| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : PIONEER CONCRETE (WA) PTY LTD -v- NAREW HOLDINGS PTY LTD & ANOR [2005] WADC 25 CORAM : O'BRIEN DCJ HEARD : 29 NOVEMBER 2004 DELIVERED : 18 FEBRUARY 2005 FILE NO/S : CIV 666 of 2000 BETWEEN : PIONEER CONCRETE (WA) PTY LTD Plaintiff
AND
NAREW HOLDINGS PTY LTD
KEVIN ALAN BLACK
Defendant
Catchwords: Breach of express and implied terms of contract for the sale and supply of concrete
Legislation: Trade Practices Act (1975) Cth s 71, s 87(2)
(Page 2)
Result:
Damages awarded to plaintiff
Defendants' counterclaim upheld in part with nominal damages awarded
Defendants' counterclaim otherwise dismissed Representation:
Counsel:
Plaintiff : Mr Ai Mei Jap
Defendant : Mr G Massey
Solicitors:
Plaintiff : Mercia Pestell Hillard
Defendant : Gary Massey & Associates
Case(s) referred to in judgment(s):
Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283
Bonham-Carter v Hyde Park Hotel Ltd (1948) 64 TLR 177
Michael Kellaway International Pty Ltd v Shark Bay Airport Pty Ltd, unreported; SCt of WA, Library No 970604; 13 November 1997
Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370
Case(s) also cited:
Nil
(Page 3)
1 O'BRIEN DCJ: Pioneer Concrete (WA) Pty Ltd ("the plaintiff") supplies concrete. The first defendant ("PTT") is a company which carries on the business of making concrete water tanks. It specialises in the erection of circular tanks. The second defendant ("Mr Black") is a director of PTT. The plaintiff claims various amounts from PTT for payment for concrete sold and delivered.
2 It is not in dispute that between 4 August 1998 and 31 December 1998, the plaintiff and PTT contracted for the plaintiff to supply quantities of concrete to PTT on five occasions; that the plaintiff rendered invoices for the supply of the concrete; and that PTT did not pay the invoices. 3 PTT and Mr Black counterclaim that the concrete supplied was not what was bargained for. Specifically, the defendants claim that the plaintiff breached the express terms of three of the contracts by failing to supply the concrete as specified. Further, the defendants claim that the plaintiff breached the implied terms of those contracts that the concrete would be fit for the purpose of constructing concrete water tanks, and that the concrete be of merchantable quality. 4 The defendants' defence and counterclaim relate only to three of the deliveries of concrete – on 4 August, 17 August and 11 December 1998. 5 The defendants also claimed that the plaintiff owed the defendants a duty of care and was negligent in the supply of the concrete, including by failing to test it. During closing submissions counsel for the defendant abandoned the cause of action in negligence and relied only on the cause of action for breach of contract. 6 PTT counterclaims that because of the breaches of contracts it has suffered loss and damage as follows: 7 The defendants opened their case first as most of the plaintiff's case was conceded. The plaintiff did not call oral evidence but a couple of documents were tendered through the defendants' witnesses under cross-examination. 8 The core issue in this trial is whether the defendants have proved their counterclaim.
(Page 4)
Remedy sought by the defendants
9 One matter can be disposed of initially. The defendants were granted leave to amend their counterclaim during the proceedings, inter alia, by seeking a remedy pursuant to s 87(2) of the Trade Practices Act 1975 Cth("TPA") for breach of the implied terms of the contract. The defendants submitted that as there were implied terms of the contract, by virtue of s 71 of the TPA, contravention of those terms constituted a contravention of a provision under Pt V of the TPA and therefore the provisions of s 87 of the TPA were enlivened. 10 This submission is misconceived. A breach of a condition which is implied by virtue of s 71 of the TPA does not involve conduct in contravention of the provisions of Pt V. This is because the breach alleged was not conduct in supplying the goods but in the want of correspondence between the state of the goods supplied and the quality referred to in s 71. A breach of the obligation imposed by s 71 is not a breach of an obligation imposed by the TPA but is a breach of the obligation imposed by the contract itself: Arturi v Zupps Motors Pty Ltd (1980) 49 FLR 283 at 285 - 286. Accordingly, the remedy pursuant to s 87 TPA is not available to the defendants.
Mr Black's evidence 11 The bulk of the evidence at the trial was that of Mr Black and most of his evidence was uncontradicted.
The contractual background 12 Mr Black purchased a company trading as the Concrete Tank Co of WA in about 1981. In 1998, at the relevant time, Statewide Water Supply Pty Ltd ("Statewide") was the owner of the trading name Concrete Tank Company Co of WA. Mr Black is a director of Statewide. Mr Black is also a director of PTT. 13 On 6 September 1989, PTT entered into a written contract with the plaintiff. The terms are not in dispute. Relevantly, they are that: • The plaintiff would supply concrete to PTT for the manufacture of concrete tanks; • PTT agreed that payment of invoices would be made to the plaintiff within 30 days of delivery of the concrete; • PTT agreed that when the credit facility became overdue, the whole amount would become due and payable by PTT;
(Page 5)
• Mr Black guaranteed PTT's indebtedness to the plaintiff. 14 In closing submissions, the defendants' counsel submitted that the plaintiff had not proved that it demanded payment of the moneys owing. This contradicted his concession during Mr Black's cross-examination that a demand for payment had been made. To put the matter to rest, I find as follows. The plaintiff rendered invoices for the jobs done; the defendants did not plead that there was no demand for payment; and it is clear, in my view, that the rendering of an invoice for the concrete supplied, given the terms of the 1989 contract and the history of the relationship between the parties, constituted a demand for payment. 15 At the end of the evidence, given the admissions made during the trial and my findings in relation to the demand for payment, I find that the plaintiff has proved its case. 16 The undisputed evidence is as follows. In or about 1998, Statewide agreed with Occtech Engineering Pty Ltd ("Occtech") to supply tanks at Naval Base, Kwinana. PTT agreed with Statewide that it would supply the labour and materials to Statewide to construct the tanks. The plaintiff delivered concrete on two separate days, namely, 4 August and 17 August 1998. On or about 10 December 1998, PTT and the plaintiff agreed that the plaintiff would supply concrete to PTT at a site in Mundaring on 11 December 1998. 17 The details of the concrete contracted for are outlined below. 18 Given the abandonment of the counterclaim in negligence and my ruling in relation to the availability of a remedy pursuant to s 87 of the TPA, the core issues in this case are: The contracts 19 Six tanks were to be constructed at Kwinana. Their respective sizes were 1 x 90 m3; 1 x 136 m3; 2 x 20 m3; and 2 x 54 m3. 20 The plaintiff and PTT entered into contracts whereby the plaintiff would supply concrete to PTT. Mr Black's evidence was that three tanks would be constructed on one day and the other three on another day.
(Page 6)
21 The contracts were as follows.
The first contract 22 On or around 3 August 1998, the plaintiff was to supply 28 m3 of S class, 50 mega pascals ("MPa"), 8 mix design, S50 water cement ratio 0.5 GP at 100 slump. "GP" stands for General Portland which is a type of cement. The concrete was not to contain any admixtures. The aggregate, or size of the blue metal component, was to be 14 mm. "S class" refers to special class of concrete and that means it is of high quality. 23 This concrete was to be used for the construction of three tanks at Kwinana (the 90 m3, a 54 m3 and a 20 m3 sized tanks).
The second contract 24 On or about 14 August 1998, PTT contracted with the plaintiff for the plaintiff to supply 35 m3 of concrete of 8 mix design S50 (special class 500 MPa), water cement ratio 0.5 GP at 80 slump. 25 This concrete was to be used for the construction of the second three tanks at Kwinana (the 136 m3 tank; a 54 m3 tank; and a 20 m3 tank). 26 There is no evidence as to what liquid was to be stored in the tanks at Kwinana except a general reference by Mr Black. Mr Black testified that "chemicals" were to be stored in the tanks at Kwinana. However, there is no evidence that the plaintiff knew this to be the case or indeed what sort of chemicals to which Mr Black referred.
The third contract 27 On or round 10 December 1998, PTT contracted with the plaintiff for the plaintiff to supply 16 m3 of concrete at 40 MPa and 100 slump. This was to be delivered to a site in Mundaring. 28 Mr Black testified that he ordered the 40 slump concrete for the Mundaring job, as water was to be stored in the tanks which is less corrosive than the "chemicals" to be stored in the Kwinana tanks. 29 In each case, the concrete was to comply with the relevant Australian Standard specifications. 30 The defendants claim, and it is not in dispute, that the implied terms of the contracts were that the concrete would be fit for the purpose of building a concrete water tank and that it would be of merchantable quality.
(Page 7)
31 The plaintiff also agreed to supply and deliver concrete to sites specified by PTT on 12 December and 31 December 1998. The defendants make no claim in relation to those deliveries. However, they seek to set off as much of the counterclaim as will be sufficient to extinguish the plaintiff's claim.
Concrete "slump" 32 Mr Black explained the specifications of the concrete. For the purposes of this action, it is not necessary to detail exactly what the specifications of the concrete mean save for an explanation about the meaning of the "slump" as it is only that quality of the concrete which the defendants claim could have caused the problems with the concrete. There was no evidence that the concrete did not comply with the other specifications required by Mr Black. 33 The slump is an indicator of the workability of the concrete and how fluid it is. The higher the slump measurement, the more wet or fluid the concrete is and conversely, the lower the slump, the more dry and less workable it is. The slump can be measured by taking a sample of the concrete and placing it in a cone shaped bucket. The bucket is then inverted and the concrete subsides or slumps. The slump is calculated by measuring the difference between the top of the bucket and the top of the sample of concrete. 34 Slump of 100 can be plus or minus 20 mm and slump of 80 can be plus or minus 15 mm and still be within the specifications of the Australian Standards applicable to concrete. Apart from that reference to the Australian Standards, there was no other evidence about them.
The methodology of constructing the tanks 35 Mr Black testified that he had worked as a formworker in the business since 1978. The plaintiff had supplied concrete to the defendants since 1989. 36 It is clear from the defendants' pleadings and from the undisputed evidence, that PTT was in the business of building circular concrete water tanks and that the plaintiff knew this to be the case through its employees and representatives. The trial has proceeded on this basis. For convenience I shall refer to the concrete water tanks as the "tanks" in this judgment. 37 Mr Black had not had any cause for complaint about the concrete supplied until August 1998.
(Page 8)
38 Mr Black testified that the concrete tanks were erected by using formwork which was assembled and into which concrete was poured. He recognised that it is important to minimise the lateral pressure on the formwork to avoid damage to it. He therefore divided a methodology of constructing the tanks, which he has used for nearly 20 years.
39 The methodology is as follows. Mr Black decides on the specifications of the concrete for the job in question. When the concrete is ordered, Mr Black informs the plaintiff of the specifications through the order department of the plaintiff (referred to as "Orders") and schedules the delivery of the concrete progressively to ensure that the concrete is poured in accordance with his methodology. 40 The formwork is made of steel and is bolted together. Reinforcement is placed on the ground for the floor of the tank. This is steel in a grid formation. 41 The formwork for the walls comprises an inner and an outer layer. Steel reinforcement is inserted between the two layers before the concrete is poured. There was no evidence as to the qualities of the formwork other than it is reinforced steel. 42 First, the floor of the tank is poured. When that has reached a stage of hardness ("initial set"), the pouring for the walls starts. The pouring for the floor commences at the perimeter of the formwork and progressive "rings" are poured towards the centre until the middle is reached. The concrete for the walls is poured in depth of 200 mm progressively until the desired height of the wall is reached. The second layer is poured while the first layer is still "plastic" and the two layers are worked together. This ensures that the two layers bond. If the first layer is too hard, there is a "cold join" and bonding does not occur. By the time the third layer is poured, the first layer has reached initial set and there is no longer any lateral pressure on the formwork retaining the first layer. This process is repeated until the desired height is reached. 43 It is not possible to visually inspect the concrete which is poured into the formwork for the walls to ensure that initial set has occurred. Mr Black testified that he relies on the plaintiff to provide concrete to the indicated specifications. 44 Once the last layer has hardened, the formwork is deconstructed. 45 Mr Black testified that in the nearly 20 years of using this method, the formwork has only been damaged once as a result of pressure caused
(Page 9)
by the concrete not reaching initial set as expected. There is no evidence that this incident involved concrete supplied by the plaintiff. 46 This was the methodology employed to construct the tanks the subject of the defendants' counterclaim.
Method of pouring concrete 47 The concrete was delivered in a Pioneer Concrete truck. The deliveries were scheduled as prearranged with Orders. The concrete was discharged through a chute on the truck into the back of a concrete pump. The pump is on a truck which is provided by a contractor. The pump transfers the concrete along a pipe, out of a hose and onto and into the formwork.
What happened at the pouring of the concrete on 4 August 1998 48 Mr Black testified that he had a "standard" plan for the construction of the tanks on 4 August. This was to build one tank at a time, starting with the 90 m3 tank. The work crew would then start to construct the 54 m3 tank and then the 20 m3 tank. 49 The formwork had been assembled before the plaintiff's truck arrived. Mr Black testified that he checked the whole site before the concrete truck arrived. This was to ensure that the "plumb" of the framework was appropriate. He also checked the reinforcement. 50 The first truck arrived at 8.43 am and left the site at 9.15 am. As the concrete was being pumped onto the floor, Mr Black noticed that it was wet and "slumping out". He said that he spoke to the truck driver and told him that the concrete was too wet and asked that the other truckloads be "up to scratch". 51 The second truck arrived at 9.04 am. The consistency of the concrete was the same as the first load. The concrete from the first load was still extremely wet. The second load was to finish off the floor and start the first layer of the wall. 52 Mr Black testified that he could not recall whether the concrete was poured into the wall but said it would have been a pointless exercise as concrete would have flowed out of the wall and onto the floor. 53 Mr Black testified that he was "pretty sure" that he spoke to someone from Orders, or the concrete plant to find out what was going on.
(Page 10)
54 Mr Black decided to finish pouring the floor. Then, with the left over concrete in the truck, with which he intended to commence the first layer of the wall, he decided to start pouring it on one of the smaller tanks.
55 The left over concrete from the second truck was therefore used to commence the floor on the 54 m3 tank. The third truck arrived at 10.05 am and left the site at 10.20 am. By then the floor of the first tank still had not reached initial set. The trucks had been scheduled to arrive according to a pre-determined programme. When the third truck arrived, Mr Black decided to use its contents on the floor of the 54 m3 tank. 56 The fourth truck arrived at an unspecified time. Mr Black testified that the concrete, which had been poured from the previous trucks, had not set. He decided to pour the first rings of the 90 m3 tank. Mr Black testified that part of the pour could have been used on the floor of the second tank, but his schedule was "all thrown out". 57 The fifth truck arrived at 10.45 am and left the site at 11.20 am. To the best of Mr Black's memory, that concrete was used on the walls of the 90 m3 tank and the 54 m3 tank. 58 Instead of pouring layers of 200 millimetres, Mr Black decided to pour the concrete in 50 to 80 millimetre layers. 59 Mr Black testified that if he ceased pouring the concrete there would be potential of a cold join which would mean that there would be a leak in the completed tanks. 60 The sixth truck arrived on site at 11.20 am and left at 12.15 pm. 61 This truck stayed on site for longer than the others as the concrete was being poured into the walls of two tanks, and this was a time consuming exercise as the pump had to be shifted from one point to another. 62 The seventh truck arrived at 11.45 am and left the site at 1.55 pm. The concrete from the seventh truck was used to fill both tanks to minimise the risk of cold joins. 63 As concrete from the seventh truck was being poured into the walls of the 90 m3 tank, Mr Black was standing on the scaffolding supporting the formwork of that tank.
(Page 11)
64 He noticed that the wall was getting thinner and the top spacers were expanding. The spacers are inserted in the formwork as a guide to determine the wall thickness.
65 As that happened, the concrete was "spewing" onto the floor of the tank underneath the formwork. The formwork was bowing and contorting. 66 Mr Black stopped the pour and everybody was removed from the area to ensure their safety. 67 Mr Black then inspected the damage. 68 He said that by then the bottom layers of the tank should have been hard and acting as a plug. 69 The internal wall of the 90 m3 tank was to measure 2.1 m high and 1.9 m of the wall had already been poured. 70 The outside mould of the tank had a huge bulge in it, and down towards the bottom of the concrete, that area of the wall had moved outwards. 71 The high tensile bolts in the formwork were still in place, but the formwork frame had bowed. Mr Black testified that he could see the reinforcement towards the bottom of the wall and there was a "whole heap of concrete on the floor". 72 Mr Black testified that he realised that the tank would not meet the requirements of the engineer's drawings for the tank. There was not sufficient concrete cover over the reinforcements. 73 Mr Black believed that if the pour finished, the tank would have to be demolished. The other option was to brace the tank and continue with the pour, given that he was so close to finishing it. He would then survey the tank in its hardened state and decide what to do. 74 Mr Black braced the internal and external formwork. He decided to pour concrete slowly and monitor the situation. 75 The concrete, which had poured onto the floor of the tank, was scooped up in buckets and poured into the formwork. 76 Mr Black was also concerned about the concrete in the 54 m3 tank reaching initial set. Accordingly, he decided to continue with the pour in
(Page 12)
the 54 m3 tank very slowly and carefully. The formwork started to move, and Mr Black decided to stop the pour. 77 Mr Black then decided to use the older concrete, which was on the floor of the tank, in the walls, so that the older concrete which would reach initial set earlier than the most recently poured concrete would act as a plug. 78 The last truck arrived at 2.20 pm and left the site at 2.40 pm. Mr Black had not pre-ordered this load. This truck contained an additional 3.4 m3 of concrete, and part of it was used to cover the lack of concrete in the bigger tanks. 79 This load of concrete was also used to pour the 20 m3 tank. 80 Mr Black testified that he telephoned either Orders or the concrete plant at 8.38 am, 10.44 am, 11.30 am and 1.50 pm to complain about the quality of the concrete and to ascertain if anything could be done about it.
The formwork 81 Prior to 17 August 1998, the formwork was stripped from the three tanks. Some of it was able to be used for the concrete pour which was to occur on 17 August. 82 Between 4 and 17 August, Mr Black met with a representative from the plaintiff and said that he was told to put his concerns in writing. 83 In the meantime, he inspected the damage to the formwork of the 90 m3 tank. Photographs taken of the formwork reveal it to have buckled in certain areas. 84 Once the formwork had been stripped, Mr Black noticed that there was a pattern of "bowing" concrete where blue metal was visible. The thickness of the wall also varied. 85 He said that: "where the formwork on the outside exploded we have this sort of pattern of bony concrete… it's not nice and smooth, it's all jaggedy and you can see the rocks or the blue metal in the concrete. Also, primarily on the inside of the tank, where all this other concrete had sort of fallen down and exploded and gone everywhere, when we went to our fixed situation, we
(Page 13)
couldn't compact that area. So that concrete tended to be bony as well." 86 Mr Black testified that the thickness of the wall also varied. It was "out of plumb", "75 mil plus out of where it should be". He took measurements but said that he could not recall what they were without reference to the "design drawings". However, this was not further explored in his evidence. 87 There is evidence that in 1998 and 2004 there were cracks in one or more of the three tanks built on 4 August.
What happened at the pouring of the concrete on 17 August 88 For the pour on 17 August, Mr Black specified the concrete to be 80 slump. He ordered 80 slump rather than 100 slump because it is drier cement and he was hoping to avoid the experience that he had with the first pour. 89 On 17 August, Mr Black wished to construct three tanks being a 136 m3 tank, a 54 m3 tank and a 20 m3 tank. This time, a total of nine truckloads of concrete arrived to complete the pours. 90 The trucks arrived between 8.35 am and 1.05 pm. 91 The intention was to pour the floor of the 136 m3 tank. As the pour commenced, Mr Black noticed that the consistency of the concrete was no different from that on 4 August. The concrete was wet, "like fluid". 92 The delivery dockets in relation to the first three loads reveal the concrete to be 100 slump. Thereafter, the delivery dockets refer to an order for 80 slump concrete. 93 There is no evidence contrary to Mr Black's evidence that in relation to the concrete ordered for the pour on 17 August, that he ordered 80 slump concrete. 94 The evidence is not particularly clear, but it would appear that the first three truckloads were used to pour the floor of the 136 m3 tank. 95 At some stage, Mr Black decided that because of the consistency of the concrete which was "pretty wet", that instead of constructing the 136 m3 tank from beginning to end, he would adopt the same course of action that he used in relation to the 4 August pour, namely, to commence pouring the smaller tanks at the same time.
(Page 14)
96 The concrete from the fourth truck was used to pour the floor of one of the two smaller tanks. Mr Black was monitoring the behaviour of the concrete on the floor of the 136 m3 tank, and it was still wet and had not reached initial set.
97 Mr Black testified that there was a marginal difference between load four and load five. 98 Mr Black was unable to recall specifically what loads five, six and seven were used for, but believed that he would have been pouring the walls of two tanks. 99 Mr Black testified that as the concrete was poured into the walls of the 136 m3 tank, he noticed the formwork move. It went "marginally out of plumb" but not as extreme as the pour on 4 August. 100 When Mr Black noticed that the wall thickness increased in parts and decreased in other parts, he stopped the pour. 101 Mr Black said that the framework also moved on the 54 m3 tank. However, it appears that the formwork was not damaged as a result of the movement. 102 On the second last pour (truck 8), a Mr Newton arrived. He was a National Association Testing Authority ("NATA") tester. There is no evidence as to what this "authority" might be and/or how a person becomes qualified to be so described. Mr Newton did not testify and there is no evidence as to his testing methods other than from Mr Black. Mr Newton's arrival was in response to a telephone call that Mr Black made to Orders at 1.08 pm.
Newton's test 103 It seems that Mr Newton was engaged by the plaintiff to test the concrete during the pour on 17 August. He arrived in time to test the loads on the trucks which arrived on site at 12.40 pm ("truck 8") and 1.05 pm ("truck 9"). 104 Mr Black testified that he spoke with Mr Newton and told him of the problems he was having with the concrete. 105 Mr Newton tested a sample from each of the trucks. The concrete from truck 8 was tested at 130 slump. Mr Black testified that at the most, this should have been 95, given that he ordered 80 slump concrete. The slump of concrete in truck 9 revealed a slump of 65. Mr Black considered
(Page 15)
the test results to be most odd given that Newton was working with "old" concrete. Mr Black testified that the slump value when the plaintiff was actually using the concrete must have been even higher given that concrete dehydrates and the first lot must have been even higher than 130 slump when it arrived on site. That indicated to Mr Black that the slump value of the first lot tested must have been "150 plus". 106 Throughout the concrete pours on 17 August, Mr Black contacted the plaintiff's employees or representatives by telephone on several occasions and also spoke to the truck drivers concerning the consistency of the concrete.
Arrival of Mr Maldon on site on 17 August 1998 107 Mr Josh Maldon was a representative of the plaintiff. He was not a witness at the trial. Mr Maldon arrived at the Kwinana site somewhere between 2 pm and 2.30 pm. Mr Black said that he showed him the problems that he was experiencing and the tanks that had been poured on 4 August. 108 Mr Maldon advised Mr Black to put his complaint in writing, and left Mr Black with the impression that the plaintiff would deal with the matter. 109 Mr Black sent a facsimile to Mr Maldon on 18 August 1998 confirming the oral complaints he had made to him on 17 August when Mr Maldon visited the site. 110 After stripping the formwork from the tanks poured on 17 August, Mr Black noticed varying wall thicknesses, particularly in the 136 m3 and 54 m3 tanks, and the walls were out of plumb. The formwork itself had not been damaged. 111 Mr Black described the problem in relation to the concrete cover over the reinforcement as follows. He said the reinforcement is not galvanised, but the concrete acts as a galvanising agent. There is "a sacrificial zone" which operates as a safety margin so that if there is some "erosion" of the concrete, there is still sufficient cover of the reinforcement to prevent its damage. 112 Mr Black testified that he sent facsimiles to Mr Maldon on 18 August, 21 September and 23 October 1998 in connection with the problems arising out of the concrete pours on 4 and 17 August 1998. The material in the facsimile dated 21 September refers to an opinion by a
(Page 16)
Mr Bryce and Mr Black's reaction to it. In my view, the reference, to the opinion is inadmissible as it is hearsay and accordingly Mr Black's reaction is of no relevance. 113 However, the facsimiles refer to the fact that Mr Black was advised by Mr Maldon to put his complaints in writing. They do not "corroborate" the alleged deficiencies in the concrete, as submitted by counsel for the defendants, as they are self-serving statements.
What happened at the pouring of concrete at Mundaring? 114 The tank built at the Mundaring site was 90 m3 in size. Mr Black testified that he ordered concrete at 40 MPa as water was to be stored in the tank and water was "less corrosive" than the chemicals to be stored in the tanks built at Kwinana. 115 Prior to the pour Mr Black inspected and checked the formwork. 116 Mr Black testified that when the concrete arrived, it was wet, of "extremely high slump" and "extremely fluid". Mr Black complained to the truck driver about the quality of the concrete. He also telephoned Orders at 9.07 am to complain. The second truck arrived at 9.45 am and Mr Black telephoned Orders again at 10 am and again complained about the quality of the concrete. 117 The first two truckloads of concrete were to be used on the floor of the tank. However, the slump of the loads seemed high to Mr Black. When the concrete was poured, it did not reach initial set within the expected time. 118 The third truck arrived at 10.40 am and left at 11.50 am. Part of the third load was used to start the walls. However, the concrete "spewed" out of the formwork and onto the floor of the tank. The fourth truck arrived at 11 am. By then, Mr Matt Sanders, a representative of the plaintiff had arrived on site. 119 Mr Black testified that he had agreed in a previous telephone conversation with Mr Sanders that the pour would continue but very slowly and that the plaintiff would pay for any flow on costs associated with that course of action. However, this was on condition that Mr Black did not reject the concrete. This agreement was reiterated when Mr Sanders attended the site. 120 The plaintiff charged waiting time if the off-loading of the concrete took more than six minutes. The third truck had taken one hour and ten
(Page 17)
minutes between arrival at Mundaring and return to the plaintiff's plant, and the fourth truck took longer on site as it had to wait for the third truckload to be poured.
Testing of samples from the Mundaring pour 121 Mr Reid, a geotechnical assistant employed by Western Geotechnics, testified that he signed off on a number of tests which were performed on samples taken from concrete delivered to the Mundaring site. The identification of the tester is unknown. The method of testing was not explained. Mr Reid testified that he was not sure of his position with Western Geotechnics in 1998 but said that he may have been the laboratory manager. He cannot recall if he was involved in conducting the tests on the concrete. However, as he signed off on the tests, he said he would have had access to the testing work sheets of the person who conducted the tests. No objection was taken to Mr Reid's evidence, no objection taken to the admissibility of the test results and no challenge was made as to the accuracy of the results. 122 Those tests reveal that samples were tested for slump and at times as follows: Time of test Slump 09.30 am 140 10.00 am 200 10.55 am 140 12.15 am 65 123 The slump of the concrete ordered was 100 slump. Given the plaintiff's position concerning the test results, I accept them as accurate. In all cases, the concrete delivered was not within the acceptable slump ranges. The first three were in excess of the acceptable range and the last one was well below the acceptable range. 124 As a result of the slow pouring, the formwork was not damaged and there were no difficulties with the tank which was eventually constructed. By facsimile dated 11 January 1999, Mr Black itemised the costs associated with the pour on 11 December 1998. 125 There is no evidence other than the mere assertion by Mr Black that it took an extra six hours to pour the tank. The delivery, arrival and departure times on the delivery dockets do not support that six extra hours were required. It would seem from an examination of the delivery
(Page 18)
dockets for all pours that one truckload would usually arrive at and leave the site in around 30 or 40 minutes. At most, the delivery dockets for the Mundaring pour reveal that the third truck was on site for one hour and ten minutes. Mr Black's assertion that the next truck had to wait because of the third truck is not supported by the delivery dockets. I am not satisfied that the Mundaring pour took an extra six hours. 126 In any event, as to the claimed cost associated with the alleged extra time as outlined in par 45 of the counterclaim, I am not satisfied that those amounts have been proved to the required standard. There is no evidence that the Western Geotechnic test cost $200. There is no evidence supporting the claimed cost of the concrete pump other than what is stated in the facsimile dated 11 January 1999. For reasons outlined, I am not satisfied as to the extra time involved other than I find that it was not six hours.
Damage to the tanks 127 Mr Black testified that he had returned to inspect the tanks at Kwinana around 10 or 15 times since they were built to monitor any damage. The last time he visited the Kwinana site was during the trial on 30 November 2004 and he took photographs which were tendered in evidence. 128 Mr Black said that the concrete had worn away. He expected that to happen but not to the extent shown in the photographs. 129 Mr Black was unable to identify which tanks were depicted in most of the photographs. As far as I can make out from the evidence, the only tanks which Mr Black was specifically able to identify in some of the photographs were the 136 m3 tank, one or both of the 90 m3 tanks and one or both of the 20 m3 tanks. 130 The photographs depicted cracking, calcification indicative of leakage through the walls of the tanks and worn away concrete. 131 Mr Black testified that in his view, the 90 m3 tank is in "shocking condition" and should be demolished. He said that the 136 m3 tank is in bad condition but not as bad as the 90 m3 tanks. 132 Mr Black testified that he expected some sort of corrosion and that was "planned for". However, there is no evidence as to the type of liquid he expected to be stored in the tanks and there is no evidence as to what
(Page 19)
liquid was actually stored in the tanks in the last six years since they were built. 133 The tanks were built according to engineer's drawings. In Mr Black's view, they do not meet those specifications at the present time. He said this is due to the thickness of some of the concrete cover and "[T]hey are not to plumb as required by the Australian Standards … They just don't meet the Codes." There is no evidence as to the engineer's drawings and no expert or evidence other than Mr Black's unexplained assertion that the tanks did not comply with the drawings.
Cross-examination of Mr Black 134 Under cross-examination, Mr Black testified that approximately half the formwork used in the August pours was 18 years old and had been used and about half had been bought in the 10 years prior to the pours. The formwork is used about 100 times a year for the 90 m3 tanks but less for the smaller tanks. 135 Mr Black was cross-examined about the age of the formwork; the method of dismantling it; the maintenance of the formwork; the scaffolding used; his methodology of tank construction; a report Mr Black commissioned from a Mr Becroft (which was not tendered in evidence); and whether he had, in fact, complained to truck drivers about the quality of the concrete. 136 The cross-examination seemed to focus on matters pleaded in the plaintiff's Amended Reply and Defence to Counterclaim, that is, that there was some design or other fault in the formwork or that it had not been properly constructed. However, there was no evidence that this was the case. Mr Black did not waver in his evidence about the suitability of the formwork, his inspection and checking of it and its construction. 137 Under cross-examination, Mr Black testified that in hindsight the pours into the walls were a problem, as they had not reached initial set within the time expected. He did not reject the concrete, as he was unable to check whether the layers poured into the formwork for the walls had reached initial set. In essence, he said that it was only when the formwork started to buckle that he realised initial set had not been reached. 138 Mr Black testified that under the "Australian Standards" he could have rejected the concrete in either the plastic or the hardened state. In either case, upon resumption of the pour, using appropriate quality
(Page 20)
concrete, there would have been a cold join resulting in leaks. He said that he decided to continue with the pour to leave his options open. 139 When asked about rejecting the concrete on 17 August, Mr Black gave the same explanation and added that the formwork had not failed as on 4 August and he assumed that the concrete would reach initial set as he expected. 140 Mr Black testified that he did not commence repairs of the formwork before February 1999 because he had stock formwork on which he could rely; he was busy; and he did not have the funds to affect the repairs. He therefore put the formwork in for repair on an as needs basis.
The evidence of Mr Dimond 141 Mr Richard Dimond has been a consultant structural engineer since 1978. 142 In 1998 he was requested by Mr Black to inspect some concrete tanks at Kwinana. He did so on 2 December 1998. 143 Mr Dimond was called as an expert witness on the issue of the damage to the tanks and the need for replacement, and as it turned out, repairs. 144 Mr Dimond confirmed that in its wet or unset state, concrete exerts horizontal or lateral pressure on the formwork. 145 On 2 December 1998, he observed in relation to tank No 1 (not otherwise specified), that the failure of the formwork: "and permanent damage to forms manifested itself with formwork vertical bolted joints separating, lower pins buckling and gross random movements of internal and external forms to such an extent that the target 130 mm thick walls were measured to vary from 100 mm to 200 mm depending on the height of the wall. The maximum bulging of the wall is clearly evident as is the fact that some reinforcement has minimal cover on the inside of the tank." 146 Mr Dimond assumed that the original design of the tanks was undertaken in accordance with "certain codes to achieve a certain outcome" for those tanks and that the amount of cover to the reinforcement was designed to achieve a certain end result. At the time of his inspections, Mr Dimond was not aware of the proposed contents of the
(Page 21)
tanks nor was he aware of the expected life span of the tanks. However, he assumed that in terms of commercial reality, a tank builder would not construct a tank with a wall thickness of 200 mm if, say, 150 mm thickness would suffice. He agreed that it would be a fair assumption that if the reinforcement cover is reduced then the life of the tank is reduced. 147 In 1998, Mr Dimond was of the view that "tanks 1, 2, 5 and 6" would probably need to be demolished but "tanks 3 and 4" could probably be salvaged. 148 As to tanks 1, 2, 5 and 6, he testified that the measurement of the walls' variation in thickness from the target thickness of 130 mm led him to believe that the concrete cover would be compromised to such an extent that the useful life would be a lot less than what was designed. 149 There is no evidence as to the tanks to which Mr Dimond was referring. There is no evidence that the numbers ascribed to the tanks matched the numbers ascribed to the tanks inspected on 30 November 2004. Mr Dimond's opinion in 1998 was also subject to "precise measurement" of the concrete cover with the appropriate instrument. There is no evidence that this was done. 150 On 30 November 2004, Mr Dimond inspected the Kwinana tanks again. His report refers to the diameter of the tanks. I have assumed that the tank with the largest diameter is the 136 m3 tank and the others are identified by cross-referencing the diameters to the capacity of the constructed tanks (this was to be the subject of agreed facts which were not provided). 151 As to tank 1 (7.5 m diameter – marked Ciba 455.S.T.005 [the 90 m3 tank] ), Mr Dimond observed: "All cracks observed were less than 1 mm wide. Horizontal crack around the entire perimeter of the tank an average of 900 mm above the base. The crack moves up and down randomly. At least 9 vertical cracks some from the top down to the horizontal crack and some full height with many showing signs of calcification. The inside of the tank was badly corroded from top fluid level to the base with the worst effects near the base. The damage to
(Page 22)
the inside face was such that all fine aggregates near the surface had dissolved leaving the rough large aggregate exposed (black in colour)." 152 He said that the exposure of the blue metal reduces the concrete cover of the reinforcement. 153 However, there is no evidence as to the cause of the dissolved fine aggregate. It may have been because of lack of an appropriate thickness due to the buckling of the formwork during the pour, but this is far from clear on the state of the evidence. 154 Mr Dimond testified that a crack in the concrete could lead to concrete "cancer". This involves liquid coming into contact with the reinforcement which ultimately rusts causing the collapse of the structure. 155 As to tank 2 (5.8 m diameter; marked Ciba 455 – ST - 004), Mr Dimond reported as follows: [I assume this to be a 54 m3 tank] "All cracks were less than 1 mm wide. A meandering horizontal crack around the entire perimeter, with some calcification, approximately at mid height. A vertical crack in the top half of the wall on the west side. The inside of the tank was as for tank 1."
156 Mr Dimond gave no evidence as to the cause of the cracks. 157 Mr Dimond reported as outlined below about his observations of the other tanks on 30 November 2004: "Tank 3 3.7 m diameter – Ciba 455 – ST – 0002 [I assume this to be a 20 m3 tank] All cracks were less than 1 mm wide. Horizontal crack around the entire perimeter at approximately mid height. Vertical crack on the outside full height, southwest face.
(Page 23)
Full height vertical crack on northwest face with some calcification. Full height vertical crack on southeast face. The tank was full however we observed damage to the inside face similar to tanks 1, 2. Vertical crack on the west face inside and outside. Tank 4 3.7 m diameter – Ciba 455 – ST – 0001 All cracks less than 1 mm wide. The tank was full. Horizontal crack around the perimeter at approximately mid height. Numerous random crazing externally. Vertical cracks on south, north, west faces and on the southwest face with calcification. Damage to the inside of the tank was similar to tanks 1, 2, 3.
Tank 5 5.8 m diameter – Ciba 455 – ST – 0003 All cracks less than 1 mm wide. Meandering horizontal crack around entire perimeter at approximately mid height. 2 or 3 very find (sic) vertical cracks in the top half of the wall externally on the west face. Damage to the inside of the tank is similar to tanks 1, 2, 3, 4. Tank 6 9.0 m diameter – Ciba 455 – ST – 0006 This tank is used for storm water storage. Horizontal crack on the east face 300 – 400 mm from the base. Horizontal crack on the southwest and west faces 400 - 900 mm from the base. Calcification in the southeast face near the base."
(Page 24)
158 Mr Dimond testified that "Ciba staff" had told him that tank 6 was used to store storm water. However, there was no admissible evidence on this point.
159 Mr Dimond testified that the tanks are now six years old and that they still perform a job, that is, they store liquids. He said he is concerned about the amount of leaching of the inside of those tanks which had acidic material in them. There is no evidence as to the so-called "acidic material" in the tanks nor as to which tanks stored this material. Mr Dimond said that he could not predict how long the tanks would last. He said that the tanks could probably be repaired which would add to the life of the tanks but he was unable to predict how much longer the tanks would last if repair work was done. 160 Ultimately, Mr Dimond could not categorically say what, if any, tanks required demolition. He said that "a sensible approach" to the problem would be to measure the amount of cover, decide what liquid would be stored in the tanks and determine their expectancy. That information might determine what needs to be done. Mr Dimond's view was that the most important factor in this regard was the amount of cover over the reinforcement. 161 He said that the leaching of fluid through the tanks indicated full depth cracks which mean that the reinforcement has probably been affected by fluid. In "extreme cases", a red appearance indicates that the reinforcement has begun to rust. There is no evidence of this in the tanks which he inspected. His view was that given the appearance of the cracks, that the reinforcement should last for a reasonable time but he was unable to predict how long. 162 Mr Dimond testified that the calcification was not evident in every crack he saw. This indicated that the tanks might be repaired and could have a "reasonable life". 163 Mr Dimond testified that what is missing from the information provided to him is the amount of reinforcement in the tanks which he considered to be very important when assessing their lifespan. 164 Mr Dimond referred to the liquid which had been stored in the tanks but this evidence was not proved by admissible evidence and his opinion in relation to it is not admissible. (See Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370).
(Page 25)
165 Mr Dimond was asked whether there is a way of repairing the reinforcement, assuming that it had already been "attacked". Mr Dimond said that an attempt to repair the reinforcement would not normally be done unless there was clear evidence of rusting and he saw no evidence of that.
166 He said that the numerous vertical cracks around the tanks and the position of those cracks led him to believe that the stress and strain within the reinforcement in the concrete was such that the concrete had created the cracks within itself. Mr Dimond said that all concrete cracks. The fact that the cracks are visible does not mean that the reinforcement has failed but that the strain within the reinforcement was such that the crack in the concrete developed. 167 Mr Dimond said, as he saw no evidence of rusting, it is very difficult to determine if there has been severe corrosion of the reinforcement given that he has no knowledge of where the reinforcement is within the walls or the measurement (I assume of the cover) using the "cover meter".
Findings as to the quality of the concrete 168 In my view, the evidence establishes that the concrete delivered on 4 and 17 August 1998 was not of the ordered slump. The unchallenged tests of Mr Newton together with the unchallenged evidence of Mr Black establish that in relation to the concrete delivered on 17 August. 169 As to the concrete delivered on 4 August, I rely on Mr Black's long experience in the building of tanks using concrete supplied by the plaintiff. His uncontradicted evidence, which I accept, is that the concrete was displaying characteristics which were not consistent with those of concrete with a 100 slump. 170 Accordingly, I am of the view that the plaintiff breached the express terms of the contracts made in connection with the concrete supplied on 4 August and 17 August 1998. 171 I am also satisfied on the basis of Mr Black's evidence as to the "behaviour" of the concrete delivered on 11 December together with the uncontested tests undertaken by Western Geotechnics that the plaintiff breached the express term of the contract to supply concrete of 100 slump on that day. 172 In effect, the defendants plead that because the concrete was not of the ordered slump and caused damage to the formwork that it was not fit
(Page 26)
for the purpose of building concrete water tanks and was not of merchantable quality. 173 There is no evidence as to what type of concrete should be used for constructing the tanks. The most that can be said is that the concrete was not of the ordered slump and therefore not suitable for Mr Black's methodology of constructing the tanks. There is no evidence that concrete of the slump of the respective loads as outlined above was not fit for the purpose of constructing the tanks. It may well have been. What is clear is that if Mr Black's methodology was to be effective, the slump of the concrete was to be as ordered by him. 174 However, even if it could be said that the plaintiff breached the pleaded implied terms of the contract, there is no evidence that the concrete which was delivered caused the cracking and damage which was observed by Mr Black and Mr Dimond. Mr Dimond's evidence is largely directed at describing the cracking which he saw in 1998 and 2004 and the likely effects of it on the tanks. Mr Black's evidence focuses on the effects of the wrong slump on the construction of the tanks according to his methodology. The cracking and "bony" surface could have been caused by a variety of factors, for example, storage of material other than water in one or more of the tanks. 175 There is no evidence that the plaintiff knew of Mr Black's methodology. It is reasonable to infer that as the plaintiff knew through its employees that Mr Black was to use the concrete to construct water tanks and that the specifications ordered by him were such as to achieve his purpose. However, the fact that the concrete did not suit Mr Black's methodology does not mean that it was unfit for the purpose of constructing concrete water tanks or was not of merchantable quality.
Consequences of the breaches of contract
The formwork 176 There is only a claim for repairs to the formwork used on 4 August 1998. It does not seem to be in dispute that wet concrete poured into formwork exerts lateral pressure on the formwork. The methodology of constructing the tanks adopted by Mr Black was designed to minimise that pressure to avoid damage to the formwork and to ensure that the tanks would be properly constructed. There is no evidence that the methodology adopted by Mr Black was not appropriate to construct the tanks.
(Page 27)
177 There is no evidence that the formwork was not properly maintained, inspected or constructed on 4 August 1998. There is no evidence of any fault in the design of the formwork.
178 Mr Black had only experienced a similar problem once before in 20 years of building tanks using this methodology of construction and similar formwork. 179 In all the circumstances, it is my view that it is more probable than not that the concrete supplied on 4 August was too wet to reach initial set in the time calculated by Mr Black. Accordingly, the lateral pressures exerted caused the formwork to buckle and bow as described by him. There is no other reasonable inference to draw based on the evidence. 180 Mr Black testified that F Panichi & Co ("Panichis") supplied him with formwork. His counsel informed the court that any witness from Panichis would not be able to identify exactly what formwork had been repaired by reference to the damaged tanks. There is no evidence as to the repairs and/or replacement of the damaged formwork other than the tender of invoices from Panichis. The most that Mr Black had to say about the invoices was that it was necessary to fabricate 10 "new 53,000 gallon panels" because they were not salvageable. 181 The invoices from Panichis were tendered by consent without calling a witness to formally prove them. The plaintiff's counsel specifically agreed to the tender of the invoices on this basis. He put the defendants' counsel on notice that if some other point in relation to the invoices was to be proved, then counsel for the defendants should "think about it". 182 However, there is no evidence as to the necessity to effect repairs (apart from Mr Black's general assertion that the repairs were necessary), or the type of repairs done or the reasonableness of the charges. This is not a case where it was not possible to prove these matters. I would expect that a witness from Panichis or even Mr Black could have given evidence as to the particular damage caused to particular items of formwork and why repairs and/or replacement was necessary. 183 The conduct of the defendants' case in this regard is similar to the situation arising in Michael Kellaway International Pty Ltd v Shark Bay Airport Pty Ltd,unreported;SCt of WA, Library No 970604; 13 November 1997, where the Full Court quoted with approval the following dicta in Bonham-Carter v Hyde Park Hotel Ltd (1948) 64 TLR 177 at 178, per Lord Goddard CJ:
(Page 28)
"Plaintiffs must understand the fact that if they bring action for damages it is for them to prove their damage: it is not enough to write down the particulars, and, so to speak, throw them at the head of the Court saying 'This is what I have lost; I ask you to give me these damages'. They have to prove it. The evidence in these cases with regard to damages is extremely unsatisfactory". 184 In my view, reasonable certainty, if not absolute certainty of proof of the above matters was possible in this case. 185 In those circumstances, I would award only nominal damages to PTT for damage to the formwork in the sum of $500.
The tanks 186 The defendants pleaded that the tanks would have to be demolished and replaced. 187 Mr Dimond's evidence describes in detail the damage to the tanks. It would seem from Mr Dimond's evidence that an important piece of information, namely, the amount of reinforcement in the tanks was not provided to him. The amount of cover was not measured with the appropriate instrument. In my view, Mr Dimond's evidence fell far short of establishing on the balance of probabilities if all or any of the tanks required demolition. I take the same view of his evidence as to the need for repair and the type and time of repairs. 188 The only evidence as to the need for the tanks to be replaced is Mr Black's opinion. His evidence is in general terms and unsupported by the evidence of Mr Dimond. 189 The defendants' counterclaim pleaded that the damage and loss was occasioned by the need to replace the tanks. It was only when Mr Dimond gave evidence that the issue of repairs was raised. Even if I ignore the pleadings, there is insufficient evidence to prove on the balance of probabilities in relation to particular tanks, that one or more require repairs. In any event, any evidence as to the need for and type of repairs was dependant on matters which were not the subject of evidence. Further, even if the defendants had proved that one or more of the tanks required repairs, there was not one jot of evidence relating to the cost of repairs.
(Page 29)
190 Even if it had been proved that one or more tanks required demolition, counsel for the defendants conceded that there was no evidence as to the cost of demolition and associated costs as pleaded in the counterclaim. Again, these are matters which are capable of assessment at least with a reasonable amount of certainty. There is simply no evidence.
191 There is no evidence as to the cost of repairing the tanks. 192 In summary, I am not satisfied on the balance of probabilities that any of the tanks require demolition and replacement.
Contingent liability 193 For the sake of completeness, I will deal with the claim made by the defendants that PTT has a contingent liability to Statewide for the cost of replacing/repairing the tanks. 194 Mr Black testified that if Occtech made a claim against Statewide for costs incurred in either replacing or repairing the tanks, Statewide would make a demand on PTT for reimbursement. However, he also said that Occtech had made no demand on Statewide. There is no evidence that Occtech is even aware that the tanks may need to be repaired and/or replaced. There is simply no evidence about Occtech's intentions. Given the state of the evidence, it is my view that PTT has not proved on the balance of probabilities a contingent liability of Statewide to Occtech and accordingly has not proved that PTT has a consequential contingent liability to Statewide.
Summary 195 I award the defendants nominal damages of $500 for the repair for the formwork. 196 The defendants have not proved that the tanks require repair or demolition. To this extent their counterclaim is dismissed.
197 I find that the plaintiff has proved its claim in the sum of $15,191.27.
(Page 30)
Schedule of damages Damages to be paid by defendants $15,191.27 Less $500.00 (set off) $ 500.00 $14,691.27 Plus interest (amount agreed) $ 5,832.18 Total damages awarded to the plaintiff $20,523.45
198 I order that the defendants pay the sum of $20,523.45 to the plaintiff.
|