Telstra Corporation Ltd v Adept Drainage Pty Ltd
[2011] VCC 1172
•2 September 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
(Not) Restricted
AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION LIST
GENERAL DIVISION
Case No. CI-09-05410
| TELSTRA CORPORATION LTD (ACN 051 775 556) | Plaintiff |
| v | |
| ADEPT DRAINAGE PTY LTD (ACN 090 652 172) | Defendant |
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| JUDGE: | HIS HONOUR JUDGE PARRISH |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 25, 26, 27, 28 and 29 October 2010 |
| DATE OF JUDGMENT: | 2 September 2011 |
| CASE MAY BE CITED AS: | Telstra Corporation Ltd v Adept Drainage Pty Ltd |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1172 |
REASONS FOR JUDGMENT
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Catchwords: Claim by plaintiff against the defendant in negligence for cost of the repair of damaged telephone cables – Liability admitted – The appropriate method to calculate damages.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr I.D. McDonald | Sparke Helmore |
| For the Defendant | Mr K.J. Naish | Hall & Wilcox |
| HIS HONOUR: |
Introduction
1 At about 11.00 am on Friday, 14 September 2007, a major “outage” occurred as a result of some underground telephone cables owned and maintained by the plaintiff (“Telstra”) being damaged as a result of underground boring work being performed by the defendant (“Adept”) near the intersection of Burwood Highway and Stud Road in Wantirna (“the incident”).
2 An “outage” occurs when telephone cables are damaged, causing telephones to stop working, and associated services such as Eftpos transactions, alarm systems and computer use. The outage affected the nearby Knox City Shopping Centre, an industrial park, part of the local police station, the local council offices, miscellaneous businesses, and an aged persons’ home. An officer of Telstra estimated that 3000 to 4000 lines were affected by the outage.
3 Telstra, largely using its own workforce and materials, worked 12-hour shifts for most of the ensuing two weeks in order to repair the damaged cables.
The proceeding
4 In this proceeding, Telstra sues Adept in negligence, seeking damages in the sum of $171,601.71, being the cost to repair the damaged cables. Such damages are made up of the following amounts:
(a) Labour costs on 14–21, 22, and 27–28 September 2008, $108,761.10 being 310.5 hours at normal time rate of $94.80 per hour,
and 667.5 hours at overtime rate of $118.84 per hour.
(I shall refer to this item of the damages as the “labour
costs”)
(b) Materials charges $39,854.55 (I shall refer to this item of the damages as the “materials
charges”)(c) Contractor costs $28,783.16 (I shall refer to such costs as the “contractor costs”)
$177,398.81
From this sum is deducted $5,797.10, which is allowance – $5,797.10 for the scrap value of the cables that were taken from the
site$171,601.71 5 Adept admits liability, but disputes the amount of damages claimed on the following bases:
(a) The labour costs: (i) Telstra should have engaged contractors to perform all of the work, or, at least part of the work. Contractors would have been much cheaper (the mitigation argument).
(ii) Telstra’s normal-time rate of $94.80 per hour and overtime rate of $118.84 per hour does not in fact or in law fairly and reasonably reflect the costs of repairing the cables. Labour costs should be based on what a contractor would have charged to repair the cables.
(b) The materials charges:
(i)
The materials charges are excessive, in that further cable was used than was necessary as a result of “hauling” such cable to a further manhole than was necessary;
(ii)
In any event, placing a 16% loading on the materials said to be for “holding charges” was inappropriate.
(c) Contractors costs:
(i)
The cables were “hauled” by a contractor, and, because they were hauled to a more distant manhole than necessary, excessive contractor costs were incurred.
6 Both parties called witnesses who gave evidence and were cross-examined. Both parties tendered extensive documentary material.[1]
[1] See Annexure A
The Evidence of Mr Trevor Michael Allen
7 Trevor Michael Allen (“Allen”) gave evidence that he was employed by Telstra as the Team Manager of the Bayside Patch Region, Victorian Tasmanian Region of Construction and Maintenance. The Bayside Patch covers approximately the area from Carlton to Collingwood, up to Ringwood, and then back to Cheltenham Heights extending up to St Kilda.
(a) His background and experience 8 Allen gave evidence that he had been employed by Telstra for 25 years involving the following jobs:
(i)
Initially, he was employed for approximately 6 years on the network installation pit and pipe gangs, which were involved in the installation of conduits, pits in the street, and anything else involving conduits to commercial or residential premises.
(ii)
He then worked in the cable jointing and cable testing area to become a technician, which also involved attending the Telstra internal school. He explained that the cables involved go into either industrial or residential premises, and within that cable there would be more cables with copper wires to carry a telephone line. Cable jointing involved joining various cables together to allow a telephone line to operate. He performed this type of work for 10 or 11 years.
(iii)
For the next 4½ to 5 years he became the acting team manager of the Southern Patch, which is situated around the Nepean/Rosebud area, and was in charge of a team of about fifteen to sixteen people. His team would attend emergency situations or perform routine maintenance, and install new cables to various industrial or domestic premises.
(iv)
Recently he was gazetted as a team manager of the Bayside Patch, with his team being one of apparently six teams available to attend outages and other emergencies. Although each team is assigned to a particular Patch, outside teams may be brought in, depending on the extent and urgency of any problem.
(b) The make-up of his team 9 Allen gave evidence that his team consisted of approximately sixteen men, all of whom except two are qualified cable jointers, and the other two men are involved with checking the cable for air pressure. He gave evidence that the make-up of the team covers the type of expertise that might be called upon to attend and rectify emergency situations, as well as the day-to-day maintenance and laying out new cable. In particular, he gave evidence that the teamwork of the team is important, and “a great part of the work”.[2]
[2] T 29 L 11–13
10 A member of such a team was generally a CFW4, which is a reference to being Customer Field Workforce at Level 4, with the very basic level being at Level 1, and team managers at Level 8. The level is also the basis for pay rates.
(c) The use of contractors by Telstra 11 When asked what is the practice of Telstra in relation to the use of contractors in an emergency situation such as an outage, Allen stated:
“We get them to haul a cable in the large instances because the amount of staff that it takes to work on a large outage, such as this, they don’t have the capability to be – you know, something that responds to that quick, and to work all around the clock, they won’t – they don’t do it. The smaller ones, we do employ them. If it is only a small damage we – if we can do a temporary fix we can get them to fix it permanently later on but in this case that wasn’t the case.”[3]
[3] See T 30 L 11–23
12 Allen described “cable hauling” to involve:
“The cables in our network run through a series of ducts or pipes or conduits. Some will be the size of your finger, some will be thicker than your leg. The larger ones are on big cable steel drums and they can be up to 200 metres in length on one drum. That would in itself weigh several tonnes. Would need several trucks to cart it around, wherever, what location it’s going from, and then heavy equipment to haul it. ... Haul it through the actual pipe and ducts. What they do is they put a rod through the ducts, a small rod, then they will pull a rope through and then they will pull the cable behind the rope.”[4]
[4] See T 30 L 24–T 31 L 6
13 Allen gave evidence that Telstra subcontracts out all its cable-hauling work to a set of known contractors. Such contractors have specially-designed trucks and hydraulic winches to perform the cable hauling. Such work involves basic skills such as operating machinery, and allows Telstra technicians to assess various other matters involving the jointing of the cables.
14 Metro Bore is one such contractor used by Telstra to haul cable.
15 Allen also gave evidence that, on occasion, Telstra will engage a contractor to perform cable-jointing work. In particular, he gave the following evidence:
“Yes, as I said before, if we can do a temporary fix, if they have only just hit the cable and we can do a temporary fix, then if the cable has to be fixed later on we will use it or engage contractors later on as a needs basis, and yeah, they will work normal hours, daytime hours, though in this case it wasn’t the case because they had damaged such a – many – they had damaged many cables but we had to work around the clock because contractors do not work around the clock.”[5]
[5] See T 33 L 12–22
16 Allen gave further evidence in relation to the use of contractors to perform jobs which required “around the clock work”:
“MR McDONALD: You made some comment about contractors generally not wanting to work weekends and/or around the clock. Is that your common experience when dealing with contractors?---Yes, it still is today.
HIS HONOUR: What you can’t get them – they are not keen to - - -? ---They won’t work around the clock. Come weekends, very hesitant, if not at all, and they come back to us.
MR McDONALD: Do you know why that is their attitude?---Personally, for an answer, could be anything, could be, you know, they have got their own private life. Could be other range of issues, money or what they get paid. We actually employ a company called Service Stream as in my patch, and then they would pay for subcontractors out to work for them, so it could be a varied range of issues, but yes.
HIS HONOUR: Put it the other way. Members of your team and yourself, is part of the deal you have to be prepared, when it is necessary, to do the urgent stuff through 24 hour shifts, sort of thing, is that right?---Generally most of us react, like, as a team manager I can’t make a person work after hours. It’s funded as an overtime rate. In this instance such a large damage, we would require a full shift. I would then go to other team managers of other areas to enquire on their assistance and vice versa.
Generally you get, well not, you do get your team made up?---Yes, 99 per cent we do get enough staff to work.
HIS HONOUR: And your staff are paid what penalty rates and the like or overtime?---Yes, overtime rates.
MR McDONALD: And being employed directly by Telstra as you’ve described would that give you the advantage of being able to contact other teams and getting those other employees in at fairly short notice? ---Yes. A far more efficient way.”[6]
[6] See T 34 L 6–T 35 L 8
(d) Allen’s attendance at the site of the outage on 14 September 2007 17 Allen gave evidence that he and another team member, Mr Andrew Bergen, attended the site of the outage approximately 1½–2 hours after it occurred. Other Telstra personnel had performed a preliminary assessment, and ascertained that Adept had been performing boring work which was the cause of the outage. Allen made an inspection through a manhole on the eastern side of the site and ascertained that a number of cables had been damaged.
18 Allen accepted the description of being in a “pressure environment” when he arrived at the site, and, in particular, gave the following evidence:
“It was like juggling ... balls, you know. On one hand you had people from the media, businesses coming down asking when were they going to be back on, when could they use their lines. On the other hand I was trying to ring contractors to engage them, to get them there, also ringing other team managers to engage to get staff out there for the night.”[7]
[7] See T 42 L 22–28
19 Allen gave evidence that the following events occurred at the following approximate times:
(i) At approximately 11 am on 14 September 2007, Telstra ascertained there was an outage at the site. (ii) Allen attended the site at approximately 1.30 pm. (iii) Metro Bore, the contractor to haul the cable, was contacted, and at about 6 pm was heading to the emergency stockyard of Telstra at Camp Road to pick up cable and arrange for their hauling trucks to attend the site and to commence winching out the old cables and hauling the new cables in. Metro Bore only has expertise as a cable “hauler”. (iv) After one new cable had been hauled by Metro Bore, which took apparently “a couple of hours”, Allen’s team commenced to perform the cable jointing work. Metro Bore were required to come back on and off over the next few days to take out old cables and haul new cables into the damaged area. (v) Allen gave evidence that his team was jointing and checking cables over most of the following two weeks, working 24 hours a day. In particular, he gave this evidence: “Over those two weeks, as and when cable was seen to be damaged and had to be replaced, that’s when you get people like Metro Bore into the scene?---Yes.
Otherwise your team, all of your team involved or most of your team?---Predominantly most of them.
That would be cable joining and the like?---Yes.”[8]
[8] See T 46 L 1–6
(e) The possibility of using a contractor to perform the repair work 20 When asked whether a contractor would have the capacity to conduct the scope of works to be carried on at the site of the outage, Allen stated:
“It simply just doesn’t happen, they just don’t have the expertise, the time frame to do the repairs, it just doesn’t happen. People would have been off the air for a lot longer than what they were.
HIS HONOUR: So your evidence to the court is that any one particular contractor from your knowledge and experience would not have the expertise to do the type of work that your group did over those two weeks?---In such a quick time, yes.
Part of that is, as I think you’ve told me a couple of times now, is that from your experience it would be virtually impossible to have people coming in from contractors on a 24 hour cycle?---That’s correct.”[9]
[9] See T 46 L 7–22
21 Allen gave evidence that a contractor would have had to have been ready to commence the cable jointing work after the cable had been put in, and have at least six people per shift working 12–hour rotating shifts.
(f) The position of the damaged cables and the method applied to repair the cable 22 Allen gave evidence that the damage to the underground cables occurred under one of the lanes of Stud Road, and accordingly the damage could not be repaired at that point, as it was in the middle of the road. He made an assessment to replace the cables, which was the:
“most quickest and efficient to get people back on the air and that’s why we engaged the contractor. We had the cable hauled from the manhole on the east side of the damage going west for approximately about 200 metres.”[10]
[10] See T 48 L 31–T 49 L 4
23 Allen explained that there are access points in the network called manholes, which people frequently see on the ground in footpaths. The steel lids are opened, and access is by a ladder, and the larger ones can hold a couple of men. Allen further described that there were two access points, or manholes, on either side of the road. The manholes are used to remove old cable and haul new cable ready for cable jointing. In this particular case, Allen described that one of the nearer manholes was not of a sufficient size for men to join cable. In particular, Allen gave the following evidence:
“HIS HONOUR: Is it the case that the cable is taken out, the length of
cable, from one manhole to the next manhole?---Yes.I see, and then the joinder is what you’re talking, at either end?---In some cases yes. In this case the one I highlighted, the closest manhole to the damage, was not sufficient to join cable, it was too small, it was inadequate and it was not – we couldn’t join cables in it safely, so my decision was to go further to the next manhole which is big enough.
... I just want to get this clear, in a normal situation – well, I suppose nothing is normal but have I got these steps right, one, there’s damage to the cable in Stud Road, in one of the lanes in Stud Road and it was impractical, inappropriate, to repair the cable at its point of damage? ---That’s correct.
So then you have to go to the nearest manholes of which you have marked on either side of Stud Road?---Yes.
The cable layers come in and lay a fresh or a new portion of cable, if it be in a normal situation, taking out the damaged piece of cable running between the two manholes?---Yes.
If it had been big enough there would have been joinder at either - - -?
---Either end, yes.
- - - either end?---Yes.
I interrupted you; what happened then?---In this case, the manhole on the north side – not on the north side – on the west side, was insufficient in room.
Perhaps you could just put a mark where you say that one is?”[11]
[11] See T 50 L 23–T 51 L 23; see also Exhibit 1
24 Allen accepted that as a result of not using the nearer but smaller manhole, more cable had to be laid between the two manholes by the contractor. When queried as to why a decision was not made to enlarge the closer manhole to enable men to enter into that manhole to effect jointing of the cable, Allen stated:
“The reason why didn’t choose that option is because the cables were severely damaged and cut in half. It was far quicker to replace the cables and join them and get people back on the air. The enlargement would have taken days and, would have taken, you know, several days, and the time frame for the damage – it happened late on the Friday – to get one of our contractors to start enlarging would have taken several days, causing the people to be off even longer. The reason taken to haul the cable is that we knew by the time it would have taken to get a contractor in to enlarge the manhole, we would have had nearly half of those people in the large cable back on the air.”[12]
[12] See T 54 L 13–25
25 Allen considered that enlarging the nearer manhole would involve the loss of several days’ productivity and probably would have cost in the order of $30,000 to construct. Allen considered that the quickest and safest option to get people back on air was to haul the cable between those manholes which were of adequate size to hold men to perform the jointing of the cables.
(g) Sundry matters 26 Allen gave evidence that in the area where the damaged cables were situated, there was no so-called “redundancy in the network” to allow an option to reroute the affected circuits through alternate paths within the network. Furthermore, it was not an option to effect temporary repairs rather than permanent repairs, given the location and the extent of the damage.
27 Allen gave evidence that the materials used in the repair of the outage were appropriate for the job, and the men worked to their normal capability. Allen also confirmed that he kept records of the identities of the men and the hours worked, which were then entered into the Telstra computerised system. Similarly, a record is kept of the materials that are used and they are also entered into the Telstra computerised system.
28 Allen also gave evidence that given the size of the outage, the timing of the outage, and the need to liaise with various organisations and people as a result of the outage, much coordination is required with Telstra personnel dealing with the media, hospitals, nursing homes and the like. When on site, Allen was in charge of the Telstra employees performing the repair work, and liaising with the management of the cable hauler contractor.
(h) The cross-examination of Allen 29 Under cross-examination, Allen identified a document headed ‘Damage to Telstra Plant – Details of Expenditure’.[13] That document is broken down into three main areas: Manhours, Material from T Store, and Incidentals. That part of the document relating to ‘Manhours’ sets out the dates on which labour was employed, the number of men employed on any particular date, the number of normal-time hours, and the number of overtime hours. The normal-time hours amounted to 310.5 hours, and the overtime hours amounted to 667.5 hours.
[13] See Exhibit 2 at p.20 of the DCB
30 Applying the Telstra normal-time labour rate per hour of $94.80 to the number of normal-time hours amounts to $29,435.40. Similarly, applying the overtime labour rate of $118.84 to the overtime hours amounts to $79,325.70, which, together with the normal-time hours costs, amounts to $108,761.10.
31 The part of the document in relation to ‘Material’ sets out the quantity, serial number, item number and the type of material used by Telstra to repair the telephone cables. That part of the document also shows the issue rate (that is, the cost to Telstra), and thereafter is a loading of 16% on such material. The issue rate of the material used by Telstra was $34,357.37, which, together with a loading of 16 per cent ($5,497.18) constitutes the material charges of $39,854.55.
32 That part of the document in relation to contractor costs sets out that such costs amounted to $28,783.16.
33 The total of ‘Manhours’, ‘Material’ and ‘Contractor’ costs is $177,398.81.
34 Although Allen accepted that Telstra distinguishes between recoverable damage (that is, damage to Telstra equipment for which the cost of repairs can be recovered from a third party) and unrecoverable damage (the cost of repairs to Telstra equipment which cannot be recovered from any third party because such party is unknown or it was not caused by a third party), he asserted that the repairs were undertaken in the same way in each case.
35 Allen accepted that when he attended the site of the outage, he did not attempt to call a contractor (other than the cable haulage contractor) and made no enquiry as to how much it would have cost for the contractors to perform the work at the site.
36 Allen confirmed in cross-examination that work done by contractors is paid pursuant to rates set out in a document referred to as “Schedule B”. Payments to contractors can either be on a piece-rate cable jointed, or on a per-hour basis, and the rates for either are found in Schedule B.
37 Allen also accepted that into the following week when work was continuing at the site, he did not make any enquiries whether any contractor would be available to perform work either in normal hours or for overtime work.
The evidence of Mr Bill Andreopoulos
38 Bill Andreopoulos (“Andreopoulos”) gave evidence on behalf of Telstra and gave his occupation as a contractors manager employed by Telstra. He has been employed by Telstra for 16½ years in the following capacities:
(i) Initially, he was employed for 4 years in civil construction known as pit and excavation, involving excavation and labouring work installing and repairing various cable networks. (ii) He was then employed in cable jointing for 2 years after completing a cable-jointing course. Such work involved carrying out maintenance and repair and laying out various copper cable networks. (iii) For the last approximately 8 years he has been a contracts manager. 39 His role as a contractors manager involves contract negotiations, schedule of costs negotiations, adherence to health, safety and environmental policies, and general adherence to Telstra policy, state and federal legislation.
40 Andreopoulos gave evidence that Telstra always utilises its own workforce, rather than contractors, at outages, because:
(i) Such workforce has the “expertise and resources” to undertake such work. (ii) The workforce has “local knowledge” – knowing the cable in the area, because teams would have been maintaining such cable over the years. (iii) The ability to mobilise people not only from the patch where any outage occurred, but also from other patches around the state. 41 Andreopoulos could not recall contractors ever being called at first instance to an outage, and certainly not to an outage of the size which occurred on 14 September 2007.
42 In particular, Andreopoulos gave evidence that:
(i) Telstra has always employed, and continues to employ, staff to attend outages. (ii) There is a difference between people performing copper-cable jointing and people performing fibre-optic splicing. The copper-cable network is owned and maintained by Telstra, whereas fibre-optic networks are owned by Optus and Telstra (and some other carriers). (iii) The duties of electricians or data-cable installers are different to those carried out by cable-jointing teams. (iv) The nature of the work carried out by Telstra is the same whether or not the cost of that work can be recovered against a third party. 43 Under cross-examination, Andreopoulos accepted that:
(i)
It was “cheaper” to engage “external contractors” rather than Telstra’s linesmen to perform jointing work on copper wire.
(ii)
Fibre-optic splicing linesmen are paid at a higher rate than copper-wire linesmen because more training is required and the job is more skilled.
(iii)
In a similar way, electricians are paid at a higher rate because of greater training and qualifications.
(iv)
Service Stream Communications Pty Ltd, a contractor used by Telstra, is the successor, or alternatively a subsidiary, of Skilled Engineering Pty Ltd.
44 In re-examination Mr Andreopoulos gave the following evidence:
“Telstra obviously continues to employ these crews [contractors] from
your evidence?---Correct.What then is the situation regarding the use of external contractors to carry out cable jointing work of outages at the present time?---A present time they provide support when we are unable to rectify services on a temporary basis. If we need to call contractors in we do to provide support in bringing up the services, rectifying the services. They could also be brought upon if we need permanent repairs to be undertaken as well.
Was that the situation that applied as at September 2007 or has there been any variation since then?---I don’t believe there has been any variation.
When you refer to ‘effecting permanent repairs’, is that in the context of an urgent repair or a non urgent repair?---Both.”[14]
[14] See T 120 L 4–19
45 Andreopoulos agreed with the evidence of Allen that when major outages occur, team leaders can call on other patches to obtain the required expertise, and that it would be “virtually impossible” to get a contracting team together to perform such work on short notice. Furthermore, he agreed with Allen that once work had commenced at an outage, there would be “difficulty” about obtaining contractors who would have the requisite expertise and number of men to carry on rotating shifts to complete the work.
The evidence of Mr Craig Lesley Giles
46 Craig Lesley Giles (“Giles”) gave evidence on behalf of Telstra, and gave his occupation as a finance manager employed by Telstra. He holds a B.Ec (Hons) and is a Certified Practising Accountant.
47 Giles has been employed by Telstra since 1985 and he has been in his present position since February 2003. Giles described his duties with Telstra to include the monitoring and updating of Telstra’s hourly rates for labour-rate calculations.
48 He gave evidence that as at 14 September 2007, Telstra’s hourly labour-cost rate for repairing the outage was $94.81 per hour normal time, and $118.86 per hour overtime.
49 He identified and referred to a document entitled ‘Telstra Corporation Limited – Hourly Labour Rate Calculations’.[15] I shall refer to this document as the ‘labour rate’ document. The labour rate document also sets out the accounting principles, methodologies and calculations of the labour-cost rates, together with the components of the labour-cost rates.
[15] See Exhibit 2, p.32, PCB
50 Giles explained that where there is a third party responsible for damage to Telstra property, ‘recoverable damages’ against that third party include the full recovery of costs associated with labour, materials, incidental, contractor and other fixed costs incurred to undertaken repairs and/or replacement of damaged Telstra facilities.
51 Giles confirmed that when the total number of normal-time hours and the total number of overtime hours have been ascertained, such hours are multiplied by the respective labour-cost rates. In a similar way, when the cost of materials is ascertained for any particular job, such material costs are loaded by 16% for “storage and administrative costs”. There is no loading for contractor costs incurred on a particular job.
52 Giles explained that the labour cost rates were based on historic cost information as at 31 May 2007, and did not include a cost of capital or any profit component.
Labour cost rates
53 Giles gave evidence that the labour cost rates were made up of direct labour costs, direct labour support costs, and indirect overhead costs. I set out the table supplied by Giles in relation to these items:[16]
[16] See Exhibit 2, p.38, PCB
Normal Overtime Time
Direct Labour Costs $46.06 $70. 11 Direct Labour Support Costs $33.18 $33. 18 Indirect Overhead Costs $15.57 $15. 57 TOTAL LABOUR RATE $94.81 $118 .86 54 Giles gave evidence of the direct labour costs, which reflect the salary and on-costs of labour deployed to repair or replace damaged Telstra facilities. I set out the table made up by Giles setting out the various items making up such direct labour costs:[17]
[17] See Exhibit 2, p.40, PCB
Normal Overtime Time
Salary $37.89 $66. 31 Superannuation $3.41 $0.0 0 Recreation Leave Bonus $0.51 $0.0 0 Long Service Leave (“LSL”) $1.15 $0.0 0 Payroll Tax $2.44 $3.7 1 Functional & Other Allowances $0.66 $0.0 0 Meal Allowance $0.00 $0.0 9 TOTAL $46.06 $70. 11 55 Similarly, Giles gave evidence of direct labour support costs for a field technician performing recoverable-damages work, such costs including transportation to worksite, supervision, administrative support, fault management, PCs and training. I set out the table prepared by Giles of such items of direct labour support costs:[18]
[18] See Exhibit 2, p.44, PCB
Rate
Motor Vehicle Running costs $9.61 Team Leader $6.85 Support Staff $4.07 Communications, PC Leasing and Other $6.30 Front-of-House and Back-of-House Support $1.74 (Service Advantage) Workers Compensation and Accident Prevention $1.88 Training $2.09 Tools & Equipment $0.64 TOTAL $33.18 56 Giles also gave evidence of the items making up the indirect overhead costs which consist of service quality management, finance, human resources, legal support, and other similar support services. I set out the table prepared by Giles detailing these items:[19]
[19] See Exhibit 2, p.50, PCB
Rate
Telstra Services: Regional $0.19 Telstra Services: National Support $3.05 Corporate (HR, Finance, Legal) $8.21 Property and Rental $4.12 TOTAL $15.57 57 When asked as to the general approach as to the calculation of these items, Giles stated:
“We – we generally – not generally – we’re extracting – we’re extracting information from our – from a range of systems that – that have this information. So for example the labour rate, we start from the award rate for – for a labour classification or really for a staff member that’s involved generally in this type of repair, so we start from the current award rate and work from there and most of the other loadings are – some of them are legislated like payroll tax, so we apply an average payroll tax percentage to the rate so they’re derived, there’s some information that we source from our systems and there’s some information that we source from just award information or you know, legislated information.”[20]
[20] See T 130 L 30–T 131 L 12
58 Giles also gave evidence that the loading of 16% on the cost price of materials used by Telstra covers the costs of ordering, storing and delivering such material to the site. When asked how the figure of 16% is arrived at, he stated:
“Now, that’s a rate that we’ve been using for the period of time, standing loading, that we receive from the – that I receive from the finance manager for the group that looks after logistics group and I assume, well, I don’t have the detail on how the 16 per cent is calculated.
And for how long have you been using the figure of 16 per cent for those purposes?---That has been a standard rate for, well, certainly since the time of the rates here, the ’06/’07 rates.”[21]
[21] See T 154 L 12–21
59 Under cross-examination, Giles accepted that the process of calculating the labour cost rates is a cost-accounting exercise and a reasonably standard approach. Furthermore, he accepted that he had averaged out a number of costs and applied them to an hour of work by a Telstra lines technician.
60 In particular, Giles accepted that there was a difference between an average costing, which he had performed, and marginal costing, which involved the specific extra cost which has been incurred by reason of a particular activity.
61 When asked was there any particular protocol or formula applied to what part of the costs of the Telstra organisation is going to be averaged out to help form the basis of the labour cost rate, Giles stated:
“There is and it is a judgment – it really is, you know, a judgment at the end of the day in terms of how far – how wide you spread the cost pool for apportionment to the activity. You know, for example, we include finance and accounting. We do average the cost over all the employees in the company and then get an overhead rate to load here, but part of finance and accounting includes my role and my finance managers that are involved in the planning and the reporting on this business. It includes the payroll function that obviously those – the people – in the field people, you know, their pays are processed through payroll. So there are, at a broad level, you know, we average it out over all the people in Telstra, so it becomes quite a small number - - -”[22]
[22] See T 160 L 4–18
62 During his cross-examination, Giles also gave this evidence:
“MR NAISH: So what this report can’t say and it’s no criticism of you Mr Giles, but it can’t say how these costs were any different as a result of the incident on 14 September 2007?---That’s true.
HIS HONOUR: Although can it be said as a matter of logic that whatever the direct labour support costs are for any – they had to be greater than they would have been absent the outage?---Yes, so that the principle here is that we’re incurring cost as a consequence of doing an activity and in this case it’s damages for recoverable damages work. If we didn’t have – if we were doing that activity we wouldn’t need a certain number of field staff therefore we wouldn’t need the vehicles that they have, there’d be some reduction in team leaders, you know, some reduction in training so it’s really allocating the costs that they incur to the function that they do so it’s true to say that, you know, the team leader costs would not have changed as a consequence of that incident in Knox but it is reasonable to allocate a portion of the cost to that activity we would have a smaller workforce and we would have - - -[23]
[23] See T 168 L 15–T 169 L 4
63 In re-examination, Giles gave evidence that the “marginal” costs in relation to the outage that occurred on 14 September 2007 would include the direct labour costs (as described by Giles), and possibly the motor vehicle running costs, which was a component of the direct labour support costs.
64 Also in re-examination, the following evidence was given by Giles:
“Question: It was put to you on a number of occasions and you agreed on a number of occasions that most of these costs are not referable to the particular job, and it was also put that a lot of these costs would exist regardless of this outage occurring and the like. You replied on a couple of occasions that not in the short term. What did you mean by that and how does that differ from the long term functions and business planning of Telstra?---I suppose at the end of the day, you could say all of these costs are not variable because we still had the workforce there. We still had the workforce there. We didn’t go out and employ anyone additional to attend to this visit but that’s not the – that’s not the intent of what we’re calculating here. We are calculating the costs of an activity but attributing in a sort of reasonable way those costs that we can link to having a field workforce, if you like, that do these field activities. So certainly over the short term some of these costs are more variable than others. So if we decided we weren’t going to do damages restoration any more, probably immediately we would reduce our staff members. So that would be an immediate consequence, we return vehicles so we - - -
HIS HONOUR: You might have less cable stored, you might have a whole variety of things?---Yes so - - -
Less space required, all that sort of thing?---So some of those costs – and most of the costs here are linked to having a volume of workers, if you like. So if we decrease the volume of workers we’ll decrease the number of vehicles we’ll need, we’ll decrease – so obviously all those direct labour costs would fall and ultimately, probably not immediately, we would have some rebalance in team leaders and you’d reduce over time the number of PCs, you’d reduce a whole range of the costs that we’re saying are indirect so – and obviously your rental’s not going to change, you’re not going to vacate buildings but over time you might need to rebalance and you might need to reduce the number of depots. That – from my own experience working in this role, year on year we’ve reduced the number of staff and year on year the level of costs has also fallen that are associated with just employing – most of these costs are associated with employing people so most of these costs over time decrease as the number of people you have fall.”[24]
[24] See T 192 L 7–T 193 L 18
The evidence of Mr Matthew John Gwynne
65 The report of Matthew John Gwynne was tendered by Telstra.[25] Mr Gwynne holds a Bachelor of Business (Accounting) and a Graduate Certificate in Forensic Studies (Accounting), and is a member of the Institute of Chartered Accountants.
[25] See Exhibit 2, p.56, PCB
66 In his report dated 12 August 2010 he reviewed the methodology adopted by Telstra to calculate the 2007 labour rate, and is of the opinion that it is consistent with the methodology previously audited and is in concurrence with market practice.
The evidence of Mr George Georgevits
67 George Georgevits gave evidence on behalf of Adept. He is the holder of a Bachelor of Engineering (Hons) from the University of New South Wales which was obtained in 1974, and was undertaking a part-time PhD in Astrophysics at the University of New South Wales.
68 From 1980 till the present, Georgevits has been the managing director and principal consulting engineer for Power and Digital Instruments Pty Ltd. Prior to that he had been a senior consulting engineer with Laurie Systems Engineers, and his duties involved the design and overseeing of installation of communication systems for various large companies. From 1974 to 1980 he held various telecommunications engineering positions with the PMG’s Department, then Telecom Australia, and then Telstra, with his last position with Telstra being senior engineer in charge of the State design laboratory, New South Wales.
69 Over the years his duties have involved project budgeting and costing, and also he has been trained to perform jointing of copper wires.
70 Georgevits identified a report written by him on 16 June 2009 and that the contents of such report were “true and correct” and he continued to hold the views expressed in that report.[26]
[26] See Exhibit A at p.3 of the DCB (such report consisting of 15 pages before the commencement of any résumé)
71 In section 7 of his report, Georgevits expresses the opinion that the labour cost rates utilised by Telstra for normal time and overtime are “excessive, being well in excess of market rates for this type of work at about the time the incident took place”.[27]
[27] See Exhibit 1 at p.9, DCB
72 Georgevits gave evidence of alternative labour cost rates:
(i) He made reference to the rates utilised by Skilled Communications Pty Ltd in 2004. At that time, according to Georgevits, Skilled engaged linesmen on a contract basis only, for between $23.00 and $26.50 per hour, subject to skill level. Skilled then contracted the same staff to Telstra (and other organisations) at a 20% mark-up, which brought the contract-out rate for linesmen to between $27.60 and $31.80 per hour. Georgevits then applied a loading of 15% for overtime, and adjusted the rates by 2.5% per year for inflation. Accordingly, taking a mean figure of $30 per hour (between $27.60 and $31.80 per hour as charged to Telstra) as a normal labour time rate, and $34.50 for an overtime labour rate, gave rise to the following figures:[28]
[28] See Exhibit 1 at p.10, DCB
Adjustment Normal Time Overtime (+ 15%)
Skilled Communications Base Rate $30. 00 $34. 50
Telstra overheads – contract admin 15% $4.5 0 $5.1 8 Inflation allowance (3 years @ 2.5% p.a.) 7.5% $2.2 5 $2.5 9 Estimated Hourly Rates for Linesmen
for 2007:$36. 75 $42. 26 (ii) Georgevits also gave evidence of what were said to be rates paid by Optus for fibre-optic splicing technicians relevant as at March 2005. In particular, he took the applicable labour rate for a fibre-jointing technician without test equipment, $55 per hour normal time as a casual rate, or $37 per hour on a weekly rate. He noted the fibre-jointing technicians are more highly skilled than telecommunications linesmen, and thus attract a higher hourly fee.
In his view, a linesman would attract an hourly rate at least 20% less than the rates quoted above for fibre-jointing technicians, which would reduce the above casual rate to $44 per hour and the weekly rate to approximately $30 per hour.
Again, if allowing three years of 2.5% inflation per annum, such figures come to $47.30 per hour for the casual labour rate and $32.25 per hour for the weekly labour rate.
(iii) Georgevits also gave evidence in relation to TransACT Communications, which apparently is a carrier providing various services to customers in Canberra. Georgevits supplied labour cost rates said to be relevant as at March 2006 for various grades of technical and lines staff, paid by TransACT to various contractors.
In particular, TransACT as at March 2006 paid linesmen from one contractor at the rate of $46.50 per hour. Georgevits also gave evidence that such rates are on a “casual” basis, and that on a weekly basis they should be discounted by about one-third, amounting to approximately $31.80 per hour after allowing one year of inflation of 2.5%.
(iv) Georgevits also gave evidence in relation to Rawlinsons Australian Construction Handbook, which he described as a publication used in the construction industry for cost-estimating purposes.
Georgevits made reference to the rate for an electrical installer, being $59.65. Georgevits gave such evidence to highlight that an electrical installer is far more highly qualified than a linesman, has a higher level of training and skill level, and even in those circumstances would only attract a rate of $59.65 per hour.
73 When queried about the appropriateness or otherwise of the loading of 16% placed on materials by Telstra, Georgevits stated:
“Your Honour, I think it is appropriate. They also have administration costs. They have to buy that cable in, they have clerical people and so forth. I mean for the same reason that I said that contract administration of 15 per cent is appropriate - - -”[29]
[29] See T 217 L 9–14
It is to be noted that the question was initially posed with a loading of 15% but
Georgevits accepted the same proposition if the loading had been 16%.[30][30] See T 218 L 6–9
74 Under cross-examination, Georgevits accepted that he holds no formal accounting qualification and had not been employed by Telstra for over 30 years.
75 Under cross-examination, Georgevits, after being informed of the factual circumstances surrounding the urgency of the rectification of the outage, the need for the expertise required, the difficulty of obtaining contractors, and indeed the concerns of the team leader about extending the size of the nearer manhole, accepted that it was appropriate for the team manager to utilise Telstra staff and utilise the larger manhole further away from the site of the outage.
76 Furthermore, given the ambit of the work, Georgevits accepted that the actual number of claimed hours for normal time and overtime was “reasonable”.
Analysis of the evidence
77 I found all witnesses creditworthy. Georgevits, the expert relied on by the defendant, made reasonable concessions after being advised of the circumstances immediately surrounding the outage and various factors which determined the making of the decisions by the team leader in charge at the site.
78 I was particularly impressed with the evidence of Allen, who struck me as a very experienced, sensible and practical team leader who was called upon to make decisions (sometimes in conjunction with others) as to the best way to rectify and repair the major outage which occurred on 14 September 2007.
79 I make the following findings of fact:
(a)
In the late morning of Friday, 14 September 2007, a major “outage” occurred as a result of some underground telephone cables owned and maintained by the plaintiff being damaged as a result of underground boring work being performed by Adept near the intersection of Burwood Highway and Stud Road in Wantirna;
(b)
The outage was significant, affecting three to four thousand telephone lines which in turn had a major impact on a large industrial park, power to the local police station and miscellaneous businesses;
(c)
Within this context, I have formed the view that Allen acted appropriately and reasonably by employing his team to perform the repair work, both initially and throughout the period of repairs. In this respect, I accept his evidence that it would have been impossible to raise a contractor team with the appropriate expertise to attend the site of the outage on short notice on a Friday afternoon. Furthermore, I also accept his evidence that it was appropriate for him to maintain his team on site throughout the period of repairs, rather than engage a contractor team to perform work after the initial assessment. His team had the requisite expertise and had the ability to work “around the clock” (including weekends) to rectify the problem. From his experience, a contractor could not supply the requisite number of men and expertise on such a continuing basis.
(d)
I also accept his evidence and find that Allen acted appropriately and reasonably in deciding to haul the cable to the larger manhole, rather than spend time and money (and thus delay the repair process) in enlarging the nearer manhole. Although more cable was utilised and the costs of the contractor hauling the cable were greater, such costs have to be balanced against the costs incurred in enlarging the smaller manhole and perhaps, more particularly, in all the circumstances of the matter, that the delay which would have ensued by waiting for the larger manhole to be completed.
(e)
I also find, consistent with all the evidence, that the number of normal time hours of 310.5 and the overtime hours of 667.5 were reasonable amounts of time for the repair of the outage.
(f)
I also find, on the evidence, that the methodology adopted by Giles in formulating the labour cost rates is consistent with appropriate accounting principles and in concurrence with market practice.
80 Given my findings, I reject any submission that Telstra in employing its own labour to rectify the outage rather than employing cheaper contract labour failed to mitigate its own loss.
81 Furthermore, given my findings, it follows that Telstra is entitled to, at least, the following sums by way of damages:
(a)
labour costs based on the found hours at the appropriate labour costs rates;
(b)
the sum of $34,357.37 being the issue rate to Telstra of the materials utilised;
(c) $28,783.16 being the contractor costs.
82 The critical issues are the determination of the labour costs rates and whether Telstra is entitled to a 16 per cent loading on the issue price of the materials.
83 Counsel for Adept submitted that in assessing appropriate damages, two principles must be borne in mind:
(a) What is the loss suffered by Telstra by reason of the incident; and (b) Telstra cannot recover any more than what are fair and reasonable damages – that is to say, the work undertaken must be necessary and the charges for such work must not be extravagant. 84 In the circumstances of this matter, the central theme of such submission was that many elements of the labour cost rates referred by Giles would have been incurred in any event, and accordingly, cannot be said that those elements of the labour cost rates were incurred by reason of the incident.
85 As I understood the submission of counsel for Adept, he was not submitting that “overhead” costs can never be part of a labour cost rate, rather, it was necessary to demonstrate that such “overhead” costs to be sustained by reason of the incident.
86 In a similar way, counsel for Adept said that Telstra was not entitled to a 16 per cent loading on materials, as it had not been demonstrated that such had been incurred as a result of the incident.
87 Counsel for Telstra submitted that the basic principle underlying recovery costs in torts was “restitutio in integrum”; that is, Telstra is to be put back in the position it would have been had the tort not been committed. However, he accepted that such damages must be “fair and reasonable” and not extravagant. The primary submission of counsel for Telstra was in the facts of this matter, the damages sought by Telstra were “fair and reasonable” given the totality of the evidence.
88 Both parties referred to Commonwealth Railways Commissioner v Hodsdon & Anor,[31] a decision of Blackburn J in the Supreme Court of the Northern Territory. In that matter, the Commissioner for Railways sued both the driver and the owner of a motor vehicle for damages for negligence causing damage to a locomotive with the vehicle at a level crossing. The locomotive was repaired by the Commissioner for Railways at its own workshops. Although Blackburn J found that the driver of the vehicle had not been negligent, he proceeded to make a provisional assessment of damages. In particular, he states:
“The plaintiff adduced evidence of the work done and materials employed, and of the charges made for these matters, which were not challenged by the defendants. The defendants did, however, object to the addition of amounts representing allowances for overhead charges. Evidence was given that these amounts were for portions of the charges for work and materials, representing the plaintiff’s entire overhead expenses, and that the proportions were calculated annually by cost accountants from the figures for the immediately past year. The defence did not seriously challenge the calculations, but challenged the principle. In my judgment, the plaintiff’s contentions should succeed on this point. The plaintiff would have been entitled (provided such a course would have been reasonable) to have had the locomotive repaired by a contractor; in that event, the damages would have been the contractor’s charges, which would have covered the contractor’s overhead expenses plus a profit. It seems to me that in principle a plaintiff who himself repairs a damaged chattel, being engaged in the business of that kind, is entitled to such damages as fairly represent the expense which his entire undertaking has sustained by reason of the damage, including the proper proportion of his overhead expenses …”[32]
[31] (1970) 16 FLR 437
[32] Commonwealth Railways Commissioner v Hodsdon (op cit) at page 438
89 The principle enunciated in Hodsdon has been applied in two cases in the District Court of New South Wales, both of which involved Telstra suing third parties to recover damages for the repair of Telstra equipment allegedly damaged by such third parties.[33] Both matters involved very similar factual situations to that in the subject matter. In both matters, damages included additional sums to cover overheads.
[33] See Telstra Corporation Ltd (formerly Australian Telecommunications Commission) v Bankstown City Council No. 5496 of 1987 delivered on Thursday, 17 August 1995; Telstra Corporation Ltd v Tetrone Pty Ltd No. 1011 of 2000 delivered on 18 February 2003.
90 Counsel for Telstra also referred to the High Court decision of Dart Industries Inc v The Décor Corporation Pty Ltd & Anor[34] which involved a patentee suing for infringement of a patent elected to have an account of profits rather than damages.
[34] (1993) 179 CLR 101
91 The party which held the infringed patent submitted the proper method of taking an account of profits of infringing activities involved what was referred to as incremental costing rather than absorption costs. A majority of the High Court distinguished the terms in the following way:
“Dart relies upon the same passage to support its submission that the correct accounting principle to employ in the taking of an account of profits is incremental costing rather than absorption costing. Incremental costing takes account only of the change in costs incurred by the manufacture or sale of a particular product and does not seek to apportion to the manufacture or sale of that product any part of general overheads, such as rent, light, heating or office expenses, which cannot be identified as a direct result of producing that product. Absorption costing on the other hand is a costing method whereby general overheads are apportioned by some appropriate means, often by sales or volume, to the manufacture or sale of each product.[35]
[35] See Dart Industries Inc (op cit) at page 112
92 For present purposes, the terms “incremental costing” and “absorption costing” can, I believe, be equated to the terms “marginal costing” and “average costing” as used by Giles in his evidence.
93 The High Court accepted that in the determination of any such profits, the infringer was at liberty to show that various categories of overheads were attributable to the obtaining of the relevant profit, and to show how and in what proportion the overheads should be allocated in the taking of the account. In particular, the High Court[36] stated:
“ … Whether Decor and Rian [the infringers] should succeed in their contentions depends upon whether, as a matter of fact and substance, the overheads which they seek to have deducted are attributable to the manufacture and sale of the infringing product. In arriving at an answer, the court must consider such questions as whether the overheads in any particular category were increased by the manufacture or sale of the product, whether they represent costs which would have been reduced or would have been incurred in any event, and whether they were surplus capacity or would, in the absence of the infringing product, have been used in the manufacture or sale of other products. Dealing with the last of these questions may require the use of the concept of opportunity cost. If any of the categories are to be brought into account, the proportion to be allocated to the infringing product must be determined and it is here that approximation rather than precision may be necessary. …”[37]
[36] Mason CJ, Dean EJ, Dawson J and Toohey J
[37] See Dart Industries Inc (op cit) at page 119
94 In his evidence, Giles freely accepted that some of the items referred to in making up the labour cost rates were not directly referrable to the particular job undertaken on 14 September 2007. However, importantly in my view, he did state:
“We are calculating the costs of an activity but attributing in a sort of reasonable way those costs that we can link to having a field workforce, if you like, that do these field activities. So certainly over the short term some of these costs are more variable than others. So if we decided we weren’t gong to do damages restoration any more, probably immediately we will reduce our staff numbers. So that would be an immediate consequence. We return vehicles so we … “
Later he continued:
“So some of these costs and most of the costs here are linked to having a volume of workers, if you like. So if we decrease the volume of workers we will decrease the number of vehicles we will need, we’ll decrease – so obviously all those direct labour costs would fall and ultimately, probably not immediately, we would have some rebalance in team leaders and we will reduce over time the number of PCs, you reduce the whole range of the costs that we’re saying are direct so – and obviously your rental’s not going to change, you’re not going to vacate buildings but over time you might need to rebalance, you might need to reduce the number of depots …”
Furthermore, as Giles stated, the spread of the cost pool is a matter of judgment to be assessed according to relevant accounting principles.
95 After a consideration of all the evidence and bearing in mind the state of the authorities, I have formed the view that it is open to Telstra as a matter of law, to claim labour costs rates based on the average costing method described by Giles. The evidence of Giles is that the elements relied on all have a cost impact in placing a team in the field to perform work such as that undertaken on 14 September 2007. Furthermore, as I have stated, such exercise by Giles has been undertaken consistent with relevant accounting principles.
96 Accordingly, I do find that Telstra should be permitted to rely on labour cost rates of $94.80 per hour for a normal time rate and $118.84 per hour for an overtime rate consistent with the evidence of Giles.
97 Giles gave evidence that the 16 per cent loading on materials was for the “ordering, storing and delivering to the site”. Although he could give no breakdown as to how the 16 per cent was calculated, I do note that Georgevits considered such loading to be “appropriate” bearing in mind administration costs, contract administration and the clerical people involved in administering that area.
98 Accordingly, although I accept that such 16 per cent has not got the component breakdown in a similar way to the labour cost rates, I have formed the opinion that such an amount is reasonable in all the circumstances.
Conclusions
99 Accordingly, I find that Telstra is entitled to recover the sums of $108,761.10 being for labour costs, the sum of $39,854.55 for materials charges, and the sum of $28,783.16 being for contractors’ costs; such amounts totalling $177,398.81, from which must be deducted the sum of $5,797.10 being an allowance for the scrap value of the cables.
100 I will hear the parties as to the appropriate orders to be made.
Annexure A
The plaintiff tendered the following documents:
(a) Exhibit 1, consisting of a diagram as marked by Mr T. Allen at p.126 of the PCB. (b) Exhibit 2, consisting of the following:
• A Notice to Admit, being Document No 7 at pp.22–24 PCB; •
Statement of Expert Evidence of Craig Giles with attachments, being Document No 10 at pp.30–53 of the PCB;
•
Certificate of Evidence of Craig Giles, being Document No 11 at pp.54–55 of the PCB;
•
Statement of Expert Evidence of Matthew Gwynne together with report dated 12 August 2010, being Document No 12 at pp.56–100 of the PCB;
•
Copy document entitled ‘Actual cost recoverable damages Part A’ with handwritten annotations, being Document No 13 at pp.101–107 of the PCB;
•
Maps showing Telstra cables in vicinity and damage to Telstra cables, being Document No 15 at pp.122–126 of the PCB;
•
44 photos of damaged Telstra Assets, being Document No 18 at pp.131– 141 of the PCB;
•
Copy document entitled ‘Damage to Telstra Plant/Equipment – details & investigations’ with handwritten annotations, being Document No 20 at pp.144–145 of the PCB;
•
Tax invoice for Metro Bore Australia Pty Ltd, being Document No 22 at p.147 of the PCB;
•
Letter from defendant’s solicitors dated 20 September 2010, being Document No 25 at pp.153–155 of the PCB;
•
Craig Giles’ response to the defendant’s solicitors’ enquiry dated 20 September 2010, being Document No 26 at pp.156–161 of the PCB;
•
Document entitled ‘PM070426 Copper Large’, being Document No 27 at pp.157–164 of the PCB;
•
HP Service Center Copper Ticket dated 14 September 2007, being Document No 28 at pp.165-171 of the PCB;
•
Damage to Telstra Plant – Details of Expenditure, being Document No 5 at p.20 of the DCB;
•
Letter from Telstra to Adept Drainage dated 9 November 2007, being Document No 6 at pp.21–22 of the DCB.
The defendant tendered the following documents:
(a) Exhibit A, consisting of the following:
•
Report of Power and Digital Instruments Pty Ltd dated 16 June 2009, being Document No 2 at pp.3–17 of the DCB;
•
Service Stream Communications Pty Ltd schedule of rates for linesperson/jointer supplied to Telstra Corporation Ltd as at September 2007, being Document No 4 at p.19 of the DCB;
•
HP service and copper tickets various states, being Document No 7 at pp.23–29 DCB;
•
Telstra Network & Services – recoverable damages evaluation and briefing guide dated 9 October 2007, being Document No 11 at pp.59–79 DCB.
(b) Exhibit B: Documents in answer to the Notice to Produce dated 26 October 2010 consisting of extracted entries.
2
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