Pearson v Greater Shepparton City Council (ABN 59 835 329 843)
[2017] VCC 468
•12 April 2017
Ext
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| GENERAL LIST |
Case No. CI-15-03729
| DEREK LAWRENCE PEARSON | First Plaintiff |
| and | |
| GLENYS NORMA PEARSON | Second Plaintiff |
| v | |
| GREATER SHEPPARTON CITY COUNCIL (ABN 59 835 329 843) | Defendant |
---
JUDGE: | HIS HONOUR JUDGE SACCARDO | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22, 23, 24, 27, 28 February, 10, 28 March and 6 April 2017 | |
DATE OF JUDGMENT: | 10 March and 12 April 2017 | |
CASE MAY BE CITED AS: | Pearson & Anor v Greater Shepparton City Council (ABN 59 835 329 843) | |
| MEDIUM NEUTRAL CITATION: [First Revision 15 May 2017] | [2017] VCC 468 | |
REASONS FOR JUDGMENT
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Subject: DAMAGES
Catchwords: Torts – defendant planted trees – damage to property – quantification of liability
Cases Cited:Powercor Australia Limited v Thomas [2012] VSCA 87; Tuncel v Renown Plate Co Pty Ltd [1976] VR 501; Winky Pop Pty Ltd & Anor v Mobil Refining Australia Pty Ltd & Anor [2015] VSC 348
Judgment:Judgment for the first and second plaintiffs against the defendant. The defendant pay the first and second plaintiffs $469,033.19, together with $47,893.70 damages in the nature of interest totalling $516,926.89. The defendant pay the first and second plaintiffs’ costs to be agreed or in the absence of agreement, to be taxed on a standard basis.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J J Isles | Faram Ritchie Davies |
| For the Defendant | Mr R J Sadler | Moray & Agnew |
HIS HONOUR:
1 In this proceeding the plaintiffs seek damages against the defendant by reason of alleged damage to their property at 3 Stephenson Street, Murchison which was occasioned by the planting by the defendant of three large plane trees (“the trees”) in front of the property.
2 There is no issue taken by the defendant:
(i) that the effect of the establishment of the plane trees was such that the root systems of the trees, through the process of removing of moisture from the ground, compromised the support to the property provided by its rubble footings; and
(ii) that rectification works are now required in respect of which liability rests with the defendant.
3 The issue for my determination in this instance involves the quantification of that liability.
Legal Principles
4 In this instance the legal principles to be applied are helpfully set out by the Court of Appeal in Powercor Australia Limited v Thomas[1] as follows:
[1][2012] VSCA 87
·“… in general, the measure of tortious damage to fixtures such as fencing, sheds and stockyards is the reasonable commercial cost of repairing and/or reinstating them.”[2]
·“… in general it is appropriate in determining damages which are to be awarded for the replacement of an item which is destroyed or damaged beyond repair to allow the cost of a new replacement. In the event that this leads to a superior replacement then an allowance should, if practicable, be made for that improvement or betterment. The onus of proving the level of improvement or betterment lies with the Defendant.”[3]
·“… the cost of replacement or repair of fixtures will not be the appropriate measure of damages if they are out of all proportion to the injury to the claimant.”[4]
·“the … obligation to mitigate does not … [arise in relation to] the relevant measure of direct loss [in respect of which the normal measure of damages is the reasonable cost of repair of the damaged fixtures].”[5]
·… the best method for calculation of appropriate damages will necessarily depend upon all the circumstances of the case.”[6]
[2]Paragraph [25]
[3]Paragraph [28]
[4]Paragraph [29]
[5]Paragraph [58]
[6]Paragraph [56]
5 The obligation to mitigate involves the following three principles:
(i)“The first and most important rule is that the plaintiff must take all reasonable steps to mitigate the loss to him into upon the defendant’s wrong and cannot recover damages for any loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the plaintiff cannot recover for avoidable loss.
(ii)The second rule is the corollary of the first and is that where the plaintiff does take reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong he can recover for loss incurred in doing so; this is so even although the resulting damage is in the event greater than it would have been had the mitigating steps not been taken. Put shortly, the plaintiff can recover for loss incurred in reasonable attempts to avoid loss.
(iii)The third rule is that where the plaintiff does take steps to mitigate the loss to him consequent upon the defendant’s wrong and these steps are successful, the defendant is entitled to the benefit accruing from the plaintiff’s action and is liable only for the loss as lessened; this is so even although the plaintiff would not have been debarred under the first rule form [scil from] recovering the whole loss, which would have accrued in the absence of his successful mitigating steps, by reason of these steps not being ones which were required of him under the first rule. Put shortly, the plaintiff cannot recover for avoided loss.”[7]
[7]Paragraphs [52]-[53] where the Court referred to the decision of the Full Court in Tuncel v Renown Plate Co Pty Ltd [1976] VR 501 at 503 and the statements of principle from McGregor on Damages
6 On the basis of the above principles I will turn to an analysis of the specific issues identified for my determination by the parties. I do so accepting the position put on behalf of the defendant that the findings of the expert conclave of 28 September 2016 between Mr John McFarlane and Mr Harry Carlin-Smith[8] should be allocated persuasive weight and that any finding the subject of the conclave should be accepted in the absence of clear and persuasive evidence to the contrary.
[8]Plaintiffs’ Court Book (“PCB”) 232
Project Length
7 The evidence as to the length of the project may be summarised as follows:
(i) Creighton Strudwick is the builder who has quoted upon the rectification works required to the property. It was his evidence that:
· reinstating the structure would take at least six months.[9]
[9]Transcript (“T”) 188, Line (“L”) 31 – T189, L1
· In cross-examination, Mr Strudwick maintained that position:
Q:“I’m putting to you, Mr Strudwick, that the works set out in your quote, if you organise your crew effectively and you perform tasks and you have people working on different tasks side by side, you could finish that job within six weeks?---
A:No, that’s not possible, you wouldn’t be having fifty men on site working over one another. For starters, it’d be a breach of guidelines for WorkSafe because certain elements of the work would have to be done when there was no other individuals there.
White ant treatment for instance, so no one would be allowed in the building while the white ant treatment was done. The demolition work in the kitchen, well, you’re going to have noise related issues, so not too many tradesmen would be on site under those conditions and it wouldn’t be – it would be presumptuous of me to assume that all my relevant trades would be holding their breath waiting for me to get them to be on that site all at once. I have to work a program in that suits both the property owner and the various tradespeople that can come in and do their job at the required time because I wouldn’t – I wouldn’t have a – a professional painter come in and do finishing coats of gloss while they were preparing concrete floors with the element of dust that would be in the building at that particular time.
Q:So where are you painting the finishing gloss paintwork?---
A:Well, I’m only saying that if you think that we can get all of this work done within six weeks that there would be wet paint on the walls while concrete is getting cut or floors are getting levelled.”[10]
[10]T215, L28 – T216, L25
(ii) Nathan John Grimes is a consulting quantity surveyor retained by the plaintiffs to give expert evidence in the case. His evidence as to the likely length of the rectification works was as follows:
Q:“And what do you say as to the proposition put by Mr McFarlane that this work could be completed in six weeks?---
A:… I would highly, highly doubt it would be able to be completed in six weeks.
...
I would suggest that a demolition and site establishment alone would be more than six weeks.
Q:All right. Is it going to take more or less than six months?---
A:… dependent on the scope it could quite be more. If they hit unforeseen circumstances when they start removing things, there is more issues than originally anticipated. But with all things going well, they should be able to complete it within six months.”[11]
[11]T137, L19 – T138, L11
(iii) Stuart McLennan is a consulting quantity surveyor retained by the defendant to give expert evidence in the case. His evidence as to the length of the rectification works was as follows:
· The building work will not take six to nine months. “I have estimated that the building work will take approximately six weeks, based on a competent builder managing the works where many of the tasks can be undertaken concurrently”.
· The estimated time to complete the work is consistent with the Strudwick builder’s quote which has allowed five weeks for the project.
· The Strudwick quote on page 3 provides a site supervision allowance of five weeks which is based on the time that the site supervisor will be attending the site during construction. Based on the quote the builder anticipates that the works will take five weeks.
8 I am satisfied on the balance of probabilities that the estimated time for the building works the subject of the evidence of Mr Strudwick and Mr Grimes provides an appropriate estimate of the reasonable time which should be allocated for the completion of those works for the following reasons:
· Firstly, the statement by Mr McLennan that the builder, in quoting the works, anticipated the works would be completed in five weeks, involves a conclusion based on a false premise that the time allocated by the builder for the presence of a site supervisor was indicative of the length of the project.
In his evidence, Mr Strudwick made it clear that in fixing the time to be allocated for the presence of a supervisor on site, he did so on the basis that the total time during which a supervisor would be required for the works was 100 hours and that those hours would be accumulated on a piecemeal basis rather than a continuous basis during the six months in which the works were undertaken.
· Secondly, Mr Strudwick, in the course of his evidence, explained the basis upon which he had fixed the timing of the works, which evidence, when considered in the context of the evidence by Mr Grimes in a similar vein, I found to be persuasive.
· Thirdly, in cross-examination of both Mr Strudwick and Mr Grimes, Counsel for the defendant was unable to put any specifics to either witness which justified the blanket statement as to the likely duration of the works made by Mr McLennan.
9 In these circumstances I am satisfied I should take the view that the evidence of both Mr Strudwick and Mr Grimes was unchallenged in any persuasive manner on this issue.
Labour rates
10 The labour rates identified by Mr Strudwick are set out at Plaintiff’s Court Book page 235 as follows:
§ Carpenter $65 per hour
§ Electrician $75 per hour
§ Plumber $85 per hour
§ Labourer $55 per hour
§ Bricklayer $65 per hour
§ Concreter $65 per hour.
11 There is no issue that it is Mr Strudwick’s view that the above rates are reasonable and that is his expectation that he will be able to supply appropriately qualified tradespersons for those rates. Indeed it was his evidence that the rates quoted by him were the current labour rates he was paying, that they were “very fair and reasonable because I got the labour rates from the Master Builders Victoria Schedule of Rates”.[12]
[12]T189, L19-26
12 In fixing the figure which represents the reasonable commercial value of the labour rates, it is clear that, in doing so, that I should fix a figure which represents the true commercial value which may in reality be greater than the sum which might be expended in employing the labour which actually undertakes the work.[13]
[13]See the discussion of the Court of Appeal as to this issue in Powercor Australia Limited v Thomas (supra)
13 Given the evidence by Mr Strudwick as to the availability of appropriately qualified tradesmen at the rates to which I have referred, I am satisfied that I should accord significant weight to that evidence but equally, that the evidence should not be determinative as to this issue. Indeed no issue was taken by the parties as to this point and expert evidence was led both from Mr Grimes and Mr McLennan as to that issue.
14 As to the contrary opinions expressed by Mr McLennan and Mr Grimes on this topic, I found the opinion of Mr Grimes to be persuasive for the following reasons:
(i) Firstly, in expressing his opinion, Mr Grimes did so relying upon his experience in the trade when quoting upon work to be undertaken on a heritage building. He said that it was the practice within his organisation when quoting upon heritage restoration (in respect of which 70 to 100 tenders were prepared each year) to do so without relying upon the Rawlinsons guide alone but also by employing rates which were:
“… tried and tested in this kind of environment, which can be a very difficult environment to estimate correctly.
…
Given that it’s a small alterations heritage based project in a country town … that can impact the rate significantly. And given that it’s going to be most likely built by a – a commercial builder I was saying that rates need to be commercial rates, not domestic rates. And I had the discussion with Mr McLennan on Friday about how we manufactured our rates, and where we got them from. I gave him a copy of Rawlinsons which was – he referenced but was contradictory to the rates that he used in his report … .”[14]
[14]T311, L24 – T312, L6
An issue arose in the course of the evidence given by Mr McLennan and Mr Grimes as to whether or not Mr McLennan had used the correct Rawlinsons guide in calculating his wage rates which in turn supported those the subject of Mr Strudwick’s evidence. Whilst Mr McLennan maintained his position that his use of his guide was appropriate because:
“… small light commercial and industrial sectors as well as housing projects generally in the 200,000 to 1.5 million price range …”[15]
[15]T318, L13-16
fell within the remit of that publication, there is no issue the Rawlinsons guide employed by Mr McLennan contained the following statement:
“… the indices are not valid for housing, small projects or remote country work, nor do they reflect the relative cost differential of the various cities.”[16]
[16]T316, L13-16
Whilst Mr McLennan maintained his position that the rates fixed via reference to Rawlinsons could be applied for housing and small commercial and industrial buildings, in giving that explanation at Transcript 318, Lines 10-11, he ignored the specific disclaimer in the guide that the indices were not to be applied in respect of “remote country work”.
Further, I found the evidence by Mr Grimes to the effect that the term “light commercial work” was employed by the Rawlinsons relied upon by Mr McLennan to describe simple work involving the erection of steel frame buildings which were to be clad but not to:
“… a heritage based project …, particularly one of this small nature in terms of, let’s say, $200,000-$300,000 of work: Rawlindson’s is almost non-applicable because the builders have to make money and they simply can’t do it off a small amount – a small project like this without increasing rates.
So given that – with all due respect, that handbook obviously says one thing and it’s quite accurate in a number of different circumstances. Given that this is a small alterations work with a lot of the demolition having to be hand demolition, a lot of the site being a dangerous site given the structural issues to the building, I would suggest that those rates aren’t necessarily accurate in this circumstances”[17]
[17]T321, L29 – T322, L11
to be persuasive given the structure of the guides prepared by Rawlinsons which involved a division between guides applicable to commercial properties (which I am satisfied meets the description of the subject property) and domestic and small light commercial properties.
(ii) Secondly, I accept the evidence by Mr Grimes that the Rawlinsons guide is not specifically tailored to deal with renovations of remotely located heritage type buildings which clearly involve issues which do not arise in new building work or renovation of conventional buildings. That such issues arise was recognised by Mr McClellan in allowing additional costs to be allocated to some of the painting work required.
(iii) Thirdly, I found Mr McClellan’s evidence that relevance of the heritage and nature of the work involved in this instance should be discounted, which he explained as follows:
“… we need to be careful about saying, because it’s a heritage building, it’s going to have an additional costs level. To me, a lot of the work that we were looking at, and the areas where the work was occurring, had been affected by time, movement, previous repairs, and I was comfortable with the rates that I included, to address the nature or the character of that fabric.”[18]
[18]T325, L3-10
to be unpersuasive, in that it ignored the issues described by Mr Strudwick and supported by Mr Grimes as to the difficulty and precarious nature of the preparatory and reconstructive work required in this instance, given:
· the age of the building;
· the lack of integrity of the lime mortar base which had been employed to support the original brickwork; and
· the reduced stability which the rubble based footings provided to the building when compared with their modern counterparts.
15 Given:
· the experience which Mr Grimes has in providing tenders for building works involving heritage issues of the type which arise in this instance in the open marketplace, which in my opinion is superior to that of Mr Strudwick;
· the evidence of Mr McRae that he was unable to secure demolition contractors for a rate less than $90 per hour which in my opinion tends to support the evidence of Mr Grimes that the quote of Mr Strudwick does not reflect the true reasonable position which pertains in the marketplace,[19] which rate is $45 more than the rate suggested by Mr McFarlane as being an appropriate rate, who, in turn, validated the rates the subject of the Strudwick quotation)
[19]T8, L17-21
I am satisfied, notwithstanding the evidence by Mr Strudwick, that the evidence given by Mr Grimes that an average figure of $85 per hour for all trades to be employed on the project represents the real commercial cost of the labour to be employed on the project.
For these reasons I am satisfied that an average figure of $85 per hour for all trades should be applied in calculating the labour costs associated with the project.
The evidence of Mr Strudwick as to the rectification work to be undertaken above the stairway to the first floor and his reliability generally
16 There can be no doubt that an issue arises in this instance as to the reliability of the evidence given by Mr Strudwick as to the quote provided by him at Plaintiffs’ Court Book page 239 under the heading “BSC Consulting Engineers’ report recommendations” (“the first floor quote”).
17 In the course of his viva voce evidence, Mr Strudwick doggedly maintained the position that the first floor quote related to the work called up by the engineers and illustrated at Plaintiffs’ Court Book pages 199-200 (“the BSC work”), which he did not intend to do, because it was inappropriate having regard to the structural integrity of the building.[20]
[20]See the evidence at T211, L12 – T212, L10 and further at T210 – T211, L11
18 In closing submission, Counsel for the plaintiffs pointed to the inconsistency between this evidence by Mr Strudwick and the evidence given by him at other times to the effect:
· that his quotation in the sum of $257,015.85 was totally exclusive of the BSC work and was inclusive of the work involved in rectifying the damage to the first floor.[21]
· that his proposed work in respect of reconstruction of the first floor involved demolishing the wall in question and rebuilding it with new brickwork, which was necessary because the steel structure called up by the BSC work could not be supported by the walls upon which it rested.[22]
[21]T101, L13-22
[22]T193, L17 – T194, L13
19 In the course of explaining these positions, Mr Strudwick gave the following evidence:
Q:“Can you describe to His Honour the level of instability of that brick wall?---
A:Well your honour it’s – it’s extremely unstable and extremely dangerous. We’re looking at aged brickwork …
Q:Can I just ask you the original bricks were they what, lime mortar, or was it cement?---
A:Yes, yes your Honour---
Q:Lime mortar?---
A:That’s correct.
Q:… And they had - well basically it doesn’t come up to Australian standards any more, and it is - it is suffering from a vast degradation of its - of its product?---
A:… It’s extremely dangerous and extremely unstable, and any works that would be carried to rectify it would probably result in collapse. And my – my recommendation would be to remove it down to solid structure, and either replace it like for like, or replace it with light weight structure depending on what the client would require.
Q:In fact you’ve got included in that quote for $11,547 you’ve got demolish existing wall, clean bricks for reuse and reconstruct the bricks?---
A:That’s correct.
Q:So your quote is for essentially the demolition of it?---
A:Yes, and replacement of like for like.
Q:What’s the strengthening and bracing that’s referred to at the top of p. 239?---
A:Well that would be strengthening the upper storey roof structure, because it’ll have props from the roof elements down onto that wall.
…
A:And then - and then because I wouldn’t be relying on just the timber floor, I would put added props directly beneath the ones that are supporting the roof structure, and anchor those down into the ground slab.”[23]
[23]T193, L17 – T194, L16
20 And further, when Mr Strudwick was taken to the diagram at Plaintiffs’ Court Book page 200 in the course of cross-examination at Transcript 210, Line 16, he said:
A:“… As I say – as I stated before, the wall is too unstable to carry that particular metal structure.
…
Q:You are not doing any of that work because you’re proposing to demolish the whole part of the western wall down to roughly that area where it says to fix a hundred by a hundred millimetres to the external brickwork?---
A:That’s correct
Q:Do you say the whole of that demolition work down to that area is contained somewhere in your quote?---
A:No, that is contained with – my element there is only that section of structural steel that Mr Harry Carlin-Smith has organised.
Q:When you say---?---
A:Since that - since I believe that the wall is too unstable to take that particular structural steel, no work has been carried out on that particular section of the building.
Q:If you go back to p.199, I will ask you again, does your quote include the work required to complete the work set out in remediation sheet 3 on p.199?---
A:You mean my $11,000 quote?
Q:Anywhere in your quotation?---
A:Yes, where - where I’ve nominated my quotation as per BSC’s recommendations.”[24]
[24]T210, L16 – T211, L8
21 It was the submission of Mr Isles, who appeared on behalf of the plaintiffs, that Mr Strudwick’s evidence, when considered in its totality, should be interpreted to be that the first floor quote involved the costs associated with the work described by Mr Strudwick as removing the suspect bricks in the upper storey wall and replacement of them by keying in new bricks laid with appropriate mortar.
22 In developing that submission, Mr Isles focused attention upon the fact that notwithstanding Mr Strudwick’s assertion that the first floor quote related to the BSC work, the quote called up no structural steel (which formed the cornerstone of BSC work) but rather described work consistent in every way with the work Mr Strudwick gave evidence that he intended to carry out as an alternative to the BSC work.
23 Having applied close scrutiny to the totality of Mr Strudwick’s evidence, I am satisfied that the position contended for by Mr Isles is correct.
24 As Mr Strudwick gave his evidence I formed a strong impression that he well understood the work required to be undertaken in this instance and that he had, on the basis of his considerable experience as a builder, applied his attention appropriately to the complications associated with the work given:
· the age of the building in question; and
· his previous experience of the building in inserting the ties which have been employed to stabilise the building on a short-term basis.
25 Other than for the issue which arises as to the inconsistency in Mr Strudwick’s answers upon the topic referred to above, no issue has been taken by the parties as to the honesty or reliability of Mr Strudwick as a witness on most of the other issues which arise for my determination and I accept Mr Strudwick was a generally reliable witness upon issues within his particular experience and expertise.
Demolition costs
26 John Alexander McRae gave evidence that his quote dated 21 February 2017 in respect of the demolition work required in this instance in the sum of $20,872.50 was the fair and reasonable cost for the work as agreed upon by the engineers in this instance.
27 In cross-examination, he maintained his position that his quoted rate:
· of $90 per man hour in respect of labour was appropriate
· that in the absence of scaffolding already being erected, he would need to employ a scissor lift
· that a bobcat was required to undertake the manual handling involved in the removal of material and its placement into on-site bins
· that his quote with respected tonnage was appropriate because it was based upon a wall with a thickness of four bricks from the ground to the eave[25]
· that he would be required to employ bins which would be transported upon trucks to dispose of waste material to be removed from the site and to hire temporary fencing.
[25]Whilst I accept this evidence with respect to the ground floor of the building, I am satisfied, having regard to the evidence of Mr McFarlane, that the first storey of the building consists of only two skins of bricks and that an appropriate allowance should be made to the tonnage involved to reflect this finding.
28 He described the need for temporary fencing as follows:
“… I just allow that because being a demolition contractor we’re always first there and there is generally nothing adequate to do it. Creighton might have allowed it, I don’t know, I haven’t been talking to him about that.”[26]
[26]T121 L3-7
29 In his unchallenged evidence, Mr Strudwick explained that before any demolition work was undertaken, he would:
· erect a site fence around the relevant areas which needed to be worked upon and make a scaffold safety tunnel for access to the supermarket to protect the public;[27]
[27]T184, L8-11
· brace and support the roof structure[28]
but that otherwise the demolition work would be undertaken by the demolition contractors.
[28]T184, L20-21
30 Mr Strudwick said that his quote did not include the employment of a scissor lift or the hire of a bobcat or tipping fees with respect to demolition.[29] He described the sequence of work on the site as follows:
[29]T185, L28 – T186, L1
“… once the demolition is finished, we’ll do a site investigation and then where relevant repairs need to be done on the ground floor level, it will be done and then the scaffold will proceed up as it’s required;”[30]
[30]T186, L9-13
and further
“… my demolition element is only remedial as of whatever the major contractor, demolition contractor, as when he has finished, I’ll do remedial demolition for reinstatement of new works … .
…
... they’ll remove a section of brickwork that needs new brickwork tied into it.
…
I will tooth out the old brickwork for the new brickwork to basically lock in.”[31]
[31]T186, L20-30
31 I am satisfied that the combined evidence of Mr McRae, when considered in the context of the evidence of Mr Strudwick, establishes that Mr McRae’s quotation involved:
(i) the performance by him of additional work; and
(ii) the use of additional equipment by him:
to that to be undertaken and employed by Mr Strudwick other than for the erection of the safety fence, and for this reason that the plaintiffs are entitled to recover the costs the subject of the McRae quote with the following provisos:
· an adjustment should be made as to the tonnage of bricks the subject of the McRae demolition to take into account the fact that the first storey involves the removal only of two skins of bricks. Although there is no evidence as to this issue, it would seem likely that the tonnage of waste should be reduced by 25 per cent to take into account this factor.
· the McRae quote should not include the erection of a safety fence which I am satisfied will be established by Mr Strudwick in the course of his preparatory work to make the site safe.
The need for an additional footing report and engineering drawings
32 It was the evidence of Mr Strudwick that an additional footing report would be required in this instance.
33 This position was challenged by Mr Macfarlan who, as a consulting engineer, opined that sufficient documentation was available to him to complete any necessary plans.
34 Given the finding of the conclave and the fact that the provision of any such structural drawings falls within the expertise of an engineer, I am not satisfied that the plaintiffs have established the need for such a report.
35 I am satisfied however that the cost of the engineering drawings to the value of $3,500 the subject of Mr McFarlane’s evidence at Transcript 276, Lines 21-25, should be allowed to the plaintiffs.
The costs associated with the new stormwater disposal system
36 It was agreed by the conclave that whilst stormwater drainage work was required, the need for that work did not arise by reason of the presence of the trees.
37 It is not in issue that that the stormwater system the subject of the quote at Plaintiffs’ Court Book page 238 was in no way impacted upon by the movement in the building of which the tree roots was a cause, other than for the fact that the downpipe on the north-west corner of the building had been bowed by reason of the movement of the building.
38 Mr Strudwick gave evidence that his quote for drainage work of $7,425 involved the price of renewing the entire stormwater system for the building. He described those works as being required because:
“… the demolition would be removing the stormwater and spouting system on the front veranda as well as the downpipes that run down either side of that alleyway … .”[32]
[32]T191, L10-13
and further:
Q:“… the stormwater disposal system, does that involve you doing work and replacing the pits that are already there?---
A:Yes, it does.
Q:How much would be involved in the plumbing work associated with that pipework that has to be dismantled and reconnected?---
A:Well, … I’m governed by current plumbing regulations which will state that I’m not allowed to have any more than six squares of roof per downpipe so therefore we would be increasing the amount of downpipes that will remove the volume of water coming off the roof and therefore disposing that to relevant pits that … would be designed by the plumber to allow for slow disposal of water into the street.
Q:Is that as a result of upgrading council requirements since this building was built?---
A:Yes, that’s correct, yes Australian Building Regulations, yes.”[33]
[33]T191, L28 – T192, L12
and further:
Q:“All right. How many extra downpipes do you estimate will be needed?---
A:Well, I would - with the length and the width of the building and the volume of water that comes off both the veranda and the existing structure, I would assume at least ten downpipes, ten to a dozen downpipes in relevant positions and probably four rain – high volume rainheads to remove the volume of water.
Q:If you did no work to the pits, would the installation of that extra pipework, what you estimate the costs of that to be?---
A:Well, I would probably install new pits anyway for the sheer volume – the initial pit would have to be quite large to allow for slow release of water into the Murchison Street system.”[34]
[34]T192, L26 – T193, L8
39 Whilst there is no issue that that the breach of duty admitted by the defendant in this instance was not a direct cause of the need to undertake works upon the drainage system, I am satisfied that the evidence establishes the defendant’s breach of duty operated such that the spouting system of the property will need to be disconnected from the stormwater system during the reconstruction of the west wall and reconnected at the conclusion of those works.
40 I am further satisfied that the defendant’s regulations are such that they now operate to make it unlikely that the plaintiffs would receive permission to reconnect any downpipes associated with the veranda and roof supported by the wall the subject of the works to the current drainage system.
41 Whilst it was put on behalf of the defendant that the evidence given by Mr Strudwick on this issue was not supported by expert evidence, I found his explanation as to the need to make alterations to the drainage system so as to prevent the escape of copious volumes of water at inappropriate rates into the street to be within his area of experience as a builder and to be persuasive.
42 Insofar as the defendant takes issue as to the existence of regulations which would require an alteration to the stormwater drainage system, I am satisfied that this issue is one well within the expertise of the defendant and that it was open to the defendant to adduce evidence to the contrary to that given by Mr Strudwick if it wished to do so. For this reason the defendant’s failure to adduce such evidence operates to make the evidence by Mr Strudwick more persuasive.
43 I accept the position put by the defendant that the drainage work the subject of the current quote by Mr Strudwick will probably involve some betterment to the plaintiffs, in that it will involve the re-establishment of the current drain over the length of the wall.
44 I am satisfied however that the defendant bears the obligation of quantifying the extent of the betterment and I am not satisfied it has done so in this instance given the nebulous state of the evidence as to that issue.
45 In the circumstances I am satisfied that the costs associated with the work the subject of the quotation at Plaintiffs’ Court Book page 238 should be met by the defendant.
Analysis of specific costings
Agreed Costs
46 There is no issue that the plaintiffs are entitled to the costs incurred in:
(i) stabilising the building in the sum of $2,614.00;
(ii) The hire of structural supports in the sum of $15,056.84.
Site Supervision
47 Whilst Mr Strudwick has estimated the total costs of the site supervisor to be $8,000.00, both Mr McLennan and Mr Grimes agree that this represents a conservative and inappropriate assessment of the site supervision required in this instance. Given the level of disagreement between these two experts and Mr Strudwick, I am satisfied that the evidence of Mr Strudwick does not represent the reasonable commercial cost of site supervision in this instance.
48 Both Mr McLennan and Mr Grimes agree that a site supervisor will be required for 20 hours a week.
49 Whilst Mr McLennan assessed that need as being an appropriate average for the duration of a six-week project, he said that it was an over estimate if it was to be employed as an average for a six-month project, because the primary supervision would be associated with the structural component of the work.
50 Mr Grimes maintained the position that there would at various times be a need for the presence of a supervisor on a virtually full-time basis and that 20 hours a week on average for the duration of a six-month project provided an appropriate and reasonable assessment of the average need for site supervision.
51 When considering the evidence given by Mr McLennan and Mr Grimes as to this issue, I found the evidence of Mr Grimes overall to be more persuasive than that of Mr McLennan, as the latter approached his analysis on what I regard as a very unrealistic assessment as to the timeframe for the completion of the rectification work, and, accordingly, the complexity of that work.
52 Nevertheless, I am satisfied, when considering the need for site supervision for the duration of the six-month project, that the intensity of supervision required would probably be less than that required of a project, the duration of which was only six weeks. In the circumstances I am satisfied that I should adopt the estimation of Mr Grimes as to the site supervision with some modification to take into account this fact.
53 Accordingly I am satisfied that I should allow six weeks of site supervision at 20 hours per week and thereafter fix the necessary supervision of 3 hours per day or 15 hours per week for the balance of the project length.
Tubular scaffolding
54 The need for tubular scaffolding was the subject of expert evidence by both Mr Grimes and Mr McLennan. No specific evidence on this issue was given by Mr Strudwick. I am satisfied that I should decide this issue on the basis of the expert evidence of these two witnesses.
55 Essentially, the disparity in the estimates of the costs associated with tubular scaffolding involved the controversy as to whether it was acceptable for painting to be done from the veranda of the premises which was at that time supported by props.
56 Mr Grimes opined that this would contravene safety regulations.
57 Although Mr McLennan made no specific comment as to this issue, he maintained his position that it would be safe for painters to employ the veranda for their work.
58 Given the evidence by Mr Grimes that working from the veranda would contravene safety regulations, about which there was no specific evidence to the contrary, I am satisfied that I should accept the evidence of Mr Grimes upon this issue and allow the costing by Mr Grimes for this item.
Sanitary facilities
59 It was the evidence of Mr Strudwick that in quoting for this item he anticipated having access to the sanitary facilities presently existing within the building.
60 Given that the building will continue to operate as a workplace for employees of the business and as providing facilities for its customers, when considered in the context of the fact that the Strudwick quote for sanitary facilities is less than the estimates of either Mr Grimes or Mr McLennan, I am satisfied that I should prefer the expert assessments of the latter witnesses when fixing the reasonable and appropriate commercial cost with respect to sanitary facilities.
61 Given that the McLennan estimate is based only on a six-week contract, I am satisfied that I should fix the cost of this item in the sum identified by Mr Grimes.
Plank hire
62 Given that the McLennan estimate is based only on a six-week contract, I am satisfied that I should fix the cost of this item in the sum identified by Mr Grimes.
Reconstruction of first-floor collapsed wall and internal doorway
63 Whilst Mr McLennan and Mr Grimes agreed that the Strudwick quote failed to include the cost of the works to be undertaken to rectify the collapsed wall on the first floor for the reasons which I previously referred, I am satisfied that those costs were the subject of the Strudwick quote at Plaintiffs’ Court Book pages 239‑240.
64 Given the absence of specific evidence by Mr McLennan or Mr Grimes as to the way in which they have arrived at their costing for this work, in the context of the detailed evidence by Mr Strudwick as to the work he proposed to undertake, which in my opinion provided him with a good basis upon which to estimate the costs, I am satisfied that the costs for this work should be fixed in accordance with the details set out at Plaintiffs’ Court Book pages 239-240 subject to any modification which is appropriate given my finding as to the wage rates which should apply in this instance.
65 I am further satisfied, having regard to the evidence of Mr Strudwick and his particular knowledge of the building given his numerous visits to the site and the work undertaken by him to secure the building by the placement of the current struts, that he is well placed to assess the structural integrity of the western wall and its ability or inability to support the steel the subject of the BSC quote. For that reason I am satisfied that it is appropriate, reasonable and likely that the rectification work will involve the works the subject of the evidence from Mr Strudwick and not those the subject of the BSC quote.
66 It follows that I am satisfied that the plaintiffs are entitled to recover from the defendant the costs of the quotation detailed at Plaintiffs’ Court Book pages 239-240.
Internal painting
67 Mr McLennan gave evidence that he had adjusted the rate relevant to external painting given the old and heritage nature of the surfaces involved but did not do so with respect to internal painting. Given that the internal painting will involve, for the most part, solid plaster surfaces rather than plasterboard surfaces, I am satisfied that I should allow the estimate with respect to this work fixed by Mr Grimes.
External painting
68 The costs associated with external painting were dealt with in item 6 of the expert conclave report as costs which were “apportionable to the Council”.
69 I interpret this statement by the conclave to involve a finding that liability with respect to those costs rests with the defendant. For the reasons to which I have earlier referred I accept the position of the conclave as to this issue, there being no persuasive evidence to the contrary.
70 The quantum of the relevant costs has been agreed by the parties as $13,504.00
Demolition of north-west corner
71 An issue arises as to the complexity of and quantity of material the subject of this demolition and whether the material to be removed consists of the ground floor, of two skins of brick supporting rubble or four skins of brick.
72 It was Mr Strudwick’s evidence that the latter position pertained.
73 Given that neither Mr Grimes nor Mr McLennan had taken any steps to ascertain the composition of the ground floor wall, when considered in the context of the fact that Mr Strudwick had broken through the wall in order to fix the bracing the subject of his initial work to stabilise the building, I am satisfied that I should and act:
· upon Mr Strudwick’s evidence as to the fact that the wall on the ground floor is constructed with four skins of bricks; but
· upon Mr McLennan’s evidence that the first floor is constructed of two skins of bricks, given his evidence as to his particular knowledge of the construction of that wall.
74 I am satisfied that I should fix the costs associated with this work in the sum the subject of the McRae quote, modified insofar as necessary to give effect to my finding as to the appropriate wage rates in this instance and my findings as to the composition of the wall.
75 As I have commented previously, although there is no specific evidence as to the effect which my findings above will have upon the quantity of material to be removed, it seems likely that the quantity would be reduced by approximately one quarter and for this reason, that that adjustment should be made to the quantity involved in the McRae demolition quote.
76 I am further satisfied, given the evidence of Mr Strudwick, that the demolition cost of $3,600 identified by him in his quotation should not be allowed, as this involves a double counting of the same item costed by Mr McRae as part of his demolition work.
The surface of the kitchen floor
77 I am satisfied that the area in question is 40 square metres and not 54 square metres, given both the evidence of Mr McFarlane and Mr Pearson as referenced in the defendant’s closing submissions.
The levelling of the front ground floor
78 I accept the evidence of Mr Grimes that the new vinyl flooring tiles should be applied to 85 square metres of the floor and not the 45 square metres in respect of which reconstruction work is to be undertaken. I am satisfied that the plaintiffs are entitled to a floor with a floor surface of uniform colour and type for the reasons expressed by Mr Grimes in his evidence which I found compelling.
79 It follows that, insofar as vinyl tiles are required to be removed or re-layed in the course of the repair and re-levelling of the ground floor, the cost of that process should be calculated on the basis that the surface involved is 85 square metres.
80 Further, I found the evidence of Mr Grimes as to the allowance which should be made for the works required to modify doorways or other fixtures or furniture by reason of the application of up to 100 mils of screed to the ground floor to be compelling. I prefer the evidence of Mr Grimes to that of Mr McLennan on this issue. In my opinion, the latter failed to give adequate weight to the problems identified by Mr Grimes as being associated with a change in the level of the floor.
81 For this reason I am satisfied that the costs as identified by Mr Grimes in respect of this aspect of the work to be undertaken at the property should be allowed.
82 Whilst it was put on behalf of the plaintiffs that the area the subject of the levelling should be 50 square metres by reason of the length of the area being 10 metres and the width of the room being 5 metres, I am not satisfied that I should tinker with the finding of the conclave which described the distance of 10 metres as being an approximation of the area involved, in that the authors employed the word “about” when identifying that distance.
External paving
83 I am satisfied that the works recommended by the conclave should be undertaken with respect to the front footpath and that no additional works are required.
Costs generally
84 Counsel for the defendant has helpfully provided me with a spreadsheet summarising the costings of Mr McLennan, Mr Grimes and Mr Strudwick, which, by reason of those costings being tendered, are all evidence in this matter. There is no issue as to the accuracy of the content of that document and I have employed it in my analysis of and the determination of a number of the issues in this instance.
85 Equally, the spreadsheet makes it clear that in certain instances where a disagreement between the parties exists, the reasons for the disagreement were not the subject of explanation either by viva voce evidence or documentary evidence. Where such a position exists, in circumstances in which I have not otherwise dealt with the cost in issue in the course of my reasons, the approach which I intend to employ to any such costing work is as follows:
(i) In a number of instances there was agreement between Mr McLennan and Mr Grimes that costings employed by Mr Strudwick were inappropriate because those costings either:
· exceeded;
· underestimated; or
· failed to identify
the reasonable costs of the material or services involved.
In each instance, given the expertise of Mr McLennan and Mr Grimes in assessing the cost of materials and labour, I am satisfied that where there are is a consensus between these witnesses as to a price, that price should be allowed whether the consensus position produces a price greater than or less than that the subject of the quotation by Mr Strudwick.
(ii) In a number of instances there was no specific evidence given by Mr McLennan, Mr Strudwick or Mr Grimes as to the reason for the presence of a minor disparity between their respective cost estimates in relation to an activity or product, the cost of which, on face value, is not affected by the length of the project. An example of the above, assuming, that is, that the costs associated with the clean-up of the site are not affected by the costs of labour, in respect of which:
· Mr McLennan estimated $440
· Mr Strudwick estimated $960
· Mr Grimes estimated $680
In such instances I am satisfied that I should adopt the approach of taking the average cost of the three quotes as being the reasonable cost, namely in the example above, $693.00.
86 I will allow the parties to identify the areas of dispute in the costings where the approach to a costing as referred to above should be employed, and to make the appropriate adjustments.
Should the Defendant be required to meet the costs associated with the establishment and relocation of the temporary kitchen?
Analysis of the obligation of the Plaintiffs to mitigate their loss
87 In the course of their evidence, each of the plaintiffs gave evidence that both the operation of the supermarket and the takeaway food business were dependent upon access to a functioning kitchen.
88 The first plaintiff described the importance of the kitchen in the operation of the supermarket as follows:
“We do all the meats that come in in bulk and we repack which go into the supermarket in the dairy fridge in there. We do all the vegies that get presented to put in the vegie fridges on display there too, they come in in bulk, and we do all the cooking, all the take-away, hamburgers, fish and chips, there’s four fry ovens. That all that goes on in the kitchen. Yes, the vital part.”[35]
[35]T54, L12-18
89 The first plaintiff:
· described the combined business activity undertaken at the premises as employing fifteen staff altogether, five of whom are more or less 15, 20 hours a week, the others of whom are casual juniors.[36]
[36]T54, L26-28
· said that the supermarket was the only supermarket in Murchison that there was no butcher shop and no vegetable shop.[37]
[37]T57, L4-7
· said that the effect of closing the kitchen would involve the necessity to close all the businesses, explaining”
“You wouldn’t make enough out of one. That’s why we had to combine the different businesses to make it a viable business and we had to extend the hours, go to seven days a week. When it was just a supermarket we – we originally built it up as much as we could and then we had to buy next door, the opportunity came up, so we put it together to try to make – you’ve got to run the whole thing together to make it viable.”[38]
[38]T57, L13-22
90 The first plaintiff described the proposed works as involving the erection of a temporary wall which would allow the supermarket and takeaway food section to continue to operate, the newsagency being relocated into the supermarket building. He said that there was no room within the supermarket building for the operation of a kitchen.[39]
[39]T56
91 The first plaintiff described the need for a temporary kitchen and temporary office in the following terms:
A:“Well, we need somewhere to cook because we won’t have a kitchen. That’s the idea of the kitchen hire, the portable kitchen hire, which is a complete built-in unit with built-in kitchen, ovens and that sort of thing. The office hire, because behind – next to the kitchen is our office, and we haven’t mentioned, but that is behind the card room and beside the kitchen, there’s the office, so we will need – that will go, so we’ll need one of these buildings as an office. They can’t be in the one building because of the noise on phones, you’ve got cooking fumes, you’ve got all paperwork, it’s got to be separate areas, and the portable storage is for all the extra – the kitchen at the moment is probably equal to twice, or what the temporary situation is going to be. So we’re not going to have the storage space and cupboards that we’ve got now, so we need some- - -
Q:Is some of the portable storage hire contemplated by that structure to taking materials that would otherwise be stored in the supermarket, but will be displaced by the newsagency?---
A:Well, not too much stores in the supermarket, because that’s more of a supermarket line, but it’s more the kitchen, take-away, cooking line, that sort of thing, which are slightly different. The same business, but a different entity of it.
Q:You have you read the Plancost reports?---
A:I have, yes. I think.
Q:Is there anything in the Plancost reports which you think is excessive, unnecessary or wasteful?---
A:No, because I started before we did Plancost’s, and when I started working these out myself and got so involved and we need a professional approach, but I was surprised myself, originally, how – how the cost went up.
Q:Yes?---
A:And when I started asking a few for pricing, and it needs someone professional to do it, to do it properly.”[40]
[40]T58, L1 – T59, L2
92 The first plaintiff described the supermarket takeaway food section in the newsagency as being run as one business, all the finances being combined.[41]
[41]T55, L2-9
93 In cross-examination, the first plaintiff said that the kitchen was involved in the preparation of all the takeaway food, the preparation of vegetables and repackaging of meat for the supermarket. Meat and food deliveries were made to the kitchen. He described the kitchen as being:
“… the vital hub in the middle where everything comes together. The rear door, a lot of stuff comes in, goes out of. On a daily basis trucks come, two or three trucks every day.”[42]
[42]T75, L18-21
94 The first plaintiff maintained that the relocation of the kitchen would require the employment of additional staff, explaining:
“Well, takeaways doesn’t walk out from the kitchen out the back to the counter themselves. How are they going to get there from behind there cooked when one person’s full time cooking, 20 or 30 orders ahead of them and the other person’s at the counter taking orders? How’s the food going to get from the back to the front?”[43]
[43]T79, L5-11
95 The first plaintiff also explained that whereas the current location of the supermarket kitchen allowed kitchen staff to supervise the takeaway section, any relocation of the kitchen would necessitate the employment of additional staff for that purpose.[44]
[44]T78 – 79
96 In re-examination, the first plaintiff explained his position as to why the replacement kitchen could not be located in the position shown at Defendant’s Court Book page 423, giving the following reasons:
(i) Firstly, he doubted that a health regulation would permit the kitchen being located so close to a worksite where there would be exposure to dust and traffic.
(ii) Secondly, the preferred location at the rear of the supermarket would allow kitchen workers more efficient access via the supermarket to the relocated counters of the takeaway business.[45]
[45]T127, L13-26
97 In the course of her evidence, the second plaintiff:
· described the business she operated with her husband as being the only butcher, grocer, greengrocer, newsagent and milk bar for the residents of Murchison.[46]
[46]T155, L14-18
· said that if the business closed:
“… the nearest town is 20 to 30 Ks away and that’s the last thing you want, because in a small town you don’t want your customers travelling out of town to other sources and they get into that habit, you don’t know whether you’re going to get them back again, so it is a loss of business.”[47]
[47]T156, L6-11
and further:
“… see we’re competing with these towns all the time, they are all bigger than ours and Shepparton of course is the major town, 30 Ks away, half an hour’s drive. But we have a lot of customers that are pensioners that don’t drive so we’re their main source of supply … .”[48]
[48]T156, L18-23
98 The second plaintiff agreed that in 2016, the total operating profit of the business was $82,849.[49] However, it is not an issue the benefit to the plaintiffs from the operation of the business was approximately $120,000 when the combined wages of the plaintiffs are taken into account and an allowance is made for the book entry of depreciation.
[49]T167
99 The second plaintiff described the totality of the business enterprise operated by she and her husband as involving a supermarket, takeaway business, newsagency, a dry cleaner and as providing access to an ATM facility.[50]
[50]T170
100 In my opinion these activities undertaken by the plaintiffs over a period of thirty years, given the hours during which they are present at the business each week, demonstrate not only that the plaintiffs are extremely hardworking and industrious, but also the importance of the operation of the business to them.
101 The second plaintiff said that she and her husband were hoping to retire but could not do so until the premises was repaired.[51] She further explained her position in this regard as follows:
“If we had to close for six months… to reopen you don’t automatically get your original business back, it takes time to build it up again to increase the business or … build it up back to current levels because people go elsewhere. …we would have to put staff off, they would lose their wages for six months…. they would have to go to other towns to find other employment. They may not come back to us which means then we have to find new staff and retrain and start from scratch all over again, it’s very difficult.”[52]
[51]T171, L6-12
[52]T177, L10-20
102 As to the importance of the business to the plaintiffs, the first plaintiff said:
A:“… that’s the whole – that is our retirement plans, the going concern of the business plus the freehold, the buildings as well.
Q:To optimise that, keeping the business open and building it up is important for that?---
A:Absolutely, and the good condition of the building, we can’t sell a run down building.”[53]
[53]T177, L28 – T178, L3
103 The second plaintiff gave evidence that the business opened at 5.00am and closed at 7.00 to 7:30pm.[54]
[54]T178
104 She described the routine involved in the operation of the business as follows:
“… can I start with … The newsagent – the person that opens at 5 in the morning to prepare newspapers for sale, there is background work to do with that. When he’s finished with that part of it he usually drains the cooking oils at 7 in the morning, we won’t be able to do that when we are relocated because it will be too far out so he won’t be able to – that takes about an hour. He won’t be able to do that while he’s managing the counter, so that work has to be done in that additional time at 9 with the extra person. As far as the supermarket, we buy pre-packaged meat from [a] butcher in Tatura, but we also buy boxes of sausages which we pack ourselves into certain trays, different variety of sizes which we wrap and price, and present them for sale. Vegetables for the vegetable fridge, we have to – we’re monitoring that all the time, you’re managing that with trimming lettuces, trimming cabbage, slicing those, wrapping, pricing, celery, bunches of celery, we break down into installer [scil smaller] trays because we service a lot of elderly people that live on their own, pensioners, so they want smaller quantities of items. Pumpkins, we don’t sell whole pumpkins, we cut and separate them, cut them into smaller portion sizes and wrap and price those. You need a storage area to keep your extra vegetables and refill the fridges as they are sold.”[55]
[55]T178, L9 – T179, L3
105 Although the evidence of the first and second plaintiffs as to the issues to which I referred above was the subject of competent cross-examination, I accept the plaintiffs’ evidence as to these issues, the persuasiveness of which was not, in my opinion, influenced notwithstanding that cross-examination.
106 It is put on behalf of the defendant that the duty of the plaintiffs to mitigate their loss obliges them in this instance to close the business during the reconstruction works. It is put that this would cost them approximately $65,000. It is put, given the disparity between that cost and:
· the costs involved in the relocation of the business; and
· the hiring of the additional staff required during the period of reconstruction
that the plaintiffs’ duty to mitigate their loss requires them to close the business during its reconstruction rather than relocate the kitchen.
107 In my opinion the figure chosen by the defendant in fixing its position as to the cost to the plaintiffs of closing the business involves a very conservative estimate of the actual financial loss to which the plaintiffs would likely be exposed were they to close the business for six months.
108 I am satisfied that the plaintiffs’ concerns as to the effect that upon reopening, they face the risk that their customers may have developed different shopping habits based upon the no doubt expanded choice of items which would be available to them were they to undertake their supermarket shopping at one of the bigger centres located within 30 minutes’ driving time, are well founded.
109 I am further satisfied that it may take a considerable period of time for the plaintiffs to re-establish their customer base and that there is a possibility that the business may never recover to a level which generates its current turnover.
110 This latter point has specific relevance in this instance, given the age of the plaintiffs, their intention in the coming years to retire from the business and to employ the funds they obtain from the sale of the business to fund their superannuation.
111 I am equally satisfied:
· that the plaintiffs feel a real responsibility to their staff and current regular clientele, none moreso than the pensioners in the local community who rely upon them for their daily needs, and that this level of responsibility is heightened by the fact that the plaintiffs live in a small country town within the community they service.
· that in seeking to maintain the operation of their business, the plaintiffs are motivated to do so because, in their view, this would involve them mitigating the loss and dislocation to their life and lifestyle by reason of the negligence of the defendant in this instance.
112 Each of the matters referred to above which are peculiar to the importance of the operation of this business to the plaintiffs in my opinion establish the fact that the maintenance of the business gives rise to the existence of “special value” for the plaintiffs as that term was employed by Digby J in Winky Pop Pty Ltd & Anor v Mobil Refining Australia Pty Ltd & Anor.[56]
[56][2015] VSC 348 at paragraphs [136]-[182]
113 For these reasons I am satisfied that the plaintiffs are acting reasonably to minimise the consequences to them of the defendant’s negligence by establishing a temporary kitchen, and the defendant should meet the reasonable costs of the continued operation of the plaintiffs’ business during the building works required to repair the premises.
Temporary kitchen labour costs
114 I accept the evidence of the plaintiffs that they will be required to employ additional staff to deal with the distance which separates the temporary kitchen from the operation of the takeaway business.
115 I further accept the evidence given by the plaintiffs that it is important for security, and also for the operation of the takeaway business, to have someone available to attend the takeaway business at very short notice, both for security reasons and for the promotion of business.
116 As to the labour costs to which the defendant should be exposed to during this period however, I am not satisfied that the plaintiffs are entitled to employ more than one additional worker, or that that worker should be paid at a rate in excess of that to which a junior employee would be entitled.
117 I am not satisfied it would not be within the competence of a junior employee to provide both the security and promotional aspects required by the presence of a worker within the takeaway area of the business.
118 I make that finding being satisfied on the basis of the evidence in this instance, that a combination of the presence of an additional junior within the takeaway business and the normal levels of kitchen staff, would most likely allow the business to operate efficiently notwithstanding the probability that it would involve some inconvenience to the plaintiffs.
119 I am further satisfied that the plaintiffs are entitled to recover damages to meet the reasonable commercial costs of a temporary kitchen, as assessed by Mr Grimes. In my opinion the correct measurement of those costs is not the cost of the cheapest product available on the market but rather the reasonable cost of an appropriately equipped kitchen.
120 I am further satisfied it is likely that the cost of the kitchen sourced by Mr Grimes most likely represents the reasonable commercial cost of temporary replacement kitchens in the open marketplace, given that the quote obtained by Mr Grimes was one generated in the open marketplace.
Location of temporary kitchen
121 As to the location of the temporary kitchen, I am satisfied that no witness other than each of the plaintiffs possesses any expertise which would entitle them to express an opinion as to the appropriate place to site the temporary kitchen.
122 In turn, I find the plaintiffs’ evidence as to the reason why the kitchen should be located immediately behind the supermarket to be persuasive. For this reason I am satisfied that the plaintiffs have established that the kitchen should be located in that position.
Relocation of the temporary office and storage area
123 The first plaintiff described the need for a separate office area at Transcript 57. This evidence was not the subject of any real challenge. In any event, I find the evidence to be persuasive. I am satisfied that it is totally impractical to locate an office within a kitchen for the reasons described by the first plaintiff.
124 The need for a storage area was detailed by the second plaintiff in the course of her evidence.[57] Given the processes involved in the preparation of food and the movement of food into storage once prepared, and thereafter into the supermarket, I am satisfied:
[57]T178-179
· that a temporary storage area is necessary; and
· that the temporary storage area should be located in the immediate proximity of the relocated kitchen to allow the efficient movement of prepared foods from the kitchen to the storage area and then into the supermarket.
125 It was not suggested that, having determined the issue between the parties as to the appropriate area for the relocation of the kitchen, the temporary storage area and office should not be relocated to the same area.
126 It is clear from the evidence of Mr Grimes[58] that the reconstruction work will result in the area in the vicinity of the current kitchen becoming a worksite and that for this reason he sought castings for temporary structures comprising a kitchen, an office and a storage area.
[58]T136
127 Given the need for the temporary erection of each of these three facilities, I am satisfied that it is likely that the greatest efficiency would be achieved if they are located in the immediate vicinity of one another.
128 For the reasons which I have earlier referred I am satisfied that the costings prepared by Mr Grimes are reasonable with respect to the provision of these structures.
Conclusion
129 Having made the findings to which I referred above I am satisfied for the reasons discussed with Counsel in the course of their respective final submissions that the parties should be in a position to undertake the arithmetical exercise required to fix the total sum of the construction costs to which the plaintiffs are entitled in this instance.
130 I will reserve to the parties the right to apply should any issue arise as to the fixing of that figure or should the parties have any difficulty in identifying my finding on a particular issue given the general approach which I have applied when fixing costs or making findings which have not been the subject of:
· explanation; and or
· viva voce evidence; and or
· specific submission.
131 In due course I will hear any costs application made by the parties and reserve to the parties liberty to apply as to costs.
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