Robson v The White Ant Company Pty Ltd
[2014] NSWDC 251
•22 December 2014
District Court
New South Wales
Medium Neutral Citation: Robson v The White Ant Company Pty Ltd [2014] NSWDC 251 Decision date: 22 December 2014 Before: Neilson DCJ Decision: Verdict and judgment for plaintiffs against defendant
Verdict and judgment for cross-defendants against the cross-claimant
Catchwords: ESTOPPEL BY DEED - Termite barrier installed in plaintiffs' home by a company other than the defendant - Termite ingress damages plaintiffs' home - Action based on a deed between parties - Barrier installed negligently - Determination of cause of termite ingress Cases Cited: Eslea Holdings Ltd v Butts (1986) 6 NSWLR 175
Cabouche & Bond v Ramsay (1993) 119 ALR 215 (FFCA)
Greer v Kettle [1937] 4 All ER 396
Re Patrick Corp Ltd and the Companies Act [1981] 2 NSWLR 328Texts Cited: Halsbury's Laws of Australia
Rawlinsons Construction Cost Guide 2012Category: Principal judgment Parties: Michael & Judith Robson (Plaintiffs/Cross-defendants) Representation: Solicitors
Somerville Laundry Lomax (Lismore) (Plaintiffs/Cross-defendants)Bennett & Philp (Brisbane) (Defendant/Cross-claimant)
Counsel
Ms C Smith (Plaintiffs/Cross-defendants)
Mr C Johnstone (Defendant/Cross-claimant)
File Number(s): 2011/101316 Publication restriction: No
Judgment
The plaintiffs bring an action for damages for breach of contract based on a document entitled "Deed by Agreement" which has not been dated by any party. Exhibit L has been executed by the plaintiffs but exhibit 10 contains a copy of it executed by each party. That copy appears from exhibit 10 to have been forwarded by the plaintiffs' then solicitor to the defendant under cover of a letter dated 9 April 2009, which appears to have been sent by email. The Deed of Agreement must be seen as being effective from 9 April 2009. The further amended statement of claim filed in Court on 21 May 2013 claims $104,547 plus interest, but that claim was reduced during the plaintiffs' address on 8 November 2013 to $87,086. Relying on the same Deed of Agreement, the defendant has brought a cross-claim against the plaintiffs for $6,880.05. The substance of the dispute between the parties arises out of the invasion of the plaintiffs' home by termites, or white ants, first discovered by Mr Michael Robson some time in 2006. The plaintiffs' claim is for the "reasonable costs of the rectification" of damage done to their home by the termites. The defendant's claim is for the costs of work done by it at the plaintiffs' home. The heart of this dispute is "a simple issue as to what was the cause of the termite infestation" of the plaintiffs' home: T 21 May 2013, p 17.38.
The plaintiffs
The plaintiffs are husband and wife. Mr Robson is a licensed builder. When he first gave evidence (30 May 2013) he had been a licensed builder for approximately 25 years. For the previous 21 years he had been self-employed. The majority of his work involved the construction of houses and home units.
The Robsons build a house
Between the northern New South Wales towns of Evans Head and Woodburn runs a road about 10 kilometres long. Evans Head is a coastal fishing town and Woodburn is on the southern bank of the Richmond River, 36 kilometres upstream from Ballina. Originally the residents of Woodburn may have described this road as the "Evans Head road" or "road to the beach" and the residents of Evans Head as the "Woodburn road". The road is now formally known as Beach Road. The Robsons purchased a block of land comprising 22 acres adjoining this road, 4.2 kilometres from Evans Head. At the time of construction of the house, the postal address was 420 Beach Road, Evans Head. There are now between 12 and 15 dwelling houses in this locality and the hamlet has been formally named Doonbah. The Robsons block of land is on the southern side of the road and is flood prone.
Construction of the Robsons' house commenced in 2000. An engineering plan for the house, exhibit D, bears date 10 July 2000. The same document bears a hand written endorsement which suggests that the house slab may have been inspected, after laying, on 2 August 2000. Because the land was flood prone, the house had to be built on a mound. There is a concrete slab on which was erected a timber frame. The external cladding was brick, the internal cladding plasterboard. There was town water and town electricity available, but a septic sewer system needed to be installed. The house was to contain three bedrooms (the master bedroom having an ensuite bathroom), a study and "sunken family room" in addition to the usual rooms found in a normal family home. On the western side of the house was to be added a double garage, but at a lower level on its own separate slab. Because of its geographical location, the house needed to have protection from termites. Mr Robson decided to install a "Termite Tite" barrier protection system because he had "used it a few times previous to this job and to the best of [his] memory [he had] seen it on another job and thought it was a good product" (T 30 May 2013, p 6.02).
Termite Tite Pty Ltd
Termite Tite Pty ltd (ACN 076 847 811) was registered on 19 December 1996. On 8 January 1997 Mr Terry John Trapnell of Banora Point became a director, secretary and a shareholder. Mr Ian David Fraser of Terranora also became a director and a shareholder. Annexed to the report of Mr Christopher Langley of 17 September 2012 (exhibit 5) is a letter of instruction to him from the defendant's solicitor dated 19 June 2012 which annexes CSIRO Technical Assessment 224, originally dated August 1997. That concerns the "White Ant Co. System" which was formerly known as the "Termite Tite System". The Technical Assessment was "updated" when the present defendant forwarded further material to CSIRO. However, the Technical Assessment does give certain information relevant to Termite Tite Pty Ltd. On page 4 of the Assessment appears the following:
"During the appraisal, the company name Termite Tite Pty Ltd was registered by Mr T J Trapnell who also trades as TJT Construction. Thus, information provided by TJT Construction is relevant to this appraisal."
The Assessment then lists a large number of "drawings and details showing various profiles and methods of fixing for various types of construction". On the same page appears this matter:
"2. TJT Constructions, P O Box 6418, Tweed Heads South, New South Wales 2486. (Facsimile 15 May 1996):
This included physical properties of the components and technical data from the suppliers, viz. details on the aluminium, plastic components and the various adhesives for joining aluminium to aluminium, aluminium to PVC, aluminium to concrete, aluminium to clay brick, aluminium to concrete blocks, PVC to concrete, PVC to clay brick, PVC to concrete blocks and general purpose adhesive.
Also included were copies of the licence design issued to trained installers, quotation form, installers job record, meter box label, the notification to home-owners, and a treatment certificate."
Also on that page commences a list of Test Reports made between 13 August 1996 and 17 May 1999 relevant to the Termite Tite System.
Mr T J Trapnell ceased to be a director, secretary and a shareholder of Termite Tite Pty Ltd on 4 July 2002. On the same date Ms Judith Dawn Fraser of Terranora became a director and the secretary of the company. Mr I D Fraser and Ms J D Fraser had the same address at Terranora. The inference is easily drawn that they are related. The Frasers ceased their involvement in the company on 19 September 2005.
The present defendant was incorporated on 28 May 2002. (T 20 May 2013, p 3.05). It forwarded to CSIRO "Product Codes and Illustrations Book (Updated 1st January 2004)." The logo of Termite Tite Pty Ltd (see exhibit 3) and of the defendant (see exhibit 8) are the same. Indeed, if any writing appears connected to the Termite Tite logo it is "Termite Tite P/L", and, if any writing appears connected to the White Ant company logo, it is that company's name on top and "Termite Tite Barrier Systems" below.
The inferences to be drawn are that Mr Trapnell devised the "Termite Tite system" and that Termite Tite Pty Ltd was incorporated for the purpose of marketing that system. In mid 2002 the present defendant acquired (probably by purchase) the intellectual property in the system. Hence one can understand why the present defendant involved itself in what ought to have been a dispute between the plaintiffs and Termite Tite Pty Ltd, and why the plaintiffs' recourse is to the Deed of Agreement referred to in [1].
The Termite Tite system
The Termite Tite system is a physical barrier system, designed to exclude termites from the building in which it is installed. Mr Langley describes the system in this fashion (with some grammatical corrections):
"6.2 The function of a termite barrier is to deter against concealed entry by subterranean termites.
6.3 There are different types of termite barriers. One type of barrier is a chemical barrier (which uses some form of termiticide). Another type is a combined barrier such as a composite barrier being a physical component plus a termiticide. An example of a composite barrier would be an impregnated membrane.
6.4 Despite the installation of these barriers, it would still be possible for termites to gain access to a building:
6.4.1 by building over or around the barrier. For instance, this could happen if termites were able to build up along an external wall. This is described at clause 1.7.1 of Australian Standard 3660-2000, Termite Management, Part 1: New Building Work (the "Standard") as bridging; or
6.4.2 if the barrier is compromised in some way. For instance, this could happen if there is a penetration through the barrier material which allows entry such as the installation of a pipe or other service facility. This is described at clause 1.7.2 of the Standard as breaching.
6.5 For many years termite barriers were installed to protect the whole of a house footprint by extending under the slab and around the external perimeter. However, clause 2.3.1 of the Standard allows a properly constructed concrete slab to form part of the termite barrier system. This means that it is only necessary to protect the perimeter of a building as the slab itself will operate as a barrier against entry. This is referred to as a perimeter barrier.
6.6 Perimeter barriers are now the most common form of termite barrier as they are significantly cheaper to install than a full under slab application.
6.7 The Termite Tite barrier system is a perimeter barrier system which utilises strip metal (originally aluminium but now stainless steel) installed with one edge on the brick course and which is then folded down the inside edge of that brick course and is then folded again at right angles so as to protrude horizontally towards the interior of the building. That protruding edge is cast in to the slab when the concrete slab is poured. As such, the entire physical termite barrier system is comprised of the concrete slab into which the shielding is cast [as well as the strip shielding].
6.8 If the entire (or sufficient depth ) of a concrete slab edge is exposed in a building then there is no need for an additional physical barrier to that part of the perimeter as the exposed edge of the slab itself forms the area that the termites would have to bridge to gain access to the building. Such an exposed slab area is at the garage of the building in this matter.
6.9 This is because if termites build up an external wall they will leave mud tunnels or tracks which will be seen by anyone performing regular maintenance. This is described at clause 1.7.6 of the Standard. Regular inspections should be conducted so as to detect any such unconcealed entry. The fact that termites are undertaking this type of activity will also be an indication that the termite barrier installed is doing its job properly. "
Diagrams of this barrier system for installation in brick veneer buildings with a concrete slab are found in exhibit 3 (Termite Tite P/L) and exhibit 8 (defendant's). These are not easily reproduced. The easiest (for me) way to describe the system is to consider a right-angled "Z" where the upper ledge rests on top of the brick which forms part of the external wall of the building, the vertical shaft runs along the inside part of the height of the brick and the lower ledge is inserted into the concrete slab. Mr Robson described the upper ledge as being 120mm long, the vertical shaft as "about 50"mm long and the lower ledge as "probably" a similar length. If the physical barrier provided by Termite Tite Pty Ltd be the same as that provided by the defendant, then the vertical shaft and the lower ledge are each 35mm long (see exhibit 8). Such appears to me to be likely. Useful photographs of the barrier system installed before the pouring of the concrete slabs are found in CSIRO Technical Assessment 224, referred to above. In addition to including in the construction of the building a perimeter barrier, a barrier must also be installed around slab penetrations, including cavity piping. In the current matter there is no suggestion that a slab penetration has been the site of termite ingress to the plaintiffs' home.
The external barrier is not a continuous piece of metal. It comes in lengths of 2.4m (T 30 May 2014 p 18.10) which must be cut if the length of the wall be shorter than 2.4m and then joined to lengths on adjoining walls or, if the length of wall be greater than 2.4m, then two or more lengths must be joined together. Joining is by way of overlapping. According to exhibit 7, the minimum lap width is 15mm. Exhibit 7 indicates that adhesive should be placed along the entire length of the overlap, but such appears not to have been the case at the time of the installation at the plaintiffs' home. Exhibit 7 is an extract from the defendant's Training/Technical Manual of January 2004.
The terminology I have used in [9] above is not technical. What I have described as "ledges" were sometimes described as "tongues". What I have described as the "vertical shaft" was variously described: "turn down"; "return"; "vertical shaft"; "vertical joint"; "upright"; "fold down".
The process of laying the slab
As might be expected, the builder of the Robsons' house was Mr Robson himself. He gave evidence of the steps taken in the laying of the concrete slab. He also drew three diagrams (exhibit E) which visually portray this process. The steps taken are these:
(i) Concrete is laid onto which the perimeter brickwork is to be laid. Into this concrete are inserted "starter bars". These are metal bars that are designed to tie the perimeter wall footing to the slab of the house when it is laid. Starter bars were installed every 600mm around the perimeter of the house. The starter bars at this stage are "L" shaped, the horizontal length and part of the vertical length being embedded in the concrete footing for the perimeter brickwork.
(ii) The perimeter brickwork is then laid in its concrete footing. There were six courses of bricks laid, except where the sunken family room was to be, where only four courses of bricks were laid (T 30 May 2014, p 7).
(iii) Within the perimeter wall is laid a filling of "subgrade" (road base or gravel) which was compacted. The engineering drawing (exhibit D) makes this stipulation:
"Any fill placed on this site is to be granular non-cohesive material with a CBR of not less than 15. Fill is to be placed in layers of loose thickness not exceeding 200mm and compacted to 98% standard compaction to AS1289."
Exhibit E shows that as the filling approached the perimeter wall its height was lowered so that its edge reached the top of the concrete footing of the perimeter wall, on its inside edge.
(iv) Pipes were then laid for drainage and electricity, but not for water (T 30 May 2014, p 9).
(v) A "vapour barrier" was then laid over the filling and the pipes. This was a black plastic waterproof membrane, often called by a brand name "Visqueen" (T 30 May 2013, p 9). That term was used by Mr Langley, the defendant's pest expert. Mr Robson made it quite clear (T 5 November 2013, p 28) by marking the third drawing in exhibit E that the vapour barrier did not reach the perimeter brickwork but was cut or so placed that it reached only about half way along the concrete footing of the perimeter, stopping where the starter bars emerged from it.
(vi) The starter bars are then "turned down" (T 30 May 2013, p 14) so that they will lie in the concrete slab when it was poured. See also T 31 May 2013, p 20.
(vii) Reinforcing mesh ("reo") was then laid over the vapour barrier and the starter bars (T 30 May 2013, p 9). Exhibit D stipulates "F82 mesh".
(viii) The Termite Tite barrier was then laid by an installer. The top ledge of the barrier rested on top of the highest bricks in the perimeter wall, with the bottom ledge protruding into the cavity which was to be filled with concrete.
(ix) "Formboards" or "edgeboards" were then placed on top of the termite barrier to create a "rebate", so that where the timber frame of the house would be erected is higher than the brick veneer wall (T 30 May 2013, p 10).
(x) The slab is then poured. Exhibit D stipulates a 100mm thick slab, but it is clearly much thicker than that at the perimeter where it must be either six or four bricks high.
(xi) The poured concrete must then be compacted. Mr Robson gave this evidence on 5 November 2013:
"Q. Where were you when the slab for your house was poured?
A. There on site.
Q. When the slab was poured what was done?
A. The slab was pumped with a concrete pump and placed by concreters and also my own self and the fellows that work for me; we manually compact it and it's screeded and trowelled and finished.
Q. When you say finished, what do you mean by finished?
A. With a trowelling machine, the concrete is placed and manually compacted and it's screeded off with a concrete screed then it is finished with a helicopter - called a helicopter which is a trowelling machine.
Q. Right, how is concrete manually compacted, what's involved?
A. Well the pump does a fair bit of it when it's pumped in but it's also done just with gumboots and shovels and trowels and these days it's mechanically vibrated with a vibrator but back then it wasn't."
(xii) Work would then stop to allow the slab to "cure". Exhibit D stipulates:
"All slabs to [be] fully cured, to minimise cracking. Ensure concrete is kept continuously wet for at least 7 days following concrete pour. Alternatively apply an approved curing compound immediately following concrete finishing."
The evidence does not disclose which alternative Mr Robson adopted.
A complication arising in the pouring of this slab occurred because of the sunken family room. This was explored in cross-examination of Mr Robson on 6 November 2013. This evidence was given:
"Q. Can I just get some idea from you about constructing the concrete slab in one pour, with a step down?
A. Yeah.
Q. That's more difficult than the usual flat slab, isn't it?
A. It is.
Q. That's because you need to rebate with form board, do you, and there's a fair amount of weight against it?
A. That's correct.
Q. Can it flow down underneath the form board?
A. Can the concrete flow down?
Q. Yes?
A. Well, it needs to, yeah.
Q. Because there's a little gap, is there, to - it flows down to form the lower part?
A. Yeah, well, the bottom of the board's at the height of the lower level and the top of the board's at the top of the high level. You can imagine there's a monolithic slab all fully connected and - did you have - there's a detail, I think, in there that shows that.
Q. You pour the top one?
A. We pour it all together. Generally poor the bottom first, okay. Fill the bottom and then the pour the top cause otherwise well, tell a lie, we can do it either way. It depends on what concrete you like, you use, you know. Actually, they generally do do the top one first and then as it starts to go off
they do the bottom one and then
Q. When you say, "go off" does that mean harden?
A. Yes.
Q. You often hear concrete talked about, green. Is that when it's hardening or it
A. Well, green's unhardened concrete or -
Q. When I say, "often" I've heard it?
A. Yeah, yep.
Q. When you construct the form boards - to effectively create a dam, don't you?
A. Yep.
Q. How do you brace the form board in place?
A. Generally with wire.
Q. Are they called form pegs?
A. We use timber pegs too, yep, and wire back to the reinforcement to hold it straight.
Q. Is that what you did with your house?
A. Yep.
Q. When you say back to the reinforcement is that laterally or vertically?
A. The peg goes vertical and gets nailed to the edge of the board on the outside, okay. We generally run a wire back to the reinforcement, sort of maybe in the centre of the span, to hold it - help - stop it from bowing out under the weight of the concrete.
Q. After the concrete had gone off, the top layer, do you then pull the pegs out?
A. As it starts going off, you do, you take the pegs out and ram it full of concrete after you take it out.
Q. Do you recall doing that with -
A. We do it all the time.
Q. So you don't specifically recall doing it with your house but that's what you say you did?
A. It would have been done, for sure."
The slabs for the garage and for the porch and breezeway were laid separately and at different times. The sequence was first the house slab, second the garage and third the porch and breezeway (T 30 May 2013, p 17). The slab for the garage is at a lower level to that of the house, 700mm to 800mm lower, and the slab for the porch and breezeway is lower than that of the house, but not as low as that of the garage ("stepped down" - T 30 May 2013, p 17.02).
There is some evidence inconsistent with this analysis but I cannot accept that evidence. Mr Robson was the builder of his own house and supervised all the work (T 6 November 2013, p 2.45). I accept that Mr Robson attempted to tell the truth and I must reject evidence inconsistent with his description of how relevant work was done. For example, Mr Witty, an architect retained by the defendant, said that starter bars were placed at 300mm along the perimeter footings but that can only be a generalisation based on his experience and is not what actually occurred at the Robsons' house. Mr Langley, the defendant's pest management consultant, said this:
"The stages of construction is that masonry goes up and then the Termite Tite installed and then the vapour barrier's laid, the concrete is poured. But the vapour barrier impedes the key [bottom edge] of the concrete with the actual Termite Tite."
By this last sentence Mr Langley meant that the vapour barrier impeded the bottom edge of Termite Tite being embedded in the concrete slab. He then drew a sketch (exhibit 6) of how he believed the slab had been laid, which is completely inconsistent with Mr Robson's evidence and exhibit E. I can not accept Mr Langley's evidence on this aspect of the case. Indeed, Mr Robson was not cross-examined to suggest the method of construction propounded by Mr Langley.
The installation of the Termite Tite barrier
The Termite Tite barrier was installed on 2 August 2000. As I pointed out in [4] the evidence also suggests that that was the date of inspection of the slab after laying. The name of the installer recorded on the Termite Tite Pty Ltd "Installer's Job Record" (Exhibit 12) is "K+M" Archbold". I infer that the plus sign replaces an ampersand. That document also contains the name "Keith" and the inference to be drawn is that the installer was a partnership of Keith Archbold and his wife. According to Mr Robson, the installer was a contractor to Mr Ron Jeffrey (T 5 November 2013, p 63.10). Exhibit 13 contains a letter from Ron Jeffrey, White Ant Co. - Northern Rivers. On the top right hand corner of the letterhead is this matter:
"The White Ant Co - Northern Rivers
(R Jeffrey Holdings Pty Ltd)
104 Carrs Drive Yamba, NSW 2464"
together with the usual data as to how to contact the business. Mr Robson said that he thought that Mr Jeffrey "bought the White Ant franchise in our area" (T 5 November 2013, p 63.14). The inferences to be drawn are that Mr Jeffrey, through his company, was an agent, licensee or franchisee of initially Termite Tite Pty Ltd and more recently of the defendant and he contracted with K and M Archbold to install the Termite Tite barrier at the plaintiffs' house. The installer did not remain at the site for the pouring of the concrete (T 6 November 2013, p 3.07). It seems likely that he left the site immediately after he completed his work.
At the time of installation, the barrier could be made of either stainless steel or aluminium. At the commencement of the hearing there was an issue as to which metal was used at the Robsons' site (T 30 May 2013, p 16) but it was eventually common ground that it was made of stainless steel (T 6 November 2013, pp 50.48 - 51.13).
According to Mr Tony John di Betta, the defendant's technical manager since December 2008, the work of the installer was "done very well" (T 7 November 2013, p 13.48).
Warranty
Termite Tite Pty Ltd issued to the Robsons a warranty (exhibit C) numbered 6386 signed by Mr Terry Trapnell, its managing director, on 15 August 2000. Under the heading "Effect of Warranty" occurs this matter:
"In the event of subterranean termite damage occurring to structural members of the premises, Termite Tite Pty Ltd will effect the repair or replacement of the damaged members of the premises or, where practical, repair the Termite Tite Protection System to a maximum of $50,000.00 per dwelling or $100,000.00 for multi-unit premises."
Consequential loss or damage was excluded. The warranty was for ten years from 2 August 2000. Ten stipulated events voided the warranty. Two of those events are:
"2. The owner of the premises allows timber or rubbish to be stored in close proximity to the premises.
4. The owner of the premises allows the Termite Tite Protection System barrier to be bridged or broken by any other material."
Paragraphs 23 to 40 of the further amended statement of claim filed in Court on 21 May 2013 rely on the warranty on the basis that "the defendant legally assumed the obligations upon the installer that arose under the warranty" (par 24). However, learned Counsel for the plaintiffs abandoned the claim based on the warranty during addresses (T 7 November 2013, p 29.38). In light of how termites first entered the plaintiffs' home, Counsel's decision was proper.
Discovery of termites in the plaintiffs' home
Mr Robson said that he first became aware of termites at his home at the end of January 2006. He rang "the White Ant Company" and "they" turned up the next day or very shortly thereafter. There is no dispute that on 1 February 2007 Mr Ron Jeffrey and Dean Watkins attended the Robsons' home and carried out certain work. I believe that Mr Robson has mistaken the time of his discovery. I shall return to the issue of timing later.
The ensuite of the master bedroom adjoins the garage. In particular the WC of the ensuite, which has its own door to close it off from the rest of the ensuite, adjoins the garage. The jamb on which that door swings is fixed to the wall between the ensuite and the garage. Mr Robson initially heard noises in the wall but did not realise that they were being made by termites until "they surfaced in the jamb near the toilet there". He immediately went into the garage where he had placed an open-shelved, wooden cupboard. He moved the cupboard and saw termite mudding behind it, which had bridged the Termite Tite barrier. He rang "the White Ant Company" and was advised to knock down the termite mudding and that a man would come out to carry out an inspection. He then made a thorough inspection of the outside of his house but did not find any other "breaches" of the barrier. Mr Robson was clearly referring here (T 30 May 2013, p 22.50) to other bridging by termites over the Termite Tite barrier. At the hearing it seemed to me likely that the termites had entered the garage penetrating the 10mm expansion joint between the slab of the garage and the brick footing of the house below the house's termite barrier. Mr Robson described this expansion joint as Abelflex (T 30 May 2013, p 25). However it is clear from another diagram drawn by Mr Robson (exhibit G) that the base of the garage slab rests on top of the outer edge of the cement footing of the house. Exhibit G shows a bridge of termite mudding passing over the termite barrier. Mr Robson then explained how they had entered the garage:
"That concrete slab is 100mm thick which is 4 inches, and the termites came out between the concrete slab and the top brick there [of brick footing below the barrier] and built a mud barrier [bridge] around and into the frame. There's cladding there. They've gone between the cladding and the brickwork and got into the premises."
Concealing themselves behind the cupboard, the termites built a bridge over the termite barrier and were thus able to enter the house. The evidence discloses that a gap of one millimetre is sufficient to enable termite penetration.
According to Mr Robson a gentleman from "the White Ant Company", a "representative" or "employee", not Mr Jeffrey, attended his home and carried out certain work (T 30 May 2013, p 24). He drilled holes along the expansion joint and through the brickwork and injected termiticide into the holes. However, termites reappeared "a month, 6 weeks, something like that" later. Mr Robson noticed dirt on the floor near the entrance to the separate WC between the laundry and the bathroom at the back (southern) side of the house. They were in the pine panelling of the wall between the laundry and the WC on the WC side (eastern) where there is a short hallway before the WC door. He telephoned Mr Jeffrey's business and on this occasion Mr Jeffrey came out to the Robsons' home with one of his employees and performed another inspection and another treatment. When asked what that treatment was, Mr Robson replied:
"At that stage I think - they did quite a few different treatments over a couple of years and ... at the stage they put boxes on the walls with termiticide in the boxes near where the - they put one in the laundry and one in the office, I think that was the - might have been the next visit. On that visit I'm not exactly sure what treatment they did but they did do some treatment on every visit." (T 30 May 2013, p 28)
This evidence is relevant to timing.
I do know from exhibit 13 that on 1 February 2007 Mr Ron Jeffrey and Mr Dean Watkins attended the Robsons' home and recommended the installation of a "Sentricon" bait station in "the hallway". This appears to be the second visit of personnel from "the White Ant Company" at the plaintiffs' home from both Mr Robson's description of those personnel and the treatment provided and the site of the treatment. If that be so, which in my view is probable, then Mr Robson's first discovery of termite ingress at his home is likely to have been at least four weeks (perhaps six weeks), perhaps a little earlier, than late January 2007, perhaps in December 2006 or very early in January 2007. That exhibit 13 does not record the first visit by the gentleman who carried out the work in the garage is wholly explicable. Exhibit 13 was tendered to quantify the defendant's cross-claim (T 7 November 2013, p 6). Mr Robson accepted responsibility for the initial termite ingress from the beginning (T 5 November 2013, p 65.34). For the work first done by the defendant "an invoice was raised and the Robsons paid it" (T 6 November 2013, p 62.15). Apparently work done at the initial visit was performed by a "Brisbane technician" sent by the defendant (ibid, line 10), rather than by someone from Mr Jeffrey's business.
Further termite ingress
I have now found that Mr Robson first discovered termite ingress to his home sometime in either December 2006 or very early January 2007. He found further termite workings, clearly shortly prior to 1 February 2007. On 8 February 2007 Mr Dean Watkins attended the Robsons' home and installed the Sentricon bait station which had been recommended a week earlier. Mr Watkins again called at the plaintiffs' home on 22 February, 26 February, 12 March and 14 March 2007 to check the baiting system and on 12 March to replenish the bait. On 17 April 2007 Mr Watkins called again, performed a "full visual termite inspection" and checked the baiting system. At some time, I infer in 2007, Mr Robson detected further termite workings in the sunken family room. He thought that this was "somewhere between 4 and 6 months" after he discovered termite workings in the hallway near the WC. Mr Robson marked on exhibit B (plan of the house) a section of the southern wall of the house between the sliding doors to the back garden and the wall between the sunken family room and the kitchen (eastern side of the sunken family room sliding door). He called Mr Jeffrey, and Mr Jeffrey and "one of his employees" called "within a day or two". Mr Robson said that one could see that the architraves around the sliding door were eaten away and also the skirting board of the wall. He believed that they "put a box in the wall" of the sunken family room and also another in the laundry, although it is possible that that was placed subsequently.
Exhibit 13 records that on 1 May 2007 Mr Jeffrey and Robert Ingleson "from Head Office" attended the plaintiffs' home and "(r)emoved part of the garage wall sheeting to inspect for activity." It is unclear to me whether this is the occasion to which Mr Robson was testifying. However, exhibit 13 does not record a further occasion when Mr Jeffrey attended with another for the purpose of treating for termite ingress. However, the same exhibit does not refer to the setting of any baits other than that installed on 8 February 2007. I accept Mr Robson's evidence that more than one bait station was installed, so exhibit 13 may not be accurate or adequately describe the work actually performed. Exhibit 13 goes on to record that Mr Jeffrey again attended the plaintiffs' home on 18 and 24 September 2007 "to assess if [there was] any further activity."
Mr Robson said that the termites "reappeared" in late 2007. He noticed that the laundry door jamb "was eaten out"; i.e. the door between the laundry and the rest of the house, not the door from the laundry to the back garden. He also noted them in the jambs of the door from the hallway to the master bedroom. Mr Robson was then asked what action he took. He gave this evidence (T 30 May 2010, p 32):
"I rang Mr Jeffrey again. He came out on site and explained to me that they didn't think the responsibility was theirs and because the cupboard was up against the garage, and I quite accepted that, and ... he said they weren't going to do any ... more rectification work, and at that stage I rang a local pest fellow."
The "local pest fellow" was Mr James Pearson of Pestagon (NSW) Pty Ltd trading as Pest-A-Gon, of Woodburn.
Exhibit 13 records this matter:
"September 26, 2007
Owner called Yamba office to report suspect activity. Ron advised owner that he would contact Head Office to arrange an inspection.
October 26, 2007
Treatment proposed by Head Office pest technician, Terry Adkins."
Initially I believed that the last conversation that I have just recorded between Mr Robson and Mr Jeffrey occurred on 26 September 2007 but, on reflection, it seems more likely to have occurred after 26 October 2007. Mr Jeffrey, in exhibit 13, does not record his advising the plaintiff of "declining liability" but only of an approach to Head Office. Mr Atkins then inspected and proposed further treatment. Furthermore, Mr Pearson did not carry out his treatment until 21 February 2008 and I do not believe that Mr Robson would have delayed further treatment of his home for a period of almost five months. The better view is that the conversation with Mr Jeffrey which I am now considering was after 26 October 2007, later in that year. Accordingly, the fourth discovery by Mr Robson of termite workings was later in 2007 than 26 October. It may be that the telephone call of 26 September 2007 relates to Mr Robson's third discovery of termite workings, in the sunken family room, but that does not fit comfortably with what I have recorded in [26]. Suffice it to say that the important facts are of four separate discoveries of termite workings and the interaction of Mr Robson and Mr Jeffrey, the defendant's agent, licensee or franchisee who was not called in the defendant's case.
Events of early 2008
Mr Robson and his employee assisted Mr Pearson in carrying out the works of 21 February 2008 to make them "a bit cheaper". Holes were drilled every 300mm around the perimeter of the house, through the porch, breezeway, through the pavers at the back of the house and through the slab of the garage adjacent to the wall of the house and the holes were injected with termiticide. Mr Pearson's "Certificate of Termite Treatment" (exhibit H) states that no termite nest was located. It describes the work done thus:
"A Treated Zone was installed to the following area(s) full perimeter of residence using the liquid termiticide(s) Termidor which contain the active constituent(s) Fipronil. The concentration of the liquid termiticide/s used was 6% and the total volume used was 480Lt. Termiticide barriers degrade (break down) over time and should be replenished in the future. The Termiticide manufacturers claim their products should last from 2 to 10 years depending on the type and strength of termiticide used and the site conditions. So in the future, after one of the required regular inspections of the property, the inspector may advise you of the need to re-install the treated zone or barrier."
The "life expectancy" of the termiticide was 5 years. Mr Pearson recommended inspection every three months.
Mr Pearson's treatment was not immediately effective. Mr Robson gave this evidence:
"It took a little while for them to work and ... I was sort of a bit panicky at that stage so I rang James back up and said they don't seem to have stopped them because they reappeared again, so at that stage he suggested I ring John Elder because he was, in his opinion, the best in the area, he has the dogs to find them..." (T 5 November 2013)
Mr Robson telephoned Mr Elder and explained what had happened. On 27 March 2008 Mr Gavin Skinner of Elders Pest Control carried out a visual inspection of the plaintiffs' home. Mr Skinner's inspection report is part of exhibit J. It states that the drill hole spacings made by Mr Pearson were not to Australian standards. However, Mr Robson stated that Mr Elder carried out the inspection. In that regard he is mistaken. Mr Elder first inspected the Robson's property on 12 June 2008 (extract transcript 30 May 2013, pp 20 - 21). Exhibit J tells me that on 10 June 2008 Mr Elder was requested by Mark Flynn and Associates, solicitors, to have an "onsite meeting" with the Robsons and Mr Flynn. The inference to be drawn is that that meeting was held on 12 June 2008. In cross-examination, Mr Elder gave this evidence:
"Q. You decided at that point that the barrier had failed, didn't you?
A. Yes.
Q. And you had no explanation as to why it had failed did you?
A. At that stage no.
Q. Your hypothesis on 12 June 2008 was well I don't know how the termites have gotten in therefore the barrier has failed?
A. I come simply to that conclusion because the barriers - the physical barriers are meant to expose the termites on the outside of the building, okay. On a full perimeter check of the building there was no evidence whatsoever that the termites had exposed themselves on the outside of the building. So one could only assume that they had bypassed the barrier."
The problem with that evidence is that the Robsons only retained Mr Flynn of Flynn and Associates on the recommendation of Mr Elder. That was the evidence of Mr Elder himself (extract transcript pp 21.48 - 22.08) and Mr Robson (T 5 November 2013, pp 18.34 to 19.41 and in cross-examination at p 62). Mr Robson gave this evidence (T 5 November 2013, p 18):
"Q. So after Mr Elder came out what did you do about the termite situation?
A. His advice to me was that the barrier had breached and that I should contact a solicitor. He ... didn't think any more treatment needed to be done just at that stage. I cant remember whether he said just to give it a couple of weeks or whatever but we didn't. My next move was to contact Mark Flynn."
Either that advice was given by Mr Skinner or Mr Elder gave that advice after reading Mr Skinner's report but without himself inspecting the property. The latter appears more likely to me.
On 4 April 2008 there was a meeting at the plaintiffs' home arranged by the defendant's head office. Present were the plaintiffs, Mr Pearson, Mr Jeffrey and Mr Watkins. I know of this meeting from exhibit 13. It was not canvassed in oral evidence.
Fortunately for the plaintiffs, and as anticipated in Mr Elder's advice to Mr Robson, termite activity at the plaintiffs' home stopped by the end of April 2008 and "they haven't appeared since" (T 5 November 2013, p 60).
The mediation meeting
On 11 June 2008 Mr Flynn sent a letter by facsimile, most likely to Mr Jeffrey. This raises another dating problem. It seems to me more likely that such a letter would be sent after the meeting involving the plaintiffs, Mr Elder and Mr Flynn than before it, so that meeting may have been held on 10 June rather than 12 June. Mr Flynn's communication was replied to by Mr Rob Monahan, the then general manager of the defendant, by email on 14 June 2008. Mr Flynn's letter has not found its way into evidence, but Mr Monahan's response is part of exhibit 10. The substance of the email is this:
"Your letter (by fax) of 11 June has been forwarded to me.
I confirm that Ron Jeffrey is an accredited licensee for The White Ant Co Pty Ltd.
As General Manager of the company I advise that all further correspondence in relation to this matter should be directed to me.
Our Licensee was surprised to receive your letter as it is his view that after having attended site and spoken to both the homeowner and an independent pest control contractor at the site that our termite barrier system was not defective nor defectively installed and therefore not consequential to the termite infestation.
In terms of your instructions and in seeking further clarification of your letter we request the following information:
● Details and particulars of the independent verification from alternative Pest Control Consultants that significant termite damage has been rendered to their property as a consequence of defective installation of termite barriers at the time the property was constructed.
● Details of the extensive invasion work that will be required to be undertaken to source the full extent of the termite invasion.
● Particulars of the professional qualifications and / or experience of the consultant (s) engaged by your client and cited in your letter.
Naturally we seek an amicable resolution to this matter and trust that we may be able to work toward this end without the necessity to become involved in court proceedings however we are not prepared to admit liability based solely on the contents of your letter. We therefore propose that you provide the requested particulars and any additional information you may possess that would indicate our liability. We further request the opportunity to attend site with or without our own independent experts to enable verification of the findings so far."
I infer that the fourth paragraph refers to the meeting of 4 April 2008 discussed in [31]. Eventually the meeting suggested in the last paragraph was arranged. The second page of exhibit 10 proposed a meeting at the Robsons' property involving the plaintiffs, Mr Monahan and Mr Jeffrey on 16 October 2008. That suggestion was made to Mr Flynn on 25 August 2008. However there is no evidence that it occurred.
Mr di Betta gave evidence that he attended the plaintiffs' home in December 2008. He was with Mr Monahan and Mr Elder attended as well as the plaintiffs. Mr di Betta said this:
"I had been with the company for ... one week and I was there to look at the building, look at the problem. I had been given records of what had occurred and I met with Mr Elder as well."
Unfortunately, this meeting was not canvassed elsewhere in the oral evidence and there is no written record of it. In particular, Mr Elder did not attest to it and was not cross-examined about it. Whether it occurred or not is one of the many small mysteries in the current matter but, if it did occur, is of no significance. Mr di Betta said that there was a second meeting, which was a formal meeting. There is no issue about the occurrence of this meeting.
What has been referred to as the "mediation meeting" occurred on 10 February 2009. In his report of 22 November 2012 Mr Elder described the meeting thus:
"On 10.02.09 Onsite meeting - Following a discussion with the Robson's [sic], Mark Flynn and myself inside the Robson's [sic] house, representatives from the White Ant Company held a meeting outside (Mr Monahan, Mr Jeffrey and Mr Di Betta). They then returned and the General Manager Mr Monahan advised the Robsons they agreed to carry out invasive work to the home and the Robsons Solicitor, Mr Mark Flynn to draw up a simple agreement between the two (2) parties."
The "simple agreement" referred to by Mr Elder is the Deed of Agreement described in [1].
The Deed of Agreement
The Deed is very poorly drawn. I set it out below without the attestation clauses. Matter in square brackets has been inserted by me either to supply missing words or to supply appropriate meanings to misused or misspelt words:
"
DEED OF AGREEMENT
BETWEEN MICHAEL AND JUDITH ROBSON of 420 Beach Road, Woodburn NSW 2472 ("the homeowner")
AND THE WHITE ANT COMPANY PTY LTD ACN 100 706 009 of 104 Carrs Drive, Yamba NSW 2464 ("the contractor")
RECITALS
A) Michael & Judy Robson are the registered proprietors of the property known as 420 Beach Road, Woodburn, NSW 2472 ("the property").
B) Michael & Judy Robson caused a residence to be constructed on the property ("the home").
C) In the course of construction of the home, the contractor was retained by the homeowner to install a termite barrier system for termite prevention within the home ("the procedure").
D) The homeowner has subsequently located termite infestation within the home and it is alleged that following visual termite inspection of the home on or about 10 June 2008, termites have breached the termite barrier system rendering significant damage to the home.
E) The homeowner alleges that the damage is due to a breach in the termite barrier system as a consequence of defective workmanship on the part of the contractor and the allegation is not omitted [admitted] by the contractor ("the dispute").
F) The parties have engaged in Meditation on 10 February 2009 and have agreed to resolve the dispute on an interim basis in accordance with the terms and conditions of this Agreement.
THE PARTIES AGREE AS FOLLOWS:-
1. The contractor shall forthwith and no later than 28 days from the date this Agreement commences [do] all such necessary works at its expense to restrain and minimise any further termite activity in the home and undertake all such investigations to determine conclusively whether or not the termite infestation in the home is due to a breach of the termite tight [Termite Tite] barrier system.
2.The homeowner shall provide all such consents and all such assistance to facilitate the works to be performed.
3. The contractor will ensure that it effectively liaises with Elders Pest Control Pty Ltd to independently report and determine for the benefit of the homeowner the accuracy or otherwise of the finding of the contractor.
4. The homeowner hereto acknowledge and agree that in the event that the termite infestation to the home is due to a cause not referable to any negligent [negligence] or breach of negligent conduct on the part of the contractor or any breach of any contractual obligation by it due to the homeowner it will reimburse the contractor all reasonable costs incurred by it in performing the works described herein.
5. The homeowner hereto acknowledge and agree that in the event that the termite infestation to the home is due to a cause not referable to any negligent [negligence] or breach of negligent conduct on the part of the contractor or any breach of any contractual obligation due to the homeowner it will reimburse the contractor all reasonable costs incurred by it in investigating and treating the termite infestation and activity that was performed prior to the meeting of the parties and on-site inspection on 10 February 2009.
6. The contractor acknowledges and agrees that in the event that the termite infestation is found to be due to any negligent work or breach of contract on its part to the home owner it will provide all reasonably [reasonable] indemnities to the homeowner and be responsible for all reasonable cost [costs] of rectification to the home as determined by an independent building consultant who shall be briefed for these purposes and retained to report at the expense of the contractor.
6. [6A.] Neither parties [party] shall assign or any of their rights hereunder without the prior written consent of the other party.
7. The Agreement will anew [accrue] to the benefit of and binding on the excessors [successors] and assigns of the parties and the parties shall not sell or assign, transfer, or otherwise dispose of their rights under this Agreement without the expressed [express] written consent of both parties [the other] hereto.
7. [7A.] This Agreement is subject to all valid and applicable laws and regulations and in the event that the Agreement is found to be inconsistent with or contrary to any such valid laws or laws and regulations the later [latter] shall prevail and this Agreement will be notified [modified] accordingly.
DISPUTE RESOLUTION
9.1 The parties hereto shall not commence any Court proceedings (except proceedings seeking interlocutory relief) in respect of a dispute arising out of this Agreement unless it has fully complied with the obligations set out hereunder [herein].
9.2 A party claiming that a dispute has arise under the Agreement must notify the other party giving details of the dispute within 21 days of the dispute arising.
9.3 During the 21 day period each party to the dispute must use its best endeavours to resolve the dispute.
9.4 If the disputants are unable to resolve the dispute within the initial period, each disputant agrees that the dispute must be refereed [referred] for Mediation in accordance with the Mediation Rules of the Law Society of New South Wales at the request of any disputant, to:-
a) a Meditator agreed on by the disputants; or
b) if the disputants are unable to agree on a Mediator within 7 days after the end of the initial period it shall be a Mediator nominated by the then current Chairman of Leader [LEDA] of the Chairman's nominee.
9.5 The role of the Mediator is to assist in negotiating a resolution of the dispute. A Mediator may not make a decision that is binding on a disputant unless the disputant has so agreed in writing.
9.6 Any information or documents disclosed by a disputant under this clause:-
a) must be kept confidential; and
b) may not be used except to attempt to resolve the dispute.
9.6 [9.6A] Each disputant must bear its own costs of complying with this clause and the disputants must bear equally the cost of any Mediator engaged.
9.7 After the initial period, a disputant that has complied with clause 9.1, 9.2 & 9.3 may terminate the Dispute Resolution Process by giving notice to each other disputant.
9.8 If in relation to a dispute a disputant breaches any provision of clauses 9.1-9.6 inclusive, each other disputant need not comply with clause 9.1-9.6 inclusive in relation to that dispute.
10. Each party shall bear its' owns costs of an [and] incidental to this Agreement.
11. The parties acknowledge hereto [hereto acknowledge] that they have had the benefit of independent legal advice of and incidental to this Agreement and fully understand their respective obligations under it.
EXECUTED AS A DEED"
Clause 1 required the defendant within 28 days of 9 April 2009 to "undertake all ... investigations to determine conclusively whether or not the termite infestation" in the plaintiffs' home was "due to a breach of" the Termite Tite barrier system. The necessary investigations were to be made within the 28 day period, not the "conclusive" determination. Clause 2 required the plaintiffs to cooperate and clause 3 required the defendant to liaise with Mr Elder so that he could verify the determination of the defendant, in essence, on behalf of the plaintiffs. The question which then arises is: what then happened?
Inertia
The last question can be answered briefly: very little. I do know that Mr Flynn wrote to the defendant a letter dated 3 September 2009. That letter was not put into evidence. It may have arranged a meeting at the plaintiffs' home on 30 September 2009 or referred to such a proposed meeting. Mr Flynn wrote again to the defendant by email addressed to Mr Monahan at an address previously provided by him and by letter addressed to the defendant at Mr Jeffrey's street address. This communication is dated 15 October 2009 and its substance is this:
"We refer to our letter dated 3 September 2009 and deed of agreement dated 24 February 2009.
We note that you failed to attend the inspection scheduled for our client's residence on Wednesday, 30 September 2009.
In these circumstances, you are in breach of your obligations under Clause 1 of the deed.
Therefore; please treat this letter as formal notification that in the absence of you immediately contacting our client's consultants, Elder Pest Control representative, Mr. John Elder, 1800 686 617 ([email protected]), we are instructed to commence District Court proceedings on account of alleged negligent installation of termite barrier system. Our client will rely upon the contents of this letter of [sic] support of any application for indemnity costs.
We will require you to implement the necessary arrangements with Mr John Elder to facilitate commencement of rectification works within seven days, otherwise the proceedings foreshadowed will be commenced without further notice."
The defendant replied to Mr Flynn's letter of 15 October 2009 by email. In cross-examination Mr Robson gave this evidence, the questions being more relevant than the answers (T 5 November 2013, pp 68 - 69):
"Q. In response to that letter where there was the accusation of the failure to attend an inspection are you aware that Mr di Betta wrote to Mr Flynn copying Mr Elder on 19 October 2009 in an email and said, "Dear Mark" which was Mr Flynn:
"I was not made aware of a site meeting for 30 September as there had been so many changes to the times and dates. I will be booking a date directly with Mr John Elder to arrange to carry out a joint investigation. I will be away interstate for the balance of this week and will put the dates of 27 or 28 October to Mr Elder to arrange access."
A. That may well.
Q. So it wouldn't surprise you to learn that Mr Flynn has accused the White Ant Company of failing to attend a meeting in circumstances where the White Ant Company wasn't advised of the meeting?
A. That may well have happened, I wouldn't know."
The suggestion in the last question that the defendant was unaware of the meeting proposed on 30 September 2009 is not borne out by Mr di Betta's evidence (T 6 November 2013, p 62).
"Q. After the meeting in February 2009 can you tell his Honour what you or The White Ant Company took to undertake the investigation of the premises in accordance with the deed?
A. There was some delay in the deed being executed, according to what I found out. The then general manager was removed from his position and the case was handed to me where I proceeded to go through the normal lines of contact with the solicitor at the time and John Elder to try and coordinate to do the inspection, which was difficult.
Q. Why was it difficult?
A. Getting people to reply, getting three parties together and it it I didn't get an action a reaction from a request or a phone call or whatever. I went about my normal daily duties.
Q. When you say, "Getting people to reply", can you be more specific?
A. Both I found it difficult to coordinate both Mr Elder and through the solicitor.
Q. Do you recall when you eventually arranged a meeting?
A. It was after I got an email that we we didn't attend a site meeting in September."
The email of 19 October 2009 forms part of exhibit 10. Mr Johnstone did not quote it in full. The penultimate sentence of the email is this:
"I request that all correspondence relating to this matter be addressed to our Head Office and my email address as there is no Mr Monahan".
Mr Flynn was sending letters to Mr Jeffrey's business' street address and emails to Mr Monahan but may have been unaware of Mr Monahan's removal as managing director.
A meeting was held on 28 October 2009. Mr Elder's report of 22 November 2012 (part of exhibit J) describes this meeting thus:
"On 28 October 2009 an onsite meeting with myself, Judy Robson - homeowner and Tony Di Betta of the White Ant Company.
The purpose of the visit was to carry out invasive work to the external perimeter of the house to determine the termite ingress into the building by removing external brickwork and whether the barrier installed by the White Any Company had impeded termite entry into the building as it is designed to do.
[...]
Termite mudding was clearly visible on the concrete slab edge [...]. Once finished the invasive inspection Mr Di Betta returned Mr Jeffrey's phone call from onsite. Mr Di Betta advised at the time that repair work would be undertaken by the White Ant Company to restore the integrity of the barrier. He gave no timeframe on commencement or scope of rectification work which I advised should be undertaken immediately as the home is susceptible to further termite attack.
At my request rectification work carried out by the White Ant Company must also include a Termite Proposal, Treatment Certificate - Certificate of Termite Treatment in accord with Australian Standard AS3660.2 - and advice to the home owner regarding ongoing termite management for the property. Once the White Ant Company determines the scope of their intended work and the termite barrier has been repaired, invasive work to the internal structural members of the building can commence which will determine the extent of the termite damage. This work must be documented as it will be vital should the property be sold in the future. It was also agreed that no work would be undertaken by the White Ant Company without my supervision on site on behalf of the Robsons requested by Mr Mark Flynn, Solicitor for the Robsons."
This is an expurgated version of what was actually written by Mr Elder, omitting parts successfully objected to by Mr Johnstone. A series of photographs (exhibit 9) was taken by Mr di Betta at this time.
This meeting was followed by further inertia. Mr Robson gave this evidence in cross-examination (T 5 November 2013, pp 69 - 70).
Q. After that inspection nothing further happened until February, March or April 2010 to your knowledge?
A. No.
Q. I've given you three months there because I'm asking what your knowledge is and whether any of those dates prompt you?
A. Well they don't prompt me but the only other time the White Ant Company were there was when they turned up without Mr Elder to do further removal of the bricks.
Q. Well I'll suggest to you that that date was 27 April 2010?
A. Yeah.
Q. The person who attended was Mr Ken Bodycote, does that sound familiar?
A. Yeah.
Q. Do you know Ken Bodycote?
A. I don't.
Q. I'll suggest to you that the reason why he was there was to clean up the site, sorry clean up that area, that is remove the muddying from inside the cavity created by the removal of the bricks?
A. Yeah.
Q. Do you agree?
A. I don't know what he was there for.
Q. I suggest that the reason why he attended was in furtherance of Mr di Betta having said to you that he would arrange for somebody to attend to apply Protectant to the area and seal it off?
A. I was under the understanding that they were doing more invasive work to the perimeter which was what the agreement was and John Elder needed to be present. That's
Q. Is that because John Elder told you that?
A. No, I was at the meeting.
Q. So you thought from the meeting that John Elder had to be there whenever the White Ant Company attended?
A. That's right.
After discussing his interaction with Mr Elder on 28 October 2009, Mr di Betta gave similar evidence (T 6 November 2013, p 64):
"Q. After that with Mr Elder, did you do anything that date?
A. No.
Q. What did you do thereafter in terms of what you had told Mr Elder you intended to do?
A. I put together my internal report for the file and I emailed off to Ron Jeffreys, the local to arrange to get one of his gentlemen down there to do the work.
Q. Do you know when that work was then carried out or do you know if it was carried out?
A. It was carried well, the work was started. That's where those other photos came from. Ken Bodycote was sent down to the place at a mutually agreed time with the Robsons, I'm led to believe, through their Yamba office. He attended the site. He started to do his work and then he was asked to leave because Mr Elder wasn't there.
Q. When was the next time you had occasion to visit the property?
A. When this action started."
What prompted action in April 2010 was an email from Mr di Betta to Mr Jeffrey sent on 15 April 2010 (exhibit 11). Its substance is this:
"We need of repair [sic] the barrier at the step down area on the southern side of this property, The problem is that the case-in barrier has not set in the vertical joint to seal this [area] off. This area will need to be cleaned and sealed with Protectant and the bricks reinstated both here and at the doorway to the laundry.
There is a second area in the garage that is question able and will need the barrier sealed, this is at the corner of the garage wall and the joint to the slab area of the laundry. This is the external corner that is a straight wall on the inside of the garage. The barrier folds down into the slab at this point and is partly covered by the wall sheeting, it is not possible to say if the termites came out at this point or came down to this point from inside the building.
Please arrange this work as a matter of urgency as this has been at this stage for [too] long.
You and I will need to work out an offer about the damage I believe that we should not except the full repair cost but I will need more info to address this with the Robson's."
On 27 April 2010 Mr Ken Bodycote from Mr Jeffrey's business attended the Robsons' home "to clean and return barrier at stepdown after opening brick wall [on] 28 October 2009" (exhibit 13). As Mr Elder was not present, the Robsons refused permission to Mr Bodycote to carry out any work. However another series of photographs was taken at that time (exhibit 5).
Any inertia of the defendant was compounded by the tardiness of Mr Flynn, who was later struck off. This is alluded to in the evidence of Mr di Betta which I have already quoted. There is direct evidence of Mr Flynn's dilatoriness from Mr Robson. That can be found at T 5 November 2013, pp 25, 66 (where the word "antipathies" is a mis-transcription of "antithesis") and p 67 where Mr Robson admitted that he was "sure" the defendant had "trouble" in dealing with Mr Flynn.
The events of 27 April 2010 were the last "amicable" interaction between the parties. The current proceedings were commenced by the filing of a statement of claim at Ballina on 29 March 2011. The delay between these two dates is wholly explicable by Mr Flynn's inaction (T 5 November 2013, p 25). However, Mr Flynn's conduct does not explain all the delay or inertia. The defendant has not adduced evidence to show what it did between 9 April 2009 and 30 September 2009 to fulfil its obligation under clause 1 of the Deed and the inaction between 28 October 2009 and 15 April 2010 must be laid squarely on the defendant. At the meeting of 28 October 2009 Mr di Betta undertook to do certain things but did, on his own evidence, nothing until 15 April 2010. I find as a fact that the defendant breached its obligation under clause 1 of the Deed that I identified in [36]. Neither Counsel made any submission as to whether time was of the essence on the proper construction of the Deed. Assuming it were not, the delay has been so inordinate as to be wholly unreasonable.
The experts
It is convenient at this stage to identify the experts and their field of expertise before commenting on some forensic issues.
(i) Mr David Oke was qualified by the plaintiffs' solicitors. He is a building consultant with Northern Rivers Building Consulting Services Pty Ltd. He was qualified as a carpenter and joiner in 1984 and as a building foreman and clerk of works in 1986. He was accredited as a building consultant by the Master Builders Association of NSW in 2005. He obtained qualifications in Queensland in 2006. His experience in building, as distinct to his experience as a building consultant, is this:
"Sub-Contract Carpenter on residential construction including new luxury homes; extensions and renovations, roof inserts and roof conversions to existing homes on the upper and lower north shore and northern beaches areas of Sydney (6 years).
Licensed Builder in carrying out extensions and renovations on small to medium scale work in the Sydney region (5 years).
Practical experience in other trade work suck as brick and blocklaying; concreting; plastering; metal roofing; ceramic tiling; painting; landscaping.
Licensed Builder in carrying out construction of new homes and extension and renovation work (medium to upper standard) in the northern rivers region of NSW (11 years).
Quantity estimates and detailing of structural members of timber framed buildings for a building materials supplier (5 years)."
(ii) Mr John Elder is the principal of Elders Pest Control Pty Ltd, which is based at Yamba but has a branch at Helensvale in Queensland. He is a pest management technician and consultant in the pest management industry. He has been in that industry for 40 years. His basic qualifications were obtained from NSW TAFE. He described his work history in his curriculum vitae thus:
"●Established Elders Pest Control initially as a single operator in 1979. Today Elders are a multi-award winning company and one of Australia's most accredited pest control firms.
● Manager of Elders Pest Control until January 2003. Company management handed over to son, Chris Elder.
● Responsible for the infield education and training of company technicians.
● Regularly used as an independent consultant for termite related issues.
● Head of Elders renowned K9 Division and in charge of training, developing and operations.
● Developed world first canine for detection of West Indian drywood termites.
● Developed Australia's first bed bug detection dogs."
He is very well described as a "hands on" expert. He was called by the plaintiffs.
(iii) Mr Christopher Langley is a pest management consultant qualified by the defendant's solicitors. Like Mr Elder his basic qualifications are from NSW TAFE, with many further qualifications obtained from NSW TAFE, Queensland TAFE and AEPMA. He has more academic qualifications as a pest management consultant than Mr Elder and has engaged in research and has published.
(iv) Mr Michael Witty is an architect qualified by the defendant's solicitors. Mr Witty was qualified to assess the quantum of the plaintiff's claim. He has an impressive curriculum vitae.
(v) Mr Graham Lancaster is the manager of the Environmental Analysis Laboratory (EAL) at the School of Environmental Science and Management at the Southern Cross University at Lismore. He obtained the degree of Bachelor of Applied Science (Coastal Management) in 1989 and Honours in 1990. He is currently studying for a PhD in Soil Carbon particularly Phytoliths at Southern Cross University. He gave evidence about Scanning Electron Microscopy (SEM) of certain samples taken from the Robsons' home. The circumstances in which he came to be qualified by the plaintiffs' solicitors I shall discuss later.
Forensic investigations
On 28 October 2009 Mr di Betta, in the presence of Mr Elder carried out what has been described as invasive work. He removed one and a half bricks from the eastern end of the sunken lounge wall where it makes a "T" intersection with the wall of the kitchen. The kitchen wall extends 600mm further south than the wall of the sunken lounge. The bricks were taken from above the Termite Tite barrier. As is stated in [39], termite mudding was visible on the concrete slab edge, above the termite barrier.
On 17 May 2012 Mr Oke inspected the plaintiffs' home. That led to his report of 26 June 2012 which is part of exhibit A. Mr Robson cut openings into the plasterboard (internal) wall lining at certain locations to allow his inspection of those areas. The inspection points were:
(a) Sunken family room: eastern wall; 2 on southern wall
(b) Bedroom 4: southern wall.
(c) Laundry: eastern, southern and western walls.
(d) Master bedroom: western wall beneath wall opening.
(e) Garage: eastern internal wall.
It should be noted that Mr Oke describes the sunken family room as the office/study, although there is a separate room identified as "study" on the architectural plan (exhibit B). Paragraph 14 of his first report is this:
"Evidence of past termite activity, comprising of damage to wall timbers, was observed at all locations, except to Bedroom 4. There was also evidence of termite sub-nest or similar mass mudding, within the eastern wall cavities and spaces of the Office/Study, both ends of the Laundry eastern wall, and the Garage eastern wall."
On 21 June 2012 Mr Langley inspected the house. Also present were Mr di Betta and Mr Robson. This led to his report of 17 September 2012, which is part of exhibit 5. He noted in par 7.0 that a brick next to the laundry door on the south-western wall of the house had been removed during the "earlier exploratory investigations (in 2009)", probably on 28 October 2009. Paragraph 7.11 of his report is this:
"On inspecting the cavity at SW corner between kitchen and sunken family room where the three bricks were removed I noted that a black PV 'Visqueen/moisture vapour membrane' laid under the concrete slab was visible between the inner concrete slab edge and turn down of the Termite Tite Barrier strip shield. I cannot inspect the part of the concrete slab where the strip shield barrier has been cast in because there are bricks preventing such inspection. However, as a result of seeing the Visqueen above the Termite Tite Barrier I consider it is most probable that the PVC moisture vapour membrane has impeded a cast (of the strip shield) into the concrete at this point. To confirm this opinion I would require a more invasive investigation to determine whether this membrane has allowed termites to breach the termite barrier system made up of the strip shielding and the slab. I did however note that the strip shielding at this position (where exposed) was intact (apart from a saw cut I am informed was made in the course of removing the bricks), the metal of the strip shielding was in all places it was necessary for it to be, the glue was apparently intact, and the metal of the strip shielding was observable at the edge of the rest of the bricks."
Mr Langley took a sample of the vapour barrier referred to in that quotation. It found its way into evidence as exhibit 4 (see T 5 November 2013, pp 60.39 - 61.20). There is no dispute that it is a piece of vapour barrier. The vapour barrier is 200 micrometres thick and is plain. It is to be contrasted with "damp course"/"flashing"/ wall moisture barrier which was installed between the brick veneer and the plasterboard of the walls. The wall moisture barrier is 500 micrometres thick and is patterned. According to Mr di Betta termites do eat plastic and exhibit 4 "certainly looks as if they've chewed the edges.": see T 7 November 2013, pp 24 - 25. Exhibit 4 has foreign matter on it, about which there is a dispute.
There was another inspection on 4 September 2012. Present were: Mr Witty, Mr Langley, Mr di Betta, Ms Nadia Braad (solicitor for the defendant), Mr Robson, Mr Elder and Ms April Grenquist (solicitor for the plaintiffs). Of this inspection Mr Langley wrote this in his first report:
"8.2 Apart from areas I had previously inspected on 21 June 2012 and which remained as they were then, Mr Robson had removed a section of wall panel in the garage wall where termite activity had occurred in 2006 (as referred to at paragraph 7.7 above). Mr Robson had also cut an opening in the gyprock stud internal wall of the sunken family room - this wall being the wall between the sunken family room and the kitchen.
(Refer photos 11 and 12 of this report).
8.3 The removed section of wall panel in the garage exposed a 1.8m length of termite timber damage to the stud wall bottom plate. Wall studs exposed were clear of termite attack. I was informed this area was reported as being a point of identified termite ingress, bridging the inspection zone of the concrete slab edge exposure. The builder provided a slab edge exposure as termite management to garage set down wall and, as acknowledged at my initial inspection, it was most probably his failure to maintain regular inspection that allowed termites to ingress at this point undetected until 2006. Those matters I have referred to at paragraph 7.7 above. As such, termites would have bridged the inspection zone at slab edge exposure and detection through frequent visual inspection was not maintained by the homeowner.
8.4 The removed section of internal wall gyprock from the wall of the sunken family room between the kitchen and the sunken family room exposed termite mudding against one corner wall timber stud known as an 'aggregation point' where termite workings provide moisture retention and shelter for above ground activity. (It should be noted that an aggregation point is not a termite nest or colony). In my view it is most probable this termite activity was associated with that activity I noted in this area (where the three bricks had been removed) during my first inspection of the building. I have referred to that evidence of termite activity at paragraphs 7.8 and 7.11 above and I set out that it indicated termite ingress into the building at or nearby that point (where the three bricks had been removed). Such evidence of mudding (where there three bricks have been removed or exposed by the removed section of internal gyprock) does not indicate any evidence of breach to the perimeter strip shield installation.
8.5 Mr Robson had also lifted the carpet edge in bedroom 1 to allow visual inspection along the carpet smooth-edge timber strip affixed to the concrete floor. I noted a movement crack in the concrete slab in bedroom 1, which crack runs parallel to the wall along which there is the wardrobe between bedrooms 1 and 2. There is termite activity tracking between the smooth-edge and timber skirtings from the entry into the ensuite, along the bay window and around to the doorway of bedroom 1. At a junction between the external perimeter wall and the dividing wall between bedrooms 1 and 2 (which aligns to alleged termite wall damage in the wardrobe of bedroom 2) the termite activity tracks back under timber skirting to what I consider likely to be an area of probable termite ingress by reason of the additional termite activity etching the carpet underlay at this point. However, from my inspection there was no evidence that termite ingress was due to a failure of the Termite Tite Barrier as installed.
(Refer photos 13 and 14 of this report)
8.6 I was also granted access to the roof void. However, ceiling insulation more than [...] limited visual inspection. I removed several insulation batts to expose ceiling joist and wall top plate timbers immediately above the SW corner between the kitchen and sunken family room. There was no visible sign of termite activity or termite damage to timbers and it is probable the termite ingress below is only of localised termite activity resulting in limited damage in that area."
It should be noted that the insulation in the ceiling had only relatively recently been installed. There was none when Mr Skinner inspected on 27 March 2008. There is no suggestion of any damage or termite workings in the roof frame or ceiling space.
On 22 January 2013 Mr Oke carried out a second inspection. The purpose of the inspection was for "analysing comments made by the other Experts", namely Mr Langley and Mr Witty. Additional bricks were removed from the existing inspection opening outside the sunken family room for the purpose of better viewing the termite barrier and slab. Two further bricks were removed, increasing the total removed to three and a half. As pointed out by Mr Oke, Mr Langley was in error in stating that three bricks had already been removed. Mr Oke states this in par 10 of his second report of 22 January 2013:
"Mr Langley confirms that he was able to gain a clear view of the slab edge where the termite barrier is embedded into the slab edge and then makes the assumption that the "pvc moisture vapour membrane has impeded a cast (of the strip shield) into the concrete at this point." At the time of my second inspection, and with a larger inspection opening available and removal of the cavity flashing, I can confirm that there was no evidence of the under-slab moisture vapour membrane protruding from under the slab or across the termite barrier at his location". (Emphasis in original.)
Further on he expressed some opinions:
"30 At the time of my second inspection, two extra bricks were removed from the inspection opening outside of the sunken lounge area. At this time I have observed a lapped join in the strip shielding at this location. With reference to images taken at the first inspection, the lapped join was already uncovered at that time and was readily visible.
31 It is my opinion that the termite barrier has failed at the lapped joint as the remaining mudding accumulates along the edge of the concrete slab edge in the vicinity of the lapped join. There was no evidence of mudding across the top surface to indicate that termites had traversed across the shield from outside of the building and therefore it is my opinion that the failed lapped join is the point of ingress for this particular area of damage to the wall framing.
32 From this observation, it is therefore reasonable to assume that other lapped joins have not been successfully connected and have been penetrated by the termites within a concealed area of the building that is not available for periodic inspection as required by AS 3660.1. This would apply to the three known ingress points, as follows:
- via the external wall of the kitchen/sunken lounge
- via the external wall adjacent to the Laundry door opening
- via the external wall at the junction of the wall common to Bed 1/Bed 2 and the external wall."
On 8 March 2013 Blanch J, CJ of DC set the current proceedings down for hearing during the sittings commencing 20 May 2013. On 23 April 2013 the Registrar at Lismore advised the plaintiffs' solicitor that this matter was number 1 in the list for that sittings and should be ready to proceed at the conclusion of the call-over on the first day of the sittings. At the same time, the Registrar gave the same advice to the defendant's solicitor. This produced a flurry of activity.
On 9 May 2013 Mr Langley carried out a third inspection. Also present were the Robsons, Mr di Betta and Ms Felicity Dore from the defendant's solicitors firm. Mr Langley noted the removal of two further bricks. At par 4.5 of his report of 15 May 2013 he said this:
a. In this case the Defendant has induced the Plaintiffs, by agreeing to accept liability under the Termite Tite warranty and by executing a Deed stating that they were retained to install the termite protection system at the Plaintiffs' residence, to assume that the Defendant was accepting liability for deficiencies, if any, in the termite barrier installation.
b. In reliance on that assumption, the Plaintiffs have not attempted to pursue Termite Tite for negligence or breach of contract and would now be statute barred from doing so.
c. Although Termite Tite is a deregistered company, it would still have been possible for that company to be restored for the purposes of litigation if investigations had suggest that was a prudent course.
d. The Plaintiffs have not, in reliance on that assumption, investigated any other legal avenues for rectification of the termite damage at their home. Instead, the Plaintiffs have, in reliance on the assumption, continued to negotiate and deal with The White Any Company in relation to the investigation and rectification of the termite problems at their home.
e. On the Defendant's own evidence (Oral Evidence Mr Di Betta 7 November 2013) prior to commencement of these proceedings Mr Di Better never told the Plaintiffs that, even if there was a proven failure in the barrier, [the defendant] would not be responsible for any rectification or repairs."
Quantum
SOC alleges that the reasonable costs of rectification of the dwelling are $105,547 and refers to Mr Oke's report of 26 June 2012. That sum is that assessed by Mr Oke. However that is for all termite damage repairs, including damage at site (i) which is the responsibility of the plaintiffs. The costs assessed by Mr Oke for rectification of the ensuite of the master bedroom are $17,461. If that sum is subtracted from the total, the estimate of Mr Oke becomes $87,086, which is the amount put to me in addresses by Ms Smith. There was no agreement on quantum. Mr Witty provides another assessment. The assessments can be tabulated thus:
Mr Oke
Mr Witty
Bathroom
$19,780
Sunken lounge ]
$12,327.80
Kitchen ]
Separate WC
$5,536
Laundry
$14,834
Bathroom
$13,049
Built-in wardrobes
$12,843
Kitchen
$5,420
Wall framing
$28,673.45
Master bedroom ]
$2,561.40
Bedroom 2 ]
Built-in wardrobes
$2,998
TOTAL
$87,086.45
$44,375.70
One will note from this table that their methodologies are different.
Mr Oke commences his assessment with this statement:
"In preparation of the cost estimates contained within this Report, reference to Rawlinsons Construction Cost Guide 2012 has been used to establish likely labour rates for categories of trade work. The use of the "Detailed Prices" within this publication, being labour and materials for a specific area and/or quantity of work is not appropriate to the type of rectification work to be carried out and therefore I have relied on my building experience in preparation of the Cost estimate."
The defendant complained that Rawlinson's Guide was not annexed to Mr Oke's report. According to Mr Oke's evidence it has about 250 pages. He described it as "an industry publication that details building costs on many parameters of building and this particular manual refers to ... residential dwellings and small scale commercial buildings" (T 23 May 2013, p 6). He had not brought it to Court but agreed to give it to the solicitor instructing Ms Smith on loan for the week commencing 27 May 2013. The Guide was not tendered or even referred to subsequently. I can only assume that the defendant did not press the complaint.
Mr Oke then quotes the "Wage Rates" provided by the Guide. He then calculated the cost of the rectification of timber wall frames as $711.50 per linear metre. He provides a lengthy table showing how that was calculated. It includes a builder's margin of 20% and GST. His assessment of the amount of wall frames to be replaced was 40.5m. $711.50 x 40.5 is $28,815.75. There is a mathematical error. I trust it is Mr Oke's and not mine! That is the final item I have set out in the table above. The remaining part of his assessment is:
"Wet Areas
35. Rawlinson Construction Cost Guide 2012 provides "Bathroom fitout and services" costings relating to wet areas within residential buildings. It is estimated that the cost per square metre is $2,366.00 inclusive of supply and installation of fixtures, fittings and services. The cost estimate also includes Builder Margin and GST.
36. The Bathroom is 8.36m2 and therefore would cost $ 19 780.00 to refurbish.
37. The Separate WC is 2.34m2 and therefore would cost $ 5 536.00 to refurbish.
38. The Laundry is 6.27m2 and therefore would cost $ 14 834.00 to refurbish.
[...]
Built-in Cupboards
40. Rawlinson Construction Cost Guide 2012 provides costings for built-in wardrobes at a rate of $ 834.00 per lineal metre of cupboard, inclusive of Builders Margin and GST.
41. The aggregate total of the built-in robes is 15.4 lineal metres and therefore would cost $12 843.00 to refurbish.
Kitchen
42. It is considered that the kitchen benchtop and cupboards, including disconnection and reconnection of fixtures, replacement of splashback, repair to bulkhead, from the western wall of the kitchen is estimated to cost $ 5 420.00."
Mr Witty divides the house up into different areas and comments on the damage in each area. Commencing at par 6.3 of his report of 14 September 2012, he assesses the internal wall between the sunken family room and the kitchen and the external wall of the southern family room. He states that if the work required to be done by Mr Oke, were done, "then a cost of $5,420.00 including GST and builder's margin might be reasonable if all of that work was required." However, that is only part of the damage in the area. He states that wall rectification in this area is "reasonable", accepts Mr Oke's rate of $711.50 per linear metre, says the length of wall damaged is 9.8m, such that the cost was $6,967.90 but that ought be $6,972.70 (if my mathematics be correct!) At least there appears to be agreement on the rate for replacement of timber wall frames. Unfortunately, Mr Oke does not provide any table showing how 40.5m of walls requiring rectification was calculated.
As to the internal wall between the separate WC and the bathroom and laundry, Mr Witty says this:
"6.4.5 I am instructed that the Plaintiffs have alleged there is rectification work required in this area. Although I was not able to inspect the dwelling to determine whether the rectification work is required, as to each of the areas requiring rectification work as outlined by the Plaintiffs, my opinion is as follows:
6.4.5.1 As to rectification of the Bathroom which the Plaintiffs allege is 8.36 sq.m., I agree that the area is 8.36 sq.m. I am instructed that the Plaintiffs have claimed rectification at a cost of $19,780.00 to remove damaged areas and supply and install fixtures, fittings and services. This is an unreasonably high amount in view of the fact that the Plaintiff is a builder plus the bath, vanity, shower, towel rails, mirror and services to this room are of a type that are readily removable and can be reused without detriment to them. In my opinion, having regard to these factors and to the size of the Bathroom, of 8.36 sq.m. I say that reasonable cost of rectification by the Plaintiffs is $13,049.
6.4.5.2 As to rectification of the WC which the Plaintiffs allege is 2.34 sq.m., I agree that it is 2.34 sq.m. I am instructed that the Plaintiffs have claimed rectification at a cost of $5,536 to remove damaged areas and supply and install fixtures, fittings & services. This is an unreasonably high amount in view of the fact that the Plaintiff is a builder plus the toilet suite, toilet roll holder, & services to this room are of a type that are readily removable and can be reused without detriment to them. In my opinion, having regard to the size of the WC, of 2.34sq.m. I say that reasonable cost of rectification by the Plaintiff is $3,652.
6.4.5.3 As to rectification of the Laundry measuring 6.27 sq.m., I agree it is 6.27sq.m. I am instructed that the Plaintiffs have claimed rectification at a cost of $14,834.00 to remove damaged areas and supply and install fixtures, fittings and services. This is an unreasonably high amount in view of the fact that the Plaintiff is a builder plus the laundry tub, laundry cabinetry, and services to this room are of a type that are readily removable and can be reused without detriment to them. In my opinion, having regard to the size of the Laundry, of 6.27sq.m. I say that the reasonable cost of rectification is $9787."
In the next paragraph of his report Mr Witty states, in essence, that the allowance he has made for rectification of these areas includes wall framing in this area. What the length of wall framing is, he does not say.
Mr Witty then assesses the cost of rectification due to termite ingress at site (i), for which the defendant is not responsible. Mr Oke brought this in at $17,461 plus, clearly, part of wall frame replacement. Mr Witty brought the cost in at $11,520 for both pieces of work.
Mr Witty then discusses the damage in the master bedroom and bedroom 2. At par 6.6.6 Mr Witty says this:
"6.6.6 I am instructed that wall framing rectification work is claimed in this area as part of an aggregate length of 40.5 metres and at a cost of $28,673.45. I say that I am unable to determine whether wall framing rectification work is necessary or reasonable in this area. If wall framing rectification work were required to this area, and I cannot tell, then the number of lineal metres for the area of damaged alleged by the Plaintiff is 3.6 LM which at a cost of $711.50 per LM is a total of $2561.40."
On built-in wardrobes Mr Witty says this:
"6.6.5 I am instructed that the Plaintiffs allege that the rectification of built-in wardrobes in the dwelling is a total of 15.4 lineal metres at a cost of $12,843.00. Although I was not able to inspect the dwelling to determine whether rectification work is required, as to rectification of this wardrobe I am of the opinion that 15.4 lineal metres is unreasonable. This is because no other built-in wardrobe has been identified by the Plaintiffs as allegedly having termite damage. The built-in wardrobe in this area is only 3.6 LM. I say that a reasonable cost for rectification to this wardrobe, if it were necessary, would be $833 per LM for a total of 3.6 LM giving a total cost of $2998."
The dispute on this issue appears to be about the length of built-in wardrobes that needs to be replaced. According to Mr Oke, the cost per linear metre according to the Guide is $834. Mr Witty says $833, with no explanation as to the difference. It seems to me to be merely an error. $834 x 3.6 is $3,002.40.
As is stated by Mr Oke in his initial report, the extent of damage to the dwelling can only be determined by removal of the wall linings from one side of each wall in the areas where past termite activity has been detected. The assessment of the damage is speculative but the Court must engage in this exercise as determining the full extent of the damage would require large areas of the plaintiffs' home to be pulled down. It appears to me to be appropriate to accept the work proposed by Mr Oke, but then to apply a discount for the vicissitude that some of the work proposed will not be required to be done, although it will be necessary to remove walls, and if no damage be found, to replace them.
In par 26 of his initial report, Mr Oke describes the "walls which will need to be demolished and reconstructed". Page 6 of that report is part of a copy of exhibit B, the architectural plan of the house on which he has marked damaged walls. Guided by the description of the walls and the highlighting on page 6 of his report (which is fading) and by using a ruler on exhibit D it appears that the following walls and lengths thereof that need to be demolished and reconstructed are:
Wall
Length
● internal wall between sunken family room/kitchen
4.2m
● external wall of sunken family room
5.0m
●internal wall between separate WC and bathroom
1.6m
● internal wall between laundry and separate WC
3.3m
● external wall of separate WC
1.0m
● external wall of laundry
1.85m
● internal north wall of laundry
1.0m
● internal walls (west, north and east) of master bedroom
12.7m
Total length
30.65m
I measured the wall between the garage and the ensuite, which extends up to the internal north wall of the laundry at 6.0m. If I add that to the last total, I arrive at 36.65. I do not know how Mr Oke arrived at 40.5m. $711.50 x 30.65 gives a total of $21,807.48, which I shall round off at $21,810.00. To that I apply a discount of 10% giving a total of $19,629.
There is great validity in Mr Witty's observation that many fixtures in wet areas can be removed and replaced. Some may not be able to be reused, depending on their construction. Services such as plumbing and draining will not need to be done again. Applying Rawkinson's Guide, as applied by Mr Oke, the cost of fitout of the wet areas in question are:
Bathroom
$19,780
Separate WC
$5,536
Laundry
$14,834
Total
$40,150
I allow half that sum, i.e. $20,075.
I allow the assessment made by Mr Oke for necessary work to be done in the kitchen. That sum is $5,420.
The dispute about built-in wardrobes appears to be the length of the wardrobe in question. Mr Oke says 15.4 linear metres and Mr Witty 3.6 linear metres. It appears from page 6 of Mr Oke's primary report that only the wardrobe in bedroom 2 has been damaged. Mr Witty's estimate of length is correct. $834 x 3.6 is $3,002.40 which I round off at $3,005.
Another point advanced by the defendant is that as Mr Robson is a builder himself, he might do the work more cheaply himself, rather than engaging another builder. However the plaintiffs' claim is in contract rather than tort. Furthermore he will expend his own time if he does the building himself, which time he could spend working, charging a commercial rate. I must decline to discount the damages further.
I have clearly not taken into account Mr Witty's assessments. They are merely ipse dixits, without any disclosure as to how he arrived at his figures. That having been said, the total of that I have arrived at is $48,129 which is much closer to his assessment than Mr Oke's. My assessment is based on monetary sums calculated by Mr Oke between 17 May 2012 (inspection) and 26 June 2012 (report) using the Rawlinson Guide for 2012. The assessment is now out of date. I propose to allow pre-judgment interest at the rates applicable under UCPR r 6.12(8) from 1 January 2013 to 22 December 2014. That sum is $6,359.29 which I round off at $6,360.
There is one further head of damage which the plaintiffs' ought to have claimed and is properly allowable. The plaintiffs paid $1,290.00 to Pest-A-Gon for work done by that business on 21 February 2008. When it was paid is not clear from exhibit H. The invoice bears date 21 February 2008 and was payable within 30 days. I allow pre-judgment interest on that sum from 1 April 2008. If the Termite Tite barrier system had not been penetrated, the plaintiffs would not have incurred this cost. Interest on that sum is $713.03 which I round off at $713.
The total of these sums is:
$48,129
$6,360
$1,290
$713
$56,492
The cross-claim
It follows automatically from my earlier findings that the defendant's cross-claim must fail. The costs it was claiming it was required to bear under clause 6 of the Deed. The defendant was claiming $6,808.05 plus interest calculated to 8 November 2013 of $1,310.99. However, of the past sum, $1,690 was part of the defendant's costs of these proceedings and ought not to have been claimed in the cross-claim
Orders
(1) I give verdict and judgment for the plaintiffs against the defendant for $56,492.
(2) I give verdict and judgment for the cross-defendants against the cross-claimant.
(3) I propose the following orders as to costs:
(a) Defendant to pay the plaintiffs' costs;
(b) Cross-claimant to pay the cross-defendants' costs.
(4) Should either party wish to argue about costs, that party is to notify my Associate and the other party by 4pm on Friday 23 January 2015 by email. If there is to be such an argument it will be heard on Monday 9 February 2015 in the John Maddison Tower, 86 Goulburn Street, Sydney, Court 15A, at 10am. If no such notice is received by my Associate by the appointed hour, I shall make the proposed costs orders in Chambers.
**********
APPENDIX 1
IN THE DISTRICT COURT
OF NEW SOUTH WALES
CIVIL JURISDICTION
JUDGE NEILSON
TUESDAY 5 NOVEMBER 2013
2011/00101316 - MICHAEL ROBSON v THE WHITE ANT COMPANY PTY LIMITED
JUDGMENT - Application by plaintiff to serve evidence out of time
HIS HONOUR: The plaintiff seeks leave to rely on a report of Mr Graham Lancaster dated 31 October 2013. The report of Mr Lancaster was served on the defendant's solicitor at 1.08pm on Friday 1 November 2013.
This case was called on for hearing before me at Lismore on 20 May 2013. The matter was before me on a number of days. Evidence was adduced on Thursday 23 May, Thursday 30 May and 31 May 2013. The matter was then adjourned to Sydney to recommence today. The last witness to give evidence was Mr Michael Witty, a qualified builder and architect, called by the defendant. In essence he was the defendant's building expert. At the conclusion of the evidence given on 31 May the following is recorded in the transcript:
"HIS HONOUR: Can I blithely [Scots usage] observe that this case - one of the issues in this case could be quickly put to bed if somebody took some samples [from the lapped joint] for analysis. Are we looking at dirt or are we looking at mudding and faecal staining from termites. Some clinical analysis, if not DNA analysis, would sort that out completely.
SMITH: Would your Honour give us leave to file that evidence and serve, being part-heard?
HIS HONOUR: ... It would appear the only sensible thing to do, ... the only trouble is, of course, that if you go down the route of DNA it costs an arm and a leg and will take forever, and I have not idea of what chemical analysis - what someone would look at in the microscope and things of that nature.
SMITH: Well, perhaps we'll have a chat between us and see what we can arrange.
HIS HONOUR: Well, if the parties want to do that, the thing to do would be to agree on a common independent expert and let him decide that."
I am told, without objection, that the transcript of 31 May 2013 only became recently available. Indeed the Court has not yet been provided with it and I am relying on the copy which the plaintiff's solicitor very kindly provided to me. However counsel and solicitors for both parties were present in court when I made my observations on 31 May 2013. There was no prompt response to my suggestion at all. On 7 August 2013 the solicitor acting for the plaintiff sent an email to the defendant's solicitor concerning a number of matters. Under the heading "Further Action" the plaintiff said this:
"We are in the process of attempting to locate an expert who may be in a position to test the material at the Robson's residence to determine whether it is dirt and/or termite workings, in accordance with his Honour's suggestion.
We expect that this testing will most likely be conducted at a forensic laboratory.
Would you please let me know, by close of business, on Friday, 9 August 2013 (if possible), whether your client agrees with this course of action and potentially sharing in the cost of this testing.
I would appreciate if you could contact me prior to 18 August 2013 if you consider that anything further remains outstanding in this matter, so that I can attempt to action it prior to going on leave."
The plaintiff's solicitor's reference to going on leave is the fact that she would be on annual leave from 21 August 2013 until 20 September 2013. The defendant's solicitor replied by email on the following day. As to the expert testing that I had suggested and which the plaintiff's solicitors were now taking up, the defendant's solicitor said this:
"We have been instructed by our client that he does not wish to take part in a test to determine whether dirt or termite workings is the substance found in the area of the Robson's property shown in photo P1 of Mr Langley's report dated 23 May 2013.
Whilst we are not asserting that this area has been interfered with by your client, their experts, or anyone for that matter, our client is just simply not in a position to know whether or not any interference into this area has occurred. Accordingly, our client will not contribute to any costs associated with this testing should your clients choose to engage an expert to conduct those tests."
When the plaintiff's solicitor returned from leave she qualified Mr Graham Lancaster of the Division of Research at Southern Cross University at Lismore. For that purpose she arranged to meet with Mr Lancaster at the plaintiff's property at Evans Head at 10.30am on 9 October 2013. Investigations were made by Mr Lancaster and he arranged electron microscopy scanning, known as SEM (scanning electronic microscopy), assessing the samples which he collected on 9 October 2013. Those are the subject of his report of 31 October 2013.
There are a number of things to note. This litigation is longrunning, and involved, but the quantum of the case appears to the order of $100,000 not $100,000,000. There must be some consideration of cost effectiveness. The suggestion that I made at the end of the evidence on 31 May 2013 was to try to narrow the issues by obtaining expert evidence which would enable one to determine whether the substance that was in dispute was in fact dirt or droppings from termites and there is opinion evidence based on the SEM in Mr Lancaster's report. The next thing to observe is that the defendant's solicitor did not object to such further expert evidence being collected, did not object to the process that I suggested but, rather, immediately declined to become involved because the defendant could not agree that the site from which the samples were to be collected had not been interfered with. That may still be a valid consideration but that should not have inhibited the defendant's solicitor from participating in the process.
Under s 56(1) of the Civil Procedure Act2005:
"The overriding purpose of this Act and the rules of court [made pursuant to the Act, namely, the Uniform Civil Procedure Rules] in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings."
For those purposes, pursuant to s 56(4), each of the solicitor, the barrister and the party who retains that solicitor and that barrister must not by his or her conduct cause the party himself to be put in breach of the duties identified in the section. In shorthand form, the party to civil proceedings and his lawyers are under a duty to assist the Court to further the overriding purpose of the Act and that "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings."
Objection is taken to the plaintiff's being granted leave to rely upon Mr Lancaster's report because, clearly, the report has not been served in accordance with the rules. However I have discretion under UCPR 31.28 to extend time in which the report of Mr Lancaster may be served. However, pursuant to subr (4), leave is not to be given unless the Court is satisfied that there are exceptional circumstances to warrant the granting of leave. The provisions of subr (4) (b) are not, here, relevant. The rule itself does not provide what constitutes "exceptional circumstances". An assessment of exceptional circumstances must depend upon a careful consideration of the facts of an individual case: AWA v Independent News Auckland Ltd [1996] 2 NZLR 184 at 186.
I continue with the commentary from Ritchie's Service:
"'Beyond that generality, in order to constitute 'exceptional circumstances warranting the granting of leave' the matters relied on:
●must be assessed against the particular statutory criterion and with a proper understanding of its rationale: R v Buckland [2000] 1 All ER 907 at 912 - 913; [2000] 1WLR 1262 at 1268;
●must be more than circumstances that are regularly, routinely or normally encountered although they need not be unique, or very rare R v Kelly [2000] 1 QB 198 at 208...
●may contribute to characterisation as 'exceptional' because of the relative infrequency of their occurrence, and also by reference to their qualitative significance; R v Buckland [supra] at ALL ER 912-913, WLR 1268
●may derive their 'exceptional' character from either a single exceptional matter or a combination of other factors which, taken individually, may be either exceptional or ordinary; Ho v Professional Services Review Committee No 295 [2007] FCA 388, [26]."
In my view there are, here, exceptional circumstances. Firstly, it was the Court itself which proposed that evidence of the nature to be given by Mr Lancaster be obtained in order to shorten the matter. When the plaintiff, albeit belatedly, sought to do so the defendant's solicitors did not object but merely declined to be involved in the process. The process has been completed, the report has been served. Fortunately, the plaintiff's solicitors have arranged for Mr Lancaster to fly down from Lismore and he will be available for crossexamination this afternoon.
I anticipate that the crossexamination will seek to establish that the opinions that the witness has expressed are beyond his expertise and no doubt, if that is established, the report could not be admitted. However, in the circumstances, I believe that it is appropriate, where the Court suggested a matter which might shortcircuit issues or narrow the issues joined between the parties, and when no objection was taken by the defendant's solicitor, who declined to become involved in expediting the shortening of the matter or the narrowing of the issues, to find there are special circumstances to warrant the shortservice of the report. Accordingly, I grant leave to the plaintiff to serve the report of Dr Lancaster at 1.08pm on Friday 1 November 2013.
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Decision last updated: 23 December 2014
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