Nortask Pty Ltd v Clarke Energy (Australia) Pty Ltd
[2017] QDC 268
•3 November 2017
DISTRICT COURT OF QUEENSLAND
CITATION:
Nortask Pty Ltd v Clarke Energy (Australia) Pty Ltd [2017] QDC 268
PARTIES:
NORTASK PTY LTD
(plaintiff)v
CLARKE ENERGY AUSTRALIA PTY LTD
(defendant)FILE NO/S:
D 179/2013
DIVISION:
PROCEEDING:
Civil Trial
ORIGINATING COURT:
District Court at Brisbane
DELIVERED ON:
3 November 2017
DELIVERED AT:
Brisbane
HEARING DATE:
4-6, 10, 11 October, 1, 2 November 2016
JUDGE:
McGill SC DCJ
ORDER:
Judgment that the defendant pay the plaintiff $500,666.06, including $148,093.35 by way of interest.
CATCHWORDS:
BUILDING AND ENGINEERING CONTRACTS – Offer and acceptance – whether contract made when quotation accepted – whether superseded by formal contract.
BUILDING AND ENGINEERING CONTRACTS – Terms of contract – whether plaintiff told to quote on a particular basis – whether quote on that basis – whether basis of quote part of contract.
BUILDING AND ENGINEERING CONTRACTS – Variations – whether latent condition – whether work done not covered by contract – amounts payable for variations.
AAI Ltd v Marinkovic [2017] QCA 54 – applied.
Australian Broadcasting Commission v AustralasianPerforming Right Association Pty Ltd (1973) 129 CLR 99 – applied.
Commercial Bank of Australia Ltd v GH Dean & Co Pty Ltd [1983] 2 Qd R 204 – cited.
Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 49 – cited.
Dillingham Constructions Pty Ltd v Downs [1972] 2 NSWLR 49 – applied.
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2002] QCA 380 – cited.
Ermogenaus v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 – distinguished.
King Tide Co Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251 – cited.
MJ Arthurs Pty Ltd v Isenbert [2017] QDC 85 – applied.
Martinek Holdings Pty Ltd v Reed Construction Qld Pty Ltd [2009] QCA 329 – cited.
Masters v Cameron (1954) 91 CLR 353 – applied.
Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271 – cited.
Morrison-Knudsen International Co Inc v The Commonwealth (1972) 46 ALJR 265 – cited.
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 – applied.
Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605 – distinguished.
South Coast Oils (Qld and NSW) Pty Ltd v Look Enterprises Pty Ltd [1988] 1 Qd R 680 – cited.
Thiess Services Pty Ltd v Mirvac Qld Pty Ltd [2006] QCA 50 – cited.
Wharf St Pty Ltd v Amstar Learning Pty Ltd [2004] QCA 256 – cited.COUNSEL:
S J Armitage for the plaintiff
N H Ferrett for the defendant
SOLICITORS:
Clifford Gouldson Lawyers for the plaintiff
Hopgood Ganim for the defendant
In early 2007 the parties entered into a contract under which the plaintiff agreed to carry out for the defendant certain civil construction work at a site near Mt Isa for a particular contract price. The work required under the contract was subsequently undertaken, but the plaintiff made a number of variation claims, and not all were accepted by the defendant. In this proceeding the plaintiff claims payment or additional payment in respect of six particular variation claims made by it on the defendant. The entitlement to each claim is in issue between the parties, both as to liability and quantum, although the focus of the defence was on the former.
Background
The defendant was the head contractor for the construction of an electricity generating facility at a mine site near Mt Isa. In late 2006, following a phone call to the plaintiff, the defendant sent an email dated 16 December to the plaintiff enclosing a request for quotation, a scope of work specification and some drawings, some of which were hand drawn preliminary sketches for the foundations, inviting the plaintiff to start work on a quotation for “civil work”.[1]
[1]Exhibit 5; Kamali p 32. He added the handwritten notes when comparing it with later versions: p 38.
The site in question was one which had previously been filled, and was the subject of a geotechnical report prepared after a number of test pits were dug on the site: Exhibit 1. It is common ground that the full report was not provided to the plaintiff at any relevant time. There is a dispute between the parties as to whether the plaintiff ever requested the report: the plaintiff’s witnesses said they asked for a copy of the geotechnical report and were told either that the information provided on a diagram in relation to the test pits which had been dug for the purpose of that report was adequate for their purposes, or that the defendant did not have a copy of the report.[2] That there was a geotechnical report in existence was communicated to the plaintiff by an email, Exhibit 6, which mentioned the report.[3] The defendant’s witness said that no request for a copy of the report was ever made by the plaintiff.[4]
[2]Speziali p 3-8; p 3-47; Kamali p 2-21.
[3]The defendant had it in late 2006 (Leong p 4-61); at least by 15 January 2007: Evans p 5-38.
[4]Leong p 4-63.
Because the site had previously been filled, a civil engineer, when preparing the design for the foundations of some concrete slabs on which generating machinery was to be placed, decided that they would sit on a series of trench piers which were to be dug through the fill, to a depth which penetrated the natural ground level by 300 mm.[5] That was reflected in the hand drawn preliminary sketch prepared by the engineer and provided with Exhibit 5 to the plaintiff. That sketch indicated that the depth of fill to be penetrated in order to reach natural ground level varied but that the plaintiff was to assume an average depth of two metres. After the trench piers had been put in position, concrete slabs which incorporated reinforced concrete beams, which came in two sizes, were to be constructed sitting on top of the piers and supported by them, so that the generating machinery could sit securely on the slabs. The design for the power station provided for 11 such generator units to be constructed, with space for three additional units to be installed in the future.
[5]Herriot: p 3-64, p 3-67. Also Kamali p 34-36. Mr Speziali referred to them as “blade piers”: p 2-60.
On 20 December 2006 the defendant requested a price for one such slab, giving a breakdown of the cost separately for what was described as “trenched piers (type B footings – you need to refer to geotechnical report to clarify depth)” and “top slab including (type A footings included)” (sic): Exhibit 6. The email indicated that the total was to be the total for each engine enclosure slab. This involved some misreading of the drawings, since the trench piers were separate from the type B footings; the type A footings and type B footings were areas of the concrete slab where it thickened out into the equivalent of beams under the slab, with type A footings running along the long section of the slab, and type B footings running across the slab, two of which extended out under a side projection, and were connected by another slab footing.[6]
[6]See Exhibit 14, Drawing CO241-CF-002-C; Kamali p 34.
The difference was that the type B footings were slightly deeper and slightly wider than the type A footings,[7] and the layout was set up so that it was only type B footings that rested on the trench piers. The type A and type B footings would be cast with the slab,[8] but the trench piers were cast separately, before the footings and slab. Accordingly, describing the trench piers as type B footings does not make sense, and indicates a misunderstanding of the drawing by Mr Evans.[9] The reference to the geotechnical report in the email was also curious: it was common ground that the principal had obtained a geotechnical report into the site, and also that a copy of this had not been provided to the plaintiff by this time, nor indeed was one provided at any time during the contract works. For the purposes of this quote however it was not necessary to refer to the geotechnical report because attached to the email was another copy of the same drawing which again directed the plaintiff to “allow two metre average” for the depth of the fill.[10]
[7]Type A footing 350 wide x 600 deep; type B footing 450 wide x 675 deep.
[8]As shown in photo 17 in Exhibit 63: form work set up to pour the slab and footings on top of the trench piers, then in place.
[9]He came close to conceding this under cross-examination; p 4-96.
[10]This was confirmed by telephone: Kamali p 40.
At one point the managing director of the plaintiff suggested that he interpreted the email, Exhibit 6, as requesting a price only for the slab and type A and type B footings: p 61, 62. That does not strike me as a natural reading of the defendant’s email. The plaintiff in fact prepared a breakdown price for one enclosure slab in the format requested and sent it later that day by email to the defendant: Exhibit 7. I note that this email described the two parts as the trench piers and the top slab, indicating an understanding that the latter included type A and type B footings. Further, the figures are very close to the calculations per slab in an internal document of the plaintiff prepared later which gave a figure separately for the trench piers, and for the slab including the type A and type B footings: Exhibit 51. The defendant’s response was that the figures “appear higher than we expected”: Exhibit 8. The defendant pointed out that the quote for top surface coating for one slab was more than the total amount paid for coating 11 such slabs at another similar project recently completed, and foreshadowed issuing a full request “for a fixed price quotation,” adding that they wanted “first time around… your best price.”
The following day the defendant sent to the plaintiff two further emails (Exhibits 9 and 10) enclosing some documentation which was to be used “to provide a fixed price quotation for all the civil works associated with X41 power station...by 15 January 2007”. The email told the plaintiff to “disregard all prior documentation…” Attached to the email Exhibit 9 apparently were two copies of the specification revised as at that date, a “request for quotation” and two site maps.[11] Attached to the Exhibit 10 email were 8 drawings.
[11]The email said a copy of the standard form contract AS 2545-1993 parts A and B were attached, but they were not included in Exhibit 9, the document produced in evidence; the defendant at one stage also produced a copy of this email with the same attachments as in Exhibit 9, without parts A and B.
The request for quotation document identified that “the following documents that form part of this inquiry are enclosed,” though only the first, the specification, was enclosed; drawings as listed in the specification were enclosed with the email in Exhibit 10. The request went on to list as requirements: “please ensure that your offer includes all the details listed in the attached specification” and “your offer should cover compliance in every respect of the specification and all non-conformances shall be clearly identified”. The specification said that it specified the general requirements for the Scope of Civil Works for the X41 power station project, and under heading 2.0, that “the civil subcontractor is responsible for compliance of all work required to meet the requirements of this specification…[and statutory and xstrata standards]…It is the intent of this scope of work to cover all civil works which include but not necessarily limited to the following:”[12] There were then listed 14 specific matters, including “(c) supply and compaction of suitable fill, achieving specified levels” and “(n) installation and testing of earth grid…”. It was then said that a list of 8 specific diagrams “cover the detailed specifications and requirements”.[13] Clause 11 required certain documentation to be supplied by the vendor as a minimum, including at 11.2, a price schedule. Paragraph 11.2 set out a blank price schedule with 11 specific items, though one of them “8 - fencing” was marked “N/A” [not applicable], with a twelfth line “Total (excluding GST)”.
[12]Sic. It was as if the author was deliberately avoiding stating exactly what work was to be done.
[13]Though only the first two were also listed in Clause 11.7 on p 14.
On 15 January 2007 the defendant sent the plaintiff an email, Exhibit 12, with a number of photographs showing the site, which were said to show that it was close to being level, and added:
“Please base your quotation on shaping the site only and do not allow for bringing in or taking any fill away for the base under the crushed rock. We will set the levels on site to suit existing levels”.
I assume that this was sent before the first tender was submitted. Mr Evans said that this was consistent with the design intention throughout, which was that the design levels would be adjusted to whatever surface level was achieved by the cut and fill process of reshaping the site: p 4-55. That is inconsistent with para 2.0(c) of the specification in Exhibit 9.
On 15 January 2007 the plaintiff provided a tender submission comprising three pages: a letter stating the contract total price and GST, a copy of the price schedule which was based on the form of price schedule in paragraph 11.2 of the specification enclosed with Exhibit 9, and a page setting out a schedule of rates for variations to the contract, following the form of the schedules in clause 11.3 of the specification: Exhibit 11. The price schedule followed paragraph 11.2 except that “detailed drawings” was inserted as item one,[14] there was a separate amount quoted for “footing” which was included in the “formwork reinforcement and concrete” item, the item “fencing”, marked as “NA” in the schedule in paragraph 11.2 was omitted, and the items for supply and spreading of gravel and chip sealing the site were marked “(sub-contract)”. Each item had a figure next to it as “lump sum price” and there was a total shown which was the sum of the 11 lump sum prices.
[14]The scope of work specification in Exhibit 9 required the contractor to provide detailed design and working drawings: clause 4.0.
The letter stating the total price included three dot points. The first was:
“As per our telephone conversation on 15 January 2006 (Kamali, Evans) no allowances have been made for imported fill materials. The final level is to be achieved by shaping the existing ground surface.”
The second dot point indicted that the figure for detailed design drawings was an estimate only and the plaintiff was proposing to do this work on a cost plus basis, another departure from the specification. The third dot point stated:
“Due to constructability problems the contractor has allowed to backfill trench footings using lean mix concrete.”
The significance of this is that the drawings included in Exhibit 10 provided for N20 concrete to be used for the trench piers, and N32 concrete which was stronger for the rest of the slabs. In the final drawings lean mix concrete, N15, was adopted for the trench piers: Exhibit 14 drawing CO241-CF-006 Revision C, para C9. This occurred after Mr Evans discussed this proposal with the design engineer.[15]
[15]Evans p 4-103.
There was a conflict of evidence between the parties as to what happened after the first tender was submitted. Mr Kamali, for the plaintiff, said that he was telephoned by Mr Evans who told him the tender was too high, and there was some discussion about items in the quote: p 55. This extended to taking some items out of this contract, and in addition there was some discussion about the amount allowed in the tender for “footings”, that is to say, for the trench piers. Mr Kamali said that he had allowed for piers to a depth of about 3.5 metres in accordance with the drawing, and said that Mr Evans told him to allow only two metres average depth of the piers: p 55, 56. Mr Kamali said that he told the managing director, Mr Speziali, who then also telephoned Mr Evans and was told the same thing: p 56. Mr Speziali gave evidence to the same effect,[16] and added that at this point he asked for a copy of the geotechnical report (p 3-8), and was told by Mr Evans that all the information that the plaintiff needed from that report was on the drawings.
[16]Speziali p 2-80, p 2-81, p 3-8: 2m to reach original ground level.
Mr Speziali said that he subsequently telephoned Mr Leong, the defendant’s engineering manager, who was the person identified on the front page of the scope of work specification for technical enquiries, who told him he did not have a copy of a geotechnical report for the site. Mr Leong denied that he had ever had any conversation with Mr Speziali about anything: p 4-60. Mr Evans also denied that he made the statements attributed to him;[17] his evidence was that he had no clear recollection of any particular conversations with the plaintiff between the first and the second tender:[18]. At one point he said he would have sent an email if there was a discussion (p 5-41), so the absence of any email suggested the absence of any discussion. He agreed however that there had been some items of work deleted from the specification between the first and second tender, and conceded it was likely that there was some conversation about that.[19] There is an email suggesting a phone call between Mr Evans and Mr Kamali on 16 January 2007: Exhibit 74. I deal elsewhere with the question of credibility, but bearing that in mind, and two other matters, I prefer the evidence of the plaintiff’s witnesses about the conversation with Mr Evans, and find that the plaintiff was told, on behalf of the defendant, to base its price on an average pier depth of two metres.
[17]Evans p 5-39; p 5-47-8.
[18]Evans p 4-58. He agreed he would have communicated with the tenderers, and it was likely he discussed with the plaintiff lowering their tender: p 5-36. Exhibit 74 suggests some contact.
[19]Evans was under pressure to get the tender prices lower: p 5-36, 45. The plaintiff’s price was well above the defendant’s estimate: Exhibit 71.
The two other matters are, first, that Mr Evans in the witness box did say that it was his view that the plaintiff had, in the information about the results of the test pits contained on one of the drawings, all the information from the geotechnical report that it needed for the purposes of preparing its quote: p 5-10. Drawing C0241-CF-001 in Exhibit 10 shows nine test pits and records for each of them the depth of the natural ground and the depth of dense colluvium soils, both measured below the existing ground surface.[20] The nine figures for depth to natural ground in fact have an average of 2.12 metres, so a superficial view of the information provided would be that the average depth of the trench piers would be two metres.
[20]Evans p 5-8.
This would be a very superficial view, for three reasons: first, because three of the nine test pits were dug away from the area where the trench piers were to be constructed. The average of the relevant six is 2.48 m. Second, the trench piers were to penetrate at least 300 mm into the natural ground surface, as shown on the drawings,[21] and “natural ground” was defined there as ground sufficient to sustain a bearing pressure of 150 kilopascals[22] whereas there is nothing in the geotechnical report Exhibit 1 that I can find which confirms that what was identified as natural ground in the test pits supported a bearing pressure of 150 kilopascals.[23] Also, the requirement that the resistance at the base of the trench be certified by an appropriately qualified person suggests that the designer was not proceeding on the assumption that penetration of 300 mm into the natural ground level would necessarily produce a base with sufficient bearing resistance.
[21]Herriot p 3-65.
[22]Drawing C0241-CF-006 para F1 in Exhibit 10.
[23]“Natural ground” is omitted from table 2 on page 4 of Exhibit 1; it is possible that an expert could work this out from the material provided in Exhibit 1, but neither party called evidence of this.
The third consideration is that 2.17 metres was the depth below the existing surface,[24] but what mattered in the construction of the trench piers was the surface level achieved after the site preparation earthworks were completed.[25] That would have altered the existing levels from which the test pit measurements were taken. According to the drawings, the top of the trench piers was 675 mm below the top of the concrete slab, that is 675 mm below RL 47.15, except under the end of the extension to the side of each slab, where it was below RL 47.05.[26] Drawing CO241-CF-001-D showed a design finished surface level as I understand it for the ground surrounding the slabs of RL 46.90 to RL 47.05,[27] but the existing ground levels in that area, shown on drawing CO241-CEW-001, ranged from 47.4 to 46.0.
[24]Herriot p 3-71 referred to on the drawings as “original ground surface”, but the site had been previously filled, and the original ground surface was the “natural ground level.”
[25]Herriot p 3-66.
[26]Exhibit 14 Drawing CO241–CF–002-C. Measured from under B beams: Herriot p 3-65.
[27]The ground around the engine footings was to slope gently outwards towards two spoon drains on the sides of the lines of slabs, with a peak of RL 47.1 in the middle between the drains: CO241-CF-001. This would have been the top of the “chip seal” around the footings. See Herriot p 3-71.
The matter is complicated by the fact that there was evidence from Mr Speziali that the level achieved on the site for the surface level was below the design level, because the amount of material available from cutting the higher part of the site was not sufficient to raise the lower parts of the site to that design level. His evidence was that the surface level achieved was about 200 mm below the design surface level[28] but Mr Kamali gave a figure of 100 mm,[29] and that was the basis of the plaintiff’s claim. The only other evidence about this was evidence from Mr Evans that some parts of the site were lower that the design level because of the shortage of fill, but that this did not extend to the area where the engine slabs were constructed: p 5-66. Bearing in mind my findings on credibility, and the analysis later, I reject this evidence and find that the levels of the whole site were lower, as contemplated in Exhibit 12. For the purpose of this exercise, I accept the evidence of Mr Speziali that the level was 200 mm lower. This meant that the finished surface levels for the engine slab area were RL 46.70 to RL 46.85.[30]
[28]Speziali p 3-18. See also cross-examination at p 4-15, where he became vague about this.
[29]Kamali p 92, presumably hearsay. He may have adopted this figure out of caution.
[30]The levels before the placing of road base and chip seal would have been lower by their thickness.
The matter is further complicated by the fact that the plaintiff maintains that it was instructed to keep to the RL levels shown in the drawings for the tops of the slabs,[31] and that, as a result of the lowering of the site, the slabs had to be made thicker, for which a variation was claimed.[32] Broadly speaking the adjustment to preserve the level of the tops of the slabs was made by thickening the slab, rather than by raising all the elements of the design including the top of the trench piers, which would have made the trench piers longer. Hence the top of the trench piers was not 675 mm below the ultimate top of the slab, but below where the top of the slab would have been if it had not been adjusted to preserve the RL of the design, essentially 200 mm lower.
[31]RL 47.15, from Section A on drawing CO241-CF-002-D (Exhibit 14). As constructed the slabs had top levels of RL 47-151 to RL 47-165, (Exhibit 82 surveyed 3.5.07) which is close to this figure.
[32]Kamali p 93, 94.
If the RL of the existing surface at the site of the test pit were known, it would be possible to derive the RL for the natural ground level detected by the test pit, but the individual test pit reports in Exhibit 1 do not state a surface RL: that part of the form was left blank. All that can be said is that the test pits lie between certain RL contour lines for the original surface marked on drawing CO241-CEW-001,[33] an exercise which is complicated by the fact that the test pit locations are not marked on that drawing, but on C0241-CF-001. The contour lines are .2 of a metre apart vertically, and are I suspect only approximate, although there was no evidence as to the level of accuracy to be expected from such dimensions.[34]
[33]Herriot p 3-71.
[34]The location of the test pits was shown in Exhibit 1 only approximately: Exhibit 1, p 2 #5.1.
Accordingly at the site of a test pit the RL of the natural ground level will be the RL of the existing surface (RLX- to be estimated from the survey contours) minus the depth to the natural ground found on excavation (DNG), both of which will vary from pit to pit. The depth of the trench pier however will run from the base of the type B footing,[35] .675 below the RL of the top of the slab if the top of the slab had been adjusted to accommodate the change in the surface level, that is RL 46.95,[36] so that the top of each trench pier will be at RL 46.275.[37] The depth of the excavation would therefore be at RL 46.275 minus the RL of the natural ground plus the depth to natural ground, plus 300 mm for the minimum penetration into the natural ground level. Hence the excavation depth can be found from the formula: 46.575 + DNG - RLX.
[35]Herriot p 3- 65.
[36]Drawing CO241-CF-002-C.
[37]Except for the trench pier under the sideways extension of the slab, where the type B footing was 100 mm lower, and it would be RL 46.175.
To pick an example for this, test pit three was dug essentially on the site of one end of one of the trench piers under the slab for engine 5, and on the basis of the contour lines, the original surface at that point was close to RL 46.80. The natural ground was found at a depth of 2.1 metres, so the RL of the natural ground at that point was RL 44.7. Assuming that it had an adequate bearing capacity, that meant the trench pier would be 1.575 metres deep to that point, but because it needed to extend 300 mm further into the ground, it would be 1.875 metres deep.[38]
[38]The trench itself would be deeper since the top of the trench pier was to be about 400 mm below the “after earthworks” surface, but this should not affect the amount of concrete required for the trench piers, as this extra depth would be occupied by the type B footings.
Several things need to be said about this figure however. In the first place, test pit three found natural ground level at a relatively shallow depth within the relevant six test pits, so this is an atypical result. The second is that it is only possible to work this out with such degree of precision because test pit three happened to lie on the site of one of the trench piers, but it and test pit two are the only test pits in such a position, or even close to such a position,[39] so far as I can tell from the drawing. Given the very limited number of relevant test pits and their distribution, the estimation of the depth of the natural ground level under this site was largely a matter of guesswork for someone in the position of the plaintiff.
[39]Except that test pit 6 lies between two trench piers.
Apart from that, the formula I have derived is one that can only be applied with hindsight. My calculation of the level of the top of the trench piers is derived from the RL of the surface of the site after the initial earthworks to level it had been carried out. As noted earlier, those initial earthworks were to be based on levelling the site with such fill as was available from the site, without importing or exporting fill, and the plaintiff was told that the RL of the finished surface would be adjusted accordingly to accommodate this: Exhibit 12. One of the figures I have used in that calculation was based on the RL of the top of the slab after construction,[40] but that would not have been known at the time when the plaintiff was being asked to produce its quote. So on the information available to the plaintiff it was necessarily impossible to determine with precision the depths of the trench piers that the plaintiff was being asked to quote to construct.
[40]I have assumed that the adjustment in Exhibit 12 had been made.
In these circumstances, there are really only two sensible ways in which a quote can be provided by someone in the position of the plaintiff: the contractor can make a generous allowance to cover the contingencies likely to be faced as a result of the uncertainty, or the contractor can quote on an assumed depth, on the basis that any variation from this will be accommodated by a variation under the contract.[41] The plaintiff was asked to proceed on the latter basis when the initial quote, Exhibit 7, was given, and did so.[42] There was then a quote invited which was not expressly on that basis, and a higher quote, Exhibit 11, was put in which was said to be calculated on the basis of an assumed average depth for the piers,[43] evidently reflecting the former approach. There was then some conversation between the parties’ representatives, and changes to the specification, as a result of which a revised quote was put in where the amount quoted was much lower in respect of the trench piers.[44] That reduction in the quote would be consistent with the plaintiff’s having been asked to quote on an basis of an average depth of two metres, and having done so.
[41]The relevant Australian Standard Subcontract Conditions provide for variations in clause 4.0, including for latent conditions: clause 12.3.
[42]Mr Evans had done this as well with another project: Exhibit 73; Evans p 5-51.
[43]Kamali p 2-50; Speziali p 2-72: 3.3 m. This would be consistent with the content of the “important note” on drawing CO241-CF-006 in Exhibit 10, that there was up to 3.6 m of “uncontrolled filling” on the site.
[44]$241,850 in Exhibit 11 to $167,548 in Exhibit 16, roughly the equivalent of reducing the assumed depth of the piers from 3m to 2m.
In those circumstances, the changes to the plaintiff’s quote seem to me to support the evidence that there was a conversation in which it was told to provide a quote on the basis of an assumed average depth of two metres, which led to the lower revised quote. That this occurred was asserted by the plaintiff at an early stage.[45] In all the circumstances, I find that Mr Evans did tell Mr Kamali and Mr Speziali that, and that, as a result of his having done so, they did tender on that basis.[46]
[45]Exhibit 30 (6 March 2007); Exhibit 31 (1 April 2007); Exhibit 52, note on drawing CO241-CF-002.
[46]Speziali p 2-84; Kamali p 59-61.
On 19 January 2007 the defendant emailed the plaintiff an updated request for quote, specification and drawings for the project: Exhibit 13. The request for quote was very similar to the one in Exhibit 9, except that the date on which it was required was 22 January, and it referred to revision “a” of the standard form contract schedules, and version 2 of the specification. The revised specification was dated 17 January. In paragraph 2.0, the lettered items said to be included in the scope of civil works had paragraph (j), supply and installation of water reticulation piping, deleted and paragraph (k) was modified so that only that part of the site shown sealed on the drawings was to be sealed;[47] paragraph (m), installation and testing of earth grid, was deleted; paragraph (a) was modified with “client will remove all existing services”; paragraph (h) referred to a sewerage collection tank and pump and connection in place of a package treatment plant; paragraph (i) included excavation as well as formwork reinforcing and concrete; and the detailed information about concrete slabs surface coating previously contained in paragraph (l) had shrunk to one line which was included in paragraph (k). This suggests some sloppy preparation, consistent with the fact that paragraph (c) was not omitted even though the policy previously expressed in Exhibit 12, of not importing fill to the site and adjusting the levels as required, had not been altered.[48]
[47]In fact almost all of it.
[48]It remained throughout: Evans p 4-55.
There was one extra drawing for the workshop amenities building. Paragraph 4.0 made it clear that the subcontractor was not to provide drawings as such, but just to mark-up drawings to reflect “as built” conditions. The requirement in clause 4.7 to produce soil and water management erosion and sedimentation plan was deleted. A reference to rain water tanks and an unintelligible sentence about overflow were removed from clause 7.0. Clauses 8.9, safety showers and eyewash installations, and 8.10, fencing, were both deleted. The price schedule in clause 11.2 was quite different, with more information about earthworks which now incorporated the former Item 7, more detail about the workshop amenities building in Item 5 in place of the former Item 10, the change about the sewerage requirements in Item 6, more detail about the surface coating of the engine plinths, the fencing item being deleted, and excavation formwork reinforcement and concrete in Item 3 seeking the following details: “3.1 - 11 number engine bases; 3.2 - lube oil bund; 3.3 - auxiliary transformer; 3.4 - gas filter slab (if required)”.
The schedule of rates in clause 11.3.1 was modified by including a reference to lean mix concrete, and the rates for labour in clause 11.3.2 now sought rates separately for an hourly rate, Sunday or public holiday rate and travelling rate or standby rate for equipment. A work schedule was still required for a start date no earlier than 29 January and no later than 2 February 2007. With the emails were Parts A and B annexures to the Australian Standard Sub-contract Conditions referred to earlier, which had been filled in, and some other pages. On one it was stated that “the bitumen pavement will not be required until all major pant [sic] has been erected and hence is not included in penalty clauses within this contract. The expected date for sealing the bitumen pavement is around end of August 2007”. One of the details completed was the times for payment claims with reference to clause 42.1: “30 days from end of month of month of invoice [sic]. Invoices to be submitted by 25th of each month”.
There were two drawings attached to the first email on 19 January, Exhibit 13. A further six were attached to an email later that day, Exhibit 14, and the extra drawing, for the workshop building, was forwarded in a separate email soon after, Exhibit 15.
The contract
On 23 January 2007 the plaintiff sent the defendant a revised tender: Exhibit 16. This document was similar to Exhibit 11, but different. The contract price was lower, and the second dot point was omitted from the covering letter. The price schedule was different from the earlier tender, but close to the version in Exhibit 13. Item 1 from Exhibit 11 was omitted, consistent with the omission of the second dot point in the earlier letter. The former Item 2 became Item 1, and its price actually went up a little. The former Item 3 became “earthworks including achieving base levels, crushed rock placement, shaping and compaction ready for chip seal” for a lump sum which was the total of the amounts previously listed separately in Items 3 and 8; the latter was for “supply and spreading of gravel” i.e. the placement of roadbase under the chip seal surface. Item 3 corresponded with the former Item 4 but was described as “excavation, place formwork, reinforcement and supply and finishing concrete” for a price which was about $80,000 less than the previous price for Item 4, and contained a break down as follows:
“3.1 11 number engine bases $269,500
3.2 Lube oil bund $17,689
3.3 Auxiliary transformer $14,860
3.4 Gas filter slab (if required) $5,638 each[49]
3.5 Under slab foundation $167,548”
[49]The total assumed 1 gas filter slab was required.
The difference between the figure quoted for “footing” in Exhibit 11 and the figure quoted for “under slab foundation” in Exhibit 16 was $74,302, most of the difference between the total for Item 3 and the former total for Item 4. Item 4 in Exhibit 16 corresponded to the former Item 5 but the price was reduced by $7,000, Item 5 corresponded to former Item 10 at the same price, Item 6 covered supply and installation of sewerage pipework, collection tank and connection to rising main, and corresponded to the former Item 7 (supply and installation of sewerage treatment plant), for the same price, Item 7 corresponded to the former Item 9 (chip sealing the site) for the same price, Item 8 covered surface coating of the engine plinths and corresponded to the former Item 11 for the same price. Item 6 in Exhibit 11, “trenching for earthing, electrical and telephone backfill and compaction” was deleted. As a result the total before GST was $1,075,882, about $160,000 lower than in Exhibit 11.
On 25 January 2007 Mr Kamali sent a further email (Exhibit 17) to Mr Evans attaching a program of work for review and approval, and adding that the annexures A and B, lists of services and facilities in separable portions, and a form of unconditional undertaking had been reviewed by the plaintiff, all of these being things included in the attachments to the email, Exhibit 13. The plaintiff advised that it was “making commitments to fulfil all requirements of the contract subject to the following modifications of the above contract conditions” and then listing five changes to the part A annexure of the Australian Standard Sub-contract Conditions. In addition the plaintiff required a telephone service to be provided, those parts of clause 52.3.2 of annexure part B to the standard conditions which referred to documents prepared by the subcontractor to be deleted as not applicable, and declined to sign the form of unconditional undertaking forwarded as part of Exhibit 13. The effect of this email was to qualify the offer of 22 January 2007 so that thereafter it was the offer as qualified which was open for acceptance.[50] The same day Mr Evans replied (Exhibit 37) querying aspects of the price, and commenting on some of the matters included in the attachments to Exhibit 17. There was no evidence of a response from the plaintiff modifying Exhibit 17 or its offer otherwise. One point made was that “all variations … will be either covered by a quotation or will be priced under clause 40.5…”
[50]It was not suggested that any of these qualifications affected directly the matters in issue. The defendant responded that day (Exhibit 37) taking issue with some of the points raised but the plaintiff did not reply before the tender was accepted.
On 29 January, the defendant sent the plaintiff an email enclosing a letter accepting that tender: Exhibit 19. That letter stated expressly that a formal contract in relation to the work to be done would be prepared in due course, but that the plaintiff was to treat the letter of acceptance as authority to commence work. That is what in fact occurred. In those circumstances I characterise this is an example of a case in the first category in Masters v Cameron,[51] where the parties enter into a contract immediately, but with the intention that a more formal and fuller expression of the terms of their contract will be prepared and executed in due course. This produces an immediate binding contract, subject to its being superseded by the later formal contract.[52] This was not just a request to start work in the hope that a contract would come into existence, but an instruction to proceed on the basis that the tender was accepted.[53]
[51](1954) 91 CLR 353.
[52]Commercial Bank of Australia Ltd v GH Dean & Co Pty Ltd [1983] 2 Qd R 204 at 209; South Coast Oils (Qld and NSW) Pty Ltd v Look Enterprises Pty Ltd [1988] 1 Qd R 680 at 699; Wharf St Pty Ltd v Amstar Learning Pty Ltd [2004] QCA 256; Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271 at [12]-[17].
[53]Note the defendant’s assertion in Exhibit 54 that the formal contract could not contain anything not in the documents at the time the “work order” was issued, consistent only with a contract already in existence.
Most of the documents that I have been through apart from the first quote were included in the list, in paragraph (a) of Exhibit 19, of documents to be included, which also referred to the plaintiff’s quality information received on 25 January, and a tender clarification of the same date, neither of which are in evidence.[54] The date of commencement was said to be 2 February 2007.[55] The note recorded that the plaintiff had declined the defendant’s invitation to attend a site inspection “prior to award of this contract”. The only aspect which could be identified as some attempt to modify the plaintiff’s offer was a further proposed amendment to schedule part A to the standard form contract, substituting in relation to the provisions for payment “terms of payment 30 days from end of the month of progress claim invoice. Quantity of claim to be agreed with CEA Site Manage prior to submittal”. This appears to modify what had been included in the document in Exhibit 13 by deleting the requirement that the progress claim be submitted by the 25th of each month, and inserting a requirement that the “quantity” be agreed with the defendant’s site manager.
[54]Unless the “tender clarification” is Exhibit 17.
[55]In fact work began on 9 February 2007 with procedural steps; actual earthmoving began on 15 February 2007: Exhibit 60.
It is not clear that this was a deviation from the offer given the terms of clause 42.1, as it could be construed as evidence supporting the progress claim reasonably required by the defendant’s representative, identified in part A as Mr Evans, but if it did technically amount to a counter-offer I consider that it was accepted by the plaintiff’s embarking on the work in response to this letter, which amounted to acceptance by conduct. Apart from that, it does not seem to me that anything in Exhibit 19 contradicted the content and the basis of the quotation of 22 January 2007, or the content of the plaintiff’s email of 25 January 2007, both of which were said to form part of the contract. To the extent that they were inconsistent with the specifications or drawings, I consider that they prevail as being more specific.[56]
[56]Curiously, Exhibit 19 referred to requests for quotation in Exhibit 9 and dated 3 January (not in evidence), but not the one in Exhibit 13, and revision 1 of the specification rather than revision 2 in Exhibit 13. These must have been mistakes, as the Exhibit 13 versions were ultimately included in Exhibit 52, and are another example of sloppy documentation by the defendant.
It was submitted for the defendant that the categories in Masters v Cameron should not be treated as a rigid classification, in reliance on what was said in Ermogenaus v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105 and Pavlovic v Universal Music Australia Pty Ltd (2015) 90 NSWLR 605 at 617. My view is that the discussion in Ermogenaus was more about the question of intention to enter into legal relations than whether entry into legal relations was to be conditional upon a formal contract being executed between the parties. Masters v Cameron was cited at [25], and nothing was said to suggest that its operation was in any way to be modified by that decision.
In the present case, there can be no doubt that the intention of the parties was that there be a contract between them, and there is no reason to characterise the revised tender provided by the plaintiff as other than an offer. In those circumstances, the issues are whether the “letter of acceptance” amounted to an acceptance of that offer, and whether any acceptance was subject to the condition of the parties entering into a formal contract, so that there was to be no contract until the formal contract had been executed. In my opinion, the correct objective characterisation of the letter of acceptance is that it was an acceptance of the offer which created an immediate contract, though it contemplated that there would be a formal contract executed, something which, on my analysis, never came about even though both parties in fact signed Exhibit 52. My analysis therefore is that this case falls squarely within the first category in Masters v Cameron, and it is unnecessary to consider to what extent those categories are to be applied strictly.
It was submitted for the defendant that the documents did not support the inclusion in the contract of what was described as the trench depth instruction, relying on the fact that the drawings referred to the trench depth varying, and contained no statement as to the average depth. That was true, but the drawings also contained statements as to the levels (RL figures) of the finished works on the site, and the specifications included the supply of fill in order to enable these levels to be achieved, but the plaintiff was instructed to tender on the basis that fill would not be imported into the site and the levels would be adjusted on the basis of the re-use of material that was already there. This instruction as to the basis on which the plaintiff was to quote was not included in the documents listed in the letter of acceptance as documents to be included in the formal contract, but that it was given was uncontroversial because it was confirmed in writing, and there can be no doubt that the plaintiff’s offer to do the work was on that basis, because the offer said so expressly. It follows that acceptance of that offer produced a contract which was in this respect inconsistent with things stated in the drawings and something stated in the specification.
On the findings I have made, the position was the same in relation to the “trench depth instruction”, the only difference being the legally irrelevant but practically important difference that the absence of any confirmatory document has given the defendant the opportunity to dispute that it was ever given. But the only offer which was open for the defendant to accept was the offer the plaintiff in fact made, and if that offer was one to do the work on (relevantly) the basis of the trench depth instruction, and that offer was accepted, that is the contract the parties entered into. The submissions to the contrary on behalf of the defendant are rejected.
The formal contract
The defendant subsequently prepared a document which was to be the formal contract between the parties, and sent it to the plaintiff for execution. The contract initially arrived at the plaintiff’s Dalby office, and was passed on to the managing director who by then was in Mount Isa.[57] Mr Speziali made some changes to a number of provisions in the contract, signed it, and gave it back to the defendant: p 2-90.
[57]Kamali p 2-15, 16; Speziali p 2-88.
The defendant’s reaction was to accept some of the changes which were made by the plaintiff, but to reject most of them, as was made clear by a letter: Exhibit 54. This was sent by the defendant to the plaintiff together with a signed copy of the contract, as it states. On the view that I take of the evidence[58] nothing happened after Exhibit 54 in relation to a formal contract between the parties. In these circumstances, the parties never agreed on the terms of the formal contract. The version prepared by the defendant was altered by the plaintiff, signed and returned, but that was technically a counter-offer, and the defendant, although signing the document, returned it as a further counter-offer, which was never accepted.[59] At that point the parties seem to have lost interest in the formal contract. So the contract initially formed by the acceptance of the tender was never superseded by a formal contract. This is covered by Clause 6.1 of Exhibit 53.
[58]Disregarding Mr Evans’ incorrect assertion on p 4–69, which involves a mistiming of the signing of the contract.
[59]See King Tide Co Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251, particularly at [13] – [15], [41](a).
I considered the significance of changes to a contract in writing after it had been signed in MJ Arthurs Pty Ltd v Isenbert [2017] QDC 85, where among other things I said at [91]:
“If after one party signs a contract in writing and sends it to the other party, the other party makes an alteration to the contract in writing and signs it, that is not an acceptance of the offer constituted by signing and sending the contract in writing; it is a counter-offer, to enter into a contract in those different terms. “In order to create a contract an acceptance must be unqualified and it must accord with the terms of the offer: cf Davies v Smith (1938) 12 ALJ 260. That and other decisions show that the requirement of correspondence between offer and acceptance is one that is insisted upon with considerable strictness.”[60] There are many cases where that principle has been applied, sometimes without being expressly stated.[61]”
[60]Evans Deakin Industries Ltd v Queensland Electricity Generating Board (1985) 1 BCL 334 at 342 per McPherson J, with whom Campbell CJ agreed. See also Cavallari v Premier Refrigeration Co Pty Ltd (1952) 85 CLR 20 at 29 per Webb J.
[61]Examples include R A Brierley Investments Ltd v Landmark Corporation Ltd (1966) 120 CLR 224; Quadling v Robinson (1976) 137 CLR 192, esp at 201, concerning the exercise of an option; Turner Kempson & Co Pty Ltd v Camm [1922] VLR 498; Costello v Loulakas [1938] St R Qd 267; Howes v Miller [1970] VR 522 at 527 (purported acceptance of settlement offer enclosing a release to be signed and returned a counter-offer), followed in Brewer v Fichera (1991) 12 Qld Lawyer Reps 98 per McMurdo DCJ; Goodman Fielder Consumer Foods Ltd v Cospack International Pty Ltd [2004] NSWSC 704 at [45] per Macready M; to which may now be added King Tide Co Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251.
Terms of the Contract
The question arises as to what the terms of the contract between the parties comprise. What occurred was that the plaintiff’s offer was accepted by the defendant. There was, with one exception, nothing in Exhibit 19 which would lead to that document being construed as a counter-offer. There are statements about what it was anticipated the formal contract between the parties would then include, but I do not consider that that amounted to an attempt by the defendant to impose conditions on its acceptance of the plaintiff’s offer, so as to amount to a counter-offer.
The offer which was accepted was that made on 22 January 2007 in Exhibit 16, which was a tender submission for the X41 power station which the plaintiff had been originally invited to tender for by the emails sent on 21 December 2006, Exhibits 9 and 10, and for which updated specification and drawings were sent on 19 January 2007, Exhibit 13. What was being offered however was set out in the price schedule attached to the offer, which had become significantly different from the price schedule in clause 11.2 of the specification in Exhibit 9, largely because of changes in the blank schedule in the revised specification in Exhibit 13. This involved deleting some work initially covered by the specification, and provided much more specificity about what was covered by the offer in terms of “excavation, placing formwork, reinforcement, and supply and finishing of concrete” than was nominated in Item 3 of the former version. It clearly did not include the matters identified in paragraphs (c) and (n) of clause 2.0, scope of supply, of the specification, and it did not include the preparation of detailed design drawings which had been included (as an open book item) in the first tender, Exhibit 11. It was, it seems to me, clear that it was an offer to do the work identified in the price schedule for the total at Item 9, because the specific prices for each of the other eight items add to the total amount.
It was also responsive to the telephone conversation on 15 January 2006, confirmed by a letter, Exhibit 12, that the levels in the design were to be amended to avoid the importation of fill, rather than the contract extended to the supply and placing of fill if required in order to achieve the design levels, as was made express in the letter. On the finding I have made, that after the first tender the plaintiff was asked to put in a revised tender based on an assumed depth for the trench piers of two metres, I consider it was also responsive to that request, even though that was not stated expressly in the letter, so that what was being offered relevantly was to build under slab foundations, that is, trench piers, having an average depth of two metres.[62] This was because the plaintiff had been asked by the defendant to tender on that basis, and I accept that the second tender, Exhibit 16, was submitted on that basis. That was what the plaintiff was offering to build for the price stated, and that was the offer the defendant accepted. Subject to the modifications which resulted from what had passed between the parties after 21 December 2006, the tender was on the basis for request for tender in Exhibit 13, as was apparent from the terms of the price schedule in Exhibit 16. I am prepared to accept that it incorporated the balance of the revised specification, the plans included in Exhibits 13, 14 and 15, and the terms of the Australian Standard Sub-contract Conditions AS2545-1993, with part A and B as in Exhibit 13 as qualified by the email, Exhibit 17.
[62]This became a term of the contract, as pleaded in Statement of Claim, para 14.
The plaintiff did work under the contract, starting on 9 February 2007.[63] It is not clear exactly when the plaintiff’s work came to an end, but it was not contentious that the plaintiff in fact did the work, and that there were no complaints on the part of the defendant about the plaintiff’s work.[64] A final payment claim was sent by the plaintiff to the defendant on 21 November 2008.[65] Under clause 42.8 of the contract, the defendant was to respond to that claim within 28 days. A certificate in response to that payment claim was not issued by the defendant until 11 June 2013: Exhibit 59.
[63]Only administrative work such as site inductions were done until 15 February, when actual earthmoving started: Exhibit 60; Speziali p 4-16.
[64]Evans p 4-90.
[65]Exhibit 3; Gouldson p 16.
Clause 42.1 of the general conditions of the standard form contract provided, among other things, “within 35 days after receipt by the main contractor’s representative of a claim for payment or within 14 days of issue by the main contractor’s representative of the main contractor’s representative’s payment certificate, whichever is the earlier, the main contractor shall pay to the sub-contractor…. an amount not less than the amount shown in the certificate as due to the sub-contractor… or if no payment certificate has been issued, the main contractor shall pay the amount of the sub-contractor’s claim.” The plaintiff submitted that 35 days after the payment claim was made, the main contractor’s certificate not having issued, it was entitled to be paid the full amount of the claim.[66]
[66]Relying inter alia on Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 49.
In response to this submission, the defendant pointed out that a claim for payment on this basis had not been pleaded, and that the amount claimed was greater than the amount pleaded as money due and owing under the sub-contract, and significantly greater than the total which was otherwise claimed in submissions on behalf of the plaintiff.[67] There is some force in these propositions, but a more fundamental reason why a claim on this basis cannot be advanced now is that, although referred to as a final payment claim, the terms of clause 42 deal with payment claims generally, and such claims and payments pursuant to them have always been regarded as payments on account, subject to the final entitlement of the parties being resolved, if necessary, in the event of a disagreement, by a court.[68] It is the true entitlement of the plaintiff under the contract, in respect of the amounts claimed in the pleadings, which has been in issue in this proceeding, and has been litigated, and that is what I am to determine, not whether the plaintiff might have been entitled to some greater amount on account if it had acted promptly in 2008. The matters in issue in this proceeding cannot be resolved on that basis.
[67]Plaintiff’s submissions in writing para 159.
[68]Clause 42.8 made a final certificate “evidence” in any proceedings, but not “constructive evidence”. See Martinek Holdings Pty Ltd v Reed Construction Qld Pty Ltd [2009] QCA 329 at [18].
Credibility
I was not impressed by Mr Evans as a witness. At times his recollection of events seemed to be very sketchy.[69] For example at p 4-69 he had no clear recollection of what happened in relation to the formal contract, and he was very vague about whether there was any communication between him and anyone from the plaintiff between the first and second tenders. When dealing with the signing of the contract he initially said that after Exhibit 54 was sent to the plaintiff he did not receive any comments in reply “other than getting the contract back signed after that process went through.”[70] He said on the same page that Exhibit 54 was sent before the contract was signed, and when his attention was drawn to the first line of Exhibit 54, he said it went with the contract to be signed: p 4-70. Plainly that was not true; the letter referred to “a signed copy of the contract”. He did eventually concede that that terms meant that the letter must have been sent with the contract after it had been signed: p 4-70. This was during evidence-in-chief and it was in response to some questions from me, because what he was telling me was obviously inconsistent with the terms of Exhibit 54. Indeed, I was rather abrupt in my questioning of him. Despite that, when counsel for the plaintiff raised this issue during cross-examination, Mr Evans again asserted that the contract had been signed after Exhibit 54 had been sent.[71] I was surprised by this response, after what had happened during evidence-in-chief.
[69]He had not kept any significant contemporaneous notes of what happened: Evans p 5-3; Exhibit 68, which shows he was at the time also involved with other projects of the defendant.
[70]Evans p 4-69, line 36.
[71]Evans p 5-52, lines 11, 12.
Mr Evans was the person who put together the formal contract document, but in spite of the fact that there are a list of things which in Exhibit 19 he said would be included in it,[72] not all those things were in fact included in Exhibit 52: significantly, the plaintiff’s quotation was missing, as Mr Evans conceded, just after he had claimed that all of the items in the list were included in the contract.[73] In addition, Exhibit 52 included his letter of 29 January (Exhibit 19) which was not on the list in Exhibit 19. Also omitted was the email dated 25 January (Exhibit 17) with the project schedules which qualified the tenders (p 5-28), although a different email of that date, which in my view had no place in the contract, was included. Exhibit 52 included a letter from the plaintiff of 29 January, sent after the acceptance letter, Exhibit 19. Overall preparation of the formal contract by Mr Evans did not display any careful attention to cover the relevant documents. This was consistent with a number of examples I have noted of sloppy documentation, apparently from him. It does not encourage reliance on contemporaneous documents he prepared, let alone any independent recollection about a decade later.
[72]As noted above, the list contained its own errors.
[73]Evans p 4-71, lines 4-8. There was between that question and answer a long pause while Mr Evans examined the document, something not obvious from the transcript.
On 15 September 2007 there is a claim for “hand trimming” in areas where other subcontractors had been working after they had vacated the site: Exhibit 24. The docket in Exhibit 56 claims a total of 10.5 hours each for five men for this, along with equipment including a grader and a water truck, each for 4 hours, but the two dockets in Exhibit 27 for this, 51168 and 51169, claim a total of 7.5 hours for five men, and also refer to the grader and the water truck. Mr Stevens did not sign the dockets for the days after 12 September. There is nothing about this work in Exhibit 105, but Exhibit 83 mentions “Photo’s also show Nortask in south east corner of site reworking areas around poles and stays with which is a variation works.” Later the note for 15 September says, inconsistently, “I have no evidence in any of the photo’s to suggest …work achieved today … around power poles and stays … .” It goes on to admit that three men were working on areas damaged by other subcontractors for an estimated 4 hours each. I accept that there was some repair work on this day, but I am wary about the evidence to quantify it. I allow 3 labourers and two supervisors at 6 hours each, but not the grader or the water truck. This comes to $1,830.
On 16 September there is a claim for further work, hand trimming and rework at the gas slab (Exhibit 27), or near main transformer, two large power poles and the gas slab (Exhibits 24, 56) which took five men four hours (Exhibits 24, 27) or three men a total of 20.5 hours: Exhibit 56. Exhibit 105 has only four men on site for the final trim along the spoon drains, and there is no support for this claim in Exhibit 83. In view of the inconsistency in the plaintiff’s evidence, I will not allow anything for this day. There is a claim in Exhibit 24 that time was spent drying out ponded water run on site by another subcontractor to cool down bitumen. There is a docket for this in Exhibit 56 but nothing in Exhibit 27, and no support for this in Exhibit 83. I find this claim very odd, because it seems to me that if the road base had been laid properly this could not have been a problem, as the water would have either sunk in or run off. I will not allow this.
On 18 September there was a claim for hand watering and final trim, said to involve nine men plus the two supervisors, two vibrating plates and a roller: Exhibit 24. The Exhibit 27 docket added a water truck, and was endorsed “site queries quantities and hours”. There is a docket in Exhibit 56, but that claims only two men. Exhibit 83 makes no reference to any work being carried out by the plaintiff that day. Given the inconsistency, and my doubt about the justification for this claim, I will not allow it.
There was then a claim for hand watering on the site on the following three days: Exhibit 24. That there were people on the site on 19, 20 and 21 September watering crushed rock, presumably prior to the bitumen seal, was acknowledged in the docket in Exhibit 27, but this does not obviously relate to the fact that the work was done then rather than at an earlier time.
Apart from this, there is the mobilisation cost. The defendant’s submissions took relatively little issue with the claims in Exhibit 24, except that it was said that the rate of $60 per hour should have been $55 per hour, which seems right, and that claiming 10 hours each for the men for the day on which they had their medical examinations was excessive because the medical examinations would not have taken so long. No doubt that is true, but for practical purposes before the men work on the site they had to undergo the induction course and they had to have medical examinations, so the day on which the medical examinations occurred was effectively time when nothing else useful could be done, and there is no reason why the defendant should not pay for that time. Mr Speziali’s rate for travelling was $70 per hour in Exhibit 16, but I think it reasonable that the total travel allowance be only $250, and I will not allow five weeks for the cost of keeping a flat empty for him. Making those adjustments to the mobilisation claim, I allow $12,800. The demobilisation amount of $5,310 conceded by the defendant strikes me as reasonable; I allow that.
Overall therefore the amount allowed in respect of the pavement timing claim is $71,515. The other aspect of this matter is that a claim was also made in relation to the delay in the construction of the spoon drains. These were constructed after the road base was laid, but I can think of no reason why it would have been any more difficult, expensive or time consuming to construct them then rather than at the time when the other civil work was done under the contract, and the plaintiff led no evidence to establish any particular increase in the costs in relation to this matter. This claim is therefore disallowed in total.
Conclusion
In summary therefore the amounts I allow for the claims that have succeeded are:
(a) Lean mix concrete claim $104,851.25
(b) Slab thickening claim $107,280.80
(c) Services support tree slabs claim $36,873.60
(d) Pavement timing claim $71,515
(e) TOTAL $320,520.65
This amount however is before GST, which must be added to produce an amount payable of $352,572.71. The plaintiff is entitled to interest under clause 42.9 of the general conditions, at the rate of 4% per annum specified in the contract schedule. By that clause interest compounds at six monthly intervals. The whole amount was owing at the latest 35 days after the plaintiff’s final payment claim, which was made on 21 November 2008: Exhibit 3, so interest runs from 27 December 2008. I calculate the interest to the date of judgment as $148,093.35. So I give judgment that the defendant pay the plaintiff $500,666.06, including $148,093.35 by way of interest.
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