30 The Formal Instrument of Agreement evidencing execution is at Exhibit B16, page 199.
31 The Contract commenced on 12 March 2007 (clause 35.1 of the Contract at Exhibit B16, pages 104 and 105, and Exhibit U), and practical completion was on 17 July 2009.
(Page 13)
32 The Specifications, which are dated April 2007, refer, at page 6, to AS 2124 being part of the Contract documents, but it was not until some two years later that AS 2124 general terms and conditions, as amended, was formally executed and backdated to 8 March 2007. 33 Under the Contract, the respondent was required to complete the work for the contract sum. 'Contract sum' is defined to be a lump sum and/or rates, whichever is accepted by the principal, but may also include provisional sums. In this instance, unusually for this type of contract, the contract sum constituted (by reason of the amendment at Exhibit B16, page 196) the 'provisional sum' at Exhibit B16, page 198, as finally determined pursuant to the Contract.
34 Pursuant to clause 11 of the Contract, a provisional sum shall not, itself, be payable, but where, at the direction of the superintendent, the work to which the provisional sum relates is performed or supplied by the contractor, the work is to be valued under clause 40.5 of the Contractdealing with valuation of variations. If the work is performed or supplied by a subcontractor, clauses 11(b) and 11(c) apply, and the Contract provides, in the annexure, for the contractor to be paid 10% for profit and attendance.
35 Further, variations directed by the superintendent under clause 40.1 of the Contract, dealing with variations to work, could be carried out and valued as daywork under clause 41.
36 Pursuant to clause 8, the several documents forming the Contract are to be taken as mutually explanatory of one another. If either party discovers any ambiguity or discrepancy in any document prepared for the purpose of executing the work under the Contract, that party shall notify the superintendent in writing of the ambiguity or discrepancy. The superintendent shall then direct the contractor as to the interpretation to be followed by the contractor in carrying out the work.
37 Pursuant to clause 14 of the Contract, the contractor was required to comply with the requirements, inter alia, of:
• acts and ordinances of the State or Territory in which the work under the Contract is carried out; • ordinances, regulations, by-laws, orders and proclamations under the acts; and
(Page 14)• ordinances and persons acting in exercise of statutory powers enabling them to give directions affecting the work under the Contract.
If a requirement is at variance with a provision of the Contract, as soon as the contractor discovers the variance, the contractor shall notify the superintendent in writing specifying the difference. If so, the superintendent shall direct a variation.
38 The law governing the Contract and its interpretation is the law of Western Australia. 39 The superintendent under the Contract was Mr Frank Saraceni. Mr Frank Saraceni was a director of the consulting engineers, SEG. He is also the brother of Mr Luke Saraceni.
40 The Plans and Specifications also specify various Australian Standards (AS) in accordance with which the corresponding part of the work is to be built.
41 The AS 2124 form of contract can loosely be described as a 'construct only' form of contract, as distinct from a contract under which a builder contracts to 'design and construct' a building.
42 Part of the respondent's defence of the applicant's claim was that the contractual relationship between the respondent and the principal under the Contract was a 'construct only' and not 'design and construct' and that, while a builder cannot blindly hide behind a lack of contractual relationship with an applicant, in these circumstances, the respondent could not be held responsible for any design defects. The respondent submitted that the design underpinning that about which the applicant complains was a design for which Pipeline Hydraulics was contractually responsible and for which, in all senses, it and probably the structural engineer were responsible (T:54 and 55; 08.10.12).
43 The Tribunal does not accept these submissions in that they do not address squarely the builder's responsibility under the BS(CRA) Act in constructing Tyne Square.
44 A 'construct only' type of contract does not have any specific meaning in law and nor does the term 'design'. The precise parameters of legal responsibility, including relating to aspects of design, are determined by the specific words of a contract, which must be interpreted within the context of the contract as a whole. Even in contracts that can be described as 'construct only', aspects of construction may be left
(Page 15)to the builder which may involve aspects that can be characterised as 'design'. Clause 16.3(f) of the Contract expressly recognises that an aspect of design may be provided by the contractor. Clause 10.4 of the Contract requires that, if the contractor is to be responsible for an aspect of design, the responsibility shall be expressly stated in the Contract.
45 In the present case, 'work under the Contract' is defined in clause 2 of the Contract to mean the work which the contractor is or may be required to execute under the Contract, including variations, remedial work, construction plant and temporary work. In this Contract, the work to be performed by the respondent is set out in the Plans and Specifications. 46 Relevantly, the Specifications, at page 57 in the 'Concrete' section, under 'Part II Materials', provide as follows (Exhibit A, page 208):
UNDERLAYS, MEMBRANES SLABS ON GROUND
REQUIREMENT: Provide a layer of waterproof film underlay as specified herein.
FILM UNDERLAY
MATERIAL: High-impact resistant polyethylene film, to AS 1326.
Thickness:….200microns
INSTALLATION: Lay over the base. Lap joints not less than 200mm. Face the laps away from the direction of concrete pour. Seal laps with approved pressure-sensitive adhesive tape. Similarly seal around penetrations such as service pipes and the like. Take the underlay up vertical faces and as detailed on the drawings.
WATER PROOF MEMBRANE SYSTEMS -
SHEET MEMBRANES:
Bituminous multilayer systems: To the relevant requirements of AS CA55.
Single layer systems: Sheets fixed and lapped with appropriate adhesive or heat welded by gas torch ('torch on').
SEAMLESS MEMBRANES: Membranes applied in liquid or gel form and air cured to form a seamless film.
(Page 16)SUBSTRATES FOR MEMBRANES: Apply the membrane to dry, smooth, firm, continuous surfaces, clean and free from loose or foreign matter. Provide coving or fillets on internal corners. Round or arris external corners and edges. Dryness test for substrate: To AS 1884 Appendix A.
MEMBRANE PROTECTION: Protect the membrane after installation with a permanent protective boarding. Use a low melt bitumen or suitable solvent free adhesive to adhere the protection boards to the membrane with maximum 6 mm gap at joints in the boards.
APPROVAL OF MEMBRANE SYSTEM:
Submit proposal together with complete technical information for the water proof membrane system to the Engineer for approval before use. The approval of the systems shall not relieve the Contractor from full responsibility for the performance and installation of the system and from mistakes or omissions or for any discrepancy or deviation from the Specification and other drawings.
BITUMOUS COATING -
MATERIAL: Rubber-fortified water-based bitumen emulsion.
APPLICATION: To clean dry surfaces, by brush or spray, in three coats, to the following coverages:
First coat: 1.7 L/m2
Second coat: 2.0 L/m2
Third coat: 2.0 L/m2[.]
47 Similarly, in the 'Tanking' section under 'Part I, General' at page 96 of the Specifications, which includes the locations and types of certain waterproof membranes to be installed, it is provided, inter alia, that:
[the]Builder [is] to confirm method of waterproofing basement prior to proceeding with construction. …
Provide to the Proprietor a warranty, for a period of ten years from the date of Practical Completion, covering the whole of the tanking including penetrations for pipes, flues, upstands, flashings and the like. (Exhibit A, page 247).
48 Also, for example, in SEG's issued 'Concrete Details' plans S201 revision 7, there is a note at Section A and at Section B: (Page 17)De-Watering and tanking proposal to be submitted to Engineer prior to works commencing. (Exhibit A, page 340)
49 In interpreting contracts, it is the objective intention of the parties as expressed in the document that is to be determined; See Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 (Codelfa); Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45. 50 The effect of the provisions extracted above, within the Contract as a whole, includes the following:
1) to the extent that a type and method of waterproofing is detailed in the Contract, the respondent was contractually obliged to the principal to comply with those details; 2) the respondent was required to submit the proposal of a waterproof membrane system to the engineer before installation; and
3) approval of the waterproof membrane system did not relieve the respondent from full responsibility for the installation and performance of the system, even if approved by the principal's consultants.
51 Contrary to Mr Psaros' assertion, the supplemental agreement to the JVA dated 1 February 2007 does not 'override ... everything else' (T:298; 12.10.12). The Tribunal does not accept Mr Psaros' assertion that the Contract is a 'costplus' contract (T:127; 11.10.12). It is a lump sum contract in which the ‘provisional sum’ provisions have been used. Whether or not the Contract might be described as having 'costplus' elements within it, the work to be performed and the final Contract Sum is determined according to the precise terms set out in it. This clearly included the respondent waterproofing the basement in accordance with the terms of the Contract.B. Chronology of events development of the design of the basement and waterproofing
52 In May 2006, Mr Psaros, at PPG, was provided with a geotechnical report prepared by Mr Davenport, then of Golder (Golder May 2006 Report), which advised, inter alia, of the following matters:
(Page 18)• The Perth Groundwater Atlas (1997) published by the Water and Rivers Commission shows the maximum groundwater level recorded at the location to be at approximately elevation RL 10.5 AHD. • The maximum groundwater levels were recorded prior to construction of the Graham Farmer Freeway tunnel. The presence of the tunnel and its associated drainage system may have a local influence on the groundwater level. Given that the groundwater flow is north to south across the site, mounding of the groundwater on the north side of the tunnel is a distinct possibility.
• Fieldwork carried out on 11 and 25 April 2006 demonstrated, inter alia, that the approximate groundwater elevation at that particular time was between RL 9.2 AHD and RL 9.5 AHD.
• The finished floor level of the basement carpark is proposed to be at elevations ranging from RL 9.4 AHD to RL 9.9 AHD.
• These elevations are about 4 metres below ground level.
• Based on historical groundwater information and groundwater elevations measured in the field, the maximum elevation of groundwater is likely to be at approximately RL 10.5 AHD.
• The proposed basement carpark would be about 1 metre below the maximum level of the groundwater and subject to uplift pressure of about 10kpa.
• Therefore, it is necessary to account for the uplift in design and construction. Failure to account for uplift pressure could lead to cracking of the basement slab and seepage into the basement.
• Methods that could be used include:
a) designing the base slab to resist uplift and partly tank the basement; and
(Page 19)b) drawing the groundwater level down to base slab level by installing an under drainage system to collect and channel groundwater to a sump for pumping into the street drainage system, or c) a combination of these methods.
However, designing the base slab to resist uplift and tanking the basement is the only method which will not require ongoing operation and maintenance costs.
53 This 'sub drainage system' (or 'sub floor drainage system') is to be distinguished from the 'sub drainage relief system'. 54 The 'sub drainage relief system' is also called 'relief points' or 'relief vents'. The Tribunal will refer to the sub drainage relief system as 'the relief vents'.
55 Mr Psaros said in crossexamination that he was aware after having read the Golder May 2006 Report that, historically, groundwater had been as high as RL 10.5 AHD, and of the need to account for uplift pressure.
56 The Tribunal finds that, as from about May 2006, Mr Psaros knew that historical water levels had reached RL 10.5 AHD and of the need to account for groundwater uplift pressure.
57 To the extent that some of Mr Psaros' evidence was also contradictory (T:290292; 12.10.12), the Tribunal does not accept that evidence, and prefers the aspects of Mr Psaros' evidence that accord with the documentary evidence.
58 On or around 20 July 2006, SEG issued plan S101 revision A and plan S102 revision A showing that the basement slab on the ground was to be 100 millimetres thick.
59 SEG plan S201 revision 1 and plan S202 revision 1 regarding 'concrete details' (Exhibit V, pages 120 and 121) issued on or around 12 October 2006 show that the slab on ground, including across control joints within the slab, and external face of the retaining walls, are to be waterproofed. The Tribunal concludes, as they have not been produced in compliance with the Tribunal's orders of 22 November 2012, that there were no Specifications at this time.
(Page 20)
60 Also on or around 12 October 2006, the Architects produced plan A101 revision 1 and plan A102 revision B showing the finished floor level for the lowest part of the basement carpark at the northern end of the basement as RL 9.8 AHD, with a small section at RL 9.75 AHD. These plans do not also detail that the trenches of the transformer room and switchboard room and the lift pit are below finished floor level, but the photographic evidence does establish this. The diagram at Exhibit B3, page 50 also usefully depicts relative levels in relation to the services in the basement. 61 These plans also show that the Tyne Square complex is bounded on three sides by Lindsay Street, Newcastle Street and Beaufort Street, and on the fourth side by a number of domestic residences.
62 The ground levels along each of the boundaries vary as follows:
Lindsay Street boundary RL 12.26 to RL 15.00; Newcastle Street boundary RL 14.25 to RL 15.00;
Beaufort Street boundary RL 13.22 to RL 14.25; and
Residential boundary RL 12.26 to RL 13.22.
63 Therefore the lowest level of the basement is 5.25 metres below the highest boundary level, being at the junction of Lindsay Street and Newcastle Street, and 2.51 metres below the lowest boundary level, being at the junction of Lindsay Street and the residential boundary. 64 The lowest level of the finished floor level in the northern part of the basement is RL 9.75 AHD.
65 The Tribunal finds that the lowest level of the finished floor level of the basement carpark is approximately 0.75 metres below the maximum groundwater level recorded at the location. The Tribunal also finds that the finished floor level of the basement is approximately 0.75 metres below what the maximum elevation of groundwater could possibly be.
66 Mr Psaros said in cross-examination that he understood, after having read the Golder May 2006 Report, that the basement could be approximately one metre below the maximum groundwater level of RL 10.5 AHD (T:291; 12.10.12).
(Page 21)
67 The Tribunal finds that, as from about May 2006, Mr Psaros knew that the basement could be approximately 1 metre below the maximum groundwater level of RL 10.5 AHD. 68 To the extent that some of Mr Psaros' evidence was contradictory (T: 290-292; 12.10.12), the Tribunal does not accept that evidence and prefers the aspects of Mr Psaros' evidence that accord with the documentary evidence, including the Golder May 2006 Report.
69 Approximately one month earlier, on or around 15 September 2006, SEG had issued plan S101 revision B and plan S102 revision B showing the basement slab on the ground was to be 100 millimetres thick.
70 Then, on or around 28 September 2006, SEG issued plan S101 revision 0 and plan S102 revision 0 which showed for the first time a thicker 200 millimetre slab on ground in the lowest segment of the basement. The 200 millimetre slab on ground in the lowest segment of the basement remained in the plans issued by SEG on or around 12 October 2006 and the plans issued on or around 20 October 2006.
71 Mr Peter Grant Airey is a structural engineer retained by the applicant. Mr Airey is a director of Airey Taylor Consulting Engineers and Scientists. He obtained, relevantly, a Bachelor of Engineering in 1960 from the University of Western Australia. The Tribunal accepts Mr Airey as a competent, independent expert and credible witness and accepts his evidence.
72 Mr Airey expressed the view that a 200 millimetre basement slab, as depicted in plan S101 revision 0 and plan S102 revision 0 and revisions 1 and 2, is broadly in line with what he would expect to be an appropriate response to the predicted uplift conditions to which the basement slab would be subject in the event of the predicted high water levels occurring.
73 The Tribunal accepts Mr Airey's evidence in this regard.
74 In around September 2006, relief vents were not part of the design of the basement.
75 The Tribunal finds that, during September 2006, the design of the basement slab was increased in thickness from 100 millimetres to 200 millimetres to resist groundwater uplift pressure.
(Page 22)
76 Further, the Tribunal finds that at 28 September 2006, the plans reflected that the basement was designed to be completely impervious to groundwater ingress. 77 To the extent that Mr Psaros' evidence suggested that at this stage the basement was not designed to be completely impervious to groundwater ingress (for example, T:299301; 12.10.12), the Tribunal does not accept it, and prefers the documentary evidence referred to above.
78 Despite having received the Golder May 2006 Report, Mr Psaros decided to undertake his own investigations into groundwater levels. By email dated 19 September 2006, Mr Psaros had indicated to Mr Swift that:
Because of water stop to basement walls / concrete slab No perimeter spoon drain is required. Water level is +/- 8.500 basement floor is +/-9300 (Exhibit B16, page 244).
79 By email dated 22 September 2006, which is copied to others, Mr Psaros of PPG advised Mr Neil Crownie of the Architects, inter alia, that at the northwest boundary on Lindsay Street there was an 'AHD RL to water of 9.690' (Exhibit A, page 71) and to pass this information on to relevant consultants and discuss the implications. 80 By email dated 20 December 2006, which is copied to others, Mr Psaros of PPG provided revised measurements of groundwater levels to Mr Frank Saraceni for Mr Saraceni's 'info and action' (Exhibit A, pages 73 and 74). This showed groundwater levels variedin different parts of the site. The groundwater level near the northwest boundary on Lindsay Street was depicted as 'AHD 9.12' (Exhibit A pages 73 and 74).
81 On or around 1 December 2006, a spreadsheet titled 'Following list of action is required in order for cost saving to be made' was circulated, according to Mr Psaros at paragraph 54 of his witness statement, by him as representative of the Project Manager. This document included item 158 which asked SEG:
What level has been used for water level design? Dwg S101 - why is slab on ground 200 thick? Why are we using N20 bars above PF1 2.4 x 2.4 x .6 footing?
82 On or around 13 February 2007, SEG issued plans S101 revision 3 and S102 revision 3 showing the segment of the basement slab in the northern part of the carpark that had previously been depicted