Telstra Corporation Ltd v Quinn Civil Pty Ltd
[2014] VCC 465
•16 April 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
GENERAL DIVISION
Case No. CI-13-01198
| TELSTRA CORPORATION LTD (ACN 051 775 556) | Plaintiff |
| v | |
| QUINN CIVIL PTY LTD (ACN 072 932 195) | First Defendant |
| HARRIS CIVIL PTY LTD (ACN 060 701 831) | Second Defendant |
| LANTAIN PTY LTD (ACN 060 508 867) | Third Defendant |
| and | |
| PEZZIMENTI LASERBORE PTY LTD (ACN 007 109 337) | Fourth Defendant |
---
JUDGE: | HIS HONOUR JUDGE SMITH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2, 3, 4 and 5 April 2014 | |
DATE OF JUDGMENT: | 16 April 2014 | |
CASE MAY BE CITED AS: | Telstra Corporation Ltd v Quinn Civil Pty Ltd & Ors | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 465 | |
REASONS FOR JUDGMENT
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Subject: NEGLIGENCE
Catchwords: Proportionate liability of defendants – whether defendant entitled to rely on investigations of others in determining if it was safe to bore underground – foreseeability of damage to underground services – contributory negligence of plaintiff – where defendant relied upon limited contractual obligations.
Legislation Cited: Wrongs Act 1958 (Vic)
Cases Cited:Voli v Inglewood Shire Council (1963) 110 CLR 74; Roads and Traffic Authority of New South Wales v Dederer & Anor (2007) 234 CLR 330
Judgment: Judgment for the plaintiff against the fourth named defendant.
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APPEARANCES: | Counsel | Solicitors |
| The Plaintiff | Mr J Simpson | Sparke Helmore Lawyers |
| For the Fourth Defendant | Mr P Hayes | Wotton & Kearney |
HIS HONOUR:
1 In July 2009, South East Water was in the process of laying a new sewerage pipeline near Berwick. The path of the pipeline was generally in a west to east direction adjacent to and on the south side of O’Shea Road, Narre Warren South.[1]
[1]West of the intersection of Clyde Road, O’Shea Road is known as Greaves Road. To avoid confusion, I shall refer to it at all times as O’Shea Road.
2 The principal contractor for the project was Thiess Services Ltd (“Thiess”). Thiess had, in turn, subcontracted the project to Quinn Civil Pty Ltd (“Quinn”). Quinn, in turn had subcontracted certain parts of the work involved to Harris Civil Pty Ltd (“Harris”) and to Pezzimenti Laserbore Pty Ltd (“Pezzimenti”) respectively.
3 Most of the pipeline was to be laid in an open trench manner. That is, a trench had been dug alongside and roughly parallel to O’Shea Road. Sections of pipe were then lowered into the trench, connected and then covered. At the point where O’Shea Road reached an intersecting road, it was necessary that the pipeline pass underneath the intersecting road.
4 Pezzimenti had contracted, inter alia, to bore under Clyde Road near to where it intersected with O’Shea Road (“the intersection”).
5 By July 2009, the laying of the pipeline had progressed in an easterly direction so that it had reached the intersection. Clyde Road was, at that point, a four-lane dual carriageway with a median strip between the northbound and southbound lanes. The total distance to be bored under the road was about 60 metres.
6 On 31 July 2009, in the process of boring under Clyde Road, the head of the bore operated by Pezzimenti struck a nest of Telstra conduits at a depth of about 3.5 metres.
7 The cost of repairing the damage to the Telstra equipment was agreed by the parties at $230,640.
8 Telstra claimed the cost of those repairs from four defendants –
(i) Quinn;
(ii) Harris;
(iii) Lantain Pty Ltd (“Lantain”) – a company associated with Harris; and
(iv) Pezzimenti.
9 The parties agreed that for the purposes of this proceeding, Harris and Lantain should be treated as the one entity. I shall refer to them collectively as “Harris”.
10 Telstra alleged that the damage to its equipment had been caused by the negligence of each of the defendants. It claimed damages in the amount of the agreed sum, together with interest and costs.
11 Shortly before the commencement of the trial, I was informed that there had been a settlement of the proceeding as between Telstra, Quinn and Harris. Orders by Consent were made as between those parties. Only the claim against Pezzimenti remained on foot.
12 The parties agree that Part IV AA of the Wrongs Act 1958 (“the Act”) applies to the claim. That is, that the claim by Telstra was an “apportionable claim” as defined in that Part.
13 Section 24AI of the Act provides:
“(1) In any proceeding involving an apportionable claim –
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just having regard to the extent of the defendant’s responsibility for the loss or damage.
(b)judgment must not be given against the defendant for more than that amount in relation to that claim.
14 Section 24AH(1) of the Act provides:
“A concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions caused, independently of each other or jointly, the loss or damage that is the subject of the claim.”
15 Part IV AA of the Act applies to a claim arising from a failure to take reasonable care. To succeed against Pezzimenti, Telstra must establish that:
(a) Pezzimenti owed a duty of care to Telstra;
(b) Pezzimenti breached that duty;
(c) the breach was a cause of Telstra’s damage;
(d) it is just to apportion liability for Telstra’s loss against Pezzimenti having regard to the extent of its responsibility for the damage and the extent of that just apportionment.
16 The matters to be determined are:
(a) Was there negligence on the part of Pezzimenti that was a cause of Telstra’s loss and damage?
(b) If yes to (a), what is the proportion of Telstra’s loss and damage that justly reflects the extent of Pezzimenti’s responsibility for that loss and damage, taking into account any concurrent responsibility of Quinn and Harris for that damage (if any) and contributory negligence on the part of Telstra (if any).
Factual findings
17 Many factual matters were not in contention. The matters referred to under this heading are facts that I find are established on the evidence or by way of agreement by the parties.
18 In December 2008, Thiess entered into an agreement with Quinn in relation to construction of a project referred to as the “Officer South Rising Main”.[2] The full terms of that agreement were not tendered. It was not in issue that part of the project involved the laying of sewerage pipes in a generally west to east direction adjacent to O’Shea Road, Narre Warren South. The exact distance of the pipeline was not disclosed in evidence but it is likely to have been some kilometres.
[2]Exhibit Q - Court Book (“CB”) 170
19 In April 2009, Quinn entered into a “Subcontract Agreement” with Harris. The agreement tendered is brief to say the least, but it seems clear that Harris contracted to construct the sewer for a lump sum consideration. The agreement provided that Harris would, amongst other things, “manage and organise subcontractors including but not limited to Access Boring P/L and Advance Poly Fusion P/L.” [3]
[3]Exhibit R – CB 172-3
20 I infer that Access Boring P/L was a contractor that engaged in underground boring services. That company was not involved in any such activities relevant to this proceeding.
21 In May 2009, Quinn entered into a further subcontract agreement with Pezzimenti, an underground boring specialist. Again, the agreement tendered is brief. It consisted of Quotation No. 4433 and Terms of that Quotation. [4]
[4]Exhibit S – CB 174-5
22 Pezzimenti’s quotation was accepted by Quinn.[5]
[5]Exhibit M – CB 176
23 I find that the agreement meant, and was understood by Quinn and Pezzimenti to mean that Pezzimenti would perform boring work under Clyde Road (58 metres) and further, under O’Shea Road (27 metres). The second of those tasks is not relevant to this proceeding.
24 The relevant terms of Pezzimenti’s quotation were:
“Others To:
1 Locate existing services.
…
3 Excavate the shafts –
5 Provide survey – Line, Level & Grade.
…
Other Notes
1No responsibility will be accepted for damage to property or services unless caused by our equipment deviating from the Contractor supplied survey.
… .”[6]
[6]CB 175
25 It was not in issue that the shafts referred to were relatively large shafts dug into the ground at the point where the boring was to commence, into which Pezzimenti would lower its equipment in order to bore horizontally.
26 The “services” referred to were, I find, a reference to underground services of various asset owners including Telstra, and electricity, gas and water suppliers.
27 The boring was performed by equipment known as a Laserbore which was described and depicted to an extent in a brochure produced by Pezzimenti, being exhibit L.[7]
[7]CB 358-64
28 The reference to the provision of a “survey – Line, Level and Grade” was explained in oral evidence by Endrea Finta, an employee of Pezzimenti, who operated the bore at the time of the damage the subject of this proceeding. He described the bore as being laser-guided. As part of setting up his equipment, he required the contractor to provide him with precise details as to the level, direction, gradient and distance that the bore was required to travel to reach a nominated end point. The survey referred to was the information as to those matters that were to be supplied by the contractor, in this case, Quinn. However, on site, it was Harris who provided that information and who was in overall control of that part of the project.
29 Telstra was not a party to any of these agreements. Nor did it have any knowledge of them. It was not involved in the laying of the pipeline.
30 As at July 2009, and for many years before, it was common knowledge in the excavation industry that any underground excavation involved a risk of striking underground services.
31 For approximately twenty four years, an incorporated association, “Dial Before You Dig Inc” (“DBYD”), had been in existence. It is a not-for-profit organisation providing a referral service (telephone and web) providing persons intending to excavate with information concerning infrastructure and other assets typically located under the ground in the vicinity of where an excavation is planned.[8] Where a person involved in excavation needs to know what services are located in the vicinity of the area in which he is intending to dig or excavate, he can obtain, through DBYD, information and plans from owners of underground services from the web or by dialling a 0011 number.
[8]Transcript (“T”) 159
32 I find that the DBYD service was well known amongst those involved in the excavation industry for many years before 2009.
33 It was conceded that Pezzimenti’s business was that of an underground excavator and/or borer, and included the description of a trenchless excavator.[9] It had carried on that business since 1989.
[9]T159
34 Service Guidelines published by DBYD in March 2009 were tendered.[10] They were available to those involved in the excavation industry. Those Guidelines provide:
“9.5 Guidelines For The Use Of The Dial Before You Dig Service As Part of Safe Work Practice
[10]Exhibit A – CB 307-339
All organisations that are involved in … horizontal or vertical boring … or any other activity that breaks the surface of the ground, have a responsibility to include the use of the Dial Before You Dig service as part of their work practice. …
In addition to receiving plans and other information, organisations must ensure that the received information is used to physically locate any underground infrastructure that may be at risk and appropriate action is taken to protect that infrastructure before work commences.”
[my emphasis]
… .[11]
[11]CB 327
10.1 Excavators
10.1.1 General responsibilities and duty of care
Excavators who represent the person or company responsible for any excavation have a duty of care to locate underground services or assets that are in the vicinity of the dig site, and then find and expose them before excavating near or around them. [my emphasis]
The duty of care is:
● To protect workers and the public from serious injury ...
● To minimise the potential for damage and loss of service …
…
Excavators should always use the Dial Before You Dig service before commencing any excavation activity as well as investigate the site themselves for evidence of underground assets.
…
Once the excavator receives plans and details of any assets relating to the Dial Before You Dig enquiry, the services or assets must be located accurately and exposed before excavation commences [my emphasis] …
10.1.2 Standard Procedures Prior to Commencing Work
…
A subcontractor must not start excavation work unless the principal contractor has either advised there are no underground services or, if they do exist, has given the relevant person the prescribed information … .
…
Where the principal contractor has an agreement that the subcontractor is responsible for the identification of and protection of assets, the subcontractor’s relevant person shall follow the Standard Procedures Prior to Commencing Excavation Work.
If any doubt remains, either party should contact the asset owner and seek clarification before starting excavation work.
…
10.1.5 Commitment to Use the Plans and to Seek More Information if Plans are Not Received in Time or Cannot be Understood
…
The customer or excavator must make every effort to find out what assets are within the vicinity of the dig site and to pothole and prove the location. The use of an underground asset locating device to verify the asset location shown on the plans sourced through the Dial Before You Dig service can save time before potholing by hand or non-destructive excavation methods.
The customer or excavator should keep a record on file of all contact with asset owners to demonstrate that they have made an effort to complete their duty of care.
…
10.1.7 Commitment to Use Underground Asset Location Devices in the Prevention of Damage and Risk of Injury
Underground asset location devices are improving all the time and new products or models help to reduce the time spent locating assets. Where the worksite includes many assets underground, or where there are a large number of sites interfacing with underground assets, the use of an underground asset locating device by the excavator will reduce the time spent hand digging. … .”
35 In July 2004, WorkSafe Victoria published a “Guide for Undertaking Work Near Underground Assets”.[12] That guide includes the following statements;
[12]Exhibit K – CB 255 - 282
“Many accidents occur as a result of damage to underground services during excavation and other work involving ground penetration. … . In addition to the risk of personal injury, the financial and social costs of damaging underground services can be extremely high. Electricity and telecommunications distribution cables, gas and water pipelines may supply entire communities. Every effort should be made to ensure underground assets are not damaged in any fashion.
TRENCHLESS TECHNIQUES
Before commencing trenchless techniques, the location of other services and survey marks is required. Pot-holing (or equivalent asset location techniques) must be used to locate existing underground services to ensure adequate clearances are maintained between services and to locate other service crossings. Pot-holing at each service crossing and at regular spacing along services is recommended.
…
TELECOMMUNICATION CABLES
…
Depth of cover
… Cables in public footways are usually laid at 450 mm, and under roadways at 600 mm. These measurements can vary according to surface level changes over time or where physical obstructions prevent achieving these depths … .
Cable records
Cable records indicating the type of service installed are maintained by telecommunication carriers. However, the accuracy of information can be confirmed only by either electrical location methods (metal content cables) or by hand excavation (non-metallic optical fibre cables). Cable depths are not recorded [my emphasis].
Cable locations
Persons wanting to identify the location of telecommunications services should telephone 1100 as indicated in the telephone directory…
…
To avoid damage to underground services, ‘Dial Before You Dig’ should be contacted. Registered utility/service providers are then contacted for information to help locate underground services. This is important to avoid injury to individuals, disruption to community services and significant costs associated with injury and third party damage. Potholing, or another endorsed non-destructive method, is the most reliable means of locating underground services at each service crossing and at regular spacing along services.
…
DIRECTIONAL BORING
When boring across the line of an underground asset:
● The location of the asset/s shall be proven by hand digging or positively proven by another approved method.
● A minimum clearance of 300 mm from the asset shall be maintained.
…
If boring is above or below the asset, a minimum clearance of 300 mm shall be maintained from the edge of the nearest asset.”
36 On 2 June 2009, Telstra sent an email to Karl Neate of Quinn marked “Attention: Ron Harris”.[13] That email was sent in response to a DYBD request by Mr Neate or Mr Harris, the managing director of Harris. Attached to that email was a Telstra document entitled “Duty of Care”. That document includes the following statements:
[13]Exhibit H – CB 145
“● Sketches and Plans provided by Telstra are circuit diagrams only and indicate the presence of telecommunications plant in the general vicinity of the geographical area shown; exact ground cover and alignments cannot be given with any certainty and cover may alter over time. Telecommunications plant seldom follow straight lines and careful on site investigation is essential to uncover and reveal its exact position.
● … The accuracy and/or completeness of the information cannot be guaranteed and, accordingly, Telstra plans are intended to be indicative only. [my emphasis]
…
1 On receipt of plans and sketches and before commencing excavation work or similar activities near Telstra’s plant, carefully locate this plant first to avoid damage. Undertake prior manual exposure such as potholing when intending to excavate or work closer to Telstra plant than the following approach distances.
●Where Telstra’s Plant is in an area where road and footpaths are well defined by curbs or other features, a minimum cleared distance of 600mm must be maintained from where it could be reasonably presumed that plant would reside. …
2 Maintain the following minimum clearance between construction activity and actual location of Telstra Plant.
Boring Equipment
(in-line, horizontal and verticalNot within 2.0m of actual location.
Constructor to hand dig (pot-hole) and expose plant.FURTHER ASSISTANCE:
Over-the-phone assistance can be obtained by calling the Network Integrity Help Desk.
…
WARNING: Telstra’s plans show only the presence of cables and plant. They only show their position relative to road boundaries, property fences etc. at the time of installation and Telstra does not warrant or hold out that such plans are accurate thereafter due to changes that may occur over time.
DO NOT ASSUME DEPTH OR ALIGNMENT of cables or plant as these vary significantly.
The customer has a DUTY OF CARE when excavating near Telstra cables and plant. Before using machine excavators TELSTRA PLANT MUST FIRST BE PHYSICALLY EXPOSED BY SOFT DIG (potholing) to identify its location.
Telstra will seek compensation for damages caused to its property and losses caused to Telstra and its customers.
ACCREDITED PLANT LOCATORS (For your area)
On-site assistance should be sought from an Accredited Plant Locator if the telecommunications plant cannot be located within 2.5 metres of the locations indicated on the drawings provided.
On-site advice should be obtained from a suitably qualified contractor highly skilled in locating Telstra plant if there is any doubt whatsoever about the actual location of the telecommunications plant, the best method for locating the telecommunications plant or the correct interpretation of the drawings provided. …
…
A list of Accredited Plant Locators operating in your area is attached … .”[14]
[14]Exhibit H – CB 134 -138
37 Attached to that email from Telstra was a list of 23 Accredited Plant Locators,[15] and a number of plans described as “DWF files”.[16]
[15]CB 151
[16]CB 152-155
38 I find that, as at July 2009, each of Quinn, Harris and Pezzimenti were involved in the excavation industry and knew of, or ought to have known of, each of the DBYD Service Guidelines, the WorkSafe Guidelines, and the Telstra information to which I have referred. Specifically, each of them knew or ought to have known that:
(a) Any excavation work involved a risk of damaging underground services.
(b) Such damage could be dangerous for persons working on such excavation or in the vicinity of it.
(c) Such damage was likely to cause loss to asset owners.
(d) Pot-holing or manual exposure of services was the only way to be certain of the nature of and whereabouts of underground services.
(e) Telstra plans were indicative only as to the location of its assets.
(f) Telstra plans did not indicate the depth of its services.
39 Prior to 31 July 2009, Harris had in its possession the documents comprising exhibit H. That is, it had possession of the email message from Telstra dated 2 June 2009 addressed to Karl Neate and marked to the attention of Ron Harris and its attachments.
40 The DWF files were computer files which displayed plans of the services in various layers of detail in the vicinity of the intersection. The plan at page 153 of the Court Book (part of exhibit H) showed three Telstra services running in an approximate north-south direction on the eastern side of Clyde Road and crossing under O’Shea Road. I shall refer to this plan as the “H Plan” (it being part of exhibit H). The H Plan depicted the following:
(a) A Distribution Cable conduit which passed from a manhole just to the north-east of the intersection, and under O’Shea Road, in a southerly direction. It proceeded to a Telstra inspection pit a short distance to the south of the intersection known as a “Six Pit”, depicted on the plan as a circled numeral six. It then proceeded a further 250 metres south to another manhole which was not depicted on that plan.
(b) A bundle of four 100-millimetre PVC conduits (known as a “Square Nest”) which passed from the manhole north-east of the intersection to the manhole about 250 metres to the south. It did not pass through the Six Pit referred to.
(c) A further four 100-millimetre PVC conduits laid side by side known as a “Flat Nest” which contained both copper and optic fibre cables. It also passed from the manhole north-east of the intersection to the manhole about 250 metres to the south. It also did not pass through the Six Pit.
41 The H Plan contained no guide as to the depth of the services shown – merely their approximate location and line.
42 Prior to 31 July 2009, Harris had also obtained a Construction Plan prepared by a company or firm named GHD (the “GHD plan”). It seems that plan was prepared on behalf of South East Water. It contains two plans. The upper plan is the equivalent of an aerial plan of the area of and around the intersection. The lower plan is a Longitudinal Section of the same area.[17]
[17]Exhibit E at CB 167
43 The GHD plan is dated 22 May 2008 and purports to show the location of existing services of Telstra, sewer and waste mains and electricity services, together with the line of the proposed pipeline and the location of the proposed bore site. It was not prepared by Telstra. There was no evidence that Telstra had any knowledge of it or had had any input into it.
44 The upper part of the GHD plan depicted three existing Telstra service lines running in a north-south direction and crossing the intended line of the bore near the south-east corner of the intersection, just east of a point marked as “Chainage 2280”. I find that that part of the plan is essentially accurate. That part does not purport to show the depth of such services.
45 The Longitudinal Section, I consider, does purport to show the depth of the three Telstra services, although it is far from clear. At best, working from the plan and the vertical scale on it, I could understand that someone looking at it might conclude that the depth of those services was at about 1.2 metres. Arguably, it shows three Telstra services at about the same depth.
46 The GHD plan contained the following statements:
“WARNING
SERVICES SHOWN ON THIS DRAWING ARE APPROXIMATE ONLY. THE EXACT LOCATION IS TO BE CONFIRMED ON SITE BY CONTRACTOR PRIOR TO COMMENCEMENT OF WORKS.”
47 Also printed on the GHD, plan under the heading “NOTES”, was the following statement:
“… CLEARENCE (SIC) TO FIBRE OPTIC LOCATED BELOW ROAD TO BE PROVEN BY EXCAVATION PRIOR TO DIRECTIONAL DRILL CROSSING AS PER TELSTRA REQUIREMENTS.”
48 I find that the H Plan and the GHD plan were consistent and relatively accurate as regards the location and line of the three Telstra services in the vicinity of the intersection. Insofar as the GHD plan purported to show the depth of those services, it was inaccurate. The distribution cable and the square nest of cables were, after the damage occurred, found to be at a depth of about 1.2 metres. The flat nest of cables was found to be at a depth of about 3.5 metres.
49 The agreement between Quinn and Harris does not specify that Harris was the entity responsible for locating underground services in the vicinity of the pipeline. However, I consider it likely that Harris accepted that it was responsible for undertaking such investigations.
50 Ron Harris had made at least one other DBYD enquiry on or before 2 June 2009. An enquiry confirmation was tendered as Exhibit G.[18] His enquiry had been referred to Telstra’s Network Integrity Help Desk and, from there, to Michael Wilson, a person employed by Telstra in its Network Integrity area. That enquiry related to problems Mr Harris was having in identifying Telstra cables at the intersection of O’Shea Road and Kimbarra Drive, an intersection some 500 metres east of Clyde Road. On 2 June 2009, Mr Wilson met with Mr Harris at that intersection. Mr Harris had with him Telstra cable plans obtained from DBYD relating to the Kimbarra Drive intersection. He had wanted advice concerning cables seen in a nearby Telstra inspection pit. By use of an electronic cable locater, Mr Wilson showed Mr Harris what he thought was the path of the cable in question and advised him to pot-hole to confirm its location or to engage an Accredited Plant Locater (an “APL”).
[18]CB 144
51 Mr Harris was not called by either party to give evidence. He had sworn Harris’ Answers to Interrogatories delivered by Telstra stating that he had contacted DBYD on two occasions on 11 March 2009 and on 2 June 2009.[19] One of these occasions related to an enquiry he had made in relation to services in the vicinity of Greaves Road (O’Shea Road) and Wood Road.[20] The other appears to have related to the enquiry concerning services in the vicinity of the intersection of O’Shea Road and Kimbarra Drive (at which location he had met Mr Wilson). The enquiry to DBYD concerning the Clyde/O’Shea intersection would appear to be a third DBYD enquiry. The response to that third enquiry was addressed to Karl Neate of Quinn but marked to the attention of Ron Harris.[21] I infer from these enquiries that Mr Harris had accepted that it was Harris’ responsibility to locate underground services of Telstra and other asset owners. Further, in those Answers to Interrogatories, Mr Harris stated that he had requested DBYD to provide information to Quinn and that Quinn then provided it to Harris. Harris’ answers were tendered by consent.
[19]Exhibit N – CB 81
[20]Exhibit P – CB 143
[21]Exhibit H
52 Pezzimenti had never regarded it as its responsibility to locate any underground services. It relies on the Terms of its Agreement with Quinn that others were to locate existing services.
53 Mr Finta was the operator of the Laserbore used by Pezzimenti. On arrival at the intersection site prior to boring, he was given a quick site induction by Ron Harris and observed that the vertical shaft had been prepared as anticipated. The shaft was about 5 metres long, by 2 metres wide and about 4 metres deep. It was complete.
54 It took Mr Finta about two days to set up his equipment. He obtained what he described as “critical information” from Mr Harris – namely the line, level and grade (terms referred to in the agreement between Quinn and Pezzimenti). Mr Harris also advised him of the pipe size and length of the proposed bore. He needed all these details before he could commence. These were in due course recorded on his Operator’s Daily Job Sheet.[22]
[22]Exhibit 1 – CB 254
55 In evidence-in-chief, Mr Finta was asked about conversations he had had with Mr Harris prior to the commencement of boring.[23] He initially mentioned discussing with Mr Harris the grouting, the vertical shaft, the alignment, the level, the grade and the pipe size. When further questioned about those conversations, he recalled discussing tipping (that is, where the material extracted by the bore was to be taken), and again mentioned grouting types. The following exchange then took place between counsel for Pezzimenti and the witness:
[23]T 452-456
Mr Hayes:“So what else did you discuss with Mr Harris prior to commencing boring when you spoke of boring?---
Mr Finta:Well – would have – I mean – services and stuff comes up in conversations that I’m ---
…
Mr Hayes:So what did you discuss with Mr Harris about services?---
Mr Finta:That there is nothing that we are – there is nothing in our path. Like there’s no sewer, there’s no storm waters, nothing that we should hit.”
56 There followed discussion with counsel as to whether Pezzimenti had ever pleaded its Defence on the basis of there having been any such a statement by Mr Harris to that effect. In the end, notwithstanding that such a representation by Mr Finta to Mr Harris would have been a material fact and had not been referred in Pezzimenti’s Defence, Amended Defence or Further Amended Defence, it was an allegation of which Telstra was aware through items of correspondence between the parties’ respective solicitors. I was satisfied that Telstra had not been unfairly taken by surprise by evidence of this alleged conversation.
57 In his evidence that followed, Mr Finta stated that he did not honestly remember exactly the conversation with Mr Harris. He was advised by me that it was permissible to give evidence as to the gist or substance of the conversation even if he could not recall the exact words of it. He evidence was that he remembered 100 per cent about discussions concerning the line, level and grade. The following questions and answers were:
Mr Hayes: “Did you discuss anything else with him?---
Mr Finta: I can’t – I can’t remember, honestly.
Mr Hayes: I’m sorry?
Mr Finta: I can’t remember, honestly.”[24]
[24]T 484
58 Looking at Mr Finta’s evidence as a whole, I do not accept that such a specific conversation concerning the presence or otherwise of services took place. In view of the damage that occurred shortly after, I would have thought that, if such a conversation had occurred, it would have been etched clearly in his mind.
59 Whether or not the subject of services was expressly discussed before Mr Finta commenced drilling, I do accept that he obtained from Mr Harris clear instructions concerning the line (direction), level (depth), and distance he was required to bore. I find that such information contained an implicit representation that Mr Harris considered that it was a safe line and level at which to bore. Mr Harris was hardly likely to give him directions to bore at a level at which it was known would involve the bore striking an underground service.
60 No pot-holing was performed in the vicinity of the intersection by Harris or by Pezzimenti. There was no evidence of pot-holing there by any person.
61 Mr Finta did not sight any plans referable to the location of underground services in the vicinity of the intersection. He did not ask to see any such plans. He saw no evidence of pot-holing nor any exposed services. As a consequence, he had no knowledge of any underground services passing across the intended line of boring.
62 On 31 July 2009, Mr Finta commenced boring under Clyde Road at a depth of about 3.5 metres. In the course of doing so, the bore struck the Flat Nest of Telstra cables.
63 Telstra technicians attended that evening but little could be done at that time. They returned the next morning, along with Mr Finta. The exact area of the interference with the nest was electronically located. It was at the south-east side of the intersection beneath the left turn lane used by vehicles turning left (south) from O’Shea Road into Clyde Road. The point was marked by Mr Daniels of Telstra with an “O” on a plan of the intersection.[25]
[25]Exhibit C.
64 In due course, Telstra contractors dug down to expose the damaged nest. That digging revealed, firstly, a nest of six conduits of 100 millimetres in diameter and one smaller conduit of 50 millimetres (the distribution cable), all at a depth of about 1.2 metres. None of these services had been damaged by the bore. Further digging followed to a depth of about 3.5 metres, at which point the damaged Flat Nest of four conduits was observed.
65 I accept the evidence of Mr Daniel that later investigation showed that the bore had, prior to striking the Flat Nest, passed relatively close to a 20,000 volt electricity cable. Some time was spent during the hearing discussing just how close that bore had come to that cable. I do not consider it matters much whether it came within a foot or a metre. I accept that it came relatively close and that Mr Finta had no idea that the electricity cable was anywhere in the vicinity.
66 I find that, at the time of the boring operation, Harris knew that the three Telstra services ran across the path of the bore. It knew that the bore must pass over, under or into those services.
67 I find it likely that Quinn had no knowledge of the GHD plan or the H plan and had effectively delegated the whole of the construction of the pipeline to Harris, including the task of locating underground services.
68 I find that Pezzimenti had no knowledge of the location of the Telstra services in question because it had made no enquiries at all concerning their location.
Liability
69 Pezzimenti’s case was that it had contracted to do the boring under Clyde Road on the basis that others would be responsible for locating existing assets. It had quoted a fixed sum to do so. Although there was no evidence on the subject, I consider it likely that, if Pezzimenti was to be responsible for location of underground services, it would either have charged more or might even have declined to quote for the contract at all. The evidence was that location of underground services was time consuming. It was not only Telstra services that had to be located, but also electricity, gas, water and sewerage services. The GHD plan indicated that, in the vicinity of the intersection, there were Telstra, sewer, water, drainage and electricity services.
70 I accept Mr Daniel’s view that pot-holing for the Telstra services alone would have taken three to four men up to a full day. It would have involved digging to a depth of 3.5 metres probably in more than one location before locating and exposing the Flat Nest in question. To locate all services would have taken considerably longer. I find Pezzimenti’s contractual obligations did not involve it taking steps to locate those services.
71 However, I consider that Pezzimenti, Harris and Quinn each owed a duty of care to Telstra. That duty arose from the fact that each of them knew or ought to have known of the existence of underground services in the vicinity, the risk of damaging them through excavation, and the knowledge that striking them would likely result in physical injury and/or damage requiring repair.[26]
[26]Voli v Inglewood Shire Council (1963) 110 CLR 74 at 84-5
72 Telstra was not a party to any of the contractual arrangements between the various parties referred to previously. It had not agreed that Pezzimenti would not be required to locate its services before boring.
73 Pezzimenti’s case was that, by reason of its agreement with Quinn, it was entitled to rely on Quinn and/or Harris to undertake all necessary checks and investigations to locate existing services. I consider that the terms of that agreement did not operate to discharge Pezzimenti from a duty of care to persons who were strangers to that agreement. In Voli v Inglewood Shire Council,[27] Windeyer J said of an architect’s duty of care to such strangers:
“… That duty is cast upon him by law, not because he made a contract, but because he entered upon the work. Nevertheless his contract with the building owner is not an irrelevant circumstance. It determines what was the task upon which he entered. … .”[28]
[27]Supra
[28]Voli (supra) at page 85
74 I find, in all of the circumstances, that Pezzimenti did owe a duty of care to Telstra to take reasonable care not to damage its services by use of its bore. That duty did not extend to a duty to prevent damage to those services. Assessment of any breach of that duty must depend on the relevant risk of loss or damage.[29]
[29]Roads and Traffic Authority of New South Wales v Dederer & Anor (2007) 234 CLR 330 at paragraph [18]
75 The risk of damage to such services, unless they were located, was obvious. The issue comes down to whether Pezzimenti was entitled, in the circumstances, to rely on others to locate them.
76 Pezzimenti submitted that its conduct should be judged to the standard of the reasonable borer in its position believing, on reasonable grounds, that others would be responsible for the location of existing assets.
77 I do not consider that, in the circumstances, Pezzimenti, in order to discharge its duty owed to Telstra, was required to conduct its own full investigations, pot-holing, and physical exposure of services. If others were to be responsible for this under the agreement, it would not be reasonable to expect Pezzimenti to undertake such tasks in duplicate.
78 The issue comes down to whether Pezzimenti was entitled to proceed to bore simply on the word or indication from Harris (express or implied) that appropriate investigations had been performed and that the level and line of the bore was safe.
79 Mr Finta had taken two days to set up the bore equipment at the intersection. He undertook no enquiries concerning the location of any underground services. I find that he must have known that no pot-holing had been undertaken by Harris or anyone else and that no services had been actually exposed. Evidence of pot-holing or of exposed services would have been obvious. He did not sight any of the plans used by Harris. He did not know if Harris had obtained or used any such plans. He made no enquiry of Harris as to the steps it had taken to form the view that the line and depth of the proposed bore were safe. Even if it is accepted that Ron Harris told him there was nothing in the path of the bore, Mr Finta made no enquiries as to the basis upon which that representation was made.
80 Mr Finta was operating plant that was, on any view, capable of causing great damage to underground equipment and to persons in the vicinity of the intersection. I do not conclude that he had to do a great deal by way of enquiry to discharge the duty he owed to Telstra. The fact is that he did nothing at all. In evidence, Mr Finta was remarkably frank. He did recall an earlier incident when, about six years before, a Pezzimenti bore had struck a Telstra cable. Notwithstanding, he said that Pezzimenti never looked at Telstra plans because it was not Pezzimenti’s responsibility to do so. Remarkably, he said he had not seen the DBYD Guidelines before.
81 Had Mr Finta asked Mr Harris what he knew of the location of Telstra services in the vicinity, he would have known, without doubt, that he was about to bore over, under or into those services. They ran straight across his path. Had he enquired whether Mr Harris had established the depth of those services, he would have known that Harris had no knowledge as to their depth. At that point, Mr Finta would have been entitled to refuse to bore until the depths of those services had been established by pot-holing and exposing the services. Rather, Mr Finta made an assumption that Telstra services were likely to be at a depth much shallower than that at which he was to bore.
82 Mr Finta stated that, in his experience, Telstra services were never at depths as low as 3.5 metres. I do not accept his evidence on that subject is reliable. I accept the evidence of Mr Wilson that Telstra services are found at depths of up to 4 to 6 metres underground.[30]
[30]T421
83 It should be remembered that location of services was not merely an issue relevant to the speedy completion of the task. It was an important health and safety issue.
84 I have reached the conclusion that Pezzimenti did not act as a reasonable bore operator would have done in all of the circumstances. In doing so, I have taken into account the terms of the agreement between it and Quinn.
85 I consider that a reasonable bore operator in the position of Pezzimenti would have taken some steps to establish the basis upon which Harris had apparently concluded that the proposed line and level of the bore was safe. Had it made even minimal enquiries, I find that Pezzimenti would have concluded that Harris had not established the depth of the three Telstra services and would have sought further investigations concerning their location. Having done so, it would not have proceeded with the bore until further investigation established the level of each of those services.
86 Such further investigations would have involved the physical location of each by means of pot-holing. That is not to say that such a task ought to have been carried out by Pezzimenti – merely that Pezzimenti ought to have satisfied itself that those services had in fact been located.
87 Pezzimenti submitted that, even if pot-holing had been undertaken, it was likely that only the services at 1.2 metres would have been located. It submitted that the H Plan was misleading, in that it showed a Square Nest consisting of four PVC conduits, a distribution cable and a Flat Nest consisting of four PVC conduits. Digging to the 1.2-metre depth would have exposed a bundle of six conduits, and the distribution cable but not the Flat Nest of four conduits. Had it pot-holed to the 1.2-metre level, I do not consider that Harris would reasonably have concluded that it had exposed all Telstra services in the vicinity of the intended bore. I consider that it would have concluded that it had yet to expose the Flat Nest of conduits. It would have continued to dig deeper and, if in any doubt, would have contacted Telstra for further clarification. It was likely that such clarification would have confirmed that the Flat Nest had yet to be located.
88 Accordingly, I find that in proceeding to bore under Clyde Road without enquiring as to whether there were underground services in his path, or without enquiring as to the basis for Harris’ representation (express or implicit) that the line and level provided were safe at which to bore, Pezzimenti breached the duty of care it owed to Telstra.
89 I find that Pezzimenti’s breach of duty was a cause of the damage to Telstra’s equipment.
90 Pezzimenti also alleges that Telstra was negligent and that its negligence contributed to the damage suffered by it.
91 In a matter where Part IV AA of the Act applies, Pezzimenti can only be liable in respect of that proportion of the loss and damage claimed that the Court considers just, having regard to the extent of its responsibility for that loss and damage.
92 In a situation where a plaintiff is partly responsible for the loss, that would properly be taken into account in assessing a defendant’s responsibility. A finding of responsibility on the part of a plaintiff would normally be reflected by a reduction of the defendant’s proportionate responsibility. It is my view that a pleading of contributory negligence in a claim to which Part IV AA applies is misconceived.
93 Notwithstanding, it is appropriate to examine Telstra’s acts or omissions in order to determine whether it should bear some responsibility for the damage suffered by it.
94 Pezzimenti’s particulars of its allegation of contributory negligence are set out in paragraph 17 of its Further Amended Defence. In summary, it alleges that Telstra installed its facilities in an erratic and unpredictable manner with variations in depths and directions which were not reasonable and which were difficult to locate.
95 The services the subject of this claim were laid along what was essentially a straight line between a manhole just to the north-east of the intersection to a manhole about 250 metres south of it. It is depicted accurately in Telstra’s H Plan. I find there was nothing erratic or unpredictable about its line or direction.
96 Perusal of the H Plan would enable a reader to observe with reasonable accuracy the location and line of the three services shown. What was not conveyed by the H Plan was the depth at which those services ran. The fact that such plans did not show the depth of services was made clear by the various publications referred to above. Persons involved in the excavation industry could be expected to be aware of the warnings set out in those publications. The GHD plan, not published or approved by Telstra, did purport to give some guide as to depth of the three services. However, it, too, contained a clear direction that clearance to fibre optic should be proven by excavation. I consider that the GHD plan was misleading as to the depth of the three services. It depicted them as being at approximately the same depth, whereas the Flat Nest was more than 2 metres lower. However, there is no basis for Telstra being held responsible for any deficiencies in the GHD plan.
97 I accept the evidence of Mr Daniel that the current depth of Telstra services could not be guaranteed or predicted with confidence. After installation of services, it was common for there to be changes to the topography of an area that would impact on the depth of services. Excavation of an area might result in the depth of services below the surface being less than was originally the case. Other forms of landscaping might result in the services being further below the surface than had originally been the case. Such changes would often be performed by persons other than Telstra and without its knowledge. Publication of the original depth of installation might often prove to be quite misleading and Telstra had provided warnings of this.
98 Clyde Road in the vicinity of the intersection is a four-lane dual carriageway with a substantial median strip between north and southbound traffic lanes. It is unlikely that this has always been so. There was no evidence as to when the subject Telstra services were installed other than Telstra’s statement that they were most likely installed before June 1997.[31] I consider that, since installation, it is likely that substantial works had been carried out at and in the vicinity of the intersection that may well have impacted on the depth of the services below the ground surface.
[31]Exhibit 2
99 In the circumstances, I consider that Telstra could not reasonably be expected to keep track of various changes in depth below ground surface of each of its services year after year. I consider that it was reasonable for Telstra to publicise that its plans were indicative only, that exact ground cover cannot be given, that cover may vary from time to time due to the activities of others, and that the only reliable method of locating the exact position of services was to manually uncover and expose them.
100 On the evidence before me, I find that there was no negligence on the part of Telstra that was a cause of the relevant damage.
Apportionment of Liability
101 I take into account the following findings:
(a) Pezzimenti’s agreement with Quinn provided that “others” would be responsible for the location of existing services, including those of Telstra. The agreement did not specify who it was that would do so.
(b) There was no evidence from Mr Finta or anyone else from Pezzimenti that it knew who was to locate such services. At best, Mr Finta might have inferred that it was Harris, because Harris was apparently in control of the project, at least in the vicinity of the intersection.
(c) Harris was not the party with whom Pezzimenti had contracted. Pezzimenti had no grounds for assuming that Harris had knowledge of the terms of Pezzimenti’s agreement.
(d) There was no evidence that Pezzimenti had had any previous dealings with Harris or that it had any knowledge of Harris’ experience or competence in locating underground services.
(e) There is no evidence or allegation that, when boring, Pezzimenti deviated from the line or depth as supplied by Harris.
(f) It was the use of the bore by Pezzimenti that actually caused the damage in question.
(g) Pezzimenti’s Laserbore was a powerful piece of plant that was capable of causing great damage to property and/or persons unless used with care.
(h) The risk of damage to person and/or property if an underground service was struck was not small. It was plainly foreseeable. On any view, the nature of such damage could range from minor to catastrophic.
(i) Harris did provide the line, level and grade to Pezzimenti. Whilst I accept that this implied that Harris considered the line and level were safe, Pezzimenti made no enquiry at all as to the basis upon which Harris had made such representation. A cursory glance would have informed Mr Finta that no services had been exposed by pot-holing. A query as to what services were disclosed by Telstra plans would have likely revealed that services passed across the path of the intended bore. At that point, a reasonable bore operator would have wanted to know the depth of those services and would have reasonably requested that they be located and exposed.
102 I find that Harris:
(a) failed to establish the depth of the services by pot-holing;
(b) failed to contact Telstra’s Network Integrity concerning the location and depth of the services in the vicinity of the intersection, notwithstanding its knowledge of that service and the fact that it had actually used the service previously with regard to other nearby intersections;
(c) failed to make any enquiries of Telstra as to the depth of the services in the vicinity of the intersection;
(d) failed to engage an APL despite having been provided with a list of some twenty three APLs in its district;
(e) failed to seek advice from Telstra if it had any difficulty in understanding or interpreting the H Plan or the GHD plan;
(f) permitted Pezzimenti to commence boring without having physically located the Telstra assets that lay across the path of the bore.
103 On the limited evidence before me, I find that Quinn simply delegated the entire task of safely constructing the pipeline to Harris and the task of safely boring under Clyde Road to Pezzimenti. On the evidence before me, it opted to play no role, supervisory or otherwise, in these aspects of the project.
104 It is clear that in determining the extent of Pezzimenti’s responsibility for Telstra’s loss, I may have regard to its contractual arrangements.[32] They were not irrelevant, but they are not decisive.
[32]Voli (supra) at page 85 per Windeyer J
105 Notwithstanding my finding that Pezzimenti’s negligence was a cause of the damage, it is open to me to hold that it is just, in all of the circumstances, that it avoid liability to Telstra. However, taking into account the matters set out above, I do not consider it appropriate to do so.
106 Pezzimenti submitted that, even if I was to find negligence on its part, it was nevertheless just that I make no apportionment against it in circumstances where, under the common law, it would be entitled to a full indemnity from either Quinn or Harris in respect of Telstra’s claim. It was submitted that “such an outcome would be justly predicated on [Pezzimenti] being wholly reliant upon [Quinn] or [Harris] to locate the existing services and to provide [the relevant] survey [as to] Line, Level & Grade before it commenced boring operations.”[33] Whilst I accept that in determining what is the just liability of Pezzimenti I may take into account the contractual arrangement pursuant to which it was acting, I consider that it goes too far to say that it was wholly reliant upon others. For the reasons set out above, there were a number of enquiries that I consider Pezzimenti ought to have made before commencing to bore. Had it made those enquiries, I consider that it would not prudently have commenced to bore without the services being located and exposed.
[33]Pezzimenti’s written Outline of Submissions
107 I have found that Pezzimenti did not discharge the duty of care it owed to Telstra. In all of the circumstances, I do not consider that it would be just to apportion no liability against it in respect of the damage to Telstra’s service.
108 I consider that the negligence of Harris was the primary cause of the damage. To an extent, it led Pezzimenti astray. It had the primary responsibility for locating all underground services and should have done so before permitting Pezzimenti to bore.
109 Taking all of the evidence into account, I consider that a just apportionment of responsibility is –
· Harris - 75 per cent
· Quinn - 12.5 per cent
· Pezzimenti - 12.5 per cent.
Conclusion
110 There will be judgment for Telstra against Pezzimenti in the sum of $28,830 being 12.5 per cent of the claim of $230,640.
111 The parties should jointly prepare draft Orders reflecting these findings and reasons. The draft Orders should include proposed Orders in respect of interest and costs if those matters are relevant and can be agreed upon.
112 In the event that the parties are unable to reach agreement as to the Orders to be made, each should prepare and file with my associate a draft of the Orders they respectively submit are appropriate.
113 I shall hear the parties in respect of costs or other consequential Orders.
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