White Constructions Pty Ltd v PBS Holdings Pty Ltd

[2020] NSWCA 277

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

White Constructions Pty Ltd v PBS Holdings Pty Ltd [2020] NSWCA 277

Hearing dates:

9-10 June 2020

Date of orders:

04 November 2020

Decision date:

04 November 2020

Before:

Bell P at [1]; Leeming JA at [136]; White JA at [154]

Decision:

Appeal dismissed with costs.

Catchwords:

APPEAL – whether or not decision of primary judge based in part on demeanour findings – significance for standard of appellate review and intervention – where primary judge’s decision was supported by contemporaneous documents – no basis for appellate interference with primary judge’s findings of fact.

CONTRACT – contractual interpretation – whether warranties in a multi-party deed were made in favour of all parties to the deed or only one party.

Legislation Cited:

State Owned Corporations Act 1989 (NSW)

Supreme Court Act 1970 (NSW) s 75A

Sydney Water Act 1994 (NSW) ss 4, 12, 70, 73, 74, Div 9

Uniform Civil Procedure Rules 2005 (NSW) r 31.54

Cases Cited:

Boensch v Pascoe (2019) 94 ALJR 112; [2019] HCA 49

Fabre v Arenales (1992) 27 NSWLR 437

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382; [2009] NSWCA 234

Olsen v Olsen (2019) 101 NSWLR 225; [2019] NSWCA 278

Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679; [2016] HCA 22

Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2019) 100 NSWLR 432; [2019] NSWCA 135

Texts Cited:

H Bennett and Professor G Broe, “The civil standard of proof and the ‘test’ in Briginshaw: Is there a neurobiological basis to being ‘comfortably satisfied’?” (2012) 86 ALJ 258

Category:

Principal judgment

Parties:

White Constructions Pty Ltd (Appellant)
PBS Holdings Pty Ltd (First Respondent)
Illawarra Water & Sewer Design Pty Ltd (Second Respondent)

Representation:

Counsel:

M Dempsey SC, M Sheldon (Appellant)
G A Sirtes SC, C L W Street (Respondents)

Solicitors:

Jones Day (Appellant)
Colin Biggers & Paisley Lawyers (First Respondent)
Indemnity Legal Pty Ltd (Second Respondent)

File Number(s):

2019/308044

Publication restriction:

N/A

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity – Technology and Construction List

Citation:

[2019] NSWSC 1166

Date of Decision:

6 September 2019

Before:

Hammerschlag J

File Number(s):

2017/285371

HEADNOTE

[This headnote is not to be read as part of the judgment]

This appeal related to a claim for damages allegedly suffered by the appellant, White Constructions Pty Ltd (White), in connection with the sewerage design for a development of a multi-lot subdivision in Kiama, NSW (the Development). One precondition for the registration of the subdivision by the Land Titles Office was the issue by Sydney Water Corporation (Sydney Water) of a s 73 certificate under the Sydney Water Act 1994 (NSW) (s 73 Certificate), certifying that Sydney Water’s requirements to service the subdivision with water, wastewater and stormwater services had been met.

In or about February 2012, White informally engaged the second respondent, Illawarra Water & Sewer Designs Pty Ltd (IWS), to provide design and project co-ordination services for the purposes of obtaining Sydney Water’s approval of, and funding for, the sewer infrastructure for the Development. IWS was principally represented by Mr Joel Edwards (Mr Edwards), and White was principally represented by Mr Trevor Unicomb (Mr Unicomb). On or about 18 December 2014, White and IWS entered into a contract for design and project co-ordination services for the delivery of sewerage infrastructure in respect of the Development (the Fee Proposal contract).

In or about early February 2015, IWS prepared and provided to White a sewer design that included two pumping stations. White subsequently entered into a contract with another company for the construction works for the Development, including sewer infrastructure works based on IWS’s sewer design. Subsequently, the first respondent, PBS Holdings Pty Ltd (PBS), a water servicing co-ordinator, submitted the sewer design prepared by IWS to Sydney Water for the latter’s approval for the purposes of obtaining a s 73 Certificate.

On 24 November 2015, White, PBS and IWS entered into a Developer Works Deed (the Deed) with Sydney Water. However, in January 2016, Sydney Water rejected the sewer design prepared by IWS.

Following a suggestion by Sydney Water in March 2016, PBS subsequently submitted to Sydney Water an alternative design, that used a horizontal deep-bore main to gravity drain for the site, which Sydney Water approved. In December 2016, the sewer infrastructure works for the Development were relevantly completed.

Before the Equity Division of this Court, White alleged that, in breach of contract, IWS failed to prepare a satisfactory sewer design within a reasonable time, and that PBS failed to ensure that IWS discharged this obligation, such that completion of the Development was delayed. This delay was said to have caused White to suffer loss and damage.

The primary judge rejected White’s contention that the respondents breached warranties given to White under the Deed, instead holding that the warranties given by the Deed were only made to Sydney Water, and not to White, but noted that essentially the same obligations were owed by IWS to White under the Fee Proposal and that, as PBS had a duty to supervise White, it also had a duty to ensure that IWS performed its duties within a reasonable time.

However, the primary judge held that there had been no breach of the Fee Proposal contract, because Mr Unicomb had given Mr Edwards an instruction not to pursue a gravity-fed design solution (the Instruction). As White had therefore instructed IWS not to propound the underbore solution, no breach of the Fee Proposal contract had been established. The claim was dismissed with costs.

The principal issues which arose on appeal were:

1. Whether PBS and IWS had obligations to White under the Deed, or whether contractual obligations were only owed pursuant to the Fee Proposal.

2. Whether the finding by the primary judge that the Instruction had been given was in part a demeanour-based finding.

3. Whether the primary judge erred in holding that Mr Unicomb had in fact given the Instruction to Mr Edwards, and in his findings as to the timing and terms of the Instruction.

The Court held (Bell P, Leeming and White JJA agreeing), dismissing the appeal with costs:

1. The primary judge did not err in his construction of the Deed and in his conclusion that it did not contain any warranties given by either of the respondents to White: [93]-[95] (Bell P); [136] (Leeming JA); [154] (White JA).

2. The simple fact that a deed contains multiple parties does not, in and of itself, mean that every warranty given by one party to the Deed is given to all others: [96] (Bell P); [136] (Leeming JA); [154] (White JA).

Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2019) 100 NSWLR 432; [2019] NSWCA 135, considered.

3. The language of the Deed did not support White’s construction of it and only Sydney Water was given remedies under the Deed for non-compliance by another party with its obligations under it: [99]-[100] (Bell P); [136] (Leeming JA); [154] (White JA).

4. As Sydney Water was ultimately to assume ownership and responsibility for the sewerage system after the Development had been completed, it also made commercial sense that the warranties contained in the Deed were for Sydney Water’s benefit: [97] (Bell P); [136] (Leeming JA); [154] (White JA).

5. By Bell P and White JA: The primary judge’s conclusions in relation to the Instruction turned in part upon an assessment of the demeanour of Messrs Edwards and Unicomb, but the conclusion was also supported by contemporaneous documents: [106]-[111]; [154]-[157].

Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187, considered.

6. By Leeming JA: In preferring the evidence of Mr Edwards over that of Mr Unicomb, the primary judge did not rely on demeanour, but based his decision on documents and objective probabilities: [136]-[153].

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, considered.

7. The primary judge’s factual finding as to Mr Unicomb providing the Instruction to Mr Edwards was not “glaringly improbable”, and was in any event fully supported by the probabilities and objective contemporaneous evidence: [102]-[134] (Bell P); [156] (White JA).

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22; Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679; [2016] HCA 22, considered.

8. The primary judge’s factual finding as to Mr Unicomb providing the Instruction to Mr Edwards was supported by the probabilities and objective contemporaneous evidence: [136]-[153] (Leeming JA).

Judgment

1. BELL P: This appeal relates to a claim for damages alleged to have been suffered by the appellant, White Constructions Pty Ltd (White), a developer, in connection with the development of a multi-lot subdivision, known as Cedar Grove in Kiama NSW (the Development).

2. White pre-sold all lots prior to commencing construction in early 2016. Completion was conditional upon registration of the plan of subdivision, which in turn was conditional on compliance with certain development consent conditions. One such precondition for the registration by the Land Titles Office of the subdivision was the issue by Sydney Water Corporation (Sydney Water) of a s 73 certificate under the Sydney Water Act 1994 (NSW) (s 73 Certificate), certifying that Sydney Water’s requirements to service the subdivision with water, wastewater and stormwater services had been met.

3. The current appeal concerns the sewerage design for the Development. The context, as explained by Hammerschlag J (the primary judge), was that the usual design goal of a new land development sewerage installation is to discharge sewerage from the development lots to a connection point with an existing sewer main, via “lead-in works” and that, ideally, an installation will be naturally gravity-fed to the connection point, but sometimes pumping installations are required: White Constructions Pty Ltd v PBS Holdings Pty Ltd [2019] NSWSC 1166 at [28]. The attractions of a gravity-fed solution lie in the costs of operation and maintenance, with a gravity-fed solution using, or predominantly using, the natural forces of gravity as opposed to requiring the mechanical pumping of sewerage.

4. In or about February 2012, at least on an informal basis, White engaged the second respondent, Illawarra Water & Sewer Designs Pty Ltd (IWS), a sewer designer, to provide design and project co-ordination services for the purposes of obtaining Sydney Water’s approval of, and funding for, the sewer infrastructure for the development. IWS was principally represented by Mr Joel Edwards (Mr Edwards).

5. In its dealings with IWS, White was, for the most part, represented by Mr Trevor Unicomb (Mr Unicomb). Mr Unicomb had been retained to be White’s project manager for the project. A major issue in the case concerns whether, when and in what terms Mr Unicomb instructed Mr Edwards not to pursue a gravity-fed solution for the sewerage design for the Development which involved horizontal drilling into rock.

6. On or about 18 December 2014, White and IWS entered into a contract, under which the latter agreed to provide design and project co-ordination services for the delivery of sewer infrastructure in respect of the Development. The terms of the contract were set out in a document prepared by IWS, entitled “Project Coordinators Fee Proposal”, dated 18 December 2014 (the Fee Proposal).

7. In or about early February 2015, IWS prepared and provided to White a sewer design that included two pumping stations. White subsequently entered into a contract with Cleary Bros (Bombo) Pty Ltd (Cleary Bros) for the construction works for the Development, including sewer infrastructure works based on IWS’s sewer design. Construction work commenced in mid-August 2015.

8. Subsequently, the first respondent, PBS Holdings Pty Ltd (PBS) (referred to in the judgment at first instance as Sydney Wide Coordinators or SWC), a water servicing co-ordinator, submitted the sewer design prepared by IWS to Sydney Water for the latter’s approval for the purposes of obtaining a s 73 certificate. This design included the proposal involving pumping stations, rather than a gravity-based solution.

9. On 24 November 2015, White as Developer, PBS as Water Servicing Coordinator and IWS as Designer entered into a Developer Works Deed (the Deed) with Sydney Water. The requirements for such a Deed and its terms are considered more fully later in this judgment. (The construction of this Deed and a consideration of to whom warranties were given under it formed an important element of the controversy between the parties.)

10. In January 2016, Sydney Water rejected the sewer design prepared by IWS.

11. On or about 16 May 2016, following a suggestion by Sydney Water in March of that year, PBS submitted to Sydney Water an alternative design that used a horizontal deep-bore main to gravity drain for the site (the horizontal bore sewerage system) instead of the previously submitted and rejected pumping stations design. This was a gravity-fed solution.

12. On or about 11 August 2016, Sydney Water approved the revised sewer design.

13. In or about late December 2016, the sewer infrastructure works for the Development were relevantly completed.

14. The essence of the claim brought in the Technology and Construction List of the Equity Division of this Court was pithily summarised by the primary judge as follows (noting that his Honour referred to PBS as SWC):

1. White says that, in breach of contract, IWS failed to prepare a satisfactory sewer design within a reasonable time and that SWC, for its part, failed to ensure that IWS discharged its obligations to do so, with the consequence that completion of the development was delayed, which caused White to suffer loss and damage.

2. The substance of this complaint is that IWS proposed to Sydney Water an installation involving pumping stations rather than a gravity-based solution involving a deep underbore, which latter solution was eventually approved by Sydney Water.

3. White says that IWS’s breach caused the completion of the project to be delayed from 15 July 2016 to 1 March 2017.”

   15. As put at [157] of the primary judgment, “White’s essential complaint is about delay. Its loss was allegedly caused because the underbore design was not prepared and submitted earlier.”

   16. White claimed to have incurred substantial financing costs as a result of the delay to completion of the Development which was said to have been occasioned by the initial proposal for, and ultimate rejection of, the two pumping stations designs, rather than the horizontal bore sewerage system which was ultimately approved and implemented.

   17. The primary judge noted at [153] that the experts called by both parties agreed that “gravity sewerage options are generally preferred over pumping stations”, and (at [155]) that a design should have been submitted by 24 November 2015 which, if prepared to the prescribed standard, would likely have been approved on or about 4 January 2016. This, it was said, would have allowed the completion of the Development by July 2016, whereas ultimate approval of the horizontal bore sewerage system was not submitted until mid-May 2016 and not approved until 11 August 2016, with installation of the sewerage infrastructure not completed until late December 2016.

   18. The primary judge rejected White’s claims, and dismissed the Further Amended Technology and Construction List Statement with costs.

Issues on appeal

19. A number of issues arise on appeal including:

1. whether PBS and IWS had obligations to White under the Deed, or whether contractual obligations were only owed pursuant to the Fee Proposal. The significance of this issue lay in the fact that the Deed contained warranties given by both IWS and PBS which, if owed to White in addition to (as opposed to solely to) Sydney Water, would, together with an entire agreement clause in the Deed, permit White to circumvent an argument that the terms of IWS’s obligations under the Fee Proposal had been qualified by verbal instructions said to have been given by Mr Unicomb on behalf of White to Mr Edwards, prior to entry into the Deed, not to pursue a gravity-fed design solution (the Instruction);

2. whether the primary judge erred in holding that the Instruction had in fact been given, and whether he erred in his findings as to the timing and terms of such instructions. A related issue concerned the nature of this finding by the primary judge, and whether it was in part a demeanour-based finding, with White contending that it was not, and that this Court was in as good a position as the primary judge to make an assessment as to whether or not the disputed Instruction had been given;

3. the role played by Mr Ian McIntyre (Mr McIntyre), an “adviser” appointed under the Uniform Civil Procedure Rules 2005 (NSW) r 31.54 (UCPR), and whether the primary judge failed to afford White procedural fairness by acting upon his advice without giving the parties an opportunity to make submissions in respect of that advice or its application;

4. the adequacy of the primary judge’s reasons with respect to the expert evidence on the issue of delay and damages;

5. subsidiary issues relating to the damages claim.

20. Before turning to consider each of these issues, it is necessary to set out in considerably greater detail both the statutory and factual background to the engagement by White of PBS and IWS, the relevant terms of the Fee Proposal and of the Deed, and of the events following rejection of the pumping station proposal.

Background

Sydney Water

21. It is first convenient to refer to Sydney Water and the role it plays in the development of land, such as that which was the subject of the Development in the present case.

22. Sydney Water Corporation is constituted by s 4 of the Sydney Water Act as a corporation. It is a corporation within the meaning of the State Owned Corporations Act 1989 (NSW). One of its functions under s 12 of the Sydney Water Act is, under licence, to “provide, construct, operate, manage or maintain systems or services for”, inter alia, “providing sewerage services” or “disposing of waste water”.

23. Division 9 of the Sydney Water Act is headed “Development”. It makes provision, in s 70, for the issue of compliance certificates in relation to particular developments, certifying either that Sydney Water’s requirements under Div 9 in relation to the development have been complied with or that no such requirements were imposed by Sydney Water in relation to the development.

24. Section 73 of the Sydney Water Act provides that:

“If an application is made to the Corporation for a compliance certificate, the Corporation:

(a) may grant the developer a compliance certificate, without serving a notice on the developer under section 74, or

(b) must grant the developer a compliance certificate, when the Corporation is satisfied that the requirements of a notice served on the developer under section 74 have been complied with, or

(c) must, at the developer’s request, grant the developer a compliance certificate, if no compliance certificate has been granted to, and no notice under section 74 has been served on, the developer within 60 days after the making of an application under section 72 or within a further period approved by the Minister in a particular case that is notified to the developer within the period of 60 days.”

25. Section 74 of the Sydney Water Act provides that:

1. If an application is made to the Corporation for a compliance certificate, the Corporation may, before proceeding further with the application, serve a notice on the developer requiring the developer to do any one or more of the following:

   (a)   to pay an amount to the Corporation to cover the whole or an appropriate portion of relevant costs (as defined in section 75), as assessed by the Corporation either in the notice or in another notice,

   (b)   to enter into one or more agreements providing for any one or more of the following:

   (i)   the payment of such an amount to the Corporation,

   (ii)   the construction, or the construction and the manner of construction, of the works specified in the notice,

   (iii)   the transfer of any such works to the Corporation,

   (c)   to provide reasonable security, in a form approved by the Corporation, for due performance of such an agreement,

   (d)   to attend to such additional or ancillary matters as are specified by the Corporation and as are necessary to give effect to any one or more requirements imposed under paragraphs (a)–(c).

1. The Corporation may withdraw a requirement contained in a notice under this section, in which case the requirement is treated as not having been made.

2. This section has effect subject to the Independent Pricing and Regulatory Tribunal Act 1992.”

   26. The primary judge observed (at [40]) that, once Sydney Water receives an application for a s 73 Certificate, it issues a Notice of Requirements (NOR) which the Developer is required to satisfy. The primary judge noted that “[t]hese requirements inevitably require the developer to engage an authorised Water Servicing Coordinator to be the contact point with Sydney Water”, and that “Sydney Water does not have direct contact with the developer.”

   27. The primary judge noted (at [40]) that Mr Edwards of IWS was designated as a Key Person with PBS, “which gave him direct access to Sydney Water”. The primary judge also noted (at [41]) that Sydney Water “requires the developer to engage appropriately capable Developer Infrastructure Providers (in this case IWS) and then to enter into a Developer Works Deed (incorporating standard terms) which sets out all the parties’ roles and responsibilities.”

Early engagement

28. From as early as 2012, Mr Unicomb was in discussion with Mr Edwards in relation to sewerage works on the development site. As is perhaps not unusual, no contractual arrangements were in place between White and IWS at this time in relation to the Development, although documents before the Court suggested that Mr Edwards was engaged in work with Mr Unicomb on other projects at around this time.

29. Thus, on 9 January 2012, Mr Unicomb sent an email to Mr Edwards with the subject line “Kiama Subdivision”, inquiring as to how he was going with the “sewer proposal for the Milne subdivision (that is the land above the Cedar Grove Estate)”. Just under a month later, on 3 February 2012, Mr Unicomb sent to Mr Edwards a plan “showing approx. location of sewer through the treed area to the east of the site”. The attachment to that email was not in evidence before the primary judge. There was, however, in evidence a plan of the proposed development which had been prepared by Don Fox Planning Pty Ltd (the Don Fox Plan) and was described on the plan as “Lot Dimensions & Areas Cedar Grove Stage 2 White Constructions”. (This plan was reproduced at [170] of the primary judgment.) On this plan, which is to be inferred was sent to Mr Edwards by Mr Unicomb, Mr Edwards had handwritten the following five options:

“Option 1 –    Retain & fill approx 8m retaining wall & drain back to Bong Bong Rd.

Option 2 –    Open cut within proposed Rd. Max depth of abt 7m – gravity to Lot 1.

Option 3 –    Low pressure sewer system in footway. Lots within this catchment require collection tank & pump set up.

Option 4 –    Pump station & rising main for this catchment.

Option 5 –    Directional drilling/horizontal bore. (Blue stone may be a problem”.

30. Metadata that was in evidence [Blue 4/1511] disclosed that the Don Fox Plan with Mr Edwards’ handwritten options was scanned into his computer on 6 February 2012 in a file named “cedargrove2sewerconcept”. This document was referred to by Mr Edwards in his affidavit of 3 July 2019 as the “2012 Options Document”, and he deposed in this affidavit that he had no email record of sending the 2012 Options Document to Mr Unicomb which he said was “unsurprising to me because it is very likely that I attended Mr Unicomb’s office to deliver the document by hand after I had scanned it to my computer”.

31. On the same day that the 2012 Options Document was scanned into Mr Edwards’ computer, Mr Unicomb emailed him inquiring how he was “going with [the] sewer design concept for Milne land at Kiama”. The evidentiary record before the Court was silent as to any documentary response to this email inquiry. Mr Edwards said in his affidavit of 3 July 2019 that he had no record of responding to Mr Unicomb’s email and posited that this was because it was “likely that I attended on Mr Unicomb personally to provide him with the original 2012 Options Document”. Mr Edwards said that he did not have a copy of the original 2012 Options Document with his handwritten annotations on his file, and that the only copy he could locate was the scanned document on his computer.

32. There was a contest between Mr Unicomb and Mr Edwards as to whether or not Mr Unicomb had even been provided with the 2012 Options Document. This was resolved in favour of Mr Edwards’ account that it had been.

33. The evidentiary record discloses little about what transpired between February 2012 and the first quarter of 2013 with regard to the Development. It would appear that Mr Unicomb was working with Council in relation to the development of a Planning Proposal for the Development and that that proposal required input in relation to Sydney Water’s requirements for sewerage and water facilities to the site. It would appear that there had been some liaison with Sydney Water because, on 2 April 2013, Sydney Water wrote to “Unicomb Development Services” (presumably Mr Unicomb’s service company) c/- of Sydney Wide Coordinators with what was described as a “Feasibility Letter” with regard to the site and the proposed development. This letter contained, under the heading “What You Must Do To Get A Section 73 Certificate In The Future”, the following:

1. Obtain Development Consent from the consent authority for your subdivision proposal.

2. Engage a Water Servicing Coordinator (Coordinator).

You must engage your current or another authorised Coordinator to manage the design and construction of works that you must provide, at your cost, to service your subdivision. If you wish to engage another Coordinator (at any point in this process) you must write and tell Sydney Water.

For a list of authorised Coordinators, either visit > Building and Developing > Developing Your Land or call 13 20 92.

The Coordinator will be your point of contact with Sydney Water. They can answer most questions that you might have about the process and developer charges and can give you a quote or information about costs for services/works (including Sydney Water costs).

1. Developer Works Deed

After the Coordinator has submitted your new application, they will receive the Sydney Water Notice and Developer Works Deed. You and your accredited Developer Infrastructure Providers (Providers) will need to sign and lodge both copies of the Deed with your nominated Coordinator. After Sydney Water has signed the documents, one copy will be returned to the Coordinator.

The Deed sets out for this project:

•   your responsibilities;

•   Sydney Water's responsibilities; and

•   the Provider's responsibilities.

You must do all the things that we ask you to do in that Deed. This is because lots in your subdivision do not have water and sewer services and you must construct and pay for the following works extensions under this Deed to provide these services.

Note: The Coordinator must be fully authorised by us for the whole time of the agreement.”

34. Section 4.2 of the Feasibility Letter, headed “Sewer”, was as follows:

“Each lot in your subdivision must have a sewer main that is the right size and can be used for connection. That sewer must also have a connection point within each lot's boundaries.

Sydney Water has assessed your application and found that:

•   The proposed development lies to the west of Hutchinson Street. It is currently zoned as Rural Landscape (RUZ) and is not included in the Illawarra MDP.

•   This development falls within the catchment draining to the existing 300 mm sewer main constructed under WN 300526 (See Figure 1 below).

•   The 300 mm sewer main has sufficient capacity to service the proposed development.

•   You must construct a waste water main extension to serve your proposed 93 Lot subdivision. The terms of the Deed define this extension as 'Major Works'.

•   You must use Sydney Water's Technical Specifications for Low Infiltration Sewer Systems to plan, design and construct the sewer. This specification must be used in conjunction with (and have precedence over) the Sewerage Code of Australia, WSA02-2002 (Sydney Water Edition). A Defect Liability Period of 12 months will apply to the works following their completion and acceptance by Sydney Water. Sydney Water will carry out Validation Testing one month prior to the expiry of that period. If we find any defects we will tell you. It will be your responsibility to rectify any notified defects.

•   Any lender called by you for the works will need to provide for the above requirements.”

35. At some point in 2013 (the evidentiary record did not disclose precisely when), Mr Unicomb prepared a Planning Proposal in respect of the Development. Section 3.3.9.2 of that document, headed “Sewer and Water Reticulation”, was in the following terms:

“Sydney Water Coordinators have completed a preliminary sewer design for the masterplan of the site. Plan No.1 in Appendix 10 shows the preliminary sewer layout. Sydney Water Coordinators are approved Water & Sewer coordinators for Sydney Water works.

The preliminary sewer design shows

1. the northern section of the site draining to Banksia Street and Lilly Pilly Way within the adjacent Cedar Grove Estate. Design flow calculations by Sydney Wide Coordinators show there is sufficient capacity in the Cedar Grove Estate sewer system for the increased flows from this development.

2. The south eastern catchment of the site draining down the Noorinan and Hutchinson Street road reserves to connect with the Willow Creek sewer carrier, and

3. Several options for the south western catchment of the development. The low point of the catchment for sewer is approximately 7m lower than the high point between the south eastern and south western catchments and approximately 6m lower than the high point between the south western and north western catchment of the development. The viable options identified to sewer this catchment are

   •   Gravity feed to the south eastern catchment by deep open cut excavation. This option is shown on Plan No.1 in Appendix

   •   Low pressure sewer system for the south western catchment. This would require a collection tank and pump setup on each lot similar to the system in Jamberoo

   •   Pump station and rising main for this catchment, and

   •   Construction of a gravity sewer main through the rural property to the west with a connection to the low pressure main along Jamberoo Road. This option is shown on plan no. 2 in Appendix 10.

Sydney Water has confirmed that the site can be serviced with reticulated sewer and water services.” (emphasis added).

36. Plan No 1 in the Appendix as referred to in the Planning Proposal (Options Plan 1) had been prepared by Mr Edwards in or about March 2013. An image of that Plan is reproduced below.

It will be seen that that Plan contained a notation headed “OPTIONS IF GRAVITY SEWER NOT CHOSEN” under which the following was noted:

1. Gravity system using deep cut excavation.

2. Pump station and rising main.

3. Low pressure system in southwestern catchment.”

   37. There is something of a gap in the evidentiary record for approximately 8 months following receipt of the Sydney Water Feasibility Letter in April 2013. That hiatus may well have been because White was awaiting rezoning of the developed land to R2 residential. So much was suggested by an email from Mr Unicomb to Mr Edwards on 20 January 2014, in which he wrote:

“As discussed last Friday the Planning Proposal for the Milne property at Kiama has been given gateway approval for rezoning to R2 residential. We need to review the sewer options for the site and present them to Sydney Water. The outcome is to get Sydney Water’[s] agreement in principle to our preferred option and to price that option for inclusion in the finance agreement for the site.

Can you please review the options so that we can meet to discuss the various advantage/disadvantages of each option. After we have met to review can you then arrange a meeting with Sydney Water so that we can present the options to them. I have no problems with initial discussions with SW or the exchange of info regarding the various options. The idea is to come to the best servicing option for the site.”

38. On 7 April 2014, Mr Unicomb emailed Mr Edwards a contour plan for the land asking him to review the plan, to then arrange a meeting with Sydney Water “ASAP”, also to charge White c/- Mr Unicomb’s service company on an hourly basis for that work. It was at about this time that Mr Edwards said in his affidavit of 8 June 2018 that he had a conversation with Mr Unicomb to the following effect:

“Edwards:   ‘Trevor, the full gravity system is the option that Sydney Water would prefer most, but I’m concerned that the geological conditions will prevent that from being a viable option.’

Unicomb:   ‘Joel, that’s correct. Even though a full gravity system would be preferred by Sydney Water it would require us to carry out either open cut excavation or deep boring to achieve the result. Open cut excavation could significantly affect the lot-yield and I can’t find someone that could bore to the required depth in this dense rock. The full gravity options are completely off the table. Please find an alternative option for the sewer arrangements other than a gravity system’.”

39. Mr Unicomb denied this conversation.

40. As summarised by the primary judge at [46]-[48] of the judgment, Mr Edwards said that he told Mr Unicomb on a number of occasions that Sydney Water’s preferred option was a complete gravity feed system, unless it was persuaded otherwise. He also recalled having discussed with Mr Unicomb the possibility of boring and the geological composition of the rock on the development site in the period between April to October 2014, but that Mr Unicomb repeatedly indicated that the rock could not be bored due to its hardness. Mr Edwards recalled such a conversation occurring and attending a meeting at Mr Unicomb’s home office in Blackbutt in or about May 2014 and that Mr Unicomb had plans and diagrams showing possible routes and depths, and that he again emphasised the hardness of the rock.

41. The primary judge recorded at [48] that Mr Unicomb denied that any such conversations took place with Mr Edwards and that he never discussed with Mr Edwards the possibility of boring until Sydney Water requested in March 2016 that it be considered in an options report. The primary judge did not accept this evidence.

42. When under cross-examination, Mr Edwards said that “the discarding of the bore option was much, much earlier, so 2012”. Mr Edwards connected the answer in this passage of cross-examination with the 2012 Options Document (which at Option 5 had referred to horizontal drilling) and Plan No 1 of March 2013 (see [36] above), which made no reference to drilling as an option if a gravity sewer was not chosen, the inference being that that option had been dropped in the interim. Mr Edwards had given no evidence of any such conversation in 2012 or 2013 in his affidavits, despite acknowledging that he had exhausted his recollection of any relevant conversations with Mr Unicomb in those affidavits. (In its submissions on appeal, White made much of this change in Mr Edwards’ evidence, the absence of any reference to a conversation in 2012/2013 in his affidavit evidence, and submitted that this undermined the integrity of his evidence including the accuracy of his account as to what he claimed Mr Unicomb had said to him in 2014 (see [40] above)).

43. When challenged with the proposition that the first time any discussion of a horizontal boring option between Mr Edwards and Mr Unicomb occurred was after 29 March 2016 (when Sydney Water had raised it: see at [72] below), Mr Edwards responded:

“That doesn’t even make sense, I don’t think. I think if I prepare a document, you said - you mentioned before that I forgot about that over a 25 couple of days, but I prepared a document with that option, then why would I - it doesn’t make any sense to say that I just forgot that was an option altogether. That discussion took place.”

44. Returning to the judgment, the primary judge recorded at [50]-[56] that:

1. Edwards says that the topic of gravity feed on the site by deep boring was raised at various times. He says that he recalls Unicomb saying words to the effect:

   Taking into account the hardness of the rock, horizontal boring is just not possible. The depth of the bore holes would have to be up to 11 meters for a considerable distance and I don’t know anyone that has the capability to bore with the degree of accuracy required to put the sewer in. If the sewer was not bored, then it could only be achieved by open cut excavation which can’t be done because it would probably significantly affect the yield on the development because of its effect on buildings adjacent to sewer lines.

2. Edwards says that whilst he was aware of horizontal boring generally, he had never had any experience or knowledge of it occurring in the area due to its rocky nature.

3. Unicomb says that at no time during his discussions with Edwards did Edwards suggest a boring option. He says that the boring option involved boring from a low point in the SW catchment to a low point in the SE catchment, then boring from the low point in the SE catchment through the ridge between the SE catchment and the northern catchment. The bore would then discharge into the gravity sewer system in the northern catchment of the site. He says further that at no time during his discussions with Edwards did Edwards tell him that a detailed options report would need to be submitted to Sydney Water to get approval for the pumping station option.

4. Unicomb says that on a number of occasions between April and November 2014, Edwards said to him words to the effect of:

   Pumping stations have been used on other sites in the Sydney Water distribution area. They are the best solution for the job.

5. Edwards says that Unicomb instructed him to research and advocate a packaged pump system. He recounts a conversation in about May 2014 to the following effect:

   Edwards: Trevor, bearing in mind that the cost of full pump stations would be significant and the lead in time required lengthy, pump stations are typically very large and complex developments and the lots required to be serviced probably do not meet that criteria, I think the most appropriate pump system would be a package pump because they are relatively inexpensive and I have had previous experience with installing this type of system.

   Unicomb: I agree, Joel. I think that the best way forward is to proceed with the package pump system.

6. On 7 November 2014, Unicomb obtained a further geological report from Douglas Partners. The report revealed very high-strength latite and that the rock was typically massive. The report stated that excavation into the high-strength rock would be difficult and would require heavy ripping, hammering, grinding or possibly rock-sawing.

7. I interpolate that Unicomb says (which appears to be inaccurate) that he only sought advice from White’s geotechnical consultant regarding the hardness of rock when seeking costs from boring contractors in mid-2016. It is plain that Unicomb (consistently with what Edwards says) was conscious of the rock problems much earlier.”

   45. The next event of significance was the making of a Fee Proposal by IWS which, although never signed, was one of the two contractual documents by reference to which White sought to make its case against IWS.

The Fee Proposal

46. On 18 December 2014, Mr Edwards sent to Mr Unicomb a Fee Proposal which commenced with the following paragraph:

“We have pleasure in submitting our Fee Proposal for Design & Project Coordination Service for the delivery of design & field coordination of sewer infrastructure to Sydney Water (see item 1 of Project Mana9ers Agreement). lf you accept our proposal it will become an agreement between you (the Developer) and lllawarra Water & Sewer Design Pty Limited (the Project Coordinator & Designer).”

47. The Fee Proposal included the following:

“Our Service

Our service to you is to ensure your obligations to Sydney Water, under your Works Agreement are complied with. Such obligations will include, that you as the Developer, must complete the construction of the works as specified in the Notice of Requirements.

We will achieve this by following the Sydney Water Asset Creation Developer Process. Our services, as part of that process include the following:

•   Prepare the design package, prepare checklists and submit to Sydney Water for approval

•   Liaise with Sydney Water should the design require amendment

•   Prepare Review of Environmental Factors from designer

•   Review constructor's Safe Work Plan, Environmental Management Plan, Incident Management Plan and Traffic Management Plan (if required)

•   Pursue design approval and forward construction package to constructor

•   Liaise with constructor on job commencement date and initiate Construction Commencement Notice and forward same to Sydney Water

•   Co-ordinate the work required by the Notice of Requirements with site personnel, constructor, designer and Sydney Water personnel as appropriate

•   Undertake field audits and/or field checking

•   Liaise with constructor during construction stage

•   Receive and review test results

•   Prepare Work-as-Executed drawings

•   Request chlorination of water line (where applicable)

•   Notify and co-ordinate connection to Sydney Water system

•   Assemble and distribute to field representative field inspection package for Sydney Water sign-off

•   Assemble and submit Project Completion Package to Sydney Water

•   Receive Transfer Letter from Sydney Water and liaise with developer regarding payment of any outstanding Sydney Water charges

• Receive and Issue Section 73 Compliance Certificate to developer (if applicable)

Please note that as Project Coordinators we will progress the above as expeditiously as possible but cannot totally control the input of others or lack thereof.

Exclusions:

•   Construction work

•   All negotiations concerning Road Opening Permits and or Road Restoration Receipts

•   All negotiations with adjoining owners, including for right of entry

•   Protracted negotiations with Sydney Water

•   Obtaining quotations from accredited contractors and reviewing same

•   Co-ordination and acceptance of preferred quote on behalf of developer

Should the developer require any of the above exclusions to be provided in our quotation then this must be stipulated in writing.

Your Responsibilities:

•   Ensure site survey has been undertaken

•   Ensure boundary alignments are maintained adjacent to works that are to be undertaken

•   Payment terms of this agreement are to be kept. If payment terms are not met, we reserve the right to cease work and retain a lean over all documentation in our possession.

Scope of Works

The scope of works for the project is:

•   Sewer & Water Design - $26260 + GST

•   Field Coordination / PM - $29795 + GST

•   Sewer & Water WAC - $7575 + GST

•   Mains to Meter $5050 + GST”.

48. It is uncontroversial that, by 3 February 2015, IWS had prepared a sewer design, incorporating pumping stations, with a connection to a lead-in main, and that, by 11 February 2015, Mr Edwards had provided Mr Unicomb with draft sewer plans.

49. On 16 June 2015, White obtained conditional consent from Kiama Municipal Council for the Development and took transfer of the land on 26 June 2015, which it had contracted to purchase from a Mr and Mrs Milne.

50. On 7 July 2015, White entered into a works contract with Cleary Bros for the construction of the works necessary to achieve the subdivision (the Building Contract). These included drainage works, road works, water reticulation and sewer works. The Building Contract specified the Date for Practical Completion to be 30 weeks, with this period later extended to 43 weeks. Mr Unicomb was appointed Superintendent under the Building Contract.

51. On 17 August 2015, Cleary Bros commenced work on the site.

52. White applied to Sydney Water for a s 73 Certificate on 15 September 2015 and Sydney Water issued a NOR on 4 November 2015. This included the requirement to enter into a Developer Works Deed. Addressed to Unicomb Development Services c/- Sydney Wide Coordinators, the NOR included the following:

“You and your Providers will need to enter into an agreement with Sydney Water. To do this you need to sign and lodge both originals of the enclosed Developer Works Deed (Deed) with your nominated Coordinator. You will then need to work with your Coordinator to have the other Providers sign the Deed.

Before signing the Deed, each party must also read and understand the conditions of the agreement that are set out in the Developer Works Deed - Schedule 1: Standard Terms document. That document as well as information about it are available at sydneywater.com.au > Plumbing, building & developing > Developing > Developer deeds & standard terms

The Deed and the Standard Terms set out for this development all parties' roles and responsibilities as well as other information.

You must do all the things that we ask you to do in the Deed. This is because lots in your subdivision do not have water and sewer services and you must construct and pay for the following works extensions under this Deed to provide these services.”

The Deed

53. On 24 November 2015, the Deed was entered into between Sydney Water, White, PBS and IWS.

54. Part B2(a) of the Deed comprised an entire agreement clause, which provided that:

“The Developer Workers Deed makes up the entire agreement between the parties about the Developer Workers. It completely replaces any previous understanding, agreement, representation or warranty”.

As will be seen, White sought to rely on this clause as superseding any prior agreement or understanding that had been reached between Mr Unicomb and Mr Edwards, to the effect that a design involving boring would not be pursued.

55. Part B1 of the Deed recorded that the Deed comprised a number of instruments, one of which was Schedule 1: Standard Terms (the Standard Terms).

56. Part A1 of the Standard Terms was entitled “General obligations”. Under cl A1.1 of the Standard Terms, it was provided that:

“(a)    The Developer is responsible for the Developer Works and must ensure that they are performed in line with the Developer Works Deed.

(b)    The Developer must engage a Water Servicing Coordinator (WSC) to manage the design and construction.

(c)    The WSC must ensure that Listed Providers design and construct the works in line with:

(i)   the Developer Works Deed and any document forming part of it, such as the Notice of Requirements (NOR), Job Specific Schedule Letter and Listed Provider Instructions

(ii)   relevant Sydney Water policies, forms and specifications

(iii)   relevant Legal Requirements and Standards.

(d)    If either the Developer or a Listed Provider Party fails to perform an obligation, Sydney Water, at its discretion, may either:

(i)   ask the Developer to make good the failure at no cost to Sydney Water

(ii)   make good the failure itself and recover its costs as a debt to be paid in line with A7.3(b).

(e)    The terms of A1.1 (d) do not affect any other rights Sydney Water might have. In particular, if a breach of the Deed causes Sydney Water to breach a Customer Contract, the Developer must pay Sydney Water damages that cover customer redress”.

57. Under cl A1.2 of the Standard Terms, Sydney Water’s obligations were specified as follows:

“(a)    Sydney Water must prepare the Developer Works Deed between the parties and set:

(i)   the functional requirements for water, wastewater and stormwater services

(ii)   standards for design, construction (including field testing and drilling) and asset recording

(iii)   acceptable pipeline materials and products

(iv)   the acceptance requirements.

(b)    Sydney Water does not have to do anything to help the Developer or Listed Providers perform their obligations under the Developer Works Deed”.

58. Part B6 of the Standard Terms was entitled “General warranties”. Clause B6.1 of the Standard Terms contained “Developer warranties”, as follows:

“(a)    The Developer warrants to Sydney Water that it has:

(i)   not been found by the Independent Commission Against Corruption (ICAC) to have engaged in Corrupt Conduct; and

(ii)   read and will comply with Sydney Water's Business Ethics Guide on the website.

(b)    The Developer warrants that, in ensuring the performance of the Developer Works, it will not employ or continue to employ an employee or subcontractor found by the ICAC to have engaged in Corrupt Conduct, or who has had their listing terminated by Sydney Water for a breach of the Business Ethics Guide.

Sydney Water may direct the Developer to stop employing an employee or subcontractor to ensure the performance of the Developer Works and stop them from being on Sydney Water's premises or worksites if the employee or subcontractor has:

(i)   had their listing terminated by Sydney Water for a breach of the Business Ethics Guide; or

(ii)   been found to have engaged in Corrupt Conduct by the ICAC.

The Developer must then stop employing that employee or subcontractor for ensuring the performance of the Developer Works and appoint a replacement subcontractor under the Developer Works Deed.

(c)    The Developer warrants to Sydney Water that:

(i)   it is the site's registered proprietor or has the registered proprietor's authority to enter the site and perform the Developer Works;

(ii)   if Sydney Water is the site's registered proprietor or has an easement over the site, it has gained all necessary approvals from Sydney Water to perform the works (with the WSC);

(iii)   it has reviewed the NOR with the WSC and is satisfied that the Developer Works can be designed and constructed in line with the requirements;

(iv)   it will arrange for the Developer Works to be designed and constructed in line with the NOR;

(v) it accepts that, if any work does not meet the terms of this Deed, Sydney Water is entitled to stop the work on site immediately and seek compensation under section 45 of the Sydney Water Act 1994;

(vi)   when the Developer Works are completed, they must be fit for purpose and comply with this Deed, all Legal Requirements and Standards;

(vii)   only Listed Providers will perform the Developer Works; and

(viii)   if the Listed Provider performing the works is found to have connected to a Sydney Water asset without appropriate approval then, at the direction of Sydney Water, the listed provider will immediately cease work. The developer must then stop employing that Listed Provider for ensuring the performance of the developer works and appoint a replacement Listed Provider under the Developer Works Deed.

(d)    The Developer warrants that it will notify Sydney Water, the Designer, the WSC and the Constructor in writing immediately if it becomes aware that it might:

(i)   discontinue its involvement with the Developer Works or

(ii)   transfer ownership of the site to another Person before the works are finished.

Sydney Water will then either negotiate transitional arrangements for the Developer Works or ask the Developer to immediately stop performing them.

(e)    The Developer warrants that, after giving the notification in B6.1(d), it will make sure the Developer Works do not restart until all parties (including incoming parties) have executed the Novation Deed in Schedule 2.

(f)    The Developer warrants that it accepts the Novation Deed.

(g)    The Developer warrants that:

(i)   the acts and omissions of Sydney Water, its sub-licensees, assignees and other users in relation to the Developer Works, Background IP and Foreground IP in accordance with Sydney Water's rights under the Developer Works Deed do not infringe any person's rights in relation to Intellectual Property or Moral Rights or misappropriate a trade secret or breach any person's confidence;

(ii)   it has the right to grant any assignments and licences granted pursuant to the Developer Works Deed;

(iii)   it has not and will not infringe the Intellectual Property or Moral Rights, misappropriate any trade secret or breach the confidence of any person or entity in relation to this Developer Works Deed; and

(iv)   it will not act in a manner inconsistent with the rights of Sydney Water in the Developer Works, Background IP or Foreground IP as set out in the Developer Works Deed”.

59. Clause B6.2 of the Standards Terms contained “Listed Provider Party warranties”, as follows:

“(a)    Each Listed Provider Party warrants to Sydney Water that it has:

(i)   not been found by the ICAC to have engaged in Corrupt Conduct; and

(ii)   read and will comply with Sydney Water's Business Ethics Guide on the website.

(b)    Each Listed Provider Party warrants that, in performing the Developer Works, it will not employ or continue to employ an employee or subcontractor found by the ICAC to have engaged in Corrupt Conduct, or who has had their listing terminated by Sydney Water for a breach of the Business Ethics Guide.

Sydney Water may direct the Listed Provider Party to stop employing an employee or subcontractor to provide the Developer Works and stop them from being on Sydney Water's premises or worksites if the employee or subcontractor has:

(i)   had their listing terminated by Sydney Water for a breach of the Business Ethics Guide

(ii)   been found to have engaged in Corrupt Conduct by the ICAC.

The Listed Provider Party must then stop employing that employee or subcontractor for providing the Developer Works and appoint a replacement subcontractor under the Developer Works Deed.

(c)    Each Listed Provider Party warrants that it:

(i)   has entered into an agreement with the Developer; and

(ii)   will perform all its obligations under that agreement in line with its terms.

(d)    Each Listed Provider Party warrants that it will, while performing the Developer Works:

(i)   Be listed on Sydney Water's web site and maintain its obligation to meet the relevant Mandatory Criteria for Providers of Developer Works; and

(ii)   ensure that any person it nominates to perform any function (including signing documents) relating to the Developer Works or this Deed, is authorised to perform that function.

(e)    Each Listed Provider Party warrants that it accepts the Novation Deed in Schedule 2.

(f)    Each Provider party warrants that it has a Quality Management System (QMS) and a Product Specific Quality Plan (PSQP) which will maintain the following minimum quality assurance certification requirements:

(i)   third party certification of the Providers QMS including processes to address Sydney Water's requirements for PSQP by an independent JAS/ANZ registered certification company to AS/NZS ISO 9001. The QMS must address all warranties, activities and services that relate to the provider under this Developer Works Deed, or

(ii)   third party certification of the providers QMS and the PSQP that documents the Providers processes to address Sydney Water's requirements for a PSQP by an independent JAS/ANZ registered certification company firm to AS/NZS ISO 9001; or

(iii)   in the case of a provider that performs construction work only in relation to Developer works, a third party accredited Product Specific Integrated Management system that complies with the Civil Construction Management Code.

(g)    The Provider will ensure and warrants to Sydney Water that developer works performed by it will be fit for the purpose or purposes detailed in its agreement with the developer.

Without limiting any other right which Sydney Water may have, if within 12 months of the date of Transfer of Ownership Notice, the Developer Works prove to be defective or not fit for purpose due to acts, errors or omissions of the Provider, the Provider must remedy the defects, by repairing, replacing or modifying the defects within the reasonable period specified by Sydney Water.

The Provider must meet all costs of the remedial work.

If the Provider does not remedy the defects by the period specified by Sydney Water, Sydney Water may remedy the defects at the cost of the provider. The provider must pay any costs Sydney Water incurs in remedying the defects within 30 days of the date of Sydney Water's invoice.

Sydney Water may consider it necessary to remedy the defects without first giving the Provider the opportunity to do so. The Provider must pay any costs Sydney Water incurs in remedying the defects within 30 days of the date of Sydney Water's invoice”.

60. Clause B6.3 of the Standards Terms contained “Sydney Water warranties”, which provided that:

“(a)    Information made available in the documents of the Developer Works Deed, before or after the e-Developer Application, does not constitute a warranty or representation of any kind by Sydney Water. The Developer and Listed Provider Parties acknowledge that they must check and verify this information.

(b)    The Developer will not be entitled to any money or to extend the Developer Works Term because of any alleged statement, warranty or representation about the information in B6.3(a) that might prove incorrect.

(c)    Sydney Water makes no representations about the financial viability of any Listed Provider.

(d)    Sydney Water makes no representations about, and will not be responsible for:

(i)   examining or approving any drawings

(ii)   inspecting or testing any Developer Works or materials

(iii)   giving any advice to the Developer”.

61. Part B7 of the Standard Terms was entitled “Specific warranties, indemnities and release”. Clause B7.1 of the Standard Terms contained “Designer warranties”, which provided that:

“(a)    As well as the warranties under B6.2, the Designer warrants that:

(i)   it will perform all its obligations under the Instructions to Designers – Major Works and related documents

(ii)   it has prepared or will prepare the Design using due skill, care and diligence

(iii)   the Design will be fit for purpose

(iv)   the Developer Works depicted in the Design can be constructed in line with the Design.

(b)    The Designer also warrants that it has reviewed the NOR and is satisfied that a Design can be prepared that will:

(i)   meet these requirements

(ii)   respond to any comments made by Sydney Water

(iii)   satisfy all Legal Requirements and Standards that applied when the Design Package was completed”.

62. Clause B7.2 of the Standard Terms contained “WSC warranties”, which provided that:

“As well as the warranties under B6.2, the WSC warrants that it:

(a)    will perform all its obligations under the relevant Instructions to Water Servicing Coordinators, its contract with Sydney Water and related documents

(b)    will monitor the performance of all Listed Providers in line with:

(i)    the Developer Works Deed

(ii)    any comments made by Sydney Water about the Design Package

(iii)    all relevant Legal Requirements and Standards

(c)    will meet its obligations under its agreement with the Developer to help complete the Developer Works

(d)    for Major Works, will work with the Designer to monitor the design and construction of the Developer Works to ensure that they will be fit for purpose and comply with:

(i)    the Developer Works Deed

(ii)    any comments made by Sydney Water about the Design Package

(iii)    all Legal Requirements and Standards

(e)    for Minor Works, will also act as the Designer and assume any obligations identified in the Developer Works Deed

(f)    if the Constructor vacates the site [see B7.3(d)], will notify Sydney Water in writing at least two days before the Constructor plans to resume construction”.

Events after the Deed

63. The following uncontroversial chronological narrative of events is largely taken directly from the primary judgment.

64. IWS’s sewer design was submitted to Sydney Water on 3 February 2016. The design provided for packaged pump stations.

65. On 9 February 2016, IWS lodged with Sydney Water a Waste Water Servicing Options Report, together with a contour plan. It included the following:

“Introduction / History

148. The primary judge enjoyed an advantage in assessing the credibility of the witnesses which this court does not have. The fact that he tested his conclusions against the objective probabilities does not affect that advantage.

149. After the conclusion of the cross-examination, the primary judge expressed a view, quoted by Leeming JA at [147], that is not found in his Honour’s reasons for judgment. Such views when expressed by a trial judge during the course of a trial must be treated with caution. For example, it is not unknown for a trial judge to suggest that he or she has not been impressed by the evidence of either party to seek to bring the parties to a realistic expectation of difficulties in their case with a view to encouraging a settlement. An explicit example can be found in statements made by a judge in a family provision case to counsel for the successful defendants quoted in Olsen v Olsen (2019) 101 NSWLR 225; [2019] NSWCA 278 at [69]. I am not suggesting that this might be an explanation for the primary judge’s observations in the present case; only that it is unsafe for this court to assume, on the basis of statements made by a judge during the course of a trial, that the judge has rejected all assistance from seeing and hearing the witnesses in making findings as to their credibility, when he or she does not say so in the reasons for judgment.

150. I agree that the appeal should be dismissed with costs.

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Decision last updated: 04 November 2020