davies was present at the Meeting on 2 December 1998 and it made the positive claim that it was Mr Brownlee who advised Mr Davies on 3 December 1998 that the Council’s budget for the project was $16.9 million. This was quite the opposite of the claim now made by the Council in its amendment first filed on 10 April 2007 (reflecting affidavit evidence of July 2006) that at the meeting on 2 December 1998 Mr Davies was the source of the statement referring to $16.9 million as a GMP and as a “surety” for the Council. The original Cross-Claim filed on 14 May 2004 was certified by the solicitor for the Council pursuant to s 198L of the Legal Profession Act 1987.

281 Mr Brownlee claimed that Mr Davies’ presentation was five minutes with a question and answer session of five to ten minutes. Ms Rosser claimed that Mr Davies’ presentation was no more than five to ten minutes with a question and answer session of five or so minutes. Mr Saddick thought that the presentation took about half an hour. Mr Keegan claimed that Mr Davies spoke for “probably five minutes, something like that, might be a little longer” (tr 301). Mr Brownlee and Mr Keegan claimed that Mr Davies spoke about the various construction options that were available to Council. Mr Saddick denied that such options were discussed at this meeting and claimed that only the costs of the Project was discussed.

282 The plaintiff referred to the fact that Mr Brownlee and Ms Rosser gave identical versions of what Mr Davies said in that each claim he said “The GMP is like a lump sum tender. It gives the Council surety that the costs will not go above $16.9 million” and submitted that it is quite extraordinary that these two witnesses could recall exactly the same words eight years after the event without any assistance from any document or record of any kind. It does present as rather extraordinary, particularly in the absence of any record in the Council Minutes. There is no doubt that both Mr Brownlee and Ms Rosser have analysed the figures that were contained in the report for the Council Meeting on 2 December 1998 to exclude various figures to reach the total of $16.9 million. In fact this exercise was done by Mr Brownlee in his affidavit sworn on 26 July 2006 which included the following:

“RB-1”

283 That analysis was also referred to by Ms Rosser in her evidence extracted earlier. Both Mr Brownlee and Ms Rosser have given evidence in the Arbitration Proceedings, the transcript of which is in evidence in these proceedings. In that evidence Mr Brownlee claimed that the instruction that he gave to Mr Davies in 1999 was that “the GMP of $16.9m is what council has approved and that we need to stick to that” and that items 1 to 4 in the Revised Tender Form Part B came out as soon as the Council accepted the $16.9 million (ex PD, Vol 25, 8709-8710).

284 Ms Rosser was cross-examined in the Arbitration Proceedings about a conversation she had with Mr Brownlee in 1999 in relation to clause 23.1 of the Austin contract. Ms Rosser was cross-examined on 25 November 2003 and was asked whether she had any recollection of what was said in that conversation. She gave evidence that she had a “general recollection” but not a recollection of “specific words”. Her evidence included the following (Ex PD, Vol 26, 9069):

There was a general discussion in terms of by this clause are we guaranteed that the maximum price will not increase above $16.9m for – for this particular project. And then we had a general discussion in terms of the meaning of this clause given the circumstances at that time.

285 In the Arbitration Proceedings Ms Rosser was cross-examined about the Council Meeting on 2 December 1998 as follows (ex PD, Vol 26, 9073-9074):

Q. Now, $16.9m was in fact not the budget; it was a larger budget, wasn’t it?
A. No, that’s not correct. It was the guaranteed maximum price, construction for $16.9m for the guaranteed maximum price of the building

Q. But didn’t council approve the relevant budget at a meeting held on or about 2 December?
A. I would need to look at the minutes. There was a resolution that went to Council that comprised – it would have comprised of a couple of components: one was the guaranteed maximum price; and then there was also an amount for a contingency vote which didn’t form part of the GMP.

Q. But it was part of the construction budget?
A. It was part of a contingency amount outside of the guaranteed maximum price.

Q. I understand that. It was part of the construction budget, though, wasn’t it?
A. I don’t have a copy of the minutes. I would need to look at the minutes to see the wording of the report.

…

Q. … you knew, didn’t you, that the contingency was part of what had been approved with the budget on 2 December?
A. You need to clarify by what you mean by budget, I’m sorry, and I’d have to ask you to provide a copy of the minutes to clarify that, which I haven’t seen since I left council.

Q. Is this your evidence seriously: you cannot remember now whether the budget for this job in fact included the contingency? That’s your evidence, is it?
A. That’s not what I’m saying.

Q. Well, what are you saying?
A. I’m saying to you that there was a report that went to council that included a guaranteed maximum price for the project and there would have also been included a contingency amount for council’s usage in terms of unders and overs and any of the additions and deletions that council required given that this was a guaranteed maximum price contract.

Q. When the budget was set, you didn’t have, did you, the benefit of Austin’s tender?
A. We didn’t have the benefit of Austin’s tender. We had, however, an allocation of money that council could afford and we had an indication from the architect of the cost of the project and that was - -

Q. Is the answer to my question no?
A. Could you ask the question again, please.

286 Ms Rosser was not asked any further questions about the so-called “indication” from the architect, however it is apparent that in 2003 her memory was that there had been such an “indication”. The difference between the architect giving an “indication” and the architect giving a “guarantee” as referred to in her evidence in these proceedings is of course a significant difference. The evidence in the Arbitration Proceedings extracted above demonstrates that in 2003 Ms Rosser did not have a specific recollection of a number of things including the terms of a conversation with Mr Brownlee and what actually occurred at the Council Meeting on 2 December 1998. Her memory was that there was a guaranteed maximum price contained in the report that went to Council for the Meeting on 2 December 1998. There was no such guaranteed maximum price in that report. Indeed there was no reference to a guaranteed maximum price. In these proceedings Ms Rosser claimed that it was Mr Davies who said to the Council that there was a GMP of $16.9 million, an alleged statement that has never been documented anywhere (except in the affidavits sworn seven and a half years later).

287 Ms Rosser claimed in her evidence in these proceedings that Mr Brownlee informed her that Mr Davies had advised him prior to the Council Meeting on 2 December 1998 that if the guaranteed maximum price methodology was pursued “the price would come in for 16.9 million dollars” (tr 215-216). Mr Brownlee was unable to corroborate this evidence.

288 It is difficult to accept that Ms Rosser’s memory could have improved with time. Her lack of precision in recall at the time of her evidence in 2003 in the Arbitration Proceedings of the particular matters discussed at the Council Meeting of 2 December 1998 and/or the contents of the report to Council for that Meeting and the conversations with Mr Brownlee in 1999, means that the assessment of her precise recall some years later of what Mr Davies said at the Meeting should be approached with caution.

289 The delay in raising this matter or suggesting that Mr Davies made such a statement is a significant matter in considering whether Mr Davies made the statement at the Council Meeting on 2 December 1998. The delay is particularly relevant having regard to the fact that the very topic of when it was that the $16.9 million was discussed was the subject of correspondence between Mr Brownlee and Mr Davies in 1999, much closer to the time at which it is alleged Mr Davies made the statement. The correspondence extracted earlier in relation to the confusion about the fees in the plaintiff's 1999 PSP was at times lengthy and/or combative. Mr Brownlee took the opportunity in his letter of the 8 July 1999 to set out what he stated to be the "Council's understanding". That included the recounting of some history including the following:

On the 2nd December 1998, Council resolved to undertake Option B, however, Michael Davies Associates had recommended to Council Officers prior to the 2nd December 1998 Council Meeting that the procurement method for delivering this project should be changed from 'Design Novate Construct' to Construction Management with a GMP and a 50/50 cost sharing arrangement. Michael Davies Associates recommendation was accepted and Council subsequently changed its method of procurement. This was reported to Council on 2nd December 1998.

290 There was no suggestion that at this meeting the Council resolved to adopt a budget of $16.9 million. There was no suggestion that at this meeting Mr Davies had given a presentation and an assurance to the Council in relation to a GMP of $16.9 million. The letter then referred to the meeting held on 3 December 1998, with no mention of any discussion of $16.9 million. The first mention of that figure was in the final paragraphs of the letter in which Mr Brownlee advised Mr Davies that Council resolved on 17 March 1999 to accept the tender from Austin for the GMP of $16.9 million. The letter then stated that Council subsequently advised the plaintiff in writing on 31 March 1999 of the “pro-rata-ed fee for the full documentation of the works" based on that figure.

291 If Mr Davies had given an assurance as claimed at the meeting on 2 December 1998 with reference not only to a GMP but also to the figure of $16.9 million, it is very strange that Mr Brownlee did not refer to this fact in his history of the matter in his letter of 8 July 1999. The absence of this reference in this particular letter is also a significant matter to be taken into account in deciding whether Mr Davies made the alleged statement at the Council Meeting on 2 December 1998.

292 It seems to me that Mr Saddick was somewhat confused about what occurred at the Council Meeting on 2 December 1998. The cross-examination extracted earlier demonstrates that although he claimed positively that the architect had said that any variations would increase the cost by 10%, he was unwilling to endorse such sworn evidence in his cross-examination. It is difficult to have any confidence in Mr Saddick’s version of events at the Council Meeting.

293 Mr Keegan’s affidavits were only sworn shortly before trial. He accepted that there was no “budget” for $16.9 million, but he claimed that if the amount had “gone over” such a figure it would not have been approved. He recalled Mr Davies giving a number of presentations in the latter half of 1998. His version of what Mr Davies said has some important differences to the identical claims made by Ms Rosser and Mr Brownlee. He did not suggest that Mr Davies likened the GMP to a lump sum contract. He claimed that Mr Davies qualified the assurance by the words “more or less” but claimed that Mr Davies did mention the figure of $16.9 million. Mr Keegan’s claim that approval would not have been granted if the figure was greater than $16.9 million is very difficult to accept when it is remembered that less than two weeks later the Council issued the Invitation to Tender with a figure of $17 million within it.

294 The Invitation to Tender issued by the Council on 14 December 1998 referred to the Council’s “anticipation” that the cost of the works to be managed would be $17 million. That Invitation did not stipulate that the costs had to be guaranteed at that figure nor was it suggested that this was the Council’s budget. It was referred to only as an “anticipation”. I accept Mr Davies’ evidence that the figure of $17 million was used for commercial reasons and I also accept that this was a device used to attempt to bring tenders in at less than the Council’s then total budget of $19.8 million. If the Council had decided that its construction/management budget was $16.9 million, commercial commonsense would suggest that it would not invite tenders at an “anticipated” figure $100,000 greater than its budget. The wording of this document militates against the Council having adopted a budget of $16.9 million at the Meeting or Mr Davies giving an assurance that the cost would not go above $16.9 million.

295 Mr Faulkner’s submission that it is glaringly improbable that these witnesses could all have been mistaken must be assessed in the light of the contemporaneous and other relevant documents. There is simply nothing in any document over all the years since 2 December 1998 to suggest that Mr Davies ever made the alleged presentation or statement at the Council Meeting on 2 December 1998. Indeed the documents seem to me to militate against Mr Davies having made such a statement.

296 After the tenders came in at around $22 million in January 1999, over $1 million more than the quantity surveyor’s estimate of $20.9 million, Mr Brownlee, on his version of the conversation, informed Mr Davies that savings had to be found to bring the Project down to $16.9 million otherwise it would not proceed. The file note of the Meeting on 27 January 1999 noted that its purpose was to discuss potential deletions from the Project “to reduce the cost to the project budget of M$17.0”. Mr Brownlee was present at that meeting as was Mr Davies. If the budget was $16.9 million and not $17 million it is reasonable to expect that there would be recorded somewhere between 2 December 1998 and 27 January 1999 the fact that the Council had adopted such a budget. I find it very difficult to accept in the light of the absence of any document in all those weeks referring to such a figure, that such a figure was in fact mentioned, let alone adopted, by the Council at the Meeting on 2 December 1998 as its budget or that Mr Davies was given an instruction that the budget was $16.9 million. I prefer the evidence of Mr Davies that the figure referred to by Mr Brownlee was $17 million.

297 I do not accept that Mr Brownlee said to Mr Davies on 3 December 1998 that the Council’s budget for the Project was $16.9 million. I do not accept that Mr Brownlee informed Mr Davies on 3 December 1998 that the plaintiff’s fees were to be adjusted on a pro-rata basis for an increase of costs to $16.9 million. I am satisfied that it is more probable than not that when the tenders were received in late January 1999 the Council reviewed the position before it gave instructions to Mr Davies to issue the Post Tender Notices and/or to attempt to bring the costs of the Project down.

298 Mr Faulkner's submission that it is glaringly improbable that four witnesses could all be mistaken is, prima facie, powerful. The witnesses appeared to be trying to do their best in the extraordinary circumstances of having to recount what occurred at an obviously very busy Council Meeting almost nine years after the event and then without any record of the alleged statement to assist their memories. It is obvious that there were a number of presentations made by Mr Davies in relation to the Project. It is probable that in August/September 1998 after he raised it in his August letter, Mr Davies spoke with officers of the Council to explain the nature of the construction management method of procurement with a guaranteed maximum price. However, I am not satisfied that this occurred at the Council Meeting of 2 December 1999. Mr Keegan's emphasis that if the cost had gone over $16.9 million he would not have voted in favour of the Project is in my view a reconstruction. It could hardly have been Mr Keegan's position as at 2 December 1998 that $16.9 million was the figure above which the costs could not go, when the Invitations to Tender went out with the "anticipation" of the cost at $17 million. The burden on these witnesses was in my view quite intense. Some of them had been subjected to cross-examination in other proceedings where a myriad of suggestions had been made to them about the Project. Memory is a complex phenomenon. The impact of delay and the intrusion of suggestions made in prior cross-examination do little to assist clarity. When these factors exist, reliance on documentary material that is contemporaneous or closer to the time of the alleged events is to be preferred.

299 There was obviously some discussion about the nature of a GMP with the Council officers at some time and there was obviously discussion about the Council’s budget of $17 million, rather than $16.9 million, in late January 1999. However I am satisfied to the requisite standard of proof that Mr Davies did not make the alleged statement at the Council Meeting on 2 December 1998. Accordingly the Council's claims in relation to these representations also fail. The Council's Cross-Claim will be dismissed.

Conclusion

300 The plaintiff is entitled to judgment in its favour to include the amounts referred to earlier in these reasons together with the amounts the subject of agreement between the parties in respect of the variations. The plaintiff will have liberty to make application in respect of any increase in its fees consequent upon the arbitral award. The Council’s Cross-Claim is to be dismissed. The parties are to file Short Minutes of Order reflecting these findings together with agreed orders on interest and costs. If the parties are unable to agree on those orders I will hear argument when the matter is listed for the filing of Short Minutes, such listing to be arranged with my Associate by no later than 31 August 2007.

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Citations

Michael Davies Associates Pty Limited v Auburn Council [2007] NSWSC 877

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CITATION:	Michael Davies Associates Pty Limited v Auburn Council [2007] NSWSC 877
HEARING DATE(S):	10, 11, 12, 16, 17, 18, 19, 23, 24, 26, 30 April 2007 and 1, 2, 7 May 2007
JUDGMENT DATE :	14 August 2007
JURISDICTION:	Equity Division Technology & Construction List
JUDGMENT OF:	Bergin J
DECISION:	Plaintiff entitled to judgment. Defendant's cross-claim is dismissed.
CATCHWORDS:	[CONTRACT] - Claims by plaintiff for outstanding fees for provision of architectural services to the defendants - Claim by defendants in cross-claim that plaintiff was in breach of retainer and that it was negligent in the provision of its services - [MISLEADING OR DECEPTIVE CONDUCT] - Claim by defendants in cross-claim that plaintiff's conduct was misleading or deceptive - Whether alleged representations made - If made, whether false
LEGISLATION CITED:	Civil Procedure Act 2005 Trade Practices Act 1974 (Cth)
CASES CITED:	Empirnall Holdings Pty Limited v Machon Paull Partners Pty Limited (1988) 14 NSWLR 523 Karedis Enterprises Pty Limited v Antoniou (1995) 59 FCR 35 Keen Mar Corp Pty Limited v Labrador Park Shopping Centre Pty Limited (1988) ATPR 40-853 Minister for Natural Resources v New South Wales Aboriginal Land Council & Anor (1987) 9 NSWLR 154 Wardley Australia Limited v Western Australia (1992) 175 CLR 514 Wormald Engineering Pty Limited v Resources Conservations Co International (1988) 8 BCL 158
PARTIES:	Michael Davies Associates Pty Limited - Plaintiff Auburn Council - First Defendant The State of New South Wales - Second Defendant
FILE NUMBER(S):	SC 55013/2004
COUNSEL:	JB Simpkins SC - Plaintiff ID Faulkner SC / HJA Neal - Defendants
SOLICITORS:	Colin Biggers & Paisley - Plaintiff Matthews Folbigg - Defendants