Pacific Century Production Pty Ltd v Jeffrey Tysoe and Lynette Mavis Tysoe
[2004] QDC 366
•1 October 2004
DISTRICT COURT OF QUEENSLAND
CITATION:
Pacific Century Production Pty Ltd v Jeffrey Tysoe and Lynette Mavis Tysoe [2004] QDC 366
PARTIES:
PACIFIC CENTURY PRODUCTION PTY LTD
ACN 087 505 860
Plaintiff
v
JEFFREY TYSOE AND LYNETTE MAVIS TYSOE
TRADING AS LYNDEE TRANSPORT
DefendantsFILE NO/S:
D103 of 2003
DIVISION:
Civil jurisdiction
PROCEEDING:
ORIGINATING COURT:
Rockhampton
DELIVERED ON:
1 October 2004
DELIVERED AT:
HEARING DATE:
9, 10 and 11 August 2004
JUDGE:
Samios DCJ
ORDER:
Judgment for the plaintiff against the defendants for $98,317.74
CATCHWORDS:
BUILDING AND ENGINEERING CONTRACTS – Breach – Damages – Recovery of Monies
COUNSEL:
Mr O’Driscoll for the Plaintiff
Mr Arnold for the DefendantsSOLICITORS:
H W Litigation for the Plaintiff
Grant & Simpson for the Defendants
The plaintiff is a farming company working an extensive and established pastoral holding at Emerald where fruit (including table grapes and citrus) is grown on a large scale production.
In 2002 the plaintiff commenced a program of construction and improvement to part of its pastoral holding to enable the planting of commercial quantities of grapes and citrus.
The defendants are contractors involved in road building and other heavy construction works using machinery.
There is no dispute between the plaintiff and the defendants that the parties entered into a contract for the construction by the defendants of gravel roads upon the plaintiff’s pastoral holding. The roads were to be constructed 4 metres wide in an area for the growing of grapes and 6 metres wide in an area for the growing of citrus trees. The price the plaintiff agreed to pay the defendants was $7,000.00 per lineal kilometre for the 4 metre wide roads and $9,020.00 per lineal kilometre for the 6 metre wide roads. The defendants constructed gravel roads upon the plaintiff’s farm during the months of May, June, July and August 2002 for which the plaintiff paid the defendants $91,651.15. The defendants constructed about 15.4 kilometres of 4 metre wide roads and about 4.6 kilometres of 6 metre wide roads (see invoices in Exhibit 32). The contract between the parties was partly oral and partly in writing.
The plaintiff claims the defendants expressly agreed:-
(a) the roads would be constructed with a minimum compacted gravel depth of 150 millimetres;
(b) the roads would be constructed with 4 per cent maximum and 3 per cent minimum cross fall; and
(c) the roads would be constructed in accordance with the specification document and plans.
Further, the plaintiff claims it was an implied term of the contract that the defendants would perform the work with a level of skill and care to be expected of a person with expertise in the area of road construction and in a proper and workmanlike manner.
The plaintiff claims the defendants owed a duty of care to the plaintiff to perform the work with a level of skill and care to be expected of a person with expertise in the area of road construction and in a proper and workmanlike manner.
The plaintiff claims the defendants breached the contract and the terms thereof and the duty of care owed by the defendants to the plaintiff. The plaintiff claims against the defendants $146,360.50 for damages for breach of the contract and the terms thereof and the breach of the duty of care owed by the defendants to the plaintiff.
The defendants deny they breached the contract and the terms thereof. Further, the defendants deny any duty of care was owed by the defendants to the plaintiff and in any event deny any breach of any duty of care owed by the defendants to the plaintiff.
The defendants claim the completed works were completed to a satisfactory standard, were serviceable roads in accordance with the terms reached between the parties and the works were completed within a reasonable time. Further, the defendants say that any defects in the completed works were not due to actions on the part of the defendants but are due to the actions of the plaintiff and breaches of contract by the plaintiff in:-
(a) failing to ensure that the construction of the vineyard, trellising, road profiling and planting did not cause undulations to the roads;
(b) providing gravel for the road base that was too fine and susceptible to deformation under load when saturated; and
(c) failing to backwater after construction by the defendants during pipe trenching, backfilling, construction of vineyard trellis and road profiling and planting causing deterioration in the road surface.
The defendants counterclaim against the plaintiff for the sum of $62,239.50 being the balance due and owing by the plaintiff to the defendants for the work done by the defendants.
The defendants also counterclaim for a further sum of $15,537.42 for breach of implied terms of the contract in that the plaintiff failed to ensure the pipe-layers kept to a designated program causing access to roads to become delayed and failed to advise of details of various road works all of which created delays for the defendants meaning the project could not be completed within a reasonable time.
In support of the plaintiff’s claim the plaintiff called its then manager, Mr
Benham and one of its directors, Ms King. Further, the plaintiff called Mr Carseldine, a civil engineer, Mr Barlow, an earthmoving contractor and Mr Bloxsom, a civil engineering consultant.
The defendants called the defendant Mr Tysoe and Mr Grillmeier, a consulting engineer.
In so far as the contract was in writing the plaintiff claims it was constituted by the following documents:-
(a) Specification document dated April 2002;
(b) Facsimile from Pacific Century Production to Jeffrey Tysoe dated 1 May 2002, 7 May 2002 and 9 May 2002; and
(c) Pacific Century Production purchase order No 80878 dated 10 July 2002.
On the other hand the defendants claim that in so far as the contract was in writing it was constituted by a letter from J & L M Tysoe to Pacific Century Pty Ltd dated Monday 27 May 2002.
The plaintiff claims the written part of the contract contained a specification requiring the defendants to construct the roads with a minimum pavement depth of 150 millimetres and with cross falls of 4 per cent maximum and 3 per cent minimum. The plaintiff claims these specifications were drawn on plans by Mr Benham for the 4 metre wide roads and 6 metre wide roads and were faxed to the defendants together with the specification document dated April 2002.
When Mr Benham gave evidence he said he had conversations with Mr Tysoe about the price. Other conversations with Mr Tysoe were about some soft spots that required rectification.
When the plaintiff commenced these proceedings against the defendants, the plaintiff did not plead Mr Benham orally agreed with Mr Tysoe that in some areas upon the plaintiff’s pastoral holding the roads need not be constructed with the specified fall. It appeared in Mr Bloxsom’s second report dated 26 July 2004 that Mr Benham had orally agreed with Mr Tysoe that in some areas upon the plaintiff’s pastoral holding the roads need not be constructed with the specified fall. When Mr Benham was cross examined he denied what he had agreed orally with Mr Tysoe extended to all the roads.
When Ms King gave evidence she said she asked Mr Tysoe was he possibly interested in doing the road works. She told him the roads were to cater for tractors and other machinery for the new area being developed by the plaintiff. Ms King said she discussed with the contractors, which I took her to include Mr Tysoe, the plaintiff’s concern with the previous roads constructed on the plaintiff’s pastoral holding which had led to the plaintiff having drainage issues. Therefore, the plaintiff required all weather access and cross falls. Ms King said she sent the plans drawn by Mr Benham showing the minimum pavement thickness and the cross fall to the defendants by facsimile (Exhibit 4). Ms King’s evidence was that the conversations with Mr Tysoe related to the issue of the soft spots requiring rectification and the finish and the quality of the roads.
When Mr Tysoe gave evidence he said although he may have spoken to Ms King on one occasion, all his dealings were with Mr Benham. He said he had several conversations with Mr Benham regarding prices for the works. He had received preliminary plans prepared by Graham Scott & Associates. He did not specifically recall receiving the plans drawn by Mr Benham showing the specified pavement thickness of 150 millimetres and cross falls of a maximum 4 per cent and a minimum 3 per cent. However, he did produce and verified when he gave evidence, part of a facscimile from the plaintiff. Mr Tysoe said what he received was about 45 plus pages. He said he faxed back the schedule quoting between $15,000 and $17,000 per kilometre for the roads to be constructed. He said he had a telephone conversation with Mr Benham who asked him to resubmit his quote that he had previously provided and if he did so he might receive the job. Therefore he submitted the price back that he had previously submitted which was Exhibit 6. He said he discussed with Mr Benham if the plaintiff wanted the price reduced there would be no surveyors and engineers employed on the job. Specifically with respect to cross falls he said that when he started on a lychee area and the boundary of the citrus area he had a conversation with Mr Benham to the effect that for the plaintiff to have access to and from the roads Mr Benham wanted them virtually flat so the roads could sheet water without going and scouring and making it drain so that small vehicles employed by the plaintiff on the pastoral holding would not tip over. He said that Mr Benham agreed that there would be minimal drainage so that the roads could sheet water and would not hold up the all terrain vehicles coming out of each row of the grapes. Further, Mr Tysoe said, on the topic of drainage, that the plaintiff’s pastoral holding was made of sandy material and it was all undulating. Therefore, as far as he was concerned it was ridiculous to start a drain that was going to scour and although there were ways of eliminating it, as the job was to be done as cheap as possible, Mr Benham had agreed with him to eliminate the requirement for cross fall.
When Mr Tysoe gave evidence he accepted that the contract with the plaintiff was to construct the roads with a minimum of 150 millimetre pavement thickness. What he was denying he said was the cross fall requirement.
Further, Mr Tysoe said there was a loss of material because of the actions of machinery and tractors upon the roads as he was performing the works and he was waiting to be told what the problem was with the roads and he would rectify what he was told to do.
Mr Bloxsom’s evidence was that his firm examined 217 locations upon the roads and found 72 per cent of these locations had less than the minimum specified pavement thickness and 2 per cent of the locations were at the specified cross fall.
Mr Grillmeier did not take issue with Mr Bloxsom’s findings. Mr Grillmeier’s position was that in road construction of this kind there is a tolerance allowed and the roads as constructed were within that tolerance. To the extent that the roads were not within that tolerance his evidence was that the next time maintenance was performed upon the roads extra gravel could be tined into the road to bring it up to the specified thickness.
There is no dispute between the plaintiff and the defendant the roads were to be constructed with a minimum pavement thickness of 150 millimetres. Further, the roads as constructed generally speaking do not have a cross fall of 4% maximum and 3% minimum. The defendants’ case is that there are reasons why the roads as constructed do not meet those specifications. As far as the minimum pavement thickness is concerned Mr Tysoe said other machinery turned on his work and reduced the pavement thickness. As far as the cross fall is concerned Mr Tysoe said he orally agreed with Mr Benham to eliminate cross falls on all the roads.
I have noted the plaintiff did not when commencing these proceedings concede the contract provided that the defendants were not obliged to construct the roads with the specified cross fall in those areas nominated by Mr Benham and referred to in Mr Bloxsom’s second report dated 26 July 2004. In my opinion, this is open to the implication that Mr Benham did not tell the plaintiff’s legal representatives that he had made an oral agreement with Mr Tysoe to that effect and further, in Mr Tysoe’s favour on the issue of his credit, that Mr Tysoe and Mr Benham did have an oral conversation that led to an oral agreement varying the cross fall specification.
However, Mr Tysoe did not distinctly deny he received the plans drawn by Mr Benham. He said he received a substantial number of pages by fax and accepted the defendants obligation under the contract was to construct the roads with a pavement thickness of a minimum 150 millimetres. This obligation was at least one of the specifications in the plans drawn by Mr Benham which Ms King said were faxed to Mr Tysoe.
Further, the specification which Mr Tysoe said he took issue with in these proceedings relates to the cross fall. The plans drawn by Mr Benham which Ms King said were faxed to Mr Tysoe contain a specification that the roads to be constructed were to have a cross fall of 4% maximum and 3% minimum. In my opinion, Mr Tysoe’s evidence that cross falls were not required because he made an oral agreement with Mr Benham on site is open to the implication there was at least a cross fall specification until he made an oral agreement with Mr Benham. That is, Mr Tysoe did not claim there was never a cross fall specification.
Further, when Mr Tysoe gave evidence he said he saw tractors turning on the top of the crown of the roads being constructed by the defendants and that was the explanation for undulations in the thickness of the pavement. Later he said when he expected his last payment no one would tell him of any other problems the plaintiff had with the works otherwise he would have rectified the problems. In my opinion Mr Tysoe knew the minimum pavement thickness was not achieved for the reasons he gave in his evidence and yet he waited for the plaintiff to tell him to rectify the defects rather than rectifying the defects.
Finally, when Mr Grillmeier gave evidence he said Mr Tysoe gave him the plans drawn by Mr Benham which Ms King said were faxed to Mr Tysoe when Mr Grillmeier inspected the roads with Mr Tysoe on 20 November 2002. In my opinion Mr Grillmeier’s evidence is open to the implication Mr Tysoe had the plans drawn by Mr Benham which Ms King said were faxed to Mr Tysoe at that stage of the dispute between the parties which was about three months after the defendants’ last invoice to the plaintiff.
Having considered the evidence, I prefer the evidence of Mr Benham and Ms King to the evidence of Mr Tysoe.
I am satisfied the contract in so far as it was oral was constituted by the conversations deposed to by Mr Benham and Ms King in their evidence. Further, in so far as the contract was in writing I am satisfied the contract was constituted by the specification document dated April 2002, the facsimiles from the plaintiff to the defendants dated 1, 7 and 9 May 2002 and the plaintiff’s purchase order.
I am satisfied terms of the contract were that the roads would be constructed with a minimum pavement thickness of 150 millimetres and with cross falls of 4 per cent maximum and 3 per cent minimum except in the areas nominated by Mr Benham and referred to in Mr Bloxsom’s second report dated 26 July 2004. Further, the roads would be constructed in accordance with the specification document and plans contained in Ex 4.
I am satisfied that it was an implied term of the agreement that the defendants would perform the work with a level of skill and care to be expected of a person with expertise in the area of road construction and in a proper and workmanlike manner.
Further, I am satisfied the defendants owed a duty of care to the plaintiff to perform the work with a level of skill and care to be expected of a person with expertise in the area of road construction and in a proper and workmanlike manner.
I was favourably impressed with Mr Bloxsom. In my opinion, I consider his evidence is supported by the objective measurements performed by the testing over the locations referred to in his reports. I thought he gave his evidence in a thoughtful and careful manner. Furthermore, much of his evidence is not in dispute in terms of what the objective testing showed. Mr Grillmeier’s evidence I did not find persuasive. Mr Grillmeier seemed to say on the one hand that the pavement thickness was acceptable because of the application of a tolerance yet accepted on the other hand when cross examined that a specified minimum pavement thickness required nothing less than the specified minimum. Mr Tysoe accepted he had contracted to construct the roads with a minimum pavement thickness of 150 millimetres.
I am satisfied the defendants breached the contract and the terms thereof and breached the duty of care owed by the defendants to the plaintiff by failing to construct the roads with the minimum pavement thickness of 150 millimetres and to construct the roads with a cross fall of 4 per cent maximum and 3 per cent minimum except in the areas nominated by Mr Benham and referred to in Mr Bloxsom’s second report dated 26 July 2004. I am satisfied that the works performed by the defendants ought to be rectified.
Mr Bloxsom’s evidence is that there are two approaches that could be taken to the as constructed road works in order to bring them to the specified requirements.
One method was to augment the existing pavement at a cost of $105,000. This method involves tining the existing pavement surface using a grader, placing an additional layer of gravel and combining to ensure a sound layer excluding lensing and lamination.
The second method is taking up the existing pavement, augmenting and reconstructing the roads at a cost of $146,200. This method provides for taking up the existing gravel, shaping and profiling the sub-grade layer to the design requirements, adding additional gravel where appropriate and relaying the pavement gravel to the specified cross fall thickness. Mr Bloxsom stated that due to the restrictions now imposed by the grape farming operations, trowell structures, irrigation valves and structures, it would be necessary to work half the road at any one time, moving to the other side after completing the first. He said using this approach it may be possible to use gravel from the greater than 150 millimetre pavement areas to augment those areas of insufficient as – constructed thickness and thereby limit the overall quantity of additional gravel required.
The second of these methods is the one recommended by Mr Bloxsom as the most viable and practical solution as it would allow proper sub-grade preparation prior to augmenting the existing pavement material, compacting and finishing the road to the design shape. The first method, while still a reasonable approach according to Mr Bloxsom, is more akin to typical gravel road maintenance whereafter having been in use for some time, road shaping and adding more gravel will be required. Mr Bloxsom states furthermore, it would be difficult to ensure that the augmentation process could achieve thickness throughout without exhaustive and ongoing measurement and depth checking leading to substantiate the costs in terms of engineering/technical supervision.
Mr Bloxsom’s evidence, which I accept, is that to have constructed the roads as specified, it would have been necessary to prepare the sub-grade surface to similar dimensions and cross-sectional shape as the pavement surface (para 4.1 Exhibit 24). Although Mr Bloxsom agreed when cross examined augmentation was a reasonable method, his agreement in that respect was limited to achieving the specified thickness. As I am satisfied the roads as constructed do not conform both as to pavement thickness and cross fall I am persuaded by Mr Bloxsom’s evidence that the second approach, although more expensive, is the reasonable method for rectification of the works in the circumstances.
Regarding the defendants’ counterclaim for the sum of $62,239.50 for the balance due and owing for the work performed by the defendants pursuant to the contract the defendants rendered invoices to the plaintiff for work performed by the defendants pursuant to the contract for the sum of $153,890.65 (see para 7 Amended Defence and Counterclaim and Exhibit 32). MrTysoe’s evidence was not challenged that the defendants performed the work set out in the invoices in Exhibit 32. I am satisfied but for the plaintiff’s claim there would be due and payable by the plaintiff to the defendants the sum of $62,239.50 for the balance due and owing for the work performed by the defendants pursuant to the contract.
I am satisfied the loss and damage suffered by the plaintiff by reason of the defendants’ breach of contract and the terms thereof and breach of the duty of care is the sum of $146,200.00.
Regarding the defendants’ counterclaim that the actions of the plaintiff delayed the defendants, I am satisfied the defendants agreed to construct the works in a way that required the defendants to integrate with other contractors. Further, the defendants did not claim that the contract between the plaintiff and the defendants required the work of other contractors to be completed before the work to be performed by the defendants commenced. Therefore, I am not satisfied the contract between the plaintiff and the defendants was subject to the implied terms alleged by the defendants. (Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; Australian Meat Industry EmployeesUnion v Frugatis Pty Ltd (1990) 2 Qd R 203). In any event I am satisfied the plaintiff did not breach the contract as alleged by the defendants. Mr Tysoe accepted when he gave evidence that on 13 June 2002 he had a meeting with the pipe layer and sorted out the progress of works “quite easy” (see Ex 34). In my opinion, that is not consistent with the defendants’ claim that the defendants had to stop work between 27 May 2002 and 18 June 2002.
I give judgment for the plaintiff against the defendants for the sum of $83,960.50 being the balance in favour of the plaintiff after the defendants’ counterclaim (Rule 184 UCPR).
I allow the plaintiff interest on the sum of $83,960.50 at the rate of 9% per annum from 6 November 2002 (being the date of Mr Bloxsom’s first report in which he expressed the cost of rectification which I took to be the cost at that date) to date which is a sum of $14,357.24.
The total judgment inclusive of interest in favour of the plaintiff then is $98,317.74.
The parties are directed to file and serve within seven days their submissions on costs.
0
1
0