Owners of Strata Plan No 30791 v Southern Cross Constructions (ACT) Pty Ltd (in liquidation)

[2020] NSWCA 199

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Owners of Strata Plan No 30791 v Southern Cross Constructions (ACT) Pty Ltd (in liquidation) [2020] NSWCA 199

Hearing dates:

24 and 25 March 2020

Date of orders:

31 August 2020

Decision date:

31 August 2020

Before:

Gleeson JA at [1];
McCallum JA at [2];
Emmett AJA at [3]

Decision:

Order that:

1.   Appeal as against the first and second respondents allowed in part, insofar as the primary judge dismissed the plaintiffs’ claim against the first and third defendants.

2.   Appeal as against the third respondent dismissed.

3.   Appellants to pay the third respondent’s costs of the appeal.

4.   As to the remaining questions of (a) the first and second respondents’ defence based on the proportionate liability provisions of the Civil Liability Act 2002 (NSW) and (b) costs of the proceedings below and in this Court, direct that:

   (i)   the first and second respondents file and serve short written submissions on or before 14 September 2020;

   (ii)   the appellants file and serve short written submissions in response on or before 28 September 2020;

   (iii)   the first and second respondents file and serve any short written submissions in reply on or before 12 October 2020.

5.   Subject to consideration of any application for a further oral hearing, which should be made in the written submissions referred to in order 4, the remaining questions be dealt with on the papers.

Catchwords:

BUILDING AND CONSTRUCTION — Negligence — Miscellaneous forms of negligent conduct — Right of support — Application of Conveyancing Act 1919 (NSW) s 177 and common law — Whether loss of support caused damage to adjoining property.

TORTS — Negligence — Essentials of action for negligence — Whether there was a failure to take reasonable care — Whether any failure caused damage — Assessment of expert evidence.

TORTS — Negligence — Proof of negligence — Res ipsa loquitur.

Legislation Cited:

Civil Liability Act 2002 (NSW) ss 5D and 5E

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW)

Conveyancing Act 1919 (NSW) s 177

Corporations Act 2001 (Cth)

Cases Cited:

Strong v Woolworths Limited (2012) 246 CLR 182; [2012] HCA 5

Suttor v GundowdaPty Ltd (1950) 81 CLR 418; [1950] HCA 35

Texts Cited:

Nil

Category:

Principal judgment

Parties:

The Owners – Strata Plan No. 30791 (First Appellant)
Albert Bonansea and Ivana Bonansea (Second Appellant)
Angus John Nicholas Brooks (Third Appellant)
Julius Wolfgang (Fourth Appellant)
Roslyn Bainton (Fifth Appellant)
Michelle Anne Carruthers (Sixth Appellant)
Alison Jean Pate (Seventh Appellant)
Vanessa Claire Winley (Eighth Appellant)
Southern Cross Constructions (ACT) Pty Ltd (ACN 111 121 450) (In Liquidation) (First Respondent)
Allianz Australia Insurance Limited (ACN 000 122 850) (Second Respondent)
Hughes Trueman Pty Ltd (ACN 003 330 783) (Third Respondent)

Representation:

Counsel:
B Walker SC with A Oakes (Appellants)
A Moses SC with S Blackman (First and Second Respondents)
D Hand (Third Respondent)

Solicitors:
Holman Webb Lawyers (Appellants)
Thompson Cooper Lawyers (First and Second Respondents)
Clyde & Co Australia (Third Respondent)

File Number(s):

2019/150753

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity – Technology and Construction List

Citation:

[2019] NSWSC 440 (Substantive); [2019] NSWSC 560 (Costs)

Date of Decision:

16 May 2019

Before:

Stevenson J

File Number(s):

2013/179839

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 2010, building works on a development project led to movements of the foundation strata below an uphill adjoining property (the Affected Property), causing extensive damage to an apartment building situated on the Affected Property. The owners’ corporation from the damaged building commenced proceedings against a variety of engineers, construction contractors and other parties connected to the development, but many of those claims settled. Proceedings continued against Southern Cross Constructions (the Builder) and Hughes Truman (Hughes), a structural engineering firm.

The building works involved extensive excavations. A concrete retaining wall supported the Affected Property (the Retaining Wall). To support that wall and the Affected Property during the excavation, the design of the development project provided for the construction of a “shoring wall” made up of contiguous concrete piles (the Shoring Wall). Although Hughes performed the structural engineering for the development building, the design of the Shoring Wall was ultimately performed by a different engineer. The Builder was responsible for the carrying out and subcontracting of the building and excavation works.

Expert evidence indicated that the movement of the foundation strata below the Affected Property caused the relevant damage. Further, the movement of the strata was caused by movements of both the Shoring and Retaining Walls. The experts attributed the Shoring Wall movement to inadequate wall design, the removal and replacement of steel props used to support the Shoring Wall and excavations for a lift pit and other foundations for the development. They attributed the Retaining Wall movement to the Shoring Wall movements and inadequate support of the Retaining Wall.

The appellants alleged that each of Southern Cross and Hughes acted in breach of the duties of care owed at common law and under the Conveyancing Act 1919 (NSW) s 177 and that they suffered damage as a result. The appellants alleged the Builder was negligent with respect to the excavations and the construction of the Shoring Wall. As against Hughes, the allegations of negligence related to their structural designs failing to properly accommodate the design of Shoring Wall. A judge of the Supreme Court determined that neither was liable for any of the damage. As against the Builder, the primary judge did not accept that the Builder’s actions could have been said to have caused the relevant damage. As against Hughes, the evidence did not disclose that their designs caused any damage.

The principal issues before the Court were:

1. Whether the primary judge erred in failing to find that the Builder was liable for the damage caused to the building.

2. Whether the primary judge erred in failing to find that Hughes was liable for the damage caused to the building.

3. Whether the primary judge generally erred in his approach to causation and in failing to apply the doctrine of res ipsa loquitur.

The Court, allowing the appeal in part (Gleeson JA at [1], McCallum JA at [2] and Emmett AJA at [277]), held:

As to issue (i), per Emmett AJA (Gleeson JA and McCallum JA agreeing):

1. The primary judge erred in finding the Builder was not negligent in directing excavations in the vicinity of the Retaining Wall. That excavation removed support for the Retaining Wall without first ensuring adequate support was in place for the Affected Property and was done so contrary to geotechnical engineering advice. While the expert evidence before the primary judge did not expressly indicate the excavation caused movement to the foundation strata, that conclusion was a necessary incident of the opinion that inadequate propping of the Retaining Wall was a cause of the movement to the foundation strata: at [178]–[199].

2. The Builder was not negligent in directing excavations for foundation piles and a lift pit as it was entitled to rely on the Shoring Wall being adequate to support those excavations: at [200]–[209].

3. The Builder may have been obliged under the development approval to retain its own independent geotechnical engineer, however, the evidence did not establish that doing so would have prevented the damage to the Affected Property: at [210]–[225].

4. The Builder’s failure to install monitoring points strictly in accordance with a pre-established “monitoring plan” could not be said to have caused damage as it was speculative as to what the additional monitoring would have revealed and whether it would have led to any action different to that which was undertaken: at [226]–[230].

As to issue (ii), per Emmett AJA (Gleeson JA and McCallum JA agreeing):

5. Hughes was not ultimately responsible for the design of the piling structure around the Northern Light Well which was excavated by the Builder’s subcontractor. The construction of that area was completed under plans provided by a different engineer: at [231]–[239].

6. Hughes’ original design of the lift shaft did not locate the shaft immediately adjacent to the Shoring Wall. That only occurred after the Shoring Wall design was modified by another engineer. Further, the modified Shoring Wall design was deficient in its failure to provide adequate support for the excavation necessary for the lift pit. These were not failures attributable to Hughes: at [240]–[249].

7. Hughes was not responsible for the incompatibility between its design of the foundation columns, footings and ground floor structures and the subsequently produced Shoring Wall design. The need to remove the props installed to support the modified Shoring Wall in order to allow for the construction of Hughes’ foundation piles was a shortcoming in the design of the modified Shoring Wall, not of Hughes’ structural design: at [250]–[257].

8. Hughes was not liable in respect of an alleged duty to take investigative action when the project’s architect requested information from Hughes in relation to neighbour concerns about cracking. Hughes provided the requested information and was entitled to assume the issue was being dealt with: at [258]–[260].

As to issue (iii), per Emmett AJA (Gleeson JA and McCallum JA agreeing):

9. It was unnecessary to consider the cumulative effect of successive breaches after finding that the only breach was on the part of the Builder. It is unnecessary to consider the contentions based upon res ipsa loquitur after finding that the Builder was negligent: at [261]–[276].

Judgment

1. GLEESON JA: I agree with Emmett AJA.

2. McCALLUM JA: I agree with Emmett AJA.

3. EMMETT AJA:

Introduction

This appeal arises out of building works carried out between July and November 2010 on land situated on the corner of Manning Road and Pine Hill Avenue, Double Bay (the Development Property). The building works resulted in damage to a three-storey block of 12 apartments (the Building), which stands on land having a frontage to Pine Hill Avenue (the Affected Property), which adjoins the Development Property from the west and uphill. The location of the Building and the Affected Property in relation to the Development Property is shown in the following diagram:

4. The Building was erected on the Affected Property in 1927. The first appellant, the Owners – Strata Plan No. 30791 (the Owners Corporation), is the owners’ corporation in respect of a strata plan subsequently registered in respect of the Building (the Strata Plan). The 2^nd to 8^th appellants are owners of lots in the Strata Plan (the Unit Owners).

5. In 1937, a block of apartments (the Old Block) was erected on the Development Property. At the time when the Old Block was erected, a two-metre-high gravity concrete retaining wall, which rose some 2.4 m above the ground level of the Development Property, was constructed on the boundary between the Affected Property and the Development Property (the Retaining Wall). The Retaining Wall is labelled “Concrete Retaining Wall” in the plan set out above. [1]

   1. At [3].

6. At all relevant times, the Development Property was owned by Qiantang Investment Group Property Development Pty Ltd (the Developer). The Developer obtained development approval (the Development Approval) from Woollahra Municipal Council (the Council) for proposed building works on the Development Property, which involved replacing the Old Block with a new block of apartments (the New Apartment Building).

Damage to the Affected Property and Procedural Background

7. The Old Block was demolished prior to July 2010 and, between July 2010 and November 2010, work on the Development Property was undertaken by Southern Cross Constructions (ACT) Pty Ltd (the Builder), in preparation for the construction of the New Apartment Building. That work consisted, relevantly, of excavation, piling and shoring work around the western boundary of the Development Property, which was adjacent to the Retaining Wall and the Affected Property (the Shoring Works). A part of the Shoring Works involved the design and construction of a shoring wall (the Shoring Wall), the purpose of which was to provide stability to both the Development Property and the Affected Property during the excavations contemplated for the New Apartment Building.

8. The location of the Shoring Wall is labelled “contiguous pile wall” in the plan extracted above. [2] As that label suggests, the Shoring Wall was to be constructed from a number of concrete piles constructed close together. These piles were to be connected together with a “capping beam”, which is a steel or concrete beam that ties a line of piles together and helps to hold back earth and transfers loads from columns or walls erected above the beam into the row of piles below. The capping beam would also create a foundation for a suspended slab that was to form a floor in the finished building. There were three parts to the Shoring Wall: a long straight section, and two shorter sections. One of the shorter sections extends around part of the northern side of the New Apartment Building (the Northern Return Wall), and the other extends around part of the southern side (the Sothern Return Wall). Also visible in the plan is an area marked out for the lift pit and stairs, which appear on the Development Property in front of the Shoring Wall.

   2. At [3].

9. The Shoring Works caused movement of the Retaining Wall, which caused the foundation strata under the Building to move. That movement caused cracking and other aesthetic and structural damage to the Building. The cost of rectification of the damage caused to the Building by those movements will be approximately $5 million and the necessary work will take some 66 weeks. The occupants of the Building will need to move while the work is carried out. The cost of temporary relocation is included in the sum of $5 million. In addition, some $500,000 worth of damage has been occasioned to internal structural walls of the Building.

10. The Builder is now in liquidation and leave under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) and the Corporations Act 2001 (Cth) has been granted for the Owners Corporation and the Unit Owners to proceed against the second respondent, Allianz Australia Insurance Ltd, the Builder’s insurer (the Insurer). The Owners Corporation commenced proceedings in the Technology and Construction List of the Equity Division against eight defendants, being the Builder, Pile & Bucket Pty Ltd (Pile & Bucket), the Insurer, Northwood Pty Ltd (Northwood), Jeffery & Katauskas Pty Ltd (J&K), Hughes Trueman Pty Ltd (Hughes), NMK (Aust) Pty Ltd (NMK) and the insurers of NMK. Those parties were variously involved in the Shoring Works. The Unit Owners were subsequently joined as plaintiffs in those proceedings. The proceedings as against all defendants other than the Builder, the Insurer and Hughes were subsequently settled.

11. On 18 April 2019, for reasons published on that day, a judge of the Equity Division sitting in the Technology and Construction List (the primary judge) ordered that the proceedings be dismissed as against the Builder, the Insurer and Hughes. On 16 May 2019, for reasons published on that day, the primary judge ordered the Owners Corporation and Unit Owners to pay the costs of the Builder and the Insurer on the ordinary basis up to 31 July 2018 and on the indemnity basis from 1 August 2018 onwards, excluding certain costs of an application in relation to the adoption of a referee’s report. His Honour ordered the Owners Corporation and Unit Owners to pay the costs of Hughes on the ordinary basis with no exclusion. His Honour ordered the Owners Corporation and the Unit Owners to pay interest on those costs. By notice of appeal filed on 16 August 2019, the Owners Corporation and the Unit Owners appeal from the orders made by the primary judge. The respondents to the appeal are the Builder, the Insurer and Hughes.

Planning and Design Prior to the Shoring Works

12. Excavation of the Development Property commenced on 30 July 2010. Although ongoing design adjustments were made throughout the course of construction, several events leading up to that point are material.

The 2006 J&K Report

13. In 2006, the then owners of the Development Property retained J&K to conduct a preliminary geotechnical and hydrogeological investigation of the Development Property. On 13 March 2006, Mr Linton Speechley, then a senior associate at J&K, produced a report (the J&K Report), in which he recorded that the Development Property was located within topography that typically slopes down to the north or north east at gradients ranging from about five degrees to ten degrees. He said that the Development Property itself was relatively level with only a slight fall of about two degrees from the south west to the north east. The J&K Report stated that, along the rear south western boundary of the Development Property, the Affected Property was supported by the Retaining Wall, which was described in the J&K Report as a concrete retaining wall up to 2.4 m high that appeared to be in good condition. The J&K Report said that the Building was erected 1.7 m to 2.4 m from the Retaining Wall. The J&K Report said that the subsurface conditions were of a silty sand and sand profile.

14. The J&K Report recommended additional geotechnical investigations to confirm assumptions made and to provide additional subsurface information for detailed design. It said that sufficient investigations had been carried out to confirm that the Development Property was suitable for the proposed development from a geotechnical and hydrogeological perspective. The J&K Report also stated that the Old Block, which was to be demolished as part of the proposed development, lay relatively close to the rear south western boundary of the Development Property, including the Retaining Wall, and that demolition of existing structures and paved services would need to be carried out with care so as not to damage or destabilise “nearby retaining walls or buildings”.

15. The J&K Report noted that the investigation disclosed some very loose and loose near surface soils, which were likely to extend beyond the boundaries of the Development Property. It recommended that dilapidation surveys be carried out on the Building and said that those surveys could be used as a benchmark in assessing potential damage claims due to ground surface movements or vibration damage.

16. The J&K Report said that where temporary batters were not feasible, which would be the case for the majority of the excavation, a properly designed in situ shoring system would be required. It said that some of the options for shoring systems would be “a grout injected contiguous piled wall”, “a grout injected secant pile wall” or “a Geocast wall”, saying that, for all options, it would be necessary to provide temporary lateral support to the shoring system in the form of anchors or propping, on the assumption that the floor slabs of the proposed New Apartment Building would be able to provide permanent lateral support to the shoring system once construction was complete.

17. The J&K Report said that, where a contiguous piled wall is adopted, it would be essential that gaps left between the piles be continuously packed with non-shrink grout or concrete as excavation progresses. Alternatively, the face of the wall could be sprayed with shotcrete to create a more uniform finish. It said that packing was required to reduce sand loss from behind the wall and that packing should be carried out such that there is no more than 1.5 m of wall height unpacked at any one time or at any time where loss of sand from behind the wall was observed.

The Architect’s Plans for the New Apartment Building

18. The Developer engaged Jahn Associates (the Architect) to design the New Apartment Building. By July 2009, the Architect had prepared “issued for construction” drawings for the New Apartment Building, which depicted five levels including level 0 (entry and car park), levels 1, 2 and 3, each containing two units, and level 4, containing a penthouse. The respective elevation of each level was RL6.75 m (variable) for level 0, RL9.7 m for level 1, 12.6 m for level 2, RL15.5 m for level 3, RL18.4 m for level 4. “RL” is an abbreviation for “Reduced Level”, which, in surveying, refers to the elevation of a particular point, in metres, from a common datum point of 0 m. The original ground level of the site of the Old Block, prior to demolition and excavation, was approximately RL11.1 m.

19. The drawings included a provision for a lift well on the western side of the New Apartment Building facing the Affected Property, as well as two light wells on the western side of levels 1 and 2. The light wells can be seen on the plan set out above. [3] On that plan, the left-hand light well is the northernmost light well (the Northern Light Well), and the right-hand light well is the southernmost light well (the Southern Light Well). The light wells were designed to allow light and ventilation into the bedrooms to be erected on level 1 and to facilitate a parterre garden accessible from those bedrooms. The light and ventilation were required because the level 1 bedrooms on the western side at RL9.7 m would be below ground level and, without the light wells, would have no windows. The parterre gardens were to be constructed inside the light wells at RL9.7 m, forming a bottom for the completed light wells. On 2 December 2009, the Architect produced drawings showing a lift pit below the level of the basement slab, one of which is extracted at Appendix 1, figure A.

    3. At [3].

Engagement of Hughes

20. During 2009, the Developer engaged Hughes as consulting structural engineers for the proposed development on the Development Property. Hughes undertook design work (the Design Works) in respect of the New Apartment Building as set out in structural plans prepared by Hughes. In particular, in late 2009, Hughes prepared a “shoring layout plan”, which included a design for the Shoring Wall near the boundary between the Development Property and the Affected Property. The shoring layout plan is set out at Appendix 1, figure B and details the basement, or level 0, of the New Apartment Building. The Shoring Wall in the Hughes design was made up of a contiguous piled wall extending along the west side of the New Apartment Building as well as along parts of the north and south sides. In Hughes’ original design, the Shoring Wall on the west side was not a straight line: rather, it “stepped out” around the location of the light wells. Also indicated in the 2009 Hughes plan is the location of various foundation piles that would be used to support the New Apartment Building.

Engagement of Northwood

21. In early 2010, the Developer engaged Northwood, structural engineers, to identify possible cost savings in respect of the basement layout proposed by Hughes, including the shoring layout plan. Between March and August 2010, Northwood proposed an amended shoring layout plan, which integrated the Shoring Wall into the structure of the New Apartment Building, proceeding in a straight line along the western side of the New Apartment Building as depicted in the plan set out in Appendix 1, figure C. Northwood investigated various ways of providing support to the proposed revised wall. However, under its final design, the Shoring Wall was to be laterally supported by steel diagonal props (the Shoring Props), which are also visible in the plan set out as figure C. The Shoring Props were to be connected at the base to additional piles located in the Development Property installed at an elevation lower than those in the Shoring Wall (the Laterally Loaded Piles) and were to extend upwards and diagonally to connect to the capping beam, which was to be constructed along the top of the piles that made up the Shoring Wall. These props would be temporary and would remain in place until concrete slabs were poured, which would provide permanent support for the Shoring Wall. By way of illustration, the Shoring Wall and the Shoring Props (with some modifications) can be seen in the photograph taken on 6 October 2010 extracted in Appendix 1, figure D, although the Laterally Loaded Piles, which were connected to the base of the props, cannot be seen.

Engagement of the Builder

22. On 25 March 2010, the Developer and the first respondent, the Builder, entered into a fixed lump sum construction contract for the construction of the New Apartment Building (the Construction Contract). It is desirable to say something about the Construction Contract.

The Construction Contract

23. By cl 3.1 of the Construction Contract, the Builder was required to carry out and complete “the Works”, a term that was defined as the construction of the “Project” pursuant to and in accordance with “the Plans”. The term “Project” was defined as the demolition of existing dwellings and construction of new residential flat dwellings on the Development Property in accordance with “the Plans”. The term “Plans” was not defined. By cl 3.2, the Builder warranted that the Works would be carried out in a proper and workmanlike manner and that, upon completion, the Works would be in accordance with the drawings, specifications, all authorisations and requirements of any authority that the Builder was obliged to comply with.

24. Clause 3.4 of the Construction Contract provided that the documents forming the Construction Contract included general conditions of contract AS4000-1997, as amended, the Builder’s proposal dated 23 March 2010, “the Geotechnical Report” and other site reports and the drawings, specifications and other documents referred to in an annexure. The general conditions of contract AS4000-1997 relevantly provided, in cl 8.2 of that document, that the Developer would supply to the Builder the documents stated in “[i]tem 15”. Item 15 referred to a schedule of documents which does not appear to have been in evidence.

Engagement of Pile & Bucket

25. On 30 July 2010, the Builder entered into a subcontract with Pile & Bucket to carry out piling, bulk excavation and capping beam works as referred to in the documentation. The subcontract contained a detailed description of the scope of works.

Engagement of J&K and the Monitoring Plan

26. On 20 August 2009, the Developer retained J&K as geotechnical consultants for the proposed development, accepting J&K’s earlier proposal of 7 August 2009. J&K’s proposal drew attention to conditions of the Development Approval, including item B9 and item C16. Item C16, dealing with “hydrogeological and geotechnical monitoring programme”, relevantly provided as follows:

“Excavation works associated with the proposed development must be overseen and monitored by a qualified and practising geotechnical engineer. A hydrogeological and geotechnical monitoring programme must be produced to ensure that all geotechnical matters are regularly assessed during the construction to prevent adverse effects resulting from the excavation.

The hydrogeological and geotechnical monitoring programme for the construction works must be in accordance with the [J&K Report].

Prior to the issue of a construction certificate, the applicant must submit … details of the proposed hydrogeological and geotechnical monitoring programme. A suitably qualified and practising geotechnical engineer must prepare the programme which must consist of the following:

-   recommendations as contained within the [J&K Report];

-   recommended hold points to allow for inspection by a geotechnical engineer during the following construction procedures:

-   excavation of the site …;

-   installation and construction of temporary and permanent shoring/retaining walls;

-   foundation bearing conditions and footing construction; and

-   installation of subsoil drainage.

-   location, type and regularity of further geotechnical/hydrogeological investigations and testing.”

J&K’s proposal stated that J&K would prepare the required programme with reference to the J&K Report and the relevant structural and architectural drawings, which identified and described the required testing and monitoring related to the geotechnical issues during construction, indicated the responsibilities of the various parties involved, stipulated hold points, if appropriate, and described methods and requirements for certification.

27. On 22 September 2009, Mr Speechley, on behalf J&K, provided the Developer with a “vibration hydrogeological and geotechnical monitoring plan” (the Monitoring Plan) intended to satisfy conditions C16 and E18 of the Development Approval. Condition E18 related to vibration during construction and provided that, prior to the issue of a construction certificate, the applicant must submit details of the proposed vibration monitoring programme to ensure that vibration created by the method of construction would not adversely impact on the existing buildings, surrounding property and infrastructure. The Monitoring Plan stated that “survey sections” [sic; scilicet “survey stations”] needed to be set up to enable survey monitoring for ground movements, with at least three stations being set up along the south western boundary and two stations along the north western boundary. Along the south western boundary, survey stations should be set up either on the Retaining Wall or other location approved by the geotechnical engineers and should consist of a survey point at the top, middle and bottom of the wall. The Monitoring Plan said as follows:

“As a minimum, survey is to be completed at the following stages of the works:

-    prior to site works;

-   after demolition and prior to shoring installation;

-   on completion of shoring installation;

-   at each stage of excavation prior to installation of each row of anchors;

-   after each row of anchors are installed; and

-   on completion of shoring construction, anchoring and bulk excavation.”

28. The Monitoring Plan stated that the Works were to be the subject of ongoing monitoring and review by the structural and geotechnical engineers, the purpose of which was to check initial assumptions regarding excavation, retention and groundwater conditions and possible variations that may occur, and to assess whether adjustments to design were required. The Monitoring Plan said that the potential vibrations during demolition, piling and excavation activities could affect adjacent buildings depending on the vibration level, nature of the vibrations, distance of the source from the buildings and the characteristics of the buildings. The Monitoring Plan recommended that, to control vibration levels, an initial vibration monitoring trial be conducted at the commencement of demolition and that monitoring trials be conducted at the commencement of piling, at the commencement of bulk excavation and during initial anchor installation.

Engagement of Hughes to Conduct Dilapidation Survey

29. Hughes was retained by the Developer to carry out a pre-construction dilapidation survey (which was outside the scope of their original retainer). It appears that a report was prepared, although only a single page of the report was in evidence. That page indicated that the report’s purpose was to record accurately and document the condition of the Building, that part of the dilapidation inspection was carried out on 7 October 2009 and that Hughes had been commissioned by the Developer to carry out the report. The dilapidation survey was relevant when complaint was first made about damage to the Building.

Northwood’s Shoring Wall Proposal

30. On 26 February 2010, Northwood wrote to the Developer proposing services concerning an assessment of the existing structural design and documentation for possible cost savings. Northwood proposed that it would peruse identified drawings, identify possible savings that may be won by amendment of the existing basement layout and retaining walls, carry out structural calculations to provide the size of amended structural elements for costing and provide sketches of the changes laid over existing drawings. The letter said that detailed reinforcement and connection details were not provided at that stage but would be required for construction.

Butter Paper Sketches

31. On 7 March 2010, Northwood provided a “butter paper sketch” laid over the existing Hughes plan for the basement level labelled “SK1” and “Part Plan - Revised Contiguous Pier Layout”, which was endorsed “for costing only”. An accompanying sketch, “SK2”, was issued on 9 March 2010 showing a cross-section of the basement level and level 1. Both sketches provided for a straight Shoring Wall along the western boundary of the Development Property, such that the piling wall would not step around the light wells and would be integrated within the structure of the New Apartment Building. The plans are set out in Appendix 1, figures E and F.

32. In those plans, temporary support to the Shoring Wall was to be provided by a 6 m to 12 m wide sand embankment, or “berm”, [4] placed in front of the Shoring Wall (i.e. on the Manning Road side). The berm appears to slope down from the Retaining Wall at approximately RL12.8 m, past the Shoring Wall to a base at RL6.75 m on a 1:2 ratio slope. Permanent support would be provided to the Shoring Wall by the level 1 concrete slab. Once that was constructed, the sand embankment could be removed.

Further Correspondence

4. “Berm” is a term that appears at times to have been used interchangeably with “batter”. To the extent that they are distinct, it appears to that a berm performs the function of a batter.

33. On 16 March 2010, Northwood wrote to the Developer saying that the structural calculation and the identification of possible savings to the basement retaining walls and layout had been completed on 9 March 2010. The letter said that, during the course of that work, the existing geotechnical investigation was found to be insufficient and that Northwood had engaged a geotechnical engineer in order to progress savings “in the extremely limited timeframe granted” for the work. Northwood noted that Hughes remained “responsible” for all footings, columns, pits, structure outside the main wall lines forming terraces, pathways and general landscaping, and that columns, footings and ground floor structure affected by the cost savings work were to be amended by Hughes.

34. On 24 March 2010, Northwood wrote to the Developer again, repeating that, during the course of work that it had carried out, the existing technical investigation was found to be insufficient. Northwood proposed that a meeting be convened in order to agree on any options that may be required in relation to the drawings that had been prepared and said that, once those issues had been resolved, the construction drawings would be produced. Northwood proposed a fee to discuss and resolve all outstanding issues and produce the electronic construction drawings that, the letter said, were required by 16 April 2010. The letter again noted that Hughes remained “responsible” for all footings, columns, pits, structure outside the main wall, lines forming terraces, pathways and general landscaping and that columns, footings and ground floor structure affected by the cost savings work were to be amended by Hughes.

19 May 2010 Meeting Between Developer, Builder and Architect

35. A meeting was held on 19 May 2010 at which representatives of the Developer, the Builder and the Architect were present. At that time, demolition of the Old Block had recently commenced. Minutes of the meeting recorded that the Builder had a Stage 1 construction certificate covering demolition, bulk excavation, shoring, piling and associated structural works. The minutes also recorded that the Builder was to contact Mr Neil Walsh, the principal of Northwood, for confirmation of piling design, piling tender assessments and associated ground works. The Builder was to organise bore holes with J&K or an excavation subcontractor and was to liaise with Mr Walsh and J&K for the number and location of boreholes. The minutes recorded that the Builder had yet to settle on the construction method and that the Builder was to consult with Mr Walsh for the best construction method option and was to confirm the construction method and reasons for the choice.

Architect Integrates Northwood’s Shoring Wall Design

36. On 9 June 2010, the Architect prepared a construction plan for level 1, which incorporated Northwood’s proposed straight Shoring Wall. Significantly, that plan indicates that the revised Shoring Wall would not be high enough to run through the light wells at the elevation of level 1 (RL9.7 m). The plan is set out at Appendix 1, figure G.

Determining Shoring Wall Design and Temporary Support System

37. The design of the Shoring Wall was the subject of extensive correspondence and discussion between the Builder, Northwood and J&K from July 2010 onwards. Northwood appears to have investigated several potential designs, including different means of providing temporary support to the Shoring Wall until such a time as the concrete slabs were complete.

“Reverse Buttressing” Temporary Support System

38. At some stage prior to 7 July 2010, the Architect requested Northwood to consider an alternative form of temporary support for the Shoring Wall involving “reverse buttresses”, as opposed to the sand berm in the original designs. [5] On that day, Northwood provided to the Architect several sketches and plans “for issue to” Pile & Bucket for costing, noting that Mr Speechley of J&K was to confirm the geotechnical adequacy. Mr Walsh described this as “a second alternative pile wall with reverse buttresses”.

    5. See above at [32].

39. The “reverse buttressing” system detailed in the plans detail a system of support for the Shoring Wall, whereby the Shoring Wall would be supported by lines of piles in a “T” shape drilled perpendicular to the Wall in the space between the Shoring Wall and the Retaining Wall. Such pile lines would be connected to the Shoring Wall by a capping beam in order to provide bracing for the Shoring Wall. The buttressing system is indicated in the following three plans, including the different types of piles “A”, “B” and “C”, C denoting the piles that formed part of the Shoring Wall:

The first plan (top) is a top down-plan of the Shoring Wall made up of C piles with the pile buttresses running perpendicular. The second plan (bottom left, marked “1” in the top plan) is a cross-section of the buttresses that were located at least 4 m from the Retaining Wall and boundary. In those cases, there would be a berm between the Retaining Wall and the edge of the capping beam of the buttress. The third plan (bottom right, marked “2” in the top plan) is a buttress that is much closer to the Retaining Wall and the piles are progressively higher than the level of the Shoring Wall. Other parts of the plans (not extracted) showed the Shoring Wall in its entirety, made up of Type C piles, along with further reverse buttresses.

40. On 8 July 2010, Mr Daniel Lipari, a contract administrator for the Builder, sent the plans to Pile & Bucket for quotation. On the same day, the Architect sent a copy of the reverse buttress plans to J&K. The Architect requested J&K to review the design “in regard to the geotechnical capabilities of the site and confirm your sign off in writing” and said that the piling was programmed to start shortly.

41. On 9 July 2010, J&K sent an email to the Architect acknowledging receipt of “the pile design” and saying that Northwood would need to provide design calculations showing what had been adopted for the design and calculations to confirm the overall wall stability. J&K said that, once it had been received, the pile design could be reviewed and comments provided. J&K expressed some concern about the Retaining Wall’s stability, noting that, while a sand berm with a 1V:2H ratio [6] would be stable on its own, it might not be stable if the crest (around the top) was “surcharged” by a footing of the Retaining Wall. The email also suggested that the batter slope may also be removing some passive support to the Retaining Wall. J&K said, however, that, ultimately, it would be Northwood’s responsibility “to ‘sign off’ the wall as it is his design”. A copy of that email was also sent to the Builder and Northwood.

    6. A ratio of 1 vertical unit to 2 horizontal units.

40. On the same day, Northwood sent a letter to the Architect and forwarded sketches providing “surcharge load” for J&K’s model. The letter said that the drawings were provided for costing purposes only and were conditional on additional geotechnical information. The letter also said that J&K was to provide contiguous pier sizes and depths and were to provide “imposed moments and shears” on the contiguous wall as well as maximum deflection of the wall.

J&K Required to Conduct Geotechnical Design of Shoring Wall

43. On 12 July 2010, Mr Speechley, on behalf of J&K, sent to the Builder, the Architect and Northwood an email saying that it had become apparent that Northwood required J&K to carry out the geotechnical design of the Shoring Wall. Mr Speechley reiterated some concerns about the stability of the nearby Retaining Wall that he had expressed in an earlier email on 9 July 2010, particularly where the batter slope was proposed. He said that, at that stage, he would not be in favour of such a batter system unless the Retaining Wall could be confirmed to have adequate stability with such a batter slope and that, where the wall stability could not be confirmed, the top of the piles would need to be no lower than existing ground surface levels.

44. J&K also attached a proposal addressed to the Builder concerning “geotechnical inspections, advice and designs during construction”, saying that J&K proposed to carry out all geotechnical consulting services on the basis of the rates set out. Mr Speechley also proposed a site meeting to discuss the wall issues.

21 July 2010 Site Meeting Between the Developer, Builder and Architect

45. A site meeting took place on 21 July 2010 attended by representatives of the Developer, the Builder and the Architect. The minutes of the meeting record that the Developer required that drilling start on 28 July 2010 and that the Builder was to commence piling as soon as possible. The minutes also record that Northwood was to design the piles, and not J&K, and that Northwood had since requested J&K to model the piles and was awaiting results.

46. On 23 July 2010, the Builder responded to Mr Speechley’s email of 12 July 2010 requesting him to “carry out geotechnical modelling of Neil Walsh's piling design (using WALLAP) to ensure that J&K can certify geotechnical properties that [Northwood] has relied upon in his design ([Northwood] will certify all structural elements of his design)”. The Builder also noted that, following Mr Speechley’s concerns with the proposed batter to retain the Retaining Wall, the Builder agreed with his suggestion that Mr Speechley complete modelling with the capping beam at a higher level.

J&K Concludes Reverse Buttress Design Infeasible

47. On 29 July 2010, Mr Speechley, on behalf of J&K, sent an email to the Builder, saying that a first run of “the Wallap retaining wall analyses” had been carried out to assess Northwood’s proposed shoring system along the south western boundary of the Development Property. Mr Speechley said that it had become clear that the proposed batter slope from the rear of the Shoring Wall back up to the existing Retaining Wall was not feasible until about half way along the Retaining Wall. He confirmed that he was not in favour of “the [1V:2H] batter slope” since there was an unacceptable risk of inducing instability of the adjoining Retaining Wall and possibly the Building beyond if it was founded on shallow footings. Thus, Mr Speechley’s model proceeded on the basis that there was no batter in place. His model also assumed that the height of the Shoring Wall was not lower than RL11.1 m, the original ground level of the Old Block.

48. Mr Speechley said that the analysis indicated that the Shoring Wall would be unstable without any propping and that, in order to model the “propping” effect of the proposed buttresses, [7] a dummy prop was installed at the top of the Shoring Wall. The modelling showed that the dummy prop needed to be able to bear a specified working horizontal load, which indicated the load that the proposed buttressing would need to be able to resist. Mr Speechley also said that the wall analysis assumed that bulk excavation did not extend deeper than RL6.6 m, or about 0.2 m below the “RL6.8 m [finished floor level]”, which was the floor level of level 0. He said that, if any greater depth of excavation occurred, higher loads and bending moments would be expected.

    7. See above at [38]–[39].

49. Based on the WALLAP analysis and other calculations conducted to assess the feasibility of the buttress propping system, the type “A” piles[8] would need to be extremely long, namely, 20 m, in order to resist the required loads. Thus, J&K did not consider that they were a feasible option to support the Shoring Wall.

    8. See diagrams above at [39].

50. In light of that conclusion, J&K recommended that further consideration be given to either providing lateral support to the Shoring Wall by the use of anchors or, if anchors were not possible, constructing the Shoring Wall using “top down construction”. Top down construction would have involved the Shoring Wall being laterally supported by the ground floor slab (i.e. level 1) at RL9.7 m before further excavation below the ground floor slab level was conducted.

Investigation of a Lateral Propping System to Support the Shoring Wall

51. On the evening of 29 July 2010, after being sent J&K’s findings concerning the reverse buttress system, Northwood emailed the Builder, J&K and the Architect, noting the problems identified by Mr Speechley and his proposal for “top down construction with temporary props to the capping beam”. In a further email that evening, Northwood asked J&K if the Builder could provide conventional wall props and, once they were in position, excavate to the basement level. Those and other communications culminated in an email on 2 August 2010 from Mr Speechley to the Builder and Northwood, in which Mr Speechley set out the assumed construction sequence of the Shoring Wall (for one section of the wall), including use of the Shoring Props, which was as follows:

1.   Install [Shoring Wall] to a toe level of RL3.3 m;

2.   Install [Shoring Prop] at RL11.1 m;

3.   Excavate to RL6.6 m;

4.   Install basement [at] RL6.7 m and ground floor slab [at] RL9.8 m;

5.   Remove [Shoring Prop].

Mr Speechley then summarised the WALLAP analysis that he had conducted, which indicated the loads that the Shoring Props would have to bear. He noted that the analysis assumed that “bulk excavation” would not exceed a depth of RL6.6 m for the basement floor slab. It appears that, at that stage, what the Shoring Props would be attached to at their base had not been finally determined.

The Course of the Works on the Development Property

30 July 2010 Excavations by Pile & Bucket

52. On 30 July 2010, Pile & Bucket carried out exploratory excavation in front of parts of the Retaining Wall to expose its footings. Prior to commencing excavation, Mr Paterson of Pile & Bucket observed that a berm existed against the Retaining Wall with a height “generally above RL11 m” and that that appeared to be the only support for the Retaining Wall. On 2 August 2010, Pile & Bucket carried out “benching” excavation to form a sand berm against the Retaining Wall in preparation for piling of the Shoring Wall. “Benching” is a method of preventing cave-ins by excavating the sides of an excavation to form horizontal levels or steps with near vertical surfaces between levels. Forming the berm would have involved “battering”, which involves creating a slope on the sides of the excavation at a particular angle.

53. The effect of the excavation was to:

1. excavate the relevant area of the Development Property down to RL9.4 m (approximately level 1 of planned New Apartment Building);

2. create a sand berm at an angle of around 35 degrees, the “toe” of the berm began at RL9.4 m sloping upwards at an angle of 35 degrees to reach a height of between RL11.5 m and RL12 m; and

3. create a horizontal crest at the top of the berm, which was a flat section that extended from the top of the berm’s slope to the Retaining Wall, the crest being between 1 m and 1.7 m wide adjacent to the Retaining Wall.

54. A cross-sectional drawing made by Mr Speechley on 4 August 2010 illustrates the effect of the proposed excavation as set out below:

The 35 degree toe of the berm is visible in the bottom right (at the excavated depth of RL9.4 m), the berm then slopes up for 3.7 m to RL11.6 m, before flattening to form a crest that then extends for 1.5 m to the Retaining Wall, which is on the left hand side of the drawing (the top of the Retaining Wall being RL13.1 m and the “toe” of the Retaining Wall being RL10.65 m). At certain points (generally where the Shoring Wall and Retaining Wall were closer together) the Shoring Wall would run through the slope of the berm, as indicated in a further sketch from 4 August 2010, which indicates the “approximate inside line of proposed piling” (as at that particular section). The sketch is as follows:

4 August 2010 J&K Site Visit and Report

55. On 4 August 2010, Mr Speechley visited the site to provide advice regarding shoring along the western side of the Development Property. In an email of that date, Mr Speechley said that one of the critical issues for the Shoring Wall would be to maintain the stability of the Retaining Wall and the Building, which were to the west. The email said that the site currently had a soil berm placed against the Retaining Wall and western boundary (as shown in the diagrams above). He noted that, typically, the top of the berm was about RL12.0 m, although at the southern end it was only about RL11.5. The berm had a crest width ranging from about 1 m to 1.5 m wide and then sloped down at a gradient of about 35 degrees to approximately RL9.0 m (as shown in the sketches set out above).

56. Mr Speechley confirmed that, as discussed on site, it was not possible, over a large portion of the Shoring Wall, for it to be constructed with a capping beam “at RL9.2 m”. He said that the amount of excavation required to achieve those levels would potentially lead to instability of the Retaining Wall and that, therefore, the capping beam would need to be raised, so that the stability of the Retaining Wall would be maintained. It appears that the reason was that the footing of the Retaining Wall was between RL10.68 m and RL10.09 m, which was only (approximately) 0.8 m and 1 m respectively below the original ground level of the Development Property prior to demolition of the Old Block (RL11.1 m). Thus, a Shoring Wall with a capping beam at RL9.2 m would have a height that was below the footings of the Retaining Wall that it needed to support.

57. The email said that it had been agreed on site that the top of the capping beam must be raised to not lower than RL11.1 m for the section of the Shoring Wall from the extreme northern end (encompassing the Northern Light Well) and including the Northern Return Wall. To the south of those sections of the Shoring Wall, the top of the capping beam could be dropped down to the original RL9.2 m. In those parts of the Shoring Wall, as shown in the following sketch, the piles for the Shoring Wall did not appear to interfere with the berm as, in those sections, the distance between the Shoring Wall and the Retaining Wall was greater:[9]

9. See above at [3].

58. Mr Speechley also said in his email of 4 August 2010 that, over the section of the berm where the capping beam was to be placed at “RL11.1 m”, it would be necessary to increase the size of the berm to accommodate the piling equipment. He recommended that, during reformation of the berm, the top of the berm not be taken deeper than RL11.5 m, which was equivalent to the original ground level plus some allowance for the loosening of the upper sands. Mr Speechley also said that the berm must have a crest of not less than 3 m, although it was expected that that would be much wider to accommodate the piling rig safely. The email said that the berm must also have a batter slope not steeper than 1V:2H. Mr Speechley recommended that, over the section of berm where the capping beam was to be placed at RL9.2m, the berm be maintained as per its current configuration.

59. Finally, Mr Speechley said, once the piling for the Shoring Wall was completed and the capping beam formed, a berm must be maintained in front of the Shoring Wall until the propping of the Shoring Wall was in place. He said that the berm should have a crest width of not less than 1 m with the crest at not lower than RL10.5 m and that the berm must be battered at not steeper than 1V:2H.

Instructions to Backfill Excavation for Re-benching and Re-battering

60. On 4 August 2010, after Mr Speechley’s site visit, the Builder instructed Pile & Bucket to backfill a large amount of what they had already taken out. The Builder said that there was going to be significant changes to the piling and that the Builder would have to go back to the engineers and modify the design. As a result of instructions from Mr Speechley, which were confirmed by Mr Frigo on behalf of the Builder, Pile & Bucket was directed to refill the excavation by re-benching and re-battering. The purpose of doing so was to increase the size of the berm to meet Mr Speechley’s requirements. Pile & Bucket was instructed that the capping beam would now be at RL11.1 m.

Piling for Shoring Wall Commences

61. On 6 August 2010, Pile & Bucket commenced piling for the Shoring Wall. Shortly beforehand, Mr Frigo of the Builder had told Pile & Bucket that the retention system, being the design and specifications of the Shoring Props, had not been finalised and that the final drawings would be provided when Northwood had finalised the design.

Issues Arising out of the Straight Shoring Wall Design

62. On 9 August 2010, the Architect sent an email to J&K, the Builder and Northwood, noting that there seemed to “have been some confusion at the site meeting” and saying that the piles for the Shoring Wall needed to avoid the external parterre gardens at RL9.7 m and that the piles could not be run through the gardens, which bring light into the bedrooms. That was in reference to the piles in the area of the Northern Light Well, which would now have a capping beam height of RL11.1 m. In effect, running a piling wall of that height through that section would largely block the windows or openings to the level 1 bedrooms that were intended to look out into the Northern Light Well and parterre garden. The Architect said that to reduce the light and ventilation to those spaces would go against “[Building Code of Australia] requirements”.

63. Mr Speechley brought this to Northwood’s attention in an email dated 11 August 2010 (other aspects of which are addressed below) and observed that it appeared that the pile wall would need to step around the parterre gardens, which would take the Shoring Wall closer to the boundary. Mr Walsh responded on the same date saying that the piles for the Shoring Wall “do not step around the parterre garden”. He said that it was so important to get the main building going that he agreed with the Builder that they would put the piles through in a straight line and sort the parterre out when they were “able to strut back off the [New Apartment Building]”.

Design of Shoring Props and Prop Foundations

Northwood’s Concrete “Pad” Foundation Proposal

64. During his site visit on 4 August 2010, Mr Speechley made some sketches titled “calculate passive restraint from propping footings”, which detailed a proposal by Mr Walsh made during a discussion in the course of the site visit regarding attachment of the base of the Shoring Props. These sketches and calculations described installing 1.5 m square x 1.5 m deep concrete “pads” spaced at 3.5 m intervals. The props for the Shoring Wall would then be attached to the pads. Mr Speechley’s notes following certain calculations noted that the proposals were “unacceptable” with respect to the total resistance to sliding and the factor of safety (FOS) against overturning. On the same day, Mr Speechley communicated his conclusions to Mr Walsh and, in a handwritten letter dated 4 August 2010, Mr Walsh provided a revised pad design and calculations using 2 m square x 2 m deep concrete pads.

65. Mr Speechley responded by email on 9 August 2010, concluding that, while the sliding appeared adequate, each pad would have an unacceptable FOS against overturning. He also noted that it would be virtually impossible to excavate such pads due to significant portions of the berm needing to be removed in order to do so. Thus, Mr Speechley strongly recommended that the pad footing option not be attempted and recommended either to anchor the new Shoring Wall or to assess strutting to a pile or pile group.

Adoption of Laterally Loaded Pile Foundation

66. Mr Walsh responded later on the same day, noting that a piled option may well be cheaper than excavating large pads and requesting the acceptable lateral capacity for such a pile. That would have involved connecting each Shoring Prop to the capping beam of the Shoring Wall and then to a capping beam linking additional piles groups located in front of the Shoring Wall. He also noted that, as Hughes was designing the foundation piles for the New Apartment Building, it might be possible to strut off the lift piles and internal column piles to save some money. After checking with the Builder, Mr Walsh, in a further email to Mr Speechley, noted that the largest pile diameter for the piling rig on site was 600 mm.

67. On 11 August 2010, Mr Speechley sent an email to Mr Walsh saying that he had carried out some lateral pile calculations and summarised those results. The results related to a 6 m long, 600 mm diameter pile and, among other things, the allowable lateral load for such a pile that would be exerted by Shoring Props.

68. He also addressed Northwood’s proposal to strut with the Shoring Props at the RL11.1 m level of the Shoring Wall, excavate and then install additional Shoring Props at RL9.2 m, followed by removal of the upper RL11.1 m strut. Mr Speechley summarised the results and said that the model assumed a batter slope of not steeper than 1V:2H on the passive side, being the Manning Road side, of the Shoring Wall during installation of the Shoring Props. He said that the berm must not be removed until at least the upper strut was installed.

Finalisation of Pile Layout and Specification

69. On 12 August 2010, the Architect provided to the Builder, Hughes and Northwood a copy of Northwood’s sketch “for the design intent to the northern boundary”. The Builder was asked to discuss that with Hughes, so that Hughes could complete its drawings and issue them for construction. At this stage, Hughes was responsible for other elements of the basement, such as the design and specification of foundation piles, which would provide support for structural columns. Thus, what follows is some overlapping discussion of piling for the Shoring Wall and for other aspects of the structural design unrelated to the Shoring Works. Mr Walsh was asked to forward an electronic copy of the drawings for the column solution to the car park that was to be located in the basement.

70. On 16 August 2010, the Builder emailed Mr Speechley asking whether 450 mm diameter piles at the base of “bracing” to the perimeter piles (i.e. to the Shoring Wall) could be used. The “bracing” appears to be a reference to the Shoring Props. The question was asked because doing so would enable the use of the piling rig currently on site rather than having to bring in a new piling rig, presumably because the rig on site was unable to accommodate 600 mm piles despite what Mr Walsh had reported earlier (see [66]). Mr Speechley responded that 450 mm diameter piles would not carry as much horizontal load as the 600 mm diameter piles. He said that 450 mm diameter piles were unlikely to be feasible unless another almost contiguous 450 mm diameter piled wall was constructed to strut against.

69. On 18 August 2010, J&K sent an email to Hughes and the Builder referring to a drawing sent by Hughes that showed the proposed pile layout and loads. J&K summarised additional calculations for individual single piles of 400 mm, 600 mm and 750 mm in diameter located at various depths below excavation. J&K said that the nominated 400 mm diameter piles would not be big enough to carry the loads unless larger pile groups were adopted. The email ended by saying that, depending on the spacing of the piles in a pile group, the total pile group capacity is usually less than the sum of the individual piles. A short time later on the same day, J&K sent an email to the Builder and Northwood referring to their discussions of the previous day, suggesting that the spacing of the 600 mm piles proposed by the Builder and Northwood was not correct.

70. Later still on 18 August 2010, Dr Andy Wang of Hughes sent an email to the Builder and J&K saying that he had carried out calculations for piles to support columns and asking, as 400 mm piles were not big enough, which size of 600 mm piles or 750mm piles was preferred so that the design of the piles could start. Still later on 18 August 2018, Mr Walsh sent an email to the Builder, J&K and the Architect saying that, if the piles were changed to 450 mm diameter pairs, then the 600 mm diameter piles currently shown on a drawing identified could be substituted with a pair of 450 mm piles joined with a capping beam for each 600 mm pile. Mr Walsh said that they would require a slightly wider capping beam.

71. Still later on 18 August 2010, Mr Walsh sent an email to Dr Wang of Hughes, with a copy to the Architect and the Builder, saying that he had detailed the northern boundary, which was outside his scope of work, just to point out “what is, was and will be there” for the Hughes and Architect designs, as well as to confirm a reasonable end to the northern piles, which was his scope, as the extent was different between the Hughes and Architect drawings. Mr Walsh also said that the contiguous wall was confirmed by J&K as being able to support the wall loads that Hughes provided. He said that, if significantly higher bearing capacities for piles were now being provided, it was a serious matter that should be taken into account in the Hughes design. Mr Walsh said, “we share your concern” and said that the extent of any effect should be confirmed by J&K and any construction implications raised with the Builder.

Pile & Bucket Instructed to Construct Piles for the Light Wells

74. Again on 18 August 2010, the Builder instructed Pile & Bucket on site to construct five piles in each of the areas identified for the light wells with a capping beam at the top at RL11.1 m for the Northern Light Well and at RL9.2 m for the Southern Light Well. Mr Paterson of Pile & Bucket noted that, at the time of receiving those instructions, he made handwritten notes on a plan in relation to instructions received on site. He noted there were also notes on the plan made by a person he believed to be an employee of the Builder. The marked-up plan is set out at Appendix 1, figure H.

Northwood Issues Final Plans for Shoring Wall and Shoring Props

75. Construction of the Laterally Loaded Piles for the Shoring Wall was completed by 19 August 2010. Thereafter, it was necessary for the Shoring Props to be obtained. On that day, Northwood produced drawings endorsed “reissued for construction”. The prior version marked “issued for construction” was dated 17 August 2020 and had been circulated by Northwood for comment on that day. Those drawings for “level 0 – entry and car park” depicted the Shoring Wall along with the 12 Shoring Props that Northwood had designed to support the Shoring Wall. [10]

Provision for Lateral Piling Design

10. See Appendix 1, figure C.

76. The Northwood plans provided for the Shoring Props to be attached to a capping beam placed on top of the Laterally Loaded Piles. The plans provided for the piles to be 600 mm in diameter. Some of the Shoring Props were to be attached to two 600 mm piles, whereas others were to be attached to a single 600 mm pile. However, it appears that due to the limitations on the piling rig available on site, each 600 mm pile was replaced with two 450 mm piles arranged in a row parallel to the Shoring Wall. Thus, some of the Shoring Props were actually supported by a line of four (as opposed to two) Laterally Loaded Piles linked by a capping beam running parallel to the Shoring Wall, and others were connected by a group of two piles with a capping beam, as opposed to a single pile.

Provision for Cutting Down Piles in the Northern Light Well

77. The Northwood drawing showing a cross-section of the “West Elevation” provided for the cutting down of the piles adjacent to the Northern Light Well to facilitate light ingress and the installation of a “waler beam” lower on the excavated piles. A waler beam is a timber or concrete beam used to support or maintain required separation between components to help maintain the form of a construction under stress. Northwood’s drawing is set out at Appendix 1, figure I. As the drawing suggests, there was no need for the capping beam and the piles of the Shoring Wall adjacent to the Southern Light Well to be cut down, as the height of the Shoring Wall in that section was lower than the section near the Northern Light Well.

20–23 August 2010 Excavation and Construction of Light Well Piling

78. Between 20 and 23 August 2010, Pile & Bucket carried out the construction of the ten piles required for the light wells in the area between the Shoring Wall and the Retaining Wall. Thus, on 20 August 2010, the site was “benched”, which involved excavating material so as to provide a level area for the drilling of the piles. On the following day, construction of the piles began with seven of the ten light well piles being built, with the remaining three having to be constructed on 23 August 2010 due to grout delay. Further excavation was conducted around the top of the piles to facilitate installation of the formwork necessary for the construction of the capping beams. The capping beam around the light wells was poured at some point after 23 August 2010, when the formwork was constructed, and before 7 September 2010, when Mr Speechley photographed it.

79. Those excavations for the benching and formwork were from the earth berm that supported the Retaining Wall. Significantly, the Northern Light Well was especially close to the Retaining Wall. Thus, excavating the berm to facilitate the light well piling and capping beam in that area was performed very close to the Retaining Wall.

20 August 2010 J&K Site Visit

80. On 20 August 2010, Mr Woody Theunissen, a representative of J&K, visited the Development Property. He subsequently said in an email that he had noted that, in places, the batters formed up against the Retaining Wall had been removed. He recommended that all batters be reinstated “without delay”, in accordance with the recommendations provided in Mr Speechley’s email report of 4 August 2010.

8 September 2010 J&K Site Visit

81. Monitoring survey results for 8 September 2010 (labelled “visit 2”) recorded movement of the Retaining Wall towards the Development Property since 5 August 2010 (labelled “visit 1”). Of the ten stations, one station recorded a movement of 7 mm, while the remaining nine stations recorded no change.

82. On 8 September 2010, Mr Speechley carried out a site visit to inspect the progress of the Shoring Works and sent an email to the Builder recording observations that he had made as follows:

• the Shoring Wall had been completed and the capping beam poured;

• the two square parterre gardens had been formed by constructing piers below each corner and centrally along the western side, a capping beam connecting the piers. Mr Speechley understood that the capping beam on the northern most parterre garden [Northern Light Well] had been poured up against the existing western boundary wall and that the timber bracing was put in for precautionary means only;

• survey monitoring of the existing boundary retaining wall [the Retaining Wall] along the western boundary was being carried out. Mr Speechley requested a copy of the survey results as soon as they were available;

• an irregular sand berm existed against the Retaining Wall between the Retaining Wall and a new contiguous piled wall [the Shoring Wall], the berm having a gradient at about 45 degrees with no crest width and the top of the berm ranging from 0.5 m to 1 m below the top of the Retaining Wall;

• a berm existed on the passive (excavated) side of the new Shoring Wall currently having a crest width ranging from about 1.5 m to 2 m and sloping down at a gradient ranging from 35 degrees to 40 degrees, the top of the berm being about 0.5 m below the top of the capping beam: this is a different berm supporting the Shoring Wall, as opposed to the irregular sand berm mentioned above, which was supporting the Retaining Wall;

• bulk excavation had been taken down to about RL5.9 m so that piers could be drilled (for the Laterally Loaded Piles) to support struts to the new contiguous piled wall [the Shoring Wall]: Mr Speechley noted that the RL5.9 m level was the bottom of the capping beam over the [Laterally Loaded Piles] and that RL6.6m was the original bulk excavation level.

The irregular sand berm against the Retaining Wall, and the Temporary Retaining Propping (see below at [84]) above the Northern Light Well, is depicted in a photo taken by Mr Speechley during his site visit on 8 September 2010. The photo, which looks to the south, is set out below:

A part of the berm against the Shoring Wall is depicted in the photo of the same date set out below, where the capping beam at RL11.1 m is visible in the right-hand side, with Manning Road on the left:

83. In his email of 8 September 2010, Mr Speechley made comments and recommendations as follows:

• The current berm supporting the Shoring Wall was not in accordance with the recommendations set out in J&K’s email of 4 August 2010. The berm must be modified to have a batter slope not steeper than 1V:2H (that is to say about 26 to 27 degrees). The toe of the current berm was also lower than was assumed in J&K’s wall analysis and had to be raised as soon as possible to RL6.6 m. For the very short-term temporary case, the level of RL5.9 m could be maintained until the Lateral Loading Piles supporting the new struts were constructed. However, the level must be raised back to not lower than RL6.6 m immediately after those piles being constructed. That was on the assumption that the berm was kept at not steeper than 1V:2H as discussed above.

• The monitoring results for the existing Retaining Wall should be provided for review as soon as they were available and the wall should be visually inspected at least daily for any signs of distress, including the footpath area above the Retaining Wall on the Affected Property.

• After the Shoring Wall has been strutted, bulk excavation must not extend deeper than RL6.6 m.

The Temporary Retaining Propping

84. At some point, the Builder installed temporary timber props near the Northern Light Well and connected to the Retaining Wall in order to provide support for the Retaining Wall during the course of construction (the Temporary Retaining Propping). It is important to distinguish the Temporary Retaining Propping from the Shoring Props. The Temporary Retaining Propping as observed by Mr Speechley on 8 September 2010 is shown above. [11] Although the evidence does not reveal exactly when the Temporary Retaining Propping was installed, Mr Frigo of the Builder agreed that he had it installed as a result of an instruction from his “superiors”. Mr Frigo could not remember if there was any geotechnical or structural advice about the installation. On 25 August 2010, Mr Walsh sent to the Developer a tax invoice that recorded “site inspection and advice” on 24 August 2010 in relation to, amongst other things, the “temporary propping of the [Retaining Wall]”. Mr Walsh did not indicate in his evidence and was not asked in cross-examination, what “advice” he had given to the Builder about “temporary propping” of the Retaining Wall. Thus, it is unclear whether the Temporary Retaining Propping was already installed on 24 August 2010, or was still yet to be installed at that time. In any case, they were in place no later than 8 September 2010.

    11. See above at [82] (the first of the two images).

10 September 2010 Hughes’ Concerns Regarding the Foundation Piles

85. On 10 September 2010, Hughes sent an email to Mr Speechley, the Builder and the Architect, saying that they had a concern that there would be differential settlement between the contiguous piles forming the Shoring Wall and the foundation piles supporting internal columns. Hughes said that the distance between the Shoring Wall and the internal columns was only 4 m and the maximum differential settlement that would be considered acceptable was 8 mm.

Cutting of the Northern Light Well Shoring Wall Piles and Capping Beam

86. On 20 September Pile & Bucket carried out jackhammering to cut the capping beam off the part of the Shoring Wall that passed through the Northern Light Well and reduce the pile heights on those piles in accordance with Northwood’s design (Appendix 1, figure I). On 30 September 2010, the waler beam was connected between the piles.

11–27 September 2010 Construction of the Shoring Props

87. On 11 September 2010, Pile & Bucket recorded that they had begun piling on the “strut piles” (the Laterally Loaded Piles) and noted, on 15 September 2010, that the last of the pile caps had been poured and that the steel beams for the Shoring Props had arrived on site. Work on fabricating the Shoring Props began on 20 September 2010.

88. On Monday, 27 September 2010, Mr Paterson of Pile & Bucket sent an email to the Builder saying that a programme for completion would be provided that day. He said that he had held off doing that on the previous Monday, 20 September 2010, on the basis that Northwood was to be requested to review the extension of the strut arrangement. Pile & Bucket had to procure materials when it was known what was required in terms of the strut extension (for the Shoring Props). Mr Paterson said that Pile & Bucket expected to have all Shoring Props taking load by the following day, 28 September 2010, but that the changes to the requirements of the work were causing delay and Pile & Bucket was responding as quickly as the supply of additional materials and resources allowed.

22 September 2010 Northwood Site Inspection

89. On 22 September 2010, Mr Walsh of Northwood conducted a site inspection to resolve issues about Shoring Props of incorrect length. He designed a rectification on site and agreed upon the rectification with the Builder and Pile & Bucket.

6 October 2010 J&K Site Visit and 7 October 2010 Report

90. Monitoring survey results for 7 October 2010 recorded no movement of the Retaining Wall from the previous results on 8 September 2010. On that day, J&K sent a report to the Builder (the 7 October Report), confirming that Mr Speechley had visited the site on 6 October 2010 to inspect and provide geotechnical advice for the support of the two parterre garden areas (i.e. the light wells) as well as a general geotechnical review of site progress.

J&K Observations About the Light Wells and the Retaining Wall

91. Mr Speechley said in the 7 October Report that he observed that the capping beam for the contiguous piled Shoring Wall had been extended out and around two parterre garden areas (i.e. around the light wells) and was supported by the five piles around each of the parterre gardens. Mr Speechley said that the height of the top of the capping beam for the Northern Light Well was RL11.1 m and the final floor level (FFL) of the garden would be at RL9.7 m. Therefore, allowing for some excavation below the FFL, Mr Speechley noted the excavation depth below the top of the capping beam would be about 1.6 m. Mr Speechley said that as the near side of the northern most parterre garden (in the Northern Light Well) was abutting the Retaining Wall, the excavation would need to be supported until the permanent concrete parterre was constructed. Mr Speechley recommended a procedure for support of the excavation of the Northern Light Well, confirming discussions on site.

92. In the 7 October Report, Mr Speechley recommended as follows:

• The piles on the eastern side of the parterre garden, being those that formed part of the line of the Shoring Wall, had been cut off short and the capping beam in that area had been removed and that should be rectified immediately. He understood that a “deep downturn beam” was to be constructed to connect with the top of the Shoring Wall.

• Prior to any excavation works within the parterre garden areas, a survey of the Retaining Wall must be carried out to check that it is performing as expected and excavation should not commence until the results of the survey have been reviewed by the geotechnical and structural engineers and approval to proceed has been provided.

• The structural engineers should inspect the Temporary Retaining Propping in the area of the northern most parterre garden and provide written confirmation that the propping is suitable to support the Retaining Wall. Co-ordination between the structural engineers from Hughes and Northwood would be required as additional loads may be placed on the shoring system, requiring additional propping.

• Push (rather than drive or hammer) channel sections internally into the four corners of the parterre garden area, which had to extend at least 2.6 m below the top of the capping beam and be fixed to the capping beam at the top. If they could not be pushed into place, then hand auger holes in which the channel sections could be placed and then backfill the holes.

• Excavate carefully by hand internally within the parterre garden and support the excavation progressively by using timbers sliding down with the excavation supported by the channel sections at either end.

• Form up and pour internal walls and floor slab.

• Provide waterproofing and drainage as required.

• Backfill between temporary shoring and permanent walls using no fines concrete.

• All works in the area should be carried out without delay and the Retaining Wall should be visually monitored at least daily during the works. If there is any concern at any point in the construction about the stability of the existing western boundary wall, further advice should be sought immediately.

93. Mr Speechley took further images during his site visit. The two images set out below show the Northern Light Well after having the capping beam partially removed and the Shoring Wall piles having been cut down. The top of the waler beam is visible in the right-hand image, which is the partially buried horizontal beam between the piles:

A fully excavated image taken on 16 November 2010 is set out at Appendix 1, figure J.

J&K Observations About the Shoring Props

94. The 7 October Report then addressed the southernmost parterre garden (in the Southern Light Well) and proceeded to deal with other geotechnical observations in relation to the steel propping that had been installed along the Shoring Wall. Mr Speechley made comments to the following effect:

• Eight steel props had been installed along the straight part of the Shoring Wall with two additional props installed along the Northern Return Wall and one prop on the Southern Return Wall. The spacing of the propping along the Shoring Wall varied between 4.7 m and 2.4 m and the propping was inclined approximately at 1V:2H.

• He was not able to observe the Laterally Loaded Piles providing support for the steel propping but that his understanding was that it would have comprised either a single 600 mm diameter pile or two 450 mm diameter piles, for which a maximum allowable lateral load had been calculated. Therefore, the spacing of the steel propping observed did not seem adequate. He requested confirmation from Mr Walsh as to the piles used to support the steel propping and the adequacy of the propping system to support the lateral loads. Mr Speechley said that that should be carried out immediately.

211. I do not consider that that evidence supports a conclusion that, had the Builder retained another geotechnical engineer, that engineer would have recommended grouting. More significantly, I do not consider that the evidence can support a finding that grouting would have prevented the damage about which complaint is made. This aspect of Ground 8 is not established.

212. The Owners Corporation and the Unit Owners also assert that condition D10 and the requirement “to comply with any reasonable direction by that professional engineer” embraced further Development Approval conditions not considered by the primary judge. They contend that the requirement to comply with reasonable directions of the professional engineer enlivened issues related to other conditions of the Development Approval, namely B9 and C16. Those conditions required that the excavation works were to implement the J&K Report of 13 March 2009 and that the Monitoring Plan be adopted as per that report. In light of the finding by the primary judge that a failure to install monitoring points before commencing work in accordance with the consent conditions (including the Monitoring Plan) was a failure by the Builder to take reasonable care, they allege that further findings should have been made that the Builder’s failure to comply with the other consent conditions, should be considered as a breach of its duty of care, such as conducting surveys after demolition and preparing a “method statement”.

213. The submissions advanced in relation to this alleged breach by the Builder raise similar issues to that raised by Ground 9. Mr Speechley’s uncontradicted evidence was that he was “comfortable” with the monitoring that was ultimately put in place in regard to J&K’s report and Mr Speechley raised no contemporaneous complaint with the Builder about the monitoring, notwithstanding his role. The issues related to the Monitoring Plan should fail on the question of both breach and causation, for the reasons advanced in relation to Ground 9. This aspect of Ground 8 is not established.

214. Finally, the Owners Corporation and the Unit Owners also submitted that the primary judge erred in not determining that the Builder’s failure to follow the professional advice of its own engineer, presumably Mr Speechley, was a breach of its duty. However, it is quite unclear just what advice the Builder failed to follow, especially given Mr Speechley indicated he was comfortable with the monitoring that was in place. This aspect of Ground 8 has also not been made out.

Ground 9: Failure to Execute Monitoring Plan

226. The Owners Corporation and Unit Owners assert that the Builder’s failure to comply with J&K’s Monitoring Plan resulted in the loss of the opportunity to mitigate or minimise damage to the Building. They say that, if the Builder had installed monitoring points prior to commencing works, and assuming that they would have shown no movement of the Retaining Wall from that period until 5 August 2010, when they were in fact installed, the 7 mm movement of the Retaining Wall recorded on 8 September 2010 would not have been dismissed as an anomaly and appropriate remedial measures would have been taken to ensure that no further movement occurred.

227. The primary judge saw no basis upon which he could conclude that, had survey monitoring been carried out in accordance with the Monitoring Plan, it was probable that the significant movement or movements of the Retaining Wall that occurred in the month prior to 8 September 2010 could not have been dismissed as an anomaly and would have been investigated by geotechnical and structural engineers, with remedial steps being taken to ensure the stability of the Retaining Wall. His Honour considered that it was a matter of speculation as to what would have been revealed had monitoring been undertaken more frequently between 5 August 2010 and 8 September 2010. His Honour observed that there was no evidence as to what steps could or would have been taken if the survey monitoring had permitted a more precise conclusion to be drawn as to when, during that period, the movement detected on 8 September 2010 took place. His Honour accepted that there was no evidence that any departure from the Monitoring Plan caused damage to the Building.

228. In addition, the primary judge observed that Mr Speechley, who had devised the Monitoring Plan, was on site on regular occasions and agreed that he was “comfortable” with the frequency of monitoring undertaken. His Honour considered that, in view of the agreement of the Engineers that the work done on the site prior to 5 August 2010 had no effect on the Building, the absence of monitoring prior to 5 August 2010 was of no consequence. Accordingly, his Honour concluded that the Owners Corporation and the Unit Owners had not established that the failure of the Builder to implement the Monitoring Plan in fact caused any damage to the Building.

229. The absence of monitoring in the very early stages could only have had a causal effect if there were reason to believe that the movement, or significant movement, occurred in those early stages. However, there was no evidence to suggest that any movement occurred at that time. Rather, the evidence suggests the contrary. Thus, during the concurrent evidence by the Engineers, when it became clear that that the benching excavation was actually done at an angle of 35 degrees, they concluded that the benching excavation in fact had no effect on the Building. The benching excavation was based on drawings and advice from Northwood and there was no evidence that it was unreasonable to proceed on that basis.

230. The Unit Owners do not explain how the primary judge erred in failing to find that the failure adequately to implement the Monitoring Plan did not cause damage to the Building within the meaning of s 5D or s 5E of the Civil Liability Act, in circumstances where it was a matter of speculation as to what monitoring might have revealed. Ground 9 has not been established.

Grounds in Relation to Hughes

Ground 2: Design of the Northern Light Well

231. On 13 July 2009, Hughes wrote to the Developer submitting a fee proposal for the provision of engineering services in relation to the project on the Development Property. The proposal was based on identified architectural drawings, a briefing document of 9 July 2009 and the Development Approval granted by the Council.

232. The fee proposal stated that the “scope for structural services”

“included:

design and to document the following structural elements:

-    foundations and retaining walls;

-    concept layouts for contiguous pile walls;

-    slabs on ground;

-    suspended concrete structure;

-    primary steelwork for roof and walls;

-    structural masonry;

brief and liaise with geotechnical engineer;

inspections during construction to allow certification on completion…;

response to builders [requests for information] as needed;

certification of compliance for [principal certifying authority] on completion.”

233. The fee proposal stated that the fee included inspections for the Council to meet conditions of approval and that, unless otherwise agreed, the construction phase services proposed would be limited to:

“review of structural steel shop drawings;

the specified number of technical inspections during construction; and

provision of associated inspection certificates.”

234. The fee proposal from Hughes stated that the following would not be contained within the scope of work:

“survey;

sub-consultant services such as geotechnical engineer;

detailed design of piling systems;

architectural metalwork and glazing;

roof safety anchor points …;

builders’ temporary work and shoring;

waterproofing;

site services search …; and

dilapidation report for adjacent properties.”

235. The Owners Corporation and the Unit Owners contend that Hughes was responsible for the structural design of the Northern Light Well and that it was negligent because it required excavation of the earth berm that was supporting the Retaining Wall and did not provide for any alternative replacement support for the Retaining Wall and the Affected Property. They asserted that Hughes breached the duty of care owed to them in that a reasonable person in the position of Hughes would not have created the design of the structural elements of the Northern Light Well, which required excavation of the berm providing support to the Retaining Wall, without taking precautions or seeking advice so as to ensure the Retaining Wall did not lose support. They say that that excavation caused movements in the foundation strata and, therefore, materially contributed to the damage to the Building.

236. The primary judge was not satisfied that Hughes did in fact prepare structural drawings from which the Northern Light Well was constructed. His Honour considered that it was more likely that the Northern Light Well was built in accordance with the instructions of Mr Walsh of Northwood. His Honour considered that that was consistent with the terms of Hughes’ proposal of 13 July 2009, which excluded detailed design of piling systems from the services to be provided. It was also consistent, his Honour said, with the terms of Hughes’ general structural notes, which said that the Builder was responsible for the adequacy of all temporary works, including shoring, propping and bracing and, where necessary, was to engage a structural engineer to design and certify the temporary works. [29]

     29. Primary judgment at [403]–[404].

237. The conclusion of the primary judge was reached after consideration of the evidence and making findings of fact based on that evidence. Thus, the position of the piles for the light wells, and a depiction of how the piles for the Shoring Wall were to be cut down, were shown on an annotation to the plans of the Architect that was provided to Pile & Bucket on 18 August 2010. Mr Patterson of Pile & Bucket said that someone from the Builder had placed two sets of five black circles on the plan to show where the piles for the light well should be placed. Mr Frigo of the Builder accepted that the Builder had told Pile & Bucket where the light well piles were to be placed. Mr Frigo accepted in cross-examination that, as at 18 August 2010, when the instruction was given to Pile & Bucket, the Builder did not have in its possession any plan prepared by Hughes showing that the five piles and capping beams were to be constructed as indicated on the plan provided to Pile & Bucket. Mr Frigo was clear that it was Mr Walsh of Northwood who gave instructions and that Hughes was not giving instructions about that matter. Between 21 August 2010 and 23 August 2010, Pile & Bucket installed the five piles for each of the two light wells as depicted in the annotation on the plans of the Architect provided to it on 18 August 2010.

238. The Owners Corporation and Unit Owners focused attention on a structural drawing issued by Hughes on 30 August 2010. However, that drawing was issued after the piling work had been carried out. Mr Frigo said that, as foreman, he understood that the drawings were “basically playing catch up to identify what’s been built”. The cross-examination of Mr Frigo on behalf of the Owners Corporation and Unit Owners proceeded on the basis that, as at the date on which the instruction was issued to Pile & Bucket and the date on which the piling works for the light wells were carried out, Hughes had not provided any design for those light wells.

239. Further, as the primary judge held, there was no evidence of what precautions a competent engineer in the position of Hughes would have specified or of how effective such precautions would have been to prevent movement in the Retaining Wall and the Building. Even if Hughes had been responsible for the design of the piling of the Northern Light Well, his Honour was not satisfied that those activities were a breach of any duty that it owed to take reasonable care or that they were causative of any damage to the Building. Ground 2 is not established.

Ground 3: Design of the Lift Pit

240. The Owners Corporation and Unit Owners alleged that Hughes’ design provided for a lift shaft adjacent to the Shoring Wall that removed support to the Shoring Wall and consequently the Retaining Wall and the Affected Property without specifying adequate precautions to provide for placement support. The primary judge concluded, however, that Hughes’ design did not provide for a lift shaft adjacent to the Shoring Wall. Rather, Hughes’ original drawings, at the time of Northwood’s retainer, showed the Shoring Wall stepping outside the light wells. Thus, his Honour said, according to Hughes’ design, the wall of the proposed lift well was not adjacent to the proposed Shoring Wall. Rather it was Northwood’s shoring design that had the effect that the Shoring Wall was to be adjacent to the wall of the lift shaft.

241. The primary judge was not satisfied that the Owners Corporation and Unit Owners had shown that it was within the scope of Hughes’ duty of care to question whether Northwood’s shoring design was adequate. His Honour held that Northwood had assumed responsibility for the design of the Shoring Wall and the proposed location of the lift well was determined long before Northwood altered the design of the Shoring Wall. His Honour referred to the criticism of the Northwood design in the Joint Report, in that it did not make provision for the lift pit (and also the foundation piles), the excavation of which would inevitably take place immediately adjacent to the Shoring Wall as built in accordance with Northwood’s design. [30]

     30. Primary judgment at [414].

242. The primary judge referred to the revision to the 30 August 2010 footing plan, which Hughes issued on 8 October 2010. The details stated that the depth of the lift pit was to be to the lift manufacturer’s details but did not otherwise give any indication of the depth of the lift pit. His Honour saw no reason to conclude that it was necessary for Hughes to go further or to conclude that a reasonable person in Hughes’ position would have gone further. His Honour considered that there was no evidence that a competent structural engineer in the position of Hughes would have made more precise specifications than those made concerning the lift pit.

243. Further, there was no evidence as to what further precautions a competent engineer in the position of Hughes would have specified or the effect that implementation of such precautions would have had. The primary judge concluded that it was not for Hughes to adduce evidence that it was entitled to assume that Northwood’s design of the Shoring Wall was sufficient to accommodate the lift pit and foundation pile excavation. It was for the Owners Corporation and the Unit Owners to adduce evidence that it was not. His Honour saw no basis on which he could conclude that a reasonable person in the position of Hughes should have understood that the Northwood design had any shortcomings and would have taken precautions to compensate for that shortcoming. [31]

     31. Primary judgment at [407]–[423].

244. The Owners Corporation and Unit Owners contend that, although Northwood originally placed the lift pit adjacent to the Shoring Wall, it was Hughes that had ultimate responsibility for the design of the lift pit detail, including its depth. They assert that it was incumbent on Hughes to ensure that the detail contained accurate information regarding appropriate excavation levels or specified that additional support would be required. They say that Hughes did not do so and the lift pit was excavated below RL6.6m. They rely on the fact that the Engineers agreed that that caused movements in the foundation strata and therefore contributed materially to the damage to the Building.

245. Mr John Alden, who was called to give evidence by Hughes, expressed the opinion that normal industry practice was that the dimensional layout of the Building, including the location of the lift shaft, was a requirement of the architectural design for the Building. He said that it was necessary for the designer of the shoring system to take into account the requirements of the Architect for the location and layout of the lift shaft as an input to the shoring design process and not the other way round. Hence, he said, any problems relating to the excavation levels for the lift represented deficiencies in the design of the shoring system.

246. Hughes contends that, in terms of the excavation of the area of the lift pit, the criticisms that were made by the Engineers in the Joint Report were directed at the inadequacies of Northwood’s design and not the design work of Hughes. The Engineers agreed in the Joint Report that the additional excavation depth over the general excavation level at the lift pit and pile caps north of the lift pit was a factor that caused the movement of the Shoring Wall. They considered that factor to be an element of the inadequate design prepared by Northwood and stated in the Joint Report that the Northwood design, including the pile depths, should have incorporated accurate information on the site excavations, lift pits, et cetera.

247. In cross-examination, Mr Alden said that the Northwood design did not show the design excavation depth but simply showed a basement floor slab level of 6.75 m and the piles at a toe depth of 3.3 m at a fixed distance below that level. He said that the required excavation depth was the primary input to the shoring design.

248. The primary judge accepted that Mr Alden’s explanation of the Joint Report position of the Engineers that had been reached during their conclave was consistent with the opinions he had expressed in his reports. For example in a report of 7 April 2016, Mr Alden was critical of the Northwood design drawings in the form they were issued for consideration on 19 August 2010, for not showing, or not correctly showing, the required depth of the piles at the lift pit and the excavation level on which the shoring design was based. He expressed the opinion in his report that, as the piling embedment depth below the base of any excavation is a critical design parameter, he would have expected the Northwood drawings to have shown clearly the excavation level that the design was based on and the minimum permissible pile embedment depth at the critical stage when excavation had reached the maximum depth.

249. The primary judge correctly concluded that any problems associated with the excavation of the lift pit arose from the inadequacies of Northwood’s design for the Shoring Wall and not from any design work undertaken by Hughes. Ground 3 has not been established.

Ground 5: Design (Location) of the Basement Level Foundation Piles

250. The Owners Corporation and Unit Owners alleged that Hughes’ design provided for excavation works for the foundation piles on the Development Property without regard to Northwood’s design of the Shoring Wall and the location of the Shoring Props. They asserted that Hughes remained responsible for columns, footings and ground floor structure affected by Northwood’s cost-saving measures. After Northwood provided its final shoring design, Hughes then finalised its design of the basement foundation piles.

251. The primary judge was satisfied that the need to remove and replace the props was a product of Northwood’s design. His Honour considered that that was significant because all of the engineers agreed that the removal and replacement of props was a significant cause of the movement in the Shoring Wall and thus of the Retaining Wall and the foundations under the Building. His Honour observed that that occurred very shortly before the significant movement detected on 8 November 2010.

252. His Honour accepted that Hughes’ design may not have adverted in terms to the location of the props. However, his Honour did not see why it should have done so. Further, his Honour did not see how it could be said that Hughes’ design had any connection with, let alone caused, the replacement and removal of the props to the Shoring Wall. The replacement and removal of the props were primarily caused by the failure of Northwood, through Mr Walsh, to heed Mr Paterson’s requirements concerning access to the area below the props. [32]

     32. Primary judgment at [218], [438]–[441].

250. The Owners Corporation and the Unit Owners contended that Hughes’ design was negligent because the excavation of the foundation piles that it designed required removal of the steel props (the Shoring Props) that were contained in Northwood’s existing shoring design. They rely on the agreement on the part of the Engineers that removal of the steel props caused movements in the foundation strata and therefore materially contributed to the damage to the Building.

251. Mr Alden expressed the opinion, in relation to excavations, that a system of shoring is typically a structural system that restrains the faces of the excavation so as to prevent collapse and to protect property and people adjacent to and within the site of the proposed development. He explained in oral evidence that the common position reached by the Engineers, as stated in the Joint Report, was that Northwood’s design failed to incorporate accurate information about the site excavations that the shoring system was required to accommodate. Mr Alden said it was necessary for Northwood to establish the depths of excavation necessary to construct the proposed building on the Development Property because that was a key input parameter for the design of the shoring system. He said that Northwood failed to do so.

252. Hughes contends that, in respect of the structural design of the foundation piles that were located to the north of the lift well and adjacent to the Shoring Wall, Northwood, as the designer of the Shoring Wall, was required to have regard to, and accommodate, the necessity to build those foundation piles and caps. On 26 February 2010, Mr Walsh, on behalf of Northwood, wrote to the Developer and acknowledged that he had been provided with a footing drawing prepared by Hughes that depicted foundation piles on the very locations about which the Owners Corporation and Unit Owners now complain.

253. The Owners Corporation and Unit Owners contend that the uncontradicted and compelling evidence below was all to the effect that it was the responsibility of Hughes to review Northwood’s shoring designs to ensure that they were not in conflict with the requirements of the piling contractor. Hughes asserts that that contention is not an accurate statement of the state of the evidence or of the manner in which the hearing was conducted. Thus, it says, it was not alleged against Hughes that it was required to review Northwood’s design of the Shoring Wall to ensure that it was not in conflict with the piling contractor’s requirements for convenient access to the site to carry out the piling works.

254. Hughes contends that the Owners Corporation and Unit Owners opened their case before the primary judge on the basis that the necessity to remove and replace the props that supported the Shoring Wall, which the Engineers agreed was a significant cause of the movement in the Shoring Wall, arose solely from Northwood’s design. His Honour accepted the evidence of the piling contractor that it had raised concerns with Mr Walsh that the spacing between the props was insufficient to allow the piling rig to gain access to parts of the site but that Mr Walsh had insisted that the props be placed in accordance with Northwood’s design. That, in turn, necessitated the removal and replacement of the props to allow the piling work to proceed. There has been no challenge to those findings. There is no substance in Ground 5.

Ground 6: Failure by Hughes to Take Action

258. The Owners Corporation and the Unit Owners asserted that Hughes was negligent in failing to take appropriate action when informed of reports of cracking in the Building on 11 October 2010. They contended that Hughes was aware or ought to have been aware that the survey monitoring had recorded a 7 mm movement between 5 August 2010 and 8 September 2010 and that a reasonable person in the position of Hughes would have investigated the complaints and, on substantiating the cracking, would have commenced an investigation of potential causes of the movement revealed by the survey monitoring. They asserted that, given the speed with which movement issues were resolved in November 2010, there was a strong probability that temporary shoring would have been recommended for the Retaining Wall or the Shoring Wall, which would have prevented the further damage.

259. The primary judge concluded that there was no evidence that Hughes knew of the monitoring results recorded on 8 September 2010. His Honour saw no reason why Hughes should itself have initiated an investigation into the reported cracking. The Architect did not ask Hughes to do anything other than to send the dilapidation reports to the Builder, which it did.

260. The email from the Architect to Hughes of 11 October 2010 saying that the Builder was encountering some neighbour concerns with regard to cracking and asking for the dilapidation reports was consistent with Hughes having no involvement in the shoring issues or with the concerns raised by neighbours that were being addressed by other parties. There is no substance in Ground 6.

Ground 11: Causation Generally

261. The primary judge found that there was no evidence linking the 7 mm movement detected between 5 August 2018 and 8 September 2010 to any shortcoming in the Temporary Retaining Propping. His Honour referred to the agreement on the part of the Engineers that, because of the sandy nature of the subsoil under the Development Property and under the Building, the underground impact of any activity on the Affected Property would be immediate and once off and would occur almost instantaneously. [33] His Honour considered that if, as the Owners Corporation and Unit Owners contended in their case against the Builder, cracking in the Building attributable to the Shoring Works first occurred during October 2010, it suffered damage and loss then. His Honour considered that there was no evidence enabling him to reach any conclusion as to what further damage occurred by reason of later events, including the lift excavation. [34]

     33. Primary judgment at [369].

     34. Primary judgment at [390].

262. Similarly, in relation to Hughes, the primary judge considered that there was, in any event, a question of what further damage could be said to have been caused to the Building by the lift pit excavation, which occurred on 29 October 2010. [35] His Honour held that, by the time of the excavation for the foundation piles on 4 November 2010 and 6 November 2010, movement of the foundations under the Building had already occurred. His Honour considered that there was no evidence enabling him to determine what further loss occurred as a result of any further movement attributable to the foundation excavation. [36]

     35. Primary judgment at [424].

     36. Primary judgment at [433].

263. The Owners Corporation and the Unit Owners assert that they have discharged their onus in respect of proving factual causation by establishing that the relevant negligence materially contributed to the movement of the foundation strata, a movement that was agreed by the Engineers to be the cause of damage to the Building. Thus, they say, but for the movement, the Building would not have been damaged. They say that the evidence of the Engineers demonstrates that to be the case.

264. Further, the Owners Corporation and the Unit Owners say, damage to the Building caused by the collapse of foundation strata was clearly an occurrence of such a kind that does not ordinarily occur without negligence and therefore of a kind to which the doctrine of res ipsa loquitur attaches. They contend that, if the Court considers that the precise cause of the damage to the Building is not revealed by the evidence, the Court should infer that it was caused by excavation, arising out of either negligence on the part of the Builder or the result of engineering negligence.

265. The Builder contends that the primary judge set out the relevant principles as to the legal test of causation in an orthodox manner, correctly identified the relevant principles and applied them correctly to the factual matrix.

266. In response to the asserted application of the principle res ipsa loquitur, the Builder complains that the contentions advanced on behalf of the Owners Corporation and the Unit Owners failed to address the requirement that reliance on the doctrine should have been clear from the pleadings and it was not. Secondly, the Builder says, the contention failed to explain how the doctrine is to be applied in the context of the Civil Liability Act. The Builder says that the primary judge was correct in not considering a contention that involved a considerable amendment to the case advanced by the Owners Corporation and the Unit Owners without pleading it.

267. The Builder says that, in accordance with s 5D of the Civil Liability Act, the starting point for any inquiry in relation to causation is to determine what breaches of duty are established and then consider whether that breach was a necessary condition of the occurrence of the harm. Further, s 5E of the Civil Liability Act makes clear that the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. The Builder asserts that, ultimately, the only breach of duty found by the primary judge in relation to the Builder was the failure to implement fully the site monitoring programme. The Builder says that his Honour was correct in finding that that breach was not causative of the harm occasioned to the Building.

268. The Owners Corporation and the Unit Owners contend that the primary judge was in error in embarking upon a search for a precise scientific linking of discrete individual acts or omissions on the Development Property during the construction works to discrete individual movements of soils or loss of soils. The Builder contends that the primary judge’s approach was orthodox and encapsulated in the finding that the critical question was whether it was a failure to exercise reasonable care by the Builder or Hughes that caused the movement of the foundations under the Building. The Builder says that, given the findings by the primary judge that, in effect, all of the elements that caused movement identified by the Engineers were ultimately the responsibility of Northwood, it is not surprising that the Owners Corporation and Unit Owners failed to establish causation.

269. Hughes contends that, on the question of causation, the primary judge adopted an orthodox approach and proceeded on the basis that it was for the Owners Corporation and Unit Owners to show that any breach of duty by Hughes caused them to suffer damage. Hughes also pointed to s 5E of the Civil Liability Act requiring the plaintiffs to prove any fact relevant to the issue of causation on the balance of probabilities.

270. Hughes relies on the fact that the primary judge did not find any breach of duty by Hughes. In respect of the Northern Light Well, his Honour held that, even if contrary to his findings Hughes was responsible for the piling of the Northern Light Well and the subsequent excavation, his Honour was not satisfied that those activities constituted a breach of the duty owed by Hughes or, in the light of the opinion evidence, was causative of any damage.

271. Hughes also complains that the principle of res ipsa loquitur was not pleaded and was raised for the first time in closing submissions. Even if the principle applies in the context of the Civil Liability Act, Hughes complains that the Owners Corporation and the Unit Owners do not address the bases upon which they contend that the primary judge ought to have made such a finding.

272. In their written reply, the Owners Corporation and the Unit Owners accepted that causation was to be determined by reference to s 5D of the Civil Liability Act, which relevantly provides that they must establish that any breaches by the Builder and Hughes were necessary conditions of the harm suffered, namely damage to the Building. The Engineers agreed unanimously that the damage to the Building was caused by movement in the foundation strata. That, they contended, raises the strong suggestion that anyone who was responsible for such movement was liable.

273. The Engineers also agreed unanimously that the movement in the foundation strata was caused by a combination of the movements of the Retaining Wall and the Shoring Wall and that inadequate temporary popping of the Retaining Wall, inadequate design and over-excavation below RL6.6 m were all factors that caused movement in the Retaining Wall or Shoring Wall. The Owners Corporation and the Unit Owners contend that the overall movement that caused the damage to the Building was thus the cumulative effect of those individual acts of negligence which, they say, will satisfy s 5D(1)(a), namely, negligent acts or omissions that are necessary to complete a set of conditions that are jointly sufficient to account for the occurrence of the harm. They contend that each of the negligent acts materially contributed to the damage suffered by them. [37]

     37. See Strong v Woolworths Limited (2012) 246 CLR 182 at 191–192; [2012] HCA 5 at [20] (French CJ, Gummow, Crennan and Bell JJ).

274. The Builder complains that the case was never put in that manner by the Owners Corporation and the Unit Owners. It is certainly not pleaded as such. However, the Owners Corporation and the Unit Owners say, the opening submissions advanced on their behalf were to the effect that the Engineers agreed that the movement of the Retaining Wall was the result of a combination of several factors, including movement of the Shoring Wall and inadequate temporary propping of the Retaining Wall. The Builder asserts, on the other hand, that that submission was based on a misunderstanding as to the state of the evidence in relation to propping. The Builder says that that is not the same as the submission now pressed, namely, that the overall movement that caused the damage to the Building was the cumulative effect of individual acts of negligence. Rather, the Builder says, the submission just referred to was that the movement was the result of a combination of several factors, including movement of the Shoring Wall and inadequate temporary propping of the Retaining Wall. The Builder says that that is different from what is now being alleged. It does not assert that any negligent act of the Builder increased the risk of the overall movement that caused the damage to the Building.

275. Having regard to the conclusions reached above, that the only breach that occurred was on the part of the Builder in relation to the excavation on 20 August 2010, the question of the cumulative effect of successive breaches does not arise.

276. Further, having regard to the conclusion reached in relation to Ground 1, it is unnecessary to consider further the contentions advanced on behalf of the Owners Corporation and the Unit Owners based on the principle res ipsa loquitur. That is to say, the primary judge ought to have found that the excavation carried out on 20 August 2010 had a relevant causal connection with the damage to the Building.

Conclusion

277. It follows from the above that the appeal should be allowed in part, in so far as the primary judge dismissed the claim as against the Builder. However, it will be necessary to hear further argument in relation to the Builder’s defence based on the proportionate liability provisions of the Civil Liability Act.

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Appendix 1

Figure A: The Architect’s Plan for the New Apartment Building

Figure B: Hughes’ Shoring Layout Plan – Issued Late 2009

Figure C: Northwood’s Design – Level 0 – Shoring Wall with Straight Western Section, Shoring Props and Lateral Loading Piles with Capping Beams

Figure D: Photograph of 6 October 2010 Looking North Over Shoring Props Against Capping Beam of Shoring Wall – Sand Berm Visible Below Props

Figure E: Northwood Butter Paper Sketch 1

Figure F: Northwood Butter Paper Sketch 2

Figure G: Architect’s Construction Plan for Level 1 – Incorporating Northwood’s Proposed Straight Shoring Wall

Figure H: Detail of the Architect’s Drawings with New Piles Indicated Around the Light Wells Marked in Black

Figure I: Western Elevation – Northwood Plan

Figure J: Waler Beam Visible Following Excavation to Level 0 with Foundation Piles Visible Below Shoring Props

Figure K: Northwood Sketches for Temporary Removal of Shoring Props

Figure L: Undated Photograph of Lift Shaft Excavation in Front of Waler Beam

Endnotes

Decision last updated: 31 August 2020