Robt Jones (363 Adelaide Street) Pty Ltd & Anor v First Abbott Corporation Pty Ltd

[1997] QSC 210

IN THE SUPREME COURT

OF QUEENSLAND

No 598 of 1991

Brisbane

Before the Hon Justice White

[Robt Jones (363 Adelaide Street) Pty Ltd & Anor v First Abbott Corporation Pty Ltd & Ors]

BETWEEN:

ROBT JONES (363 ADELAIDE STREET) PTY LTD           

First Plaintiff

AND:

ROBT JONES INVESTMENTS LTD

Second Plaintiff

AND:

FIRST ABBOTT CORPORATION PTY LTD

First Defendant

AND:

WHITE INDUSTRIES (QLD) PTY LTD

Second Defendant

AND:

HENNESSEY GLASS & ALUMINIUM SYSTEMS PTY LTD

Third Defendant

AND:

LYNCH & BLOW PTY LTD

Fourth Defendant

AND:

BEVAN THOMAS LYNCH

Fifth Defendant

AND:

McKERRELL LYNCH PTY LTD

Sixth Defendant
AND:

BLIGH JESSUP BRETNALL ARCHITECTS PTY LTD

Seventh Defendant

AND:

JON JAMES VOLLER

Eighth Defendant

AND:

BLIGH VOLLER ARCHITECTS PTY LTD

Ninth Defendant

REASONS FOR JUDGMENT - WHITE J

Judgment delivered 28/10/1997

CATCHWORDS:     SPONTANEOUS breakage of glass in highrise building - nickel sulphide inclusions - liability of developer - builder - fabricator - architects - whether duty of care owed - breach of contract - Trade Practices Act claim - s.55 Property Law Act - assessment of future breakages - quantum.

Counsel:Mr DB Fraser QC for the plaintiffs

Mr RS Litster for the first defendant
Mr PA Hastie for the second defendant
Mr T Hennessey (director of third defendant) for the third defendant
Mr B O’Connell QC with him Mr DG Ryan for the fourth, fifth and sixth defendants
Mr RW Wensley QC with him Ms JH Dalton for the seventh, eighth and ninth defendants

Solicitors:Nicol Robinson & Kidd for the plaintiffs

Deacons Graham & James for the first defendant
Minter Ellison for the second defendant
Mr T Hennessey (director of third defendant) for the third defendant
Thynne & Macartney for the fourth, fifth and sixth defendants
Gadens Ridgway for the seventh, eighth and ninth defendants

Hearing Dates:  15 May 1995 to 3 August 1995

IN THE SUPREME COURT

OF QUEENSLAND

No 598 of 1991

Brisbane

[Robt Jones (363 Adelaide Street) Pty Ltd & Anor
v. First Abbott Corporation Pty Ltd & Ors]

BETWEEN:

ROBT JONES (363 ADELAIDE STREET) PTY LTD           

First Plaintiff

AND:

ROBT JONES INVESTMENTS LTD

Second Plaintiff

AND:

FIRST ABBOTT CORPORATION PTY LTD

First Defendant

AND:

WHITE INDUSTRIES (QLD) PTY LTD

Second Defendant

AND:

HENNESSEY GLASS & ALUMINIUM SYSTEMS PTY LTD

Third Defendant

AND:

LYNCH & BLOW PTY LTD

Fourth Defendant

AND:

BEVAN THOMAS LYNCH

Fifth Defendant

AND:

McKERRELL LYNCH PTY LTD

Sixth Defendant

AND:

BLIGH JESSUP BRETNALL ARCHITECTS PTY LTD

Seventh Defendant

AND:

JON JAMES VOLLER

Eighth Defendant

AND:

BLIGH VOLLER ARCHITECTS PTY LTD

Ninth Defendant

REASONS FOR JUDGMENT - WHITE J

Judgment delivered 28/10/1997

The plaintiffs seek damages from the defendants on a variety of bases but essentially for the losses which they have sustained and will sustain into the future as a consequence of having certain glass installed in their multi-storied commercial building at 363 Adelaide Street, Brisbane (“the Building”).  They allege that liability arises because the impugned glass in the building being fully toughened had and has a propensity to shatter spontaneously due to the instability of certain nickel sulphide impurities contained within it and that heat strengthened glass which does not have this characteristic ought to have been used (or advised to be used as the case may be) or alternatively toughened glass which had been heat soaked to remove those impurities.  A claim is also made in respect of an allegedly negligently constructed glass and aluminium awning on the Building.  The defendants have made third party claims between themselves and claims for contribution and indemnity.

At the commencement of the hearing by consent it was ordered that the evidence in the action was to be evidence in the defendants’ proceedings inter se subject to all proper reservations and objections.  Issues of contribution and indemnity of which there are numerous notices are to await the outcome of the principal actions.

Index of Contents

1.Parties  .............................................................................................................  4

2.The Causes of Action in Summary .....................................................................  6

3.Glass ................................................................................................................  7

4.Background ....................................................................................................  10

5.Chronological Findings of Fact ........................................................................  12

6.The Cause of the Glass Breakages ...................................................................  34

7.Duty of Care.................................................................................................... 40

8.Standard of Care - Knowledge of and

Enquiry About Glass......................................................................................... 54

9.Causation of Loss ...........................................................................................  68

10.The Plaintiffs ...................................................................................................  69

11.The Trade Practices Act Claims ......................................................................  71

12.Abbott Holdings’ Liability to the Plaintiffs .........................................................  74

13.White Industries’ Liability to the Plaintiffs .........................................................  75

14.Hennessey’s Liability to the Plaintiffs ................................................................  78

15.Lynch & Blow’s Liability to the Plaintiffs ..........................................................  78

16.Mr Bevan Lynch .............................................................................................  78

17.Bligh Jessup’s Liability to the Plaintiffs ..............................................................  80

18.Mr Jon Voller .................................................................................................  81

19.Quantum .........................................................................................................  81

20.Third Party Claims ..........................................................................................  88

21.Orders ............................................................................................................  95

The Plaintiffs

First Plaintiff:    

Robt Jones (363 Adelaide Street) Pty Ltd is the registered proprietor of the land on which the Building was constructed (“the first plaintiff”).  It changed its name from Two Hundred and Twenty-Two Pty Ltd on 5 September 1988.  It changed its name to Tasman Properties (363 Adelaide Street) Pty Limited on 22 August 1994.  It contracted with the first defendant to construct the building on the land by contract dated 24 December 1986, (“the development contract”).

Second Plaintiff:

Robt Jones Investments Ltd changed its name to Tasman Properties Limited on 19 August 1993 having changed its name to RJI Limited on 6 April 1993 (“Robt Jones”).  At material times it owned all the shares in Lacanau Pty Ltd which owned the shares in the first plaintiff.  It guaranteed the obligations of the first plaintiff under the development contract.  It is a registered foreign company with a New Zealand base.

The Defendants

First Defendant:

First Abbot Corporation Pty Ltd changed its name from Abbott Holdings Limited on 23 November 1987.  It was the developer of the site engaged by the plaintiffs to develop and execute the building work (“Abbott Holdings”).  It has consented to judgment being entered against it with damages to be assessed and has made no submissions about the causes of action.

Second Defendant:

White Industries (Qld) Pty Ltd (“White Industries”) entered into a contract with Abbott Holdings on 17 December 1986 to carry out the building work (the building contract).

Third Defendant:

Hennessey Glass & Aluminium Systems Pty Ltd provided the glass for the building pursuant to a subcontract with White Industries (“Hennessey”).

Fourth, Fifth and Sixth Defendants:

·Lynch & Blow Pty Ltd, the fourth defendant, carried on business providing architectural services and was the project architect retained by the developer (“Lynch & Blow”).  Its directors were the fifth defendant and Wayne Blow.  It was dissolved on 24 June 1993.

·McKerrell Lynch Pty Ltd, the sixth defendant, took over as project architects during the construction of the building on 5 October 1987 (“McKerrell Lynch”).

·Bevan Thomas Lynch, the fifth defendant, was a director of each of the fourth and sixth defendants at different times and overall in charge of the project.

It is convenient to refer to these defendants compendiously as “Lynch & Blow” or as “the project architects” unless the context requires otherwise.

Seventh, Eighth and Ninth Defendants:

·Bligh Jessup Bretnall Architects Pty Ltd, the seventh defendant (“Bligh Jessup”) and subsequently

·Bligh Voller Architects Pty Ltd (“Bligh Voller”), the ninth defendant, were retained by Robt Jones as “owners architects” to overview the project.  It was previously named Bligh Jessup Robinson Pty Limited from 29 June 1987 to 13 August 1990.

·Jon James Voller, the eighth defendant, was the director of the seventh and ninth defendants in charge of the retainer.

It is convenient to refer to these defendants as “Bligh Jessup” or “the consultant architects” unless the context requires otherwise.

The Causes of Action in Summary

The plaintiffs delivered a further amended statement of claim on 21 June 1995 and amended consolidated further and better particulars dated 7 June 1995.  In summary the plaintiffs claim

·damages for negligence against all the defendants;

·against Abbott Holdings, White Industries, Hennessey, Lynch & Blow and McKerrell Lynch, damages for breach of the Trade Practices Act;

·against Abbott Holdings, damages for breach of contract;

·against White Industries such remedies and relief as may be provided by s.55 of the Property Law Act 1975 (promises for the benefit of third parties);

·against Bligh Jessup and Bligh Voller damages for breach of contract.

Abbot Holdings has issued third party proceedings against

·White Industries for damages for breach of contract, negligence and breach of the Trade Practices Act;

·against Hennessey for damages for negligence, breach of the Trade Practices Act and pursuant to s.55 of the Property Law Act;

·against the project architects for damages for breach of contract of retainer and negligence.  There are outstanding issues relating to the amended pleadings delivered on 29 March 1995 which will be addressed below.

White Industries has issued third party proceedings

·against Hennessey for damages for breach of the subcontract.

As mentioned there are numerous notices claiming contribution and indemnity between the parties.

Glass

Glass and its properties was the subject of evidence which, ultimately, was not controversial.  Glass is manufactured by heating the raw material and cooling it very slowly.  In that form it is known as annealed glass.  When it breaks it tends to do so in large dagger like pieces which are likely to fall.  The raw glass of the kind involved in this case is called float glass because it is manufactured by floating it on a bed of molten tin to make it flat.

A stronger glass can be obtained by the further application of heat to annealed glass and by rapidly quenching it in cold air.  The interior of the glass cools less rapidly than the surface and contracts to a greater extent than the surface layers.  This produces glass which has a set of built-in stressors as a result of this differential contraction - compressive stress at the surface of the glass and a balancing tensile stress in the central region.  The compressive stress at the surface has to be overcome before the flaws in the surface become susceptible to overstressing.  The result is glass which is more resistant to applied forces - mechanical, impact or thermal in origin.  Two types of heat-treated glass were and are available commercially and are at the centre of this action.

Toughened glass (in the U.S. described as tempered glass) is made from annealed glass which has been heated to a uniform temperature above 650°C and cooled rapidly usually by blowing cold air evenly at both surfaces.  Toughened glass has a high built-in stress as a result of the rapid cooling giving a surface compressive stress in the range of 11,600 psi to 21,700 psi.  Toughened glass suitable for safety glass applications will most likely have a surface compressive stress greater than 4,500 psi.  It will resist mechanical forces more than four times greater than will annealed glass.  It will resist thermal stresses and thermal shock at levels more than six times higher than annealed glass.  Due to the high levels of built-in stressors, once a fracture is initiated in toughened glass it propagates violently due to the released energy.  The effect is to disintegrate the glass into small particles which are unlikely to cause cutting and piercing injuries like broken pieces of annealed glass.  It is because of this pattern of fragmentation after fracture that toughened glass is regarded as a safety glass.

Toughened glass has the potential for spontaneous fracture, that is, fractures due to no immediately obvious reason.  The reasons for this are various and will be discussed more fully in due course.  The fracture propagates often with a loud bang accompanied by falling particles in many instances and is quite dramatic.  The failure of glass panels in Brisbane in this fashion has generated considerable publicity since towards the end of the 1980s.  The fracture has an appearance similar to an older damaged front windscreen in a motor car hit by a flying stone.  Foreign particles or impurities  present in all glass are more likely to cause fracture in toughened glass than in other forms of glass because these particles can disturb the very high built-in stressors, but the substance which appears to cause the greatest problem is the compound nickel sulphide (NiS).

Nickel sulphide is a crystalline inclusion which is formed when raw float glass is manufactured and does not mix with the molten glass.  Its source is not always identified and a particular batch may contain little nickel sulphide compared with another batch.  It has two crystalline forms - an alpha phase and a beta phase.  In annealed glass the compound is in the beta phase and benign.  When glass is heated to toughen it the nickel sulphide inclusions change to the alpha phase.  During the rapid cooling phase the nickel sulphide does not cool as quickly as does the glass and is locked into the glass in its alpha phase.  It remains present in the glass in a metastable form which returns very slowly to its stable beta phase.  The reversion can take place over a number of years and is accompanied by an increase in volume which can generate significant stresses in the glass, sufficient to cause failure.  Although there a number of different forms of nickel sulphide inclusions it seems that only one - NiS - causes these problems in toughened glass.  There are various factors such as thermal and wind loadings and position in the glass panel which will influence its transformation to the beta phase.  Because of its tendency to expand during phase change the size of the inclusion will be significant in terms of glass breakages.

Heat soaking is a quality control process which is used to eliminate toughened glass panels which may be at risk of failing due to edge defects or foreign bodies including nickel sulphide inclusions.  The heat soaking process was designed specifically to eliminate toughened glass panels which may contain critical nickel sulphide inclusions by speeding up the rate of the reverse transition to the low temperature state.  Most toughened glass panels which contain a critical nickel sulphide inclusion (and other defects) fracture during the heat soaking process.  It is generally accepted that 95% of nickel sulphide inclusions will be identified in this process.  Toughened glass panels which pass through the heat soaking process are not otherwise  altered in any of their physical, mechanical or optical properties.

Heat strengthened glass is made from annealed glass which has been heated to a uniform temperature above 650°C and cooled fairly rapidly usually by blowing cold air evenly at both surfaces as with toughened glass.  The difference between the two is obtained by controlling the cooling to different rates.  Heat strengthened glass has a built-in stress as a result of this process giving a surface compressive stress in the range 3,600 psi to 8,700 psi.  If the induced compressive stress is higher than 8,700 psi the heat strengthened glass will have a similar fracture pattern to toughened glass.  It will resist mechanical forces more than one and a half times higher than annealed glass and thermal stresses and shock at levels more than twice that of annealed glass.  The fracture characteristics of heat strengthened glass are similar to annealed glass and accordingly cannot be regarded as safety glass.

Initially glass manufacturers had considerable difficulty in regulating the cooling process to overcome the nickel sulphide problem and the methodology is a trade secret.  Nickel sulphide inclusions exist within heat strengthened glass but controlling the cooling process makes it much less susceptible to changes in phase occurring subsequent to manufacture.  Toughened and heat strengthened glass must be manufactured to a specific size since the glass will shatter if cut subsequently.

Laminated glass consists of two or more sheets of glass held together by an interlayer and may be composed of annealed, toughened, heat soaked-toughened, and heat strengthened glass.   Generally speaking laminated glass is the most expensive glass.  Glass has a unique characteristic in as much as it carries the history of its fracture and if the broken panel, particularly the point of initiation, can be retrieved the cause of the break can be ascertained.

The description of the glass which was incorporated into the Building as McDowell Pacific Super “R” S20 on Bronze float was interpreted by Mr Calderone an engineer with considerable experience in the manufacture of glass as

“ “Super-R” is the trade name of the company (McDowell Pacific) for the coating on the glass; “S20" is the silver reflective coating with a 20% light transmission;

“On bronze float” means that the glass is on bronze body tinted float glass.  By that name it does not indicate the style [type or class] of glass and the evidence suggests that it was available in toughened, heat strengthened, annealed or laminated style.”

Background

In about June 1985 Lynch & Blow was engaged as architect by Catco Developments Pty Ltd to prepare plans and specifications for the construction of a seventeen storey office building to be located at 363 Adelaide Street, Brisbane.  There was some evidence that an earlier developer had been interested in this project.  Mr Davidson an architect employed by Lynch & Blow carried out the work.  The specifications contemplated that a “structural silicon-glazed flush-faced system” would form the glass curtain wall facade for the Building and that the facade glass would be a green colour.  The glass preferred was Pilkingtons “sky on green” laminated glass although the glazing specifications offered the following alternatives:

“a.Vision Panel & Spandrel Panel

Single glazed with Pilkington ACI HP Reflections Glass “Sky on Green 20"

OR

b.Vision Panel & spandrel Panel

Single glazed with PPG Industrial Solarban 570-20 (2) solex.

OR

c.Vision Panel

Pilkington ACI AUSTWIN HP Insulating Glass Units with PACI “Sky on Green 20" to outside.
Spandrel Panel
Single glazed with PACI HP “Sky on Green 20"

OR

d.Vision Panel

PPG Industries Solarban window unit with 570-20(2) Solex to outside.
Spandrel Panel
Single glazed with PPG Industries Solarban 570-20(2) Solex

OR

e.Vision & Spandrel Panels

Pilkington ACI HP Laminated glass “Sky on Green 20" ”

Ove Arup & Partners were involved in the design of the awning as structural engineers for Catco.  Lynch & Blow did not include the awning in the architect’s specifications for the project.  Construction to ground level was carried out but the project was subsequently abandoned by Catco Developments by about May 1986.  The Commonwealth Government was a major contemplated tenant and it had certain minimum requirements for the Building.

Chronological Findings of Fact

This was an action with a great many contested issues of fact.  Not all require a resolution in order to address the broader issues of the claims and accordingly not every issue will be considered.  There were many witnesses.  They all appeared to give their evidence honestly.  Some seemed more reliable than others when it came to recollection and some experts were of greater assistance than others as far as the issues were concerned.

Abbott Holdings acquired the project from Catco’s receivers.  In about August 1986 Abbott Holdings and White Industries obtained the plans and specifications from Lynch & Blow which was no longer involved in the project.  Abbott Holdings wanted a less expensive building than had been contemplated by Catco.  White Industries proposed some changes to the original plans to Abbott Holdings which would result in certain economies.  The relevant change so far as this action is concerned was the proposal that the glass curtain wall consist of exposed anodised mullions and transoms with bronze/grey tinted reflective glass rather than the system proposed by Lynch & Blow for Catco.  White Industries sought a quotation for the supply and installation of, inter alia, the glass awning and facade wall from Hennessey based on this proposal.  Hennessey’s quotation dated 1 September 1986 was for an “Aluminium Framed Curtain Wall System, comprising anodised aluminium extrusions of profile discussed and Bronze Reflective Heat Strengthened Glass.”

In late August/early September 1986 Abbott Holdings and White Industries agreed in principle to proceed with the project and White Industries submitted a lump sum tender which, by inference, incorporated the Hennessey quotation.  White Industries accepted Hennessey’s quotation on or about 12 September 1986 and its further quotation for the glazed aluminium awning on 18 September.  Subsequently a formal (undated) subcontract was entered into between them.

Discussions took place between Mr Michael Lasky for Abbott Holdings and Mr Bevan Lynch in early September to explore Lynch & Blow’s involvement in the proposed new development.  On 15 September 1986 a meeting was held between Abbott Holdings’ representative Mr Mulvaney, Mr Lynch, two representatives of White Industries, Messrs Anderson and White and others.  There was discussion about the glass curtain wall and glass specimens in grey and bronze tinting were to be available for Mr Lasky’s consideration.  On 17 September Lynch & Blow put forward a proposal to Abbott Holdings for Lynch & Blow’s involvement in the project including a fee proposal.  Abbott Holdings through Mr Lasky and Lynch & Blow through Mr Lynch reached agreement on 8 October 1986 as to the work which the architects would carry out and the fees which they would be paid.

The first site meeting for the project occurred on 9 October between representatives of Abbott Holdings, White Industries and Lynch & Blow.  Consistently with the proposal discussed between Abbott Holdings and White Industries and Hennessey’s quotation, White Industries advanced the proposal for “a two way mullion system using a nominal 50mm wide aluminium section, of either powder coat or anodised finish.”  A minimum of 20% of the windows were to be operable to accord with Commonwealth requirements.  The minutes record:

“Lynch & Blow are to liaise with Hennessy Glass and White Industries to prepare a recommendation on the curtain walling and presentation to Abbott Holdings.  It is noted at this stage that a bronze glass is favoured and is most likely to be McDowell Super (R) S20 on bronze float or similar.”

McDowell Pacific Pty Ltd was an Australian glass supplier which sourced its product from the United States - usually from Ford.

Hennessey asked White Industries to “confirm type of glass selected for (a) typical floor glazing (b) awning” by memo dated 9 October 1986.  White Industries in turn passed on the request to Lynch & Blow.

The terms of the retainer between Lynch & Blow and Abbott Holdings were partly oral and partly set out in Abbott Holdings’ letter dated 15 October 1986.  The letter provided that Lynch & Blow would liaise with Abbott Holdings in the selection of materials and other items of finishes and arrange for samples to be available for examination.  The letter provided

“You will undertake regular inspections of the building progress to ensure a satisfactory quality control and attend all site and consultant meetings.  It will be your responsibility to record minutes of all meetings and, in your capacity of superintendent’s representative, report immediately to Abbott in the event any matter should arise necessitating a variation to the agreed plan.”

There was some dispute as to when the terms of Lynch & Blow’s retainer were finally settled and what they were.  Whatever may be the explanation for the cheque for $10,000 paid or signed, it seems, prior to 8 October 1986 by Abbott Holdings to Lynch & Blow the retention of Lynch & Blow was not concluded until after the site meeting on 9 October and its terms worked out during a subsequent telephone conversation and in the letter.  I accept that at the site prior to the meeting on 9 October Mr Lasky suggested to Mr Lynch that Lynch & Blow’s fees could be kept down as a relatively limited role was envisaged for the project architects.  The account of the telephone conversation which occurred between 9 and 16 October came from Mr Lynch.  Mr Lasky could not recall it but did not disagree with its terms.  The role for Lynch & Blow from that conversation was that Abbott Holdings wanted Lynch & Blow to make regular inspections during construction to ensure that quality of workmanship was of a satisfactory standard and that in particular he [Mr Lasky] was looking for minimal compliance with the governmental standard because Abbott Holdings intended to lease the building to a government department.  Lynch & Blow’s role as Superintendent was revised to be that of representative of the Superintendent.  Mr Mulvaney was to be the Superintendent because he would regularly be in Brisbane.  Lynch & Blow’s role was to support Mr Mulvaney and to act in a reporting role.  Mr Lynch said that Mr Lasky limited the role of Lynch & Blow as Superintendent’s representative to have no power to issue any instructions which would have a cost implication on the work because Mr Lasky did not want anyone outside his control to have power to issue instructions that would affect price.

The first plaintiff became the registered proprietor of the land on 26 September 1996.  Discussions had occurred prior thereto between Sir Robert Jones, executive chairman of Robt Jones, and Abbott Holdings.  Robt Jones was interested in acquiring quality commercial office buildings in Brisbane.  It already had other property in Brisbane and had a large international property portfolio.  Whilst the other defendants learnt of Robt Jones’ existence in the course of the project it is doubtful if Hennessey ever heard of it.

On 16 October 1986 Mr Lynch went to Melbourne to meet with Mr Lasky and took a number of glass samples one of which was to be selected by Mr Lasky.  There was some uncertainty as to the source of the glass but more than likely it came from White Industries who had obtained it from Hennessey.  From the evidence of all the witnesses who were present at these early conversations, including Mr Peter White of White Industries, Mr Lynch and Mr Lasky to the extent that he did not deny the conversations and inferences, the architects were only to consider the aesthetic aspects of the glass and in particular the colour, the question of heat loading and the extent to which that would have an impact on the air conditioning; whether curtaining might be required; and particularly whether the glass would comply with Brisbane City Council requirements as to reflectivity.  This was a very important consideration at the time in Brisbane because of public views about existing highly reflective highrise buildings in the City.  Throughout the oral and, to some extent to be gleaned from the documentary evidence, it was clear that Abbott Holdings was concerned to keep the price down and expressed this from time to time.  White Industries was also concerned to keep the cost of the building within the lump price already proposed to Abbott Holdings.  This tended to emphasise the relatively limited scope of the project architect’s involvement in the project.

The second site meeting took place on 23 October 1986 attended by Mr Davidson for Lynch & Blow.  The minutes of the meeting noted that the favoured selection of glass was McDowell Pacific Super “R” S20 on bronze float and that “[g]lass selection and curtain wall component colours are critical items.”  On 24 October 1986 Mr Davidson at Mr Lynch’s direction prepared Addenda No 1 to the original contract specifications for Catco concerning the curtain wall glazing system.  The alternatives (set out above in “Background”) were deleted and in lieu was inserted “McDowell Pacific Ltd Super “R” S20 o[n] Bronze Float.”  The curtain wall system specification was changed from a structural silicone glazed flush face system to “... a stick construction glazed curtain wall”.

White Industries provided Hennessey with wind pressures on the building and on the same day, 29 October 1986, Hennessey provided McDowell Pacific with the glass sizes for the building and asked for a quotation.  Hennessey sought quotations from Solarglas and Geo. Fethers & Co for the supply of glass for the Building at about the same time.  The selected glass was S20 Bronze as per sample submitted by McDowell Pacific.  Hennessey described the glass as  “HEAT STRENGTHENED” to Solarglas and to Geo. Fethers as “All glass is Heat Strengthened”.  George Fethers responded with several alternatives of PPG glass and at the end indicated

“Hestorn [sic] heat strengthened glass properly installed and undamaged minimises the risk of thermal stress breakage.  A thermal stress analysis may indicate 6mm hestron to be a preferable glass choice.”

It was not until 11 November 1986 at a contract administration meeting that a firm decision was made to choose the McDowell Pacific Super R S20 on bronze glass.  The minutes indicate that Mr White and Mr Jimmieson, an architect in the employ of Lynch & Blow were to discuss the glass and frame with Hennessey.

Hennessey accepted the quotation from McDowell Pacific and by fax dated 13 November 1986 McDowell Pacific sought the establishment of a letter of credit in which the goods were described as “... super RS20 on Bronze Tempered Glass as per Contract SR463".  In a further detailed document describing the dimensions of the glass from McDowell Pacific dated 4 December 1986 the glass to be supplied is described as “6MM thick super-RS20 on bronze tempered glass”.

Mr Trevor Hennessey principal of Hennessey said that he sent to Mr Barry Chard at McDowell Pacific the fax from White Industries dated 29 October 1986 giving the wind pressures on the Building together with the elevations and floor plans.  He said that he had sought this information from White Industries so that it could be passed on to McDowell Pacific to pass on to Ford in the United States to assess what degree of strengthening to the glass was needed for the glass in the curtain wall.  McDowell Pacific was a well known and reputable glass supplier used by Hennessey previously.  It had been and was involved in the supply of glass to numerous high rise building projects in Australia and Asia.  Mr Hennessey said that the information received back from Mr Chard was that the glass in the curtain wall had to be fully tempered and that Chard had received that information from Ford Solarglas, a subsiduary of Ford Motor Company, Detroit, the manufacturer of the glass to be supplied.  Mr Hennessey was challenged by Mr Fraser to produce Mr Chard to confirm this advice.  Mr Chard had been involved in the glass industry for forty years and had, by the trial, retired.  When employed by McDowell Pacific he was group sales director.  He said McDowell Pacific forwarded the plans and specifications to Ford America and the advice received back was that in view of the design loadings on the glass particularly the external columns it would be prudent to adopt a fully tempered glass.  Ford America was known to Mr Chard to have a technical advisory section.  Mr Chard confirmed that he had passed on that written advice from Ford to Mr Hennessey although Mr Hennessey was unable to produce it.

The three architects called on behalf of the plaintiffs gave evidence to the effect that it was to the manufacturer of glass that an architect would resort for advice on the appropriate type of glass to use in a given project.  I accept that advice was given by a reputable manufacturer as to the requisite strength of glass to be used in the Building which was conveyed to McDowell Pacific who in turn conveyed that advice to Hennessey.  The supply of toughened glass involved an increase in price which McDowell Pacific and Hennessey equally absorbed.  This evidence of the advice received from Ford was objected to by Mr Fraser on the ground that it was hearsay but it was admitted to demonstrate that advice was sought from the manufacturer and that advice of a particular kind was given, Subramaniam v.  Public Prosecutor [1956] 1 WLR 965 at p.970.

It is likely that the decision to use toughened glass was made on or about 12 or 13 November 1986.  Mr B Falvey an experienced glass estimator commenced employment with Hennessey on 3 September 1986.  Throughout the construction of the Building he thought that the glass to be used and then installed was heat strengthened glass.  He was unlikely to have had access to the documentation from McDowell Pacific describing the glass as “tempered” glass because that was a matter of finance for Mr Hennessey alone.

Mr Dempster who was responsible at White Industries for obtaining prices and Mr White the contract administrator and then project manager were informed as to the type of glass to be used by the Hennessey quotation of 1 September 1986 which was accepted by White Industries.  They were never informed to the contrary.

By oral conversations and a letter dated 17 November 1986 Robt Jones retained Bligh Jessup.  The relevant terms of the letter were

“To act on our behalf to undertake an Architectural/Engineering assessment and advise on the overall quality in respect of our proposed purchase of the building.

We also confirm that part of your instruction is to provide us with your recommendations relating to minor, but nevertheless important cosmetic improvements to the facade design.”

The plaintiffs contend that the retainer required the consultant architects to investigate, inter alia, the type of glass selected for the glass curtain wall and to do a structural analysis of the glass awning.  The consultant architects contend for something much less.  Mr Jon Voller had been approached by Mr E Kann, Robt Jones’ Brisbane solicitor to ascertain if his company was interested in providing reports to Robt Jones in respect of buildings it was proposing to purchase in Brisbane.  At a subsequent meeting held at Brisbane, possibly in August 1986, Sir Robert Jones, then chief executive of Robt Jones, explained to Mr Voller the kinds of things that he was particularly interested in knowing about when purchasing a building.  These were the adequacy of services particularly air conditioning, lifts and electrical services as well as the aesthetic quality of the building and its position in the marketplace.  Robt Jones was to be a long term owner with a fully tenanted building and in Sir Robert Jones’ opinion these services were vital to keep tenants.  In his evidence Sir Robert Jones did not contend that anything more than the reports which were prepared by Bligh Jessup were required by the retainer.  Bligh Jessup was to engage consultants to carry out the necessary engineering assessements in respect of the services in which Sir Robert Jones was interested and to review the available documents when buildings were not complete.  The reports were to be done quickly because, according to Sir Robert, quick commercial decisions had to be made.  Bligh Jessup was to be paid at an hourly rate.  There were other meetings involving Sir Robert Jones and Mr Voller and Mr Martin Butterworth, an employed architect with Bligh Jessup, in which Sir Robert’s interest in the aesthetics of the Building was canvassed.  By the time proceedings were issued Sir Robert Jones was no longer associated with the plaintiffs.

Bligh Jessup produced several reports for Robt Jones in respect of other Brisbane buildings prior to being retained in respect of the Building and that retainer needs to be construed in the light of the general relationship between them as to the preparation of reports, see Mutual Community Limited v. Lorden Holdings Pty Ltd (unreported decision of Byrne J of Supreme Court of Victoria No 10561 of 1990, judgment of 29 March 1993).  Sir Robert Jones said that the Building retainer was no different from the others and he did not require any wide ranging analysis.  The brief reports which were submitted to Robt Jones in December in respect of the Building are consistent with other reports and were not the subject of complaint.

There was a subsequent agreement that Bligh Jessup was to advise Robt Jones with respect to certain “cosmetic” improvements designed by Robt Jones to the facade of the Building - a crown at the top and a waistband above the awning and to liaise with respect to those amendments with Lynch & Blow.  These are not matters the subject of any negligence claim or breach of contract (the awning allegations do not relate to these changes).

The third paragraph of the letter of 17 November stated:

“We would also propose to appoint you as our representative Architects during the total construction period, and this would be covered by a separate letter.”

The plaintiffs have pleaded this role for the consultant architects and the particulars allege a further retainer reached between Mr Rushworth for Robt Jones and either Mr Voller or Mr Butterworh for the consultant architects in late December 1996.  This fresh retainer is alleged to include responsibility for inspecting and reporting on documentation and work in progress and advising Robt Jones on the performance of the construction of the building in terms of the contract.  Neither Mr Rushworth, Mr Voller or Mr Butterworth gave evidence as to the making of any fresh retainer.  I accept that the building contract was not seen by Mr Voller and that it was not provided to the consultant architects.  Neither was there any evidence that any of the consultant architects were aware of the terms of the development agreement and in particular the provisions of cl.12 which contemplated a role for Robt Jones’ architects in respect of the building until Robt Jones wanted Bligh Voller to report on practical completion which it was reluctant to do.

On 1 December 1986 Bligh Jessup provided a report to Robt Jones.  The consultant architects referred to a preferred colour for the anodised aluminium for the curtain wall, the top of the Building (the provision of a “crown”) and some concerns with the awning.  The tenor of the report was as to visual appearance.  A further report dated 19 December 1986 gave an overall evaluation of the Building.  The changed curtain wall system was described as straightforward using tried and proven techniques but suggested that Robt Jones seek confirmation from the developer with respect to the shade co-efficient and the connection of the curtain wall system to the built-up columns on the facade.  The other comments concerning the external cladding related to the colour selection of the anodised aluminium framing and glass.

None of the circumstances surrounding the retainer of Bligh Jessup suggested that a literal meaning ought to be given to the expression “architectural/engineering assessment” which would have on its widest view involved, for example, investigations of the foundations and geotechnical engineering design assessment, none of which was ever attempted or contemplated.  The presence of project architects further suggests the limited role contended for by the consultant architects and would not have involved a consideration of the strength of the glass to be installed in the building or of an engineering analysis of the design and structure of the awning.

As a result of some difficulties relating to lines of authority on the site White Industries wrote to Lynch & Blow on 27 November 1986 requiring the architects to refrain from issuing instructions outside the parameters of the contractual relationships:

“We find ourselves totally unable to accept the situation where representatives from your company contact either Douglas [sic DOLGAS, an acronym for a Commonwealth department dealing with the tenancy of the Building] or proposed tenants, or the proposed end-on purchaser, or Subcontractors, and issue verbal instructions, agreements or notices without our prior approval especially as these instructions/agreements/notices may cause financial repercussions between ourselves and the clients.  ...

It should be remembered that as a result of pre-contract negotiations between White Industries (Qld) Pty Limited and the client to which Lynch & Blow were not a party, a number of major deviations from the original specifications were agreed upon and our contract price reflected those decisions.”

This letter was copied to the senior people in Abbott Holdings, including Mr Mulvaney, the Superintendent of the building contract.  Mr A Anderson the marketing manager of White Industries confirmed that the reference to pre-contract negotiations included its letter to Abbott Holdings of 21 August 1986 proposing the revised curtain wall system.

It was clear from the evidence of the officers of White Industries and to a lesser extent from Mr Lasky, whose memory of these events was not clear but who did not dispute the propositions put to him by counsel for the project architects, and from Mr Bevan Lynch, that Abbott Holdings and White Industries had made decisions to vary aspects of the Building without consulting Lynch & Blow and that the architects were asked to record those changes for the purpose of documentation.  Hennessey had quoted on heat strengthened glass and all that was left for Lynch & Blow was to advise on colour and reflectivity and air conditioning matters associated therewith.

The building contract between Abbott Holdings as principal and White Industries as contractor was executed on 17 December 1986.

On 24 December 1986 the first plaintiff then named Two Hundred and Twenty-Two Pty Ltd (the principal), Abbott Holdings (the developer) and Robt Jones (Robt Jones) entered into the development contract.  The first plaintiff is described as the registered proprietor of the land interested in the development of the land by the completion of the construction of a commercial office building.  Preamble D recites that Robt Jones by agreement made on the same date between itself and Abbott Holdings agreed to acquire control of the first plaintiff.  Robt Jones guaranteed the due performance of the contract by the first plaintiff.  Clause 11.1 provided that Abbott Holdings had appointed Lynch & Blow as the Superintendent to the project.  This did not occur and Mr Joe Mulvaney of Abbott Holdings was appointed Superintendent.  Lynch & Blow were Superintendent’s representatives.  Clause 12 noted that Robt Jones had appointed Bligh Jessup to act for and on behalf of Robt Jones in the supervision of the construction and execution of the works and that the architects would inspect the execution of the works and provide Robt Jones with independent quality control reports.  That was never part of the consulting architect’s retainer with Robt Jones and Sir Robert Jones said that it was a clause included to keep Abbott Holdings alert to Robt Jones’ interests which Robt Jones could implement if it chose.  By cl.4.1 the parties agreed that Robt Jones was entitled to vary the works and specifications at any time prior to the date for completion on certain conditions and that Robt Jones would be responsible for any additional costs.

After it received Bligh Jessup’s report Robt Jones wrote to Abbott Holdings by letter dated 7 January 1987 raising certain concerns.  Robt Jones sought to incorporate a band running through the perimeter of the building where the glass facade met the glass awning as well as additional framework at the top of the building.  Bligh Jessup had discussed this with Lynch & Blow and when Lynch & Blow received a copy of the report from Abbott Holdings it responded commenting upon the Robt Jones proposed changes including those for the facade and proposed to give a breakdown of the extra costs involved.

The plaintiffs maintain that there was a direct relationship between the project architects and the first plaintiff by virtue of cl.11 of the development contract between themselves and Abbott Holdings.  The architects maintain that they had no copy of the contract and had never seen cl.11 and the role that was envisaged for them contained within it.  Clause 11 provided that

“[Abbott Holdings] has appointed Lynch & Blow Ltd (“the Superintendent”) to supervise the execution of the works in accordance with the (contract and Specifications and ... notwithstanding that the Superintendent shall be paid ... by [Abbott Holdings] the Superintendent shall supervise for and on behalf of the Principal [the first plaintiff] the execution of the Works in every respect including determining and certifying the quality of workmanship and materials used in construction and generally acting in the interests of and for the due protection of the Principal.”

Clause 11.4 provided that

Abbott Holdings would cause the architects to provide to the first plaintiff “independent written quality control reports on the Works at intervals of not greater than one (1) month throughout this Contract ...”

There was a great deal of correspondence passing between all of the parties and in particular some direct contact between the project architects and senior officers of Robt Jones and the consultant architects.  It is clear that the project architects at no time were aware of the contents of cl.11 of the development contract or the role which it envisaged for them.  When the plaintiffs became involved in the construction of the Building a formal chain of command was maintained with letters written to Mr Mulvaney, the Superintendent which in turn were passed to the plaintiffs or, alternatively, the consultant architects.  Abbott Holdings had instructed the project architects to cooperate with the consultant architects in order to maintain momentum, and it might be thought, goodwill.  As the momentum was not maintained and concerns were expressed about the delay in making decisions by the plaintiffs, on occasions direct communication was made between the project architects and the plaintiffs or the consultant architects but at the direction of Abbott Holdings as a matter of expediency.  The formal relationship between the parties was never lost.

The plaintiffs also maintain that Lynch & Blow became aware prior to completion of construction that toughened glass had been used in the building with the consequence that they ought to have been advised of it.  Mr Lynch said in cross-examination that he had become aware “perhaps prior to the completion of the construction” (t/s 2369 l.40) that toughened glass was being used.  However he expressed no confidence in his recollection and it seems more likely that he was informed for the first time when he spoke to a representative of Hennessey in December 1988 enquiring about the progress of the investigation of a fractured glass panel.  On a number of occasions Mr Jimmieson used the term “toughened” in notes or correspondence after 8 January 1987.  In March 1987 Mr Jimmieson had a conversation on site with Mr Falvey from Hennesseys after the first batch of glass had arrived and was told by Mr Falvey that the glass in the curtain wall was heat strengthened.  He said that he did not notice the manufacturer’s marks on the glass in the course of construction which indicated that the glass was toughened.  The preponderance of architectural opinion was that with Lynch & Blow’s retainer it was not something that a competent architect would be concerned to investigate.  He noted some broken glass which exhibited the small particle fracture which was typical of toughened glass.  Mr Jimmieson’s explanation was that he had no great understanding of glass types and that at the time any glass which was not ordinary annealed glass but had been subjected to some further heat treatment he thought was loosely termed toughened.  It is not difficult to accept this explanation as Mr Chard tended to describe glass which had been further strengthened by heat as “tempered glass”.  Mr Falvey was also imprecise in his use of that expression.  Against the background of the quotation by Hennessey of heat strengthened glass and that no one from Hennessey told Lynch & Blow of the change to toughened glass there is no reason to infer that the project architects were aware that toughened glass as opposed to heat strengthened glass was being incorporated into the Building.

By early March 1987 Abbott Holdings and White Industries were expressing concern as to delays in proceeding with the work due to the changes sought by Robt Jones.  The glazing program was delayed by more than a month because of late delivery of the glass.  The first glass was delivered to the site on 5 March 1987 and the second on 13 March.

By the middle of July delays were still being experienced in the completion of the Building due in part to the involvement of Robt Jones in approving finishes etc and its requirements for design change which were difficult to accommodate whilst the work progressed.  Bligh Jessup was involved in the design of the waistband and the crown.  The waistband was in juxtaposition to the awning but Bligh Jessup was not involved in the design or supervision of the construction of the awning.  Mr Voller learnt that the awning was to be constructed of a single sheet of toughened glass which, from his experience, he thought inadequate for the loadings and ordered a report from Rankine & Hill, engineers.  Calculations were made by the engineers who reported that the latest (not single sheet glass) proposal for the glass satisfied the loading requirements.  The plaintiffs sought to make something of this event as indicating a “representative” role for the consultant architects.  I accept the architect’s submission that this was very much a “one off” event and there is no other conduct by the consultant architects which embraces a larger role.

By letter dated 17 July 1987 Hennessey warranted that the curtain walling was installed in strict conformity with the engineer’s calculations and that the glazing was of the type and quality as determined by the manufacturer.  This was noted, probably by Mr Mulvaney, to White Industries to be insufficient, but no further warranty was obtained.

Mr Peter White of White Industries noticed cracking in the glass awning in about July or August 1987.  He subsequently climbed up on the awning and noticed that some 6 or 7 panes of glass were cracked.  The edges of some of those panes were damaged by the screw fixings during installation.  Hennessey accepted responsibility and replaced those panes at its cost.  Mr White thought the other cracked panes were the result of structural movement within the steelwork of the awning and that one was due to impact load.  Mr Davidson and Mr Jimmieson had done some drawings of an architectural concept kind in respect of the awning but the detailed working drawings were prepared by Ove Arup & Partners.  The work which the architects performed was not said to be inappropriate by the glass and engineering witnesses.  Mr White obtained a report on the cracking from Ove Arup dated 15 March 1988.  Ove Arup reported no other signs of distress to the structure and suggested that the damage might have been the result of thermal movement of the glazing relative to the structure and an inability of the glazing fixings to accommodate that movement.  Shortly afterwards 5 of the sheets were replaced at the cost of White Industries and 2 by Hennessey.  At the site meeting on 25 May 1988 attended by representatives of Robt Jones, White Industries, McKerrell Lynch and Abbott Holdings the minutes record that the cracked sheets were to be replaced, there was no evidence of further cracking and the slight movement in the building had ceased.  It is more than likely that the cracked panes of glass had been replaced by the time the final certificate issued on 6 February 1989.

Mr Richardson of G James Glass inspected the awning on 2 October 1990 and reported that 23 panes of glass were then broken.  The evidence suggests that this was due to the glass falling from the tower of the building or by impact damage from the BMU or by vandals.  Whilst Mr Hickey, the specialist engineer who gave evidence for the plaintiffs, considered that the awning was of less than normal commercial standards of stiffness he found that the degree of rafter stiffness had little effect on the stresses imposed on the glass from loading and that the design of Ove Arup was “satisfactory enough”.  He further thought that in combination with the tight capturing of the glass the lack of rafter stiffness may have been a small contributing factor.  Mr Hickey suggested that the choice of glass was poor, but as has been mentioned, Rankine & Hill advised on the glass awning prior to incorporation and found the proposed glass to be satisfactory for canopy glazing in the building and had passed a sandbag test.

By mid-July 1987 the question of the issue of a certificate of practical completion was canvassed.  Abbott Holdings wished to be paid by Robt Jones and White Industries were equally anxious for their payment under the building contract.  Lynch & Blow reminded White Industries that the issue of certificates of practical completion was the duty of Mr Mulvaney as Superintendent and the terms of its appointment as Superintendent’s representative did not extend to the issue of certification.  The architects indicated that clarification had been sought from Abbott Holdings “of our duties in this regard” and that they were awaiting advice.  Lynch & Blow wrote to Abbott Holdings on 21 July 1987

“Our appointment as Superintendent’s representative did not authorise us to issue Certificates but we can act [on] your direction to carry out this task or alternatively to advise you of the state of completion of the building works so that you may issue such certification.”

On 23 July 1987 Mr Mulvaney from Abbott Holdings, Messrs Anderson and Dugan of White Industries and Mr Lynch met to discuss the issue of a certificate of practical completion so that outstanding moneys owed by Robt Jones would be paid to Abbott Holdings.  The minutes reveal that essentially it was a discussion between Mr Mulvaney and the representatives of White Industries including a telephone conference with Mr White in Melbourne.  The minutes noted that Mr Lynch confirmed that he would issue a certificate of practical completion notwithstanding that certain items were incomplete and was “happy to do so” with exceptions, subject to the normal list of defect items.  Mr Lynch said in re-examination that at the conclusion of the meeting of 23 July Mr Mulvaney said he was comfortable with and happy for Lynch & Blow to issue a certificate and that he would give that direction in writing.  Mr Mulvaney “authorised” Mr Lynch by letter dated 28 July 1987 pursuant to cl.24 of the development contract between Abbott Holdings and the first plaintiff to issue the certificate of practical completion and any other certificates required under the terms of the contract.  He wrote on Abbott Holdings’ letterhead and signed as Superintendent for and on behalf of the first plaintiff (Two Hundred and Twenty-Two).  The minutes of the meeting and the oral evidence lead to the conclusion that Mr Mulvaney was directing Lynch & Blow to issue the certificate of practical completion rather than authorising it to do so.

Lynch & Blow issued a notice of practical completion for a separable part of the works on 29 July 1987.

Since cl.11 of the development contract provided for Lynch & Blow to prepare quality control reports for Robt Jones the plaintiffs contend that the two quality control reports that were prepared by Lynch & Blow were in response to cl.11's requirements.  The first quality control report was dated 11 February 1987 and was distributed at the site meeting of 11 February 1987 to the representatives of Abbott Holdings and White Industries.  Mr Jimmieson was the author of the report headed “Abbott Holdings”.  Quality control report No 2 was distributed to those at the site meeting on 28 May 1987, namely, Abbott Holdings and White Industries as well as Lynch & Blow.  Mr Jimmieson could not recall sending either of those reports to the plaintiffs.  He thought that they would be provided to “the purchaser” (t/s 2562 l.35).  Mr Rushworth, whose memory was generally good, did not recall receiving reports of that kind on behalf of the plaintiffs.  There is no evidence to suggest that these reports were prepared other than for Abbott Holdings as requested by the Superintendent.

By the end of July 1987 the retainer between the seventh defendant and Robt Jones was assumed by Bligh Jessup Robinson Pty Ltd.  Mr Voller wrote on 5 August that the inspection of the property for Robt Jones had occurred consequent upon the issue of the certificate of practical completion and certain outstanding works were identified.  The plaintiffs submit that this further evidences an ongoing role as representative architect for the consulting architect.  Mr Voller said that in about July or August 1987 his office was contacted by Robt Jones concerned that the consultant architects should be making inspections for the issue of a certificate of practical completion.  His reaction, he said, and there is no reason not to accept his evidence, was surprise because having had no involvement in the construction of the building he could not understand how his firm could be involved at that late stage.  He rang Mr Kann and was provided with a copy of cl.12.1 of the development agreement which concerned the role of Bligh Jessup but which I am confident no one in the consulting architect’s office had seen prior thereto.  Mr Voller advised Mr Rushworth  and Mr Kann that his firm could not participate in issuing the certificate.  Mr Voller said that he was told that it was necessary for the purposes of the contract between Robt Jones and the developer that the consultant architects be involved.  Someone from Bligh Voller inspected the building and reported on it following receipt of a copy of the certificate from Lynch & Blow.  When the circumstances surrounding the letter of 5 August are considered that letter cannot be regarded as a comprehensive consideration of whether or not the building as constructed was in conformity with the provisions of the building contract or the plans and specifications and there is nothing to suggest in the terms of the retainer that the consultant architects were obliged to do so.  It appears that no fee was rendered for this report.  Indeed only one was sent for 50 hours’ work which was paid.

The first plaintiff, Abbott Holdings and Robt Jones entered into a deed on 5 August 1987 amending their contract of 24 December 1986 to include inter alia guarantees in respect of a lease with the Commonwealth Government and other matters relative to the lease of the Building.

McKerrell Lynch took over Lynch & Blow’s retainer with Abbott Holdings as Superintendent’s representative on 1 October 1987.

By October 1987 Robt Jones was dissatisfied with the failure of White Industries to finalise certain building and tenancy works.  It had appointed an architect, Malcolm Middleton, to supervise and inspect all further works on the Building.

On Wednesday 16 November 1988 at approximately 7.30am an outer glass panel on the  seventh floor of the Wharf Street frontage of the Building dislodged and fell onto the second floor balcony.  The tenant of that part of the building, Australian Customs Service, required an investigation into the cause of the incident and the likelihood of a similar mishap occurring again.  White Industries thought the cause was the Building Maintenance Unit (“BMU”) seen in the vicinity in windy conditions bumping against the glass.  Robt Jones’ property manager passed the information to Robt Jones who in turn sought a report from McKerrell Lynch via Mr Jimmieson.  The fragments of the broken spandrel glass were referred to Hennessey who had it tested by Brisbane Surface Analysis Facility (“BSAF”) a group co-sponsored by three Brisbane Universities and specifically carried out by Mr B Wood and others of the Department of Chemistry at the University of Queensland.

The nature of the testing was admitted by Mr Woods at the trial to have been inappropriate for the task.  The BSAF report on the glass by crush testing was:

“1.Nickel could not be detected either in the crushed glass or the fracture face.

2.There is a very small level of sulphur on the fracture face which is possibly the result of contamination from polluted atmosphere entering the crack.

If this is the case, the crushed glass would have a lower sulphur level because a “fresh” surface was exposed by the crushing (see Sheet 3).

3.The surface of the fracture face and the crushed glass sample are similar in elemental composition.

4.The reflective coating on the glass is principally a Titanium-Nitrogen compound with lead as a minor constituent.”  (Ex.22)

By letter dated 3 February 1989 Mr Jimmieson for McKerrell Lynch reported to Abbott Holdings summarizing the findings of the BSAF report and noting that “nickel” impurities “have been known” to cause toughened glass to break under differing conditions.  The report also dealt with other building defects in respect of the issue of the Final Certificate.  On 6 February 1989 McKerrell Lynch under the hand of Mr Jimmieson issued the Final Certificate dated 23 January 1989 and certified that all defects and outstanding work relating to the construction of the building envelope were complete.  These letters and the Final Certificates were sent by Abbott Holdings to Robt Jones.

Between 17 April 1989 and 12 June 1990 a further eight panels of glass in the curtain wall failed.  On 2 July 1990 the Brisbane City Council issued a show cause notice to the first plaintiff as to why the entire external glass walling system should not be removed and renewed.  The Council considered that the potential for failure of the glass represented a substantial risk to the public passing under or adjacent to the Building and that the safest way to proceed was to remove all glass panels, inspect them for the presence of nickel sulphide inclusions and, where necessary, replace those panels.  The first plaintiff submitted to the Council that the rate of incidents had maximised and would diminish to the accepted  Australian Standard for normal glass installations (that 8 in 1,000 panels of glass would break in normal circumstances) by late 1991.  The first plaintiff undertook to eliminate any risk to the public by providing security fences and barriers to restrict access to the area exposed to potential glass falls and to fit the sloping canopy sections over the Adelaide and Wharf Street footpaths with deflectors to retain any falling glass particles on the top surface of the canopy.  Mr D Howe an engineer appointed pursuant to the Building Act to hear the matter concluded that it was impracticable to test visually the glass walls or to replace them.  He allowed the objection on the condition that in accordance with the report of Resource Co-ordination Partnership Pty Ltd (“RCP”), an architectural services provider, an open area adjacent to the north wall of the building was secured against public access or the canopy extended to the alignment and that warning signs were provided, all to occur within three months.

Robt Jones was particularly concerned to protect the tenancies of the Building 95% of which were Commonwealth departments whose employees were organised with respect to expectations of workplace conditions.  Initially the system for reporting glass failures was adhoc but subsequently Robt Jones retained RCP through its Australian property manager Mr Glen Eather.  RCP coordinated the repairs and replacements necessitated by the shattered glass panels including damage to the glass awning.  Mr Roger Bylett, an architect, was principally concerned with the work for RCP and in due course he left that entity and joined a similar organisation.  The Robt Jones property office in Queensland was closed and the management of the Building was carried on by Hooker Corporation Queensland Limited through Mr H Luland who was responsible for reporting on glass failures to Mr Bylett.

Numbers of specialists were retained to consider the problem of the failure of the glass including a company, AMDEL Limited based in South Australia.  It carried out technical and visual materials inspections on a consultancy basis.  Mr John O’Brien an inspector with AMDEL and his staff carried out visual inspections of numbers of panels of glass in the Building in an attempt to identify nickel sulphide flaws which might cause failure so that those panels could be replaced before shattering.  The preferred option of the plaintiffs at the commencement of the trial was to inspect and replace the flawed glass using AMDEL although, as a result of the deficiencies demonstrated in the AMDEL system in the course of the trial, the plaintiffs sought to argue a total replacement of the glass option which was not permitted.  The plaintiffs retained Professor Brungs, a glass expert from New South Wales to review the work of AMDEL and to advise on the appropriate course.

The quantum for the work which was carried out prior to trial was generally not contested although there was some argument as to the administration costs since there appeared to the defendants to be considerable indecision associated with the appropriate action.  What was of controversy was the likely failure rate of the glass panels for the future.

The Cause of the Glass Breakages

Central to the plaintiffs’ actions is the assertion that the panels of glass which have failed have done so because of the presence of nickel sulphide impurities and that a reasonably predictable number will do so in the future for the same reason.  The defendants contend that in the absence of acceptable scientific proof as to the cause of the breakages no inferences ought to be drawn as to the number of breakages attributable to nickel sulphide inclusions in the past.  The calculations for future failures are said to be flawed because of lack of acceptable proof about the past and other problems of predictability.

Mr Roger Bylett was retained through RCP of which he was a director by the plaintiffs to investigate the glass failures in the building, to keep records of the failures, to attempt a prognostication for the future and was involved in replacement and remedial work.  He had experience of high rise glass failures in a number of Brisbane buildings said to be due to the presence of nickel sulphide inclusions and in particular 80 Albert Street which had experienced glass failures from 1988, Century House, and briefly, Waterfront Place.  He ceased work with RCP in about 1994 and was employed by Project International Pty Ltd of which company he was also a director.  He produced a document, exhibit 97, which sets out, inter alia, in tabular form an analysis of the number of glass breakages, the date, the position on the Building, whether spandrel or vision panels were involved and the cause of the breakage.  The total number of glass panels in the building is 2,963.  At the time exhibit 97 was produced there had been 46 breakages of which three were said to have failed for other documented reasons than nickel sulphide inclusions.  One further breakage occurred at the end of the trial which had not been tested.  Mr Bylett commissioned a number of reports from Mr Barry Wood of BSAF.  Excluding the analysis for Hennessey, he tested 8 panels of glass which had broken and where the initiation point was recovered.  All but two tested positive for nickel sulphide inclusions at the initiation point of the fractures.  Of the two the inclusion was lost in one but the crater remained.  There was conflicting evidence as to whether the possible cause of the breakage was due to nickel sulphide or an air bubble.  Of the remainder Mr Bylett concluded that the assumption could be made that the cause of the failure was the presence of nickel sulphide in the glass even though, in some instances, it was not known which panels had broken.

The evidence of Mr Calderone, Professor Brungs and Mr Jacob, all experts in glass, was that it is necessary to recover and test the initiation point of a breakage in order to ascertain the cause of failure of a panel of glass.  Although very few initiation points in the fractured glass had been recovered in order for scientific analysis to occur, the plaintiffs maintain that inferences may be drawn that the breakages were attributable to nickel sulphide.  Mr Bylett had by the time his company was retained in respect of the Building considerable experience of fractures in toughened glass.  Mr Luland had some previous experience with failed glass at 80 Albert Street and inspected the breakage site and coordinated the various trades when a panel of glass failed.  Mr Bylett used his information to assist in compiling exhibit 97.  The basis for their assumption that the fracture was due to a nickel sulphide inclusion was largely the visual appearance of the cracks in the glass - a distinctive detailed pattern likened to butterfly wings which was present in the tested panels of glass.  The evidence of  Mr Calderone and particularly Mr Jacob was that such patterns can result from a number of causes in toughened glass (or at the upper range of heat strengthened glass), for example, a scratch or a blow from a centre punch (demonstrated in court).

Mr Leon Jacob gave evidence which I found of particular assistance.  He had written his Master of Engineering Science thesis on thermally induced fracture in glass and at the time of giving his evidence had completed his research towards his PhD into the strength characteristics of laminated and toughened glass.  He had recently co-authored with Dr Swain, an acknowledged leader in the field, a paper with fresh observations on the mechanism of failure by nickel sulphide in glass.  He had worked for many years as a technical advisory service engineer for Pilkingtons designing glass walls.  He had then worked for about nine years for O’Brien Glass Industries Limited as group technical manager which involved the development of many new techniques in the production of glass.  He was a member of a number of committees of the Standards Association of Australia relating to glass, in some cases as chairman.  In 1991 he established his own consultative company designing, testing, and investigating materials including glass failure analysis.  He had initially been retained by all the parties to investigate the cause or causes of the glass failures in the Building.  In the event he was called by Hennessey at the trial.  He examined the Building on two occasions although on the first occasion the weather conditions made close inspection impossible.

Mr Jacob carried out three drops in the BMU on 13 July 1993 as a sample examination.  By then there had been 33 failures.  He observed minute scratching on a large number of both vision and spandrel panels possibly due to window cleaning but also numerous locations where the scratches were deep.  He also observed some deep pit marks and from their colour concluded that granosite particles had been driven onto the glass surface during application after the glass curtain wall was installed.  He summarised his findings:

“1.Only 6 of the 33 failures have been identified with nickel sulphide inclusions.

2.Only 14 panels of the 33 failures were identified in terms of its location on the facade.  1 has been classified as an edge failure.

3.13 failures occurred on the NE elevation.

4.17 occurred on the NW elevation.

5.3 from the SW elevation.

6.On examination of the known location of the failures as per to the elevation attached in Appendix D, 10 out of 18 panel failures have occurred either at the edge of the building or adjacent to a column.  These locations are potential high suction load areas.

7.For 14 panels out of 33 - the location and type of panel is not known.  In other words for 42% of the failure there is no evidence or even knowledge of where they occurred.

8.Failure in Panel 12 on Level 4 NW elevation has occurred twice.  The replacement panels apparently made by Pilkingtons.”  (Exhibit 323)

During “the brief and limited site inspection” a number of characteristics were observed

“(a)4 panels were found to have insufficient edge cover,

(b)Approx 6 panels were found with severe pit marks on the surface,

(c)Numerous panels were found with deep scratches,

(d)There was evidence of building movement,

(e)Some of the pivot windows were not closed correctly.”  (ibid)

He concluded

“Given the various failure mechanisms and the characteristics that have been discussed previously, a single cause for failure experienced in the glass of this building cannot be identified.”

Some of the other possible causes of failure in the Building discussed by Mr Jacob in evidence were air bubbles or vents each of which can propagate under stress; silicon inclusions (rare); pitting from the granosite which when combined with the wind loadings was significant; deep scratches; damage caused by the poorly maintained BMU and edge damage, insufficient edge cover and inadequate edge arris.  Mr Jacob said that he knew of numbers of high rise buildings in Australia containing toughened glass which had not failed.

Mr Calderone who had had an extensive experience in the glass industry with Pilkingtons was prepared to infer that all of the failed panels were due to nickel sulphide inclusions except for those which had been specifically excluded on the basis that the spontaneous fractures continued occur over an extended period time and some origins of fracture were proved to be due to nickel sulphide inclusions.  He was also influenced not only by the ongoing nature of the breakages but the diminishing number of breakages.  He accepted that surface damage could cause breakages in appropriate conditions.  Mr Jacob considered that ongoing and diminishing failures were as consistent with scratching and subsequent crack growth as with nickel sulphide inclusions.  This has been Mr Jacob’s area of major research for some five years and he has concluded that the mechanism for failure is the same whether the initial flaw is a nickel sulphide inclusion or a scratch.

“... Now, if glass is scratched, deeply scratched and failure takes place under mechanics, wind loading you will get these radial cracks emanating from it.  So in the past, you know, in the 50s, 60s, 70s - not 50s - in the 60s and 70s and early 80s as soon as we saw a point there were two conclusions:  one, somebody fired a bullet or it was nickel sulphide, but that’s not necessarily true.  A scratch or a centre punch will give you the same pattern and to the uninitiated you can sort of look up and say, “Oh, that’s nickel sulphide”, and what happens is the glass is up there 20 storeys or 14 storeys as such, the wind comes under and if it is not centre, particles keep playing away and then you don’t have the fracture origin, but you will tend to say, “Oh, that started from this point, it must have been nickel sulphide.”  (t/s 1944)

Mr O’Brien for AMDEL suggested that he and his inspectors had not detected a great many significant scratches but agreed that reporting on scratches was not part of the AMDEL brief but if it was considered detrimental, that is, relatively deep, a scratch would be reported.  Examiners had been verbally instructed by him to report any untoward flaws which they might find during their inspection.  Mr O’Brien had not given them any dimensions to conclude whether a scratch was deep.  They required and had (apart from Mr O’Brien) no special skills save visual acuity.  (Mr O’Brien did not claim this).  Mr O’Brien could not say what dimension of scratch would be worth reporting.  Professor Brungs conceded that it was possible that not all of the untested failures had been caused by nickel sulphide but maintained that this might not be more than two based on an assumption that the other failures came from within the body of the glass.  However in only about a dozen of the failed panels was the location of the initiation point known on the X/Y axis of the panel.

The second to sixth defendants submit that the plaintiffs have failed to prove to the necessary standard that all or most of the failures were caused by nickel sulphide inclusions and rely on certain statements in The “Popi M”: Rhesa Shipping Co v. Edmunds [1985] 1 WLR 948. The seventh to ninth defendants saw it as a proof of damage issue. The failure to adduce scientific proof of the cause of failure of the balance of the panels does not, in my view, lead to a failure of proof on the balance of probabilities. There is other acceptable evidence which, when taken in conjunction with the results of the scientific tests would permit an inference to be drawn that the glass failures are primarily due to the presence of nickel sulphide inclusions but making some allowance for other causes. There is the clear acceptance by all of the experts in glass that toughened glass is at risk of failure as a consequence of nickel sulphide inclusions of a particular kind. The risk is increased with the increased level of stressors within the pane of glass and Mr Jacob’s conclusion that this was glass which had been heated to an extremely high level was not challenged. Although Mr Jacob referred to some buildings which incorporated toughened glass and which had no failures that may be explained by the particular batch of annealed glass used or the glass may have been heat soaked after toughening or the glass may have been toughened to just above the heat strengthened temperature. Mr Jacob noted that at the upper end of heat strengthened glass the fracture pattern is very similar to fully toughened glass. There is of course no suggestion here that any of the glass installed was heat strengthened, but to specify heat strengthened glass in 1986 may have resulted in a glass type little short of toughened glass and at risk of attendant nickel sulphide weaknesses. In the United States the evidence suggests some manufacturers of glass in more recent times when filling an order for heat strengthened glass manufacture it up to 7,500 psi rather than to 10,000 psi, the minimum for toughened (tempered) glass, to maintain a gap between the two types of glass.

Quantum
Past Loss

There is little dispute as to the quantum of the past losses incurred by the plaintiffs save that there is concern by the defendants that the administration costs have to some extent been duplicated by the retention of TPC after RPC had performed similar work.  The fourth, fifth and sixth defendants retained John Mitchell and Associates quantity surveyors to advise on the quantum of the claim of the plaintiffs.  Mr McCracken carried out the survey.  The amounts claimed and not contested as to quantum as appearing in paragraph 22 of the amended statement of claim and the consolidated particulars are

(a)the cost of replacing the broken glass panels  $72,939.49

(b)the cost of erecting protective scaffolding

around the building  $55,815.56

(i)costs of repairing and extending the awning  $75,428.00

(reduced claim by plaintiffs see Richardson’s evidence)

(e)costs of reconstructing the awning  $180,726.00

The plaintiffs claim $136,572 for the administration costs associated with the rectification work.  These are not actually administration costs but the costs charged by Resource Coordination Partnership Pty Ltd (RCP) and Total Project Control (TPC) the project management consultants.  Mr McCracken noted that RCP were paid $65,890.50 between June 1990 and March 1994.  TPC were paid $46,500 thereafter.  The balance of the amount claimed was paid to design and consultant organisations.  Mr McCraken found that the quantum of the claim was verified and in respect of each particular organisation reasonable but he challenged the value.  He noted that TPC were successful in February 1994 in outbidding RCP for the ongoing project management services for the Building.  It researched the problem, proposed solutions, managed testing and were managing the reconstruction.  The works that TPC did was not reduced by the services which had previosly been rendered by RCP.  In Mr McCracken’s opinion the project management fees past and future as claimed by the plaintiffs are $158,290.50 “far more than would be expected”.  As a matter of value and being familiar with consultancy fees, he concluded that the proprietor with access to expert advice from Mr Bylett from mid-1990 failed to take decisive action until the employment of TPC in early 1994.  That lack of action together with the adhoc use of RCP has resulted in excessive costs for the management of the Building rectification works.  Mr McCracken considered that RCP’s costs on a value basis should be discounted.

Mr Bylett said that the plaintiffs were very hesitant to spend money on the rectification works on the building and as to what should be done even though they had the benefit of Mr Bylett’s advice.  Whilst the question of the breaking of the glass in the Building was a relatively novel one, it had occurred in other buildings and solutions involving protective canopies had been employed, for example, on the Century Building referred to by Mr Way.  I accept the submission of the defendants that some discounting is called for.  I would deduct one-third from RCP’s fees in the sum of $21,963.50 which allows an amount of $114,608.50 for the project management costs.

I have concluded above that the quantum of the plaintiffs’ damages should be reduced by 20% to take account of causes of damage other than nickel sulphide inclusions in the glass.  The  amount allowed is $399,614.  Interest is claimed at 10% per annum on the items of expenditure when incurred.  White Industries has contended for a less precise approach and for reduced interest because of delay.  There is no basis for the latter and where the calculations are based on exact dates of payment the plaintiffs’ approach may be accepted.  Interest is allowed based on the calculations set out in the plaintiffs’ submissions reduced in the way the principal amounts have been reduced.  The amount for interest is $181,488.  The calculations based on the plaintiffs’ figures are:

Para 22(a)  $23,722.56 to trial

$14,587.90 to judgment

Para 22(b)  $11,690.80 to trial

$11,163.11 to judgment

Para 22(d)  $22,875.55 to trial

$22,921.70 to judgment

Para 22(i)  $39,492.52 to trial

$15,085.60 to judgment

Para 22(j)  $29,175.20 to trial

$36,145.20 to judgment

$226,860.14

Less 20%  $181,488.11

Future

The plaintiffs claim damages for breakages of glass in the future.  The method preferred is a “test and replacement method” which envisages that all of the glass in the building will be scrutinised for the presence of nickel sulphide inclusions, tested and where the inclusions are found and would be likely to put the glass at risk the glass should be replaced.  The plaintiffs had sought in the course of the trial as mentioned above to reintroduce a claim for total replacement of the glass in the building.  The plaintiffs propose that they should utilise the services of AMDEL or similar to carry out this project.  The defendants argue that this is not a reasonable approach to the question of future losses and that the appropriate method is to erect protective canopies around the building.

There are two concepts which should guide the assessment of damages for the future namely the degree of probability of the occurrence of future breakages and the reasonableness of the amount posited as necessary to compensate in respect of that probable damage, Ruxley Electronics and Construction Ltd v. Forsyth [1995] 3 WLR 118, Malec v. JC Hutton Pty Ltd (1990) 169 CLR 638; Poseidon Ltd v. Adelaide Petroleum NL (1994) 179 CLR 332.

The estimated cost of testing and replacing defective glass based on the AMDEL figures is in excess of $1 million.  The AMDEL phase 3 proposal is estimated at $586,900.  Mr Jacob whose company does similar work offered a round figure of $200,000 to do the same work.  The AMDEL testing procedures came under considerable criticism in the course of the trial including by Professor Brungs who operated as a quality controller for their testing.

AMDEL’s detection rates were far from satisfactory and Professor Brungs was not prepared to recommend the test and replace option to the plaintiffs unless the identification rate was able to be improved.  Apart from the deficiencies in the detection rates in the past the opinion of Dr Swain suggests that the critical size of the stone is between 40-50 microns (or 70-80 microns according to Professor Brungs).  AMDEL proceeded on the basis that 100 microns was the critical size to look for in nickel sulphide inclusions based on earlier work of Dr  Swain.  Mr O’Brien did suggest that AMDEL could detect flaws down to 50 microns by using another method but it has apparently not been investigated because it is regarded as extremely expensive.  Another problem not sufficiently taken into account by AMDEL is the existence of vents from the nickel sulphide inclusions and their directions.  One final concern for the plaintiffs is that AMDEL is not prepared to guarantee that it will find all of the nickel sulphide at risk panels.  Mr Eather, as a consequence of the course of the evidence in the trial, was not persuaded of the utility of the AMDEL work.

The other difficulty is the assessment of the number of panels which can be expected to fail in the future.  No expert was able to predict the number with any degree of precision.  Professor Brungs accepted that most of the failures on the two northern facades of the building had already  occurred.  Mr O’Donnell placed before him calculations which used the known facts to establish that it was reasonable to expect 33 more failures in the building (exhibit 179) which he agreed was reasonable.  He also agreed that the failures could occur any time over the next 30 years.  The evidence suggests that that is the maximum life for the Building and indeed more likely than not after 20 years it will be refurbished which will include the facade.

Mr Calderone in the course of researching his PhD thesis arrived at a methodology for predicting failure in glass panels affected by nickel sulphide inclusions using an adjusted log normal distribution mathematical model based on data of past failures and other assumptions.  He has given different estimates of future failure in the building - in November 1993 he predicted 40 more failures but in May 1995 he predicted 50.  He accepted that his technique produced only approximations and indicated that there was an uncertainty of plus or minus 10% on his prediction of 50 future failures.  He accepted that if the graphs were varied to assume all failures would be finished over 10 years then there would be only 34 further failures.

The evidence of Professor Brungs is to be preferred and his acceptance of 33 further panels yet to break is a good working basis for the future.  The calculations accepted by Professor Brungs assumed that those panels have nickel sulphide inclusions.  There is therefore no need to reduce further that figure to take account of other causes as was proposed by the seventh, eighth and ninth defendants.

Those figures suggest that it is not reasonable to suppose that the failures will occur at a rate which would make the test and replace option reasonable even if carried out for a figure approaching that quoted by Mr Jacob.  Although the breakages are more likely than not to occur in the shorter rather than the longer term nonetheless on a life of 30 years that would approximate to one breakage per year.

The appropriate costing of damage for the future is based upon the building of canopies and awnings as has occurred with other buildings.  Although the plaintiffs made some reference to public safety that has not been a major consideration with them in the past but rather the economic consequences of the Commonwealth not renewing its lease.  Submissions were made on behalf of the plaintiffs to the City Council that tenants’ safety had not been raised as a major concern and it took some years between the recommendation by RPC to install a barrier at the bottom of the canopy before that occurred.  The existing and proposed canopy system would provide an adequate safety measure so far as falling glass was concerned and the plaintiffs have had Peddle Thorpe design such a canopy system.  The amount claimed for new canopies is $240,000 which Mr McCracken accepted as reasonable.  Nonetheless the defendants point to temporary canopies which were erected for a number of years and which would duplicate to some extent the new canopy.  Those two temporary items cost $68,855.67 which if deducted would leave an amount of $171,144,33.  Whilst it is clear that the plaintiffs have spent considerable sums of money on temporary works some had to be done quickly to accommodate the Brisbane City Council’s requirements and was not unreasonable to do so although the temporary work has remained in situ until the time of trial.  Nonetheless that does not seem to be a disqualifying factor and I would allow the amount of $240,000.

The cost of replacement of the glass initially was based on $490 per panel with a minimum of 100 panels to be replaced.  Mr McCracken added a premium of 10% to that rate resulting in a revised rate of $539.  The claim now made is for replacement at $1,284 per panel although Mr Richardson indicated a figure of $1,000 as reasonable.  The evidence of Mr Jenkins who had prepared some of the material for the new project budget incorporated some other costs including the BMU which are reasonable and I would allow that amount per panel for 33 failures to be discounted as the breakages will be spread over a long period.  Using the 5% tables the figure is $22,325.52.

The plaintiffs have claimed a contingency figure designed to cover unforeseen costs and it was acceptable to Mr McCracken in principle in the sum of $8,000.  I accept Mr McCracken’s recommendation that a construction management fee of 4% should be added to the amounts for the new canopies and the glass replacement to cover the costs of the agent who performs the function of builder on behalf of the client similar to that carried out by TPC in the past.  I round that figure off at $10,500.

The total amount allowed for past losses is in the sum of $581,102.  The total amount for future losses in a total of $280,825.52.  The total quantum is $861,927.52.

Third Party Claims by Abbott Holdings

1. White Industries

   Abbott Holdings has issued third party proceedings against White Industries.  It claims damages for breach of contract and for negligence.  The term in the building contract upon which it relies is cl.30 which deals with materials and work.  Clause 30.1 provides

   “Materials used in the work under the Contract and standards of workmanship shall be in conformity with the provisions of the Contract.  In the absence of any such provision in the Contract in respect of any material or standard of workmanship that material or standard of workmanship as the case may be, shall of a kind which is suitable for its purpose and is consistent with the nature and character of work.

Unless otherwise specified in the Contract, any materials to be incorporated into the Works shall be new and, where applicable, materials and workmanship shall be in accordance with the relevant standard of the Standards Association of Australia.”

The specifications are part of the contract and by agreement between Abbott Holdings and White Industries the specification for the glass was McDowell Pacific Limited Super RS20 on bronze float for the glass curtain wall.  The evidence of all the experts was that this specification did not indicate what strength of glass or type of glass should be used in the glass curtain wall.  It cannot be said, as White Industries argues, that the glass has been specified in the contract and White Industries has complied with that specification.  The building contract required “best quality materials” to be used.  There was a body of opinion that toughened glass whether heat strengthened or fully toughened was the glass suitable for this curtain wall.  If fully toughened glass was to be used it needed to be have been heat soaked to avoid the risk of spontaneous breakages due to nickel sulphide inclusion.  A particular advantage of toughened glass was that it was a safety glass.  Because the particular batch of glass used in the Building has been found to experience failures due to nickel sulphide inclusions to the extent of 80% it cannot be described as “best quality” glass whatever its suitability might be.  By cl.9.3(b) of the building contract White Industries was not relieved of its obligations by Hennessey’s subcontract, no matter how reputable that company was.

Abbott Holdings has referred to the claims by the plaintiffs against it as a basis for liability against White Industries.  Robt Jones has contended for an implied term in the development contract between the plaintiffs and Abbott Holdings that the materials supplied under the contract would be reasonably fit for the purpose for which they were to be used.  The plaintiffs allege that the glass was not fit for the purpose of being used as part of the glass curtain wall.  The criteria for determining whether a term should be implied into a written contract apparently complete are well established, Codelfa Construction Pty Ltd v. State Rail Authority of New South Wales (1982) 149 CLR 337 at p.347. The term to be implied must be reasonable and equitable, it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it, it must be so obvious that “it goes without saying”, it must be capable of clear expression and it must not contradict any express term of the contract. The plaintiffs and Abbott Holdings recorded their mutual obligations in a detailed extensive and formal written document in which they had the assistance of their lawyers. The contract is complete upon its face and needs no implied term to give it business efficacy. The parties set out specifically what were the contractual obligations regarding the work on the building and the quality of workmanship and materials. The parties set the parameters of the nature of the materials by the specifications which could be in conflict with material which was reasonably fit for the purpose but not in conformity with the specification. Further the glass curtain wall fabricator who was to supply the glass was specified in the contract between Abbott Holdings and White Industries. There is good reason for not construing any implied term of quality and fitness where the goods are to be provided by a nominated subcontractor, Cable (1956) Ltd v. Hutcheson Bros Pty Ltd (1969) 123 CLR 143.

Further breaches alleged by the plaintiffs against Abbott Holdings were that the glass did not comply with the Codes, it was not best quality material, the works were not executed and finished in an expeditious, efficient and workmanlike manner, the works were not constructed in accordance with the specifications, Abbott Holdings did not supply the glass required in accordance with the specifications, Abbott Holdings did not cause the work to be carried out and completed in a good, safe and workmanlike manner with materials in accordance with the specifications, the glass was inadequate for the purpose of execution of the work and the glazed aluminium awning was structurally unsound.

There were no relevant codes dealing with these aspects of the specifications in Australia.  The reference to best quality materials as applied to the glass has been dealt with.  There is no compelling evidence that the Building was not constructed in a good, safe and workmanlike manner.

Abbott Holdings also claims in negligence against White Industries.  There may be a coincidence of contractual and tortious responsibilities between the same parties but the existence of a contract may lead to the conclusion that there is no relationship outside the contract.  The relationship between Abbott Holdings and White Industries in my view is governed by the detailed terms of the contract and, implicitly, the parties did not rely upon any superimposed obligations outside the contractual regime, Bryan v. Maloney (1995) 182 CLR 609, RW Miller & Co Pty Ltd v. Krupp (Australia) Pty Ltd (1995), B & Con Law 74.

The trade practices claim has been dealt with above and the same observations apply.

1. Hennessey

   Hennessey has not pleaded to the amended statement of claim against Hennessey delivered by Abbott Holdings on 29 March 1995.  Abbott Holdings in its submissions noted that Mr Hennessey in his submissions has not addressed that particular claim and seeks judgment against Hennessey in favour of Abbott Holdings for damages to be assessed.  Mr Trevor Hennessey appeared on behalf of Hennessey.  He was not assisted by a solicitor.  By the time that pleading was delivered there were almost 300 pages of pleadings between the parties.  The actions are complex and the pleadings not easy to follow even for a legally trained person.  There could be no doubt as to the position of Hennessey with respect to all the claims that were made against it.  Should Hennessey seek leave to defend the claim formally made against it by Abbott Holdings such leave will be given.

   The actions against Hennessey are in negligence, pursuant to s.55 of the Property Law Act and in breach of the Trade Practices Act.

   The issue of negligence in respect of Hennessey have been canvassed in the principal action and the same conclusions apply.  In the circumstances of a complex series of contracts no duty of care beyond that matrix of contracts ought to be imposed.  Further I have concluded that Hennessey was not negligent in installing the glass and that the plaintiffs have not made out to the requisite standard of proof that the problems with the awning were other than caused by the falling shattered glass.

   Abbott Holdings claims to be entitled to the benefit of the provisions of s.55 of the Property Law Act against Hennessey.  The provisions of the section are set out earlier.  Abbott Holdings contends that the provisions of the head contract between itself and White Industries were incorporated into the subcontract pursuant to cl.3, that under the subcontract Hennessey implicitly agreed to carry out and complete the works the subject of the subcontract for the benefit of Abbott Holdings.  Abbott Holdings further incorporates the plaintiffs’ pleadings against it and in particular that the building contract required White Industries to obtain guarantees from Hennessey to the benefit of Abbott Holdings.

   Abbott Holdings contends that by its acceptance of Hennessey as subcontractor and approval of Hennessey’s proposal for the curtain wall as notified to it by Lynch & Blow during a site meeting on 9 October 1986 which was communicated to Hennessey by Lynch & Blow by the issue of Addenda No 1 to the specifications on or about 24 October 1986 Abbott Holdings accepted the promise.  Those facts are not in dispute and Abbott Holdings may have benefit of that promise.

   I have already dealt with the question of the guarantees under the building contract and have concluded that guarantees were obtained.

1. The Lynch & Blow Defendants

   On 2 March 1995 Moynihan SJA ordered

   “Notices claiming contribution be delivered by any party seeking to do so by 17 March 1995, subject to those Notices not raising issues affecting the duration or course of the trial.  Defences to contribution notices be delivered by 27 March 1995.”

On 29 March Abbott Holdings delivered its notice claiming contribution against the Lynch & Blow defendants and a document entitled “Amended Defence and Counterclaim to the Fourth, Fifth and Sixth Defendants’ Statement of Claim against the First Defendant”.     

By virtue of s.42 of the Limitation of Actions Act 1974 the counterclaim would be deemed to have been commenced when the fourth, fifth and sixth defendants’ claim for contribution was commenced and would thereby defeat a limitation defence.

The Lynch & Blow defendants did not object when the pleading was delivered two days’ late and on 8 May 1995 at the review indicated that they would plead to it and did so on 10 May 1995 in conformity with an order made that day.  On 23 May 1995 the Lynch & Blow defendants gave notice that they would make amendments to their pleadings.  On 7 June 1995 Mr O’Donnell for Lynch & Blow sought unsuccessfully a ruling that the issues raised in Abbott Holdings amended defence and counterclaim were not issues in the action.  I ruled that the order of the Senior Judge Administrator was apt to include amendments to the pleadings between the defendants.  The outstanding matter was whether an extension of time ought to be granted.

The Lynch & Blow defendants have sought to reopen the question of the amendment to the defence and counterclaim but by the ruling on 7 June 1995 that matter is closed.  In any event the Lynch & Blow defendants did not raise the issue at any of the reviews after 29 March and indicated an intention to plead to that pleading.  There are no new matters involved in the pleading except a legal argument as to when the cause of action based on tort would commence and accordingly would not offend against the qualification to the general order made on 2 March 1995.

There should be an extension of time from 27 March to 29 March 1995 for Abbott Holdings to comply with the order made 2 March 1995.  Leave which is not opposed is given to the Lynch & Blow defendants to deliver their reply and answer.

The ambit of the retainer between the Lynch & Blow defendants and Abbott Holdings has been addressed together with the standard of care of an ordinary competent architect.

The Lynch & Blow defendants submit that Abbott Holdings does not plead that because of the failure of a duty of care or in breach of the retainer it exposed Abbott Holdings to action (and judgment by consent) by the plaintiffs.  But on a proper construction of the amended defence and counterclaim of Abbott Holdings it is clear that Abbott Holdings pleads that if it is found liable to the plaintiffs it is because of the breaches of duty and retainer owed by the Lynch & Blow defendants to Abbott Holdings.

There is no liability owed by the Lynch & Blow defendants to Abbott Holdings.

Third Party Proceedings by White Industries

White Industries claims damages for breach of contract or negligence from Hennessey.  Under the subcontract between them the provisions of the head contract were included in the subcontract.  By cl.B of the subcontract Hennessey was obliged to indemnify and save White Industries against and from any breach, non-observance or non-performance by the subcontractor of the provisions of the head contract and any act default or omission of the subcontractor which involved White Industries in any liability to Abbott Holdings under the head contract.

By cl.28 of the subcontract all the materials used should be the best of their respective kinds and work of every description should be executed in strict accordance with the provisions of the subcontract and in the best substantial and workmanlike manner.  Similarly with the provisions relating to the supply and installation of the glazed aluminium awning.  There is no difficulty with the construction of the subcontract and to the extent that White Industries is liable to Abbott Holdings it is entitled to judgment against Hennessey for that same amount of damages.

Orders

The formal orders are as follows:

1.Judgment for the plaintiffs against Abbott Holdings in the sum of $861,927.52.

2.Dismiss the plaintiffs’ actions against the second to ninth defendants.

In the third party proceedings:

Judgment for Abbott Holdings

·against White Industries for damages for breach of contract

·against Hennessey for damages pursuant to s.55 of the Property Law Act

Both in the sum awarded against Abbott Holdings.
Judgment for White Industries against Hennessey in the sum for which White Industries is liable to Abbott Holdings.