CIROCCO CONSTRUCTIONS PTY LTD (ACN 087 252 891) v ROSSLYN GAY CLARKE [2024] SADC 150
Applicant: CIROCCO CONSTRUCTIONS PTY LTD (ACN 087 252 891)
Counsel: MR R ROSS-SMITH - Solicitor: FBR LAW
Respondent: ROSSLYN GAY CLARKE Counsel: MR A DAL CIN - Solicitor: COWELL CLARKE
First Third Party: WILLIAMS BURTON ARCHITECTS PTY LTD (ACN 008 090 873)
Counsel: MR P ADAMS - Solicitor: MINTER ELLISON
Second Third Party: TASMANIAN SANDSTONE QUARRIES PTY LTD (ACN 092 517 283)
Counsel: MR T GUTHRIE - Solicitor: BELPERIO CONNELL
Hearing Date/s: 06/07/2022 to 08/07/2022, 11/07/2022 to 15/07/2022, 18/07/2022 to 22/07/2022, 26/07/2022 to
27/07/2022, 29/07/2022, 07/11/2022 to 11/11/2022, 17/11/2022, 15/02/2023
File No/s: DCCIV-15-483
B
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply
to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach
any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated.
CIROCCO CONSTRUCTIONS PTY LTD v CLARKE & ORS
[2024] SADC 150
Judgment of her Honour Judge Thomas
13 November 2024
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS -
PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS -
THE CONTRACT - CONSTRUCTION OF PARTICULAR CONTRACTS AND
IMPLIED CONDITIONS - VARIATIONS
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS -
OTHER MATTERS
PROFESSIONS AND TRADES - ARCHITECTS - DUTIES AND LIABILITIES
ARBITRATION - ADOPTION OF AWARD
The applicant/cross respondent builder (Cirocco Constructions Pty Ltd) and the respondent/cross
applicant owner (Mrs Clarke) entered into a written building contract for the construction of a new
custom designed house, swimming and spa pools, outdoor entertaining area and the renovation of an
old church hall in Rose Park in November 2012. The first third party (Williams Burton Architects
Pty Ltd) is the owner’s architect, engaged from March 2012 to design, document and administer the
building contract. The second third party (Tasmanian Sandstone Quarries Pty Ltd) is the supplier of
Tasmanian sandstone that was purchased and used on the Owner’s house and garage walls and
damaged the works when it cleaned the stone with a mild solution of acid in late 2014.
-- 1 of 362 --
In May 2015, the builder commenced this proceeding seeking payment of its last two invoices for
$158,359.79 inc GST, following the certification of progress payment certificates Nos 11 and 12
(PPC 11 and PPC 12) whilst defect correction works were ongoing.
In her first defence, the owner claimed PPC 11 and PPC 12 were invalid and brought her cross action
against the builder for defects in the works and third party proceedings against the architect claiming
breaches of its retainer and common duty of care in issuing PPC 11 and PPC 12. The builder brought
a successful summary judgment application and PPC 12 was found to be provisionally binding by
this Court in July 2015. The owner paid PPC 12 with interest. The owner challenges the builder’s
entitlement to the approved variations and provisional sum adjustments certified in PPC 12 and
makes further miscellaneous claims for credit adjustments under the building contract.
The builder joined the stone supplier as a third party to the owner’s cross action seeking contribution
and/or indemnity for any liability to the owner for defects in the Tasmanian sandstone supplied or
the damage caused to the works by the stone supplier’s negligent stone cleaning works.
In October 2020, the owner’s claims for remedial costs of $923,685.39 excluding GST for 183 items
of defective or incomplete works were referred to arbitration. The arbitral award delivered on 28
June 2022 determined total remedial costs for defective or incomplete works in the amount of
$59,053.09 excluding GST. The arbitrator referred a number of issues back to the trial judge for
determination, other questions were reserved to the trial judge and the owner made limited challenges
to aspects of the award. The other parties joined issue with the owner’s challenges and contend there
is no good reason not to adopt the entirety of the award as part of this Court’s judgment in the
proceeding.
The owner’s claims about defects in the sandstone cladding on the external walls of her house and
garage were reserved for the trial judge to determine. These claims required determination of the
varied contractual requirements for new stone masonry in circumstances where in January 2013, the
specified Basket Range sandstone became unavailable. The parties embarked on a process of
selection and approval of an alternate stone and by their dealings between April and June 2013 agreed
a varied specification for new stone masonry. The dispute about the terms agreed as to stone colour
turns principally on what happened at a meeting at the stone supplier’s Gillman yard on 30 April
2013 and two meetings on-site in June 2013.
There are further disputes about other stone defects alleged by the owner including at its quality and
workmanship. The owner further alleges the architect instructed the stone to be laid with a larger
joint size without her approval with the result that it is not fine ashlar stonework. The owner claims
the stone defects are so substantial that the entirety of the stonework must be replaced.
There are related disputes about the effect of non-compliance with the contractual scheme for
variations, provisional sum adjustments, the effect of notices of dispute and practical completion and
architect’s instructions, prevention, reasonableness, the time for assessment of damages and the
entitlement of the builder to recover the cost of work performed outside the contract.
Held:
1. Clause A8.2 of the Building Contract should be read as provisionally binding and does not
operate to exclude the parties’ rights to a remedy for a breach of contract arising by operation of law.
If it was read as finally binding, it would be void by s 42 of the Building Work Contractors Act 1995
(SA): Part B [335]-[357].
2. PPC 11 is invalid and has no contractual effect in the absence of a valid notice of practical
completion having been issued in accordance with the contractual scheme: Part D [884]-[929].
3. The architect’s certification of practical completion of the works in two notices is invalid.
The Building Contract does not contemplate separable portions of the works or the issue of more
than one notice of practical completion for different separable portions with different dates of
practical completion, defects liability periods and retention sums: Part D [935]-[943].
4. The architect should proceed to issue a single notice of practical completion in accordance
with clauses M4 or M8 of the Building Contract: Part D [944].
-- 2 of 362 --
5. PPC 12 is not final and conclusive. Summary judgment in the builder’s favour only resolved
the question of the owner’s provisional liability to pay the builder’s invoice for the amount certified
in accordance with the Building Contract leaving the owner’s challenges to approved variations,
provisional sum adjustments, other claims and deductions for allegedly defective and incomplete
works to be determined by this Court: Part D [945]-[950].
6. The amount certified in PPC 12 for approved variations was overstated by $151.05 excluding
GST: Part D [951]-[1182].
7. The amount certified in PPC 12 for provisional sum adjustments was overstated by $8,672.20
excluding GST: Part D [1183]-[1310].
8. Credit adjustments in the owner’s favour for the overstatement of approved variations
($151.05 excluding GST) and provisional sum adjustments ($8,672.20 excluding GST) should be
allowed by the architect in issuing the final certificate.
9. The selection and approval process provided for in the Architect’s Specification for new stone
masonry was superseded by the parties’ inconsistent conduct and their mutual assent to a materially
different process. The specified stone colour under the varied Building Contract is the range of light
coloured Tasmanian sandstone laid in the section of the stonework approved by the owner on site on
about 21 or 22 June 2022, save for the several stones near the front for that were to be removed (and
were) and the remainder of the stonework was subject to the architect’s direction to use the best stone
on the front: Part E [1345]-[1549].
10. Save for one chipped stone, the owner has not established on the evidence that her complaints
about the colour and workmanship of the external stone cladding on her house and garage walls are
defects in the works and constitute breaches by the builder of the Building Contract as varied: Part E
[1558]-[1660].
11. Contrary to her claim she did not approve the joint size instructed in architect’s instruction
AI:07, the owner did in fact by giving her approval to the stonework at Kermode Street as the design
intent for the external stone cladding on her house and garage walls: Part C [433]-[446].
12. The change in joint size in the built stonework does not defeat the contractual specification
for ashlar stonework: Part E [1665]-[1673].
13. The phenomenon of ‘quarry sap’ is not a defect. The builder’s warranty of quality in clause
A.09 of the Architect’s Specification should not be construed as imposing on the builder an obligation
to only supply sandstone that would not manifest ‘quarry sap’, an inherent characteristic of
Tasmanian sandstone known to the parties: Part E [1568]-[1613].
14. The measure of damages to which the owner is entitled is the cost of making the stonework
conform with the requirements of the Building Contract. In the absence of any evidence about
whether the one proven chipped stone can be repaired or the stone replaced, for finality’s sake,
remedial costs are assessed at $200.00 excluding GST and is solely the builder's liability: Part E
[1708]-[1713].
15. The arbitral award addressing other alleged defects and incomplete works should be adopted
as a judgment of this Court under s 33(4) of the District Court Act 1991 (SA) save for the limited
findings set out in Annexure B to these reasons: Part F [1714]-[2040].
16. Total determined remedial costs of the defects and incomplete works the subject of the award
are $69,216.19 excluding GST as shown in Annexure C to these reasons: Part F [2038].
17. The joint and several liability of the builder and the architect to the owner for remedial costs
of $7,385.25 excluding GST for three referred items is to be limited under s 72 of the Development
Act 1973 (SA) as to $2,242.97 to the Builder and $5,142.28 to the architect, both excluding GST:
Part F [2005]-[2033].
-- 3 of 362 --
18. The builder is entitled to a credit adjustment in the final certificate of $18,900.00 excluding
GST for the insurance proceeds received by the owner for the unpaid remedial works for acid
damaged items done by the builders’ subcontractors at the architect's direction: Part F [1782]-[1819].
19. The builder is entitled to contribution from the stone supplier of $12,887.21 excluding GST
for its liability to the owner for acid damaged items referred to arbitration under s 6 of the Law
Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA): Part F [2034]-
[2036].
20. By reason of the architect’s failure to properly administer provisional sums strictly in
accordance with section K of the Building Contract in breach of its retainer and/or duty of care, the
owner has suffered loss and damage in the amount of the credit adjustments she has been denied
totalling $8,670.00 excluding GST: Section G [2050]-[2064].
21. The architect’s claim for an equitable set off against any loss and damage for which it is liable
to the owner for unpaid fees of $13,647.00 excluding GST is allowed. Its claim for contractual
interest is not proven and dismissed: Part H [2121]-[2131].
22. The appropriate order to be made under s 37(6)(b) of the Building Work Contractors Act 1995
(SA) is for payment to be made by the builder by way of compensation: Part H [2117]-2120].
23. The Court will hear the parties as to the form of orders and judgment, interest and the question
of costs.
Development Act 1993 (SA) s 72; District Court Act 1991 (SA) s 33; Building Work Contractors Act
1995 (SA) ss 32, 37, 42; Law Reform (Contributory Negligence and Apportionment of Liability) Act
2001 (SA) ss 3, 6, 8; Uniform Civil Rules 2020 (SA) rr 67.2(3)(a) and (c), 71, referred to.
Alstom Ltd v Yokogawa Australia Pty Ltd (No 7) [2012] SASC 49 ; Aon Risk Services Australia Ltd
v Australian National University (2009) 239 CLR 175; Banque Commerciale SA (In Liq) v Akhil
Holdings Ltd (1990) 169 CLR 279; Bedrock Construction and Development Ltd v Crea [2021]
SASCA 66; Bellgrove v Eldridge (1954) 90 CLR 613; BP Refinery (Westernport) Pty Ltd v Shire of
Hastings (1977) 180 CLR 266; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR
153; Built Environs Pty Ltd v Saunders International Limited [2012] SASC 111; Built Environs Pty
Ltd v Tali Engineering Pty Ltd [2013] SASC 84; Cirocco Constructions Pty Ltd v Clarke & Ors
[2015] SADC 98; Cirocco Constructions Pty Ltd v Clarke (No 2) [2015] SADC 107; Cirocco
Constructions Pty Ltd v Clarke & Ors [2020] SADC 82; Clarke v Cirocco Constructions Pty Ltd &
Ors [2022] SASC 126; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR
337; Crea v Bedrock Construction and Development Pty Ltd [2020] SADC 124; D Galambos & Son
Pty Ltd v McIntyre (1974) 5 ACTR 10; Dare v Pulham (1982) 148 CLR 658; Dura (Australia)
Constructions Pty Ltd v Hue Boutique Living Pty Ltd & Ors (No 3) [2012] VSC 99; Electricity
Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; Ermogenous v Greek
Orthodox Community of SA Inc (2003) 209 CLR 95; Film Bars Pty Ltd v Pacific Film Laboratories
Pty Ltd (1979) 1 BPR 9251; Gilbert-Ash Northern Ltd v Modern Engineering (Bristol) Ltd [1974]
AC 689; Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490; Hawkins v Clayton (1988)
164 CLR 539; Hegarty v Keogh (No 2) [2023] SASCA 30; Johnson v Perez (1988) 166 CLR 351;
Kirsch v HP Brady Pty Ltd (1937) 58 CLR 36; Liebe v Molloy (1906) 4 CLR 347; Lumbers v W Cook
Builders Pty Ltd (In Liq) (2008) 232 CLR 635; Mann v Paterson Constructions Pty Ltd (2019) 267
CLR 560; Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; Morgan Equipment
Co v UMW Corporation SDN BHD [2002] NSWCA 193; Mount Bruce Mining Pty Ltd v Wright
Prospecting Pty Ltd (2015) 256 CLR 104; National Coal Board v William Neill & Son (St Helens)
Ltd [1985] 1 QB 300; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Realestate.com.au
Pty Ltd v Hardingham & Ors [2022] HCA 39; Robinson v Harman (1848) 156 ER 363; South
Australian Railways Commissioner v Thomas (1951) 84 CLR 84; Stone v Chappel (2017) 128 SASR
165; The Owners - Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067;
Tinckell v Duthy Homes Pty Ltd; Duthy Homes Pty Ltd v Tinckell [2020] SASCFC 24; Toll (FGCT)
Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Tomko v Palasty [2007] NSWCA 258; Trimis v
Mina [1999] NSWCA 140; Update Constructions Pty Ltd v Rozelle Child Care Centre Limited
(1990) 20 NSWLR 251; Walker Group Construction Pty Ltd v Tzaneros Investments Pty Ltd [2017]
NSWCA 27; Water Board v Moustakas (1988) 180 CLR 491, considered.
-- 4 of 362 --
[2024] SADC 150
1
CIROCCO CONSTRUCTIONS PTY LTD v CLARKE & ORS
[2024] SADC 150
Civil
Contents
INTRODUCTION....................................................................................................................................... 9
The Issues to be Determined ...................................................................................................................... 9
The Contracting Parties ............................................................................................................................. 9
Overview of the Contract ......................................................................................................................... 10
Procedural History.................................................................................................................................... 11
The Relevant Pleadings ............................................................................................................................ 13
The Arbitration ......................................................................................................................................... 13
The Trial .................................................................................................................................................... 13
The Views................................................................................................................................................... 14
The Documentary Evidence ..................................................................................................................... 14
The Witnesses Generally .......................................................................................................................... 14
The Owner’s Witnesses ............................................................................................................................ 15
Mrs Clarke ............................................................................................................................................. 15
Dr Clarke................................................................................................................................................ 20
Associate Professor Danvers ................................................................................................................. 22
Ms White ................................................................................................................................................ 28
Mr Prider................................................................................................................................................ 29
Mr Pentelow ........................................................................................................................................... 29
Mr Allen ................................................................................................................................................. 29
The Builder’s Witnesses ........................................................................................................................... 33
Mr Cirocco ............................................................................................................................................. 33
Mr Tittoto ............................................................................................................................................... 35
The Architect’s Witnesses ........................................................................................................................ 35
Mr Williams ........................................................................................................................................... 35
Ms Crowden ........................................................................................................................................... 37
Mr McAllister ......................................................................................................................................... 38
Mr Penglase ........................................................................................................................................... 39
Mr Altamura .......................................................................................................................................... 44
The Stone Supplier’s Witnesses ............................................................................................................... 44
Mr Calabrese.......................................................................................................................................... 44
PART A: LEGAL PRINCIPLES ........................................................................................................... 47
Ascertainment of Terms ........................................................................................................................... 47
Ascertaining Meaning............................................................................................................................... 50
Damages ..................................................................................................................................................... 50
The Cardinal Rule ................................................................................................................................. 50
Reasonableness ...................................................................................................................................... 51
-- 5 of 362 --
[2024] SADC 150
2
Date of Assessment of Damages ........................................................................................................... 52
Mitigation ............................................................................................................................................... 52
Betterment .............................................................................................................................................. 53
PART B: FOUNDATIONAL MATTERS ............................................................................................. 53
The Written Building Contract ............................................................................................................... 53
Form ....................................................................................................................................................... 53
The Builder’s Obligations ..................................................................................................................... 54
The Owner’s Obligations....................................................................................................................... 54
The Role of the Architect....................................................................................................................... 54
Payment Obligations.............................................................................................................................. 55
Practical Completion ............................................................................................................................. 56
Defects .................................................................................................................................................... 58
Final Certificate ..................................................................................................................................... 59
Variations to the Works ......................................................................................................................... 60
Claims to Adjust the Contract ............................................................................................................... 61
Clause A8 ............................................................................................................................................... 62
The Architect’s Specification ................................................................................................................... 66
Generally ................................................................................................................................................ 66
For New Stone Masonry........................................................................................................................ 67
Clause A.09.01 ....................................................................................................................................... 68
Other Relevant Provisions ..................................................................................................................... 70
Clause A.05.08 ....................................................................................................................................... 71
PART C: THE FACTS ............................................................................................................................ 71
The Parties and their Relationship.......................................................................................................... 71
Design and Specification of Basket Range Stone ................................................................................... 74
Selection of an Alternative Stone ............................................................................................................. 77
Kermode Street ......................................................................................................................................... 80
Change of Pattern and Jointing ............................................................................................................... 82
The Gillman Meeting ................................................................................................................................ 83
AI:04 – 1 May 2013 ................................................................................................................................... 93
Ordering of Stone...................................................................................................................................... 96
Delivery of Stone ....................................................................................................................................... 98
Set Up for Stone Site Meeting .................................................................................................................. 99
Sample Dry Wall ..................................................................................................................................... 100
AI:07 – 12 June 2013............................................................................................................................... 100
Rejection of Stone ................................................................................................................................... 102
18 June Meeting ...................................................................................................................................... 103
AI:08 – Stop Work Instruction .............................................................................................................. 113
Subsequent Site Meeting ........................................................................................................................ 115
Completion of Stone Laying................................................................................................................... 122
First Complaint of Quarry Sap ............................................................................................................. 123
Foreshadowed Practical Completion .................................................................................................... 124
-- 6 of 362 --
[2024] SADC 150
3
Stonework Cleaning and Sealing ........................................................................................................... 124
First Formal Defects List........................................................................................................................ 124
Owner Moves into the House ................................................................................................................. 125
Practical Completion Certified .............................................................................................................. 127
New Stone Complaints............................................................................................................................ 128
Further Assessment of Stonework ......................................................................................................... 129
Lawyers and Litigation........................................................................................................................... 131
May 2015 Complaints ............................................................................................................................. 131
25 June 2015 Site Meeting ...................................................................................................................... 132
Further Defects Lists .............................................................................................................................. 133
HSR Inspection........................................................................................................................................ 134
September 2015 Defects Correction Works ......................................................................................... 135
6 October 2015 Meeting.......................................................................................................................... 135
Builder’s Report on Defect Correction Works .................................................................................... 135
HSR Report ............................................................................................................................................. 136
November 2015 Defects List ................................................................................................................... 138
AI:21 – Stone Cleaning Impasse ............................................................................................................ 139
Cleaning & Sealing Trial ........................................................................................................................ 140
AI:22 – Stone Cleaning and Replacement ............................................................................................ 141
AI:22A – Stone Cleaning Held Over ..................................................................................................... 142
Characteristics of Tasmanian Sandstone.............................................................................................. 143
The Stone Supplier’s Colour Categories............................................................................................... 144
Exhibit R31 .............................................................................................................................................. 145
Sample Stone ‘SC 135’............................................................................................................................ 148
The Photographic Evidence ................................................................................................................... 151
The Laid Stonework ............................................................................................................................... 152
Acid Damaged Stones ............................................................................................................................. 152
PART D: THE BUILDER’S CLAIMS AGAINST THE OWNER ................................................... 154
Is PPC 11 Valid and Binding? ............................................................................................................... 154
The Issues ............................................................................................................................................ 154
Consideration ....................................................................................................................................... 155
Clause C6 ............................................................................................................................................. 155
Consequences of the Invalidity of PPC 11 ......................................................................................... 161
Owner’s Claim against the Architect .................................................................................................. 161
Validity of Two Notices of Practical Completion ............................................................................... 162
Builder’s Claim for Payment under PPC 12 ........................................................................................ 163
PPC 12 is not Final and Conclusive ................................................................................................... 163
Owner’s Challenge to Approved Variations, PC Sums etc ................................................................. 164
Approved Variations - $59,253.66 ex GST – The Pleaded Issues...................................................... 164
The Parties’ Submissions .................................................................................................................... 166
Legal Principles ................................................................................................................................... 167
Facts Generally .................................................................................................................................... 172
-- 7 of 362 --
[2024] SADC 150
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Extras (a) – Paint waterproofing around Foundation - $575.00 ex GST ......................................... 175
Extras (b) – Supply & Fix 2 LVL Beams - $632.50 ex GST .............................................................. 176
Extras (c) - Additional Steel - $2,875.00 ex GST .............................................................................. 177
Extras (d) – Stair Additional Reinforcing & Concrete - $4,965.13 ex GST ...................................... 178
Extras (e) – Boundary Block Wall Extra Height - $1,667.50 ex GST............................................... 179
Extras (f) – Adjust & Modify Lift Doors - $1,437.50 ex GST ............................................................ 180
Extras (g) – Supply & Fit Steel Frame for Safe - $552.00 ex GST ................................................... 181
Extras (h) – Wall Tiles – Changed to ‘Cotton’ - $3,176.74 ex GST .................................................. 182
Extras (i) – Wall Tiles – Pantry & Laundry - $575.00 ex GST.......................................................... 183
Extras (j) – Additional Moulding to Front Foor - $678.50 ex GST .................................................. 183
Extras (k) – Cut Tiles for Porch & Balcony – $920.00 ex GST ......................................................... 184
Extras (l) – Labour to Fit Stone Window Rebates - $1,035.00 ex GST ............................................. 186
Extras (m) – Rear Verandah Lining Materials - $2,415.00 ex GST ................................................. 186
Extras (n) – Side Fence - $6,220.45 ex GST ...................................................................................... 187
Extras (o) – Water Feature - $5,842.00 ex GST ................................................................................. 188
Extras (q) - Sealing of Cellar Floor - $667.00 ex GST ...................................................................... 189
Extras (r) – Footings & Reinforcement - Front Fence - $4,996.75 ex GST ..................................... 190
Extras (s) – Additional Mouldings - Front Fence - Nil ..................................................................... 191
Extras (t) – Moulded Timber Handrail - Nil ...................................................................................... 192
Extras (u) – Additional Pool Items - $13,695.45 ex GST ................................................................... 193
Extras (v) – Supply & fix Additional LVL & Fascia - Nil ................................................................. 194
Extras (w) – Additional Plantation Shutters - Nil .............................................................................. 194
Extras - Summary ................................................................................................................................ 195
PC Sum Adjustments ........................................................................................................................... 196
Pleaded Issues ...................................................................................................................................... 196
Submissions ......................................................................................................................................... 197
Consideration ....................................................................................................................................... 197
Facts Generally .................................................................................................................................... 202
PC Sum Adjustment (a) – Solar Pool Blanket.................................................................................... 202
PC Sum Adjustment (b) – Letter Box & Street Number .................................................................... 203
PC Sum Adjustment (c) - Repointing Hall Stonework....................................................................... 204
PC Sum Adjustment (d) – Church Hall Plastering ............................................................................ 205
PC Sum Adjustments (e) & (f) - Wrought Iron Panels ...................................................................... 205
PC Sum Adjustment (h) – Window Furniture .................................................................................... 207
PC Sum Adjustment (i) – Door Hardware .......................................................................................... 207
PC Sum Adjustment (l) – Timber Repairs to Old Hall ....................................................................... 208
PC Sum Adjustment (m) - Roof Repairs to Old Hall ......................................................................... 208
PC Sum Adjustment (o) – Airconditioning......................................................................................... 209
PC Sum Adjustment (p) – Electrical ................................................................................................... 210
PC Sum Adjustments (k) & (r) – Miscellaneous Works Old Hall ..................................................... 211
PC Sum Adjustments - Summary ........................................................................................................ 212
Other Claims ........................................................................................................................................... 213
-- 8 of 362 --
[2024] SADC 150
5
Extra Costs – April 2013 - Nil ............................................................................................................. 213
Cash Payment – March 2014 - Nil ...................................................................................................... 214
Distinctive Gardens Direct Payment - Nil .......................................................................................... 215
Owner’s Delay Claim - Nil ..................................................................................................................... 216
PART E: THE STONE DEFECTS ....................................................................................................... 218
The Liability Issues ................................................................................................................................. 218
The Nature of the Stone Defects ......................................................................................................... 218
The Final Pleadings................................................................................................................................. 219
Owner v Builder ................................................................................................................................... 220
The Stone Defects and the Builder ..................................................................................................... 220
The Same Stone Defects ...................................................................................................................... 227
The Owner’s Case on Damages .......................................................................................................... 232
The Builder’s Defences ....................................................................................................................... 233
The Architect’s Defences..................................................................................................................... 233
The Third Party Claim ........................................................................................................................ 235
The Stone Supplier’s Defences ........................................................................................................... 236
Scope of the Owner’s Pleaded Case on Stone Colour .......................................................................... 237
Relevant Legal Principles .................................................................................................................... 237
Objection to Departure from Her Pleaded Case................................................................................. 238
The Owner’s Ultimate Case ................................................................................................................ 240
Conclusion ........................................................................................................................................... 241
As to Colour Category ......................................................................................................................... 241
As to AI:04 ........................................................................................................................................... 243
Consistency of Colour ......................................................................................................................... 244
White and Creamy White .................................................................................................................... 244
The Contractual Requirements for Stone............................................................................................. 244
What were the agreed varied terms for Tasmanian Sandstone? ....................................................... 245
Breach of the Building Contract as Varied .......................................................................................... 252
Stone Colour ........................................................................................................................................ 253
‘Quarry Sap’ ........................................................................................................................................ 254
‘Orange’ Stones ................................................................................................................................... 262
Mortar Colour ...................................................................................................................................... 263
Chipped Stones .................................................................................................................................... 263
Workmanship ....................................................................................................................................... 266
Acid Damaged Stones .......................................................................................................................... 269
Alternative Cases on Breach ............................................................................................................... 270
Other Defences .................................................................................................................................... 270
Responsibility for any Breach of the Building Contract as Varied .................................................... 270
Breach by the Architect .......................................................................................................................... 270
Ashlar Masonry and Joint Size ........................................................................................................... 270
Approved Samples................................................................................................................................ 272
Failure to Document Instructions ...................................................................................................... 273
-- 9 of 362 --
[2024] SADC 150
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The Architect’s Instructions AI:21, AI:22 & AI:22A ........................................................................ 273
Remedy..................................................................................................................................................... 274
Required Remedial Works ................................................................................................................... 274
‘Quarry Sap’ ........................................................................................................................................ 274
Acid Damaged Stones .......................................................................................................................... 275
Chipped Stone ...................................................................................................................................... 275
Damages ................................................................................................................................................... 276
Generally .............................................................................................................................................. 276
The Cost of Remedial Works ............................................................................................................... 277
Apportionment ..................................................................................................................................... 277
PART F: THE STATUS AND EFFECT OF THE AWARD ............................................................. 278
Which parts of the Award should the Court Adopt? .......................................................................... 278
Reference to Arbitration ........................................................................................................................ 278
Reserved Issues........................................................................................................................................ 279
The Award ............................................................................................................................................... 279
Principles as to Adoption of the Award ................................................................................................ 279
Referred Back & Other Issues ............................................................................................................... 282
Findings Not Adopted ............................................................................................................................. 282
Practical Completion ........................................................................................................................... 282
Sealing the Cellar Concrete Floor ...................................................................................................... 283
The Arbitrator’s Approach.................................................................................................................... 283
Meaning of Defect ............................................................................................................................... 283
Observations at the View ..................................................................................................................... 284
Defences Based on DLPs and PC ....................................................................................................... 284
Clause A.05.06 of the Specification .................................................................................................... 285
Clause A.09.01 of the Architect’s Specification ................................................................................. 286
Defect ‘Caused’ by Builder ................................................................................................................. 286
Certificates & Payment Issues ............................................................................................................ 287
Prevention ............................................................................................................................................ 287
Remedial Works Required ................................................................................................................... 287
Remedial Costs ..................................................................................................................................... 288
Cost Savings ......................................................................................................................................... 288
Compromised Remedial Costs ............................................................................................................... 288
The Owner’s Challenges to the Award ................................................................................................. 288
Issues For the Trial Judge ...................................................................................................................... 288
Approach .............................................................................................................................................. 288
Acid Damaged CSS Items – Insurance Proceeds – Credit $18,900.00 ex GST ................................ 289
CSS Item 15.14 – Acid Damaged Pavers - $4,015.00 ex GST ........................................................... 294
CSS Item 16.18 – Pool Fence Fixings - Nil........................................................................................ 297
Acid Damaged CSS Items – Conclusion............................................................................................. 297
CSS Item 1.3 – Movement Cracks/Painting - $1,805.10 ex GST....................................................... 298
CSS Items 1.11/26.21 – Door Thickness - $3,880.80 ex GST ............................................................ 299
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CSS Items 2.9, 5.3, 13.3 & 25.10 – Exhaust Fans - $2.089.80 ex GST each .................................... 299
CSS Item 9.2 – Internal Stair Plaster – Nil ........................................................................................ 299
CSS Items 14.4 – Cellar Vent - $2,089.80 ex GST ............................................................................. 301
CSS Item 15.17 – Verandah Nosing Profile - Nil .............................................................................. 303
CSS Item 16.1 - Paving Drainage - Nil............................................................................................... 304
CSS Item 16.5 – Church hall Window Masonry Cracks - $2,219.80 ex GST ................................... 304
CSS Item 17.19 - Stone Block at Central Porch Pier – Not Considered ........................................... 305
CSS Item 19.1.1 - Repointing Church Hall - $350.00 ex GST .......................................................... 305
CSS Item 19.2(d) – Paintwork on Verandah Soffit – Nil ................................................................... 308
CSS Item 19A.1 & 20.12 – Church Hall Render - Nil ....................................................................... 308
CSS Item 20.10 - Church Hall Timber Trims - Nil ............................................................................ 310
CSS Item 20.16 - Finial - $4,945.45 ex GST ...................................................................................... 311
CSS Item 20.21 – Plastering West Wall Garage – Nil ....................................................................... 313
CSS Items 29.1 – Bin Store Masonry Wall – Nil ................................................................................ 313
CSS Item 29.5 - Bin Store Varnish Coating – Nil .............................................................................. 313
CSS Item 29.6 - Bin Store PVC Pipes - Nil ........................................................................................ 313
Other Award Issues: Prevention by the Owner ................................................................................... 314
Legal Principles ................................................................................................................................... 314
CSS Item 10.2 – Wrought Iron Panel Upper Church Hall - Nil ....................................................... 315
CSS Item 17.32 – Front Balcony Wrought Iron Balustrade - Nil ..................................................... 315
Other Award Issues: Reasonableness ................................................................................................... 317
The Legal Principles ............................................................................................................................ 317
Generally .............................................................................................................................................. 317
CSS Item 14.4 – Cellar Vent ............................................................................................................... 318
CSS Item 15.17 – Verandah Nosing Profile – Nil .............................................................................. 318
CSS Item 15.12 – Clothesline – Nil ..................................................................................................... 318
Acid Damaged CSS Items – Stone Supplier’s Liability....................................................................... 318
Remedial Works at Builder’s Cost ........................................................................................................ 319
Damages - Time of Assessment .............................................................................................................. 319
Apportionment ........................................................................................................................................ 320
Generally .............................................................................................................................................. 320
Acid Damaged CSS Items - $12,887.21 ex GST – No Apportionment .............................................. 321
CSS Item 1.3 - Movement Cracks/Painting – No apportionment ...................................................... 322
CSS Item 14.4 – Cellar Vent - $2,089.80 ex GST – 60% Builder/40% Architect ............................. 322
CSS Item 16.5 – Church Hall Window Masonry Cracks – No Apportionment ................................ 323
CSS Item 17.32 – Wrought Iron Painting – No Apportionment ....................................................... 323
CSS Item 19.1.1 – Repointing Church Hall - $350.00 ex GST – 100% Architect ............................ 323
CSS Item 20.16 - Finial - $4,945.45 ex GST – 20% Builder/80% Architect ..................................... 323
Other CSS Items Determined in Favour of the Owner ...................................................................... 324
Result after Apportionment ................................................................................................................. 324
Contribution ............................................................................................................................................ 325
Acid Damaged CSS Items - $12,887.21 ex GST – 100% Stone Supplier .......................................... 325
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Conclusion – Adoption of the Award .................................................................................................... 325
PART G: OWNER’S OTHER CLAIMS AGAINST THE ARCHITECT ....................................... 326
Owner’s Claim against the Architect for PPC 11 ................................................................................ 326
Owner’s Claim against the Architect for PPC 12 ................................................................................ 326
Introduction ......................................................................................................................................... 326
Approved Variations – $151.05 ex GST plus Interest ........................................................................ 326
PC Sum Adjustments - $8,670.00 ex GST plus interest ..................................................................... 327
Other Claims - Nil ................................................................................................................................... 329
Assessment of Defects - Nil ..................................................................................................................... 329
CSS Items Not Pressed ........................................................................................................................... 330
CSS Item 19.1.1 - Repointing Church Hall - $350.00 ex GST ............................................................ 330
CSS Item 20.16 – Finial - $4,945.45 ex GST ......................................................................................... 333
Other Claims ........................................................................................................................................... 334
CSS Item 9.2 – Stair Plaster - Nil ....................................................................................................... 334
CSS Item 14.4 – Cellar Vent - $2,089.80 ex GST ............................................................................... 334
CSS Item 19.1 - Church Hall Windows - Nil...................................................................................... 335
Assessment of Damages .......................................................................................................................... 336
PART H: OTHER MATTERS ............................................................................................................. 336
Builder’s Entitlement to Do Remedial Works...................................................................................... 336
Architect’s Set Off - $13,647.90 ex GST ............................................................................................... 337
PART I: CONCLUSION AND FORM OF JUDGMENT ................................................................. 339
ANNEXURE A – FINAL TRIAL PLEADINGS.................................................................................. 341
ANNEXURE B – AWARD FINDINGS NOT ADOPTED .................................................................. 342
ANNEXURE C – FINAL SUMMARY AWARD DETERMINATIONS .......................................... 343
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INTRODUCTION
The Issues to be Determined
1 This proceeding concerns protracted and complex disputes between the
owner, builder, architect and stone supplier arising from the owner’s complaints
about defective and incomplete domestic building works carried out from 2012 to
2016 on land in Alexandra Avenue, Rose Park, approved variations, provisional
sums, other minor claims and associated payment issues.
2 The building works are significant, comprising the construction of a new
custom designed house, swimming and spa pools, associated siteworks and
landscaping and the renovation of an old church hall known as ‘Rose Hall’.
3 The issues to be determined are addressed in these reasons in five parts
corresponding with the approach taken at trial and in closing submissions.
Relevant legal principles and foundational matters concerning the building
contract are addressed in Parts A and B. The proven facts are set out in Part C.
4 The issues to be determined are addressed as follows.
Part D - The Builder’s Claims Against the Owner
Part E - The Stone Defects
Part F - The Status and Effect of the Award
Part G - Owner’s Other Claims Against the Architect
Part H - Other Matters
Part I – Conclusion and Form of Judgment.
The Contracting Parties
5 The Applicant and Cross Respondent, Cirocco Constructions Pty Ltd (the
Builder), is a builder of custom designed residences. In November 2012, the
Builder was engaged by the owner to construct the owner’s new residence.
Mr Rocco Cirocco is the sole director of the Builder and its principal representative
in carrying out the relevant building works.
6 The Respondent and Cross Applicant, Mrs Rosslyn Clarke is the registered
proprietor of the land (the Owner) and a party to the relevant contracts. The Owner
was closely involved in all stages of the project from initial design and
development approval through to construction and defect rectification. The Owner
was precise in specifying her requirements, fastidious in her oversight of the
building works and overly demanding as regards her requirements.
7 The Owner’s husband is Dr Ian Clarke. Although not a contracting party or
extensively involved in the contract administration the subject of dispute,
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Dr Clarke attended key meetings and is an important witness for the Owner. He
has an obvious interest in the outcome of this litigation and is partisan to the
Owner’s case.
8 The Third Party, Williams Burton Architects Pty Ltd (the Architect)1
specialises in high-end residential construction projects. In February 2012, it was
engaged by the Owner to provide full architectural services for the Owner’s new
residence including design, documentation and contract
administration. Mr Robert Williams, one of the Architect’s directors was its
representative and responsible for the Owner’s project until he retired in December
2015. He was primarily assisted by a junior employed architect, Ms Erin Crowden.
9 The Second Third Party, Tasmanian Sandstone Quarries Pty Ltd (the Stone
Supplier) carries on business as a supplier of sandstone from its quarry in
Tasmania and trades from its yard at Gillman. Tasmanian sandstone was purchased
from the Stone Supplier and used as cladding on the external walls of the house,
garage and water feature in the front garden. Mr Rito Calabrese is the principal of
the Stone Supplier and had all the relevant dealings with the other parties.
10 The Owner’s complaints about the colour and quality of the sandstone
supplied and the workmanship in the laid stonework as not conforming with the
contractual requirements for stone are the most significant alleged defects. The
stone defects are addressed in Part E below.
Overview of the Contract
11 The Architect’s retainer by the Owner is recorded in writing in an unsigned
service and fee summary.2
12 The Architect prepared specification No. 2122 dated September 20123 (the
Architect’s Specification) for the materials to be used and the works to be
performed to construct the Owner’s new residence and the architectural drawings
issued for tender and construction. The Architect’s Specification is one of the
specified contract documents.4
13 The building contract is in writing and comprises a standard form ABIC
Simple Works SW-2008 H SA Contract dated 15 November 2012 (the Building
Contract),5 the Architect’s Specification and the contract drawings listed in
1 The Architect changed its name to Williams Burton Leopardi when Mr Robert Williams retired in
December 2015 and Ms Sophia Leopardi became a director.
2 Exhibit R3.1.
3 Exhibit R3.3.
4 Building Contract, Order of precedence – Schedule 3, Architect’s Specification clause A.02.
5 Exhibit R3.2.
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Schedule 3 of the Building Contract (the Contract Drawings).6 Foundational
matters concerning the contractual framework are addressed in Part B below.
14 The initial contract price was $2.117 million including GST.
15 Building works (including defect correction works) were performed between
2012 and 2016.
16 Practical completion was scheduled for 11 April 2014. The Owner moved
into the house on 31 July 2014 whilst building works were still progressing on the
church hall and attached garage. On 1 December 2014, the Architect certified the
date of practical completion for the works in two certificates: one for the works
comprising the house and attached outdoor areas as 31 July 2014 and the second
for the works comprising the church hall and attached garage as 10 October 2014.7
The validity of the Architect’s certification of two dates of practical completion of
the works is considered in Part D below.
Procedural History
17 This proceeding has had a long and complex history. It was commenced on
10 April 2015 by the Builder filing a summons and statement of claim8 seeking
relief against the Owner for non-payment of its final two tax invoices totalling
$158,359.79 for the works under the Building Contract. Both invoices were
rendered following the Architect issuing Progress Payment Certificates Nos 11
(PPC 11)9 and 12 (PPC 12).10 At the time, building and defect correction works
were ongoing.
18 On 26 May 2015, the Owner filed her first defence alleging PPCs 11 and 12
were invalid and brought a cross action against the Builder for defects in the
building works, claiming a defensive set off against any countervailing liability to
the Builder and damages for breach of contract and, in the alternative,
compensation under s 37 of the Building Work Contractors Act 1995 (the Building
Work Contractors Act).11 The defective works were (improperly) identified by
way of reference to a series of defects lists and a letter from the Architect.12
19 Also on 26 May 2015, the Owner instituted third party proceedings13 against
the Architect claiming damages for breach of its retainer and common law duty of
care for issuing PPCs 11 and 12 in circumstances where a notice of practical
6 Exhibits R1 and R3.4. The footing plans comprising part of the Contract Drawings were prepared by
the engineers, Coombe Pearson Reynolds.
7 Exhibit R3.195.
8 FDN 2.
9 Exhibit R3.152.1315.
10 Exhibit R3.185.1411.
11 FDN 19. The Owner’s preliminary challenge to the jurisdiction of this Court to determine the Builder’s
claims for payment of domestic building works was determined in favour of the Builder. See Cirocco
Constructions Pty Ltd v Clarke [2015] SADC 98 (Cirocco v Clarke (No 1)) per Tilmouth DCJ.
12 Ibid [19].
13 FDN 20.
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completion had not been issued, the Builder was allegedly not entitled to contract
price adjustments for variations and provisional sums and the Architect had failed
to certify amounts payable by the Builder to the Owner for allegedly defective
building works. The defects complained of were not identified, with particulars to
be provided after disclosure and inspection.14 In the first Scott Schedule filed on
23 December 2015, the Owner complained of 220 defects despite the Architect’s
latest instruction’s to the Builder instructing the correction of only 14 of 32
identified items of incomplete or defective works.
20 The Builder joined the Stone Supplier as a third party to the Owner’s cross
action15 on 19 July 2018 seeking contribution and/or an indemnity for any liability
to the Owner for defects in the sandstone supplied by the Stone Supplier.
21 Two matters in the procedural history are relevant to the issues to be
determined at trial.
22 First, on 9 July 2015, Tilmouth DCJ gave judgment in favour of the Builder
against the Owner in the sum of $99,484.79 plus interest of $6,185.19 on the
Builder’s application for summary judgment for PPC 12.16 His Honour found
PPC 12 was validly issued (whereas he considered it was reasonably arguable that
PPC 11 was not)17 and there was no reasonable basis for defending the claim for
PPC 12. This followed because his Honour found the Building Work Contractors
Act does not displace common law remedies available for breaches of domestic
building work contracts including the Building Contract here:18
On its proper construction that contract is to be read as providing for the enforcement of
the building contractor’s capacity to enforce certified payments, undiminished by any right
of set-off, irrespective of the extant contest over remedial work, or the merits thereof. No
infringement of s 42 of the Building Work Contractors Act occurs in this situation.
23 The remaining question as to the validity of PPC 11 is addressed in Part D
below. The underlying disputes as to the Builder’s entitlement of an adjustment
of the contract price for approved variations, provisional and prime cost sums (PC
Sums) and other miscellaneous claims are also addressed in Part D, as is the
Owner’s minor delay claim.
24 The second relevant matter in the procedural history concerns the Owner’s
evolving case on the stone defects. When the defect claim for the new stone
supplied and laid at the Owner’s residence was introduced on 23 December 2015
14 Ibid [24c].
15 FDN 64.
16 [2015] SADC 107 (Cirocco v Clarke (No 2)).
17 Because PPC 11 included a claim for the return of cash security as distinct from a claim for payment of
for the works. Ibid [41]-[42].
18 Ibid at [49].
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[2024] SADC 150
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in the first Scott Schedule to the Owner’s amended cross action, it was confined to
a complaint about the colour of the sandstone:19
Sandstone to all external walls comprised discoloured stones and stones outside of the
specified and agreed colour range.
25 The Owner amended her cross action against the Builder and third party
claim against the Architect on stone defects in March and November 2017,
December 2018 and July 2020. The July 2020 amendments introduced significant
new complaints about the quality of the workmanship in the laid stonework.
26 On 18 July 2022, this Court dismissed the Owner’s further application to
amend her pleadings concerning the colour of the sandstone part way through the
first part of the trial.20 The Owner’s subsequent application for leave to appeal the
Court’s ruling was dismissed by his Honour Justice Stanley on 3 November 2022,21
shortly before the second part of the trial commenced. This procedural history is
of importance because the Owner seeks in final submissions to advance a case on
the colour of the sandstone that departs from her trial pleadings. The Builder and
Architect insist she be confined to her pleaded case.
The Relevant Pleadings
27 The trial pleadings are identified in Annexure A of these reasons.22 Where
necessary, they are considered in detail in the context of the issues to be
determined.
The Arbitration
28 An arbitration (the Arbitration) was ordered by this Court on 12 October
202023 whereby 183 items of defective and/or incomplete works identified in the
then ‘Compiled Scott Schedule’ were referred for determination by an arbitrator
appointed by the Court, Ms Lolita Mohyla (the Arbitrator). The Arbitration trial
comprised a two-day site visit and 27 days of hearing between 28 September and
21 December 2021 (excluding directions hearings).
29 The arbitral award (the Award) was delivered on 28 June 2022. The date for
delivery of the Award was extended multiple times to permit adequate time for the
significant volume of referred items and issues to be determined.
The Trial
30 The trial was heard in two parts following the handing down of the Award.
It was initially listed to start on 1 November 2021.
19 Scott Schedule Item 15.1 to Second Defence and Cross Action (FDN 33).
20 Ex tempore ruling 18 July 2022.
21 [2022] SASC 126.
22 They include the pleadings the July trial commenced upon and those filed subsequently.
23 FDN 114.
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31 Due to the prolongation of the Arbitration hearings and the continuing delay
in delivery of the Award, the initial trial date was vacated and relisted on 15 March
2022 and then relisted again to commence on 4 July 2022. The Owner’s
application to amend her plea of loss and damages on stone defects was determined
on 4 July 2022 and the start of the trial deferred again until 6 July 2022.
32 To preserve the July trial dates, the parties agreed to confine the issues to be
determined to liability on the stone defects and for the balance of the issues24
(including remedy and the measure of damages for any liability found on the stone
defects) to be determined in a second part of the trial to be held in November 2022.
The Views
33 To enable the Court to better understand the evidence given by the witnesses,
views were undertaken at the start of the July trial of the Owner’s residence, the
external walls of a residence in Kermode Street, North Adelaide built of
Tasmanian sandstone (Kermode Street), a residence in Dutton Terrace, another
residence in Medindie, the exterior of the Adelaide Magistrates Court and the
Stone Supplier’s depot at Gillman.
34 What was said and observed is not evidence in the trial.25
The Documentary Evidence
35 The documentary evidence is extensive. During the course of the trial, the
parties relied on documents in a common tender book as well as documents
tendered separately and marked accordingly. At the beginning of the November
trial, a consolidated list of documents to be relied on referable to the Owner’s List
of Issues26 was agreed upon the parties and marked MFI R53.27 It referred to both
trial exhibits and Arbitration exhibits, helpfully including some references to the
Award and Arbitration transcript. The referenced documents were admitted into
evidence on the basis that any documents in the common tender book not expressly
admitted and referenced in the transcript would be received de bene esse and
identified by the document and page in the common tender book. Where a
document in the common tender book was not formally received in evidence but
referred to in oral evidence or relied upon without express objection, it is
appropriate the Court have regard to it, attributing whatever weight is appropriate.
The Witnesses Generally
36 Generally, no serious criticism should be made of the poor recollection of
witnesses as to the sequence of events and matters of detail that occurred between
seven and ten years before they gave evidence. Generally, the witnesses were frank
about their lack of recall or uncertainty about matters.
24 MFI A64.
25 South Australian Railways Commissioner v Thomas (1951) 84 CLR 84 at 89.
26 FDN 240.
27 Documents in red were inserted at the Architect’s request.
-- 18 of 362 --
[2024] SADC 150
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37 There are some matters of importance where the evidence of the witnesses
diverges or aspects of their evidence is unsatisfactory warranting specific comment
despite faded memories. Generally, such comment is made in the context of the
relevant topic having regard to the issues in contention. No comment is made
where it is not necessary to resolve differences between witnesses’ recollections
and does not ultimately matter.
38 By agreement between counsel, the opposing parties divided the topics of
cross-examination between them. No criticism should be made about which
opponent cross-examined (or did not) on any topic.
The Owner’s Witnesses
Mrs Clarke
39 Mrs Clarke is the Owner and the key witness in her case. She gave evidence
in trial over the course of seven days. The Owner was thoroughly cross-examined
by the Builder and Architect. Cross-examination by the Stone Supplier was
limited.
40 The Owner’s closing submissions blandly describe her as a reliable witness
who was open to the possibility that some events did not occur as she remembered
and about having made errors, specifically with regard to the approval of the colour
of the stone, a central factual dispute in the proceeding. The attempt to dismiss
what she said or did not say during the ongoing defect correction works as having
no bearing on whether the Builder or Architect were in breach of their duties is not
compelling.
41 The other parties submitted the Owner’s oral evidence should not be accepted
and given no weight where contentious unless supported by other reliable
evidence. The Builder criticised her for reconstruction, exaggeration and not
telling the truth, highlighting her unsatisfactory evidence in cross-examination on
the pleadings and her participation in the key meetings concerning the selection
and approval of Tasmanian sandstone. The Architect prepared a schedule of the
Owner’s evidence relevant to her credit that identified significant contradictions,
inconsistencies and other difficulties with her oral evidence. 28 The Stone Supplier
adopts the Builder’s position as to the Owner’s poor credit and general
unreliability.
42 The other parties’ general criticisms of the Owner as a witness should be
accepted, despite the Owner’s contention that the Architect’s schedule is not an
objective consolidated compendium of evidence references and omits important
matters.29
28 Schedule 2 to FDN 257.
29 FDN 279.
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43 The Owner is a director and/or secretary of seven companies, has an
extensive property portfolio (of both commercial and residential properties) and
considerable experience in managing and overseeing commercial building and
maintenance works. She has held company positions for more than 30 years and
held property for almost as long. The Owner is capable, astute and a diligent record
keeper. She has a keen eye for detail and, as already stated, was precise in
specifying her requirements, fastidious in her oversight of the building works and
overly demanding as regards her requirements.
44 However, in giving evidence the Owner presented with a poor recollection
of events adverse to her case, and all too often in cross-examination was shown to
be unreliable and evasive. She repeatedly failed to answer questions directly. At
other times she had a remarkably precise memory of matters that favoured her case
that was unpersuasive in the context of her own and other evidence. At times her
noticeable and repeated delay in answering difficult questions or her asking the
question to be repeated in cross-examination was particularly unimpressive.
45 It should not be accepted that the Owner was merely being careful in giving
evidence of dated events.
46 At times the Owner embellished her answer to questions in a patent attempt
to diminish the significance of a matter adverse to her interests or to show her
opponents in a poor light. An early example of this was her pointed evidence about
the visit to Kermode Street and the meeting being cut short by the householder
returning and providing an excuse for why she did not discuss with Mr Williams
the colour and overall appearance of the stonework. The Owner’s suggestion that
Mr Williams was rude and abandoned them should be rejected as an untrue. The
Owner’s attempt to deflect attention from a difficult issue for her case on joint size
was transparent and unpersuasive.
47 Another example was the Owner’s repeated insistence she was warned not to
attend the building site uninvited, and therefore only attended site infrequently and
only drove past to see the progress from the street once or twice after construction
began. The suggestion was she did not complain about the stonework because she
had limited opportunity to see it. Her evidence in this regard was unsatisfactory
bearing in mind she eventually conceded she knew the colour of the stone and
quality of the stonework because of course she saw the works as they progressed
to completion.
48 On the topic of the discussions about the colour of Tasmanian sandstone and
the selection ultimately agreed, the Owner’s evidence was particularly
unsatisfactory in key respects.
49 First, the Owner said Mr Calabrese did not discuss his light, medium and
dark ranges or show her stones indicating the full spectrum of his lighter range at
the meeting on 30 April 2013 in the Stone Supplier’s Gillman yard (the Gillman
Meeting). That is despite her accepting that Mr Cirocco opened a pallet in front
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[2024] SADC 150
17
of them containing other generally light coloured stones. Her evidence was
inconsistent with the accounts of Mr Calabrese, Mr Williams and Ms Crowden and
common sense. Nonetheless the Owner said she discussed and acquiesced in the
selection of colours ‘1’ to ‘2’ without knowing what colours ‘2’ to ‘8’ were
because they were not defined and not shown to her. Her evidence is implausible.
50 Secondly, there was the Owner’s repeated inability to explain the
inconsistency between her initial evidence about the outcome of Gillman Meeting
as regards colour selection (that is colours ‘1’ to ‘2’) and her repeated reference in
extensive dispute correspondence, her pleadings and answers to the Notice to
Admit to different colour ranges, ‘1’ to ‘3’ and ‘2’ to ‘3’ and ‘2’.
51 Next, there was the Owner’s implausible evidence that after June 2013 she
complained about the colour of the sandstone repeatedly to Mr Williams as works
progressed and were finalised, and her complaints were dismissed with disdain.
But no complaints were made about colour variation in any of her extensive defects
lists or her correspondence about defects until February 2015. This is significant
because her first complaint was made six months after the Clarkes had moved into
the house and more than two months after practical completion had (purportedly)
been certified without objection. By this time the certified defects liability period
had expired for the first portion of the works and was due to expire for the church
hall and garage works on 10 April 2015.
52 The Owner’s lack of complaint about stone colour is all the
more implausible against the background of the Architect’s correspondence about
her continuing failure to pay the certified claims. The Architect identified some
17 pieces of correspondence between them in this period, during which the Owner
did not ever provide an explanation for her non-payment. The Owner’s
explanation in evidence that she did not respond because she “felt so emotionally
debilitated” and “didn’t feel [she] had the fortitude to cope with any further
abuse”30 should be rejected as hyperbole.
53 Another topic on which the Owner’s evidence was unsatisfactory and
implausible concerns cleaning the stone to bleach or whiten it. She denied
anything was said about cleaning at the Gillman Meeting, and first said Mr
Williams promised at the 18 June Meeting the stonework would be white when
cleaned. She then attributed this statement to Mr Calabrese. Her evidence was
inconsistent with the evidence of the other witnesses (save her husband) and her
later correspondence between May and October 2014 that makes clear her
understanding was that cleaning would remove brown spots or the grey/black
staining known as ‘quarry sap’.
54 The Owner was evasive in cross-examination regarding her May 2015
instructions to Mr Allen of Heritage Stone Restorations (HSR). The documentary
evidence shows that the Owner initially dealt with Mr Allen with regard to acid
30 T1957.6-.34.
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[2024] SADC 150
18
over spray remediation works in late 2014. Mr Allen prepared HSR’s 11 May
2015 quotation for the partial replacement of discoloured sandstone for the Owner
to agitate for the replacement of 71 darkened stones she did not like. Later in
evidence the Owner tried to distance herself from this quotation, no doubt because
her claims about stone defects had expanded considerably and there was ultimately
a significant difference between its quantum and the costings for the same defects
in Mr Allen’s supplementary costings report (the Allen Report) received in the
Arbitration.31
55 Overall, the Owner was not an objective or reliable witness of fact. Her
evidence was coloured, consciously or unconsciously, by her desire to advance her
case. Her grievances about the stone affected by ‘quarry sap’, the unsuccessful
acid cleaning process and frustrations with the general defect correction works
have infected the accuracy and reliability of her historical narrative throughout.
56 In this regard, it is necessary to deal at some length with the strident criticisms
made of the Owner’s conduct concerning the claim made on the Stone Supplier’s
liability insurer for acid overspray damage given the attention this topic received
in both the Arbitration and the trials. A detailed chronology of the relevant events
is set out in the Award.32
57 The Owner’s attempts to paint her conduct as reasonable are unsatisfactory
having regard to the circumstances in which she retained the insurance proceeds
paid directly to her.
58 First, substantial glass cleaning and painting works were carried out in
November and December 2014 by the Builder’s subcontractors. The Owner well
knew the acid overspray remediation works were being done with urgency to
address her strong complaints about the damage caused by the Stone Supplier
despite the damage being superficial and the Stone Supplier’s insurer positively
responding to a claim on the Stone Supplier’s insurance policy made with the
Architect’s assistance on her behalf.
59 The acid overspray remediation works were carried out on the Architect’s
instruction to the Builder without the prior authority of the Stone Supplier’s
insurer. In cross-examination in the Arbitration, evidence emerged to the effect
that the Owner took financial advantage of the informality with which the
Architect, Builder and Stone Supplier dealt with the remediation works and
pending insurance claim. Her conduct in all the circumstances calls into question
her integrity by her apparent double dealings.
60 As mentioned, it is plain the Architect was promoting the Owner’s interests
by facilitating the expedition of a claim on the Stone Supplier’s insurance policy
for acid damaged items. An initial offer was received by the Architect but was not
31 Arbitration Exhibit R182.
32 Award [2:5]-[2:470].
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[2024] SADC 150
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acted on. Then, in April 2015, as a result of the Owner having initiated private
negotiations with Crawford (the loss adjuster for the Stone Supplier’s insurer), the
Owner was paid a substantial interim settlement sum of $25,121.20 (including
GST). The settlement was made on the basis that she would be responsible for
directly paying the contractors already retained to remediate the damage without
the insurer’s prior authority and without any admission of liability by the insurer
or the Stone Supplier.
61 The two largest components of the settlement sum for painting33 and glass
cleaning34 were quantified by reference to invoices received from the Builder’s
subcontractors for works done. Glass cleaning works had been fully carried out.
The painting works were (on the Architect’s assessment) 95% complete when the
Owner’s requested a break from trades over Christmas. The outstanding works had
been left because they would be affected by the remediation of the acid damaged
paving (that was still subject to assessment by the insurer), the Owner then
reporting to Crawford, that despite the painting being incomplete, the painter had
done an excellent job.
62 The Owner did not pay either the glass cleaner or the painter, contrary to the
terms of her interim settlement with the insurer.
63 Her explanations as to why she did not in oral evidence in the Arbitration and
at trial and in closing submissions are unsatisfactory. The Owner gave inconsistent
accounts in examination-in-chief and in cross-examination in the Arbitration and
at trial as to who she wrote to get the contractor’s invoice reissued to her. Her
explanation she did not pay the contractor’s invoice because she thought that
having it reissued was “the right thing to do”35 was unpersuasive given her
extensive commercial experience as a property owner and company director. It
was unnecessary because she had reached an interim settlement with the insurer
based on the very invoice she had.
64 It is, however, the position the Owner took with regard to the painter’s claim
for payment that warrants the most serious criticism. Her unwillingness to pay
anything for this work until she received an appropriate invoice for less painting
than had been done was not only unreasonable but inexplicable in circumstances
where she was happy with the work, could have arranged the further works to be
done or short paid the invoice. And she had received the entirety of the fund to pay
the invoice on the basis of an invoice first issued to the Stone Supplier, then
reissued to the Stone Supplier’s insurer.
65 In any event, at the Owner’s request, another invoice was reissued to her at
50% of the original value claimed but it was still not to her satisfaction. Her and
Dr Clarke’s correspondence with the then deceased painter’s wife about non-
33 $13,200.00 including GST.
34 $8,250.00 including GST.
35 Arbitration P-494 [30].
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payment is a discredit to them both. They obfuscated and gave a number of
unmeritorious reasons as to why payment could not be made without an
appropriate tax invoice. Their position was extraordinary given the evidence that
on other occasions they were willing to deal directly and pay cash to subcontractors
without any paperwork to apparently secure the commercial advantage of a lesser
price.
66 The Owner’s submissions in closing that her conduct was reasonable and the
criticisms made of her conduct are gratuitous and unfounded must be rejected.
When the full circumstances are known, it is disingenuous to suggest that it was
reasonable for the Owner not to pay these contractors for any of the reasons
advanced, whether that reason was because the Owner had identified a charge for
incomplete work on the painter’s invoices, did not know the trading terms on
which they were engaged, or could not pay without the correct invoice or until all
the work was done.
67 For these reasons, the Owner’s evidence on contentious topics is to be
scrutinised most carefully and generally, not preferred where it conflicts with the
evidence of the other parties’ witnesses.
68 Further specifics of the Owner’s evidence are discussed below in the context
of the relevant issues.
Dr Clarke
69 Dr Ian Temple Clarke was presented as having less involvement in the
management and day-to-day administration of their new residence than his wife.
Generally, the documentary evidence supports the position that he left his wife, the
Owner, to communicate with the Architect. He said he did not see the Architect’s
instructions or other correspondence. He also said he was not involved in
compiling the defects lists or in dealing with or responding to proposed solutions
for the stone defects and left all this to his wife.36 He did however make most of
the payments by cheque37 and there is incidental correspondence showing his close
involvement in design decisions, such as the internal stair handrail.
70 Nonetheless, Dr Clarke did attend most site meetings, either with his wife or
on occasion in her stead. Indeed, the dispute over the finial on the church hall turns
on his alleged lack of authority to communicate the Owner’s instructions to the
Architect. Most critically, it is uncontroversial Dr Clarke attended the meetings in
the Architect’s boardroom and at the Stone Supplier’s Gillman yard to select and
approve the stone. He also attended the meeting held on-site on 18 June 2013
(18 June Meeting) and was therefore a witness to these key events concerning the
stone defects.
36 T749.11-750.29.
37 T154.5-.12.
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71 Unsurprisingly, given the extended passage of time between his evidence and
the events in question, Dr Clarke’s recollection of pertinent detail was at times
poor, and his recollections sometimes muddled. An example was his evidence in
cross-examination about when he first met Associate Professor Danvers38 and his
inability to explain why he had written entries in his wife’s diary in 2013 and 2014
referring to Associate Professor Danvers.39 Generally, Dr Clarke is not to be
criticised for the impact of time on the quality of his evidence and his inability to
recall matters.
72 There were, however, some aspects of his evidence that were unsatisfactory
for other reasons. It was apparent early on that Dr Clarke’s evidence tended to
reflect the Owner’s position in the litigation on key issues rather than his
independent recollection of what he saw, heard or did. This was particularly
evident when immediately after relaying a definitive detail about what someone
said or did, he then could not remember anything more such as what anyone else
said or did in response. It was not plausible that he had no memory of any of these
things but could recall the one conclusionary matter important to the Owner’s case.
73 Another example was his evidence in cross-examination by the Architect’s
counsel about wanting light colours and sandstone being a natural product.
Dr Clarke gave evidence to the effect he is not a geologist and expects that the
light-coloured stone “one wants and requires and pays for”40 should come without
imperfections and should “not vary in any way, shape or form”. His denials in
this context that neither Mr Calabrese nor the stone mason told him that sandstone
is a natural product and carries with it variations were just not persuasive given the
evidence of his involvement in the selection and approval of Tasmanian sandstone
and its obvious characteristics.41
74 Another unsatisfactory feature of Dr Clarke’s evidence was his tendency to
recount his opinion of events and embellish them such as his evidence of the
18 June Meeting. He said in examination-in-chief that Mr Williams and
Mr Cirocco assured him and the Owner that an application of acid by Mr Calabrese
would result in “a wonderful white house”.42 In cross-examination by the
Builder’s counsel, Dr Clarke affirmed three times that these were the words spoken
but then when pressed changed his position and said they were Mr Calabrese’s
words.43
75 Having observed Mr Calabrese give evidence, this in not language he would
ever use. Nor should it be accepted that anyone said these words at this meeting.
These words are Dr Clarke’s and reflect his opinion at best based on a
38 T747.32-748.30 particularly 748.10-.15.
39 FDN 257 [2.10(a)].
40 T753.3-.9.
41 T753.10-754.2.
42 T729.4-.8 and T729.21-.23.
43 T735.35-736.20; T737.7-.9.
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misunderstanding about what Mr Calabrese said about dealing with ‘quarry sap’
or are an unreliable reconstruction.
76 It is necessary to be cautious about Dr Clarke’s evidence on important issues
where it supports the Owner’s version but conflicts with the evidence of other more
reliable witnesses whose evidence generally should therefore be preferred.
Associate Professor Danvers
77 The Owner relies on two expert reports prepared by Associate Professor
Danvers to prove the stone defects (among others) and consequent breaches of
contract and duties alleged against the Builder and the Architect.
78 The first report is dated 3 September 2019 (First Danvers Report)44 and the
second, titled “Final Report on the Recording of Defects in Stone Walls” is dated
25 May 2022 (Second Danvers Report).45
79 Associate Professor Danvers also provided the information compiled in the
Schedule of Defective Stone prepared by the Owner’s solicitor, Ms White, that
ultimately comprises Annexure B to the Owner’s primary pleadings (Owner’s
Annexure B).46 It is identical to Attachment 1 to the Second Danvers Report.
80 The First Danvers Report was prepared following two inspections of the
stonework in June and August 2019 and expresses opinions about deficiencies in
the stonework generally and in response to specific questions he was instructed to
answer.
81 The Second Danvers Report was prepared following further inspections in
September, October and November 2019 involving a stone by stone assessment of
alleged defects. This assessment involved two elements. First, a visual comparison
to a sample stone (‘SC 135’) 47 that was instructed to be the required stone colour
and secondly, as to whether the stone was chipped or damaged. Ms White
prepared diagrams of each wall identifying the individual stones and assisted
Associate Professor Danvers’ inspections by confirming and recording his
identification of defects for individual stone faces on the diagrams as he called
them out for her to record. Ms White and her staff later finalised the diagrams into
the wall by wall schedule comprising the Owner’s Annexure B.
82 Associate Professor Danvers Reports are therefore fundamental to proof of
the Owner’s case that the built stonework does not conform with the varied
contractual requirements for new stonework.
83 Associate Professor Danvers has some 60 years’ experience as an architect,
specialising in heritage restoration and adaptation, urban design and conservation.
44 MFI R3.410.
45 Exhibit R3.411. A draft of this report was prepared in May 2021.
46 See [1389] below.
47 See [844] and following below.
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His qualifications, experience, publications and awards in these fields as set out in
his profile are extensive and impressive.48 His specialist expertise as an architect
is predominantly in the restoration of heritage buildings and public projects and
his work in residential design has involved major alterations and new additions to
heritage listed houses. He has not supervised new domestic home constructions
for some 40 years, focussing on other priorities in his illustrious career.
84 Associate Professor Danvers’ expertise was challenged by the Builder. The
Architect went further and criticised his opinions as seriously doubtful, his
independence and impartiality as questionable and submits he has applied “an
unrealistic and unachievable metric”49 as the standard for assessing the laid
stonework as defective. The Stone Supplier adopts the Builder’s position.
85 Serious and extensive challenges were made to the admissibility of both of
Associate Professor Danvers reports on multiple grounds. Most of the objections
were properly taken.
86 Since the constituent facts need not have been fully proved at the time
Associate Professor Danvers reports were tendered, they were received
provisionally and conditionally.
The First Danvers Report
87 In face of the opposing parties’ objections to all and, in the alternative, certain
parts of the First Danvers Report, the Owner withdrew a number of contentious
passages. The parts that were withdrawn and others the Owner pressed but the
Court ruled as inadmissible were ‘red-lined’ out. Without objection, leave was
given for the Owner to examine on limited topics.50
88 What remained was either in the nature of Associate Professor Danvers’
evidence of factual matters (that is, his instructions, his experience with sandstone,
his preliminary investigations, site inspections and his observations) or his
opinions about defects he observed in the stonework. These parts of the First
Danvers Report should be accepted as admissible evidence at trial and are to be
afforded whatever weight is appropriate in all the circumstances.51
89 To address the properly made objection that Associate Professor Danvers had
failed to identify his assumptions of primary fact, the Owner separately tendered
his written instructions in the form of a letter from the Owner’s solicitors.52 This
letter set out the assumptions he was instructed to make. Whilst it nullifies the
objection about the identification of his assumptions, it ultimately gives rise to
48 Attachment 2 to Exhibit R3.411.
49 Architect’s Stone Closing [2.12].
50 T873-888.
51 Despite receipt of these parts of the First Danvers Report as evidence in the trial, his report is still
referred to as MFI 410 for convenience.
52 Exhibit R25.
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serious difficulties with the basis of his opinions given the disconformity between
his instructed assumptions and what are the proven contractual requirements for
Tasmanian sandstone.
90 The balance of the First Danvers Report was the subject of the following
further objections.
91 The first was that the Owner had failed to demonstrate that the assessment of
stone colour is a recognised field of specialised knowledge. The second was that
it had not been demonstrated that Associate Professor Danvers has relevant
experience or expertise to qualify as an expert in assessing stone colour even if this
were a recognised field of specialised knowledge. The third was that the
assessment of whether the laid stone met the requirements of the varied Building
Contract is the ultimate issue for the trial judge, not for an expert. The final
objection was that his opinions are largely irrelevant because he was instructed to
assess the laid stonework on criteria unconnected to the Owner’s pleaded case or
the proven contractual requirements for Tasmanian sandstone.
92 The First Danvers Report was marked for identification and the trial
proceeded on the basis that the Court would rule on the admissibility of the balance
of this report when the evidence had concluded and as part of the reasons for
judgment.
The Second Danvers Report
93 The Second Danvers Report was received as an exhibit subject to the same
overriding objections made by the opposing parties to its admissibility as were
made for the balance of the First Danvers Report.
94 The parties’ submissions as to the admissibility of the Danvers Report were
extensive.53
Ruling - Field of Expertise
95 Whether there is a recognised field of specialised expertise is a question of
fact that depends on the precise question on which expert opinion is sought and the
relevant evidence.
96 Confining the inquiry to the assessment of the colour of sandstone, as the
Builder seeks to do, is too blunt a question.
97 As a general proposition, it should be accepted that a sufficient degree of
specialised knowledge is required to express opinions about the built stonework
and aspects of the specification to render expert evidence admissible. Here
53 The Owner’s written submissions are made in Appendix B to the Owner’s Stone Closing. The Builder’s
submissions are found in section 50 of its Stone Closing. The Architect took a different approach and
challenged the weight and relevance of Associate Professor Danvers’ evidence.
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relevant matters include the origin, nature and use of specific stone as a building
material, what constitutes ashlar stonework, jointing and pointing techniques, the
constituent ingredients of different mortar mixes and questions of trade custom and
proper professional standards in supervising the construction of stonework.
Ruling - His Expertise
98 Associate Professor Danvers’ expertise as an experienced architect is not
challenged. The Builder accepts that Associate Professor Danvers chooses colours
as part of his professional practice but says that does not qualify him to compare
stone colours on a building. The Owner contends otherwise and frames the
questions for opinion as to the use of stone in the construction of stone walls and
in the assessment of stone as a building material, including consistency of colour.
99 By reason of his professional qualifications and practice, Associate Professor
Danvers has sufficient expertise and experience to express opinions about built
stonework, considerably more than an ordinary person. It should be accepted that
generally he is qualified to express opinions about the quality of the built
stonework (ie workmanship, chips, surface damage). This of course is an entirely
different question from the reliability of his opinions or the weight that should be
given to any opinions he has expressed in the face of conflicting evidence.
100 As to stone colour, the opinions Associate Professor Danvers has expressed
in the Owner’s Annexure B are in the nature of non-expert opinion evidence as
conveniently described by the learned author of Cross on Evidence.54 They are
observations he has made of the stones he has inspected, albeit informed by his
professional perception, recollection and classification of the matters he had
identified on the basis of the assumptions he was instructed to make.
101 Associate Professor Danvers frankly admits a lack of expertise in the
chemistry of ‘quarry sap’ and its treatment, having not experienced it before or
with which he said he was not “very familiar”.55 His uncertainty as to whether his
observations of pale grey stones are due to ‘quarry sap’ should be noted and
accepted as disqualifying him from expressing any expert opinion on the subject
of ‘quarry sap’.56
Ruling - Assumptions of Primary Fact
102 The assumptions of primary fact upon which Associate Professor Danvers
has expressed his opinions have been adequately identified where relevant.
Ruling - Proof of Assumed Facts
54 JD Heydon, (Lexis Nexis, 12th ed, 2020) [29025].
55 T937.12-.26.
56 See page 2351 of the First Danvers Report [section 7.3(b)(ii)].
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103 The Owner has not proved the basis for almost all of the opinions expressed
by Associate Professor Danvers in his reports about defects in the stonework.
104 Most fundamentally, a reasonably close match to the sample stone ‘SC 135’
is not the varied contractual requirement for stone colour. Therefore, Associate
Professor Danvers’ opinions as to which stones conform and which are defective
as to colour are inadmissible and should not be received.
105 It follows that his opinions about the number and extent of non-conforming
stones as to colour, the stones indicated as defective in Appendices B1 and B2 to
the First Danvers Report and consequential opinions about the quality of the
stonework and what a competent architect should have done in the instructed
circumstances are also inadmissible and should not be received.57
106 The same follows for much of the Associate Professor Danvers’ assessment
of non-conforming stone in the Owner’s Annexure B, which forms the basis of the
Owner’s case on breach for the stone defects. Specifically, the third (Conforms),
the fourth (Colour)58 and final (Defective) columns of the Owner’s Annexure B are
inadmissible and should not be received.
107 Since the basis for Associate Professor Danvers’ opinion that the mortar
colour is too dark is his unproven assumption that it should match a lighter stone
colour, it is also inadmissible.59
108 The Owner has also not proven that fine 5mm joints are a contractual
requirement. The instruction to change joints size to 10mm is on the evidence
properly explained and does not constitute a breach of the Architect’s duties.
Therefore Associate Professor Danvers’ opinion that the size of the 10mm jointing
renders all of the stonework defective is unproven and inadmissible and should not
be received. Nor should his consequential opinions about the quality of the
stonework because it is built with 10mm joints be received.60
109 However, the inadmissibility of much of his assessment of the stonework
does not render his other opinions about the nature of ashlar stonework and its
requirements, or standards of workmanship and materials inadmissible where
relevant and based on his proven expertise, experience or observations.
Accordingly, these parts of the Second Danvers Report are to be accepted as
admissible evidence in the trial.
Ruling - Independence and Impartiality
110 The Architect criticised Associate Professor Danvers’ independence and
impartiality as questionable in circumstances where it was not disclosed until trial
57 See pages 2347, 2348, 2350-2 [section 7.1.b), 7.2, 7.3(b)(i) and (c)] and 2367-2372.
58 And codes CD, CL. CG and SP are not relevant.
59 See pages 2348, 2350, 2351, 2352 and 2353.
60 See pages 2348, 2349 [section 6], 2351 [sections 7.2, 7,3(b)(i) and (c)].
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that Dr Clarke and he were members of the same private club where they met five
or six time a year. Further, the Clarkes could not explain references to his name
and phone number in the Owner’s 2013 and 2014 diaries and his involvement in
advising the Clarkes on another alleged defect earlier, at a time when no stone
defects were identified (which was also not disclosed until trial).
111 The lack of disclosure is unsatisfactory. However, having observed Associate
Professor Danvers give evidence and be thoroughly cross-examined, there is no
good reason to doubt his impartiality and independence on this ground.
112 However, it was difficult not to doubt his impartiality and independence for
other reasons. He sought to impose a quality standard for stonework at the
Owner’s residence that was not met by work which he described as a good example
of fine ashlar stonework, in circumstances where he did not know or ask why the
relevant Architect’s instruction was issued, he was prepared to accept a single
stone as the control for assessing stone colour and apply an unrealistic metric
which he frankly acknowledged would be difficult for the Stone Supplier to fulfil
having viewed the Stone Supplier’s light range of Tasmanian sandstone. And he
made no allowances for inspecting the stonework some six years after it was laid
knowing sandstone darkens with age due to the oxidisation of minerals in exposed
faces.61
Reliability
113 For the following reasons, the Builder’s criticisms of Associate Professor
Danvers’ methodology as insufficiently scientific and unreliable should be
accepted as well made. If Associate Professor Danvers’ assessment of colour had
been relevant, it should be afforded little weight by reason of his methodology.
114 Associate Professor Danvers undertook two assessments of the stonework,
both of which ultimately find their way into his final assessment in the Owner’s
Annexure B.
115 The methodology for his first assessment of overall conformity is described
in detail in the First Danvers Report and again summarily in the Second Danvers
Report as a stone by stone analysis of defects. Associate Professor Danvers said
he adopted a similar methodology for the second assessment as the first, generally
confirming his earlier records of his observations in the form of hand sketches.
116 On his own account, his methodology was “experimental, trial and error”.62
117 On his second site visit Associate Professor Danvers selected a paint colour
swatch to match the sample stone ‘SC 135’ and began using it as the basis of
61 First Danvers Report page 2345.
62 T977.1-.5.
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comparison for conforming and non-conforming stone colour. At some point he
stopped using the swatch and used his memory to assess colour conformance.
118 His visual assessment was performed from the ground, despite some of the
stone being very high off the ground and areas being so difficult to view that he
could not sensibly photograph them. Associate Professor Danvers frankly
acknowledged the following limitations of his assessment:63
… limitations inherent in viewing walls in different lights and from various distance sand
angles.
119 He made hand drawn sketches. In his stone by stone inspections, reference
was made to these earlier records of observations made on his earlier visits in
different light conditions, “starting in overcast conditions”64 and varying sunlight
during the course of the inspection. Associate Professor Danvers reports that the
first day of the second assessment was a “better day”, “with satisfactory light
levels on all walls”.65
120 Despite his view that a portable stone sample was important for assessing
stone colour, Associate Professor Danvers used a paint swatch as the control for
assessing stone colour when he started the exercise. The swatch was not in
evidence, having been ‘lost’. It was of a different material and therefore different
in texture and consistency from stone and reflected light differently. It was also a
single definitive colour. None of these characteristics favour a paint swatch as a
reliable control for assessing stone colour.
121 Associate Professor Danvers then abandoned the paint swatch and used his
memory. Whilst it should be accepted the human eye can detect subtle differences
in shades of colour, it is notoriously difficult to remember colours accurately when
both colours cannot be seen at once.
122 The distance from which Associate Professor Danvers viewed individual
stones from the ground varied. His assessment of distant and difficult to see stones
is questionable, particularly in changing light conditions.
Ms White
123 Ms Kathryn White was the Owner’s solicitor from 2015 until August 2021.
She made an affidavit on 15 July 2022 that was read into evidence66 deposing to
two matters. The first concerns samples of Tasmanian sandstone Mr Calabrese
delivered to her office on 28 August 2015 that were received in evidence
(Exhibit R31) and the second, her participation in recording Associate Professor
Danvers’ assessment of the stonework in October and November 2019. Ms White
63 Second Danvers Report page 2378.
64 First Danvers Report page 2348
65 Second Danvers Report page 2376.
66 Exhibit R30.
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prepared the form of the schedule of defective stone that ultimately became the
Owners Annexure B.
124 Whilst Ms White’s assistance in preparing the Owner’s Annexure B is not
contentious, her evidence about Exhibit R31 is. In evidence, Mr Calabrese
disagreed that the label she had placed on the second lightest stone was the correct
colour category. He identified it as colour ‘2’ to ‘3’, not a ‘3’ to ‘4’ as it was
labelled. Mr Calabrese’s evidence should be preferred for the reasons discussed
below67 and Ms White’s recording of what he supposedly said be treated as
mistaken.
Mr Prider
125 Mr Philip Prider is a highly experienced structural engineer with impressive
credentials as a testifying independent expert in legal proceedings. Mr Prider was
instructed to prepare a report addressing the extent to which the stonework was
loadbearing and required propping if part or all of it was to be replaced.
126 His written report dated 3 June 202268 was received in evidence without
objection. It is unnecessary to address Mr Prider’s report because the Owner has
not proved any entitlement to have a substantial part or the entirety of the
stonework replaced.
Mr Pentelow
127 Mr Sam Pentelow is a director and principal of Stone Ideas Pty Ltd, a
specialist in heritage masonry restoration, established in about 2001. Mr Pentelow
identified HSR as Stone Ideas’ only true competitor in Adelaide.
128 Mr Pentelow was called as a witness for the Owner in the November trial and
his tender estimates dated 18 November 2019 and 1 June 202269 were relied on for
the cost of remediating the stone defects.
129 It is not necessary to consider Mr Pentelow’s evidence further because the
Owner has not proved any entitlement to have a substantial part or the entirety of
the stonework replaced.
Mr Allen
130 Mr William (Will) Allen’s qualifications, experience and expertise in
estimating and costing remedial building work is set out more fully in the Award.70
131 In the Arbitration, the Owner relied on a series of purported ‘expert’ reports
prepared by Mr Allen that opined on remediation costs for the various defect and
incomplete items referred to the Arbitrator for determination, despite his prior
67 See [825]-[843] below.
68 Exhibit R51.
69 Exhibits R49 and R50.
70 Award [1:145]-[1:147].
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dealings with the Owner both directly and through the Architect. Following a
challenge by the Builder and the Architect to his expertise, on the voir dire the
Arbitrator ruled Mr Allen’s reports were inadmissible for non-compliance with the
Court rules for expert reports. The Arbitrator then ruled that she would accept a
supplementary report that was later received in evidence and referred to as the
Allen Report.71
132 The Arbitrator’s general assessment of Mr Allen as a witness was that some
of his evidence was clear and some contradictory. Generally, although not
necessarily, she preferred Mr Allen’s evidence as regards remediation of heritage
items, given his experience in this area as an employee of HSR.72
133 This Court’s assessment of Mr Allen’s evidence is less favourable than the
Arbitrator’s assessment given the circumstances in which his evidence came under
close scrutiny at trial.
134 First, there are some aspects of the Owner’s limited challenges to the Award
turning on the Arbitrator’s rejection of Mr Allen’s evidence as regards specific
referred items. In this context, the Arbitrator’s specific assessment was that there
were anomalies in Mr Allen’s costings that led her to reject their reliability. This
assessment should be accepted as well founded for the reasons discussed below in
Part F.
135 Secondly, Mr Allen gave evidence in the November trial, limited primarily
to the topics of the cost to replace the sandstone cladding and the bluestone pavers
that were damaged by acid overspray (a challenged referred item from the
Arbitration).
136 As for the stone defects, the Owner relies on two estimates for partial and
total replacement prepared by Mr Allen in July73 and November 201774 and submits
his costings are reliable and not seriously challenged. The Owner seeks to bolster
Mr Allen’s reports on sandstone remediation by reference to other cost estimates
and an average ‘broad brush’ estimate per square metre as broadly affirming
Mr Allen’s approach.
137 The Builder and Architect maintain their challenges to Mr Allen’s evidence
as partisan and of little weight given his demonstrated lack of qualifications,
expertise and experience as a quantity surveyor, pointing to material deficiencies
in his cost estimates generally and specifically as regards sandstone.
71 Award [1:151]
72 The Arbitrator’s assessment of Mr Allen as a witness is addressed at Award [1:144]-[1:155] and her
general findings as to the costing expert reports are addressed at Award [1:110]-[1:113].
73 Exhibit R3.253.
74 Exhibit R3.396.
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138 There is merit in their criticisms of Mr Allen’s expertise and experience and
the anomalies in his costings requiring a cautious approach to be taken to his
evidence specifically on these topics and more generally.
139 The first concern is Mr Allen’s prior and continuing involvement and direct
dealings with the Owner in the circumstances described below. The second is his
relative lack of expertise and inexperience in costing remedial works for the
purposes of assessing damages in litigation. The third is that Mr Allen’s costings
for sandstone were high and, as he volunteered in evidence, included an allowance
for the (unspecified) risk of carrying out the works. Finally, the basis of Mr Allen’s
anomalous costing opinions was not disclosed and he kept no working papers.
140 From January 2015, Mr Allen began pricing various remedial works for the
Owner as an employee of HSR. At that stage, Mr Allen had limited experience
working as the sole estimator for HSR (some four years). Before joining HSR,
Mr Allen had no relevant experience in stone masonry, its repair or replacement.
He had no hands-on experience, and worked in an administrative role, albeit with
some site attendances.
141 Mr Allen did not charge the Owner for his quotes while an employee of HSR
and in cross-examination in the Arbitration conceded his quotes were estimates
priced for HSR to win the work. In cross-examination in the November trial,
Mr Allen further acknowledged his estimates were prepared for the Owner to use
in litigation as well as quotes to possibly win the work. He said his estimates
included a material allowance for the uncertainty of carrying out “quite risky”
work, being the removal of the existing stone cladding.75 He defended his estimates
by saying quantity surveyors did not have do the work and carry the risk of their
estimates not being high enough.
142 The first report relied on by the Owner at trial was dated 14 July 201576 and
prepared on instructions from the Owner’s solicitor, Ms White, although Mr Allen
dealt directly with the Owner in its preparation. The opined costs were described
variously as an ‘estimate’ and ‘tender sum’. Mr Allen assumed 20 square metres
(15%) of stone required replacement and priced a 100% replacement at
$100,320.00 including GST. Mr Allen estimated that if more than 20% of the
stonework was replaced, it would be more cost effective to replace 100% of it. In
evidence he said 15% was arrived by him looking at the building as a guide because
he had no report instructing him how much to replace. He said the amount to be
replaced was open to interpretation. On the evidence, it is apparent there was no
principled basis for the figure of 15%.
75 T2101.5-.16.
76 Exhibit R3.253.
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143 Mr Allen estimated in the alternative that if 100% of the stonework was
replaced, the price would be $169,950.00 including GST. He priced replacement
of the garden water feature at an additional $8,360.00 including GST.
144 Mr Allen provided a revised estimate dated 11 October 2017.77 The ‘tender
sum’ as he termed it for 15% replacement was now $106,920.00 including GST.
For 100% replacement the ‘tender sum’ was $195,250.00 including GST.
Replacement of the water feature was priced at $10,230.00 including GST.
145 Mr Allen revised his 11 October 2017 estimate less than a month later on
2 November 2017.78 The only difference was the addition of 12 lintels.
146 In the course of preparing these estimates, despite being instructed as a
testifying expert by the Owner’s solicitor, Mr Allen kept no working papers, took
no photographs of his site visits or verbal instructions from the Owner. In cross-
examination, Mr Allen could not give breakdowns between scaffolding, labour and
materials. Nor could he definitively confirm whether there was any change in the
scope of his instructions between estimates. It was clear he was reconstructing
when he recounted the methodology he would have used and thought he just
updated prices between estimates.
147 When regard is had to Mr Allen first two estimates in evidence and his
costings for the same or similar items of remedial work from 2015 through to the
Allen Report relied on in the Arbitration, it is plain there are serious anomalies not
satisfactorily answered by his oral evidence either in the Arbitration or in the
November trial.
148 First, as to the partial replacement of discoloured sandstone, there is
Mr Allen’s earlier estimate of $30,000.00 excluding GST for 12 m2 ($2,500/m2) in
May 2015 which the Owner does not rely upon. Mr Allen’s estimate for the partial
replacement of sandstone inexplicably escalates in July 2015 to $91,200.00
excluding GST for 20 m2 ($4,560/m2) and by November 2017 to $97,200.00
excluding GST ($4,860/m2). The escalation for partial sandstone replacement is
not satisfactorily explained by a significant increase in price or scale of works. The
escalation is all the more anomalous having regard to the size of the change
between May and July 2015 compared to November 2017 and that there was no
change to the less contentious items of render repairs between 2015 and 2017.
Between July 2015 and October 2017, there is a 7% increase in Mr Allen’s estimate
for replacement of 15% of the stonework and a 15% increase for replacement of
100%.
149 Secondly, as regards the cleaning or replacement of acid damaged pavers, as
the Arbitrator identified, there was a more than sixfold increase in the price of Jos
cleaning between January and May 2015. When Mr Allen gave the Owner his
77 Exhibit R3.395.
78 Exhibit R3.396.
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May 2015 estimate, he advised against sealing the outside pavers. Mr Allen’s
estimates for Jos cleaning 110 m2 made in May 2015 and 2017 remained the same
at $28,000.00 excluding GST (unlike for stone) then escalated in the Allen Report
to $38,120.00 including GST. His later estimates included the sealing he had
advised against being done earlier.
150 Thirdly, the garden feature estimates include ‘scaffolding access.’
Scaffolding is not necessary for a feature that is only four stone courses high.
151 Mr Allen’s lack of independence is concerning. It is shown by both his prior
involvement and direct dealings with the Owner and his approach to preparing
estimates without charge whilst he was an employee of HSR in the expectation
HSR might carry out the work.
152 There is reason for further concern when regard is had to the written
communications between the Owner and Mr Allen in relation to his assistance in
preparing a version of the Scott Schedule and his quotes for rectification of defects.
In January 2017, Mr Allen emailed the Owner asking for a copy of a previous
defect report advising that “our pricing should match this as well as your scope of
works”.79 His email suggests reconstruction rather than the independent critical
thinking required of an expert witness. Later, the Owner not only instructed
Mr Allen as to the nature of certain defects and the scope of remedial works to be
priced but gave written comments on his draft. By his email response it should be
inferred Mr Allen changed his estimates to accommodate her further instructions
as to additional works and costs.80 In December 2017, Mr Allen advised the Owner
that the Architect has sought pricing from HSR as regards AI:22 and AI:22A
(which he emailed her) with the comment “thought you should know”.81
The Builder’s Witnesses
Mr Cirocco
153 Mr Rocco (Rocky) Cirocco in the principal of the Builder company and its
representative of the Builder designated in the Building Contract. As a 16 year
old, Mr Cirocco emigrated to Australia from Italy. English is his second language
and his evidence needs to be understood in the context of his language skills.
154 Mr Cirocco has held his own unrestricted building licence since 1977. His
company, the Builder, has held a category ‘1’ licence since 2000 and
predominantly carried out residential building works, with some commercial
works such as doctors’ surgeries.
155 The expertise and experience of Mr Cirocco in high-end residential building
is considerable.
79 Arbitration Exhibit R182 volume 1, email dated 23 January 2017.
80 Ibid, email chain 5 to 9 March 2017.
81 Ibid, email dated 11 December 2017.
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156 By the first part of the trial, Mr Cirocco had been working on projects with
Mr Williams for some 30 years. Initially, he started with low-end residential jobs
including renovations and then started tendering for bigger and higher-end new
residential jobs. The Builder worked on projects with another well-renowned
architectural firm until he had no capacity to work with two firms.
157 The Builder won a competitive tender for the Owner’s project following an
invitation to tender issued by the Architect.
158 At the time of giving evidence, Mr Cirocco was 76 years old and retired from
full-time work. He was hard of hearing and had serious health issues requiring
heart surgery in May 2016. Mr Cirocco was frank that his memory was not the
same as it was before his surgery and it was difficult for him to remember things
because it was all so long ago. Quite understandably, he had limited recall of some
matters given how dated events were by trial.
159 The Owner submits Mr Cirocco’s evidence should be dealt with cautiously
because of his language and health issues. As already stated, that may be the case
as regards some matters, but Mr Cirocco did recall other matters with certainty and
clarity. In particular, what he recalled of the stone selection at the Gillman Meeting
was largely consistent with the evidence of Mr Williams, Ms Crowden and
Mr Calabrese and should not be discounted.
160 Overall, Mr Cirocco’s evidence should be accepted as honest and reliable
where his evidence directly sheds light on relevant controversies. His evidence to
the effect that if Mr Williams instructed him to do something he would have done
it without question82 and he remained ready, willing and able to attend to any
defects works identified83 should be accepted as genuine. Indeed, the documentary
evidence supports the Builder’s continuing willingness to attend to any necessary
defect correction works and Mr Williams gave evidence to the same effect. There
is nothing exceptional or untoward about Mr Cirocco’s willingness to comply with
Mr William’s instructions, as discussed below.
161 Other important examples are Mr Cirocco’s evidence that two stones near the
front door were replaced,84 some supplied stone was rejected85 and site meetings
were fortnightly until they became weekly at the end.86 Mr Cirocco’s evidence that
he was not involved in the cleanup and sealing of the stonework should be accepted
as true but his subjective view is not determinative of the dispute about whether
the Stone Supplier was the Builder’s subcontractor for the acid cleaning and
sealing works.
82 T1204.20-.24.
83 T1251.37-1252.6.
84 T1223.2-.6.
85 T1221.8; T1223.21-.26; T1224.3-.9.
86 T1134.18-.27.
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Mr Tittoto
162 Mr Dennis Tittoto is a bricklayer and stone mason with some 45 years’
experience at the time of giving evidence and 30 years of dealing with Mr Cirocco.
He and his four employees did the brickwork for the cellar and the bottom storey
of the house and the stonework for the bottom storey. They did not finish the brick
and masonry works or do the columns at the back, the garage or the top storey.
163 Mr Tittoto’s evidence was clear and direct. He was also frank about what he
could and could not recall from a job he did nine years before giving evidence.
His evidence about his instructions and the progression and quality of the works
was credible and consistent with other reliable evidence.
164 His recollection of the 18 June Meeting was largely consistent with that of
Mr Cirocco, Mr Williams, Ms Crowden and Mr Calabrese but conflicted in
material respects with that of the Owner and Dr Clarke. In this regard, Mr Tittoto’s
evidence about his conversation with Dr Clarke about the variation in stone as a
natural product and what Mr Calabrese said to them as a group about acid washing
removing quarry sap but not the stone’s natural colour should be accepted as
reliable. His account should be preferred to the Owner’s and Dr Clarke’s where
they differ.
165 Mr Tittoto also confirmed he removed and replaced two stones by the front
door as a result of the Owner’s complaint about them at this meeting.87 He gave
evidence about the characteristics of ashlar stonework and his experience that
10mm was the usual joint width for ashlar stonework depending on the
application.88 His evidence on these topics should be accepted and carries
significant weight given his considerable experience as a stone mason, that he had
worked with Tasmanian sandstone four of five times over the preceding 10 years
and was a relatively neutral witness who showed no partisanship. Indeed, no party
criticised Mr Tittoto’s evidence.
The Architect’s Witnesses
Mr Williams
166 From 2012 until he retired in December 2015, Mr Robert Williams was a
director and one of the principals of the Architect. He graduated from university
in 1975, practised overseas initially and started his own practice in 1982. By the
time he retired the Architect employed 16 staff. Mr Williams’s experience as an
architect in high-end residential work was significant and his design work highly
reputed. He was, for example, the design architect for the Gateway to Adelaide
fountain at the Carmelite.
167 Unsurprisingly, Mr Williams, like other witnesses, had some difficulties
recalling the detail of events from long ago, and he said so. That said, Mr Williams
87 T1263.26-1264.5.
88 T1269.8-.35.
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did have a clear recollection of certain events. His account of the events he recalled
was generally consistent with that of other reliable witnesses or the
contemporaneous documentary evidence.
168 Notably, where Mr Williams recalled events with clarity, they concerned
issues that were pertinent to his role as a principal of the Architect intent on
fulfilling the Owner’s requirements for a custom-designed residence. His evidence
of these events was generally both plausible and persuasive.
169 A key example was Mr Williams’ evidence that the decision to change the
specified pattern and jointing was made as part of the decision to replicate the
stonework viewed at Kermode Street. He was thoroughly cross-examined on why
he issued Architect’s Instruction AI:07 (AI:07) and changed the joint size. When
it was suggested to him that his firm had covered up the Builder’s mistake, his
denial and reaction were genuine. His evidence on the topic to the effect that it
was a design decision should be accepted unreservedly in preference to the
Owner’s contrary evidence.
170 Another important example was Mr Williams’ evidence on the topic of the
two June 2013 site meetings. His account of both meetings was plausible and did
not reflect any defensiveness or show any undue preference to the Builder’s
interests. Specifically, Mr Williams’ relatively detailed recollection of the change
in the Owner’s attitude was unrehearsed and a persuasive account of the second
meeting.
171 The various other attacks made on Mr Williams’ credit by the Owner were
not made out.
172 First, the Owner’s suggestion that Mr Williams was overbearing and
overrode or bullied the Owner in dealing with her complaints is without
foundation. Such suggestion is not consistent with Mr Williams’ presentation and
manner in the witness box or reflected in any of his written communications.
Mr Cirocco’s observations of their interaction and Mr Williams’ behaviour at the
tense 18 June Meeting were to the opposite effect. Mr Cirocco’s evidence that
Mr Williams was responsive and sensitive in addressing the Owner’s concerns
should be accepted as reliable.
173 It was of course Mr William’s role to express his view and give advice and
make recommendations on architectural issues. It should be accepted that in
expressing his views about architectural issues, Mr Williams concern was to ensure
that Owner’s expectations were realistic, and she understood the implications of
her decisions. Mr Williams made plain this was particularly the case as regards
the discussion at the Gillman Meeting where Mr Williams suggested they accept
Mr Calabrese’s recommendation and select a range of colours because that would
be more realistic.
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174 Secondly, allegations to the effect that Mr Williams negotiated the price of
the stone, issued AI:07 or corresponded in a way to divert attention from the
Builder’s failures to comply with the Architect’s instructions to assist the Builder
should be rejected. Mr Williams’ rejection of the various propositions put to him
in cross-examination and his explanations of relevant events should be accepted as
truthful and demonstrating a genuine concern to act in the Owner’s best interests.
175 Mr Williams should be accepted as a witness of truth and a reliable witness
where he could recall events. Where his evidence conflicts with that of the Owner
or Dr Clarke, Mr Williams’ evidence should generally be preferred.
Ms Crowden
176 Ms Erin Crowden (neé Welsh) was employed by the Architect and worked
on the Owner’s project as a reasonably fresh university graduate. This was the
most complex and first project she worked on from beginning to end under the
direct supervision of Mr Williams and the other principals, Ms Sophia Leopardi
and Mr David Burton. It was the beginning of her learning the technical skills for
double masonry and two-storey buildings when she was at an impressionable stage
of her career. It is therefore unsurprising that she had better recall of the events
she observed than most other witnesses, although perhaps an imperfect technical
understanding given her inexperience. Ms Crowden became a registered architect
in late 2015.
177 Ms Crowden’s unchallenged evidence was that Mr Williams took the design
lead and arranged and held all the client meetings. Ms Crowden prepared the
architectural drawings with the assistance of a more senior architect and these were
reviewed and amended by Mr Williams. Ms Crowden also prepared the interior
design drawings under the supervision of Ms Leopardi.
178 Ms Crowden was introduced to the Owner and Dr Clarke during the design
phase of the project and sat in on some client meetings. She was not involved in
every meeting and many conversations took place between only Mr Williams and
the clients. However, when the project reached the documentation stage,
Ms Crowden became more involved in client meetings because she was
responsible for documenting the project. She attended site meetings.
179 Ms Crowden was not involved in the payment side of the project although
she assisted in working through the unfinalised schedules of approved variations
and PC Sums in October 2014.
180 When Mr Williams retired in December 2015, Ms Crowden took over
responsibility on-site for wrapping up the project. Her work was then overseen by
Mr Burton. However, Mr Williams still participated from time to time despite his
retirement.
181 Ms Crowden was an impressive witness with a quite detailed memory of
events. She answered counsel’s questions directly and where she recalled events,
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her recollection was consistent when challenged and plausible. Where she could
not recall detail or was challenged as mistaken, Ms Crowden made appropriate
concessions. At other times, she held her ground persuasively.
182 The Owner criticised Ms Crowden’s evidence as prone to conveying a
message or case rather than relaying her memory of the facts and in particular, as
having reconstructed the site meeting about joint size.89 These criticisms should
not be accepted. Her evidence did not present as partisan. There was no message
or mantra in her answers in cross-examination relied on by the Owner as examples
of this, contrary to the Owner’s submissions. Indeed, Ms Crowden’s evidence on
the topic of selection and approval of an alternative sandstone at the Gillman
Meeting should be accepted as reliable and preferred to that of the Owner and
Dr Clarke where their evidence conflicts.
183 There is one controversy where Ms Crowden’s evidence should be
considered as mistaken rather than rejected as reconstruction as the Owner
submits. That is her evidence that the change in joint size resulted from an on-site
discussion about the size of wall ties. That there was such an on-site discussion
should be accepted. However, Mr Williams’ evidence that the change in joint size
was made to reflect the stonework at Kermode Street should be preferred.
Ms Crowden did not attend the visits to the as built houses and likely did not
appreciate the genesis of the change to 10mm joints because she did not participate
in the discussions that led to that design decision.
184 Overall, Ms Crowden’s evidence should be accepted as honest and reliable.
Mr McAllister
185 Mr Keith McAllister is the managing director of HSR, a business formed by
him in 1999. He has some 38 years of experience in the stone industry as a stone
mason, university lecturer in stone masonry in the United Kingdom and manager
of a stone masonry company in the United Kingdom. Mr McAllister worked on
the restoration of the Adelaide Magistrates Court project, a project the subject of
some debate on the topic of stonework quality.
186 Mr McAllister had purchased and worked with Tasmanian sandstone on a
number of projects over the years. He had experience with ‘quarry sap’ affecting
Tasmanian sandstone and cleaning it, with varied success, and even when
successfully cleaned, had found it may return.
187 Mr McAllister was clear and direct in his evidence about his important but
limited role in the dispute.
89 FDN 237 [A17] and [A19].
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188 In September 2015, Mr McAllister’s advice was sought as an independent
expert by the Architect with the Owner’s approval to consider the black staining
(quarry sap) and orange discolouration (oxidisation) of individual stones.
189 Mr McAllister attended a meeting on-site with Mr Williams, Ms Crowden,
the Owner and Dr Clarke on 7 September 2015. Mr McAllister’s instructions were
limited to advising on the discoloured stone and he was not involved in any
discussion about colour variation outside the specified or agreed colour range and
therefore contractual non-compliance. He had a clear recollection of this meeting
and the advice he gave.
190 Mr McAllister prepared the HSR Report90 that summarised his verbal advice
and proposed works to address the black staining and orange discoloration of some
stones. The HSR Report was the basis of the Architect’s recommendation to the
Owner that she accepts Mr McAllister’s expert advice and carry out the proposed
remedial works, and when she withheld her approval, the subject of three formal
Architect’s instructions (AI:21, AI:22 and AI:22A).
191 Mr McAllister’s expertise and experience in stone masonry and sandstone
was not challenged by the Owner: “Clearly, Mr McAllister knows a lot about
sandstone”.91 Objection was taken to him giving expert opinion evidence by the
Owner because he had not been called on as a testifying expert witness and
prepared an expert report in compliance with the Court rules. Nevertheless, his
evidence about the nature and characteristics of the discoloured stone he observed
and the remediation works should be accepted as reliable factual evidence. That
is, non-expert opinion evidence as referred to by the learned author of Cross on
Evidence.92
Mr Penglase
192 Mr Stephen Penglase is a qualified and highly experienced architect. He
graduated in 1975, ran his own professional practice from 1981-1989 and for some
30 years since has been a principal of the architectural firm Swanbury Penglase.
193 Mr Penglase was cross-examined primarily by the Owner and, to a lesser
extent, by the Builder and Stone Supplier. His expertise was not directly
questioned. Instead, the Owner challenged first, the admissibility of his written
reports on extensive grounds and secondly, his views as unreliable and partisan,
submitting the Court should not accept his evidence where it differs from Associate
Professor Danvers. 93
194 For the reasons that follow, the Owner’s submissions as to the reliability and
impartiality of Mr Penglase should be rejected. Save for the limited exceptions
90 Exhibit TPI3.307.
91 Owner’s Closing FDN 237 [A20].
92 Op cit [29020].
93 Appendices B and C to Owner’s Stone Closing. The Owner’s Objections comprise FDN 280.
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identified below, his written reports should be received as admissible evidence and
the Owner’s criticisms should be accepted as relevant to the weight of his evidence
where appropriate.
Mr Penglase’s Reports
195 The Architect relied on three reports authored by Mr Penglase for varying
and limited purposes.
Mr Penglase’s First Report
196 Mr Penglase’s first report dated 10 May 201994 (First Penglase Report)
addresses whether, in the circumstances of his instructions about then current
dispute about the stone defects (among other defects), the Architect acted in a
manner generally accepted by members of the architectural profession in Australia
as competent professional practice. Mr Penglase’s three letters of instruction drew
his attention to the allegations made by the Owner and Architect in the then current
pleadings as to the dispute. The report and his instructions are dated.
197 The substance of his opinions in this report comprises just over a page, is
brief and generally expressed in terms of the appropriateness of the general process
followed by the Architect in administering the Building Contract. Mr Penglase
sets out his general understanding of the problems with the stonework consistent
with his dated written instructions and the pleadings and his opinions are expressed
on that basis. His summary opinion that the problems with the sandstone are for
the Builder to rectify is consistent with his assumption that there are defects.
Mr Penglase was not instructed to assess any defects nor does he purport to do so.
198 The Owner objects to the admissibility of all of the First Penglase Report on
the ground that Mr Penglase does not identify the assumptions relied on for the
opinions expressed and, in the alternative, to specific parts on this and numerous
other grounds.95
199 The Owner makes these objections despite pressing the tender of the First
Danvers Report in which Associate Professor Danvers comments on the First
Penglase Report96 and agrees with Mr Penglase’s opinion that generally a correct
and professional process was followed by the Architect. Their disagreement about
the quality and colour of the stonework arises primarily because of Associate
Professor Danvers’ express instructions as to the contractual specification.
200 The assumptions of primary fact upon which Mr Penglase has expressed his
opinions in the First Penglase Report have been adequately identified overall and
proven. His letters of instruction and the brief he states he read are expressly
94 Exhibit TP1.32.
95 Variously, inadmissible conclusion, ultimate issue, no established foundation, relevance, speculation
and impermissibly vague or ambiguous.
96 Page 2354.
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identified. His opinions as to appropriate process reference the action referred to,
and where not expressly, implicitly. His opinions although generally expressed,
are not impermissibly vague, nor do they address the ultimate issues.
201 Whilst the First Penglase Report is admissible evidence, the controversial
opinions expressed in it are made on the most basic of assumptions on superseded
pleadings. Ultimately, it is of little assistance in resolving any of the contentious
trial issues and must be given little evidentiary weight.
Second Penglase Report
202 Mr Penglase’s second report dated 1 June 202197 (Second Penglase Report)
in part addresses the stone defects and responds generally to the First Danvers
Report. His instructions as the stone defects are in the form as alleged by the
Owner in Item 15.1 of the then amended Scott Schedule, with an added reference
to the then current pleadings. The generality of Mr Penglase’s opinions as to stone
colour suffer from the same imprecision as the Owner’s allegations in the Scott
Schedule that the stonework was discoloured and outside the specified and agreed
colour range. Again, Mr Penglase was not expressly instructed to make any
assumption about the requirements of the Building Contract.
203 The Owner’s admissibility objections are confined to certain passages in the
four-page section addressing the alleged stone defects.
204 In the preliminary overview, objections are taken to Mr Penglase’s opinions
based on his inspection of the stonework and assumptions made from his
instructions.98 This evidence is relevant and admissible. Mr Penglase’s opinions
about the variability of natural stone and his observations do not require any
contractual context to be relevant and are not objectionable as conclusion or for
trespassing on ultimate issues. The basis of this evidence is adequately identified.
The reference to the client’s requirement for evenness of colour etc should be
understood and received as an instructed assumption on which Mr Penglase makes
comment.
205 The passage concerning joint issue is admissible.99 Mr Penglase opinions as
to the desirability of a wider joint sizes are relevant, they are not vague or
impermissible conclusion nor do they trespass on the ultimate issue. These
opinions are self-evident and require no assumptions or further foundation since
Mr Penglase has identified that there has been an apparent departure from the
specification that requires further explanation on his instructions.
206 The objections to the two passages concerning the feasibility of replacing the
entirety of the stonework100 and likely consequential damage are not well made.
97 Exhibit TP1.33.
98 Pages 2717 and 2718. Objections [9], [10], [13] and [14].
99 Objection [11].
100 Objections [12] and [13].
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The opinions expressed are not conclusionary, nor do they trespass on the ultimate
issue. Their foundation is clear from the Owner’s pleadings, her correspondence
and Associate Professor Danvers’ assessment of the extent of the defects. That
Mr Penglase raises (without resolving) the structural engineering implications and
feasibility of such works does not affect admissibility. That said, it is not
ultimately necessary to consider this issue because the Owner has not proved any
entitlement to replacement of a significant part or the entirety of the stonework.
207 The Owner’s objection to Mr Penglase’s summary opinion about the
acceptability of the stonework in specific response to the questions asked should
be upheld.101 The foundation for what is acceptable and what are defects is not
adequately identified. However, Mr Penglase’s opinion about the requirements of
institutional versus residential building is admissible.102 His evidence is relevant
given the contention at trial on the topic of quality of workmanship and not
objectionable conclusion and does not trespass on the ultimate issue.
208 The passage commenting on the Architect’s reliance on the Stone Supplier103
is admissible evidence, although non-responsive. It does not involve speculation
and requires no further foundation than the one provided.
209 The final sentence the subject of objection is inadmissible as trespassing on
the ultimate issue and not received in evidence.104
Third Penglase Report
210 Mr Penglase’s third report dated 6 July 2022105 (Third Penglase Report)
concerns his inspection and opinions of the stonework at the Adelaide Magistrates
Court and Kermode Street by reference to the approach taken by Associate
Professor Danvers in the Second Danvers Report culminating in the Owner’s
Annexure B.
211 The Owner objects to the admissibility of the whole of Third Penglase Report
on the ground of relevance, failure to identify the assumptions of primary fact or
demonstrate the facts on which the opinion is based form a proper foundation for
the opinions expressed. Yet the Owner submits that part of the final sentence in
the conclusion section is admissible to prove the stonework is not ‘first class’. 106
212 The Owner cannot have it both ways. Her objections to the Third Penglase
Report are overruled.
213 Mr Penglase’s opinions are relevant. The Architect relies on his opinions to
demonstrate the proposition that some of the faults identified by Associate
101 Objection [15].
102 Objection [16].
103 Objection [17].
104 Objection [18].
105 Exhibit TP1.24.
106 Appendix B – Owner’s Stone Closing [B24.4].
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Professor Danvers in the stonework laid on the walls of the Owner’s house are
commonplace (inconsistency of colour, chips and damage). This proposition is
relevant to the standards of the workmanship required under the Building Contract.
214 By assessing faults in the stonework in the same way as Associate Professor
Danvers assessed the built stonework on the Owner’s house, the Architect seeks
to establish the contention that Associate Professor Danvers has applied an
unrealistic metric to his assessment of defects in the laid stonework.
215 The Adelaide Magistrates Court is a relevant comparator because Associate
Professor Danvers expresses the opinion that it is a good example of fine ashlar
work. Kermode Street is relevant because it is relied on by the Architect as the
design intent for the stonework to be laid on the walls of the Owner’s house. The
point to be made is not that the Owner agreed such faults were acceptable.
216 Mr Penglase adequately summarises the verbal instructions he was given to
prepare this report and the Owner cross-examined Mr Penglase about the detail of
those instructions and the foundation for his opinions is self-evident.
Reliability
217 Mr Penglase was an impressive witness in Court. He gave clear and direct
evidence consistent with the general views expressed in his reports as relevant to
the limited trial issues on which he expressed a view. It is important to emphasise
that Mr Penglase did not carry out a stone by stone assessment of the stonework.
Instead, he expressed views about Associate Professor Danvers’s opinions and the
stonework generally based on his observations of the stonework.
218 Whilst that most of the Owner’s admissibility objections should be overruled
when proper regard is had to the context of Mr Penglase’s opinions, it must be said
that his written reports are of varying and limited assistance in resolving the trial
issues. The first two reports are so generally expressed and dated that little regard
should be had to them in determining the trial issues. As already discussed, the
Third Penglase Report is contemporary and has a relevant but limited use.
219 On the specific issues of joint size and the nature of ashlar stonework (for the
reasons discussed below),107 Mr Penglase’s opinions should be preferred to those
of Associate Professor Danvers. On the issue of stone colour, as already stated,
Mr Penglase’s opinions are based on his observations of the stonework and are
admissible and relevant. He does not address the contractual specifications
directly in any of his reports because that was not his brief.
220 On the question of his impartiality, Mr Penglase’s description of the Owner’s
expectations (whilst loosely and frankly expressed) is not unfair, bearing in mind
the emotion and exaggeration in her correspondence with the Architect that he read
107 See [1665] and following below.
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in the brief he was given. His views on joint size are not so plainly unreasonable
that it should be inferred he is partisan.
221 Nor should Mr Penglase be criticised for failing to address Architect’s
Instruction AI:04 in his reports when the Owner’s complaints about the stonework
did not refer to AI:04 until the July 2020 pleading amendments, and then did not
allege it as a contractual requirement. It is unsurprising Mr Penglase did not
consider it necessary to specifically reference AI:04. It was not part of the Owner’s
case on stone colour until trial.
Mr Altamura
222 Mr Giulio Altamura is a director of Rider Levett Bucknall, construction and
property consultants and quantity surveyors, and was called by the Architect as an
independent expert witness in the November trial.
223 Mr Altamura prepared a report dated 7 June 2022 setting out his opinions as
to the costs of remediating the stone defects on both a full or selective replacement
basis and the threshold at which the selective replacement became uneconomical.
He also expressed views on the soundness of certain opinions expressed by
Mr Paddick in his report dated 2 July 2021 that was tendered in the Arbitration.
224 Like Mr Pentelow’s evidence as to the costs of remediating the stone defects,
it is not necessary to consider Mr Altamura’s evidence on this topic because the
Owner has not proved any entitlement to have a substantial part or the entirety of
the stonework replaced.
The Stone Supplier’s Witnesses
Mr Calabrese
225 Mr Rito Calabrese is the principal of the Stone Supplier. He is a qualified
stone mason who first worked with sandstone some 50 years ago. After operating
two bluestone quarries, he began selling sandstone sourced from a quarry in
Queensland from a yard he leased at Gillman. Since about 1997, Mr Calabrese
purchased sandstone from a quarry in Tasmania and in 2000 bought the quarry and
continued to supply Tasmanian sandstone from his Gillman yard.
226 Mr Calabrese gave largely uncontentious evidence about the quarrying and
cutting of sandstone into blocks, grading into colour ranges and transportation on
pallets in containers to Gillman for on-supply to customers. He also gave
contentious evidence of the colour changes he has observed occur in sandstone
after it is quarried and cut and what he said about that in the meetings he had about
the supply of Tasmanian sandstone for the Owner’s project. The specifics of his
evidence are addressed in the consideration of the relevant issues below.
227 The Owner criticised Mr Calabrese as an unreliable witness and submitted
the Court should not accept his evidence in effect where it does not assist the
Owner on contentious topics such as what happened at the Gillman Meeting, the
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June 2013 site meetings and the stone samples delivered to the Owner’s former
lawyers.
228 The Owner further criticised Mr Calabrese’s evidence in his narration of
events in June 2013 as bordering on “fabulist” and “so breathtakingly different to
every other witness”.108 The Owner was particularly critical of his evidence in
cross-examination by the Architect about seeing the stone before it was delivered
and that the stone delivered was all within the colour category ‘2’. His evidence
was described as “very damaging to his reliability because it reveals an astute
understanding” of what was in the interests of defeating the Owner’s claims.109
229 These criticisms are overstated.
230 True it is that Mr Calabrese’s account of the Owner’s complaints in June
2013 was different to all the other witnesses. He gave evidence last and that
aspects of his evidence were not put to other witnesses does not suggest he made
them up in giving evidence. Not all aspects were new. Some matters were in the
Stone Supplier’s defence filed in April 2020. In any event, they are not relevant
to the key issues and necessary to resolve.
231 As to the second matter, the effect of his evidence is mis-stated.
Mr Calabrese agreed that most, not all of the delivered stone would fit within
colour category ‘2’. That is not an unreasonable view when the characteristics of
the Stone Supplier’s light range of Tasmanian sandstone are fully appreciated. 110
232 A more measured approach should be taken in assessing the reliability of
Mr Calabrese’s evidence.
233 Generally, Mr Calabrese presented as genuinely trying to assist the Court
without regard to whether his answer was in the Stone Supplier’s best interests or
not. He was not at all astute to damaging the Owner’s interests as the Owner
suggests. His approach was consistent with the co-operative attitude he took
towards his dealings with the Owner, Mr Williams and Mr Cirocco at the time and
the assistance he gave the Owner’s lawyer, Mr Minicozzi, by delivering Ms White
dry samples111 of his stone despite the serious allegations made against the Stone
Supplier by the Owner.
234 Mr Calabrese was born in Italy and left school at the age of 13. He emigrated
to Australia before he was 20 and learned English as a second language. His
evidence reflected his education, literacy and language capabilities, informality in
his business dealings and, at times, was expressed in colourful vernacular.
108 Owner’s Final Closing [A25].
109 Ibid [75].
110 See [539]-[ 541] below.
111 Dry samples not only appear lighter than ones that have been wet and retain moisture but are not
susceptible to ‘quarry sap’ or ‘oxidisation’ as is stone exposed to the elements.
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235 Overall, Mr Calabrese’s evidence was uncomplicated and generally
plausible. That said, parts of his evidence were generalised and there were
inaccuracies and inconsistencies in his evidence on some topics. A prime example
was his examination-in-chief that the stone ordered and delivered was the same as
the ‘Palumbo’ job: colours ‘1’ to ‘4’ but in cross-examination by the Architect all
was within ‘1’ to ‘3’.
236 At times these inconsistencies seemed to be the result of him not
understanding the question or listening properly to what was asked. At times his
answers were difficult to comprehend and the effect of his evidence unclear.
Often, he said what he thought in a conclusionary way, rather than faithfully
recounting what he saw or did.
237 Mr Calabrese’s background and the passage of time largely explain some of
these difficulties with parts of his evidence. No criticism should be made of his
inability to accurately recall the detail of events so long ago or of the words he
used to communicate the effect of what he did recall. Mr Calabrese should
therefore be accepted as an honest witness doing the best that he could to
communicate what he recalled from events that occurred long ago and some of
which were at the time fairly unexceptional. However, it should be accepted that
care must be taken in assessing the effect of his evidence and its reliability by
comparison to other evidence.
238 That said, Mr Calabrese’s evidence was of particular relevance and
assistance to the Court in understanding the characteristics of Tasmanian sandstone
from his observations and experience in quarrying and supplying it. As the owner
of the quarry and a long-standing supplier of Tasmanian sandstone, he was in the
best position to inform the Court on this topic. This evidence was insightful as to
how he would have expressed himself in explaining these things to others, bearing
in mind his ‘sales pitch’ has been repeated many hundreds of times over the years.
239 As to the status of Mr Calabrese’s evidence as expert opinion, in particular
on the topic of ‘pyrite’ in sandstone, it was submitted by the Owner he was plainly
relying on what he had been told over the years and not his own expertise arising
from study or experience.112 Whilst that was how he described his evidence,
Mr Calabrese was not presented as an independent expert for the purpose of
expressing opinions on geology or the chemistry of sandstone and its scientific
properties. The evidence he gave was of his observations, experience and the great
deal of practical knowledge he had of the product since he had been dealing with
it since 1997. The Owner did not challenge Mr Calabrese’s experience and
practical knowledge and could not reasonably have done so.113
240 As already stated, one difference between the evidence of Mr Calabrese and
some other witnesses’ recollection concerned the number of ‘colours’ in his three
112 Owner’s Stone Closing [A26].
113 Ibid [A23].
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sandstone ranges of light, medium and dark stone. He said there were 12 whilst
others recalled nine or ten. Given Mr Calabrese established the classification
system for the purpose of ordering stone from his quarry some 20 years ago and
said his system had not changed, Mr Calabrese should be preferred on this point
to the extent the difference matters.
241 Ultimately, it does not matter for two reasons. First, this case only concerns
the Stone Supplier’s light range comprising colours ‘1’ to ‘3’ or ‘4’. Secondly,
once it is appreciated that the number of a ‘colour’ category is indicative and
denotes a range of colour within three ranges of light, medium or dark stone it is
apparent that no single stone is a definitive representation of any ‘colour’ category
number. Moreover the delineation between colour categories is blurred. This is
obvious given the inherent variation in colour and pattern in a natural product like
sandstone and particularly so for Tasmanian sandstone.
242 It should be accepted that Mr Calabrese’s selection process of his colour
ranges necessarily involves judgment and approximation and his pallets usually
contained a mixture of colours within each of either of the light, medium or dark
ranges. His evidence that there was some variation in colour within and between
stones of the same colour number is incontrovertible and is a critical contextual
fact bearing on the dispute about the colour range selected and approved by the
Owner.
PART A: LEGAL PRINCIPLES
Ascertainment of Terms
243 In this case, the requirements under the Building Contract for new stone
masonry were varied informally, by a course of conduct involving some spoken
words, conduct and writing in the form of written directions issued by the
Architect, and not articulated by rewriting the Architect’s Specification.
244 The rights and liabilities of the parties under the varied Building Contract are
to be determined objectively.114 As the High Court explained in Toll (FGCT) Pty
Ltd v Alphapharm Pty Ltd:115
It is not the subjective beliefs or understandings of the parties about their rights and
liabilities that govern their contractual relations. What matters is what each party by words
and conduct would have led a reasonable person in the position of the other party to believe.
References to the common intention of the parties to a contract are to be understood as
referring to what a reasonable person would understand by the language in which the parties
have expressed their agreement. The meaning of the terms of a contractual document is to
be determined by what a reasonable person would have understood them to mean.
114 Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39 (Realestate.com.au) at [17] per Kiefel CJ and
Gageler J and at [43] per Gordon J. Citations omitted.
115 (2004) 219 CLR 165 at 179 [40].
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245 The High Court in Ermogenous v Greek Orthodox Community of SA Inc
described what is meant by contractual intention as:116
… what it is that would objectively be conveyed by what was said or done, having regard
to the circumstances in which those statements and actions happened. It is not a search for
the uncommunicated subjective motives or intentions of the parties.
246 Accordingly, the ultimate question is what reasonable people with
knowledge of the background circumstances then known to the parties would be
taken by their words and conduct to have agreed as the terms of the varied
specification for new stone.117
247 When the Court is confronted with an informal contract (or variation of
contract as in this case) the approach: 118
… is to consider the evidence and to find the relevant terms of the contract. Ascertaining
the terms is a question of fact. The issue is not one of interpretation because there are no
definitive words to interpret; “we are here concerned not with construing a contract but
with evidence as to what the terms of a contract were”. The issue is one of fact and
substance, not mere form: what did the parties…agree?
248 In making factual findings, the Court must assess the witnesses’ evidence of
what was said and done and their knowledge of relevant matters in context of the
objective surrounding facts (where undisputed or proven) and the apparent logic
of events.119
249 The Court must consider the full range of circumstances as existed at the time
of contract including, among other things, the nature of and relationship between
the parties to the contract, their previous dealings, as well as standards of
reasonable conduct in the commonly known circumstances.120
250 An agreement and its terms may be inferred from the conduct of the parties,
including the absence of words:121
In light of surrounding circumstances, that absence [of words] may evidence a tacit
understanding.
251 That is, one party’s silence coupled with relevant knowledge may in context
of the surrounding circumstances give rise to a tacit understanding on the part of
the other party as to the intended basis of their contractual relationship. This is
116 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at [25] per Gaudron, McHugh,
Hayne and Callinan JJ. Citations omitted.
117 Realestate.com.au op cit at [15] per Kiefel CJ and Gageler J. Citations omitted.
118 Ibid at [45] per Gordon J. Citations omitted.
119 Ibid at [46] per Gordon J. Citations omitted.
120 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 (Film Bars) at 9255 per
McLelland J.
121 Realestate.com.au op cit at [30] per Kiefel CJ and Gageler J.
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particularly the case where what was known by the parties was material to
achieving the contractual objective.
252 Pre- and post-contractual conduct is admissible on the question of what were
the terms of the varied contractual requirements for new stone.122 Commonly,
subsequent communications may be legitimately used against a party as an
admission by conduct of the existence or non-existence, as the case may be, of a
subsisting contract.123
253 There are limits, however, as to the use to which subsequent communications
can be put. They are but one aspect of proof. First: 124
the probative value of such subsequent communications must be found in the light they
throw on the proper interpretation of the earlier communications alleged to constitute the
contract.
254 For example, subsequent communications may show that, at the time of the
relevant communications, their dealings could not properly be interpreted as
mutual assent to be bound. Secondly: 125
[The] probative force [of an admission] will usually vary inversely with the strength of the
available direct evidence of the matters in question.
255 Although the Building Contract and Architect’s Specification were in
writing, there is nothing preventing the parties from subsequently varying the
terms of their agreement orally or by conduct. As Bleby J said in Alstom Ltd v
Yokogawa Australia Pty Ltd & Anor (No 7):126
… Even a contract under seal may be modified or discharged by oral agreement. If the
contract provided that it could only be amended in writing, such a stipulation would also
be ineffective.
256 The Owner’s submissions to the effect that oral instructions given by the
Architect to the Builder on her behalf could not bind the Builder or her as a
variation to the Building Contract are without merit. Even if there is a stipulation
in the Building Contract requiring a particular written procedure to be followed,127
it does not exclude a variation to the parties’ rights and obligations where
agreement is reached on usual contractual principles.
257 On the facts of this case, three further observations should be made as to the
application of the relevant principles.
122 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [24]-[25] per Heydon JA;
Tomko v Palasty [2007] NSWCA 258 at [67] per Einstein J.
123 Film Bars op cit at 9256 per McLelland J.
124 Ibid at 9255.
125 Ibid at 9256.
126 [2012] SASC 49 at [1519], citations omitted.
127 Such as the requirement for written Architect’s instructions (A7.1) and for variations (J11).
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258 First, in circumstances where agreement is reached informally, it is necessary
to consider what it is in point of fact that constitutes the making of the contract and
identify the manifestation of the mutual communication of the parties’ respective
assents to be bound to identifiable terms capable of having contractual force
(whether the mutual communication takes the typical form of offer and acceptance
or is manifested in other circumstances from which mutual assent can be
inferred).128
259 Secondly, where agreement is reached informally (whether orally or by
conduct), it should be recognised there may be imprecision as to the terms where
what is said (or not said) or done (or not done) is not reduced to writing or further
refined.
260 Thirdly, fact finding is all the more difficult here given the considerable
passage of time since the relevant events occurred.
Ascertaining Meaning
261 In this case there are some disputes about the proper construction of the
alleged terms of the Building Contract to be resolved. Plainly, each contract must
be construed according to its own terms.
262 It is uncontroversial that the meaning of a contractual term is to be
determined objectively by reference to its text, context (as a whole) and purpose.
The essential question to ask is what a reasonable person having all the background
knowledge that is proven to be known to the parties at the time of contracting
would have understood its terms to mean. This assessment requires consideration
of the language used by the parties, the surrounding circumstances known to them,
together with the purpose or objects to be secured by the contract.129 An
understanding of the genesis, background, context, market and other surrounding
circumstances facilitates the appreciation of contractual purpose.130
Damages
The Cardinal Rule
263 The cardinal rule in assessing damages at common law for breach of contract
is, as stated by Parke B in Robinson v Harman,131 that the injured party is to be put
in the same position as if the defaulting party had performed (and not breached)
the contract so far as money can do it.
264 The compensatory principle for damages at common law applies in tort to
award an injured plaintiff compensation in a sum that will put, so far as money can
128 Film Bars op cit at 9254.
129 Electricity Corp v Woodside Energy Ltd (2014) 251 CLR 640 at [35].
130 Codelfa Constructions Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 350 per Mason J.
131 (1848) 156 ER 363 at 365.
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do, that party in the same position as they would have been if the tort had not been
committed.
265 For breaches of a building contract, the prima facie measure of damages is
the cost of making the works conform to the contract. The availability of this
measure of damages reflects the plaintiff owner’s performance interest, even
where that intertest is “some subjective aesthetic or eccentric benefit bargained
for the [owner] rather than some objective financial benefit”.132 Therefore, where
there is defective works, a plaintiff owner is not confined to compensation for the
loss of the objective financial or economic benefits of performance.
Reasonableness
266 That said, as authoritatively stated by the High Court in Bellgrove v
Eldridge,133 the remedial work must not only be necessary to conform to the
contractual specification, but a reasonable course to adopt.
267 Whilst simply put, the question as to what remedial work is necessary and
reasonable is fact specific and must be answered in all the circumstances up to trial
having regard to the plaintiff owner’s performance interest. It is a difficult
question not readily constrained by rigid rules and should be understood as
fundamentally informed by the compensatory principle. That said, the following
principles may be distilled from the consideration given to this qualification in
Stone v Chappel.134
268 First, it is necessary to properly identify the plaintiff owner’s performance
interest having regard to the nature of the contractual objective: was it purely
functional or economic or a matter of an aesthetic choice or amenity?
269 Secondly, the extent to which the builder has achieved the contractual
objective and fulfilled the plaintiff owner’s performance interest, despite
contractual non-conformity should be considered. Was the non-conformity de
minimis and unimportant as regards the plaintiff owner’s performance interest?
270 Thirdly, lack of proportionality between the required remedial works and the
cost and the benefit to be achieved by such remedial works may be a relevant
consideration as to what is reasonable in all the circumstances.
271 Finally, the plaintiff owner’s intentions and ability to carry remedial works
may inform the issues as to the true nature of the loss and the reasonableness of
the required remedial works bur are not otherwise relevant.
132 Stone v Chappel (2017) 128 SASR 165 at [200] per Doyle J.
133 (1954) 90 CLR 613; considered in Tinckell v Duthy Homes Pty Ltd; Duthy Homes Pty Ltd v Tinckell
[2020] SASCFC 24 at [89]-[90] per Parker J.
134 Op cit.
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Date of Assessment of Damages
272 The general, although not universal, rule is that damages in contract or tort
are assessed at the date of breach or when the cause of action arises.135 The rule
has been explained as motivated by concerns about mitigation and, in turn, in part
by notions of fairness to the defaulting party.136 For a contract for services or
supply of goods there is a good reason for doing so because once an injured party
learns of the other’s breach, they can minimise the loss for which the other will be
liable by procuring a replacement supply.
273 In building cases, the date of assessment of damages is often complicated by
disputes about whether there is a defect at all, and if there is, what remedial works
are required. The authorities show the flexibility of the general rule that depends
on the circumstances as to what is adequate and fair compensation in any case. In
some cases damages are assessed at the date of breach, others at later dates or at
trial.
274 As a general principle, the time for assessing contractual conformity is at
practical completion when the works are substantially complete and handed over
by a builder to an owner. Works that conform to the contractual specification when
built but not at practical completion constitute defective works, just as the
manifestation of latent defects in previously conforming works do.
275 The onus lies on a plaintiff owner as the wronged party to establish that
departure from the general rule of assessing damages is necessary to do justice
between the parties in terms of adequately and fairly compensating the plaintiff
owner for the loss and damage suffered by reason of the defendant builder’s breach
of contract in handing over defective works.
Mitigation
276 Generally, a plaintiff cannot recover damages for a breach of contract for a
loss that was avoided or should reasonably have been avoided. The so-called duty
to mitigate only requires a plaintiff to take reasonable steps to mitigate its loss as
was explained in The Owners - Strata Plan No 76674 v Di Blasio Constructions
Pty Ltd: 137
Generally speaking, a person who suffers loss as a consequence of a breach of contract is
required to act reasonably in relation to the loss in order for the loss to be recoverable. An
important aspect of this general principle is that the party who suffered a loss is under a
duty to mitigate its loss. Sometimes the use of the word “duty” in this context is criticised,
since there is no requirement that the plaintiff act in a particular way and no requirement
that the plaintiff minimise its loss: eg. J Carter, E Peden and GJ Tolhurst, Contract Law in
Australia, (5th ed, 2007, LexisNexis) at [35-35]. Rather the principle is that the plaintiff is
not entitled to recover losses attributable to its own unreasonable conduct.
135 Johnson v Perez (1988) 166 CLR 351 at 356 per Mason CJ.
136 Ibid at 357-358.
137 [2014] NSWSC 1067 at [42] per Ball J.
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277 In a building contract, principles of mitigation of the plaintiff’s loss must be
considered in light of the generally accepted obligation of an owner to give the
builder a reasonable opportunity to correct defects and incomplete works that may
reduce the quantum of the builder’s damages. Often the building contract provides
a reciprocal rights and obligations on the parties for the builder to correct defects
and incomplete works as it does in this case in clause M11 of the Building
Contract. Importantly, the Builder’s contractual right and opportunity to correct
defects is not constrained by any notion of reasonableness.138
Betterment
278 The concept of betterment has been described as the cure of a defect that
results in a higher standard, quality or value of built or supplied works than
contractually required.139
279 Again, whilst simply stated and often alleged, whether there is a betterment
is often difficult to resolve and depends on the proven facts. If it is shown that a
lesser expenditure would be satisfactory remediation, then a plaintiff owner cannot
recover more than the lesser cost of remedial works.
280 The question of betterment is connected to questions of mitigation and the
date at which damages should properly be assessed. These questions arise where
the cost of carrying out the same building works is shown to be more expensive if
done later than earlier because of inflation.
PART B: FOUNDATIONAL MATTERS
The Written Building Contract
Form
281 Whilst the Architect’s Specification, Drawings and commercial terms are
bespoke, the written Building Contract made between the parties is based on a
standard form contract used widely in South Australia for domestic building work
developed by Master Builders Australia and the Australian Institute of Architects.
That form is a Simple Works Contract for Housing in South Australia: “ABIC-SW-
2008 H SA” executed by the parties on 15 November 2012.140
282 The contract documents (as defined)141 comprise the standard form general
conditions set out in sections A to S and the bespoke Schedules (including in
Schedule 1 the “Contract Information”), the Architect’s Specification and the
Contract Drawings.
138 Bedrock Construction and Development Ltd v Crea [2021] SASCA 66 at [130] (Bedrock v Crea).
139 Walker Group Construction Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 at [193].
140 Exhibit R3.2.
141 That is, the *contract documents, * denoting a defined term as set out is clause S1, meaning “any special
conditions shown in schedule 2, the conditions of this contract the specifications, the drawings and any
other documents shown in schedule 3.”
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The Builder’s Obligations
283 The Builder’ primary obligation is to perform the works under the Building
Contract. It must diligently carry out and complete the works to the standard set
out in the contract documents142 and bring the works to practical completion in
accordance with clause M1,143 the date for practical completion in this case being
11 April 2014.144
284 The Building Contract is a “domestic building work contract” within the
meaning of the Building Work Contractors Act. The warranties implied into a
domestic building work contract by s 32(2) of the Building Work Contractors Act
are replicated in clause A3.2.
285 Unexceptionally, the Builder has other important obligations. It must comply
with all instructions issued under the Building Contract by the Architect and all its
other obligations under the Building Contract.145
The Owner’s Obligations
286 The Owner’s payment obligations are the fundamental quid pro quo for the
Builder’s performance of the works. Among other things, the Owner must pay the
Builder the contract price as adjusted in accordance with the Building Contract,
appoint the Architect to administer the Building Contract, issue instructions only
through the Architect and comply with all her other obligations under the Building
Contract. 146
The Role of the Architect
287 Although not a party to the Building Contract, the Architect has an important
dual role in administering it.
288 The Architect is appointed by the Owner to administer the Building Contract
on behalf of the Owner who expressly warrants it has her authority to do so.147 The
Architect is the Owner’s agent in giving instructions to the Builder, which
instructions bind the Owner and must be followed by the Builder, even if disputed
under clause A8.148
289 However, the Architect when acting as assessor, valuer or certifier under the
Building Contract must act independently and in doing so does not act as the
Owner’s agent.149 The Owner must ensure the Architect acts fairly and impartially,
142 Clause A2.1.b.
143 Clause A2.h.
144 Schedule 1, Item 22.
145 Clauses A2.1.d and A2.1.f.
146 Clauses A4.1.d, A4.1.f, A4.1.h and N2.
147 Clause A6.1.
148 Clauses A2.1.d, A4.1.f, P1.1.
149 Clause A6.3.
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having regard to both parties’ interests in acting as assessor, valuer of certifier and
must not compromise the Architect’s independence in this role.150
290 The Architect is otherwise engaged by the Owner (under a separate contract)
and has distinct contractual obligations to her for design of the works and quality
control of the works. This responsibility necessarily includes specification of the
technical details for the supply of materials and workmanship for construction of
the Owner’s Residence which the Owner has relied on to achieve the design intent.
291 The Building Contract confers certain discretions on the Architect to make
determinations based on experience and judgment as distinct from a mechanical
computation of fixed criteria. Key examples are the Architect’s discretion to adjust
the contract in the absence of a claim from the Builder151 and to decide how far
trade custom and trade shall prevail in assessing the standard of workmanship.152
Questions as to whether the Court should interfere with such determinations for
(alleged) error are addressed below generally and in the context of the specific
issues between the parties.
Payment Obligations
292 The parties obligations as regard payment for the works are provided for in
Section N.
293 The contract price is a lump sum and what is allowed for is provided in
clause N1. In this case, the issues over the final contract price primarily concern
disputes over adjustments for approved variations, PC Sums and the cost of
correcting defects.
294 Most fundamentally, any amount stated as owing in any certificate must be
paid with the seven calendar days153 after delivery of the certificate and any
applicable Builder’s tax invoice.154 The question as to whether the Builder is
provisionally entitled under the Building Contract to the payment of certified
payments without deduction when a dispute arises as to defects was settled by
Tilmouth DCJ in determining the Builder’s summary judgment application.
295 Accordingly, the question as to whether PPC 12 is valid and binding has
already been decided. There are now different questions to be resolved as to
whether the Builder is entitled to the maintain its claim for adjustments to the
contract price for approved variations and PC sums in circumstances where the
contractual processes were not strictly followed and the Owner’s entitlement to
dispute these matters is in issue given the absence of any clause A8.1 notice of
dispute. These questions are addressed in Part D below.
150 Clause A6.4.
151 Clause H6.
152 Clause A.09.06 of the Architect’s Specification.
153 Schedule 1 Item 10.
154 Clause N6.1.
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296 As to PPC 11, the question now to be resolved is whether in the
circumstances in which it was issued it is valid and binding. This question is also
addressed in Part D below and turns upon the proper construction of the contractual
requirements for practical completion and the release of security on practical
completion.
Practical Completion
297 The following definition of practical completion is provided in clause
M1.1.155
1. The contractor must bring the *works to *practical completion by the date for
*practical completion shown in item 22 of schedule 1 as adjusted in accordance with
the contract. The *works are at *practical completion when, in the reasonable
opinion of the architect:
a. they are substantially complete and any incomplete *necessary works or
*defects remaining in the *works are or a minor nature and number, the
completion or rectification of which is not practicable at that time and will not
unreasonably effect occupation and use;
…
c. any approvals required for occupation have been obtained from the *relevant
authorities and copies of *official documents evidencing the approval have
been provided to the architect.
298 Clause M1.2 provides:156
From 4.00pm on the day the architect issues the notice of *practical completion, the
contractor ceases to have access to the *works except by prior arrangement with the owner.
299 The contractual machinery for inspection of the works by the Architect to
decide whether the works have reached practical completion (or not) is provided
in clauses M2 and M3. Importantly, if the Architect decides the works have
reached practical completion, the Architect must within five working days issue a
written notice of practical completion to the parties stating the date when practical
completion was reached.157
300 There is an important distinction between the event of practical completion
and the Architect’s notification of the date of practical completion. It is not the
event but the issue of the notice of practical completion that triggers significant
consequences under the Building Contract. First, under clause M1.2, the Owner
takes possession of the works at 4.00pm on the date the Architect issues the notice
of practical completion where clause M4 applies.158 Secondly, the Architect must
155 Emphasis supplied. Clause S1. Subparagraph b of clause M1.1 is not applicable. No commissioning
tests were specified.
156 Schedule 2b of the special conditions replaced the standard form clause M1.2.
157 Clause M4.1.
158 Subject to clause M11 [Contractor to correct *defects and finalise *necessary work].
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notify the Owner in writing that security must be released in accordance with
clause C6.159 Thirdly, the date of practical completion determines the Builder’s
obligation to pay liquidated damages, if any.160 Fourthly, the defects liability
period commences from the date of practical completion of the works.161
301 In some building contracts, practical completion may be deemed in
circumstances where the Owner takes possession of the works before the Architect
issues a notice of practical completion. In this case, the works are to be treated as
having reached practical completion under clause M8 which provides:
.1 If the owner takes possession of the *works before the architect issues the notice of
*practical completion, the *works are to be treated as having reached *practical
completion. The architect must issue to the contractor and the owner of a notice of
*practical completion within 5 *working days after being notified in writing that the
owner has taken possession, unless clause M4 applies.
.2 If the owner takes possession of the *works before the architect issues the notice of
*practical completion, the contractor may make a *claim to adjust the contract.
.3 The requirements for making a *claim to adjust the contract and the procedures to
be followed are stated in section H.
302 Again it is the issue by the Architect of the notice of practical completion,
not the event, that has contractual significance.
303 The necessity for the notice of practical completion to state the date of
practical completion must be emphasised, whether issued under clause M4 or M8.
The Architect alleged in its defence to the allegation it breached its retainer and
duty of care to the Owner by issuing PPC 11 that the Architect’s letter dated
3 September 2014 gave notice of practical completion.162 This contention and
defence must be rejected. The letter did not purport to give notice of practical
completion and does not state the date of practical completion. It therefore does
not constitute a valid notice of practical completion under the Building Contract.
304 The Owner correctly submits that the issue of a certificate of practical
completion by itself it not determinative as to whether the works have been
completed in conformance with the Building Contract. The Builder’s contentions
to the contrary should therefore be rejected.
305 There is no basis in fact however for the Owner’s contention that the works
had not reached practical completion because all the parties were proceeding on
the basis that there was a non-conformance as to stone colour identified by the
159 Clauses M4.2 and C6.2.a.
160 Clauses M9 and M10.
161 Clause M13.
162 Architect’s Defence [18.3(c)].
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Owner at the 18 June Meeting that was going to be remedied by acid washing
making the stone white, as is discussed below.163
Defects
306 It is universally understood that work that does not conform with the
requirements of the relevant building contract is defective. At common law, the
performance of defective building work is a breach of contract entitling an owner
to damages measured by the cost of making the works conform to the contract. In
this case, where the Building Contract is subject to the Building Work Contractors
Act, the Owner has rights to apply to the Court for orders for remediation works to
be done and/or compensation.164
307 The parties’ rights and obligations are subject to the terms of the Building
Contract, provided there is no purported exclusion of the rights conferred or the
conditions or warranties implied into the Building Contract by the Building Work
Contractors Act as provided for in s 42:
Any purported exclusion, limitation, modification or waiver of a right conferred, or a
contractual condition or warranty implied, by the Act is void.
308 In this case, the Building Contract provides an express definition of a “defect
or defective works”:165
*necessary work that is:
a in breach of any of the warranties set out in the *contract documents
b not in accordance with the standard or quality of building work specified in the
*contract documents
309 The definition of “*necessary work” is “all work including any temporary
work necessary to complete the works”.166
310 Clause M1 provides the Builder’s right and obligation to correct defects,167
whether before or after practical completion, within the agreed time stated in an
Architect’s instruction or, if no time is stated, within ten working days after receipt
of such instruction.
311 Clause M14 addresses the Builder’s obligations during and after the defects
liability period. Clause M14.1 importantly provides that the Builder’s obligation
to fix a defect continues until finalised and does not end when the defect liability
period ends for any remaining defect there is or any defect the Builder becomes
aware of by instruction from the Architect or from its own observations during the
163 See [599]-[616] below.
164 Section 37(6).
165 Clause S1.
166 Ibid.
167 And incomplete *necessary work, which is not relevant here.
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defects liability period. The latter obligation arising from the Builder’s obligation
is absent in clause M11.
312 Several matters warrant emphasis. First, the Builder’s right to correct a defect
is important because ordinarily the Builder’s cost in doing the necessary work will
be less than the price another person would charge to do the same work. Secondly,
the Owner’s entitlement to use another person to correct a defect or finalise
necessary works is not automatic and conditioned on the Builder’s failure to
correct the defects within the time nominated in an Architect’s instruction or show
reasonable cause as provided for in clause M12. Thirdly, the Builder’s obligation
to correct a defect or complete necessary work is triggered by an Architect’s
instruction or its own observations during the defects liability period.
313 The defects liability period is an important limit on the Builder’s obligation
to correct a defect or complete incomplete works. Latent defects apart, this
obligation only arises during the defects liability period and is made express by
Clause M14.2:
.2 The architect cannot give the first instruction to correct an outstanding *defect or
finalise any incomplete *necessary work after the end of the defects liability period,
unless it is for the rectification of a latent *defect and the final certificate has not
been issued.
314 Finally, a defect or defective works are not confined to works identified in an
Architect’s instruction to the Builder to correct a defect or carry out incomplete
works.
Final Certificate
315 No final certificate has been issued in this case. Nevertheless, two aspects of
the relevant contractual provisions warrant mention. The first is when the Builder
is entitled to submit a final claim for payment under clause N10.1. That is, when:168
a. all defects liability periods have ended
b. the contractor has rectified all *defects and finalised all incomplete * necessary work
it became aware of by instruction from the architect or the contractor’s own
observations during the defects liability period and
c. the *works have been completed in accordance with the contract.
316 The second is the effect of the final certificate:169
The final certificate must state the architect’s assessment of all outstanding entitlements
under this contract. The final certificate is evidence of the *parties’ entitlements under this
contract and that the contractor has performed its obligations under this contract, subject to
any matter already in dispute under section P.
168 Clause N10.1.
169 Clause N14.1.
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317 The substantive purpose of the final certificate is to conclude the parties’
relationship under the Building Contract and the role of the Architect in
administering it, save for any extant disputes. The final certificate constitutes
important evidence as to the completion and discharge of the Owner’s payment
obligations and the Builder’s obligations to complete and carry out the works.
318 In this case, there are adjustments yet to be made to the contract price
following the Architect’s final assessment of all outstanding entitlements under the
Building Contract.
Variations to the Works
319 Section J of the Building Contract addresses the process agreed by the parties
for variations to the works. Its purpose is to provide a mechanism for controlling
variations to the works that have time and cost implications in a fixed price
contract. Importantly, the Builder has no obligation to perform variation works
unless instructed in writing to proceed and no automatic entitlement to adjust the
contract price absent a written Architect’s instruction to proceed.
320 A variation is defined as follows:170
A *variation is a change to:
a the scope of the *works as contemplated by the *contract documents and capable of
being executed under this contract
b a dimension or level of the *works
c the materials, workmanship or quality of any part of the *works
d a detail of the *works or
e the order of precedence of the *contract documents referred to in clause B2.
321 The definitions of works and contract documents are provided in clause S1.
“Works” is defined as “the completed construction set out in the *contract
documents (briefly described in item 5 of Schedule 1)”. Item 5 of Schedule 1
briefly describes the “works” as “Construction of a new residence & associated
works to ‘old hall’ and swimming pool etc” and thereby provides some definition
about what is to be built.
322 The “contract documents” are defined as:171
any special conditions shown in schedule 2, the conditions of this contract, the
specifications, the drawings, and any other document shown in schedule 3.
170 Clause S1 and clause J1.2.
171 Ibid.
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323 A variation to the works may be instructed in two relevant circumstances.172
First, under clause J1.1 where the Architect gives the Builder a written instruction
for a variation at any time before the date of practical completion. Secondly, under
clause J1.3 where the Builder considers a variation may be required and requests
in writing an instruction from the Architect.
324 Clause J2 provides that if the Builder receives a written instruction from the
Architect, the Builder must review the instruction. Relevantly, the Builder must
notify the Architect “promptly” in writing if the instruction will result in an
adjustment to the contract price or the Date for Practical Completion or both unless
it has been instructed to provide information under clause J1.2.173
325 Clause S1 defines “promptly” as “as soon as practicable”.
326 Clause J3 provides that within five working days of receipt of the clause J1.2
information or the Builder’s written notice under clause J1.3, the Architect must
instruct the Builder as to whether the variation will proceed (nominating any
quotation or estimate accepted) or not or negotiate.
327 If the Architect issues a written instruction to proceed with the variation, by
clause J4.1 the Builder must do the work promptly. If the instruction to proceed
confirms acceptance of a quotation, by clause J5, the Architect must adjust the
contract price (and the date for practical completion) in accordance with the
accepted quotation in the next progress certificate.
328 If however the Builder receives a written instruction to proceed with the
variation but all or part of a quotation is not accepted, the Builder is required to
comply with the instruction and clauses J4.2 to J4.4 apply and specifically, under
clause J4.2.d, the Builder must submit a detailed claim to adjust the contract within
a further 20 working days under clause H2.
Claims to Adjust the Contract
329 Section H of the Building Contract addresses claims to adjust the contract
price or the date for practical completion174 or both.
330 The Builder’s entitlement to make a claim to adjust the contract is strictly
provided for as regards time and the details required. As to time, clause H1
relevantly provides:
1. The [Builder] is entitled to make a *claim to adjust the contract only if the [Builder]:
172 The circumstances provided under clauses J1.5 and J1.6 where an official document requires a variation
are not relevant here. Therefore, clauses J6 to J8 have no application here.
173 Clauses J2.3.c.
174 It is not necessary to consider further claims to adjust the time for practical completion since that is not
an issue here.
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a *promptly notifies the [Architect] in writing of its intention to make a claim
after receiving an instruction or, if no instruction is issued, *promptly notifies
the [Architect] after becoming aware of an event that will result in a claim and
b submits the detailed *claim to adjust the contract to the [Architect] within a
time agreed in writing between the [Builder] and the [Architect] or, if no time
is agreed, within 20 *working days after receiving an instruction or, if no
instruction is issued, within 20 *working days after becoming aware of the
even that has resulted in the claim and, for these purposes, an event is not a
consequence of an instruction.
2. If the claim results from an instruction to proceed with a *variation, the requirements
for submission of the claim are set out in clause H2.
331 The details required for a claim as provided in clause H2 include
identification of the Architect’s instruction or where none has been issued, details
of the event and the basis of the claim, a breakdown of costs.
332 Notably, the Builder’s entitlement under clause H1 to make a claim to adjust
the contract price for a variation only arises if it complies with the requirements of
H1.a and H1.b as to time and notice and the requirements of H2 for the details of
the claim.
333 The Architect must promptly assess the claim to adjust the contract price as
provided for in clauses H3 and H4. Clause H4.2 provides the Builder may dispute
the Architect’s decision or failure to issue a decision under clause A8 but must
continue to perform its contractual obligations.
334 Clause H6.1 relevantly confers on the Architect an important discretion to
adjust the contract at any time up to the time of final certificate:
If the [Builder] has not made a *claim to adjust the contract in relation to any change which
results from complying with any instruction given under section J for a *variation…, the
[Architect] may adjust the contract at any time up to the issue of the final certificate under
clause N11 …
Clause A8
335 A preliminary dispute resolution process is provided in clause A8 as regards
matters the subject of a certificate, notice, written decision or written assessment
issued by the Architect or the failure of the Architect to issue something in the
course of administering the Building Contract. Before disputing a certificate,
notice, etc, a party must give the Architect written notice in accordance with clause
A8.1.175 The Architect must then assess the notice of dispute and give a written
175 That is, within 20 working days after receiving the certificate, notice, written decision or written
assessment or becoming aware of the failure of the architect to do something.
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decision to the parties within 10 working days.176 If a party wishes to dispute the
Architect’s decision, the contractual dispute resolution process applies.177
336 By clause A8.2, if a party fails to give a notice under clause A8.1, the party
“will not be entitled to dispute the matter at all”.
337 Clause A8.2 is relevant because the Owner’s claims concern matters the
subject of various Architect’s certificates, notices etc that she did not dispute by
giving a notice under clause A8.1. Specifically, the Owner did not give any notices
disputing the Architect’s certificates comprising PPC 11 and PPC 12 or the two
notices of practical completion dated 1 December 2014. Nor did she dispute
Architect’s instructions AI:07 (stonework jointing), AI:18 (proposing separable
portions for practical completion) or AI:19 (first defects list) or any of the
subsequent instructions issued during 2014 and 2015 updating the defects lists.
338 The Builder contends the Owner’s failure to give notices under clause A8.1
excludes the Owner’s rights to challenge the Architect’s certifications made in
PPC 11 and PPC 12,178 the notices of practical completion and instructions as to
defects correction. The Architect concurs and contends that the Owner is
contractually barred from disputing those certificates179 and AI:07.180 That the
Owner is not entitled to dispute the matter at all is said to mean the matters certified
are finally and conclusively determined and cannot be challenged in court
proceedings.
339 In response, the Owner submits clause A8 does not apply to Architect’s
instructions.181 Further, since PPC 11 was not issued in conformance with the terms
of the Building Contract and is void, the Owner contends there was no need for
her to issue a notice of dispute.182
340 Ultimately, for the reasons that follow, none of the parties’ contentions as
regards the proper construction of clause A8 should be accepted as entirely correct.
341 The first question arising is whether, where a party fails to give a notice
disputing an Architect’s certificate, notice etc under clause A8.1, clause A8.2
should be construed as being provisionally or finally binding. As is always the
case, the answer turns on an objective reading of this provision in the context of
the Building Contract as a whole, having regard to contractual purpose.
342 As a matter of general principle, clear express words must be used to rebut
the presumption that neither party intends to abandon any remedies for breach of
176 Clause A8.3.
177 Clause A8.4.
178 Claim [11].
179 Architect’s Eight Defence [18.5] and [18.6].
180 Ibid [14.2(c)(iii)].
181 Owner’s Final Closing [247]-[262].
182 Ibid [36]-[38].
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a building contract arising by operation of law.183 In this case, none of the
provisions in the Building Contract indicate an objective intention to ultimately
exclude the parties’ rights for any remedies for breach of contract arising by
operation of law, save clause A10 which has no bearing on clause A8.
343 To the contrary, it is implicit from the contractual scheme for dispute
resolution provided for in clause A8 and section P [Dispute Resolution] that the
intended effect of clause A8.2 is for Architect’s certificates, notices etc to be
binding until resolved by either an Architect’s clause 8.3 decision, the parties’
agreement during the contractual dispute resolution process or ultimately the
Court’s determination.
344 Section P [Dispute Resolution] provides the requirements for a compulsory
conference and mediation. This dispute resolution process is not mandatory and
the parties’ rights to take action to enforce a payment due under a certificate issued
in accordance with the Building Contract or to seek urgent Court relief are
expressly preserved.184 There is no contractual bar to suit in section P. It is well
understood that the agreed dispute resolution processes are intended to promote
early and cost effective dispute resolution as an alternative to long tail litigation.
345 Fundamentally, the parties must continue to perform their obligations under
the Building Contract if there is a dispute or difference arising out of or in relation
to the Building Contract.185 This obligation applies to the dispute resolution
processes in both clause A8 and section P. By requiring the parties to comply with
any Architect’s certificate, notice etc despite dispute, certainty of the parties’ rights
and obligations is ensured until the dispute is resolved.
346 It follows that clause A8.2 is not intended to finally exclude the parties’ rights
to a remedy for breach of contract arising by operation of law.
347 Read in context of the Building Contract as a whole, an important purpose of
clause A8.2 is to reinforce the primacy of a party’s rights under any certificate,
notice etc issued in accordance with the Building Contract and the other party’s
obligation to perform its corresponding obligations. This very point is implicit in
the reasoning in line of authorities concerning the bindingness of Architect’s
certificates discussed by Tilmouth DCJ in Cirocco v Clarke (No 2).186 Whilst the
Building Contract is on foot, the entitlement to payment is the quid pro quo for the
obligation to continue working. Similar considerations apply to the Architect’s
assessment of variations, PC sums and defects and determination as to whether
practical completion has been reached and certification of the date of practical
completion and the consequential rights and obligations of the parties.
183 Gilbert-Ash Northern Ltd v Modern Engineering (Bristol) Ltd (Gilbert-Ash) [1974] AC 689 at 717 per
Lord Diplock.
184 Clause P4.1.
185 Clause P1.1.
186 Op cit, [20]-[36].
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348 The second question arising is the Owner’s contention that clause A8 does
not apply to an Architect’s instructions. For the following reasons, this
construction of clause A8 should be rejected.
349 First, clause A8 is expressed to apply to any “notice” given by the Architect
(as well as any certificate, written decision or assessment or failure to issue
something). There is no good reason why a “notice” should not be construed as
intended to include an Architect’s instruction. An Architect’s instruction in
essence communicates an instruction given by the Architect on behalf of the
Owner to the Builder and thereby gives notice of such instruction.
350 Secondly, there is no principled reason why clause A8 should be read as not
applying to an instruction given by the Architect to the Builder just because the
word ‘instruction’ is not used. The Builder has an express obligation to comply
with all instructions issued by the Architect under the Building Contract187 and the
Owner has appointed the Architect as her agent to administer the Building
Contract, warranting the Architect’s authority to administer it and act as her agent
in giving instructions.188 The Owner does not suggest the Builder was not obliged
to correct the defects identified in Architect’s instructions as to defects.
351 Thirdly, there is no other mechanism for disputing an Architect’s instruction.
352 Fourthly, failure to issue “something” would include an Architect’s
instruction.
353 Undisputedly, clause P1.1 applies to a dispute about an Architect’s
instruction: it would of course be a dispute or difference arising out of or in relation
to the Building Contract. There is no good reason to exclude Architect’s
instructions from the first step of the contractual dispute resolution process but
otherwise apply section P. To the contrary, there is every reason to do so.
354 It follows that despite the Owner’s contentions to the contrary, the capacity
in which the Architect acts is not determinative as to whether clause A8 applies.
355 In any event, an Architect’s instruction in form may in certain circumstances
give notice of a relevant matter or in substance be a written decision or written
assessment to which clause A8 literally applies.
356 If it had otherwise been concluded that clause A8.2 was finally binding and
excluded the Owner’s right to dispute a matter the subject of a right conferred by
the Building Work Contractors Act or a warranty implied by the Act, it would be
void by s 42 of Act.189
187 Clause A2.1.d.
188 Clause A6.2 and A6.3.
189 See [307] above.
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357 Both the Builder and the Owner have a right under the Building Work
Contractors Act to apply to the Court for determination of a dispute arising out of
a domestic building contract or the performance of the building work to which a
statutory warranty relates.190 Here all the disputes between them about the
Architect’s certificates, notices, written decisions and written assessments
concerning defects, variations, PC Sums and liquidated damages involve “some
question as to whether the building work has been performed in accordance with
the contract”.191 Further, the Owner’s defect and delay claims involve alleged
breaches of the implied warranties provided in s 32(2) of the Building Work
Contractors Act.
The Architect’s Specification
Generally
358 The Architect’s Specification is the key contract document as regards the
stone and other alleged defects. It serves a number of contractual purposes.
359 First, it sets out as ‘preliminaries’ various general and site specific terms for
performance of the works. Secondly, it sets out the technical specifications for the
materials to be used and works to be performed by the Builder to construct the
Owner’s house. It describes the detail of the work to be done trade by trade. For
example, section E concerns bricklaying and stone masonry, a major focus in this
case because of the stone defects.
360 Given its technical nature and function, it was prepared by the Architect and
used to tender for the Builder, forms part of the executed Building Contract and
therefore sets out the contractual requirements for performance of the works: both
as to the materials to be used and workmanship and their respective quality and
standard.
361 Unsurprisingly, it expressly provides the contract between the parties will be
in accordance with the referenced ABIC Simple Works Contract192 and that the
work must be done in accordance with the noted drawings, the specified contract
and the Architect’s Specification “together with any subsequent details issued”.193
362 These words make it clear that not all the requirements in the Architect’s
Specification are intended to be fixed and some are changeable. Indeed, a number
of requirements are generic, qualified as generally applicable and expressed as
subject to further discussion and direction on-site. Such requirements are not
intended to be fixed because they concern design and technical issues for the
Architect to resolve for and on behalf of the Owner during construction.
190 Subsection 37(2).
191 Subsections 37(3) and (4).
192 Clause A.01.06.
193 Clause A.02.01 [Contract Documents].
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For New Stone Masonry
363 The stone defects primarily concern the new masonry terms in the Architect’s
Specification and the extent to which these terms were superseded by the parties’
agreement to use Tasmanian instead of Basket Range sandstone.
364 The Owner’s pleaded case relies on parts only of four provisions in the
Architect’s Specification: clauses A.09.01, E.03.06. E.04.01 and E.04.03. The full
terms of the relevant provisions of the Architect’s Specification are relevant (and
not just the parts relied on by the Owner), and they must be read in the context of
the Building Contract as a whole and its purpose.
365 The Builder accepts these clauses remained relevant when Tasmanian
sandstone was selected and approved but says they apply in a much-modified form.
The Architect’s primary case is different and it contends these provisions were
largely superseded by the process of selection and approval adopted by the parties
and concluded in the June 2013 site meetings.
366 The following clauses relied on by the Owner in section E are specific to new
stone masonry and were modified at least as to the source of stone as shown by the
overstriking in the relevant parts of clauses E.03 and E.04 set out below.194 The
requirements highlighted in bold and underlined are central to the dispute as to
stone colour.
E.03 MATERIALS – STONE MASONRY
.01 Stone to new wall, extent as shown on the drawings ie:
- Front, west and portion of north wall of house to height of projecting course
- South wall of Garage; at back of swimming pool area
- Stone columns to rear Verandah
For these new walls, the Builder shall allow to supply and lay sawn faced Basket
Range sandstone. Refer also Spec Clause E.03.06 below
…
.06 Source of Stone
The Builder shall obtain at least two (2) quotations for the supply of Basket Range
Sandstone including the following selected contractors.
• Ashley Scott, Scott Quarries.
Phone: 8721 1122
• Basket Range Sandstone Quarry.
Phone: 8390 3420
194 Emphasis supplied.
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All stone purchased and used shall be consistent in colour, texture, density etc,
and within an acceptable range in comparison to the approved stone samples.
Stone sizes shall be confirmed on the site with Architect and stone supplier, prior to
delivery to site
E.04 WORKMANSHIP
.01 Samples
Submit samples of all masonry materials to be used in the works, including the stone.
Refer also Spec Clause E.03.06
…
.03 Bond and Jointing – Stonework
Generally stonework shall be laid in random ashlar pattern with 5mm fine mortar
joints in matching colour mortar. Discuss prior to commencing on site, and prepare
sample panel for the approval of the Architect and Owners
367 Notably, the Architect’s Specification did not require the Builder to clean or
seal the Basket Range sandstone.
Clause A.09.01
368 The Owner relied on clause A.09 as regards the quality of materials and the
standard of workmanship required for items alleged to be defects or incomplete
work referred to Arbitration. The Owner’s pleaded case on stone defects relies on
part of clause A.09.01 for the quality of the stone and workmanship in laying the
stone. The part relied on must be read in context and as the Builder and Architect
correctly submit, all of the surrounding words in the clause are relevant.195
A.09 MATERIALS AND WORKMANSHIP
.01 STANDARDS
Materials, unless otherwise specified, shall be new and of the best quality of the
respective kinds specified, and all subject to the Architects approval. Remove
condemned materials from site at once. Treat materials damaged on site as
condemned. Use proprietary materials and products strictly in accordance with the
maker’s instructions, and deliver to the site in their original unbroken containers.
Supply evidence, if required, of the quality of materials.
Workmanship shall be up to first class standards, and to the approval of the
Architect, who shall decide how far trade [custom] shall prevail.
Current editions of SAA Specifications and Codes shall apply to materials and
workmanship where not in conflict with the provisions of the Specifications.
The naming [in] the Specification of a proprietary item (whether material, product
or service) shall be deemed to indicate a standard of quality, type or finish which is
195 Emphasis supplied.
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acceptable subject to compliance with the relevant provisions of the Specification
but naming of such an item does not guarantee such compliance, nor does it imply
that no alternative may be approved. The Builder may submit alternatives for
approval and the Architect may approve them if he is satisfied that they are equal or
exceed the standard in all respects and comply with the Specification ABS, but no
claim shall arise from any refusal of the Architect to approve an alternative, or
because the cost of the alternative is greater than the cost of the named items.
If the cost of the alternative is less, the difference may be deducted from the Contract
Sum at the Architect’s discretion.
369 The requirements of clause A.09.01 apply generally and are not confined to
new stone masonry. Contrary to the Owner’s submission, there is no reason why
the express reservation to the Architect of approval of the specified materials and
workmanship (highlighted above) should not survive the selection and approval of
Tasmanian sandstone and subsequent variations to the stonework directed by the
Architect on the change from Basket Range to Tasmanian sandstone.
370 Their application does not however confer on the Architect a discretion to
override the express requirements as to the quality and standard of workmanship.
These provisions should be read as imposing a cumulative requirement for
performance of the works, imposing on the Builder a dual obligation as to the
standard of material and workmanship. As the learned authors of Brooking on
Building Contracts explain,196 clear and express words would be required for the
Architect to have the discretion to in effect waive the Builder’s breach of its
obligation to construct the works in conformance with the requirements of the
Building Contract.197
371 It is a different matter for the contractual requirement as to what constitutes
a first class standard of workmanship to be informed by the Architect’s decision
as to how far trade custom shall prevail. This is an important discretion expressly
conferred on the Architect and a matter that binds the parties in accordance with
the principles set out in Dura (Australia) Constructions Pty Ltd v Hue Boutique
Living Pty Ltd & Ors (No 3)198 as follows.
372 First, by the contract, the parties agreed to be bound by a determination made
in accordance with the terms of the contract. If the determination complied, the
parties were bound.
373 Secondly, this Court will not set aside the Architect’s determination simply
on the ground that it is incorrect or that it reveals errors. It must only be interfered
with if it is not made in accordance with the terms of the contract.
196 Cremean, Whitten and Sharkey, (LexisNexis, 6th ed, 2019) 205-207 [8.1].
197 National Coal Board v William Neill & Son (St Helens) Ltd [1985] 1 QB 300 at 321-322.
198 [2012] VSC 99.
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374 Thirdly, that the process of making the determination will be conducted
honestly, bona fide and reasonably will ordinarily be implied terms of the contract.
375 The proper construction and application of clause A.09.01 of the Architect’s
Specification are relevant to the disputes about the Owner’s claims that certain
works were defective. For example, as regards the Tasmanian sandstone affected
by ‘quarry sap’ it is alleged it was not best quality and the stonework was not up
to a best quality standard because the Architect changed the specification for joint
size to 10mm. The stone issues are addressed in Part E below.
Other Relevant Provisions
376 Whilst less central, the following further provisions in the Architect’s
Specification are contextually important. They are all provisions of general
application, and there is no suggestion of their modification by the varied
contractual requirements for new stone masonry.
A.01.08 CO-OPERATION
The Builder shall co-operate with the Architect and the Proprietor in ensuring
that the job progresses smoothly and satisfactorily. Any suggestion which the
Builder may have regarding possible improvements or savings in the job, will
be readily received and duly considered by the Architect.
A.05.06 DECISIONS
The decision of the Architect upon the quantity, quality and the state of the
work and on the general management thereof, and also as to the true intent
and meaning of the drawings and specification, shall be final and conclusive.
No expression of the Architect’s reasonable satisfaction or approval shall be
deemed to be an acceptance of the defective materials or workmanship not
complying with the terms of this Contract, nor as authority for any variation
except where such variation is authorised as provided in this Contract.
A.05.07 ON SITE INSTRUCTIONS
In order to avoid conflicts through verbal communications, it shall be a
requirement that the Builder obtain authorisation from the Architect before
accepting or implementing any on site instruction from the Proprietor, or any
other party other than the Architect.
377 These clauses reflect the Architect’s responsibility under the Building
Contract for design and resolving technical issues arising during the course of the
works for the Owner and the importance of the parties’ co-operation in achieving
the contractual objective of the construction of the Owner’s house in accordance
with the bargain made between the parties in the Building Contract.
378 The Architect and Builder rely on clause A.05.06 to contend that it is within
the Architect’s discretion to determine whether there is a defect or incomplete
necessary works. They contend if a defect/incomplete necessary works was not
identified and/or the Builder was not instructed to correct a defect/incomplete
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necessary works, the consequence is there is no defect/incomplete necessary
works.
379 These contentions should be rejected as a matter of principle given the
express definition of a defect or defective works in the Building Contract and
because they ignore the express words of clause A.05.06: “No expression of the
Architect’s reasonable satisfaction or approval shall be deemed to be an
acceptance of the defective materials or workmanship not complying with the
terms of this Contract…”.
Clause A.05.08
380 Finally, the Owner’s reliance on clause A.05.08 of the Architect’s
Specification as a primary ground for challenging the approved variations certified
in PPC 12 should be noted. Its terms are inconsistent in a material respect with the
scheme provided by sections J and H of the general conditions of the Building
Contract. Clause A.05.08 provides:
A.05.08 VARIATIONS AND ARCHITECT’S INSTRUCTIONS
Variations to the Contract Sum or Date for Completion, shall be authorised
only in a variation order issued by the Architect, in which the amount of the
variation shall be stated. Claims for variations shall be for the complete
amount of the variation and a claim for cost variation shall include consequent
claim for time variation, if any, and vice versa, otherwise it shall be held that
no such consequent claim shall exist.
All variations approved shall be listed and forwarded with each progress claim
submitted by the Builder.
381 Contrary to the blanket prohibition in clause A.05.08, section H contemplates
claims to adjust the contract more broadly and in different language, including in
circumstances where a variation has not been instructed by the Architect in writing:
clause H1.1.a applies where there is no instruction/variation order. The Architect
then must proceed to assess the claim under clause H3 and give a written decision
specifying any adjustment to the contract price under clause H4.
382 This inconsistency must be disregarded given that sections J and H of the
general conditions have a higher order of precedence than clause A.05.08 of the
Architect’s Specification by operation of clause B2 and Schedule 3 of the general
conditions of the Building Contract.
PART C: THE FACTS
The Parties and their Relationship
383 As already stated, the Owner was a relatively sophisticated party given her
experience in business, property ownership and building works. She selected the
Builder in a competitive tender after meeting Mr Cirocco in her old home and was
actively involved in the design and administration of the Building Contract, “more
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active than a lot of clients”.199 During construction and the certified defects
liability periods, the Owner usually attended and actively participated in the
fortnightly and then weekly site meetings during construction (often with
Dr Clarke), took lots of notes and corresponded regularly and extensively with the
Architect.
384 The Builder was an experienced builder, specialising in custom-designed
residences. Its principal, Mr Cirocco, whilst a less sophisticated and articulate
witness given his background and education, certainly knew his trade, and was
reputed to be thorough and produce quality work but was slow. The Owner was
told of his reputation, and that he was slow.
385 The Architect was a highly reputed professional firm of architects,
represented on this project by Mr Williams, a senior architect with leading
expertise and significant experience in high-end residential building works. He
took the design lead for the Owner’s project and was assisted by employed
architects (including Ms Crowden) and the Architect’s other principals from time
to time.
386 Mr Williams had worked with Mr Cirocco for many years on other residential
building projects before the Owner’s. The Builder was one of a pool of four to
eight builders the Architect kept busy who were all builders it could rely on for
their quality, their trades and their timing. The Owner and not Mr Williams made
the final decision in selecting the Builder. Mr Williams would have been happy
to work with any of the other builders on the short list.
387 The Owner submitted that in assessing the Architect’s conduct the subject of
her complaints, the Court should have regard to the close relationship between
Mr Williams and Mr Cirocco. The Owner pointed to a number of matters as
allegedly showing the Architect favouring the Builder and acting against her
interests or not acting independently in the discharge of his duties as assessor,
valuer or certifier. She went so far as to allege that the issue of AI:07 was to cover
up a mistake made in ordering stone for 10mm joints and Mr Williams’ failure to
defect the stonework was because Mr Williams was protecting the Builder.
Further, Mr Williams was himself in an awkward position in assessing the non-
compliant stonework because he had stepped in to help the Builder do its job in
obtaining samples of stone and ordering the stone. Further, the Architect consulted
the Builder in answering the Owner’s August 2015 notice of dispute and thereby
failed to act independently.
388 These serious allegations were not pleaded at the start of trial and were
initially only advanced for issues of credit. Ultimately, they are not founded in the
proven facts for the following reasons.
199 T1433.23-.28.
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389 First, there is the allegedly inappropriately close relationship between
Mr Cirocco and Mr Williams. On the evidence, there was nothing untoward about
their relationship.
390 It is uncontentious that Mr Cirocco and Mr Williams had a long and co-
operative working relationship. On this project, they usually met at least
fortnightly on-site during the construction phase of the project, and weekly once
the construction was out of the ground (which was sometime around March 2013).
These site meetings were also often attended by the Owner and Dr Clarke and
provided an opportunity for all to discuss issues arising. No doubt, they worked
like that on past projects.
391 Much of the conduct complained of was due to the informality of some
dealings between the Architect, Builder and Stone Supplier (which informality the
Owner does not complain about per se). This informality occurred in
circumstances where there was some urgency to resolve the design issue arising
over selection of an alternate stone.200 Their relationship in all the circumstances
was consistent with their express contractual obligations to co-operate and act
reasonably in all matters to ensure the smooth and satisfactory progress of the
job.201
392 Next there were the allegations about the Architect’s involvement in
obtaining stone samples for approval following the unavailability of Basket Range
sandstone. The Architect’s necessary and proper involvement was explained by
the Architect involving itself in an urgent and major design issue. It was not the
case that Mr Williams stepped in to help the Builder do the Builder’s job. He was
doing his job in moving the project forward when due to no-one’s fault an
important material was not available.
393 As to the communications between the Architect and the Stone Supplier in
May 2013, they were not inappropriate and do not show Mr Williams negotiating
price. As discussed below, 202 this does not follow because Mr Calabrese sent him
a fax that included prices and Ms Crowden, on Mr Williams’ instructions, later
analysed them and determined an average price per metre. The fax sets out
drawings showing stones that needed to be specially cut to fit complicated pillars
and corners.
394 It was the Architect’s role to supervise and approve final dimensions and the
design of the pillars, not the Builder’s. Mr Williams’ denial that he negotiated
price and evidence that he as the architect does not negotiate with suppliers, but
builders do, should be accepted. In any event, as the contract administrator, he
needed to know whether the quoted price exceeded the cost allowed in the Building
Contract price for a different material.
200 T1702.14-.15.
201 Building Contract, clause A1; Architect’s Specification, clause A.01.08.
202 See [533] and following below.
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395 Perhaps the most serious allegations were those concerning the suggestion
that Mr Williams issued AI:07 to overcome the alleged difficulty that the
stonework had begun to be laid with 10mm joints contrary to the Architect’s
Specification. As discussed below,203 the evidence shows that the decision to
change the joint size was made as part of the decision to change the pattern from
random to stretcher bond, following the Owner’s general approval of the
stonework at Kermode Street as the design intent for new stone. This decision led
to the selection of Tasmanian sandstone at the Gillman Meeting on 30 April 2013.
396 The facsimile the Stone Supplier sent to Mr Williams on 9 May 2013 (the
9 May Fax)204 therefore confirms 10mm joint sizes had already been discussed
between the Architect, Builder and Stone Supplier. Certainly, the stonework had
not commenced before the change in pattern and joint size was decided or
instructed orally. As discussed below,205 the evidence does not establish the
stonework commenced before 12 June 2013 when AI:07 was issued to formalise
the instruction as to joint size.
397 The allegation that the Architect compromised its duty of independence in
consulting the Builder in preparing its response to the Owner’s August 2015 notice
of dispute is also without foundation. The letter comprising the notice of dispute
concerned the Architect’s 19 July 2015 defects list and a proposed agreement to
progress the defect works as proposed by the Owner. It was necessary for
Mr Williams to liaise with the Builder and the Stone Supplier about their
availability and the programming the proposed defect works and the Owner well
knew that from earlier correspondence. The Architect’s response to the Owner’s
notice of dispute addressed both her notice and the proposed agreement to progress
the works.
Design and Specification of Basket Range Stone
398 The Architect’s retainer was formalised in about March 2012 when the
Owner engaged the Architect to design a new residence and convert the existing
church hall into a ground floor garage with a bedroom and bathroom on the first
floor.
399 Mr Williams led the design process, naturally with the close involvement of
the Owner and Dr Clarke and the assistance of the Architect’s employed staff.
400 The design process was substantially completed by September 2012 and
formally documented in the written Architect’s Specification. Mr Williams was
closely involved in its preparation and recalled Ms Crowden assisting him put it
together.
203 See [447]-[449] and [552] and following below.
204 See [525] below.
205 See [547].
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401 The Owner said in evidence she relied on the Architect to prepare the
Specification for her, make the necessary decisions to ensure the works proceeded
in accordance with the overall design intent and she entrusted the Architect with
approval of workmanship and the determination of how far trade custom would
prevail. The Owner said she did not read the Building Contract and only briefly
read some of the Architect’s Specification. 206
402 Both the Owner and the Architect shared high expectations of the standard
of design and build of the house and the renovated church hall, including the new
stonework which was an important feature.207 The Owner expressed in evidence
her general “hope for a fine stone home”.208 The Owner selected the Builder
because she and Dr Clarke were impressed by Mr Circocco’s commitment to doing
a quality job. The Owner’s concern for high quality is a relevant consideration,
but it should not overbear the Court’s objective assessment of what in point of fact
constitutes the manifestation of the parties’ agreement for the supply and use of
Tasmanian sandstone on the new stone masonry walls in all the proven
circumstances.
403 The Owner said in instructing the Architect she gave a lot of thought to the
design of her new residence and referred to her wish list for the kitchen, rear
outdoor entertaining area and other features she wanted. Because of the Council’s
Land Management Plan requirements, the heritage overlay of the area and the
neighbouring homes, the house was to be constructed of “some kind of stone”209.
She said in evidence she accepted Mr Williams’ view that the stone would not be
bluestone like the existing church hall but a “cream coloured stone”.210
404 Mr Williams gave contrary evidence. In cross-examination he agreed the
Owner was more interested in paler colours but disavowed discussion of a cream
coloured stone as the design intent. The stone originally specified by the Owner
was Basket Range sandstone, a stone Mr Williams described as “multicoloured”,
“sort of brownie-grey-creamy” colours211 and not a cream or creamy white stone
or very light stone. Mr Williams’ evidence about the colour and variability of
Basket Range sandstone was not challenged.
405 Moreover, Mr Williams’ evidence was supported by the evidence of
Mr Penglase, an expert architect, who in his Second Report described the
characteristics of Basket Range sandstone. He said there is significant variation in
colour and texture and a very limited opportunity to get a consistent and even
206 T527.3-.528.28.
207 T1469.3-21.
208 T370.27.
209 T118.4-.5.
210 T118.36-.38.
211 T1477.36-1478.11.
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colouring from it. Further, Tasmanian sandstone has similar qualities in
appearance to Basket Range sandstone.212
406 Mr Williams’ evidence should be preferred to the Owner’s as to the original
design intent for stone colour.
407 As to the design intent for stone colour, there is one final matter to address.
It concerns the Owner’s reliance on the handwritten entry in her diary relied on as
evidence that she required white stone, a requirement allegedly communicated to
Mr Williams early on. Her evidence was that the note “Ros wants white stone”
was written by her as a note to her husband whilst he was on the telephone speaking
to Mr Williams to prompt him to tell Mr Williams this. It was written next to the
entry on 12 April 2013, the likely date of the meeting in the Architect’s boardroom
to view stone samples, in her hand in a different pen. It is unclear when it was
written.
408 This evidence was not compelling and should be given little weight for
several reasons. First and most importantly, any requirement for white stone was
inconsistent with the specification of Basket Range sandstone and subsequent
selection of light coloured Tasmanian sandstone at the Gillman Meeting. Both
have similar qualities in appearance and neither is a uniformly white stone.
409 Secondly, the circumstances in which the note was claimed to be made were
odd. Why was Dr Clarke talking to Mr Williams and not Mrs Clarke given she
generally handled the communications with the Architect and allegedly it was her
preference. If it was to reiterate the preference expressed in the boardroom for the
white stone she referred to in evidence, her requirement was superseded by her
selection and approval of the Stone Supplier’s colour categories ‘1’ to ‘3’ at
Gillman that were not white either.
410 As to the originally specified pattern and jointing of the stonework, the
Owner did not stipulate any specific requirement and was guided by Mr Williams
who prepared the Architect’s Specification and subsequent Architect’s instructions
without objection from the Owner. As already mentioned, the Owner did not read
all of the Architect’s Specification, relied on the Architect to ensure the design
intent was achieved and did not identify any deficiency in the jointing prior to
Professor Danvers expressing adverse views about the workmanship in 2019 in the
course of litigation.
411 Mr Williams specified the stonework be laid in a random ashlar pattern with
5mm fine joints in clause E.04.03 of the Specification. Fine 5mm joints were
Mr Williams’ considered requirement as Architect for a random ashlar pattern
212 Exhibit TP1.33 page 2728.
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involving different size stones and a random arrangement of joints. Mr Williams
explained that with a random ashlar pattern:213
… you can get too many joints and too many small stones and it gets a bit of a mish [mash]
– it looks like a jigsaw puzzle and that’s why 5mm is often used, not always, it’s often used.
The one we took the clients to, it was a reasonable example, quite a good example but there
were some small stones in it, it was 10 mil joints in that one anyway.
412 Joint size was therefore a consideration connected to the pattern of the
stonework and was a changeable requirement determined by Mr Williams as part
of the design decision to replicate the stonework at Kermode Street.
413 The Specification required the Builder to obtain at least two quotations from
two nominated contractors and for samples of Basket Range Sandstone to be
approved. Mr Williams recalled the Builder had obtained and submitted
quotations for Basket Range sandstone as part of its tender.
414 Save for the nomination of Basket Range sandstone, the requirements for the
stonework in the Specification were generic, standard provisions included by the
Architect and not reflective of any specific requirement stipulated by the Owner.
A number of specified features of the stonework were ultimately to be confirmed
with the Architect on-site (stone sizing, stonework jointing and bonding including
mortar colour). As Mr Williams explained in cross-examination,214 these were
changeable requirements between tender and construction involving design issues
requiring the Architect’s approval, consistent with the Architect’s responsibility
under the Building Contract for ensuring the true design intent is met by the built
works.
Selection of an Alternative Stone
415 It is uncontentious that after the Building Contract was signed, there was a
difficulty with the availability of Basket Range sandstone. This difficulty was
discovered after the Builder had obtained four or five samples of Basket Range
stone and delivered them to site sometime after Christmas 2012.
416 It was Mr Williams’ recollection that the Builder told him that Basket Range
sandstone would not be available in sufficient quantities for the next nine months.
He informed the Owner, and a process was begun for the selection and approval
of an alternative stone involving views of houses with different stone facades and
arranging for samples to be delivered to the Architect’s office for viewing.
417 As to the samples, they were obtained by the Architect from quarries in New
South Wales, Queensland, Tasmania and Western Australian. After a preliminary
review, some heavily veined and very colourful stone was excluded by the
Architect, and the rest were placed in the Architect’s boardroom for review in a
meeting with the Owner and Dr Clarke. The Clarkes met with Mr Williams and
213 T1476.2-.8.
214 T1477.14-.27.
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Ms Crowden to review the samples and discuss some indicative pricing on about
12 April 2013 according to the Owner’s diary.
418 Mr Williams could not recall the meeting. Ms Crowden did and was able to
describe the stone samples in some detail. First, there was one stone from Gosford
Quarries that was “almost purely white with really not any [characteristics] of the
stone on it, it looked just like a white block.”215 There were also a couple of samples
of Tasmanian sandstone that were very lightly coloured: one was a lighter cream
stone with “some movement and some colour but not a great deal” and another
cream based stone “that was sort of slightly more coloured and [had] slightly more
movement through it”.216 The Queensland stone was more coloured and had more
movement and another was discounted because it was far too colourful.
419 The Owner described the same stones as “very light, very pale” and one from
Tasmania she liked was “cream” with a “gold fleck”.217 Dr Clarke similarly
recalled liking a single stone with a “slight gold fleck”.218 Ms Crowden did not
recall the gold flecks in the lighter of the two samples of Tasmanian sandstone.
420 Contrary to the Owner’s submissions, the evidence does not support a finding
that when the Owner said she wanted the lighter of the two Tasmanian sandstone
samples she thereby conveyed to the Architect, without any doubt, that the stone
she required was to be light and cream coloured, without yellow veining or yellow
colouring.219
421 Notably, the Owner did not prefer the whiter stone from Gosford Quarries
despite her later claims at trial that she required white stone. Nor did the Owner
or Dr Clarke express any dislike of yellow veining or yellow colouring in this
meeting. When asked whether the stone the Owner’s said she liked in the
boardroom was consistent with what the Owner had indicated she liked at the
Gillman Meeting, Ms Crowden emphasised the following obvious and important
contextual fact:220
Generally, yes, obviously, the stone would differ from one block of stone to another block
of stone.
422 Further, as is self-evident for any natural stone product, Ms Crowden said the
samples of Tasmanian sandstone viewed in the boardroom (and at Gillman) were
indicative of the range of stone to be supplied:221
215 T594.16-.18.
216 T594.15-.22.
217 T136.9-.10 and .12-.13.
218 T708.5-.18.
219 Owner’s Final Closing - Annexure [16] and [17].
220 T623.1-.6.
221 T624.1-.5.
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Well, the samples that we got, and the samples that we saw onsite came from different parts
of the quarry, and so they were indicative of the range, and not necessarily indicative of the
entire stone that would be supplied.
423 The result of the meeting was that a preference was expressed by the Owner
and Dr Clarke for light coloured Tasmanian sandstone, a stone that Mr Williams
had worked with before. No final selection was made or approval given at this
meeting for Tasmanian sandstone to be specified as an alternative to Basket Range
sandstone.
424 As to the views of the stonework of Kermode Street and Dutton Terrace,
no-one could precisely date when they occurred. It happened too long ago.
Although Ms Crowden did not attend them, it was her evidence that the views of
built stone were precipitated by the Owner and Dr Clarke expressing a preference
for Tasmanian sandstone in the boardroom meeting when they viewed the stone
samples. The Owner had a different recollection and remembered the boardroom
viewing of the samples as occurring after the views, although she could not be
sure. What is clear is that the viewing of the boardroom samples and views
occurred before the Gillman Meeting on 30 April 2013. Dr Clarke recalled
attending the views before the Gillman Meeting, consistent with Mr Williams’
denial in cross-examination that the views occurred after the Gillman Meeting.
425 Ms Crowden’s recollection that it was decided in the boardroom meeting to
visit the Stone Supplier’s yard at Gillman as the next step is most plausible.
426 There is therefore no foundation in the evidence for the Owner’s contention
that the views occurred after 1 May 2013 when AI:04 was issued.222
427 That said, nothing really turns on which happened first because the decision
to select Tasmanian sandstone was finally made later at the Gillman Meeting on
30 April 2013.
428 It was Mr Williams’ suggestion to the Owner and Dr Clarke that they look at
some houses he had designed using different types of stone. That was a sensible
approach to take and provided the Owner and Dr Clarke with considerably better
information about the stone than viewing a few samples of a natural product.
429 Mr Williams nominated a house in Kermode Street built of Tasmanian
sandstone and another at 34 Dutton Terrace built of Western Australian limestone
he had designed that had been constructed by the Builder. Two photographs of the
house at 34 Dutton Terrace were received in evidence showing it is built of a
uniformly coloured light stone in a stretcher bond pattern.223
430 The recollection of the Owner and Dr Clarke was they visited a different
house at 24 Dutton Terrace and visited both it and Kermode Street for the limited
222 Owner’s Stone Closing [65].
223 Exhibit TP1.8.
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purpose of considering the pattern of the stonework: random or stretcher bond.
Neither Mr Williams nor the Builder had any connection with the house at
24 Dutton Terrace that the Owner and Dr Clarke now claim they were
shown. Mr Williams had no recollection of looking at No. 24 with them or any
serious interest in it, although they likely drove past it given its proximity to
No. 34.
431 Mr Williams’ recollection should be preferred. It is not plausible that
Mr Williams would have suggested the Owner view a house he had not designed
in which he had no particular interest and also had no connection with the Builder.
That Western Australian limestone was excluded as a suitable alternative to Basket
Range sandstone is consistent with the view being of 34 Dutton Terrace.
432 It should therefore be accepted that the views of Kermode Street and
34 Dutton Terrace occurred as part of the process for selecting and approving an
alternative stone, not just in finalising the pattern of the stonework as contended
by the Owner. In the circumstances of being ‘back to the drawing board’, it would
have been incongruous for the purpose of the views to be limited to consideration
of a single attribute of the stonework when all were relevant design considerations.
Kermode Street
433 It is uncontentious that the Owner and Dr Clarke visited the Kermode Street
house with Mr Williams, liked the smoothness and the stretcher bond pattern of
the laid stonework they saw and told Mr Williams so.
434 The Clarkes arrived separately from Mr Williams, but they all viewed the
stonework together on the western side wall, both from the top of the street and as
they walked towards it. They then viewed the stonework on the front. Photographs
of Kermode Street were received in evidence showing the stonework in 2022.224
435 The Owner gave evidence that she was not told that Tasmanian sandstone
had been used to build Kermode Street. This evidence should be rejected. That
they viewed two houses built of different stone and rejected one stone is a
compelling reason for her to be told which stone they were built from. It is
implausible she was not told. There was no reason for Mr Williams not to tell her
and every reason for him to tell her the source of the stone when they were
investigating an alternative stone. Its source was an important and necessary fact
to know. Mr Williams was quite effusive in evidence in discussing the house and
stone used. More than 10 years later he was still proud of the design and said as
much: he said they used what he thought was “fairly handsome stone” on “quite
a nice looking house”.225 It was likely he was the same when he discussed the
stonework at Kermode Street with the Owner and Dr Clarke in about April 2013
and said it was Tasmanian sandstone.
224 Exhibit TP1.27 pages 66 to 74.
225 T1417.4-.6.
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436 The Owner nevertheless accepted in cross-examination that aside from the
stretcher bond pattern of the stonework which she liked, she did notice the colour,
the variability and non-uniformity of the colour within a stone and between stones
in the stonework, the overall appearance of which she described as
“multicoloured” and “variable”.226 However, the Owner repeated her earlier
evidence that they did not discuss the colour of the stone and the meeting was cut
short by Mr Williams leaving them outside when the householder came home.
437 Her evidence is inconsistent with the answer she gave in her Response to
Notice to Admit:227
The defendant’s only connection with [Kermode Street] was that Mr William in his
capacity as Architect, suggested to the defendant that she should inspect the exterior of the
said home as an example of the use of sandstone in the construction of a house…
438 Again, it is implausible that there was no discussion about the source or type
of stone, or its colour given the importance of the decision to select an alternative
stone.
439 Dr Clarke’s evidence of the extent of their approval of the Kermode Street
stonework went further than the Owner’s. He said they looked at it and whilst he
was not impressed by the colour, the stone was of the type they required and the
overall concept was good as regards the laying of the stone including the mortar,228
plainly meaning generally and more than just the stretcher bond pattern.
440 Mr Williams’ gave contrary evidence to the effect that the Owner and
Dr Clarke’s approval of the stonework at Kermode Street was unqualified. His
evidence that the purpose of the view was to look at the stone itself and not just
the pattern should be preferred to the Clarkes’ evidence on this critical topic.
441 He said in examination-in-chief, the Kermode Street house:229
… was one of the ones I took them past, and they seemed to like the stone and liked the
house and so that was one of the ones under consideration…
[it was under consideration] because it was readily available stone from Tasmania and I
hadn’t checked …[but] assume[d] the quarry was still open and they liked it and I liked it.
442 When specifically asked what observations and comments were made to him
by the Owner and Dr Clarke about the stonework at Kermode Street, Mr Williams
confirmed they liked the stone and “seemed to be quite favourable to the overall
look of the house and the stonework”.230
226 T247.29-248.14.
227 Exhibits A6 and A7.
228 T707.23-.36.
229 T1417.7-.15.
230 T1422.9-.10.
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443 Mr Williams confirmed his understanding of the Owner and Dr Clarke’s
unqualified approval of Kermode Street stonework again in cross-examination
(albeit on the different topic of the sample dry wall built on-site):231
Well I mentioned it before. We didn’t feel as though it was terribly controversial. We
thought the clients and everyone understood what we wanted to do. Everyone had seen
Kermode Street. Everyone liked Kermode Street. That was our guiding light. That was
going to be the pattern, the joints, the colours, everything except the details of the house
that we were about to start …
444 All of the characteristics of the stonework were obvious from looking at the
walls of the Kermode Street house, from across the street and up close. Again,
there was every reason to discuss every aspect of the overall appearance (that is,
the colour, the pattern, the joints and workmanship) and no reason not to, given
the purpose of the view was to consider an alternative stone to Basket Range
sandstone.
445 That the Owner and Dr Clarke communicated to Mr Williams their general
approval of the Tasmanian sandstone at Kermode Street as a suitable alternative is
consistent with the decision to proceed with an inspection of Tasmanian sandstone
at Gillman.
446 That Mr Williams’ understood the Owner liked the stone and stonework at
Kermode Street was confirmed by Mr Calabrese who gave evidence that
Mr Williams told him that when he telephoned to arrange the Gillman Meeting.
Contrary to the Owner’s objection to this evidence as hearsay, his evidence is
admissible for the use of proving Mr Williams’ understanding.
Change of Pattern and Jointing
447 Contrary to the Owner’s contentions, Mr Williams’ evidence should be
accepted that the decision to change the specified pattern and jointing was made
as part of the decision to replicate the stonework viewed at Kermode Street. This
decision was made at or shortly after the view and before the Gillman Meeting.
448 Mr Cirocco was told about this decision orally before he ordered the stone.
449 The Owner’s reliance on the 9 May Fax232 as showing the decision to change
from a random ashlar pattern was made later (contrary to Mr Williams’ evidence)
is misplaced. Mr Calabrese confirmed what is apparent from the facsimile that he
was quoting for four ‘random’ lengths all of the same height, consistent with a
stretcher bond rather than random pattern. Not every stone laid is the same length.
This is clear from the photographs tendered in evidence,233 showing different
231 T1494.21-.28.
232 Exhibit R3.41.
233 Exhibit R3.421.
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lengths around corners and (as Mr Calabrese’s drawings show) different lengths
were required for the pillars in places.
The Gillman Meeting
Their Purpose
450 After the Owner and Dr Clarke expressed an interest in the samples of
Tasmanian sandstone viewed in the Architect’s boardroom and their general
approval of the stonework at Kermode Street, Mr Williams spoke to the stone
supplier for that job. He was directed to Mr Calabrese of the Stone Supplier with
whom Mr Williams had not previously dealt. Mr Williams then organised the visit
to the Stone Supplier’s Gillman yard. He said he took the Clarkes to look at the
Stone Supplier’s sandstone range because he wanted the comfort of actually seeing
the stone that was then available to be supplied to ensure it still had the same
characteristics as the stone installed at Kermode Street a number of years before.
The Stone Viewed
451 It is common ground that the Gillman Meeting took place on 30 April 2013
during daylight. The Owner was mistaken in her recollection that that the meeting
occurred late in the afternoon and that Ms Crowden left early in a separate car.
Controversy over these details is of no moment.
452 The Owner, Dr Clarke, Mr Williams, Ms Crowden, Mr Cirocco and
Mr Calabrese were present. During the course of the visit, Mr Calabrese walked
the group around the yard and explained his colour range and classification system
for the sandstone stock displayed on pallets. They saw various pallets of sandstone,
inspected the stone on one closely, later had coffee in Mr Calabrese’ caravan and
he showed them through his partially built new showroom. Almost all the
discussion occurred between Mr Calabrese, the Owner, Dr Clarke and
Mr Williams. Whilst Mr Cirocco did not actively participate and had little
recollection of the discussion, Ms Crowden was as attentive observer.
453 While showing them around, Mr Calabrese told them about the stone on
display on the pallets in the yard was graded into three colour ranges of light,
medium and dark stone corresponding to colour categories of “1-4, 4-8, 8-12”.234
He told them these colour categories went from lightest to darkest by reference to
a number from ‘1’ to ‘12’, with “white No.1, and really dark No.12”.235
454 In evidence Mr Calabrese explained the grading was done at the quarry in
Tasmania by reference to 12 pieces of stone kept in the quarry lunchroom that
“more or less” indicated the 12 colours.236 From his evidence it should be inferred
it was done manually by a visual comparison of the quarried stone to the
234 That is: at T1645.23-.25.
235 T1637.13-.14.
236 T1667.3-.6.
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12 lunchroom pieces. Whilst it is unclear on the evidence how far Mr Calabrese
went on the day in explaining how his colour selection method was done, it should
be accepted that by what he said he made clear his method was relatively
unsophisticated and unscientific. Both Mr Williams and Ms Crowden gave
evidence that they understood this from what he told them.
455 Some of the witnesses recalled the range comprising nine237 or ten238 colours
and therefore the lighter range comprising only colours ‘1’ to ‘3’. Mr Calabrese’s
evidence should be preferred. It was his evidence that the Stone Supplier’s grading
system had been the same and not changed for some 20 years since it was
introduced to facilitate ordering different colour ranges by telephone from
Adelaide. He was clearly the person who best knew, and the other witnesses were
not certain about it or in any position to disagree.
456 Mr Calabrese was told early on they were only interested in the lighter range
of his stone. The group’s attention was therefore focussed on this range, although
Mr Calabrese pointed out examples of his darker stone on his partially built
showroom and in passing.
457 In the course of walking around the stone on pallets, Mr Calabrese cut open
the shrink-wrapping on one pallet from the lighter range to show them the
individual stones on it. In evidence, Mr Calabrese said the pallet was stone for a
job for the builder Danny Palumbo and confirmed twice the stone he showed the
that the owner selected was colours ‘1’ to ‘4’ being his lighter range but then said
it was ‘1’ to ‘3’. Mr Williams also described it in evidence as a pallet of colours
‘1’ to ‘4’. Ms Crowden’s recollection was that it was labelled ‘1’ to ‘3’. Whether
there were stones of colour ‘4’ on the pallet is unresolved.
458 Mr Calabrese pulled out and put on top some of stones of varying colours
and patterns for them to see an overview of the colours in his light range.
459 Mr Cirocco recalled two, three or four stones being shown to them so they
could see their colours. He described them as “mixed colours”239 and light, not
dark colours and “the colour was varied, you know, all varied because that’s the
stone.”240
460 Ms Crowden had the clearest recollection of the detail of the individual stones
they were shown. Her account should be accepted as reliable. Ms Crowden
described the stone from the pallet shown to them by Mr Calabrese as regularly
shaped with various markings:“… some that were particularly light and some that
had some colouring in it and some that were slightly darker”.241
237 T141.2 [The Owner]; T598.8-.13 [Ms Crowden].
238 T710.4; T730.8 “but it may have been [12]” at T767.15-.17 [Dr Clarke].
239 T1173.15-.31.
240 T1176.1-.2.
241 T599.9-14.
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461 When asked whether the stone had striping or patterning Ms Crowden said:242
Yes, they did. They looked like sandstone with natural movement in it. As I said, there
was one that was lighter that had sort of less movement and less colour and less markings
through it, there was one that was medium, mid-range, that had markings in it and natural
features and the darker one again had sort of veining through it in a slightly lighter tone.
462 Whilst Ms Crowden understandably could not recall specifically what was
on the exact stones they were shown, she explained by ‘natural movement’ she
meant natural imperfections, colour variation, blemishes and marks throughout the
stone because she knew:243
… a feature of the stone from seeing it on site is that some have circular markings, some
have sort of diagonal markings through either a deeper or a lighter colour, others have little
sort of pinpricks of colour that looks a deeper colour, it is all part of the natural stone.
463 In cross-examination, Ms Crowden agreed with the Owner’s counsel that the
lightest stone they were shown was nominated by Mr Calabrese as an example of
a colour ‘1’ and might possibly be described as ‘white’ because it was quite a
bright day. However, she did not accept that it was essentially white because she
could not now recall if there were any blemishes or markings on it.244 She also
agreed Mr Calabrese nominated stones as colours ‘2’ and ‘3’ but did not agree the
‘2’ was a uniform cream colour with no sedimentary lines, consistent with her
earlier evidence that the mid-range stone had markings and natural features in it.
Ms Crowden further accepted the third stone was nominated as a colour ‘3’ and
was predominantly cream but said it was a darker stone, having described it earlier
as having “sort of veining through it in a slightly lighter tone”.245
464 In cross-examination, Mr Calabrese accepted there was a band of yellow in
colour ‘3’.246
465 Neither example of a colour ‘2’ or ‘3’ stone they were shown was a uniform
white or cream stone.
466 In explaining how the Stone Supplier’s colour grading worked, Mr Calabrese
told them that there would be variation within a batch of any colour category. He
said this several times in different ways as he showed them his stone and
recommended the Owner select a range of colours and not a single colour because
of the inevitable variation in the natural sandstone that brought in many colours to
any single colour category. It was, as he said, unrealistic to pick a single colour
category or expect consistency of colour within any colour category.
242 T599.22-.28.
243 T600.1-.6.
244 T599.27-.28.
245 T599.27-.28.
246 T1673.18.
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467 It was apparent from looking at the stone they were shown that variation
might occur within a single stone and between stones, either in the background
colours or as movement (as Ms Crowden described it) in the form of sedimentary
lines and other markings in any one stone.
468 It was also apparent from looking at the stone they were shown that the colour
of stone within the Stone Supplier’s light range was not uniform within any of its
colour categories, and the colour categories each involved a range of colours, the
categories overlapped and were not mutually exclusive. This was why it was not
feasible (or ‘realistic’ as the witnesses described it) to select a single colour
category and expect uniformity of colour even in the lightest colour categories ‘1’
or ‘2’ and Mr Calabrese told them as much when he said his grading system did
not work like that.
469 Mr Williams’ recollection of their discussion about the variation in the colour
categories was consistent with Ms Crowden’s evidence as follows:247
… and we walked with Rito and he talked us through the different colour ranges. The
Clarkes took a while, but we looked at everything, but Ros certainly liked the lighter shades
with a preference, I think, even for the 1s. I quite liked the 2s and Rito made it quite clear
all along that they were all the lighter colours and even if you asked for a 1 or a 2 or a 3
you will get – there was always going to be some…level of variation in the colours, even
if you chose a particular colour. His recommendation was to choose a range of colours like
the lighter range 1-3s and I think because Ros had started with a preference of 1s, but I
think she sort of leaned towards the 2s after some discussion. So, in the end, I think we all
decided that 2 was the objective – to try and get the house built of 2s, but accepting Rito’s
comments that there is going to be some colour variation which will seep in for the 1s and
3s, and we expect no 4s.
470 Whilst her evidence at trial was different, the Owner’s answer in her
Response to Notice to Admit (although attributed to both Mr Calabrese and
Mr Williams) was consistent with Mr Williams and Ms Crowden’s evidence on
this topic. That is, they said:248
words to the effect that choosing one colour category only was unrealistic and in acting on
that advice, [she] said she required sandstone in the colour range 1-3.
471 The Owner’s answer in her Response to Admit should be accepted as more
reliable than her evidence at trial.
472 The samples of Tasmanian sandstone the Owner was shown in the
Architect’s boardroom and at the Gillman Meeting were plainly just that: single
stones from the Stone Supplier’s Tasmanian light sandstone range. As such they
were indicative and not representative of the entirety of any colour category in the
Stone Supplier’s light sandstone range. That this was the case was all the more
obvious given the discussion at the Gillman Meeting about the variation in colour
247 T1423.22-1424.10.
248 Exhibits A6 and A7 [12.5].
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within the Stone Supplier’s colour categories and that it was unrealistic to order a
single colour category and expect any uniformity of colour.
Cleaning and Sealing
473 On the topic cleaning and sealing the sandstone it is important to distinguish
between general cleaning of the stone, chemical cleaning using a diluted solution
of acid and sealing the cleaned stone. The general cleaning process involves
removing any paint and mortar splashes, scuffs and general debris accumulated on
the face of the stone during construction. The purpose of acid cleaning is to
remove organic matter from the face of the stone that has leached out from the
freshly quarried wet stone as it dries. This phenomenon was referred to as ‘quarry
sap’ in the pleadings and at trial.
474 It was Mr Calabrese’s evidence that he told the group at the Gillman Meeting
that the stone would darken over time and sometimes some would discolour and
go grey or black due to organic matter leaching out as the stone dried. In speaking
about stone ‘darkening’ and ‘discolouring’, he was referring to two different
phenomena.
475 As to some stone darkening over time, Mr Calabrese’s evidence was clearest
in cross-examination (by the Builder). He said he showed the Owner and the others
his partially completed showroom and pointed out some stone that was once “a
little bit white”249 but it had darkened over time. This disappointed him because
he wanted more contrast with the darker stone he had used. Mr Calabrese also said
it was his practice to always tell customers that the colour of the stone might
change over time: 250
I tell them and I tell you get more colour, look my building, and I explain, you know. In all
of it that’s the lessons.
476 As to the stone discolouring and going grey or black, Mr Calabrese was
referring the second phenomenon of ‘quarry sap’. Mr Calabrese reiterated in
evidence many times he did not consider this sort of darkening to be a problem or
a difficulty because in his experience it could be easily fixed by cleaning or
washing the stone with acid. When challenged in cross-examination by the Owner
that he did not mention ‘quarry sap’ at the Gillman Meeting (whether in those
terms or otherwise), Mr Calabrese strongly disagreed but did accept he may not
have given a demonstration of spraying black stone with acid to show how the
‘quarry sap’ is easily cleaned off (as he did during Associate Professor Danvers’
visit and the Court view).
249 T1728.7.
250 T1727.24-.26. His earlier affirmative answer in cross-examination by the Owner to the question that he
was mistaken and did not say this should be accepted as wrongly answered, likely because he did not
understand the question or listen properly as shown by his other evidence at times. See T1681.9.
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477 There is some confusion in the evidence of the other witnesses at times about
which phenomenon they or counsel were referring to.
478 In her evidence, the Owner disagreed with Mr Calabrese and said there was
no discussion at the Gillman Meeting about the possibility of some stone darkening
over time or the need or preference for at least cleaning and sealing or how that
process would deal with the possibility of darkening. She did say Mr Calabrese
showed them his building, talked about it and his preference for darker colours at
the other end of his range (colours she did not like at all).
479 Initially she said her first knowledge of ‘quarry sap’ was when she saw black
stones in the stonework on 18 June 2013. She denied in cross-examination being
advised in November 2012 by Mr Williams not to accept stone blighted by ‘quarry
sap’ despite the allegation in her primary pleading on her instructions that she was
so advised.251 She later accepted that she knew about the possibility of ‘black’
stones before construction started from viewing a house in Unley Park designed
by Mr Williams built of Chinese stone but said she was told nothing could be done
about them when they appeared.252
480 Mr Williams said in evidence Mr Calabrese explained ‘quarry sap’ from the
start, possibly at the Gillman Meeting, and told them this darkening of the stone
was a simple process to clean. Since Mr Williams already knew about the
phenomenon of ‘quarry sap’ (because he had dealt with it before at Unley Park and
Kermode Street) he appreciated what Mr Calabrese was telling them about the acid
washing process being simple and its purpose.
481 Ms Crowden confirmed there were definitely discussions about acid washing
the stone, primarily between Mr Williams, Mr Calabrese and the clients, but she
was unsure whether that happened at the Gillman Meeting. Again it was all so
long ago, she could not be certain.
482 Sealing by the Stone Supplier was identified in AI:04, issued the day after
the Gillman Meeting. It was a new requirement because neither acid cleaning nor
sealing of the stonework was required by the Architect’s Specification and formed
part of the Builder’s original scope of works under the Building Contract.
Although only sealing is referred to, that it is suggests that the need or preference
for acid washing and sealing the stonework was discussed at the Gillman Meeting
in context of Mr Calabrese telling them about the possibility that the stone colour
would darken over time.
483 Mr Williams had first recounted the matters discussed at the Gillman Meeting
in some detail in his letter to the Owner dated 23 February 2015,253 including their
discussion with Mr Calabrese about the tendency of sandstone to darken after
251 Seventh Cross Action [19A.3].
252 T249.37-251.5.
253 Exhibit R3.226.
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laying, ‘quarry sap’ and addressing it by acid cleaning. His account in this letter
should be accepted as a reliable summary of what happened.
484 It should therefore be accepted that Mr Calabrese told the group at the
Gillman Meeting about both stone darkening after it was laid and ages and the
possibility of ‘quarry sap’. This no doubt led to the discussion about acid cleaning
and sealing the stone and the reasons why this was needed or at least preferrable
in general terms. It should also be accepted that Mr Williams understood what
was conveyed by Mr Calabrese at the Gillman Meeting about the darkening of
stone as it ages and the phenomenon of ‘quarry sap’ as did the Owner who had
discussed it with Mr Williams previously in the context of the Chinese stone.
485 Accordingly, the Owner’s evidence that there was no such discussion should
be rejected.
The Agreed Colour Selection
486 The outcome of the Gillman meeting was that the Owner selected colours ‘1’
to ‘3’ from the Stone Supplier’s lighter range of Tasmanian sandstone for the new
stone masonry and conveyed her selection orally to Mr Calabrese and
Mr Williams.
487 That this was the case was ultimately accepted by the Owner in cross-
examination and was consistent with both Mr Williams and Ms Crowden’s
evidence. Mr Calabrese’s recollection that the Owner selected colours ‘1’ to ‘4’
should be accepted as mistaken.
488 The evidence was therefore contrary to the Owner’s pleaded case (‘2’ to ‘3’)
and the case ultimately advanced in final submissions (‘2’). It was also not the
Owner’s evidence in examination-in-chief.
489 In examination-in-chief, the Owner initially said after being shown a mixture
of stones on a pallet she expressed her preference for the lightest stone, nominated
as colour ‘1’. She described that stone as “creamy white”.254 She said
Mr Williams said “that’s just a bit restrictive”255, her husband agreed and “the
general agreement on the day was that we would be pleased with colours 1-2.”256
The Owner affirmed her evidence that this was the outcome of the selection made
at the Gillman Meeting numerous times in examination-in-chief and initially in
cross-examination.
490 It is uncontentious that the Owner did say she liked the lightest stone and
initially expressed a preference for the stone nominated as colour ‘1’, that
Mr Williams and Dr Clarke expressed a preference for colour ‘2’ and after some
254 T546.17-.19.
255 T141.19.
256 T141.25-.26.
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discussion about colour ‘1’ being too white and restrictive a selection, the Owner
leaned their way.
491 However, this is the limited extent to which the evidence of the Owner and
Dr Clarke should be accepted as a reliable account of the outcome of the Gillman
Meeting and her colour selection. The Owner’s evidence as to the selected colour
range changed too many times. Further, the Clarkes’ evidence as to what happened
is incomplete, implausible in certain material respects and at significant odds with
that of the other witnesses.
492 In this regard, a stark example was the Owner’s evidence to the effect she
was only shown a category ‘1’ stone and that colours ‘2’ to ‘8’ were not defined,
despite her initial evidence of her selection of ‘2’s. Dr Clarke gave evidence to a
similar effect but said when they were shown a ‘2’, he formed a view that he did
not want stone ‘darker’ than colour ‘3’ despite not seeing or knowing what that
colour was and despite Mr Williams saying ‘3’s would be acceptable at the outside.
Their evidence was quite implausible. If the Owner did not see an example of
colour ‘2’ at Gillman, it is difficult to see how could she identify stone SC 135 two
years later as a good representation of colour ‘2’ as the colour she said she wanted.
493 The Clarkes’ evidence was further undermined by the concessions the Owner
eventually made in cross-examination about the inconsistency between her
evidence and her pleaded case that she selected very light coloured sandstone in
the range of colours ‘2’ to ‘3’. Their evidence was not consistent with the Owner’s
statements in extensive dispute correspondence that complained of stone darker
than the selected colours ‘1’ to ‘3’ or her answers in her Response to Notice to
Admit filed in November 2016 that stated:257
12.5 Mr Calabrese and Mr Williams said words to the effect that choosing one colour
category only was unrealistic and in acting on that advice, the defendant said that
she required sandstone in the colour range 1-3.
12.6 The outcome of the meeting was that stones in the colour range categories “1” to “3”
were approved stone samples for the purposes of clause 3.06 of the Specification.
494 The Owner was thoroughly cross-examined about these inconsistencies and
could not explain why the selected colour range ‘shifted’ as she put it, save that
she said she did not object and gave her tacit approval to the narrower colour range
after the 18 June 2013 Meeting.258 Later she conceded that the answers she gave
in 2016 in the Response to Notice to Admit were more proximate to the events,
more likely to be accurate than her earlier evidence at trial given some six years
later, and accepted her earlier evidence at trial might have been wrong. Eventually,
she accepted she agreed to colours ‘1’ to ‘3’ at the Gillman Meeting and her
257 Exhibit A7.
258 T217.37—218.11.
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selection gave the Builder a fair degree of latitude given it was effectively about a
third of the Stone Supplier’s entire colour range.259
495 Mr Williams explained in evidence that the selected range of ‘1’ to ‘3’
reflected their preference for colour ‘2’, the centre of the selected range, bearing
in mind that “category 2 stone wasn’t a single colour entity”260 and is supported
by the independent witnesses with expertise or experience in stone:
… they were happy with the stone, happy with the colour range if it was hovering the 2
mark, but they had come to the realisation that it wasn’t going to be all one colour, that
they accepted Rito’s description that it was going to have some other colour ranges mixed
in with the batch, even though we targeted ‘2’. 261
… being realistic in our understanding …that we knew a consistent selection of 2 wasn’t
going to happen with the selection process and it’s a natural material and it’s going to
change over time anyway. 262
496 Ms Crowden said she was present when the clients and Mr Williams agreed
the colour range ‘1’ to ‘3’ would be ordered.263 Her following account of the
discussion in examination-in-chief was consistent with Mr Williams’ evidence
about what Mr Calabrese told them about the variability of any colour category: 264
… It seemed agreed in that meeting that the colours that everyone wanted was sort of a 2-
3 range. Rito explained that you can't pick a single colour which I think Ros had asked
specifically for 2s, Rito explained that that's not part of the way that system works, if you
wanted 2s you would select 1-3s, you would get some 1s, you would get some 3s, you
might get some 4s, it was an unscientific method of colour selection. That seemed to be
agreed upon by all parties…
497 When it was put to Ms Crowden in cross-examination that the Owner said
she specifically wanted colour ‘2’, she confirmed her earlier evidence about
Mr Calabrese’s explanation that it was not feasible to select a specific colour
because there inevitably for a ‘2’ there would be a variation between colours ‘1’
and ‘3’.265 When asked about her understanding of what colour the Owner wanted
from the Gillman Meeting, Ms Crowden said “she wanted 1-3”266 and light
coloured stone. Ms Crowden accepted the Owner wanted cream as a feature in her
stone but qualified that proposition as follows: “with stone variation as well”.267
498 Mr Calabrese was adamant he would not have accepted an order for white
stone because it was not feasible:268
259 T552.7-.13.
260 T1551.32-.37.
261 T1424.31-.36.
262 T1427.8-.12.
263 T601.8-.11.
264 T598.22-.30.
265 T620.9-.12.
266 T620.10-.14.
267 T620.15-.26.
268 T1679.35-.38.
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The thing I never accept number one order, it’s impossible, the stone they change, and
people they can be fussy with a little bit of colour, no it’s problem, I will not accept that.
499 Mr Calabrese’s evidence should be accepted in this regard and was supported
by the other witnesses with expertise or experience in stone. The Stone Supplier
submitted the Owner’s selection was broader and she simply chose the entirety of
the Stone Supplier’s lighter range. In evidence, Mr Calabrese consistently referred
to the Owner as expressing a preference for the stone on the pallet for the ‘Danny
Palumbo’ job but inconsistently referred to it as comprising colours ‘1’ to ‘4’ and
‘1’ to ‘3’. He went so far as to say the Owner liked all of the stone on that pallet
and not just one white stone she was shown. When pressed in cross-examination
as to whether what the Owner was really saying was that she wanted was a white
stone she pointed to, Mr Calabrese said she did not say that and indicated she
wanted all of the pallet by touching it and saying ‘this is what I like’.
500 Mr Calabrese’s evidence about colour ‘4’ being selected should be rejected.
No-one expressed interest in colour ‘4’ of the Stone Supplier’s range, even
accepting Mr Williams’ evidence they were shown a pallet including colour ‘4’
stones. Accepting that colour ‘4’ was part of the Stone Supplier’s light range
(because there were in fact 12 not nine colours), the Owner did not just select the
Stone Supplier’s light range. That said, bearing in mind the natural variability of
the sandstone and the vicissitudes of the Stone Supplier’s colour grading system
as Mr Calabrese explained to them, it should reasonably have been expected that
the final selection of colours ‘1’ to ‘3’ might include some ‘4’s in the batch, even
though they were not wanted.
501 The Owner’s and Dr Clarke’s evidence of the Gillman Meeting was plainly
a reconstruction of events to suit the Owner’s new case on stone colour advanced
at trial. Accordingly, where the Clarkes’ evidence is inconsistent with that of the
other witnesses, their evidence about colour selection should be rejected as should
their denials of almost everything the others said Mr Calabrese told them. In
particular, the Owner’s evidence should be rejected that Mr Calabrese did not
explain his three light, medium and dark colour ranges or discuss the variability of
his colour categories, ‘quarry sap’ or stone darkening over time or that it was not
realistic to order a single colour.
502 Further, Dr Clarke’s attribution to Mr Williams in his evidence of the
recommendation that it would be preferable to have the whole house in colour ‘2’
should be rejected. This is not only contrary to Mr William’s evidence about the
breadth of their discussion but was entirely contradicted by the discussion about
the colour categories being variable, Mr Calabrese’s warnings about the
inevitability of variation in the colour of the stone and their acceptance of his
recommendation the Owner select a range because it was not feasible to select a
single colour because inevitably there would be ‘1’s, ‘2’s and ‘3’s mixed in any
batch of ‘2’s.
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503 Importantly, at the Gillman Meeting neither the Owner or Dr Clarke
expressed any dislike for sedimentary patterns, stripes or natural markings
apparent in the stone they viewed or any requirement for uniformity of colour in
an individual stone and between stones.
No Samples Taken
504 Everyone knew that the Owner had conveyed her instructions as to her
selection of stone colour from the Stone Supplier’s range to Mr Calabrese and
Mr Williams orally at the end of the Gillman Meeting and it was left to the Stone
Supplier to ensure the supplied stone was within the selected and approved colour
range of ‘1’ to ‘3’.
505 The Owner submits the Court should find that neither the Architect nor
Builder took any samples of the stone selected at the Gillman Meeting. The
Builder agrees. Because it was so long ago, none of the other witnesses could
reliably say whether any further samples of Tasmanian sandstone were taken from
the Gillman Meeting or not than those already in the Architect’s boardroom.
506 On the evidence, it should be accepted that no samples were taken of the
stone viewed and selected at the Gillman Meeting and none became the approved
stone for the purpose of the Architect’s Specification. However, contrary to the
Owner’s contention, for the reasons discussed below, the Builder was not required
by anyone to obtain samples of Tasmanian sandstone for approval because the
parties by their conduct had agreed to a different selection and approval process
for an alternative stone. This process superseded the requirements in the
Architect’s Specification for Basket Range sandstone.
507 It is a different question as to whether the failure to take samples constitutes
a breach of the Architect’s duties to the Owner.
AI:04 – 1 May 2013
508 AI:04 was prepared by Mr Williams the day following the Gillman Meeting
as an instruction to the Builder to confirm the selection of stone and the process
for finalising the details of the stonework. It was received by the Builder and
Owner without any objection being made under clause A8 of the Building
Contract.
509 Only the text concerning the first item, the sandstone selection meeting, is
relevant to the disputes arising on stone issues.269
1. Sandstone Selection Meeting
Notes from meeting at Rito Calabrese’s stone yard on 30th April, 2013.
269 Exhibit R3.40.
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1.1 Stone to be laid in random ashlar pattern. At some stage before commencing, Builder
to build sample wall panel for stone layout, joint sizes and pointing colour and
technique.
1.2 Stone colour is to be ‘2’. Stone supplier/mason are to remove any stones fitting in
the ‘3’ category.
1.3 “Invisible’ quoins are to be used. These are to be flush with the surrounding wall
surface but will help turning the corner. The random ashlar pattern is to butt into the
quoins.
1.4 Recessed window reveals – Stone supplier is to provide price to supply stone for the
recessed portions around windows to the ground floor as previously indicated in
rendered masonry, Stone Supplier is also to provide cost to supply and install single
sections of stone to the central columns and windows WG.01-WG.03 & WG.13-
WG.15. These will be fixed in place using an epoxy as detailed by the Stone
Supplier.
1.5 Builder is to set up ready for stonework and hold meeting on site with the Stone
supplier and Architect to confirm final measurements and details.
1.6 Finished stone faces to be sealed by Rito Calabrese. Cost to be negotiated as part of
contract supply. Builder to advise of any costs exceeding the allocated amounts in
the Tender/Contract.
510 Consistent with clause E.04.03 of the Architect’s Specification, this
instruction does not fix the final details of the stonework. It expressly provides in
paragraphs 1.1 and 1.5 for construction of a sample wall and further
communication and decision about the final measurements and details for
stonework.
511 The specification in E.04.03 of 5mm fine mortar joints is noticeably absent
from AI:04.
512 Mr Cirocco confirmed he read it and spoke to Mr Williams about at their next
meeting, although he could not recall at trial precisely what they discussed. He
said he did not need to revisit it and did not think he had to because he had to wait
to discuss with Mr Williams what they needed to do next: “Of course. I had to
wait for Mr Williams to tell me what he wants.”270 He did not say in evidence he
was told to “just wait” as the Owner submits.271 Mr Cirocco’s actual evidence
reflects his understanding that there would be further instructions about the final
measurements and details of the stonework to be constructed and approval of a
sample panel of the stonework as directed in AI:04.
513 As to paragraph 1.2 re stone colour, the Owner makes two contentions about
its importance. First, it is said to be objective evidence of the Owner’s express
request for colour ‘2’ since it was written the day after the Gillman Meeting when
it was fresh in Mr Williams’ mind that ‘3’s were to be excluded. Secondly, the
270 T1180.31-.31.
271 Owner’s Stone Closing [41].
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Owner submits it should be read as a contractual requirement that the Builder is to
supply and lay Tasmanian sandstone of colour ‘2’ and discard stone of colour
category ‘3’ and above and contractually binds the Builder to that requirement.
514 As to the first matter, the other (reliable) evidence of the colour range selected
by the Owner and orally conveyed to Mr Calabrese and Mr Williams is
overwhelmingly not consistent with a selection of only ‘2’s (or ‘2’ up to ‘3’ but
not including ‘3’). In any event, accepting the intent of Mr Williams’ instruction
as to colour in AI:04 was to minimise variation in the range of colours by targeting
‘2’ as the middle of an acceptable range of ‘1’ to ‘3’, AI:04 confirms the Owner’s
unambiguous selection of colours with the Stone Supplier’s range of ‘1’ to ‘3’.
515 As to the second matter, it is not necessary to resolve how this instruction as
to colour should be read. First, it is not the Owner’s pleaded case as to the
contractual requirements for colour. Even if it were, as the Architect submits, this
Architect’s instruction was overtaken by the Owner’s subsequent approval of the
colour of the stonework laid and her evidence in cross-examination that ultimately,
she does not require stone of the colours ‘1’ to ‘3’ to be replaced.272
516 That said, it cannot properly be said that the instruction in paragraph 1.2 is
unambiguous and should be read literally as the Owner now contends. Nor does
the ‘parol evidence rule’ apply to its construction. It does not apply where an
agreement is partly in writing and partly oral273 as is the case here where the
specification for new stone was not simply recorded in writing in unambiguous
terms.
517 Accordingly, the instruction in paragraph 1.2 of AI:04 should be read in
context of what happened at the Gillman Meeting that led to the Owner’s selection
of colours ‘1’ to ‘3’ from the Stone Supplier’s range. The parties knew the colour
of the selected stone was variable and that any colour category in the Stone
Supplier’s range denoted a range and mixture of colours. It was not feasible or
realistic for the Stone Supplier or stone mason to identify any single colour to lay
as such and discard another by reference to the Stone Supplier’s category numbers.
518 In the circumstances where the parties knew and accepted that the Stone
Supplier’s colour categories involved a range and mix of overlapping colours and
did not denote a definitive colour (or, as Mr Williams’ explained it, a “single
colour entity”),274 the instruction to discard colour ‘3’ from a range of ‘1’ to ‘3’ if
read literally is quite illogical. This instruction should be read in context of the
parties’ discussion at the Gillman meeting as instructing the Builder that the target
was the preferred centre of the range (the ‘2’s) given Mr Calabrese’s warnings that
there would be other colours in the batch including the unwanted ‘4’s.275
272 T219.10-.16.
273 Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234 at [90(3)] per Campbell JA.
274 T1551.34-.35.
275 T1426.23-.37;1551.32-.37.
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519 Nonetheless, whilst it should be accepted (as the Owner contends) that
Mr Cirocco did not give a copy of AI:04 to either of the stone masons or convey
any instruction to remove category ‘3’ using that language, he did convey
instructions as regards the rejection of unsuitable stone including dark stone.
520 It is therefore not the case that the Builder basically ignored his instructions.
In any event, the Builder’s instructions in AI:04 were overtaken by subsequent
instructions from the Architect and the Owner’s approval of the sample of built
stonework at the site meeting subsequent to the 18 June Meeting.
521 As to the instruction to lay the stone in a random ashlar pattern referred to in
paragraphs 1.1 and 1.3 of AI:04, Mr Williams’ evidence should be accepted that
was this was an error carried over from the Architect’s Specification. Again, the
decision to change the pattern and jointing had been made following the Kermode
Street view and before the Gillman Meeting and was communicated to Mr Cirocco
orally before AI:07 was issued on 12 June 2013.
522 The reference to sealing of the stone face by Mr Calabrese in paragraph 1.6
is consistent with the discussion at the Gillman Meeting about the desirability of
cleaning and sealing the sandstone. The omission of cleaning should be regarded
as an oversight because both processes were discussed and agreed by the Owner
to be required and later came about.
Ordering of Stone
523 The parties relied on the Stone Supplier to deliver the stone in the selected
colour range as per the instructions conveyed directly to Mr Calabrese by the
Owner.
524 The evidence of the parties’ dealings with regard to the ordering and delivery
of the stone was not documented and is incomplete. As to be expected, the
witnesses could not recall a lot about what was then an unexceptional event that
occurred long ago.
525 Mr Williams did not order or negotiate the price of the stone for the Builder,
contrary to the Owner’s contentions that he did. It is clear on the reliable evidence
there is that Mr Cirocco ordered the stone and did so orally. It is not clear when
he did, although there is a reference to Mr Cirocco ordering 95 quoins in the 9 May
Fax. Mr Cirocco must have ordered some stone well before the first load arrived
and was invoiced on 7 June 2013 since it had to be quarried and shipped from
Tasmania to Gillman then Rose Park.
526 Mr Cirocco did not recall providing Mr Calabrese with the Architect’s
Specification, any Architect’s instructions or other documents. Mr Calabrese said
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he possibly had the plans, but he did not want to deal with any plans, he wanted to
be told what to cut and “will always check” what is wanted.276
527 Mr Cirocco knew at the time what to order. His evidence is clear about this.
He said that he knew the quantities and dimensions to order because those details
had already been worked out between Mr Calabrese and Mr Williams and he was
told them. Indeed, Mr Cirocco still had a clear memory of the quantities he ordered
at trial, whilst Mr Williams did not and said he would not have known the
quantities anyway. As the architect this was not his role.
528 Plainly, it was necessary for those details to be worked before the required
stone could be ordered. Mr Calabrese repeatedly said in evidence ‘somebody’ told
him, because: “… this was between the architect and the builder”.277
529 As to colour, Mr Calabrese knew which stone was to be supplied, confirming
he knew from the Owner: “She only come selected the colour” but not the
dimensions.278 He knew the colour because he was told at the end of the Gillman
Meeting when the Owner conveyed her selection and approval orally to
Mr Williams and Mr Calabrese, as is the Owner’s pleaded case279 and established
on the evidence.
530 It should be accepted that between the Gillman Meeting and the ordering of
the stone, Mr Calabrese, Mr Cirocco and Mr Williams had discussed between them
the quantities and dimensions required and Mr Cirocco knew exactly what was
required by the time the order was finalised. Such discussion was a necessary next
step and expressly instructed by AI:04.
531 There was nothing untoward about Mr Williams being involved in finalising
these details. Whilst it was the Builder’s contractual responsibility to supply and
install the stone, it was necessary for the Architect to be involved in the finalising
these design details and the Builder and the Architect on behalf of the Owner were
required to co-operate in their dealings.
532 When Mr Cirocco ordered the stone, he also knew about the decision to
change to the pattern to stretcher bond and for the size of the joints to be 10mm.
The drawings of the stone for the quoins and pillars in the 9 May Fax confirm that
the decision for 10mm joints had already been made as result of the earlier decision
to replicate the stonework at Kermode Street.
533 The Owner makes no complaint about the informality of these dealings.
However, the Owner alleged that by ordering and negotiating the price of the stone
Mr Williams took on the Builder’s role. He was assisting the Builder and working
276 T1696.6.
277 T1698.15-.28.
278 T1698.30.
279 Seventh Cross Action [19A.5].
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“in tandem with and for the Builder”280 It was submitted this was significant for
two reasons. First, for the collateral purpose of impugning Mr Williams’ credit
generally about who negotiated price (a peripheral matter). Secondly, because it
provided the factual context against which the Court should assess the Architect’s
alleged failure to identify the stone defects. It was submitted that these dealings
demonstrated an unduly close relationship between Mr Williams and Mr Cirocco,
Mr Williams’ role in acquiring non-compliant stone (both as to colour and joint
size) and him failing to take action to protect the Owner’s interests in June 2013.
534 Mr Williams had no recollection of these discussions with Mr Calabrese
since they were ten years ago. He did however accept he must have discussed the
detail for the stone around the windows with Mr Calabrese, because the 9 May Fax
referred to such a discussion. He said he would not have spoken about the
quantities of stone required because he said did not know them. Whether he did
then or not does not matter because it is clear that the discussions that did occur
were had in the context of necessary discussions between Mr Calabrese,
Mr Cirocco and Mr Williams (whether separately or together) to finalise the details
of the dimensions of the stone to be cut and delivered.
535 Mr Williams’ denial that he negotiated the price with Mr Calabrese was clear
and should be accepted. Whilst Mr Cirocco recalled otherwise, Mr Calabrese said
he negotiated and agreed price with Mr Cirocco. Mr Williams’ and Mr Calabrese’s
evidence should be preferred to Mr Cirocco’s on this issue. Furthermore as already
discussed, the 9 May Fax offering prices is not conclusive proof of any negotiation
as such. First, it is evidence of only one part of the parties’ dealings. Secondly,
the fax also seeks confirmation of measurements and details of the stone to be cut
as well, not just pricing. These were all matters that needed to be confirmed with
Mr Williams as the Architect as directed in AI:04, consistent with the Architect’s
role in the contract documentation stage of the project and clause E.03.06 of the
Architect’s Specification:
Stone sizes shall be confirmed on site with Architect and stone supplier, prior to delivery
to site.
536 It may be inferred that Mr Calabrese faxed his drawings to Mr Williams and
not Mr Cirocco because he only had a fax number for Mr Williams written in his
order book and not one for Mr Cirocco,281 consistent with Mr Williams’
explanation as to why it may have been sent to his office.
Delivery of Stone
537 The stone was delivered in at least four batches, the first batch of a bit more
than half (95m2) arrived on-site on about 7 June 2013, the date of the Stone
280 Owner’s Stone Closing [53].
281 Exhibit R3.277.
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Supplier’s first invoice addressed to the Builder.282 This delivery was paid for on
the Saturday 8 June 2013.
538 Mr Calabrese’ evidence was that the stone delivered was the same as the
stone for the Palumbo job the Owner chose on the pallet that he said he showed
them and she liked. That is, colour categories ‘1’ to ‘4’ from the Stone Supplier’s
light range, putting aside his contradictory evidence in cross-examination that it
was colour s ‘1’ to ‘3.
539 The Owner submits the Court should accept Mr Calabrese’s evidence that he
delivered colours ‘1’ to ‘4’ but submits his evidence led in cross-examination by
the Architect that it was colours ‘1’ to ‘3’ and most of it was colour ‘2’ should be
rejected. The Owner points out the stone was wet and wrapped in plastic when it
arrived from Tasmania at Gillman and Mr Calabrese had no interest in checking it
with such care to ascertain it was all colour ‘2’.
540 The Owner’s submissions should be rejected. It is illogical to cherry pick the
bits of Mr Calabrese’s evidence that suit the Owner then urge the Court to reject
the bits that do not.
541 In any event, it should not be accepted that in June 2103 Mr Calabrese
mistakenly delivered what had been selected at the Gillman Meeting: that is,
colours ‘1’ to ‘4’ instead of ‘1’ to ‘3’. It is more likely that Mr Calabrese was
mistaken in recalling what was selected and delivered nine years’ later when he
gave evidence, even accepting that what was inspected was the same as the
Palumbo job. Secondly, since Mr Calabrese saw the stone on-site, on pallets and
as laid, his assessment of stone colour is not confined to him unwrapping the pallets
mid-delivery. Thirdly, his evidence was that most (not all) of the stone he saw that
was delivered was colour ‘2’.283 Such an assessment is not implausible given the
colour variation in light Tasmanian sandstone within and between the Stone
Supplier’s colour categories, a delineation that is well described as ‘blurry’.
Set Up for Stone Site Meeting
542 AI:04 directed the Builder to set up ready for stonework and for a site meeting
to be held between the Builder, Stone Supplier and the Architect to confirm final
measurements and details. It is uncontroversial that the Builder set up for
stonework to commence. As to a site meeting to finalise stonework measurements
and details, it was a necessary and important next step that needed to happen to
progress the works once the stone was delivered. Whilst the Owner challenged
whether one did take place, and understandably no-one could remember it, it is
likely one did because the final measurements and details were decided at some
stage. It is implausible to suggest there was no such site meeting in the
circumstances.
282 Exhibit R3.45.
283 T1736.6-.1.4.
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Sample Dry Wall
543 The requirement for a sample panel of stonework to be prepared for the
approval of the Architect and the Owner was a requirement carried over from
clause E.04.03 of the Architect’s Specification into paragraph 1.1 of AI:04 for
stone layout, joint sizes and pointing colour and technique.
544 A sample panel was erected in the front yard in the approximate location of
the current water feature just before a site meeting. Both Mr Williams and
Ms Crowden described it as a dry wall, not mortared or pointed made of two or
three courses of stone from the pallets stacked in brick (ie stretcher bond) pattern.
Mr Williams did not think it lasted long past the 18 June Meeting.
545 As to its purpose Mr Williams said:284
… It’s just really to sort of see the stone as it came [off] the pallets: the colours, but it was
quite wet and it was pretty hard to be useful but at least it showed that the colours were
basically consistent with what we were expecting and we laid it in a brick pattern…
546 The Owner and Dr Clarke said they did not see it. Mr Williams thought they
did see it. Whether they did or not or did but had forgotten does not need to be
resolved because the specified requirement was not for a dry wall and its purpose
was overtaken and served by the inspection and approval of the partially built
stonework in June 2013.
AI:07 – 12 June 2013
547 On 12 June 2013, the Architect issued Architect’s instruction AI:07. It was
the Wednesday following a Monday public holiday. That it was is relevant to the
Owner’s allegation that the laying of the stonework commenced before AI:07 was
issued. That was not at all likely because there were only two working days
(including a working Saturday)285 between the likely delivery date to set up for
stonework to commence, prepare the dry wall and meet on-site to finalise
measurements and details and AI:07 being issued. That some four or five days’
stonework had been done by the 18 June Meeting (according to the stone mason)
indicates stonework laying started on Wednesday 12 June 2013 or the following
day.
548 AI:07 instructed the Builder as follows.
Stonework to be laid in mortar with 10mm nominal recessed joints for pointing later.
Mortar mix [sic] and finish of final pointing to be discussed further with Rito and WBA
before proceeding.
Mortar mix for pointing to include:
284 T1428.17-.21.
285 T1189.21-.37.
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• 2 parts Golden Grove fine washed sand
• 1 part Brightonlite cement
• Lime (to future instructions)
549 Mr Williams likely issued this instruction without consulting the Owner. The
Owner confirmed in evidence that she received it and did not raise any objection
to the Architect’s specifying 10mm instead of fine 5mm joints either under
clause A8 of the Building Contract or otherwise until Associate Professor Danvers
raised joint size as an issue in 2019 after four years of litigation.
550 Self-evidently, this instruction mostly concerns pointing. Whilst it refers to
joint sizes, it says nothing about the earlier decision to change from a random to
stretcher bond pattern, although the pattern is connected to the joints.
551 As to jointing, this instruction formalised the further discussion of the
bonding and jointing that was required before commencing on-site as expressly
provided for in clause E.04.03 of the Architect’s Specification and reiterated in
paragraphs 1.1 and 1.5 of AI:04. Mr Cirocco said the written instruction would
have been discussed on-site, perhaps before he received it, but he could not recall
what was said so many years later.
552 Mr Williams was thoroughly cross-examined on why he issued AI:07 and
changed the joint sizes from 5mm to 10mm. His evidence is clear. The Architect’s
Specification of 5mm joints was made to minimise the appearance of too many
joints for the previously specified random pattern. When the decision was made
to change from a random to a stretcher bond pattern and replicate the stonework at
Kermode Street of 10mm joints, 5mm joints were no longer the design intent.
553 Other reasons were suggested for 10mm joints being necessary. The decision
for wider joints facilitated compliance with tolerances required under the Building
Code. Mr Williams explained this by reference to the tolerance of 10mm +/- 3mm
under the Masonry code and the difficulty, if not impossibility, of using a 4mm
heavy duty wire tie in a 5mm joint. In cross-examination, it was Mr Cirocco’s
unprompted recollection (twice) that they discussed joint width because of a
problem with wall ties286 although he could not remember the details of any
conversation about this.
554 Much was made in submissions by the Owner of Mr Williams’ evidence
about the size of wall cavities given the Architect’s Specification provided for
special purpose wall ties. These issues were not relevant and his evidence about
them does not detract from his other evidence about the decision for 10mm joints
being made before the Gillman Meeting to replicate the stonework at Kermode
Street. Nor does it discredit Ms Crowden as a reliable witness, bearing in mind
286 Transcript incorrectly refers to “tiles”: T1199.8 and T1199.25.
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how long ago these events occurred, Ms Crowden did not make the final design
decisions and was not party to the Kermode Street view.
555 Mr Williams emphatically denied in cross-examination that he issued AI:07
to cover up a mistake, describing this suggestion as “outrageous” and
“ridiculous” because they were professional people that would not just run with a
mistake and cover it up.287 Mr William’s reaction was genuine, and his evidence
should be accepted as truthful, as should his assurances that the he and his firm
would never allow mistakes to be made by their tradesmen and accept them when
things were changed that should not have been.
556 The yet further suggestion made in cross-examination that this was a cover
up because Mr Williams used the future tense in his instruction, despite stone
laying having already started (which was not the case), was equally uncompelling.
557 It should be accepted that AI:07 confirmed the decision for 10mm joints
made before the Gillman Meeting in consequence of the decision to replicate the
pattern and jointing at Kermode Street. This decision was made some six weeks
before AI:07 was issued. It was communicated orally to Mr Cirocco before it was
committed to writing because it was necessary for him to know so he could order
the required stone.
558 There is therefore no foundation to the Owner’s contention that Mr Williams
issued AI:07 to cover up for the Builder’s or the stone mason mistakenly laying
stone with 10mm joints contrary to the Specification.
Rejection of Stone
559 Mr Cirocco’s evidence should be accepted that some of the stone on the
pallets was rejected by him and the stone mason before it was laid.
560 Mr Cirocco said they rejected stones that were dark or “black or if there was
some damage on, something that we didn’t think right for the job”.288 He instructed
the stone mason to put that stone aside. The first stone mason, Mr Tittoto, said
they did not discard any black stones because they would not find them on the
pallets.289 In context of his earlier evidence, it should be inferred that was because
in his experience stone only discoloured with ‘quarry sap’ once it was laid and
what they discarded was some darker coloured stone.
561 Mr Tittoto took photographs of some stone on the pallets that was damaged
or chipped. He confirmed in cross-examination that these stones were not laid and
used for offcuts. He identified one stone he photographed that was chipped after
it was laid and said that was why he photographed it.
287 T1515,9-.20.
288 T1223.22-.26.
289 T1295.22-.23.
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562 It should be accepted that the stone mason and his crew did not use any
damaged stone or stone with big chips. They only used stone where the chips were
small and part of the usual character of sandstone or could be covered by the
pointing.
563 Mr Cirocco delivered the rejected stone to the Stone Supplier’s yard himself.
Mr Calabrese swapped them for other stones without charging for them.
18 June Meeting
564 Before considering the lay evidence as to what occurred at the site meeting
held on 18 June 2013, it is important to emphasise that there are many reasons why
a witnesses’ recollection at trial of events that occurred many years ago may be
unreliable. Faded memories and self-interest at trial are very relevant
considerations. Sometimes what a party did at the time may be a more reliable
indication of their knowledge of events than what they say at trial about matters.
565 This meeting was still memorable many years later because it was unpleasant
and awkward for some and led to the Architect directing stonework to stop. While
all the witnesses recalled it occurring, their recollections as to the detail need to be
assessed with care. Understandably, most were unable to recall exactly what was
said. Many questions of detail were answered with ‘I don’t recall’ or qualified
with ‘I think so’, ‘possibly’, ‘I believe so’ or not. Indeed, most witnesses
mistakenly thought Ms Crowden was there, but she was not. There were other
inaccuracies and inconsistencies in the evidence. For example, Mr Williams
recalled discussion about the stones near the front door occurring at the next site
meeting whilst Mr Tittoto recalled that happening at the meeting where he stood
next to Dr Clarke but it was Dr Clarke’s evidence that he attended only one
meeting and that was on 18 June 2013 and he stood next to the stone mason then.
566 Inaccuracies and inconsistencies in the evidence are unsurprising. The
discussion was relatively short (half to three quarters of an hour), the meeting was
more than nine years before the witnesses gave evidence and the witnesses had
differing interests and perspectives with regard to the discussion that occurred at
the time and at trial.
567 The Owner submitted the evidence of the Owner and Dr Clarke as to what
occurred should be accepted and Mr Williams’ evidence and Mr Cirocco’s should
be rejected. It was submitted Mr Williams’ evidence should be assessed in context
of the allegedly awkward position he was in because he had assisted Mr Cirocco
acquire non-compliant stone. Despite strongly criticising the reliability of
Mr Calabrese as a witness generally and acknowledging the difficulties arising
from his use of language and the passage of time, the Owner sought to pick out
bits of his evidence as favouring the Owner’s account.
568 The Owner’s submissions should not be accepted. The Owner’s evidence
was contradicted in material respects by other reliable evidence and her pleaded
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case.290 Her evidence in cross-examination on this topic was wholly unsatisfactory
as regards her credibility on this topic and more generally.
569 The Owner’s evidence was not bolstered by Dr Clarke’s evidence.
570 To the contrary, Dr Clarke had a limited recollection of what occurred. In
cross-examination by the Builder he retracted much of his examination-in-chief
about Mr Calabrese’s purported solution to everyone’s problem and the assurances
of the result of “a wonderful white house” allegedly made by Mr Williams and
Mr Cirocco.291 He changed position and finally said it was Mr Calabrese who said
this. He could not recall what was said after this.
571 Mr Calabrese did not give any such assurances. He certainly did not use the
words attributed to him. They are Dr Clarke’s words and a reconstruction
reflecting the Owner’s new case at trial.
572 The Architect took objection to the Owner’s suggestion that Mr Williams’
evidence was in some way influenced by him having assisted Mr Cirocco obtain
the stone, relying on a “baseless conspiracy theory”.292 As already stated, there
was nothing untoward in Mr Williams’ dealings regarding the ordering and supply
of the stone. Mr Williams’ evidence was plausible and did not reflect any
defensiveness. It should be accepted the meeting was awkward generally, despite
the Builder’s submission it was not for Mr Cirocco. The Owner’s adverse rection
to the stone was unexpected and strongly voiced. A difficulty arose at the meeting,
and it was Mr Williams’ responsibility as architect to address the concerns
expressed by the Owner that remained unresolved at the end of the meeting. This
was particularly so given the purpose of the meeting was for the Owner and
Architect to approve a section of built stonework.
573 Generally, the evidence of the other witnesses should be preferred to the
Owner’s and Dr Clarke’s evidence where there are material differences.
The Extent of the Owner’s Complaint
574 After the stone arrived on-site, Mr Williams arranged a meeting for the
purpose of the Owner and Architect inspecting and approving a section of laid the
stonework. The Owner accepted in evidence this was the purpose of the meeting
and complained of her surprise and disappointment to see actual construction had
begun when she understood she was to see and approve a sample panel of
stonework.
290 Seventh Cross Action [19A.15].
291 T728.1-729.22 cf. T735.35-739.14.
292 Architect’s Stone Closing [7.40].
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575 There is consensus that this meeting occurred on Tuesday, 18 June 2013. The
Owner’s diary293 and her notebook294 confirm this is likely to be correct, as does
Mr Calabrese’s receipt for payment of stone.295 AI:08 dated 20 June 2013 (the
written instruction to stop the stonework that followed from the meeting) is further
confirmation that this was the date.
576 Those present at the meeting were Mr Williams, Mr Cirocco, Mr Calabrese,
Mr Tittoto, the Owner and Dr Clarke.
577 The meeting started on the front porch (or verandah as some described it),
facing the newly laid stonework near the front door.
578 When the Owner arrived with Dr Clarke, she saw that the stonework had
commenced on the front of the house and down the western wall. The witnesses
gave varying accounts of how many courses of stone had been laid by this time of
two, three to four or six (of 16 full courses as the photographs in evidence show).
Mr Tittoto said the stonework was “about six foot around the building”,296 being
the same height across the southern façade around the front entrance and part way
down the western wall. He said six foot was about six courses. Mr Calabrese also
said it was six feet high and part way down the western wall. The front pillars and
porch had not been started. Mr Cirocco could not reliably remember how many
courses had been laid in the western wall. Mr Tittoto’s evidence should be
preferred as the best memory of the height of the stonework since it was his crew’s
work.
579 Undisputedly, the laid stone was wet and not yet pointed. It should be
accepted that wet stone and mortar look quite different after the stonework dries
and the colour lightens considerably.
580 Accepting that the time in the Owner’s diary is correct, the meeting began
around 11:00 am. The stone mason, Mr Tittoto, and his crew were on-site working
nearby. Mr Tittoto came to be standing towards the back of the group, near
Dr Clarke. Most of the talking occurred between the Owner, Mr Calabrese and
Mr Williams, who were standing at the front of the group looking at the stonework.
581 Mr Cirocco did not speak much, if at all, but could hear what was being said.
He had little to contribute because he saw the issue as one between the Architect,
the Owner and the Stone Supplier. His position was that he would do whatever he
was instructed to do by Mr Williams.
582 There is consensus that the atmosphere of the meeting was tense and
unpleasant. Mr William’s description of the Owner as “quite agitated and quite
293 Exhibit R2.
294 Exhibit R3.9 page 899.
295 Exhibit R3.48.
296 T1261.25.
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angry”297 is consistent with the Owner’s examination-in-chief that her initial
choice of words was unfortunate: she said outright: “Well, it’s ugly and I don’t like
it” and that she would prefer a rendered house if it was going to look like this.298
The Owner said she thought what she said about the stonework was unexpected
and there was an awkward silence. Whilst Mr Williams could not recall her exact
words, he accepted this was the substance of what she said.
583 There is also consensus the Owner strongly expressed her disappointment
and dissatisfaction with the colour of the stonework and not any other aspect of the
stonework (such as the pattern, joints etc). The dispute about this meeting therefore
concerns the extent of her complaint about the colour of the stonework and what
was said by way of addressing her complaints.
584 On the evidence, it should be accepted that the Owner’s general complaint
was that more colour was showing through in some of the laid stone than she
expected, the colour of some stones was wrong and she did not like it. Plainly, the
stonework did look darker and more highly coloured than the stone she had viewed
at Gillman because it was wet and the colour was stronger than when it was dry.
585 Contrary to her pleaded case,299 in expressing her dislike and her expectations
the Owner did not refer to the stone by numbers referrable to the Stone Supplier’s
colour categories. Rather, the Owner’s evidence was that she identified some
stones she described as ‘orange’ that she did not like. When asked in cross-
examination how many she said (unhelpfully) she had not counted them, but there
were several and, when pressed, several were “may be four or five”.300
586 Other witnesses had a different recollection. Mr Williams described her being
concerned about some yellowing in places and her pointing out some stones near
the front door: “…ít was more about this bit of yellowness that is still there”301 but
he said this conversation occurred at a later meeting and did not have a memory of
the Owner doing this at the 18 June Meeting. The stone mason similarly recalled
the Owner complaining about several stones near the front door that he described
as having “iron spots that needed to be replaced”302 which he later replaced.
587 The Owner’s evidence to the effect that she complained specifically about
stripes should also be rejected. Stripes were not part of her pleaded case nor did
anyone recall any such complaint being made in June 2013. Her evidence in cross-
examination about how many striped stones she thought were ‘awful’ at this
meeting was not persuasive:303
297 T1434.36-.37.
298 T148.9-.13.
299 Seventh Cross Action [19A.11].
300 T209.22.
301 T1574.7-.8.
302 T1263.26-.28.
303 T209.23-.30.
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Well, all of the ones either side of the front door and some others, maybe 12. It's just a
rough count, Mr Ross-Smith. I haven't counted them.
588 The Owner’s evidence about the ‘black’ stones she saw should also be
rejected. Her pleaded case was that at the 18 June Meeting she also identified
stones “blighted by quarry sap”.304 She accepted in cross-examination she did not
use these words then and said she referred to “black” stones and said they looked
“horrible”.305 She said there were “[m]aybe 10”306 black stones out of the
“[m]aybe 50”307 they were looking at and when asked about shades of grey she
described them differently by saying most of them were “very dark grey” and a
couple were darker.308
589 The Owner exaggerated in giving this evidence. On the reliable evidence it
should be accepted that she complained about yellow showing through the wet
stone in places, not orange, and her concern was because it was right next to the
front door, an important place in the front façade. The photographs taken on
24 June and 18 July 2013309 do not indicate any black or dark grey stones, nor any
orange or distinctly striped ones all around either side of the front door or all
around it. This is all the more important bearing in mind that on the Owner’s and
Dr Clarke’s evidence, Mr Cirocco allegedly refused Mr Williams’ requests to
remove the orange and black stones she identified when asked during the meeting
twice. If the Clarke’s evidence was truthful, those stones should have been evident
in the photographs taken in June and July 2013 (despite the poor quality of the
photographs). They were not and these photographs are the best evidence of the
appearance of the stonework when the Owner viewed it.
590 Mr Tittoto confirmed that no discoloured stone was laid. His evidence was
he knew about and had seen the phenomenon of ‘quarry sap’ and when sprayed
with an acid solution it disappeared. Further, the stone on the pallet was not
discoloured (it was “white or whiteish and striped”),310 and only some go grey-
black after they are laid and you cannot tell whether this will happen when you are
laying them. Mr Tittoto’s evidence should be accepted as truthful and reliable
given his experience as a stone mason and disinterest in the litigation.
591 As to the allegations that Mr Cirocco refused to remove any discoloured or
orange (or yellow) stone when asked by Mr Williams, Mr Cirocco’s denials in
cross-examination that he did not refuse should be accepted as truthful. Some stone
was replaced. And Mr Cirocco’s repeated insistence that he would have done it if
asked and would never say no was genuine:311
304 Seventh Cross Action [19A.11].
305 T208.28-.35.
306 T209.4.
307 T209.6.
308 T209.7-.12.
309 Exhibit R3.421 pages 2818-2825, 2835-2840.
310 T1282.21.
311 T1204.22-.24.
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… I would've taken instruction from Mr William[s]. If Mr William[s] would tell me 'Take
the wall down', I would've took it down, because it was no problem for us to do, because
we would've sent the stone back.
592 From Mr Cirocco’s perspective it was not even a problem to remove all the
stone and send it back to Mr Calabrese at that point. His evidence was persuasive
when he said:312
A. For us, for that day, they would have said 'The stone, that all wrong', for me would
have been easier, I would have said 'We pull them all out and get all that'. I would
have tell Mr Calabrese 'I brought the stone back and then you sort it out', because
Mr Calabrese went over the colours, he knew [with] that. So, for us, all I did as I
said. I put it all in. If she [sic] doesn't like, it would be easy for me to stop the job
and take them out with many stones.
Q. And also you had paid money to Mr Calabrese and so you didn't want to be
interfering with the stone.
A. It doesn't matter. It doesn't matter that I paid the money for Mr Calabrese. I would
have got the money back or he would have supplied different stone. That doesn't
matter about the pay.
593 The Owner also exaggerated in her evidence that by her reaction to the
stonework she offended Mr Cirocco and the stone mason Mr Tittoto “was upset
and left to sit in his car”.313 Mr Tittoto’ s evidence gave no impression of him
being upset or leaving the job because of the Owner’s complaints. Indeed, he
replaced several stones when asked. As for his side discussion with Dr Clarke
about the features of stone as a natural product (addressed later below), he said
their discussion was not disgruntled.
What Was Said to the Owner
594 In response to her complaints, it is uncontroversial on the Owner’s evidence
that she did listen to and understand what Mr Calabrese said about the stonework
being wet and darker than when it was dry and would therefore look different when
dry. The Owner said:314
Mr Calabrese said ‘Well, you’re not seeing it as it will be when it’s finished’. So the stone
was extremely wet, so he said ‘It will be lighter when it’s dry and when it’s dry and it’s
been pointed …
595 However, what Mr Calabrese was alleged to have said about cleaning the
stonework and why it is necessary or preferable is contentious.
596 The Owner’s pleaded allegation is that Mr Cirocco and Mr Calabrese assured
her that the discolouration caused by ‘quarry sap’ and stone colouring darker than
colours ‘2’ and ‘3’ would be remedied by the Builder prior to practical
312 T1214.11-.25.
313 T149.9-.10.
314 T149.11-.14.
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completion.315 The Owner’s and Dr Clarke’s final position in evidence in cross-
examination was that it was only Mr Calabrese who gave such assurances by
saying that “the acid wash will make everything white”316 and “he can take the
colour out of the stone”317 and he insisted:318
… that when the acid washed the stone it would all be white in the end, including the black
stone or the highly coloured stone.
597 As to ‘quarry sap’, the Owner, Dr Clarke and Mr Calabrese were clear it was
discussed at the 18 June Meeting. Some of the other witnesses agreed that probably
was the case. It therefore should be accepted that Mr Calabrese talked about the
phenomenon of ‘quarry sap’, although perhaps not it those words. Mr Williams’
referred to him saying he could get ‘the mould’ off easily with an acid wash. The
Owner and Dr Clarke referred to ‘quarry sap’ as ‘black’ or ‘grey’ stones.
Regardless, it is uncontentious that everyone understood that when Mr Calabrese
talked about acid washing the stone, he was referring to removing the grey or black
discolouration referred to in the pleadings and at trial as ‘quarry sap’.
598 That Mr Calabrese talked about ‘quarry sap’ when no discolouration was
evident in the laid stone is not anomalous given Mr Calabrese’s tendency to be
effusive about his stone and his standard practice of always telling clients all about
it and the need and preference for cleaning and sealing sandstone. He did the same
when giving evidence.
599 The next issue concerns the significant contention about the Owner’s and
Dr Clarke’s claims in evidence that Mr Calabrese said in effect acid washing
would remove colour from the stone and make it all ‘white’ as distinct from
removing ‘quarry sap’.
600 ‘Quarry sap’ aside, Mr Calabrese was clear in his denials that he did not say
cleaning or acid washing would take the colour out of the stone and make the stone
white:319
Q. You said that sometimes when you use the acid the customer complains that the stone
becomes too white.
A. Because they very clean and new.
Q. So, do you agree that you said that.
A. Well, it does yes, but not because change colour. The black, clean the black.
315 Seventh Cross Action [19A.12].
316 T149.15-.16.
317 T149.21-.22.
318 T149.30-.32.
319 T1721.29-1722.16.
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Q. I want to be very clear. You said to Mrs Clarke 'Sometimes when I wash with the
acid the customer complains that the stone becomes too white'.
A. Not really, she misunderstood what I was say. The stone is the colour what it is.
Doesn't come any white, never, no, so she may dream that.
Q. You said to her that you can take the colour out, but you want to put the colour in,
cannot put the colour back Do you agree or not.
A. I cannot agree that.
Q. Cannot.
A. No. No.
Q. You said 'If you want your house all white, it's going to be boring'.
A. Correct, I did say to customer.
Q. And you said that to Mrs Clarke.
A. I tell everyone, just my opinion, you need a bit of colour, looks natural stone,
otherwise looks render, that's what I tell them.
601 The Owner submitted Mr Calabrese confirmed earlier in cross-examination
that he said the stone would be ‘white’ when finished. This is not correct when the
passage relied on is read in context. Mr Calabrese’s reference to ‘white’ when the
stonework “is all finished they all blend in”320 was said in context of the wall
looking different when it is finished, not because cleaning or acid washing would
render coloured stone white.
602 In assessing Mr Calabrese’s evidence it is important to take into account his
tendency for loose language generally and more specifically to refer to ‘white’ by
comparison to the ‘dark’ stone from the Stone Supplier’s range of Tasmanian
sandstone. At times it seemed he used ‘white’ interchangeably with ‘light’. In any
event, little weight should be placed on Mr Calabrese alleged use of ‘white’ in this
passage of his evidence, bearing in mind his clear denials about the effect of acid
washing.
603 The difficulties arising from Mr Calabrese use of language also affected other
witnesses’ evidence about their recollections of what he said. Their evidence on
the topic of what Mr Calabrese said about removing colour from the stone was all
the more unreliable given the uncertainty and qualifications they expressed in
giving this evidence given the passage of time, and accordingly of limited weight
in resolving what was actually said.
604 For example, all Mr Cirocco could recall Mr Calabrese saying was “once the
job finished and cleaned and sealed it will come up good”.321 In cross-examination,
320 T1719.
321 T1206,27-.28.
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Mr Tittoto recalled Mr Calabrese raising the question of washing the stone in the
context of ‘quarry sap’ but “he did not know” about making “the stone less
yellow” as the Owner’s counsel put it to him.322 His answer suggests that
Mr Calabrese did not say he would make the stone less yellow, but it is unclear
whether Mr Tittoto was really saying he did not now know that was said.
605 Mr Williams’ evidence was also unclear. When asked directly by the Court
whether Mr Calabrese said anything about cleaning the yellow off, his evidence
was:323
He said that the yellow sometimes fades anyway but he said the yellow can - just a normal
cleaning, so the quarry [sap] – the method of the material of the oxalic acid I don’t believe
has anything – any use for the other colours in the stone, they’re the stone colours but
some of that apparently comes out when he does the wash. Because it is a washing and
spraying process.
606 This answer suggests a stone’s colours remain the stone’s colours and its
colours are not affected by acid washing but then Mr Williams seems to contradict
himself, depending on what he meant by “that”. In cross-examination by the
Builder, Mr Williams confirmed (‘quarry sap’ aside), that Mr Cirocco did not say
anything about changing the colour of the stone and it was Mr Calabrese who
indicated there were possibly some ways of reducing or altering the colour
sometimes through the cleaning processes the colour changes. He then qualified
his evidence by saying he was unable to remember exactly what Mr Calabrese said.
He said that numerous times: “I can’t remember the conversation, I just remember
the emotion and the event”.324
607 In cross-examination by the Stone Supplier, Mr Williams clarified that
Mr Calabrese was talking about the general cleaning process sometimes reducing
or altering colour in the stone by cleaning off scuff marks and dirt and the like.
608 Leaving aside ‘quarry sap’ and that Mr Williams’ could not recall what was
said, the most that should be inferred from his evidence is that the effect of what
Mr Calabrese said was that the colour of stonework looks different when finished
and generally cleaned.
609 This proposition is, however, quite different from the Owner’s case at trial
that Mr Calabrese gave an assurance that the stone would be rendered white by
cleaning or acid washing it. Mr Williams did not recall Mr Calabrese saying that.
610 Lastly, there is Ms Crowden’s evidence about her later understanding about
the effect of cleaning the stone. Her evidence is not probative of anything
Mr Calabrese may have said at a meeting she did not attend. The Owner’s
submission that it was should be rejected.
322 T1282.27.
323 T1438.23-.28. Emphasis supplied.
324 T1521.8.-9.
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Mr Williams’ Response
611 The Owner’s evidence was that Mr Williams response to her complaints
about the colour of the stonework was to tell her:325
'Well, I'm an architect and Erin's an architect, Mr Cirocco's a builder and Mr Calabrese
owns the quarry, not only does he sell it but he owns the quarry in Tasmania and then there's
the stonemason and we all have qualifications in construction and stone and we're telling
you that it will be white and you have no qualifications in any of those fields, so you have
to accept that we're you that the house will be white when it's finished'.
612 This evidence was untruthful or at best an exaggeration. For a start,
Ms Crowden was not there. Mr Williams did not say the house would be white
when finished. Rather, Mr Williams suggested they listen to what Mr Calabrese
had to say about giving the stone time to dry and be cleaned.
Side Discussion between Dr Clarke and the Stone Mason
613 Before the meeting ended, there was a side discussion between Mr Tittoto
and Dr Clarke when the rest of the group moved off the porch. Mr Tittoto recalled
saying to Dr Clarke:326
… I said well stone is – I tried to explain that stone was a natural product. It comes out of
the ground, it’s not like bathroom tiles in factory that are all made the same. Whatever
comes out, comes out, That’s the beauty of stone. Then I said ‘Look, if you want to pick
out which ones you like, it not going to be easy because no two stones are the same. And
then he turned around and said ‘Yeah I understand’.
614 Dr Clarke’s denial in cross-examination that this was said was not persuasive.
He recalled no detail of their discussion. Mr Tittoto’ s evidence should be
preferred on this issue.
How It Ended
615 The meeting dispersed quite quickly when the Owner and Dr Clarke left. In
Mr Williams’ words, the Clarkes had “made their point and left”.327 It ended
without any resolution of the Owner’s dissatisfaction with the stonework.
Mr Williams said he then stopped the stonework because “we were left trying to
decide what to do next”.328 He believed he asked Mr Cirocco orally to stop the
stonework that day and followed it up with a note later.
616 The intended purpose of the meeting had not been achieved because the
Owner had not given her approval to the laid stonework. Nor had the Architect.
There certainly was no agreement or understanding reached at the 18 June Meeting
to the effect that the stonework could continue because it could later be cleaned or
325 T149.33-150.3.
326 T1266.12-.20.
327 T1439.3.
328 T1439.4-.5.
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acid washed to meet the Owner’s specified requirements of not being “of a colour
darker than samples 2 and 3”329 or “colour 2”330 or “white”331 as variously alleged
by the Owner.
AI:08 – Stop Work Instruction
617 Consistent with his evidence, Mr Williams issued a written instruction dated
20 June 2013, AI:08332, directing that no further stonework was to proceed until a
meeting took place on-site with the Stone Supplier, stone mason, Builder and
Architect to discuss and rectify issues.
618 The Owner accepts she received a copy of AI:08, and in cross-examination
by the Builder was difficult about answering when she received it. First, she said
she did not know because the Architect’s instructions were always posted. When
pressed, she reluctantly accepted that it was safe to assume she received it some
two or three days later and on about 22 or 23 June 2013 knew the stonework was
not proceeding until there was a meeting on-site to rectify her complaints.
619 The Owner’ pleaded case was that the Builder did not comply with AI:08 and
did not stop the stonework.333 At trial, the Owner’s allegation was more specific:
the stonework did not pause between the 18 June Meeting and 24 June 2013, the
date the parties adopted at trial as the date of the subsequent site meeting directed
in AI:08.
620 In examination-in-chief, when Mr Cirocco was shown the stop work
instruction, he said he was on the job every day and he told the stone mason to not
lay any more stone until they had a meeting with Mr Williams. He said he made
sure the stone mason did not lay more stone until this meeting.
621 In cross-examination Mr Cirocco was frank that whilst he could not
remember the dates or the detail and could not be “one-hundred-per cent”,334 he
could remember he ‘probably’ did stop work on the day because Mr William told
him to stop work. When he was challenged by reference to photographs of the
stonework taken on the afternoon of 24 June and it was suggested that they showed
more work had been done since 18 June, Mr Cirocco said ‘maybe’ the work was
done before or after, but he could not remember and ‘probably’ he did not tell the
stone mason until the day after. He just could not remember when he told him.
622 In assessing Mr Cirocco’s evidence it must be borne in mind that he was
doing the best he could to recall what happened more than nine years ago.
Mr Cirocco’s first memory (in examination-in-chief) that he told the stone mason
to stop work and the stonework did stop should be preferred to his final answer (in
329 Seventh Cross Action [19A.12].
330 Owner’s Reply to Architect’s Defence [2.10(f)].
331 Repeatedly asserted in the Owner’s evidence and her submissions.
332 Exhibit R3.49.
333 Seventh Cross Action [19A.14].
334 T1215.22.
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cross-examination) despite his inability to remember when he told him. His
evidence in cross-examination was led. It was not put to him that the work stopped
and restarted before 24 June. His uncertainty and honesty about his difficulty in
remembering exactly what happened so long ago does not undermine what he did
recall, it concerns the detail he has forgotten. That said, it should be accepted that
he was uncertain when he told the stone mason and it may well have been the day
after the 18 June Meeting.
623 There is no good reason why Mr Cirocco would not have complied with the
Architect’s instructions to stop laying stone until a further meeting had taken place
to discuss and resolve the Owner’s complaints. Plainly, the Owner had not
approved the stonework and her approval was a necessary next step. Furthermore,
Mr Cirocco was contractually obliged to do as directed by Mr Williams, was
willing to do as directed and continuing to lay stone against Mr William’s
instruction (whether oral or written) only risked the Builder having to take down
what was laid without the Owner’s approval. It was simply not in the Builder’s
interests not to stop stonework.
624 The stone mason Mr Tittoto was not given a copy AI:08. When asked if the
stonework continued after the 18 June Meeting, his evidence was that after the
meeting he went back to work with his boys but “not stone”.335 He did not think
it was stonework that day and he thought it could have been the next day that they
replaced the stones “they did not like”.336 He said they could have started laying
stonework generally again and when asked if he was aware of “any pause in the
laying of the stone”, he said “no”.337
625 The Owner relies on Mr Tittoto last answer in cross-examination on this topic
as establishing the stonework did not pause and submits Mr Cirocco’s
examination-in-chief that it did stop should be rejected.
626 The Owner’s submissions should be rejected. The evidence is equivocal and
does not establish on the balance of probabilities the stonework simply continued
to be laid, course after course, contrary to Mr Williams’ instructions. As
Mr Tittoto’s evidence makes clear, he and his crew’s work on-site was not only
laying stone. Their work also included brick laying and the internal brick walls
for the stone cladding. Mr Titotto’s evidence was they were not doing stonework
after the 18 June Meeting, so it follows that there was no pause in the stonework
generally as he recalled.
627 The only objective evidence is the handful of photographs taken between
15:49 and 15:54 on 24 June 2013, near the end of the working day. The
photographs of the front (southern) façade around the front door show the
335 T1284.3.
336 T1284.7-.8.
337 T1284.10-.16.
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stonework was seven full courses across it338 and the western wall was fourteen or
fifteen courses339 of the final height of sixteen full courses.
628 Importantly, the photographs of the southern façade show that the number of
courses of stonework done by late afternoon on 24 June was the same height as the
stonework at the time of the 18 June Meeting (according to Mr Tittoto).
629 As to the western wall, its height by late afternoon on 24 June was
considerably higher than witnesses’ recollections indicate it was at the 18 June
Meeting. Whilst it follows that further courses of stone were laid on western wall
between 18 and 24 June 2013, that this work was done contrary to Mr Williams’
stop work instructions only follows if the subsequent site meeting occurred at the
end of the working day on 24 June 2013. There are good reasons to doubt this was
the case.
Subsequent Site Meeting
The Pleaded Contentions
630 The Builder’s pleaded case was the meeting directed in AI:08 occurred on
around 22 June 2013 (a working Saturday), at which meeting the Architect directed
the Builder use the best stone supplied on the front façade and the rest on the other
façades.340
631 The Architect’s pleaded case was in effect that the Owner agreed and
accepted the stonework she viewed in June 2013 at the meeting directed in AI:08
and on the basis of her agreement, the stonework proceeded.341
632 The Owner’s pleaded case in reply was that there was no such best stone on
front direction given as alleged by the Builder and that if the Architect did give
such an instruction, it was contrary to her instructions, contrary to her express
requirements as to the colour of the stone and given for the purpose of benefitting
the Builder so as to save the costs of ensuring the stone acquired complied with
the Building Contract.342
The Date Issue
633 In opening, the Builder submitted this meeting involved all parties and,
contrary to its pleading, occurred later on about 24 June 2013 (the following
Monday).
634 There is no contemporaneous written record of this meeting and no objective
evidence establishing the date the parties met on-site as directed. None of the
338 Exhibit R3.421 pages 2821 and 2822.
339 Ibid pages 2819 and 2825.
340 Defence to Seventh Cross Action [19A.14.1] and [19A14.2].
341 Eighth Defence [14.2(k)-(p)].
342 Owner’s Reply to Architect’s Defence [2.19]-[2.20].
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witnesses had any independent recollection of the day of the week or dates of any
of the key events that occurred, including this meeting. Their evidence was based
either on an assumption as to the relevant date or was reconstructed from the
contemporaneous documentary evidence.
635 The Owner’s case was she did not attend this meeting, nor did Dr Clarke. It
was accepted by some of the other witnesses that Dr Clarke did not attend. That
was not Mr Williams’ recollection.
636 The other parties ultimately adopted 24 June 2013 as the date of this meeting.
Despite not attending the meeting, the Owner had tactical reasons for adopting this
as the relevant date. The little evidence there is suggests however that the
subsequent site meeting occurred earlier than 24 June, and certainly after 18 and
20 June 2013, the dates of the earlier meeting and AI:08.
637 Given general stonework had stopped, it was necessary this site meeting take
place with a degree of urgency to avoid further delay in the progress of the works.
The Owner put to Mr Williams that it was a ‘crisis meeting’, and he accepted so.
He said the Clarkes arrived “and after four days or whatever it was, they had a
totally different mindset.”343 Four days was 22 June 2013.
638 Mr Cirocco’s best recollection was that it would have been two or three days
after the 18 June Meeting: 20 or 21 June 2013.
639 Accepting that stonework had stopped, other evidence indicates this site
meeting occurred earlier than 24 June 2013. Mr Williams said the decision to
proceed and lay the best stone supplied on the front façade and the rest on the
western wall was made when there was room to do that:344
I think at that stage there must have been some scope to do it because otherwise – we were
standing there looking at it, otherwise, we wouldn’t have said it.
640 Contrary to the Owner’s submissions, there is no good reason to reject
Mr Williams’ evidence on this issue as dishonest or unreliable.
641 That this meeting occurred earlier than 24 June 2013 also fits with both
Mr Tittoto’s and Mr Cirocco’s evidence. That is, Mr Tittoto’s recollection there
was no pause in effect with the stonework because they were doing other work in
the meantime and Mr Cirocco’s evidence that he ensured no stonework proceeded
until the next site meeting. This timeframe also fits with the completion of further
stonework on the western wall between an earlier meeting on 21 or 22 June and
the late afternoon of 24 June (Monday) when the photographs were taken.
343 T1529.35-.36.
344 T1533.25-.28.
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The Owner’s Participation
642 The Owner’s participation in this site meeting is a fundamental issue. It is
unnecessary to resolve whether Dr Clarke was there or not.
643 The Owner’s approval of the stonework was the final step in the process
adopted by the parties to select and approve new stone. The Owner’s approval
was an express requirement of the Architect’s Specification and was carried over
into AI:04 as a necessary final step. All the parties understood the purpose of the
Owner’s approval. In circumstances where the Architect had instructed the
stonework to stop because the Owner had complaints about some of the colour in
the wet stonework, her approval for the stonework to continue was all the more
important because it finally determined her requirements and the contractual
specification for new stone.
644 For these reasons, whether the Owner approved the stonework in
circumstances where the stonework had stopped by reason of her complaint about
its colour is the seminal factual issue to be resolved in determining the varied
contractual requirements for new stone.
The Outcome
645 Consistent with the Owner’s pleaded case, it was her evidence that she did
not participate in the site meeting directed in AI:08 (whatever the date was) or any
other meeting to approve the built stonework or the stonework continuing, whether
in June 2013 or thereafter. Further, she denied knowledge of any direction to use
the best stone on the front, did not authorise it and said it was contrary to her
requirements for stone colour.
646 Mr Williams disagreed. He had the most detailed recollection of the site
meeting directed in AI:08. The Clarkes arrived “quite happy” compared to the
previous meeting.345 The mood had changed totally and Mr Williams said he was
absolutely delighted because the Owner walked in with a smile on her face and he
had a clear memory of this.
647 The Owner told him she had been in turmoil but she had come to the
realisation after talking to the stone mason or the Stone Supplier (he could not
recall which) that stone is a natural product and it is beautiful for what it is
including its unpredictability. She said she now understood the nature of natural
stone and its variation, so she wanted to move on with more attention to optimising
the beauty of the south façade and removing any darker colours she did not like.
345 T1529.10-.11.
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648 Mr Williams proposed the stonework proceed with any unacceptable stones
to be put to the side (as they would anyway) and any that were not within the
“comfort area of a No. 2”346 should be used on the western wall. That is:347
… And if there’s any too dark, following the normal procedures, if any of them were
outside the expectations of one to threes anyway, they would be put aside and not used at
all but the one that were just slightly – slightly different than the expectations, to move
those to the west wall.
649 They looked at the laid stonework in the area near the front door and agreed
several stones should be replaced. According to Mr Williams, this was the
outcome agreed with the Owner and the basis for the stonework proceeding.
650 Mr Williams then told Mr Cirocco to use the best colour stone on the front
and the second best on the western wall thereby instructing Builder to proceed with
the stonework on the basis agreed with the Owner. He thought he gave a written
instruction but there was not one.
651 Mr Williams’ evidence of this event was persuasive. He was thoroughly
cross-examined by the Owner on this topic. He was challenged as to the accuracy
of his recollection in evidence and as to his account of what happened in the
Architect’s record of outstanding items as at 19 July 2015, just over a year later.348
He said his record was exactly as it happened. His evidence in examination-in-
chief and cross-examination and his record were consistent and when challenged
about the impossibility of the agreed solution because the western wall had been
fully constructed by 24 June 2013, he genuinely questioned the logic of the
propositions put to him as being wrong. He was definitive in his denial of the
suggestion that the Owner did not agree to put darker stones on the western wall:
that was wrong, she did agree.
652 Mr Williams evidence was supported by that of Mr Cirocco.
653 Mr Cirocco remembered “very well”349 getting approval for the stonework to
proceed at this meeting. He recalled the meeting, that it did not last very long and
he was “pretty sure”350 that Mr Calabrese and the Owner were there, but maybe
not Dr Clarke. Mr Williams told him to use the best stone for the front and the rest
on the side wall and he instructed the stone mason accordingly. He said of this
instruction:351
Again, we going to make sure that we going to make the client happy the best way we can,
use the best stone for the front.
346 T1529.26.
347 T1441.29-.34.
348 Exhibit R3.257.
349 T1130.26-.37.
350 T1130.13.
351 T1132.7-.9.
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654 The stone mason, Mr Tittoto said he did not attend a further site meeting to
the earlier one he described on the porch. He did however say he was instructed
to put stone that was a little bit darker on the western wall near the boundary and
mix them in so they were not altogether. He recalled the instruction was given
after the group meeting, and likely was given a couple of days after. Mr Tittoto
said he followed that instruction and did not put together two dark stones or put
striped ones too close to one another.
655 Mr Tittoto’s evidence should be accepted as reliable. Moreover, it follows
from his evidence that the western wall was not substantially completed when the
direction to use the best stone on the front façade was given. It should therefore
be inferred the site meeting directed in AI:08 occurred earlier than 24 June 2013
on about 21 or 22 June 2013.
656 The Owner’s submission as to why the Court should accept the Owner’s
evidence in preference to Mr Williams’ and Mr Cirocco’s evidence on this topic
was fanciful. The Owner submitted their evidence should be rejected because the
direction to use the best stone on the front facade was:352
at best a plan by [them] as to how they would justify the use of the stone without actually
addressing the problem that the stone supplied and laid was not as directed in AI:04.
657 In closing submissions, the Owner went further than alleging a plan between
them: Mr Williams’ evidence at trial in this regard was “manufactured” and an
attempt to circumvent the Builder’s failure to comply with the Building Contract
and the Architect’s failure to hold the Builder to the Building Contract.353
658 Yet the Owner’s case does not address the serious difficulties with the
credibility of her own evidence about her alleged lack of participation in any
decision for the stonework to restart and continue until finally completed.
659 In cross-examination, the Owner could not explain why the stonework
restarted without her approval despite the strong dissatisfaction and complaints she
expressed at the 18 June Meeting being unresolved and her knowing stonework
had stopped and there was to be a site meeting to rectify her issues. At first, she
said her issues were resolved because of an instruction that any stone “outside that
colour range would not be laid”, referring to AI:04 although she could not recall
exactly what it said.354
660 Then she said unconvincingly:355
I didn't know when it recommenced. I didn't know when it did or was planned to. I wasn't
advised.
352 Owner’s Stone Closing [114].
353 Ibid [116].
354 T235.16-.17.
355 T235.30-.31.
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661 Then she denied going to her house to look at what was being done or to
check what stone colour was being installed, despite being very unhappy about the
stonework. When asked why she had lost interest in that, she gave an implausible
reason: they were always advised they were not permitted on-site. When pressed
as to there being no obstacle to her standing on the footpath and looking from there,
she accepted she could have done that but said she did not.
662 The Owner then said when she did see the colour of the stonework again, the
walls were much higher and the colour was still unacceptable. When asked what
she did about that, she said she spoke to Mr Williams on more than one occasion
and said: “They are still laying colour that’s yellow and orange”.356 She could not
remember the dates and had no records of those conversations. There are none in
evidence. She again said Mr Williams treated her questions with “disdain”357 and
his response was always the same:358
‘We’ve been through this before and I’ve told you it will be white when its dried and it’s
washed.’
663 The Owner’s evidence on this topic was most unsatisfactory and should not
be accepted as truthful or reliable. Putting aside her initial mistake about AI:04, it
is not credible she did not attend the site meeting directed in AI:08 or participate
in any decision to restart the stonework yet continued to be very unhappy about
the colour, orally voicing complaints to Mr Williams and being treated with
disdain in the expectation the walls would be rendered white when finished and
cleaned. Her account of her conduct is not consistent with the extensive evidence
showing she was an active participant in every aspect of the works and documented
her complaints assiduously, as she said so herself. The Owner’s repeated evidence
that she was not permitted on-site and did not go often was contrived and contrary
to the documentary evidence recording frequent unrestricted attendances on-site.
664 In the circumstances, there is every reason to believe Mr Williams invited the
Owner to the site meeting directed in AI:08. Her participation was essential and
her approval of the stonework was necessary to crystallise agreement as to the
approved stone colour, pattern and jointing before any decision could be made
about whether the stonework continued.
665 Accordingly, it should be accepted that by the time the Owner attended the
subsequent site meeting she had reflected on what she had been told about stone
and changed her mind in the way Mr Williams described in evidence. That is, she
said she was more appreciative of the natural characteristics of the stone and its
variability, generally accepting that the stone was wet and when dry the colours
would lighten and inevitably there would still be some colour variation.
356 T237.2-.3.
357 T237.14.
358 T237.15-.16.
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666 Whilst looking at the partially completed western wall and the front façade,
the Owner and Mr Williams discussed the removal of several stones near the front
door that the Owner considered too dark or yellow. They also discussed taking
extra care with the front façade because it was (in Mr Williams’ words) the
“prize”.359 This was the genesis of the best stone on front direction that
Mr Williams gave to Mr Cirocco orally that was not confirmed in writing. This
direction was given with the knowledge of the Owner and her express approval
and the basis upon which the stonework continued to be laid at the Architect’s
direction.
The Owner’s Collateral Allegations
667 It is again necessary to address the Owner’s submissions as to why the Court
should reject the evidence of Mr Williams and Mr Cirocco. The Architect’s
objected to these submissions as scandalous, illogical and inconsistent with the
evidence. The Architect’s objections were well made. Plainly, these are serious
allegations and they were made without any proper foundation in fact and
proceeded on false premises.
668 First, there is no evidence suggesting any such ‘plan’ between Mr Williams
and Mr Cirocco. Bearing in mind the Owner’s approval of the stonework was
essential and had not been given at the site meeting held for that purpose on
18 June 2013, Mr Williams directed stonework to cease in the Owner’s best
interests and only instructed it to restart with the Owner’s express approval.
Mr Cirocco merely did as he was instructed by Mr Williams to do, consistent with
the Builder’s obligation to follow the Architect’s instructions.
669 Secondly, the problem faced was the Owner’s strong dislike of the colour of
some stone when she saw it wet, not that the stone supplied was not as directed in
AI:04 as was the Owner’s ultimate submission.360 As was plain from the Owner’s
evidence at trial, her selection at the Gillman Meeting was colours ‘1’ to ‘3’ and
she did not complain at the 18 June Meeting about the stone colour by reference
to her selection of the Stone Supplier’s colour categories, let alone the instruction
as to colour in AI:04.
670 Thirdly, in 2013 neither Mr Williams nor Mr Cirocco had any reason to
consider they had breached their contractual obligations with regard to the supply
and installation of stone. The Owner did not make any allegation about stone
colour variation being a defect in the stonework until February 2015 and only did
when she was being pressed for payment of monies due in September and
November 2014 having not explained why she was withholding payment.
671 Finally, although of less importance, there is the Owner’s reliance on AI:08
as not expressly nominating her or Dr Clarke as participants. It does not follow
359 T1441.20.
360 Owner’s Stone Closing [114].
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that she did not attend because she was not mentioned as a participant. It was
necessary for Mr Williams to direct the relevant trades attend a site meeting in a
written instruction to the Builder to stop work. Mr Williams only had to telephone
the Owner’s to involve her, as was their practice.
Completion of Stone Laying
672 As stated, the stone mason replaced several stones near the front door after
the AI:08 site meeting as a result of the Owner’s instructions as to the basis for the
stonework to continue.
673 Stone that was not suitable continued to be rejected from the pallets.
Mr Titotto took photographs of some stone that was damaged on the pallets or had
unusual markings as a record.361
674 Following the Owner’s approval for the stonework to continue on the basis
of the best stone on front direction, the works continued without further issue save
some minor issues about a chipped stone that was damaged after it was laid.
675 Contrary to the Owner’s contentions, there continued to be regular site
meetings in which she actively participated.
676 By 18 July 2013, the stonework was substantially complete as Mr Tittoto’s
photographs record.362
677 The best evidence of the colour and overall appearance of the stonework
during its construction and following completion of its laying is the photographs
taken first on 24 June and 18 July 2013363 and then on 5 February364 and 11 March
2014.365 Despite the varying quality of the photographs, they show stonework of a
similar overall appearance, and that the colour apparently depicted changes
markedly with different lighting and perspectives.
678 Bearing in mind the limitations of the photographs compared to the human
eye, these photographs generally show that there is some variation in stone colour,
both within and between stones, consistent with the natural variation in Tasmanian
sandstone from the Stone Supplier’s lighter range of colours. That is, there are
some stones with less movement, colour and natural markings compared to others
such as sample stone ‘SC 135’.366 There are others with noticeable sedimentary
lines and natural markings, both in lighter and darker colours than the background.
Overall, the colour range is from grey/white to cream to a creamy yellow.
361 Exhibit R3.421 pages 2826 to 2832.
362 Exhibit R3.421 pages 2835 to 2840.
363 Ibid pages 2818 to 2840.
364 Ibid pages 2814 to 2817.
365 Ibid pages 2841 and 2842.
366 ‘SC 135’ is visible on page 2836 of Exhibit R3.421: it is the stone immediately above the orange plastic
to the left of the man.
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679 There are no prominent orange or black or brown stones visible in these
photographs.
680 None of the stones identified as affected by ‘quarry sap’ in the HSR Report
or by Associate Professor Danvers in his Annexure B that appear in any of these
photographs are visibly grey, brown or black.
681 The Owner did not complain about any stones being ‘black’ or ‘too
coloured’, contrary to her evidence that she repeatedly complained to Mr Williams
whilst the stonework continued to be laid because none was evident as it was being
laid. She did not complain about the stone colour generally because the issues she
raised at the 18 June meeting had been resolved to her satisfaction in the next site
meeting when she gave her approval to the partially built stonework.
682 Contrary to the Owner’s submissions,367 Mr Williams not only denied he was
rude in his dealings with the Owner, but he also disagreed that the Owner
complained about yellow stone during the following phase of construction.
Mr Williams’ reference in evidence to her not being happy when it was laid in
some areas, was a reference to her complaints at the June 2013 site meetings. His
recollection of a later occasion should be understood as a reference to the site
meeting directed in AI:08.
First Complaint of Quarry Sap
683 The first record of complaint about ‘quarry sap’ was made ten months after
the June 2013 site meetings, although it was not expressed in those terms. In
photographs taken by the Owner on 23 April 2014, there is a single noticeably dark
stone on the rear central column (referred to in the Owner’s Annexure B as stone
C3-53) and some slightly darker stones on the eastern wall of the porch (although
it is difficult to see much clearly given the angle from which the photograph was
taken).368 In notes the Owner prepared for a meeting with the Architect on 19 May
2014, she queried whether the “brown stones” in the rear pillars and the front were
laid brown “or have they coloured since installation?”369
684 Stone cleaning was an outstanding item of the works and the Owner’s notes
for a meeting with the Architect on 30 May 2014 recorded for cleaning: “in
particular the brown stones”.370
685 The Architect issued instruction A:17 dated 3 June 2014 directing the Builder
“to arrange for Rito to clean and [seal] all remaining stone when appropriate.”371
This instruction is an indicia of the parties’ intention that the Stone Supplier would
367 Owner’s Final Closing – Annexure [118].
368 Exhibit R3.421 pages 2845 and 2844.
369 Exhibit R3.112.
370 Exhibit R3.117.
371 Exhibit R3.119.
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be subcontracted to the Builder and the cleaning and sealing works would become
part of the Builder’s scope of works under the Building Contract.
Foreshadowed Practical Completion
686 The scheduled date for Practical Completion under the Building Contract was
11 April 2014.372 The Owner was keen to be in her new house before June, then
mid-June and wished to host a birthday celebration on 3 July and avoid paying rent
in July. The process of the Architect and Owner compiling lists of defective and
incomplete work for the house began in earnest about May 2014 in anticipation of
her taking possession.
687 At a site meeting on 26 June 2014, the Owner and the Architect discussed
completion and 11 July 2014 was nominated as the date of practical completion of
the internal works for the house and so soon as possible after 11 July, but not later
than 23 July 2013, for the remaining external works, the church hall and garage.
The Builder was instructed of these dates by the issue of AI:18.373
Stonework Cleaning and Sealing
688 On 23 July 2014, the Owner complained Mr Calabrese had attended site the
day before, had cleaned the “[v]ery chocolate brown stones” on the rear pillars
but left “many brown blotches/marks elsewhere” and left a mess.374 The Owner
said she required thorough cleaning of the remainder of the stone.
689 Mr Williams inspected the cleaned stone that day, and whilst he considered
it a good improvement, he identified areas and remaining stones that needed
further treatment. He noticed some residue on the pavers and spoke to Mr Cirocco
who then spoke to Mr Calabrese about it and Mr Calabrese assured them that the
residue would wash off easily. Mr Cirocco said he would get that done that or the
following day. Mr Cirocco’s involvement is a further indicia of the parties’
intention that the Stone Supplier would be the Builder’s subcontractor for these
works.
First Formal Defects List
690 On 25 July 2014, the Architect issued Architect’s Instruction A:19, the first
defects list for the main residence, but not the front fence, pool area, garage or the
church hall.375 Only two minor defect items concerned the stonework: “mortar
splashes from the stone to front adjacent/under porch”376 was to be cleaned and
“black marks”377 were be cleaned off stone on a window lintel.
372 Item 22, clause M1.
373 Exhibit TP1.3.130.
374 Exhibit R3.141.
375 Exhibit TPI.3.143.
376 Ibid, page 1299, Item 21.1.
377 Ibid, Item 21.7.
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691 No mention was made of the brown stones that has been cleaned on 23 July,
nor the damage to the bluestone paving by the earlier stone cleaning. This damage
was later included in the Owner’s additional defects list of 8 September 2014.378
Owner Moves into the House
692 The Owner moved into and took possession of the house and attached
outdoor areas on 31 July 2014 whilst building works were still progressing on the
church hall and attached garage and defect correction works were ongoing for the
house. The stonework had not been fully cleaned (either generally or acid washed)
or sealed. This incomplete work did not unreasonably affect occupation and use of
the house.
693 On 16 September 2014, the Architect inspected the house and progress with
defect correction works.
694 At about this time, after being given a revised quote of a month of works to
complete the stone cleaning and sealing by another contractor, the Owner
expressed her reservations to Mr Williams about Mr Calabrese’s capability to do
this work to a high standard and adequately protect the surrounding surfaces, given
his earlier work.
695 On 3 October 2014, a meeting was held at the house to discuss the stone
cleaning and sealing works. The Owner, Dr Clarke, Mr Williams, Ms Crowden,
Mr Cirocco and Mr Calabrese attended. The Owner’s understanding of the scope
of works agreed at that meeting was later recorded in her email as follows:379
a) Clean marks from the stone – obvious black/and or brown marks and also bits of
cement, mortar, pointing material paint and other substances/marks
b) Clean the stone with a chemical
c) Seal the stone
d) Provide good protection for the surrounding painted and stone surfaces of our home
whilst undertaking steps a) to c)
696 A decision was made by the Owner to proceed with the Stone Supplier due
to time and cost implications.
697 Mr Calabrese attended to clean and seal the stonework over the 2014 October
long weekend and on two days a week later. His first attempts at general cleaning
resulted in complaints by the Owner that he had damaged the surface of some
stones and left them ‘scratchy’ and not cleaned all marks from the stonework. His
acid cleaning works caused damage to the surrounding surfaces by reason of his
378 See Exhibit A3.154, page 1330.
379 Exhibit R3.173.
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failure to adequately protect those surfaces from overspray or to properly wash
them down afterwards, or both.
698 Mr Williams inspected the stonework and damage from the acid overspray
on 17 October 2014 with the Owner and prepared a Schedule of Works for closer
supervision of the remaining cleaning and sealing the stonework and works to
rectify the acid damage.
699 The damage of the surrounding surfaces was extensive but superficial and
not structural. The damage, the finalisation of the cleaning and sealing works and
the remaining defect correction works became major issues the subject of ongoing
communications between the parties until Christmas 2014. The Owner made
strong complaints about the resulting inconvenience and emotional stress and was
demanding in her continuing requirements as to the proposed defect correction
works and finalisation of the cleaning and sealing works. She expressed
dissatisfaction with the rate of progress of the defect correction works generally,
although the outstanding issues were not significant.
700 The Stone Supplier accepted responsibility for the damage caused by acid
overspray from Mr Calabrese’s chemical cleaning of the stone and made a claim
on its insurer. The Owner and Architect co-operated and assisted the Stone
Supplier’s insurer with assessment of the claim.
701 The Owner again expressed her understanding of the scope and intended
effect of the unfinished cleaning and works in an email sent to Mr Williams on
31 October 2014 as follows:380
My understanding of cleaning required is:
a) Remove staining black and brown marks which require chemical cleaning. Could
need a scrub as well to remove sealant?
b) Scratches (made by Rito and Rocky scratching of mortar, etc) to be rubbed/cleaned
with brush or whatever Rito used to clean/remove the scratched off the ‘sample
stone’ on the verandah. The sample stones has scratches adequately removed and
has been adequately sealed.
c) Clean mortar etc from other stone as identified. The mortar etc. was not removed by
the chemical cleaning undertaken on 4 October 2014 so my understanding is that
these stone will require Rito to use stone-on-stone
702 The Owner’s references to the chemical clean refers to a diluted solution of
acid being applied to the stone to remove ‘quarry sap’. Contrary to her case and
evidence at trial, the Owner expressed no understanding in this email that the
‘chemical clean’ would reduce the colour in the stone or bleach coloured stone
white (‘brown’ stones or ‘quarry sap’ aside).
380 Exhibit R3.181.
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703 On 2 November 2014, the Owner complained that multiple of the cleaned
and sealed stones on the rear pillars, the front and the wall behind the lap pool were
“colouring again” by “turning brown” and asked the Architect to have another
look.381
704 The cleaning and sealing works continued throughout November 2014 with
the final section of stonework being sealed late on 18 November 2014. The Owner
prepared an extensive list of damage from acid overspray and detailed procedures
she required be followed in the acid spray rectification works. Her requirements
were included in Architect’s instruction AI:20 dated 25 November 2014382
confirming the Stone Supplier’s insurer would cover the costs of these works.
705 General defects and acid overspray rectification work continued until
Christmas 2014. The Owner requested a break from trades until the new year,
which the Builder accommodated.
706 The Owner did not express any concerns or complaints about the inherent
colour or variation in colour of the stonework or the quality of its laying in this
period.
Practical Completion Certified
707 By letter dated 10 November 2014, the Architect notified the Owner that a
final claim had been received from the Builder and because of the two stage
completion, proposed different dates be nominated for practical completion and
the commencement and expiry of the defects liability periods and two retention
sums. This proposal was consistent with the proposal made in the June 2014 site
meeting and AI:18, save the dates were different.
708 Notably, the Architect’s letter proposed the final 50% retention sum of
$52,925.00 be split into two components of $42,925.00 and $10,000.00
corresponding to the two stages of occupation of 31 July and 10 October 2014.
709 On 1 December 2014, the Architect certified practical completion by issuing
two formal notices of practical completion383 consistent with the proposal made in
his 10 November letter. The first notice was for the house proper and attached
outdoor areas that were stated to have been completed for occupation and had
reached the stage of practical completion as at 31 July 2014. The second was for
the church hall and attached garage that were stated to have been completed for
occupation and had reached the stage of practical completion as at 10 October
2014.
381 Exhibit R3.184.
382 Exhibit A3.194.
383 Exhibit R3.195.
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710 The respective defects liability periods were certified as commencing on the
dates of practical completion and expiring on 31 January and 10 April 2015
respectively for two separable portions of the works.
711 Neither the Builder or Owner gave notice under clause A8 of the Building
Contract disputing the Architect’s certification of the dates of practical completion
or the decision to separate the works into two portions with different dates of
practical completion, different defect liability periods and different final retention
sums.
712 Nonetheless, there is an issue joined between the parties as to the validity of
the Architect issuing two notices of practical completion. This issue is addressed
in Part D below.
New Stone Complaints
713 Matters came to a head in February 2015. The Architect had been
corresponding with the Owner about her continued withholding of payments to the
Builder since September 2014, and had expressed his puzzlement as to her
continuing refusal to respond to his letters or offer any views to his suggestions or
discuss her reasons for withholding payment.
714 In response to his letters of 2 then 5 February 2015, the Owner wrote a letter
dated 8 February 2015 expressing dissatisfaction generally with the quality of
construction (defects) and repeated assurances that these issues would be promptly
rectified. As for the stonework, she complained further about the two unsuccessful
attempts to clean the sandstone that left a number of “discoloured” stones and
extensive unrectified acid overspray damage.384 She included her own 22 page
defects list based on the Architect’s first list dated 25 July 2014385 and made a new
complaint about the consistency of the colour of the stonework and the now
“huge” colour variation that was to be “minimal – colours 1 to 3”:386
Sandstone specified in the contract is to be consistent in colour as per samples. Sandstone
is not consistent in colour and is not as per samples.
715 She further complained that the “brown coloured stones remained brown”
despite cleaning and allegedly repeated assurances:387
… that brown coloured stones would “clean up” – and remain clean and not deteriorate to
brown over time …
716 Brown coloured stones and stones not consistent in colour with that specified
were required to be fixed.
384 Exhibit R3.223, page 1531.
385 AI:19. Exhibit TP1.3.143.
386 Exhibit R3.233, page 1587.
387 Ibid.
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717 The Owner also made a new generalised complaint about the quality of the
workmanship: the joints were sloppy and crooked, there were mortar runs, many
stones were chipped and the stone laying was uneven, with some stones protruding
more than others.
718 The Owner’s letter concluded by requiring a written program of works for all
matters to be rectified, stating that payment would be made when all the required
remedial works were done.
Further Assessment of Stonework
719 Mr Williams inspected the works on 16 February 2015 with the Clarkes for
the purposes of assessing the remaining defects and incomplete items in the first
stage works.
720 Mr Williams responded to the Owner’s letter of 8 February by letter dated
23 February 2015.
721 Having completed the final inspection of stage 1 works (as he described
them), his stated assessment was that the extent and severity of most of the listed
defects was relatively minor and very much within the normal range. There were
some items of the Owner’s list that were not straightforward and needed further
investigation before including them on the formal list. Most related to the stone
and the acid cleaning damage the subject of the Stone Supplier’s insurance claim.
722 Mr Williams then set out his response to the items in her 8 February letter,
starting with his account of events concerning sandstone including as to her initial
concerns about some chipped stone and stone colour variation. He said that after
initial concerns and discussion about the inevitable colour variation in natural
quarried stone, it was agreed:388
… that stone in inherently imperfect, but the overall beauty of the final product overruled
any concerns.
723 The Owner’s submission that his statement was disingenuous and further
criticisms about the inaccuracy of his account is not ultimately supported by the
proven facts.
724 As regards ‘quarry sap’, Mr Williams proposed getting someone with the
skills to treat it as required, both in terms of the cleaning method and the overlap
with the insurance claim. He continued to press this recommendation, both in
correspondence with the Owner and in formal Architect’s instructions, but the
Owner did not engage with him about it substantively until September 2015, some
seven months later, after the litigation had started.
388 Exhibit R3.226, page 1541.
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725 Next, on 24 February 2015, the Architect compiled a list of items not
included in the final defects list. Item 14 addressed stone and reiterated in much
the same terms the advice he had given in his letter of 23 February: 389
In regard to the stonework, as I said, I am keen to get another stonemason on site, to inspect
the work and suggest any rectification works, to address the concerns
- Stone continuing to darken
- Edge chipping
- Stone colour variation generally
Our view is that given the nature of the product, being a beautiful, natural, relatively soft
quarried sandstone, that the colour variation is acceptable, and I say that because the overall
appearance of the house from Alexandra Avenue is quite beautiful, which you have also
expressed.
If one or two stones remain unacceptable to you through excessive chipping or issues of
colour, and if a stonemason agrees that he can replace them without a guaranteed better
result, then that can be arranged. As I have said before however, in building there are many
instances where the repair can look far worse than what was before.
I would like to see the end of the darkening of some stone faces, and this is where I would
like another opinion, other than Rito’s, and perhaps another person undertaking the
cleaning process if required.
726 On 25 February 2015, an Architect’s instruction for outstanding items was
issued. Under the heading of “Sandstone Work Generally”, Mr Williams made
plain his assessment as Architect of the colour variation in the built stonework
against the contractual specification, although in not so many words. He did not
merely express his opinion or view for the Owner’s consideration as the Owner
submits, (a conclusion that might reasonably be drawn for the views expressed in
his covering letter and the list of items not on the then final defects list).
Mr Williams stated:390
Apart from the documented issues with the stone cleaning process, which are the subject
of Rito’s insurance claim, there are some on-going issues with the stone that may need
attention.
We intend to find another stonemason to inspect the stone and offer advice on the
continuing darkening of a few stone blocks. There are also a couple of stones blocks that
are chipped and we would like an opinion on the options of repair or a [sic] possible
replacements, subject to the outcome we could expect.
The darkening of the stone we believe, is not a defect as such, but it is a characteristic of
the stone, but this needs to be confirmed by the stonemason, before any rectification can
be suggested.
389 Exhibit R3.227.
390 Exhibit R3.226, page 1550.
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727 The Owner did not respond to the Architect’s letter of 23 February 2015 or
his list of items not in the final defects list. Nor did she dispute the Architect’s
assessment of defects and outstanding items in the Architect’s instruction issued
on 25 February 2015 by giving a clause A8 notice.
Lawyers and Litigation
728 Relations between the parties deteriorated further when lawyers became
involved following the Builder’s formal demand for payment on 30 March 2015.
729 It is not necessary to recount all of the detail of the parties’ continued and
extensive dealings as the litigation escalated. Suffice it to say that the continuing
defects correction works became increasingly protracted. The Owner demanded
stricter notice and formal programming of the trades attending her home and
eventually the lawyers became involved in supervising this process. Rectification
works were suspended, a formal defect works program eventually negotiated and
works continued from August to November 2015 in parallel with the litigation.
730 That said, some events bear on the issues to be determined.
731 The Builder instructed solicitors to send a letter of demand which was
received by the Owner on 2 April 2015. The Owner’s response dated 7 April 2015
was emotional and extravagantly worded. As to sandstone, in addition to
rectification of the acid overspray and the “many, many” stones that were
“chocolate brown”,391 the Owner complained the colour variation was too broad:
“almost 1 through to 9 not 1 to 3”392 and whilst she understood that sandstone is a
natural product and there will be imperfections, now too many stones showed
“blemishes”. For the first time, she made the allegation:393
In addition we were advised that the final clean would bleach colour from the stone so that
any excessively coloured stones (close to orange colour) would fade.
732 The Owner repeated her position that payments would be made once all the
remedial works she required were done.
733 The Builder commenced this proceeding on 10 April 2015 and sought
summary judgment by application filed on 16 April 2015.
May 2015 Complaints
734 By letter dated 10 May 2015,394 the Owner responded to the latest Architect’s
instruction as to the outstanding defects as at 30 April 2015. She attached previous
correspondence and her updated February defects list.395 As regards the sandstone,
she reiterated much of the complaints made in her previous letter in similar terms.
391 Exhibit R3.233, page 1568.
392 Ibid.
393 Ibid, page 1569.
394 Exhibit R3.238.
395 Ibid, pages 1625-1641: “Clarke Defects List 10 May 2015”.
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However, she now said the stone she selected was in the “2-3 colour range”.396 As
to the brown stones, she said they numbered at least seventy one (71) and she had
obtained a quote of $33,000.00 for their replacement. The quote did not include
replacement of brown/black stone in the front water feature or chipped stones.
735 Since early 2015, the Owner had been dealing with Mr Allen, HSR’s
estimator. Mr Allen sent the Owner a copy of the quotation he had sent the
Architect and later sent her a revised quotation for cleaning the bluestone pavers
for the insurance claim for acid damaged items. In early April they had
corresponded and spoken about the preferred cleaning method for the exterior
stonework without the Architect’s involvement.
736 Mr Allen prepared a quotation dated 11 May 2015 for the removal and
replacement of 12m2 of discoloured sandstone in the amount of $33,000 including
GST.397 It is apparent from the covering email and the Owner’s 10 May letter to
the Architect that the quotation was for 71 brown stones identified by the Owner
for replacement.
737 In an affidavit filed in the proceeding, the Owner expressed no confidence in
the Builder’s ability and preparedness to undertake the remedial works to an
acceptable schedule and level of finish. Her affidavit led to the Builder formally
notifying the Architect by letter dated 14 May 2015,398 that it remained ready,
willing and able to remedy defects and reserved its rights under the Building
Contract.
738 This was the first of many communications by the Builder seeking access to
the site to finish the outstanding defect correction works, in circumstances of the
Owner’s increasing lack of co-operation.
739 On 26 May 2015, the Owner filed her first cross action against the Builder
and third party claim against the Architect.
25 June 2015 Site Meeting
740 On 25 June 2015, the Architect and Owner and their lawyers met on-site to
discuss outstanding defects. It was at this meeting the Owner’s solicitor asked the
Owner to point out a stone that represented the colour “we wanted”399 and she
identified a stone on the south side of the column nearest the door on the south
façade. In cross-examination, the Owner confirmed she selected this stone against
the colour range of ‘1’ to ‘2’ she had selected at the Gillman Meeting, being “quite
a white stone”.400 The Owner said in examination-in-chief that Mr Williams agreed
396 Ibid, page 1611.
397 Exhibit A3.239.
398 Exhibit R3.242.
399 T174.18.
400 T303.27-305.5; T309.37-310.2.
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this stone was a good representation of the stone colour she wanted and selected
for her home.
741 This is the stone ‘SC 135’ photographed and adopted by Associate Professor
Danvers as the ‘sample stone’ for his assessment of the colour of the built
stonework the subject of his expert reports discussed below.401
742 The Owner’s evidence about stone ‘SC 135’ was unconvincing and should
be rejected for the following reasons.
743 First, her selection at the Gillman Meeting was of colour categories ‘1’ to ‘3’,
not ‘1’ to ‘2’. Secondly, the sample stone ‘SC 135’ is not a definitive
representation of the stone colour she selected and approved that constitutes the
varied contractual requirement for stone colour as discussed below.402
744 As to Mr William’s alleged agreement, the Owner kept repeating there was
agreement but could not say exactly what was said, despite being asked several
times for the basis of her conclusion. Mr Williams could not assist. He had no
recollection of the meeting. In any event, in context of the proven circumstances
and his consistent evidence about the variability of the colour range selected and
approved by the Owner it is implausible that Mr Williams would have agreed that
a single stone was a definitive representation of the approved stone colour.
745 Plainly, it is a different matter to agree that sample stone ‘SC 135’ is within
the selected colour range.
746 The 25 June 2015 meeting was followed by the Owner setting out her self-
serving account of it in an email sent to Mr Williams on 29 June 2015 and
providing another updated defects list for him to add to the Architect’s 25 February
list.
Further Defects Lists
747 On 29 July 2015, the Architect issued an updated and supposedly final
defects list in an Architect’s instruction dated 19 July 2015 with reference to the
25 June meeting.403 The list contained 233 items. The instruction did not require
the Builder to take any action as regards stonework.
748 By letter dated 18 August 2015,404 the Owner formally disputed the July 2015
Defects List under clause A8 of the Building Contract. The Owner referred to and
relied on a report from Blue Chip Building Consultants dated 24 June 2015 (a
report that was not relied on at trial).
401 See [844] below.
402 Ibid.
403 Exhibit R3.257.
404 Exhibit R3.267.
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749 The Architect assessed the Owner’s notice of dispute and gave a written
decision in the form of its letter dated 27 August 2015.405 The Architect issued an
updated defects list in an Architect’s instruction dated 27 August 2015.406 The
Owner did not dispute the Architect’s written decision or the August 2015 defects
instruction.
750 The Architect requested the Builder prepare a schedule and program for
carrying out the defect corrections work identified in the August 2015 defects
instruction, which it did.
751 On 4 September 2015, the Builder prepared and circulated to the Architect
and its subcontractors a program of defects correction works in accordance with
the August 2015 defects list.
HSR Inspection
752 The Architect continued to press the recommendation first made in February
2015 for an expert opinion to be sought from an independent stone mason about
the ongoing issues with the discoloured stonework and its treatment before it could
be assessed as a defect as distinct from a natural characteristic of the stone.
753 With the Owner’s approval, a meeting was finally arranged on-site with
Mr Keith McAllister of HSR on 7 September 2015 to inspect the stonework.
Mr Williams said in evidence he respected Mr McAllister and his company’s
expertise in stone and understood that the Owner had been dealing with HSR
directly in relation to remediation of the acid damaged pavers the subject of the
claim on the Stone Supplier’s insurer. Mr McAllister confirmed in evidence he
was initially contacted by the Architect to attend the site and view the discoloured
sandstone and give advice about it.
754 Prior to the meeting, Mr McAllister had driven past the house and taken some
photographs in preparation for the meeting.
755 In attendance at the meeting were Mr McAllister, Mr Williams, Ms Crowden,
the Owner (and perhaps Dr Clarke). They inspected all the façades, the rear
columns and the front fountain.
756 Mr McAllister observed the dark staining on stones affected by ‘quarry sap’
and some prominent orange colouring was pointed out that the Owner did not like.
Both phenomena were discussed. Mr McAllister told them the black stone was the
result of a metal oxide leaching out known as ‘quarry sap’ and identified the orange
colouring as oxidisation, which he described in evidence as like the effect of
peeling an apple and not eating it. Mr McAllister advised those present that these
405 Exhibit R3.275.
406 Exhibit R3.276.
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were natural occurrences in a natural product that occurred when quarried stone
was exposed to air, having been in the ground for millions of years.
757 They then discussed what could be done to address both issues. As to ‘quarry
sap’, he said that it could be treated by applying hydrochloric acid but success was
not always guaranteed and, whilst it may lighten the staining, it may not remove
all of it. Sometimes this treatment was successful, sometimes not and he was not
aware of any explanation for that. As to the second issue of oxidisation,
replacement was the only option for oxidised stones if they were unwanted.
758 Mr McAllister was not involved in any discussion about colour variation by
reference to the contractual specification. He recalled observing the workmanship
and being asked about it, but said it was not discussed in depth.
759 Mr McAllister was instructed to provide a report addressing the two different
phenomena discussed on-site and their treatment: that is, ‘quarry sap’ and the
oxidised stones that were described as prominently orange. Whilst his report refers
to the latter as stones condemned as being too colourful, Mr McAllister confirmed
in oral evidence he did not address the issue of colour variation outside the
contractual specification in his report because he was not asked to do so. That was
not his brief.
September 2015 Defects Correction Works
760 Agreed defect corrections works were carried out over the course of about
three weeks during September 2015. Weekly site meetings were held with the
Owner and Architect to inspect the defect corrections works. By 22 September
2015 most of the internal defects on the August 2015 defects list had been
corrected. The Architect issued an instruction reporting on defects management
on 22 September 2015, addressing ten outstanding items including stone, noting
that a report was imminent from HSR.
6 October 2015 Meeting
761 On 6 October 2015, Mr McAllister attended a meeting at the Architect’s
offices with Mr Williams, Ms Crowden, Mr Cirocco and Mr Calabrese.
Mr McAllister brought with him photographs of the stonework and the notes he
took at the site meeting and they were used to identify the individual stones to be
treated for ‘quarry sap’ or oxidisation. His involvement in the discussion
otherwise concerned the feasibility of removing the ‘quarry sap’ from the stone,
replacing stone if cleaning was unsuccessful and whether HSR could do the work.
Builder’s Report on Defect Correction Works
762 On 7 October 2015, the Builder provided the Architect with a formal updated
defects register, reporting that of the 139 internal defects, 132 had been completed
and of the 94 external defects, 11 had been completed. This left 7 internal and
83 external defects as incomplete.
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763 On 10 October 2015, the Owner advised the Architect that moving forward
it would be more efficient if appointments with the trades were to be made directly
with her.
HSR Report
764 In his report dated 9 October 2015 (the HSR Report),407 Mr McAllister
identified proposed works involving the replacement of some 38 oxidised stones
and chemical treatment of some 49 stones affected by ‘quarry sap’. Before he
issued it, he had provided a draft408 to the Architect who suggested he reorder some
of the photographs more logically, mention his verbal advice that there is no known
way to permanently remove the manganese oxide and queried whether an
additional six stones should be included following the discussions at the 6 October
meeting.
765 The Owner submits Mr McAllister’s evidence and the HSR report should be
understood in the context of his limited instructions and involvement in the matter
and described him as not being independent. The Owner submits Mr McAllister
was brought in by the Architect to put forward a compromise that the Architect
wished to achieve, namely some limited remediation of the just the most
egregiously dark stones.409
766 The Owner’s implicit criticisms of Mr McAllister’s evidence and thus the
relevance and weight of the HSR Report should not be accepted. Mr McAllister’s
expertise and experience in stone is not challenged. His oral evidence and the HSR
Report are relevant to the phenomena of darkening and discoloured stone, although
it is not directly relevant to the Owner’s primary case on colour variation by
reference to the selected and approved colour categories from the Stone Supplier’s
range.
767 It is clear on the evidence Mr Mc Allister was not instructed to make any
assessment on colour variation. This is consistent with the Architect’s assessment
that, darkening stone aside, the colour variation in the stonework was acceptable,
conformed to the contractual requirements and was not a defect.
768 The evidence also makes it plain that Mr McAllister observed and
independently identified the obviously discoloured stone pointed out to him when
he inspected the stonework at the Owner’s house and was not merely instructed to
assume which ones were ‘condemned’ by the Owner:410
So on attending the meeting it was pointed out and quite blatantly obvious that there was a
dark stain to the stone and also it was pointed out the orange colour in what was prominent
on the stone façade as well.
407 Exhibit TP1.3.307.
408 Exhibit R3.295.
409 Owner’s Stone Closing Appendix A [A22].
410 T1584.10-.13.
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769 Furthermore, Mr McAllister took the photographs in the HSR Report and
identified the stone affected by ‘quarry sap’ and oxidisation, including the
additional six stones at the Architect’s suggestion. Mr McAllister confirmed in
evidence he stood by the contents of the HSR Report and his report indicated the
stones that were heavily stained or prominently orange and consequently
‘condemned by the client’.
770 It is clear from the documentary evidence from about February 2015 that
Mr Williams genuinely sought Mr McAllister’s expert advice on the stone
discolouration because, as the Owner well knew, the Architect was not an expert
on the subject. True it was that a stalemate had been reached over defects in the
stonework (and in carrying out the defect corrections works more generally) and,
as Mr Williams said in cross-examination, he thought Mr McAllister’s advice
might possibly assist in resolving issues. However, Mr Williams did not seek his
advice for the purpose of putting forward a compromise the Architect wished to
achieve to limit the extent of remediation works required in circumstances where
many more stones were defective, as the Owner suggested at trial.
771 As to the Architect’s input to the HSR report, properly considered, the
Architect’s suggestions do not compromise Mr McAllister’s advice and
independence. Indeed, there is no ‘whitewash’ as the Owner contends. The
suggested addition of six stones to those Mr McAllister identified does not
diminish the issues or the extent of the proposed remediation works.
772 The HSR Report was sent to the Owner under cover of the Architect’s
proposal for stonework dated 8 October 2015. The Architect was transparent in
reporting that a meeting had been held between representatives of the Architect,
Builder, the Stone Supplier and HSR to discuss and plan the process of the
remediation works proposed in the HSR Report. This was a necessary and
practical step for the Architect to take. As regards the supply of replacement stone,
it was proposed that Mr McAllister and Mr Calabrese would hand select stone from
mature supply already at Gillman to minimise to the extent possible the likelihood
of the replacement stone changing colour over time. The Owner’s acceptance of
the proposed works was sought.
773 No immediate response from the Owner was forthcoming. On 21 October
2015, Mr Williams followed up the Owner for a response as soon as possible
because they were keen to undertake the stone cleaning works in November when
HSR was available.
774 On 23 October 2015, the Builder notified the Architect it stood by ready to
let a contract to HSR to undertake the proposed stone rectification works on
approval by the Owner and finalise the remaining defect corrections works
dependent on the stone works thereafter. The Builder gave notice that time was
now of the essence since the expiry date for the certified defects liability period
had been exhausted beyond the specified 6 month period.
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775 By letter dated 28 October 2015, the Owner wrote to the Architect seeking
clarification of matters in the HSR Report before she would respond formally. The
first concerned her acknowledgement of Mr McAllister’s advice that sandstone
may darken and clarification of his view about permanently removing magnesium
oxide (i.e. ‘quarry sap’). The second concerned her query as to why the proposal
did not include the western wall. The third concerned consistency of colour. She
asked by what method stones were judged for replacement and asked to be
provided the stones used as a control for the purposes of identifying “stones
outside the colour range 1 -3”. 411 The final question was who will supervise the
works.
776 The Architect responded by letter dated 11 November 2015 in circumstances
where Mr McAllister had unexpectedly left the country due to extenuating
personal circumstances and was not available until January 2016. As to ‘quarry
sap’, the Architect reported Mr McAllister’s confidence in the cleaning but advised
if it was unsuccessful because it could not be guaranteed, the stone would be
removed. As to the western wall, the Architect advised that neither Mr Williams
or Mr McAllister412 considered the stone colour variation to be a defect and rejected
the suggested use of a controlled sample as irrelevant, unreliable and open to
challenge. Further, if any darkened stone on the western wall was identified it
would be included in the cleaning process. Mr McAllister would supervise the
works and proceed in January 2016 with her approval.
777 As to replacement of coloured stones as distinct from those affected by
‘quarry sap’, the purpose of the proposed works was made clear by the Architect.
Consistent with Mr McAllister’s advice that oxidisation of the stone was a natural
phenomenon, replacement was proposed not to address a defect but the Owner’s
“stated dissatisfaction with the colour consistency of some stones”. 413
778 The Owner did not respond formally as she had said she would nor did she
give her approval to the HSR works proceeding.
November 2015 Defects List
779 The Architect issued an updated defects list dated 20 November 2015.414 By
this time, the list had been reduced to 32 items. The Builder was instructed to
attend to 14 items and of the remaining items, 11 were to be completed once
sandstone works were complete and seven concerning acid damaged items were
deleted because the Owner was to use the previous or available insurance claim
payout to organise rectification.
411 Exhibit R3.314.
412 Mr McAllister confirmed in evidence he did not consider the colour variation to be a defect. T1602.29-
.32.
413 Exhibit R3.326.
414 Exhibit A3.363.
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780 The Architect advised the Owner that the external cleaning works to
sandstone were not included because would be addressed in the new year when
Mr McAllister returned from overseas.
AI:21 – Stone Cleaning Impasse
781 By February 2016, the Owner had still not provided the formal response to
the HSR Report she foreshadowed in her 28 October 2015 letter.
782 The Architect issued AI:21 dated 5 February 2016 instructing the Builder to
clean the stones identified in the HSR Report as being adversely affected by
‘quarry sap’ as soon as possible. These 49 stones were stated “to have been
identified as being defective”.415 The works were to be carried out by a
subcontractor to be approved by the Architect.
783 The Builder gave notice by letter dated 23 February 2016 that it would
perform the works subject to a claim to adjust the contract price because:416
The report states the black spotting/staining is a natural property of Tasmanian sandstone,
and we therefore consider it is the owner’s maintenance problem and not the result of
defective work or materials as you state.
784 The Builder asked the Architect to approve HSR as the subcontractor for the
purpose of undertaking the cleaning works instructed.
785 The Owner gave written notice under clause A8 of the Building Contract
disputing AI:21 on 26 February 2016. The stated grounds were that the instruction
did not identify all defective stones, including stones outside the specified colour
range or stones in the water feature and directed cleaning and not replacement.
The Owner did not identify the further allegedly defective stones.
786 By letter dated 22 March 2016, the Architect responded to the Builder’s
23 February letter, stating that the Architect considered the stones affected by
‘quarry sap’ were defective because they did not comply with the contractual
specification for stone colour or best quality materials. Removal of the ‘quarry
sap’ by acid cleaning was therefore not maintenance. Colour variation (apart from
‘quarry sap’) was not considered a defect.
787 The Architect responded to the Owner’s notice of dispute by letter dated
22 March 2016 inviting the Owner to identify all the further stone she considered
affected by ‘quarry sap’ or were otherwise defective and why. The Architect
reiterated its assessment that colour variation in the stonework (apart from ‘quarry
sap’) was not a defect and clarified that if the further cleaning was unsuccessful,
the stones affected by ‘quarry sap’ would be replaced.
415 Exhibit R3.335.
416 Exhibit R3.336.
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788 The Builder gave a notice dated 4 April 2016 disputing AI:21. Reserving its
rights to claim an adjustment under the Building Contract, the Builder sought a
quotation and works program from HSR to undertake the stone cleaning works
directed in AI:21. HSR then quoted $6,941.00 including GST to treat the 49 stones
identified in the HSR Report as affected by ‘quarry sap’ and advised it was
available to do the works from 20 June 2016.
789 By letter dated 10 June 2016, the Architect gave notice to the Builder under
clause H4 of the Building Contract that it had assessed the Builder’s claim for an
adjustment to the contract price for the stone cleaning works and determined there
would be no adjustment. The works instructed by AI:21 were required to correct
a defect in the works as required by clause M14 of the Building Contract.
790 On 29 June 2016, the Builder accepted HSR’s quotation for the purpose of
complying with AI:21 and sought a start date and program for the cleaning works
and communicated to the Architect that it was ready, willing and able to attend site
and perform the stone cleaning works by its approved subcontractor HSR. The
Builder otherwise reserved its rights as regards AI:21.
791 On 7 July 2016, the Builder wrote to the Architect seeking urgent instructions
about access to the site in circumstances where its solicitors were informed that
the Owner would not provide access to the site unless the Builder was willing to
replace all the stonework. The Builder gave notice that without access it could not
perform the cleaning works but it remained ready, willing and able to do so, subject
to its earlier formal reservations of right.
792 Meanwhile, the Owner continued to maintain her complaints about stone
colour variation and ‘quarry sap’ generally, without identifying which further
stones were defective. General defect correction works had completely stalled.
The Owner was unco-operative in giving the Builder’s trades access to site to
complete the remaining general defect works, sought to impose conditions about
the order in which the works be done and made a number of demands in relation
to the proposed stone cleaning works, still withholding her approval to it being
done.
793 By letter dated 17 August 2016, the Architect’s solicitors finally wrote to the
Owner’s solicitors about her contractual obligations to co-operate and provide the
Builder with reasonable access to the site to remedy the few remaining defects.
Cleaning & Sealing Trial
794 The Builder’s project manager, Mr Obbiettivo, spoke to the Owner a number
of times in August 2016 to discuss stone cleaning and sealing testing as per AI:21
and completion of the minor outstanding other items. The Owner was non-
committal about access to the site and told Mr Obbiettivo she was not available in
September and October 2016 whilst she was on annual leave.
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795 Eventually, the Owner relented and agreed to HSR conducting on
6 September 2016 a trial cleaning of a sample of six stones affected by ‘quarry
sap’ near the front door and on the rear column (C4). The Architect made notes of
the attendances on 6 and 7 September. Photographs417 were taken on 7 September
showing the cleaning had lightened but not fully removed the dark staining. The
stone on the front improved from a first clean, but the stones on the rear column
did not.
796 HSR recommended additional cleaning take place the following day. That
did not suit the Owner. The Architect recommended another time be arranged for
further cleaning of the front stones but considered the stones on the rear pillar
should be replaced. The Owner refused further access to the site for the stone
cleaning trial. The Owner asserted the HSR Report was flawed based on it going
from the photographs.
797 By letter dated 8 September 2016, the Owner wrote to the Architect
complaining that the trial cleaning was ineffective, the sample stones were now
“black and yellow”418 and nine stones suffered consequential damage, which she
photographed and sent the Architect. The Owner requested all the black and
yellow and the nine damaged stones be replaced.
AI:22 – Stone Cleaning and Replacement
798 The Builder continued to press the Architect for instructions on stone
rectification works, accepting it was bound by AI:21 but prevented from accessing
the site by the Owner. Mr Burton of the Architect wrote to the Owner by letter
dated 21 November 2016 asking for access to the site to review the HSR test work
and compile a rectification schedule for instructing the Builder. Mr Burton
proposed a visual inspection, the preparation of a photographic record and marking
up elevations for reference.
799 Many months later, the Architect issued AI:22 dated 25 May 2017419
instructing the replacement of seven stones on the rear columns and the cleaning
of 83 stones affected by ‘quarry sap’ as well as the rear columns. These
instructions comprise a photographic record and marked-up elevations.
800 The Builder sought a program and pricing to carry out the works instructed
in AI:22 from HSR. HSR declined to offer any more advice or do works for the
Owner. The Builder sought further direction from the Architect.
801 By letter dated 19 June 2017, the Owner gave a formal notice under clause
A8 of the Building Contract disputing AI:22 and the instructions as to replacement
417 Exhibit R3.421 pages 2925 to 2932.
418 Exhibit R3.385.
419 An earlier version was issued on 4 April 2017.
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and cleaning of the stonework. As to the contractual requirements for stone colour,
the letters stated yet a new position as to the selected colour range:420
I selected stone sample identified by supplier as Colour No 2 of a range indicated by the
Builder’s supplier. An acceptable range in comparison with Colour No 2 extends lighter
that Colour No 2, but not as light as Colour No 1 and darker than Colour No 2 but not as
dark as Colour No 3.
802 The Owner’s notice of dispute proposed a regime for the appropriate
treatment of defective stone to ensure the Architect could have no doubt as to the
Owner’s view of the contractual requirements for new stone. She proposed that
the Builder produce a sample stone of Colours Nos 2 and 3 from the Builder and
identify all the stone not of Colour No 2 or within and acceptable range of Colour
No 2 on the basis that Colour No 3 was unacceptable to her. The Architect would
then direct the replacement of stones to achieve the outcome of consistent colour
stonework of light coloured stone consistent with Colour No 2.
803 This communication appears to be the genesis of the Owner’s ultimate case
advanced at trial that was not ever pleaded and is all the more curious because this
position was taken some 18 months before the Owner inconsistently pleaded the
first form of paragraph 19A,421 that she amended three422 and five years423 later
alleging the selected stone was with an acceptable range of Colours ‘2’ and ‘3’.
AI:22A – Stone Cleaning Held Over
804 The final impasse on stonework was reached in November 2017.
805 The Architect issued AI:22A dated 23 November 2017 confirming the
Builder was to replace the seven stones previously instructed but to hold over the
acid washing works instructed in AI:22.
806 On 11 December 2017, the Builder sought a price from HSR to undertake the
works instructed in AI:22A. Mr Allen told the Owner by email that HSR had been
asked to price a scope that she may not approve of. In reply, the Owner agreed
and sent Mr Allen the notice of objection to AI:22 she sent the Architect two days
later.
807 By letter dated 13 December 2017, the Owner gave a formal notice under
clause A8 of the Building Contract disputing AI:22A on the basis that the
rectification works were inadequate and did not identify all the stone she required
be replaced. She welcomed the direction as to no cleaning.
808 The remedial works instructed in AI:22A have not been carried out. The
Builder has been unable to carry out these works by the Owner refusing access to
420 Exhibit R3.394.
421 Fifth Cross Action (FDN 70) filed on 14 December 2018.
422 Sixth Cross Action (FDN 102) filed on 31 July 2020.
423 Seventh Cross Action.
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the site in the circumstances of her disputing the Architect’s instruction under
clause A8 of the Building Contract and the ongoing litigation.
Characteristics of Tasmanian Sandstone
809 The general characteristics of Tasmanian sandstone are well established by
the evidence.
810 Sandstone is a natural product. It is not uniform or consistent in colour or
pattern. Even individual stones cut from the same larger stone block are variable
in colour and pattern, described variously as natural movement, circular or linear
markings, smudges and pinpricks of different colours, blemishes and other
imperfections. Uniformity of colour is a rare exception in any stone424 and, in a
sedimentary stone like sandstone, there are likely to be multiple random veins of
different materials, colours and textures.425
811 Sandstone from the Stone Supplier’s quarry in Tasmanian is highly variable
in colour and patterning. All the witnesses with expertise or experience in stone
agreed and considered there is a limited opportunity to get consistent and even
colouring from Tasmanian sandstone.
812 The Owner’s expert architect, Associate Professor Danvers said there was a
very broad spectrum of colour and sedimentary patterns in Tasmanian sandstone.426
Putting aside the question of what was required contractually, he said:427
Mr Calabrese’s stone is attractive for the reasons that contradict what was required – great
variety of colour and sedimentary pattern.
813 In cross-examination Associate Professor Danvers agreed that the wide
variety of colour in Tasmanian sandstone is readily observable from looking at the
Stone Supplier’s range (as he did) and that it is an important characteristic of this
stone. He reiterated his earlier observation that:428
… the stone is so full of character, sedimentary character and changes of colour …
814 Mr Penglase said:429
… as we all know stone is a natural product, it’s not consistent in colour across the stone.
It is inconsistent in colour, it’s uneven, it’s variable and the type of stone used and selected
in this particular project is the type of stone that is a sedimentary stone and they are even
more uneven in colour than other types of harder stones like granite and so, in any selection
process of a sandstone product, you’re going to get an unevenness in colour, discrepancies
etc.
424 T946.27-.31 [Associate Professor Danvers].
425 Exhibit TPI.33: Penglase Second Report page 2717.
426 First Danvers Report page 2343.
427 Ibid page 2350.
428 T946.22-.26.
429 T1351.23-.32.
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815 Mr McAllister said Tasmanian sandstone:430
… varies from a consistent off-white to buff with prominent brown-orange veining (natural
bedding plains) or spotting. This is commonly found in a majority of sandstones.
816 As already mentioned, Mr McAllister said in evidence he did not consider
the colour variation a defect.431
817 Variability in colour and patterning is an important characteristic of
Tasmanian sandstone, even in the Stone Supplier’s lighter range of colour ‘1’
to ‘3’.
818 It was Associate Professor Danvers’s opinion that it would not be possible
for any stone supplier to provide absolute consistency with the sample stone ‘SC
135’432 and it would be very difficult for the Stone Supplier to provide other than a
small percentage of stones that would be a reasonably close match to the sample
stone given the characteristics of Tasmanian sandstone.433
819 Accordingly, it should be concluded that the variability of colour within the
Stone Supplier’s lightest range of sandstone was obvious to the parties from
everything they saw and were told at the Gillman Meeting by Mr Calabrese.
The Stone Supplier’s Colour Categories
820 It is well established by the evidence that the Stone Supplier’s colour
categories each comprise a range of colours and patterns and are not a single entity
colour. Nor are they differentiated simply by shades of increasing darkness. A
single stone is not a definitive representation of any colour category. A number of
sample stones would be necessary to indicate the range of any of the Stone
Supplier’s colour categories given the variability of Tasmanian sandstone (both
within a single stone and between stones) within the range of any colour category.
821 The evidence of what comprises any specific colour category is
impressionistic.
822 For example, the evidence that there is indicates that colour category ‘2’ is a
light coloured sandstone exhibiting natural markings and veining of differing light
colours and is variably coloured, as best described by Ms Crowden in her
evidence.434 A ‘2’ is not a uniformly white or cream stone without any sedimentary
markings. This description best fits a ‘1’. At either end of a category in the Stone
Supplier’s lightest range, a stone might also fit into the next category, as was
shown to be the case with the stone samples in evidence, Exhibit R31.435
430 Exhibit TP1.3.307, page 2034.
431 See [776] above.
432 First Danvers Report page 2351.
433 T946.14-.17.
434 See [460]-[463] above.
435 See [825] and following below.
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823 It should therefore be concluded that the parties knew from what they saw
and were told at the Gillman Meeting that stone within the Stone Supplier’s colour
categories ‘1’ to ‘3’ would overall be variable in colour and pattern and could not
reasonably be described as consistently or uniformly coloured, absent natural
markings and veins of different light colours.
824 Ultimately, what objectively and definitively defines any of the Supplier’s
colour categories not established by the Owner. Most fundamentally, the limits of
the relevant colour categories have not been objectively proved.
Exhibit R31
825 At the request of the Owner’s solicitor, Mr Calabrese delivered a box of five
pieces of Tasmanian sandstone to the Owner’s solicitors on 28 August 2015. The
stones were discovered by the Owner and the subject of Ms White’s affidavit
received in evidence.436 The stones were also received in evidence de bene esse,
subject to objections as to relevance.437 They are relevant to the general question
of nature of Tasmanian sandstone and what constitutes the Stone Supplier’s colour
categories and therefore admissible evidence.
826 In her affidavit, Ms White deposed to her labelling the stones with post-it
notes denoting the colour category nominated to her by Mr Calabrese and exhibited
a photograph of the five pieces of stone.438 According to her post-it notes,
Mr Calabrese said the lightest piece of stone is in the colour categories ‘1’ to ‘2’,
the second lightest ‘3’ to ‘4’.
827 Whilst Ms White’s affidavit was received without any party requiring her for
cross-examination, not all of her evidence was ultimately uncontentious. In cross-
examination, when Mr Calabrese was shown the box of stone by the Owner’s
counsel, he gave contrary evidence about the colour category for the second
lightest stone.
828 When Mr Calabrese was first asked about Ms White writing the post-it notes
to label the stone, he confirmed the lightest stone was a ‘1’ or ‘2’ because “it’s not
white, white”439 and some stone is whiter.440
829 However, when Mr Calabrese was shown the second lightest stone with the
post-it note of ‘3-4’ stuck to it, he said perhaps Ms White was confused because
he thought it was more a ‘2’ to ‘3’ than a ‘3’ to ‘4’ because ‘4’ “has got more
colour”.441 When led as to whether what makes a stone more ‘3’ is yellow lines,
Mr Calabrese agreed but went further and said it is the yellow colour. He then
436 Exhibit R30.
437 Exhibit R31. T1092.32-1093.7.
438 Ibid Exhibit KAW-43.
439 T1675.32-.34.
440 T1731.26-.29.
441 T1676.2-.17.
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agreed that the division between category ‘2’ and ‘3’ was “a little blurry”.442
Mr Calabrese’s evidence on this topic was credible and there was no apparent
artifice. His evidence demonstrates the difficulty in definitively categorising a
variably coloured natural product like Tasmanian sandstone by colour.
830 In re-examination, Mr Calabrese was asked to lay out the five pieces of stone
from lightest to darkest and again identify their colour categories. He again
confirmed the lightest stone was a ‘1’ to ‘2’,443 the second a ‘2’ to ‘3’, the third a
‘3’ to ‘4’, the fourth a ‘5’ and the darkest one, the fifth stone, a ‘6’ or ‘7’.444
831 Mr Calabrese said the first three stones all fitted within the Stone Supplier
light coloured range comprising colour categories ‘1’ to ‘4’. Mr Calabrese also
said he cut these stones dry in his Gillman factory at the Owner’s solicitor’s request
and since they have never been wet and in a box all this time, the colour has not
changed.445 His evidence should be understood as meaning they have not changed
colour over time because they have not been weathered and oxidised.
832 Looking at the stones in daylight, the following is evident. They are
relatively small samples by comparison to the large blocks installed in the Owner’s
House walls. Four measure approximately 23 cm x 7.5 cm x 2 cm thick. The
fourth stone is only 20 cm long.
833 The lightest stone identified by Mr Calabrese as being within colours ‘1’ to
‘2’ of the Stone Supplier’s light range is a block of finely grained sandstone of
fairly even colour. It might reasonably be described as white but is of a grey rather
than cream tone and most obviously so by comparison to the other stones. In bright
sunlight, faint yellow markings are discernible on close inspection. They are not
obvious from any distance. On the edge of one corner there is some dark chocolate
or black colouring, which Mr Calabrese said was manganese and permanent. He
implied in evidence it would not wash out with acid.
834 The second stone identified by Mr Calabrese as a ‘2’ to ‘3’ is also a light
coloured stone but the base colour is yellow with obvious grey/white to cream
coloured soft movement throughout. In sunlight, the colour variation is distinct.
835 The third stone identified by Mr Calabrese as a ‘3’ to ‘4’ is overall darker,
more yellow and beige in tone with lighter sedimentary lines of the same grey
white/cream colour evident in the first two stones.
836 All three stones would reasonably be described as light sandstone and of
variable colour and natural markings. The fourth and fifth stones are distinctly
442 T1676.10,16.
443 Exhibit R31.1.
444 T1743.4-.34.
445 T1730.1; T1744.14-.32.
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darker and would not reasonably be described as light coloured by comparison to
the others.
837 Notably, the colour photograph of the five stones exhibited to Ms White’s
affidavit446 is a remarkably poor representation of the stones as observed by the
human eye. In the photograph all stones are significantly more coloured and the
contrast between white and any evident colour stark. The yellow markings on the
lightest stone are distinct in the photograph but hardly discernible to the human
eye. The colour in the other stones appears quite orange by comparison to the faint
yellow to beige and light brown colours observed in natural light by the human
eye.
838 Mr Calabrese’s evidence in Court as to the second lightest stone sample’s
colour category should be preferred to what Ms White has recounted in her
affidavit. His evidence was tested and broadly consistent with the evidence about
the visible differences between the samples in the different categories
Mr Calabrese showed at the Gillman Meeting as described by Ms Crowden.
839 Whilst helpful in appreciating the characteristics of Tasmanian sandstone
more generally, several observations should be made about the limited relevance
and utility of Exhibit R31 in resolving the dispute about what colour stone was
required or used on the Owner’s House and garage walls.
840 First, whilst it should be accepted that Mr Calabrese knows his product, he
made his identification without reference to the lunchroom stones and in the
lighting of a court room. These matters cast some doubt on the reliability of his
assessment. Whilst Mr Calabrese has had decades of experience with Tasmanian
sandstone, it should be accepted that it is notoriously difficult for anyone to
remember shades of colours although the human eye can readily distinguish
between them.
841 Secondly, as his evidence demonstrates, it is inherently difficult to
definitively categorise a single relatively small piece of stone by colour. The
demarcation between categories is well described but understated as ‘a little
blurry’, as shown by Mr Calabrese’s identification of the first three stones as each
bridging two colour categories.
842 Ultimately, none of the evidence concerning Exhibit R31 assists the Owner’s
case. The colour variation shown by the first two stones identified as fitting within
colours ‘1’ to ‘3’ is significant and it is not possible to discern from them what
constitutes colour ‘2’ as distinct from colours ‘1’ or ‘3’, either by reference to
Exhibit R31 or in the context of the evidence more generally.
843 This evidence does not assist the Owner objectively prove what colours
comprise the Stone Supplier’s colour categories ‘1’, ‘2’ or ‘3’. It clearly
446 Exhibit R30 – KAW-43.
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demonstrates the limited utility of single samples in identifying a range of variable
coloured stone when as a natural product, no two stones are alike. As Mr Calabrese
said: “You always, one piece to the other, you find something” different.447
Sample Stone ‘SC 135’
844 Sample stone ‘SC 135’ is the foundation of the Owner’s case on stone colour.
She submits the Court should find it is on the balance of probabilities a colour
representative of stone colour category ‘2’ and therefore the stone colour required
under the varied Building Contract.448
845 The stone is known as ‘SC 135’ because this is the reference number it was
given by Associate Professor Danvers in the Owner’s Annexure B.449 It is in a
column on the south façade of the porch, a section that was not built by the time
of the 18 June or subsequent site meetings according to the photographic evidence.
846 It is described by Associate Professor Danvers as “an even off-white or cream
colour” and as darker in colour than the stones above and below it in the house
wall. He considered it fell within the middle of the range of three stones he had
been shown at Gillman on 20 August 2019 because it was not at the lighter end of
the spectrum and had no discernible sedimentary markings.450
847 The Owner’s description is that it is “quite a white stone.”451 A photograph
of it appears in the First Danvers Report.452 Whilst these descriptions are generally
confirmed by the photograph, the image quality is not sufficient to discern any
material difference between the sample and surrounding stones.
848 Associate Professor Danvers assessed the colour of individual stones in the
built stonework as defective if any stone was too light, rich or dark and/or had
contrasting sedimentary lines by comparison to sample stone ‘SC 135’. His
comparison was made on the basis of a reasonably close match: that is only
accepting very slightly lighter or darker stones so that small differences would not
likely detract from the overall uniformity of the “even off-white or cream” colour
of the walls.
849 The Owner’s submissions as regards ‘SC 135’ representing colour category
‘2’ and the stone colour required under the varied Building Contract should be
rejected for the following reasons.
850 First, in August 2019, Associate Professor Danvers was instructed by the
Owner’s solicitors to assess the colour of the stonework against a range of stones
the Owner considered are of the colour range she selected at the Gillman
447 T1738.2-.6.
448 Owner’s Final Closing [171].
449 See Second Danvers Report Exhibit R3.411. That is, southern façade, elevation C, stone 135.
450 T907.7-908.17.
451 T303.27-305.5; T309.37-310.2.
452 MFI R3.410, pages 8 and 9 respectively.
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Meeting.453 Despite his instruction that a range of colours was selected, the Owner
nominated a single stone: the stone she identified at the June 2015 site meeting as
being a good representation of the colour she selected at the Gillman Meeting,
being colour categories ‘1’ to ‘2’. 454
851 Associate Professor Danvers’ instructions as to the require colour range are
inconsistent with the Owner’s case advanced at trial that the contractual
requirement was ‘2’. It is also inconsistent with the Owner’s evidence that she
selected colours ‘1’ to ‘3’ at the Gillman Meeting and her pleaded case that these
were the approved sample stones for the purpose of clause E.03.06 of the
Architect’s Specification.
852 Second, the Owner has failed to establish any definitive connection between
sample stone ‘SC 135’ and colour category ‘2’ of the Stone Supplier’s range. The
evidence about the colour categories is limited and impressionistic. On one hand
there is the Owner’s and Associate Professor Danvers’ descriptions and his
photograph of ‘SC 135’. On the other, there is the witnesses’ descriptions of the
Stone Supplier’s colour range and the evidence about Exhibit R31.
853 Critically, Associate Professor Danvers’ evidence of his observations of
stone at Gillman does not establish which of the Stone Supplier’s colour categories
he was viewing:455
So we looked at actually three stones: one being almost white; one being a sort of a creamy
colour, more of an off-white; and the third one, which showed some very faint sedimentary
markings in the stone.
854 Accepting Associate Professor Danvers’ observation that sample stone ‘SC
135’ was darker than the lighter stones above and below it or in the middle of the
three stones he viewed at Gillman, does not render it a ‘2’ given the evidentiary
difficulties of identifying the limits of any of the lighter colour categories ‘1’ to
‘3’, bearing in mind each colour category constitutes a range and the definition
between them is ‘blurry’.
855 From the limited evidence there is about the characteristics of the Stone
Supplier’s light categories, the more probable conclusion is that the sample stone
falls within colour category ‘1’ than ‘2’.
856 Thirdly, as already discussed, the Owner’s nomination of stone ‘SC 135’ as
a good representation of the stone colour she selected at the Gillman Meeting
should be rejected. The proposition is illogical and against the weight of evidence
because it ignores the variable characteristics of light coloured Tasmanian
sandstone and her selected range of colours ‘1’ to ‘3’.
453 Exhibit R25, page 6.
454 See [740]-[747] above.
455 T907.8-.11.
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857 Nor has it been proven that the Owner’s colour selection at the Gillman
Meeting was confined to a pale creamy white stone, consistent in colour. The
Owner accepted in cross-examination that she acquiesced in a broader selection of
colour, a range comprising colour categories ‘1’ to ‘3’456 from the Stone Supplier’
sandstone range. Whilst light coloured, this range is established by the evidence
to be variable in colour and natural markings.
858 It is also plain on the evidence, that no single stone is representative of the
entirety of the colour range the Owner selected (nor of any one or more colour
categories) because each category involves a range and there is no clear delineation
between colour categories, bearing in mind the variable characteristics of light
Tasmanian sandstone.
859 The Owner’s reliance on clause E.03.06 of the Architect’s Specification does
not assist her case because it requires her to address where the limits of ‘an
acceptable range’ to ‘SC 135’ would lie in comparison to the colour of the laid
stone. She has not addressed this question. Instead, Associate Professor Danvers
has been instructed to assess the colour of the laid stonework on the basis that a
reasonably close match is required to ‘SC 135’ to achieve overall uniformity of
colour of the walls for contractual conformity. His instruction effectively ignores
the express stipulation of contractual conformity being ‘within an acceptable
range’.
860 Associate Professor Danvers’s assessment of sample stone ‘SC 135’ as
falling with middle of the range of three stones he viewed at Gillman was also
made by reference to his memory of the colour of the stone viewed. Whilst he
took a single photograph457 of the lightest of the three stones viewed, he took no
portable samples from Gillman to compare to sample stone ‘SC 135’, despite
criticising the Architect for not doing so in 2013 for the purposes of assessing
contractual conformance. His evidence in this regard is of no assistance to the
Court in resolving the relevant issues.
861 Finally, the Owner’s identification of sample stone ‘SC 135’ was made more
than two years after the Gillman Meeting. It is not plausible that the Owner could
hold a memory of the various stone colours she was shown from pallets that long
ago, bearing in mind the variability of Tasmanian sandstone in the lighter colour
range and the difficulty of any person remembering precise shades of light stone
colours. The Owner’s evidence that she was not shown an example of colour ‘2’
or ‘3’ at the Gillman Meeting completely undermines the credibility of her claim
that ‘SC 135’ is representative of the Stone Supplier’s colour category ‘2’.458
456 Not colours ‘2’ to ‘3’ as pleaded, or ‘1’ to ‘2’ as the Owner inconsistently describes the sample stone as
representing, or ‘2’ as she ultimately advances in her final submissions.
457 MFI R3.410 page 2357.
458 See [492] above.
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The Photographic Evidence
862 A volume of photographs of the stonework taken during construction, around
its completion and at various times up until trial was tendered and received in
evidence.459
863 The same criticisms as made earlier of the photographs taken by Associate
Professor Danvers and Ms White apply to these photographs.
864 These photographs are of varying quality and (severe ‘quarry sap’ aside) a
generally poor depiction of the stone colours by comparison to what is perceived
by the human eye. The limited reliability of photographs in truly depicting stone
colour is evident from the visible differences between photographs taken at the
same time of different locations and photographs taken of the same location at
different times in different lights from different perspectives.
865 For these reasons, the Owner did not seek to simply rely on photographs to
prove her case on colour and consistency. She did however seek to rely on the
photographs taken on 24 June and 2, 11 and 18 July 2013460 as showing three things
at the time of laying. First, it was submitted a number of stones depicted were
plainly like the third Exhibit R31 stone Mr Calabrese described as ‘3’ to ‘4’.
Secondly, the stonework depicted was not a consistent colour. Thirdly, in one
photograph a number of stones are described as “already blighted by what appears
to be the dark markings described as “quarry sap” in these proceedings”.461
866 Contrary to the Owner’s closing submissions in reply, it is not plain that any
of the stones depicted are like the third Exhibit R31 Stone. Putting aside the poor
quality of the photographs, whilst some of the photographed stones do show
distinct sedimentary lines, none appear to be of the same depth of colour (either
overall or in part) as the third Exhibit R31 stone.
867 As to consistency of colour, the photographs show a range of light colour
sandstone of varying patterns. That the stonework is not a consistent colour is not
in contention. What is in issue is what degree of colour variation conforms with
the varied contractual specification for stone colour.
868 Finally, it cannot clearly be seen that a number of stones were already
blighted by ‘quarry sap’ from the single photograph relied on.462 The quality of the
photograph is too poor to draw any reliable inferences about the true colour of the
laid stone. This is evident from the artificial appearance of the stone colours and
excessive contrast in photographs having regard to the appearance of stone in
evidence as Exhibit R31 when observed by the human eye.
459 Exhibit R3.421.
460 Ibid pages 2818 to 2840.
461 Owner’s Reply Closing [23].
462 Ibid page 2035.
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869 The apparent significant misalignment of the faces of the stonework shown
in photographs taken on 16 January 2017 should be specifically disregarded as an
accurate representation of the quality of the workmanship.463 This odd effect is not
evident in any of the other photographs taken on various other dates of the same
stonework.
870 Accordingly, limited weight must be placed on the photographs as accurately
representing the true colour of the laid stone (‘quarry sap’ aside) or the general
alignment of the faces of the stonework depicted.
The Laid Stonework
871 It should be accepted that variably light coloured and patterned Tasmanian
sandstone was supplied and installed on Owner’s house and garage walls. But,
most fundamentally, the Owner has not proved what colours are in the stonework
in terms of the Stone Supplier’s colour categories. This evidentiary gap is fatal to
her case on stone colour (whether her pleaded case of ‘2’ to ‘3’, her evidence of
‘1’ to ‘3’ or her ultimate case at trial of ‘2’).
Acid Damaged Stones
872 In her written submissions, the Owner contends the Court should find the
acid washing process undertaken by the Stone Supplier has had a detrimental effect
on the appearance of the stone generally, such that it is not of best quality.464
873 This general claim is unpleaded and not supported by the evidence.
874 First, the Owner’s pleaded claim for acid damage is confined to ten465 (out of
1927) stones with surface damage alleged to have been caused by acid washing.466
Why the Owner then submits there are 132 such stones (as compared to ten) is not
known or explained by the evidence.467
875 These ten stones are located on the eastern face of the most eastern rear
column (C4) and identified in the Owner’s Annexure B by the code “DS-Acid”.468
These stones are depicted in a photograph taken on 1 December 2016.469 It is
difficult to discern any difference between the stones complained of and the
surrounding stones (save for the obviously dark grey stones) or make any
observation about surface damage.
876 Four of these stones were severely affected by ‘quarry sap’470 and acid washed
several times, the last being the cleaning and sealing trial undertaken by HSR in
463 Ibid pages 3018 to 3020 and 3025 to 3027 of Exhibit R3.421.
464 Owner’s Stone Closing [166].
465 The Owner originally complained of nine in her 8 September 2015 letter.
466 Seventh Cross Action [19A(ii) second bullet point].
467 Owner’s Final Closing [336.1].
468 Second Danvers Report, page 2441.
469 Exhibit R3.421 page 2934.
470 See [1581] below.
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September 2016.471 They are also four of the seven stones the subject of disputed
Architect’s instructions AI:22 and AI:22A.
877 The photographic evidence also shows that the stones surrounding the four
the subject of the HSR trial were not exposed to chemicals during the trial because
they were covered in black plastic.472 There is no reliable evidence that this
protection was ineffective.
878 Thirdly, contrary to the Owner’s submission, Associate Professor Danvers
did not give evidence about the detrimental effect of oxalic acid on the stonework
generally. His evidence was confined to the stones he inspected in the rear
courtyard on the northern side of the house.
879 Associate Professor Danvers’s evidence was that he had inspected stones in
the rear courtyard of the house that had obviously been treated to overcome some
staining.473 Whilst he did not expressly identify the stones inspected, it should be
inferred they are the stones on the rear column (C4) identified in the Owner’s
Annexure B as acid damaged and were cleaned by the Stone Supplier and the
subject of the HSR cleaning trial.
880 Associate Professor Danvers said from inspecting these stones, he assumed
a chemical had been applied to them and he formed the opinion that the chemical
had affected the appearance of the stone face:
… It wasn’t totally conclusive but I came away with the distinct impression that the
treatment with oxalic acid was more problematic that simply the removal of the black stain;
it seemed to have an effect on the character of the stone face as a whole, left the stone face
with a less than pristine sort of look to it that I would be looking for normally in a stone
wall. 474
…
Well it’s not easy to describe, but let’s say it’s a deterioration in the sharpness of the
appearance of the colour.475
881 By his own admission, Associate Professor Danvers’ evidence on this topic
is equivocal and impressionistic and he has disclaimed expertise and experience
with ‘quarry sap’ and its treatment other than from what he was told and shown by
Mr Calabrese when he visited the Stone Supplier’s yard at Gillman in August
2019. Most importantly, he inspected these stones between August and October
2019, six years after the stone was laid. Whilst it should be accepted that the four
severely affected stones were chemically cleaned several times, his assumption
471 See [794]-[797] below.
472 Exhibit R3.421 pages 2927 to 2931, and 2925 to 2926 for the porch.
473 T909.1-.3.
474 T910.29-.38.
475 T911.4.-.5.
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that all of the surrounding stones had also been chemically cleaned several times
has not been proven by the Owner.
882 The evidence does not establish that the acid cleaning of the stonework has
had a detrimental effect generally. As to the ten allegedly acid-damaged stones, it
cannot reasonably be concluded that what Associate Professor Danvers said he
saw is surface damage caused by reason of chemical cleaning. It is also not
possible on the evidence to resolve the extent of the effect he said he saw and
whether replacement is the necessary or appropriate remediation option. The
Owner adduced no expert evidence on the subject.
883 Again, whilst these ten stone should be replaced for aesthetic reasons, it does
not follow that the Builder is liable for the unsatisfactory results of attempts to
remove the natural phenomenon of ‘quarry sap’ by acid cleaning.
PART D: THE BUILDER’S CLAIMS AGAINST THE OWNER
Is PPC 11 Valid and Binding?
The Issues
884 The Builder claims the sum of $58,875.00 is due and payable and remains
unpaid by the Owner for its tax invoice476 dated 3 September 2014. 477 The Builder’s
invoice is equal in value to the payment certificate issued by the Architect on
3 September 2014 for an approved variation ($5,950.10 including GST) and
release of 50% of the cash security held ($52,925.00). Both were delivered to the
Owner in purported compliance with clauses 6.2.b and N5 of the Building
Contract.
885 By clause N6.1, the amount stated as owing in any certificate must be paid
within seven calendar days478 after delivery of the certificate and any applicable tax
invoice.
886 The Owner denies any obligation to pay the Builder arises under purported
PPC 11, contending it is void and of no effect because it was issued without a
notice of practical completion.479 Furthermore, the Building Contract does not
authorise the issue of two notices of practical completion and at no time has the
Architect issued a notice of practical completion in accordance with the Building
Contract.480
887 The Owner’s submissions as to the validity of PPC 11 focus on the
requirements in clause C6.2 of the Building Contract and the inevitable
consequences she contends must follow.481 The Owner contends that the issue of
476 Exhibit R3.152.
477 Claim [7] and [13].
478 The period stated in item 10 of Schedule 1.
479 Fifth Defence [7].
480 Ibid [9].
481 Owner’s Final Closing [18]-[38].
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a notice of practical completion is a precondition to the Architect validly giving a
clause C6.2 certificate. In support of this contention, the Owner emphasises the
mandatory requirements (in clause C6.2.a) for the certificate and notice to be given
to the Owner “at the same time” and (in clause C6.2.b) for “both” the tax invoice
and notice to be given to the Owner by the Builder.
888 According to the Owner, the subsequent issue of a notice of practical
completion does not comply with the contractual requirements because, properly
construed, clause C6.2.a should be read as requiring a notice of practical
completion to be issued before or no later than the Architect’s certificate.
889 The Builder submits PPC 11 is an undisputed certificate issued in accordance
with both clause 6.2.a and N.4.1 of the Building Contract and is valid and finally
binding in the absence of any clause A8 notice of dispute being given.482
890 In its reply, the Builder denies the Owner’s allegations and says the works
were deemed practically complete when the Owner took possession and occupied
the premises and she is bound by the Architect’s certification made in good faith
and is now precluded from challenging it by clause A8.2.483 The Builder says
further that the two certificates were issued under the same letter, on the same date
and reflect the dates when the Owner took possession of the premises and
concurrently they deal with the whole of the contract works.484
891 The Architect supports the Builder’s position, submitting the issue of a notice
of practical completion is irrelevant to the operation of clause C6 in circumstances
where the Owner took possession on 31 July 2014 and (under clause M8.1) the
works are to be treated as having reached practical completion.485 Accordingly, the
Architect submits the absence of a notice of practical completion at the date of
issue of PPC 11 does not invalidate it.486
Consideration
892 The disputes arising essentially concern the proper construction of the
relevant terms of the Building Contract: clauses C6 [Owner’s release of security
on practical completion], N [Payment for the works] and M [Completion of the
works].
Clause C6
893 Turning first to clause C6, the security provided by the Builder was by way
of cash retention in the amount of 5% of the contract price.487
482 Builder’s Final Closing [A1].
483 Ibid [7].
484 Builder’s Reply [9].
485 Architect’s Final Closing [8]-[10] and [18].
486 Ibid [11].
487 Items 7 and 8 of Schedule 1.
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894 Clause C6 provides:
.1 When the architect issues the notice of *practical completion, the contractor is
entitled to the release of 50% of the amount of the security then held.
.2 If the security is cash retention:
a. the architect must give to the contractor a certificate equal to 50% of the
amount of the security held at the same time that the notice of *practical
completion is issued.
b. the contractor, on receiving the certificate, must prepare a *tax invoice in
accordance with clause N5 and give both documents to the owner for payment.
c. the amount stated in the certificate must be paid in accordance with clause N6.
The Requirement for a Notice of Practical Completion
895 Undisputedly, the Builder’s entitlement to release of security on practical
completion is expressly conditioned on the issue of the notice of practical
completion, howsoever the works reach practical completion. Both clauses C6.1
and C6.2.a make this plain.
896 If under clause M8.1 the works were to be treated as having reached practical
completion when the Owner moved in on 31 July 2014, the Architect was required
to issue a notice of practical completion within five working days after being
notified in writing that the Owner has taken possession. The Architect did not
issue a notice of practical completion until 1 December 2014, well after PPC 11
was certifed, and then issued two notices.
897 Further, as the Owner points out, under clause A8, the Builder had a right to
dispute the Architect’s failure to issue a notice of practical completion but did not
when it could simply have done so.
898 The question then arising is whether the Architect could validly give a clause
C6.2.a certificate in anticipation of a subsequent notice of practical completion.
At the Same Time
899 The Owner emphasises the words “at the same time” as precluding the issue
of a notice of practical completion subsequent to the clause C6.2.a certificate. That
is, to be validly given a clause C6.2.a certificate, the notice of practical completion
must have been issued before or no later than the Architect’s certificate.
900 Whilst ultimately, the Owner’s contention should be accepted as correct (for
the reason explained below), it is not because of any stipulation arising from the
words “at the same time”.
901 Properly read, the words “at the same time” mean no more than the
Architect’s obligation to give the certificate accrues when the notice of practical
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completion is issued. In other words, the Builder’s substantive right to release of
the security accrues at the same time as the Architect’s obligation to give the
Builder the clause C6.2.a certificate accrues. That is, on the issue by the Architect
of the notice of practical completion.
A Harmonious Reading
902 Whether the clause C6.2.a certificate might validly precede a notice of
practical completion and mature on its issue was considered by his Tilmouth DCJ
in Cirroco v Clarke (No 2). He said:488
… It may be accepted that practical completion is a condition of release, but there is nothing
to suggest that an anticipatory claim cannot be made beforehand, even though the liability
for release will not mature until practical completion. It follows that due delivery of
certificates for payment may trigger the contractual right to release of 50 per cent of the
amount of security held, but the entitlement to enforce only triggers on practical
completion. This aspect of the defendant’s case must therefore be rejected.
903 Bearing in mind that a contract should be construed as a whole so as to yield
a harmonious and not unworkable reading of its constituent clauses,489 with respect,
such a construction would result in irreconcilable conflict in the operation of
clauses C6.2.b, C6.2.c and N6.1.
904 Under clause C6.2.b, the Builder must on receiving the certificate prepare a
tax invoice in accordance with clause N5 and give it and the certificate to the
Owner. Under clause C6.2.c, the Owner is required to pay the amount stated in
the certificate in accordance with clause N6. Clause N6.1 provides that payment
must be made within 7 days of delivery of the certificate and the tax invoice.
905 The time for payment provided in clauses C6.2.c and N6.1 is strict and cannot
sensibly be read as pending ‘maturity’ of the occurrence of the condition for
release, that is the issue of the notice of practical completion.
906 The correctness of this conclusion is evident from a consideration of the issue
Tilmouth DCJ identified as a reasonably arguable defence to the Builder’s claim
for payment relying on PPC 11.
The Form of PPC 11
907 The Builder’s application for summary judgment on its invoice based on PPC
11 was ultimately refused because Tilmouth DCJ considered it was reasonably
arguable that clause C6.2 might require its own certificate to be validly given. That
is, it could not validly be given by including it in a progress claim certificate and
488 Op cit at [39].
489 Morgan Equipment Co v UMW Corporation SDN BHD [2002] NSWCA 193.
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should have been given in a certificate confined to the release of 50% of the
security held.490
908 The Builder accepts his Honour correctly applied the principles for summary
judgment but submits there is nothing in the text of the Building Contract requiring
certificates to be labelled in any way or to be in any specific form or for there to
be separate and distinct certificates and tax invoices issued under the Building
Contract.
909 The Builder’s submissions in this limited regard should be accepted as
correct. As a matter of general principle, it is well established that it is sufficient
for an architect to certify by implication the necessary effect of any certificate
required under the contract.491 Further, what constitutes a valid certificate is a
question of substance, depending entirely on the requirements of the Building
Contract. In this case, there are no express contractual requirements as to the form
of an Architect’s certificate under the Contract, generally or specifically for the
release of security on practical completion. The only requirements specified are
substantive ones and turn on harmoniously reading the relevant provisions in the
context of the Building Contract as a whole and its purpose.
910 Here (timing aside), for the release of security on the issue of a notice of
practical completion, clause C6.2.a provides that “a certificate equal to 50% of the
amount of the security held” must be given. On the face of PPC 11 it appears a
certificate to this effect has been given in that it states as follows:492
Release of 50% retention $52,925.00
911 However, the certification in PPC 11 of the amount of security to be released is
ultimately combined with the sub total certified as payable for an approved
variation (for the extra cost of the fence as quoted) as follows:
Sub total $5,950.10
Release of 50% retention $52,925.00
AMOUNT CERTIFIED THIS CLAIM (INCL GST)
Fifty Eight Thousand, Eight Hundred & Seventy Five Dollars exactly $58,875.00
912 Tilmouth DCJ considered a question arose in the circumstances of this case
as to how the obligation to regain retention sums could be governed by Clause N
of the subject agreement at all.493 With respect, there generally is no difficulty
when it is appreciated that clause N addresses payment for the works more broadly
than the Builder’s progress claim by reason of clause C6.2.b and C6.2.c expressly
requiring compliance in accordance with clauses N5 and N6.
490 Ibid [40]-[41].
491 Kirsch v HP Brady Pty Ltd (1937) 58 CLR 36 citing Harman v Scott 1874 2 CA (NZ) 407.
492 Exhibit R3.152. There is no dispute about whether $52,925 is 50% of the security held. It is.
493 Cirocco v Clarke (No 2) op cit at [40].
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913 Moreover, clause N4 expressly provides that in assessing the Builder’s claim
for a progress payment, the Architect must among other things, make allowance
for defects or cash retention where clause C2 applies and any other matter to be
taken into account in accordance with this contract. Such matters would include
the Builder’s right to return of 50% of the security held under clause C6 on the
issue of a notice of practical completion.
914 Therefore, it should be accepted that in principle a single progress payment
certificate might in substance be validly given that contains both certificates made
under clause C6.2.a. for release of 50% of the security held and clause N4.1 for an
approved variation. It is not a question of unfairness as the Builder suggests. What
is important is compliance with the terms of the Building Contract.
915 But this is not a case where one certificate would do as the Builder submits.
In circumstances where the Architect had not yet issued any notice of practical
completion, separate certificates and/or tax invoices were required to comply with
the terms of the Building Contract.
916 The inherent difficulty in the Builder’s position is exposed by the statement
appearing in the footer on the face of PPC 11 as follows:
The original is issued to the Builder.
On presentation of this original to the Proprietor with a tax invoice, the Builder is entitled
to payment within the period stated in the Agreement.
917 By clause N6.1, payment was due in seven calendar days of the total amount
certified as payable.
918 Yet, the two sub totals were due at different times under the Building
Contract (by reason that no notice of practical completion had yet been issued by
the Architect whilst the variation was approved and the payment obligation for it
had ‘matured’ using Tilmouth DCJ’s words).
919 This difficulty is replicated in the Builder’s tax invoice delivered to the
Owner in accordance with clause N5 of the Building Contract. It similarly
identifies the amounts equal to the two certified sub totals (one for release of the
50% retention and the second for the approved variation) and has a grand total
equal to the total amount certified in PPC 11.
920 If clause C6.2 were to be construed as permitting an anticipatory certificate
in the case of PPC 11, it is not possible to reconcile the inconsistency arising
between clause C6.1 that provides the entitlement to release of the security only
accrues on issue of the notice of practical completion and the obligation under
N6.1 to pay in seven calendar days absent such certificate.
921 It therefore must be concluded that the strict time for payment in clause N6.1
arising on delivery of the certificate and the relevant tax invoice presupposes the
prior satisfaction of any precondition to the issue of the certificate and relevant tax
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invoice. In the case of clause C6, the notice of practical completion is the
necessary precondition. The contractual machinery for payment would otherwise
be unworkable.
Amount Claimed
922 There is another compelling reason why it must be concluded that PPC 11
was not validly issued in accordance with the terms of the Building Contract.
923 As at 3 September 2014, only a portion of the works (being the house and the
attached outdoor areas) had reached practical completion and was occupied by the
Owner according to the Architect’s certification in the two notices of practical
completion issued on 1 December 2014. The first notice stated:494
With reference to our letter dated 10 November 2014.
Pursuant to the conditions of the building contract between the Proprietor and the Builder,
notice is hereby given that only [sic] the works of the building contract for the house proper
and attached outdoor areas were completed for occupation and had reached the stage of
practical completion as at 31 July 2014
The Defects Liability Period shall commence as from that date and expire on 31 January
2015.
924 The second notice was in the same form but identified the works as for “the
Hall and attached Garage”,495 the date of practical completion as 10 October 2014
and the date of expiry of the Defects liability Period as 10 April 2015.
925 Following the Owner’s request to move in before all the works were
practically complete, the Architect proposed a two stage completion with different
dates of practical completion and defect liability periods. Whilst the initial dates
instructed by the Architect in AI:18 were 11 and 23 July 2014, the dates ultimately
certified were different and first proposed in the Architect’s letter of 10 November
2014 (which is expressly referenced in the notices). That letter also proposed the
remaining cash retention to be released on issue of the final certificate be split into
two sums as follows:496
• Stage 1 – House, pool and courtyards $1,717,000.00
Retention Sum $42,925.00
• Stage 2 – Garage and old Hall $400,000.00
Retention Sum $10,000.00
926 There is no explanation as to why on 3 September 2014 the Architect certified
the release of entirety of all of the 50% security held (and not the $42,925.00 later
certified for that portion of the works) yet on 10 November 2014 proposed the
494 Exhibit R3.195.
495 Ibid.
496 Exhibit TP1.3.188.
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second stage of the works reached practical completion at 10 October 2014 and
gave a certification to that effect on 1 December 2014.
927 For these reasons, it should be concluded that PPC 11 was not validly issued
in accordance with the terms of the Building Contract. Either a valid notice of
practical completion was required before the issue of PPC 11 or separate
certificates were required for the release of security and the approved variation.
Presupposing the validity of the two notices of practical completion issued by the
Architect on 1 December 2014, at 3 September 2014, any notice of practical
completion issued for the first stage of the works should have been in an amount
commensurate with a portion the retention sum later determined by the Architect,
that is $42,925.00.
Consequences of the Invalidity of PPC 11
928 For the reasons just explained, the invalidity of PPC 11 is not able to be cured
by the passage of time and the subsequent issue of a notice of practical completion.
The consequence is that PPC 11 is, as the Owner submits, void and of no effect. It
therefore does not bind the Owner to pay the Builder the amount certified as
payable from the purported due date or at all. Nor then is there any obligation for
the Owner to pay interest on the certified amount as claimed by the Builder.
929 Further, for the reasons stated earlier,497 the Owner’s failure to give a notice
of dispute under clause A8.1 of the Building Contract does not assist the Builder’s
position. Properly construed, clause A8.2 does not operate to preclude this Court
from determining the issue of the validity of the PPC 11.
Owner’s Claim against the Architect
930 It is not necessary to consider the Owner’s claim against the Architect for
allegedly breaching its common law and contractual duties by issuing PPC 11
without a notice of practical completion because the Owner has not shown that
PPC 11 was negligently issued (even though it is wrong) or most fundamentally
that she has suffered any loss. She did not ever pay PPC 11.
931 However, presupposing the validity of two notices of practical completion, it
should not be considered that as at 3 September 2014 the Architect ought not have
issued a notice of practical completion because it was aware of significant
defective works that remained to be completed as alleged by the Owner.498
932 As found below, there was no requirement under the Building Contract as
varied for the supply and use of Tasmanian sandstone for acid cleaning to render
the stone colour compliant with the contractual requirements. The outstanding and
therefore incomplete cleaning and sealing works did not unreasonably affect
occupation and use of the house and surrounding outdoor areas.
497 See [335]-[357] above.
498 Owner’s Final Closing [40]-[42].
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933 Moreover, the damage to the works caused by the acid overspray was
superficial. Neither this damage or the outstanding defects unreasonably affected
occupation and use of the house and surrounding outdoor areas. Nor in fact did
any alleged failure to correct defects in breach of clause M11 bear on whether the
works had reached practical completion or not. It follows that none of these
matters precluded the Architect acting reasonably from forming the requisite
opinion that the house and surrounding outdoor area works had reached practical
completion under clause M1 or that practical completion had been reached because
the Owner had taken possession of the works when that eventually occurred on
about 10 October 2014.
934 It therefore follows there is no foundation to the Owner’s allegation that the
Architect acting reasonably should have reduced the amount in any certificate
issued to nil on account of the stone defects. The Builder was entitled to correct
the defects instructed in various defects lists and the Owner has no accrued right
to damages or compensation at that time. And the amount of the remedial costs
ultimately determined in the Owner’s favour is less than 50% of the retention sum
held.
Validity of Two Notices of Practical Completion
935 Since PPC 11 is not valid and therefore void and of no effect, the dispute over
the validity of the two notices of practical completion issued by the Architect on
1 December 2014 does not affect the parties’ disputes about PPC 11.
936 It is however necessary to resolve this issue because the Building Contract is
still on foot and it affects the parties’ ongoing rights and obligations under the
Building Contract as regards the correction of defects. It also bears on the adoption
of the Award considered in Part F below.
937 For the following reasons, it should be concluded that the Architect has not
validly certified the date of practical completion of the works.
938 First, the Building Contract does not contemplate separable portions of the
works or the issue of two certificates of practical completion for different portions
of the works. Nor does the Building Contract confer on the Architect power to
unilaterally bind the parties to the creation of separable portions of the works with
different dates of practical completion, defects liability periods and retention sums.
939 It is not a question of the absence of any prohibition in the Building Contract
as the Builder submits.
940 Accordingly, the issue of two certificates of practical completion on
1 December 2014 by the Architect did not conform to the contractual scheme for
practical completion of the works and the certificates issued are not valid.
941 Secondly, it was not pleaded or established on the evidence that the parties
on usual contractual principles agreed to vary the Building Contract to create
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separable portions of the works with different dates of practical completion,
defects liability periods and retention sums. The evidence simply does not rise
high enough to establish a mutual understanding by the parties that they were
binding themselves to a different contractual regime. In particular, the Owner’s
questions about the meaning of different proposed dates of practical completion
and defect liability periods in her 18 September 2014 email to the Architect is
strong evidence that there was no mutual consensus.499
942 Thirdly, there is difficulty in resolving this issue on the basis of deemed
practical completion from 31 July 2014 or in stages. There is conflicting evidence
about precisely how much of the works the Owner “took possession of” on 31 July
2014500 and when and how she took possession of the second stage of the works
nominated by the Architect at 10 October 2014. The parties in their
correspondence and at trial inconsistently referred to the ‘occupation’ and
‘possession’ of the ‘site’, ‘premises’ and ‘works’. By contrast, clause M8 only
uses the terms “possession” and “works”.
943 Next, the contractual process for inspection and the preparation of a detailed
schedule of defects and incomplete works was not undertaken by the Architect
strictly in accordance with the Building Contract, without objection from the
parties. Notably, the defects list for the second stage of the works (the garage and
church hall) was issued as an Architect’s instruction on 13 November 2014,501 after
the subsequently certified date of practical completion for that portion of the
works.
944 Finally, in the circumstances found, the Architect should now proceed to
issue a single notice of practical completion in accordance with clauses M4 or M8,
unless the Architect can confirm the parties’ agreement in writing to vary the
Building Contract to create separable portions of the works with different dates of
practical completion, defects liability periods and retention sums.
Builder’s Claim for Payment under PPC 12
PPC 12 is not Final and Conclusive
945 The Builder brought a claim in debt for its 12 November 2014 invoice
no. 0540 (the Builder’s Invoice 540)502 for inter alia the amounts certified in PPC
12 for approved variations ($59,253.66 excluding GST) and adjustments for PC
Sums ($18,230.70 excluding GST).
946 The Owner in her first defence denied that PPC 12, and consequently the
Builder’s Invoice 540, were authorised by the Building Contract and the amount
claimed was payable provisionally or at all.
499 Exhibit R3.159.
500 That is the house internally or the house and outdoor areas.
501 Exhibit R3.190.
502 Builder’s Claim [8.2].
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947 Following the handing down of summary judgment in Cirocco v Clarke
(No 2), the Owner paid the amount claimed in the Builder’s Invoice 540 plus
interest on 18 August 2015. The Owner now accepts an interim obligation to pay
arises on an invoice delivered in reliance on an undisputed certificate issued in
accordance with the terms of the Building Contract.
948 The Builder submits summary judgment on PPC 12 has finally disposed of
the merits of the Builder’s underlying claims for approved variations and PC Sums,
relying on clause A8.2 as disentitling the Owner from disputing PPC 12 at all. The
Architect concurs with the Builder and the Owner disagrees.
949 The Builder’s submission must be rejected. For the reasons stated earlier,503
the Owner’s failure to give a notice of dispute under clause A8.1 of the Building
Contract does not preclude this Court from determining the merits of the
underlying claims for approved variations and PC Sums. Summary judgment has
only resolved the question of the Owner’s provisional liability to pay the Builder’s
invoice for an amount certified in accordance with the Building Contract,
irrespective of any deductions for defective work, set offs, counterclaims or other
defences that might ultimately be determined by this Court.
950 It is therefore necessary to determine the Owner’s challenges to the Builder’s
entitlement to approved variations, PC Sums, and the Owner’s other claims.
Owner’s Challenge to Approved Variations, PC Sums etc
Approved Variations - $59,253.66 ex GST – The Pleaded Issues
951 The Owner’s alleges that the Builder is not entitled to payment for the (22 of
23) claims for variations approved and certified in PPC 12 (with a total value of
$58,506.16 excluding GST).504 The same bare generic plea was made for each
variation challenged. That is, there was no instruction or variation order such that
clause A.05.08 of the Architect’s Specification disentitles the Builder to any
payment and the Builder did not comply with the requirements of sections J or H
of the Building Contract.505
952 The Owner further challenges the quantum of a number of approved
variations as exceeding the Builder’s quoted cost, overlooking the Builder’s
entitlement to an allowance of 15% for overheads and profit under clause H2.1.b.2
and Item 17 of Schedule 1. This contention was not ultimately pressed in closing
submissions.
953 In her reply, the Owner further alleges generally that the Architect did not
adjust the Building Contract under section H or exercise its discretion under clause
503 See [335]-[357] above.
504 VO (p) for $747.50 is not challenged.
505 Fifth Defence [8] and [13] and Seventh Cross Action [63].
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H6, the Builder has not given notice under clause A8 and restitutionary claims are
not available for the works the subject of the variation claims.506
954 As against the Architect, the Owner’s alleges the Architect breached its
retainer and common law duty of care by its approval and certification in PPC 12
of adjustments to the contract price for variations to which the Builder was not
entitled.507
955 The factual allegations made by the Owner for each challenged variation and
contract price adjustment are set out in Annexure D to her Ninth Third Party Claim.
Why they were not pleaded against the Builder was not ever addressed. They stand
however as issues to be resolved between the Owner and Builder as well as
between the Owner and the Architect.
956 In its reply,508 the Builder similarly pleads the same bare and unsatisfactory
generic denial and response to the Owner’s challenges to each of the approved
variations certified in PPC 12. For example, as regards the first challenged
variation:
24. Denied and the [Builder] says further:
24.1 the Variation has been approved by the Architect;
24.2 the [Owner] failed to dispute that approval pursuant to Clause A8 and is no
longer entitled to dispute the Variation at all;
24.3 in the alternative, if the Variation is not due and payable pursuant to the
Contract, the [Builder] is entitled to be paid a reasonable sum in respect of
performance of the work on the grounds that the [Owner]:
24.3.1 knew or ought to have known the work was being performed;
24.3.2 knew or ought to have known that the work was not intended to
be performed gratuitously and without charge;
24.3.3 has been enriched by the performance of the work;
24.3.4 to retain the benefit of the work without compensation the
[Builder] would be unjust.
957 In its defence, the Architect denies it has breached its retainer or common
law duty of care and joins with the Builder in alleging clause A8.2 precludes the
Owner from disputing the Architect’s certification of the approved variations in
PPC 12. The Architect pleads a denial of the Owner’s allegations and a positive
case in response to each of the Owner’s challenges to the approved variations.
These pleas are set out in Annexure A to its Eighth Defence.
506 Reply to Builder’s Defence [15] and [16].
507 Ninth Third Party Claim [24b] and [25].
508 Reply [24]-[42].
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958 In the alternative, the Owner claims against the Builder that the adjustments
certified in PPC 12 are claims to which she is entitled on a restitutionary basis for
money had and received.509 These claims need not be addressed further. They
were not advanced at trial and have no foundation in the evidence, having regard
to the fact that a final accounting on the issue of a final certificate has not occurred.
959 Neither the Builder nor the Architect advanced any claim based on waiver or
estoppel for any of the approved variations, despite their likely application to the
evidence adduced as to the Owner’s knowledge, acceptance and approval of the
works and costs the subject of the approved variations during the course of the
works. Nor curiously did any party tender updated drawings issued during
construction that likely constituted written instructions from the Architect to vary
the works.
The Parties’ Submissions
960 The Owner’s ultimate contention is that the absence of any written instruction
as required by clause A.05.08 of the Architect’s Specification and the Builder’s
non-compliance with any of the requirements of section J or H are fatal to the
Builder’s entitlement to an adjustment to the contract price for any challenged
variation. In support, the Owner relies on the recent decision of this Court in Crea
v Bedrock Construction and Development Pty Ltd,510 submitting this decision
should be followed with the result that the Builder is not entitled to payment under
the Building Contract nor on a restitutionary basis for any of the challenged
variations, despite the works being carried out.
961 The Builder’s submissions briefly address its contractual defences under
clauses N4 and A8 of the Building Contract and do not address its pleaded
alternative claim in restitution at all.
962 The Architect’s submissions address the Builder’s contractual defences
under clauses A8 and H6 and the Builder’s entitlement to restitution for extra work
both generally and in the context of the alleged facts and circumstances of some
but not all of the individual variations.
963 The Architect relies on the decision in Liebe v Molloy511 and the seminal
passage often cited for the proposition that there is an implied obligation to pay
fair value for work done at another person’s request that in the case of a
construction contract is an extra or additional to the contract. The Architect
submits the Builder will be entitled to restitution where it has undertaken work
additional to the contract in circumstances where the Owner knew that the work
509 Seventh Cross Action [65].
510 (Crea v Bedrock) [2020] SADC 124. The decision of the Court of Appeal in Bedrock v Crea did not
disturb the findings and conclusions of the Court on the builder’s variation claims.
511 (1906) 4 CLR 347.
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was being undertaken, knew that it was additional to the contract and knew that
the Builder expected to be paid an additional amount for the work.
964 The Architect submits the Owner has therefore suffered no loss where the
Builder is entitled to restitution for extra work by the Architect’s certification of
PPC 12 despite non-compliance with the contractual procedure for variations.
965 None of the parties properly engaged with the legal principles relevant to
restitutionary claims where the relevant contract was in writing and enforceable
and whether the Building Contract was inconsistent with and precluded a
restitutionary claim for reasonable remuneration in the relevant circumstances.
Legal Principles
966 The relevant contractual provisions are set out above.512
967 Before addressing the circumstances of each variation claim, it is necessary
to emphasise some points of general principle arising from the parties’ exiguous
analysis of the applicable legal principles and facts.
968 At the outset, the contentions of the parties as regards clauses N4 and A8
must be rejected for the reasons already discussed and therefore need not be
considered further.
969 This leaves essentially two questions to be determined. First, whether the
Builder has any entitlement under the Building Contract for payment for the
approved variations, and if not, whether it has any entitlement to a claim in
restitution for extra work done at the Owner’s request, with her acceptance and
knowledge that the Builder expected to be paid for the extra work done and for
which she has not paid.
970 Contrary to the contention implicit in the Owner’s submissions, these
questions cannot be resolved globally by reference to the terms of the Building
Contract or by simply following the decision in Crea v Bedrock. Close attention
is required to the particular facts and circumstances of each approved variation in
context of the rights and obligations the parties assumed under the Building
Contract.513
971 That said, the decision in Crea v Bedrock is of assistance in identifying many
of the relevant legal principles to be applied in this case because that decision
concerned the same form of general conditions: a “Simple Works Contract – ABIC
SW-2008”. However, as the Court’s consideration of each of the individual
variations demonstrates in Crea v Bedrock, the builder’s entitlement to recovery
there depended on the proven facts and circumstances specific to each claim.
512 See [319]-[328] for section J and [329]-[334] for section H.
513 Lumbers v W Cook Builders Pty Ltd (In Liq) (2008) 232 CLR 635 (Lumbers) per Gummow, Hayne,
Crennan and Kiefel JJ [127].
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972 More recent consideration was given to the nature of a claim in quantum
meruit in context of the concept of unjust enrichment in the South Australian Court
of Appeal in Hegarty v Keogh (No 2).514 Whilst this decision concerned a claim to
recover a reasonable sum for work done under an unenforceable contingency costs
retainer, the Court of Appeal’s discussion of the principles drawn from the seminal
authorities should be borne in mind here.
973 Citing Pavey & Matthews Pty Ltd v Paul515 and Mann v Paterson
Constructions Pty Ltd,516 the Court of Appeal explained three matters of particular
relevance here.
974 First, contrary to the Architect’s submissions, a claim in quantum meruit rests
not on an implied contract, but a claim for restitution or unjust enrichment that
arises independently of the contract.
975 Secondly, as emphasised in Mann following Lumbers¸ restitutionary claims
must respect contractual regimes and the allocations of risk made under those
regimes. It is therefore essential in any case to ask whether and how a claim in
quantum meruit fits with the parties’ contract.517 This requires consideration as to
how the parties defined and allocated their mutual rights, obligations and risks
including the consequences of non-performance, acknowledging general
principles of autonomy in contract, and the desirability of certainty and limiting
dispute and litigation.518
976 It follows that where there is a valid and enforceable contract governing a
party’s right to payment, there is “neither occasion or legal justification for the law
to superimpose or impute an obligation or promise to pay a reasonable
remuneration.”519
977 That two conflicting sets of legal obligations cannot subsist in the context of
claim for payment for variations under a building contract was explained by
Mason P in Trimis v Mina520 as follows:
The starting point is a fundamental one in relation to restitutionary claims, especially claims
for work done or goods supplied. No action can be brought for restitution while an
inconsistent contractual promise subsists between the parties in relation to the subject
matter of the claim. This is not a remnant of the now discarded implied contract theory of
restitution. The proposition is not based on the inability to imply a contract, but on the fact
that the benefit provided by the plaintiff to the defendant was rendered in the performance
of a valid legal duty. Restitution respects the sanctity of the transaction, and the subsisting
contractual regime chosen by the parties as the framework for settling disputes.
514 [2023] SASCA 30.
515 (Pavey & Matthews) (1987) 162 CLR 221 at 257, 263 (Deane J) and 228 (Mason and Wilson JJ).
516 (2019) 267 CLR 560 (Mann) [202] (Nettle, Gordon and Edelmann JJ).
517 Mann op cit [14]-[16].
518 Ibid [18].
519 Pavey & Matthews op cit at 256 per Deane J.
520 [1999] NSWCA 140 at [52], Priestly JA and Handley JA agreeing.
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978 Mason P then referred to the earlier decision of the NSW Court of Appeal in
Update Constructions Pty Ltd v Rozelle Child Care Centre Limited521 with approval
and two points made by Priestly JA that are most apt here:522
One point which seems to me to be basic to the decision in Liebe is that if the work claimed
for had been work required by the contract to be done, then the builder could not recover
for it, because he had not complied with the contractual requirements. If however, the work
was work which the builder was not required to do by the contract (“outside the contract”
in the words of the High Court) then, if certain further facts were found, the builder could
recover. It may be that the basis of such recovery would these days be referred to ideas of
restitution rather than implied contract.
979 The second point was that where work is ‘outside the contract’ in the
restricted sense used in Liebe, it is irrelevant whether the contractual requirements
for instructions, notice and quotations occurred.
980 It follows that is necessary to carefully consider the contractual regime for
variations and adjustments to the contract price provided for in the Building
Contract to see how the parties have framed their agreement for additional work.
981 The critical question then arising is whether the work is properly a ‘variation’
within the meaning of the Building Contract that would result in an adjustment to
the contract price and is therefore regulated by sections J and H. This question
turns on the important distinction between ‘extras’ and ‘variations’ as the Court in
Crea v Bedrock explained (citing Brooking on Building Contracts523). That is, an
‘extra’ is work that does not fall within the contractual definition of a ‘variation’
or power to order ‘additions’ and is therefore to be regarded as ‘outside’ the
contract.524
982 Astute attention is therefore required to be given to the wide contractual
definition of a ‘variation’ in clause J that includes any change to the scope of the
works contemplated by the contract documents and capable of being executed
under the Building Contract (as well as changes in dimensions, levels, materials,
workmanship or details). This definition is relevantly informed by the definition
of ‘works’ being the completed construction set out in the contract documents
briefly described as a new residence, associated works to the ‘Old Hall’ and
swimming pool.
983 Secondly, the primacy of a written instruction given by the Architect in
sections J525 and H must be acknowledged in terms of the extent and limits of the
power conferred on the Architect to instruct a variation that binds the parties and
521 (1990) 20 NSWLR 251.
522 Ibid page 272.
523 Op cit page 205-207 [9.9].
524 Op cit at [124]-[126].
525 Clause J1.1, J2.1, J3.1 and J5.1.
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is capable of altering their contractual rights and obligations as to price and
payment under a fixed price contract.
984 Thirdly, as previously mentioned, the provisions in sections J and H take
precedence to the extent of any the inconsistent requirements in clause A.05.08 for
Architect’s instruction and variations by operation of Clause B2 and Schedule 3 of
the general conditions of the Building Contract. Specifically, the blanket
prohibition on a variation to the contract sum absent a written variation order must
be read subject to the operation of clauses H1, H3 and H4 that expressly
contemplate and provide for the Architect to assess a claim to adjust the contract
price where no instruction is given.
985 Fourthly, it should be accepted as found in Crea v Bedrock526 that the
Builder’s entitlement to make a claim to adjust the contract under clause H1.1 is
conditional on the Builder’s compliance with the requirements of clauses H1.1.a
(prompt notification of intention to claim) and H.1.b (submission of a claim).
986 However, these provisions are not the limit of the Builder’ entitlement to an
adjustment to the contract in consequence of the issue of a written Architect’s
instruction for a variation. Under clause H6, the Architect may adjust the contract
price at any time prior to the issue of the final certificate for any change resulting
from the Builder complying with a written instruction given by the Architect in
section J. The Architect’s discretion under clause H6 to adjust the contract in the
absence of a claim was not addressed by the Court in Crea v Bedrock.
987 Contrary to the Owner’s submissions, it follows non-compliance by the
Builder with the requirements of clauses H1 and H2 for making a claim to adjust
the contract price are not fatal where there the Architect has given a written
instruction for a variation because H6 provides as follows:527
If the contractor has not made a *claim to adjust the contract in relation to any change
which results from complying with any instruction given under section J for a *variation
or from causes of delay noted in clause L1 or L2, the architect may adjust the contract at
any time up to the issue of the final certificate under clause N11, or a certificate under
clause Q9 or Q17.
988 The Owner submits clause H6 should be read as only conferring discretion
on the Architect where there is full compliance with the section J process save that
the Builder has not made a claim under section H.528 This submission should be
rejected. The emphasised words should be read in context and purpose as simply
referring to any written instruction for a variation given by the Architect at any
stage in the process (whether under J1.1 or J3.1). The process is not necessarily
linear.
526 Op cit at [210].
527 Emphasis supplied.
528 Owner’s Final Closing [75].
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989 Fifthly, the Court’s conclusion in Crea v Bedrock529 should be accepted that
where there is a written instruction for a variation given by the Architect in
section J, there is no room for a restitutionary claim to override the allocation of
risk agreed between the parties for variations. The clear scheme of sections J and
H is to confine the Builder’s entitlement to adjustments to the contract price for
variations to those instructed in writing by the Architect.
990 However, the Builder’s entitlement to an adjustment to the contract where no
instruction for a variation is issued by the Architect under clause H1.1 should not
be overlooked. Where the Builder promptly notifies the Architect after becoming
aware of an event that will result in a claim and submits the detailed claim to adjust
the contract within 20 working days after becoming aware of the event, the
Architect must assess the claim and issue a written decision under clauses H2 and
H3.
991 A more difficult question arises as to the availability of restitutionary claims
for payment where purported variations to the works proceed as a result of informal
dealings between the parties, whether by oral instructions from the Architect or
direct dealings between the Builder and the Owner, neither of which are authorised
by the Building Contract as binding.
992 Having regard to the risk allocation implicit in the Building Contract, it
should be concluded that the parties intended adjustments to the fixed contract
price for variations to the works to only be regulated by the contractual scheme
constituted by sections J and H. Their manifest intention is that any entitlement to
an adjustment to the contract price is conditioned on the Builder’s compliance with
any instruction given by the Architect under section J in the absence of a claim or
the Architect’s assessment of a claim made by the Builder where there is no
instruction.
993 Otherwise, absent a written Architect’s instruction, the parties’ rights and
obligations would continually fall to be determined by a restitutionary claim for
quantum meruit that is inconsistent with the rights and obligations they assumed
under the Building Contract. If there was always room for a restitutionary claim
in the absence of a written Architect’s instruction, it would subvert the clear
contractual object of promoting agreement and certainty about variations in
circumstances where the adherence to the contractual mechanism of a written
Architect’s instruction is fundamental in regulating the parties’ mutual rights and
obligations in a domestic building contract.
994 Conversely, where instructions are for ‘extra’ work (ie work that is not a
variation within the meaning of the Building Contract), they are not regulated by
the Building Contract and non-compliance with the contractual process for
variations and adjustments is irrelevant. Unquestionably, there may be room for
529 Op cit [170].
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the Builder to bring a claim in restitution depending on the facts and circumstances
particular to the claim.
Facts Generally
PPC 12, Invoice 540 & Statement 1229
995 The dispute between the parties over approved variations concerns the
Builder’s entitlement to have been paid the amounts assessed by the Architect and
certified in PPC 12 as invoiced in the Builder’s Invoice 540.
996 The total amount of approved variations certified in PPC 12 is $59,253.66
excluding GST.
997 The Builder issued an invoice/statement No 1229 dated 7 November 2014
(Statement 1229) that includes the Builder’s claims for approved variations and
PC Sum adjustments. The total of the Builder’s Invoice 540 for approved
variations is $59,229.02 including GST and understates the amount certified by
the Architect by approximately the amount of the GST. The difference arises
because the Builder has not included the 15% allowance for overheads and profit
in accordance with clause H2.1.b.2 and item 17 of Schedule 1 of the Building
Contract that the Architect has included when the variation claims were shown.530
Architect’s Variations Schedule
998 The Owner was kept appraised of the running cost of approved variations
(and PC Sum adjustments) during construction from a running schedule
maintained by the Architect. This schedule was progressively updated on four
occasions as is apparent from the recorded dates of approval of approved variations
and correspondence between the Architect and the Owner.
999 The Owner was first provided with the variations schedule by letter dated
21 November 2013 (the November 2013 Variations Schedule). The list of
approved variations then totalled $9,335.13 excluding GST. In the covering letter,
the Architect drew her attention to the adequacy of the $40,000.00 contingency
sum included in the contract price.
1000 For three of the challenged variations approved by the Architect in November
2013 it is apparent the Architect had accepted a quotation from the Builder dated
7 November 2013 (the November 2013 Quotation).531
1001 A second batch of 11 variations was approved by the Architect (and PC Sum
adjustments) in May 2014 following the Builder’s provision to the Architect of a
quotation dated 21 May 2014 for further ‘extra’ works (and a credit for a PC Sum)
530 This is evident from a comparison of the quoted cost ex GST and the amount shown in the Variations
Schedule which is 115% of the cost ex GST.
531 Exhibit TP1.3.69.
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(the May 2014 Quotation).532 A third written quotation dated 4 June 2014 for the
‘extra’ side fence works (the June 2014 Quotation)533 was provided to the
Architect.
1002 The Architect assessed the variations claimed in the Builder’s May and June
2014 Quotations as is shown in the Variations Schedule sent to the Owner by email
on 13 October 2014 (October 2014 Variations Schedule).
1003 The Owner confirmed in cross-examination that she received the Architect’s
running schedules of approved variations (and PC Sums adjustments).
1004 The Architect’s final variations schedule is not in evidence, nor any
supporting workpapers or vouchers (save the Builder’s quotations referred to
below.)
1005 (Putting aside the issue of the incorrect GST treatment in the Builder’s
Invoice 540), the amounts assessed for the approved variations shown in the
October 2014 Variations Schedule are readily reconciled to the amounts shown in
the Builder’s Invoice 540.534
The Work Done
1006 There is no dispute that the work the subject for the approved variations was
done, and the Owner knew this, save for one item: extras (c) for additional steel.
The Evidence
1007 The evidence shows that there was a degree of informality as regards
instructions given by the Architect to the Builder for some parts of the works and
the Owner and Dr Clarke actively participated in the process, particularly as
regards the church hall. However, there were written instructions given by the
Architect to the Builder and quotations for ‘extra’ works prepared by the Builder
and submitted to the Architect and Owner for approval from time to time, contrary
to the Owner’s allegation there were none at all.
1008 It is apparent from the documentary evidence that the Contacts Drawings
were revised from time to time and issued to the Builder for it to construct the
works. However, a complete set of for construction or as built architectural and
structural drawings were not in evidence showing all instructed changes to the
works made during construction.
1009 It is also clear on the evidence that the Owner knew about and was involved
in most if not all the decisions made about whether to progress the variations she
now challenges. Her regular attendance at site meetings with Mr Williams and
532 Exhibit R3.114.
533 Exhibit TP1.3.120.
534 Item r) for window winders in the October 2014 Variations Schedule is not in the invoice and item w)
plantation shutters are in the invoice but not the October 2014 Variations Schedule.
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Ms Crowden for the Architect and Mr Cirocco and her detailed correspondence
with the Architect show both her close involvement in ongoing decisions about all
manner of details and changes to the works and her express approval and
instructions given to the Architect to proceed with such decisions and works,
including many of the approved variations. In some instances, the Owner and
Dr Clarke instructed the Builder directly.
1010 The Owner’s evidence at times about her apparent indifference and lack of
information or knowledge about variations and PC Sums and the cost of the works
should be discounted as evasive and unreliable. The Owner received all the
Architect’s instructions, although she claimed to be missing some until later in the
works.
1011 The Owner well understood the concept of a ‘variation’ and an ‘extra’ and
that she could not expect to have an ‘extra’ she requested without paying for it.
She used these expressions in her correspondence with the Architect numerous
times. A telling example was made in her meeting notes of 30 May 2014:535
… We would like a rear boundary fence, maybe wood, to match the bin construction. This
was not on the original WB plans so assume that’s an extra we may have to do after Rocky
has completed his contract?
1012 In response to questions from the bench, the Owner frankly admitted her
understanding of the concepts of variations and PC Sums, despite the attempt in
examination-in-chief to suggest she did not because she was only asked whether
the Architect ever explained these concepts to her.
1013 The written quotations submitted by the Builder are important. Where the
works the subject of the claim constitute a variation within the meaning of the
Building Contract, they constitute compliance with the Builder’s obligation to
promptly notify its intention to a make and submit a claim under clause H1.1
(either after receiving an instruction or if no instruction is issued), thereby
requiring the Architect to assess the claim under clauses H3 and H4. Such
assessments are shown to have been made by the two versions of the Architect’s
running schedules of approved variations (and PC Sums adjustments).
1014 The Owner’s general allegation that the Builder failed to comply with clauses
H1 and H2 ignores the Builder’s quotations for the approved variations where
relevant. Accordingly, the Owner’s global claim that the Builder failed to comply
with clauses H1 and H2 of the Building Contract should be rejected and must be
determined by having regard to the facts and circumstances specific to each
challenged variations approved by the Architect.
1015 The evidence about the specific circumstances of each challenged variation
was limited and primarily documentary. Minimal oral evidence was adduced in
the November trial on the topic of the approved variations. There was some
535 Exhibit R3.117 page 1249.
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relevant evidence adduced in the Arbitration in the context of the referred matters.
The parties’ submissions were brief and, in many cases, did not address the specific
circumstances of some variations at all or provide much relevant assistance in
resolving the issues arising. This might be explained in part by the
disproportionate cost of forensically proving claims of a relatively insignificant
quantum and the difficulty in circumstances where it was doubtful any witness
would have reliably recalled the detail of mundane and uncontentious events from
nine years ago.
1016 It is in this context, the Builder’s claims and the Owner’s challenges to
approved variations are now considered.
Extras (a) – Paint waterproofing around Foundation - $575.00 ex GST
1017 For the following reasons, the Builder was entitled to payment of $575.00
excluding GST as approved and certified by the Architect in PPC 12 for this item.
1018 In her pleading, the Owner challenges this work as not being a variation for
which the Builder is entitled to payment on three grounds. First, the work was
within the existing scope of works as obvious work under clause A.01.09 of the
Architect’s Specification (the Obvious Work Ground).536 Secondly, there was no
instruction or variation order as required by clause A.05.08 of the Architect’s
specification (the No Instruction Ground). And thirdly, the Builder did not
comply with its obligations under clauses J2.3, J4.2, H1 and H2 of the Building
Contract (Builder’s Non-compliance Ground). For convenience, these grounds
are collectively referred to below as the Owner’s Standing Grounds of
Challenge.
1019 In final submissions, the Owner further alleges this work was in nature of
painting exposed footings concrete which was shown in Detail 04 in Drawing
W06537 and specified as required to be painted.
1020 In its defence, the Architect alleges the work was full waterproofing and
sealing around the external, partially above ground concrete slab, was work that
was not standard building practice and was the subject of an on-site discussion
with the Owner who reached the view that the work would provide her a long-term
benefit.
1021 None of the pleaded allegations were the subject of oral or expert evidence.
Only the Owner addressed this item in closing submissions.
1022 This work was described as “paint waterproofing around foundation” in the
Builder’s November 2013 Quotation. Whilst this quotation and subsequent
reference to the work quoted in the November 2013 and October 2014 Variations
536 Clause A.01.09 provides: “Any work which is not shown on the drawings or in the specification or is
not clearly outlined in the same but is necessary for the proper performance or completion of the works,
is to be completed by the [Builder] at no extra cost to the [Owner].”
537 Exhibit R1.
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Schedules show the Owner’s knowledge and acquiescence of the work being done
and costed and approved as an ‘extra’ at her implied request, there is no evidence
of any written direction to proceed with the work allegedly apparently instructed
on-site by the Architect with the Owner’s approval.
1023 Detail 04 in Drawing W06 concerns “painted cement render to masonry
boundary walls generally” and not to waterproofing or the painting of
waterproofing. Despite the paucity of evidence there is, it should be concluded
this is properly a claim for works ‘extra’ to the Building Contract done at the
Owner’s implied request, which works she knew about and has accepted without
complaint and for which she has had the benefit without payment.
1024 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost of labour and material ($500.00 excluding GST) and 15% ($75.00) as
an allowance for overheads and profit in accordance with clause H2.1.b.2 and item
17 of Schedule 1 of the Building Contract. In the absence of any challenge to the
quantum assessed, the Architect’s assessment of this cost should be accepted as
bona fide and a fair and reasonable price for the works done.
Extras (b) – Supply & Fix 2 LVL Beams - $632.50 ex GST
1025 For the following reasons, the Builder was entitled to the payment made in
the amount of $632.50 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1026 In her pleading, the Owner relies on her Standing Grounds of Challenge.
1027 In its defence, the Architect alleges the work was additional and requested by
the engineer during construction.
1028 None of the parties identified any relevant documentary evidence, adduced
any oral or expert evidence or made submissions to the Court about this item.
1029 There is however relevant documentary evidence.
1030 Clause G.07 of the Architect’s Specification for truss roof structures required
the Builder to provide shop drawings of truss design and layout for approval prior
to fabrication. The roof truss layout prepared by Footersville Structural Timber
Solutions dated 30 September 2013 and certified for the purposes of the
Development Application was in evidence.
1031 The November 2013 Quotation includes this work as item (d) “two extra LVL
Beams to support upstairs trusses (7.8 long each) – supply and fix)”. It should be
inferred from its description that this work is the result of a structural engineering
design change. It is apparent from the November 2013 Variations Schedule that
the Architect approved the variation as quoted, which the Owner knew because
she was sent the schedule.
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1032 Work and materials required as a result of a structural design change is not
obvious work, although it is a variation within the meaning of the Building
Contract and therefore not an ‘extra’.
1033 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the November 2013 Schedule. Clauses J2 and J4 do not apply in the absence
of a written Architect’s instruction (whether in the form of a revised drawing or
otherwise). The absence of any such instruction is not fatal to the Builder’s claim.
No relevant non-compliance with the requirements of section H of the Building
Contract has been shown on the evidence.
1034 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost of labour and material ($550.00 excluding GST) and 15% ($82.50) as
an allowance for overheads and profit in accordance with clause H2.1.b.2 and item
17 of Schedule 1 of the Building Contract. In the absence of any challenge to the
quantum assessed, the Architect’s assessment of this cost should be accepted as
bona fide and a fair and reasonable price for the works done.
Extras (c) - Additional Steel - $2,875.00 ex GST
1035 For the following reasons, the Builder was entitled to the payment made in
the amount of $2,875.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1036 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds as well as alleging there was no variation in the nature
described.
1037 In its defence, the Architect alleges the work was additional (the supply and
installation of beams to the stair and laundry) and requested by the engineer during
construction.
1038 None of the parties identified any relevant documentary evidence, adduced
any oral or expert evidence or made submissions to the Court about this item.
1039 The Owner’s claim there was no variation as described is, on the evidence,
incorrect. There is relevant documentary evidence.
1040 On 8 August 2103, the Builder was sent by email revised for construction
structural and detail drawings (120203-S02 and 120203-S04) prepared by the
project engineers, Coombe Pearson Reynolds. These drawings constitute a written
instruction given by the Architect within the meaning of section J of the Building
Contract, enlivening the Architect’s discretion to adjust the contract under clause
H6 of the Building Contract.
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1041 The November 2013 Quotation included this work as item (a) “extra cost for
Steel (as per attached copy of Tax invoice from Peluso Engineering Pty Ltd”.
Despite the limited evidence, it is clear this work is the result of a structural
engineering design change following an engineer’s inspection overseen by the
Architect.
1042 The work is detailed in Pelosu Engineering invoice dated 22 October 2013
and describes the works carried out as:
Shop drawings/site measure
Supply of steel material
Fabrication
Erection
…
1) Extra T-bar lintel for front porch
2) Material change to garage opening x 2 due to incorrect sizes from engineer
3) L8 lintel – change form t-bar to PFC and angle
4) Extra column in church to support floor beam
1043 It is apparent that the Architect approved the variation as quoted on the basis
of the tax invoice issued by Peluso Engineering, which the Owner knew from the
November Variations Schedule she was sent.
1044 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as per Peluso Engineering’s tax invoice ($2,500.00 excluding GST) plus 15%
($375.00) as an allowance for overheads and profit in accordance with clause
H2.1.b.2 and item 17 of Schedule 1 of the Building Contract. In the absence of
any challenge to the quantum assessed, the Architect’s assessment of this cost
should be accepted as bona fide and a fair and reasonable price for the works done.
Extras (d) – Stair Additional Reinforcing & Concrete - $4,965.13 ex GST
1045 For the following reasons, the Builder was entitled to the payment made in
the amount of $4,965.13 excluding GST as approved and certified by the Architect
in PPC 12.
1046 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1047 In its defence, the Architect alleges the work involved the supply and
installation of beams and additional reinforcing to the stair in the main residence
requested by the engineer during construction.
1048 None of the parties identified any relevant documentary evidence, adduced
any oral or expert evidence or made submissions to the Court about this item.
1049 There is however relevant documentary evidence.
1050 In August 2013, the project engineers, Coombe Pearson Reynolds inspected
the first floor slab and stairs and issued an invoice for their services in doing so.
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Revised structural drawings were issued on 8 August 2013 to the Builder. The
revised drawings constitute a written instruction given by the Architect within the
meaning of section J of the Building Contract, enlivening the Architect’s discretion
to adjust the contract under clause H6 of the Building Contract. The Owner’s
challenge on the No Instruction and Builder’s Non-compliance Grounds therefore
fails.
1051 The Architect approved the variation in the amount of $4,965.13 excluding
GST, which the Owner knew from the November 2013 Variation Schedule. In the
absence of any challenge to the quantum assessed, the Architect assessment should
be accepted as bona fide and a fair and reasonable price for the works done.
Extras (e) – Boundary Block Wall Extra Height - $1,667.50 ex GST
1052 For the following reasons, the Builder was entitled to the payment made in
the amount of $1,667.50 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1053 In her pleading, the Owner relies on her Standing Grounds of Challenge.
1054 In its defence, the Architect alleges the work was additional, was instructed
by the Architect following the Owner’s request for privacy and security from the
neighbouring development.
1055 In closing submissions, the Owner referred to the drawings (W01 and W06)538
as requiring a full height wall and submits it was obvious work. Otherwise, none
of the parties identified any relevant documentary evidence or adduced any oral or
expert evidence about this item.
1056 The May 2014 Quotation included this item of work. The Architect approved
the variation in the amount of $1,667.50 excluding GST, which the Owner knew
from the May 2014 Quotation addressed to her and the October 2014 Variation
Schedule.
1057 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the November 2013 Variation Schedule. Clauses J2 and J4 do not apply in the
absence of a written Architect’s instruction (whether in the form of a revised
drawing or otherwise). The absence of any such instruction is not fatal to the
Builder’s claim. No relevant non-compliance with the requirements of section H
of the Building Contract has been shown on the evidence.
1058 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost of labour and material ($1,450.00 excluding GST) and 15% ($217.50)
as an allowance for overheads and profit in accordance with clause H2.1.b.2 and
538 Exhibit R1.
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item 17 of Schedule 1 of the Building Contract. In the absence of any challenge
to the quantum assessed, the Architect’s assessment of this cost should be accepted
as bona fide and a fair and reasonable price for the works done.
Extras (f) – Adjust & Modify Lift Doors - $1,437.50 ex GST
1059 For the following reasons, the Builder was entitled to the payment made in
the amount of $1,437.50 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1060 In her pleading, the Owner relies on her Standing Grounds of Challenge.
1061 In its defence, the Architect alleges the work the subject of the variation
involved adjustments to the lift door surrounds including additional steel angles
due to amendments to the lift specification and was instructed by the Architect
following a preliminary inspection by the lift supplier. Visual compatibility with
other doors was required. Further, the work was not obvious work under clause
A.01.09 of the Architect’s Specification.
1062 In closing submissions, the Owner referred to clause T.01 of the Architect’s
Specification, contending further that the contractual requirement to comply with
changes in the manufacturer’s specifications were obvious works.
1063 A change to comply with the manufacturer’s specification is not obvious
works within the meaning of clause A.01.09 of the Architect’s Specification. It is
however a variation within the meaning of the Building Contract in so far as it is a
change to the scope of works contemplated by the contract documents for the
construction of works including the house.
1064 Clause E.21 of the Architect’s Specification required the Builder to meet with
the lift supplier prior to commencing and clarify all dimensions, details etc. The
specification was provided in section T. The detail of the lift doors was to be
confirmed with both the Architect and the lift supplier prior to fabrication by clause
G23.05 and was the subject of a PC Sum in clause T.02. The lift door was shown
in Drawing W09539 as DC02.
1065 The Architect instructed the Builder by AI:01 dated 22 January 2013 that a
meeting was being arranged on-site with the lift supplier JPS Lifts to discuss lift
doors and associated details. It should be inferred the Builder was instructed to
attend as obliged by the Architect’s Specification. Lift finishes were formally
instructed in AI:12 dated 18 October 2013. Further instructions were provided in
AI:13 dated 6 November 2013. It is apparent that the lift supplier was consulted a
number of times throughout construction.
1066 On 24 January 2014, an email from the Architect to the Engineer advised that
the lift doors shown in Rev C of Drawing W09 may still need to be revised to
539 Exhibit R1.
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include a timber panelled door similar to others throughout the residence.
A further revised drawing showing the revised change was not in evidence.
1067 The evidence is not sufficient to resolve whether the work the subject of the
approved variation was the subject of a written instruction in the form of a revised
drawing that would constitute the requisite instruction for a variation enlivening
the Architect’s discretion under clause H6 of the Building Contract.
1068 Nonetheless, the May 2014 Quotation included this item of work. The
Architect accepted the Builder’s quotation and approved the variation in the
amount of $1,437.50 excluding GST, which the Owner knew from both the May
2014 Quotation and the October 2014 Variations Schedule.
1069 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the November 2013 Schedule. Clauses J2 and J4 do not apply in the absence
of a written Architect’s instruction (whether in the form of a revised drawing or
otherwise). The absence of any such instruction is not fatal to the Builder’s claim.
No relevant non-compliance with the requirements of section H of the Building
Contract has been shown on the evidence.
1070 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost of labour and material ($1,250.00 excluding GST) and 15% ($187.50)
as an allowance for overheads and profit in accordance with clause H2.1.b.2 and
item 17 of Schedule 1 of the Building Contract. In the absence of any challenge
to the quantum assessed, the Architect’s assessment of this cost should be accepted
as bona fide and a fair and reasonable price for the works done.
Extras (g) – Supply & Fit Steel Frame for Safe - $552.00 ex GST
1071 For the following reasons, the Builder was entitled to the payment made in
the amount of $552.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1072 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds as well as alleging the safe was required to be cemented and
therefore a steel frame was not required.
1073 It is not disputed that the safe was ‘extra’ work not specified in the contract
documents.
1074 The Owner’s notes made in March 2012 record the features the Owner said
she would like in a new house, including having the “existing safe cemented in.”
Eighteen months later the Owner gave her written approval for the safe be installed
and approved it being recessed into the void between the single robe in the dressing
room on the Architect’s recommendation with the compliment: “You have done a
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great job again”.540 It should be inferred this work required a steel frame and was
not cemented because it was installed in a cupboard.
1075 The Owner’s oral evidence that she asked for a safe that would be cemented
in should be understood as incomplete and misleading, having been superseded by
the instructions she later gave in writing when the design of the safe was being
finalised during construction. Indeed, she made no complaint about the safe not
being installed to her requirements in her extensive defects lists.
1076 The May 2014 Quotation for this item was accepted by the Architect and the
variation approved, which the Owner knew from the May 2014 Quotation and the
October 2014 Variations Schedule.
1077 The Builder has a good claim for this item in quantum meruit. On the
evidence, it is properly a claim for works ‘extra’ to the Building Contract done at
the Owner’s request, which works she has accepted without justified complaint
and has had the benefit of without payment. In assessing the Builder’s claim, the
Architect has allowed the amount quoted ($480 excluding GST) and 15% ($72.00)
as an allowance for overheads and profit consistent with clause H2.1.b.2 and item
17 of Schedule 1 of the Building Contract. In the absence of any challenge to the
quantum assessed, the Architect’s assessment of this cost should be accepted as
bona fide and a fair and reasonable price for the works done.
Extras (h) – Wall Tiles – Changed to ‘Cotton’ - $3,176.74 ex GST
1078 For the following reasons, the Builder was entitled to the payment made in
the amount of $3,176.74 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1079 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1080 The Owner did not adduce any evidence or address this item at trial or in
closing submissions. The Architect made brief written submissions.
1081 In its defence the Architect alleged that the wall tiles were changed to reduce
the number of different finishes as a result of an agreement between the Owner
and Architect. In closing submissions, the Architect referred to the Internal
Finishes Schedule dated 18 September 2013 issued to the Builder specifying the
change to ‘cotton’ wall tiles. Later correspondence between the Owner and
Architect confirms the Owner’s approval of the ‘cotton’ wall tiles.
1082 The May 2014 Quotation includes a cost for this item of $2,762.38 excluding
GST, calculated as the difference in cost of $46.82 /sqm @ 59 sqm.
540 Exhibit TP1.3.62.
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1083 The Internal Finishes Schedule constitutes a written instruction given by the
Architect within the meaning of section J of the Building Contract, enlivening the
Architect’s discretion to adjust the contract under clause H6 of the Building
Contract.
1084 The Architect approved the variation in the amount of $3,176.74 excluding
GST (including the 15% allowance), which the Owner knew from the May 2014
Quotation and the October 2014 Variations Schedule.
1085 In the absence of any challenge to the quantum assessed, the Architect’s
assessment of this cost should be accepted as bona fide and a fair and reasonable
price for the works done.
Extras (i) – Wall Tiles – Pantry & Laundry - $575.00 ex GST
1086 For the following reasons, the Builder was entitled to the payment made in
the amount of $575.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1087 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1088 The Owner did not address this item at trial or in closing submissions. The
Architect made brief written submissions.
1089 In its defence the Architect alleged that the wall tiles were changed to reduce
the number of different finishes as a result of an agreement between the Owner
and Architect. In closing submissions, the Architect referred to the Internal
Finishes Schedule dated 18 September 2013 issued to the Builder specifying the
change to feature wall tiles.
1090 The May 2014 Quotation includes a cost for this item.
1091 The Internal Finishes Schedule constitutes a written instruction given by the
Architect within the meaning of section J of the Building Contract, enlivening the
Architect’s discretion to adjust the contract under clause H6 of the Building
Contract.
1092 The Architect approved the variation in the amount of $575.00 excluding
GST (including the 15% allowance), which the Owner knew from the May 2014
Quotation and the October 2014 Variations Schedule. In the absence of any
challenge to the quantum assessed, the Architect’s assessment of this cost should
be accepted as bona fide and a fair and reasonable price for the works done.
Extras (j) – Additional Moulding to Front Foor - $678.50 ex GST
1093 For the following reasons, the Builder was entitled to the payment made in
the amount of $678.50 excluding GST as approved by and certified by the
Architect in PPC 12.
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1094 A design change to the front door was agreed at a meeting on-site between
the Owner, Mr Williams and Ms Crowden.541 As a result, on 7 February 2014, the
Architect issued the Builder by email with a drawing of elevations and cross-
sectional detail of the mouldings for the front door (DG01).542 The email and
drawing constitute a written instruction given by the Architect to vary a dimension
of the works, enlivening the Architect’s discretion to adjust the contract under
clause H6 of the Building Contract.
1095 The May 2014 Quotation quoted $590 ex GST for extra labour for this item.
1096 The Architect accepted the Builder’s quotation and approved the variation in
the amount of $678.50 excluding GST (including the 15% allowance), which the
Owner knew from the May 2014 Quotation and the October 2014 Variations
Schedule. In the absence of any challenge to the quantum assessed, the Architect’s
assessment of this cost should be accepted as bona fide and a fair and reasonable
price for the works done.
Extras (k) – Cut Tiles for Porch & Balcony – $920.00 ex GST
1097 For the following reasons, the Builder was entitled to the payment made in
the amount of $920.00 excluding GST as approved and certified by the Architect
in PPC 12.
1098 In her pleading, the Owner relies on her Standing Grounds of Challenge.
1099 The Owner and the Architect made brief written submissions on this item.
1100 Drawing W01 specified 400mm x 400mm x 20mm bluestone pavers for the
front porch and overhanging balcony (area H).
1101 In March 2014, the Owner and Architect began dealing with Mr Robert
Cooper of Distinctive Gardens with a view to Distinctive Gardens taking over the
external paving works as part of the landscaping. This led to a review of the paving
selections to conform with the new landscaping design. By email dated 12 March
2012, the Owner confirmed her instructions to proceed with the original selection
for bluestone sawn and honed pavers. The following day, Mr Cooper informed
the Owner he was meeting with the Builder about paving materials, volumes and
costs the following day and proposed a meeting on-site to discuss the proposed
works.
1102 It is apparent the order for the specified tiles was not made until after the
Owner confirmed her selection and the Architect directed a change in size and
cutting to maintain progress of the works. There is however no written direction
given by the Architect to the Builder for this work in evidence.
541 Award [907]-[910].
542 Award [906].
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1103 The tile supplier then notified the Architect the bluestone sawn & honed
400mm x 400mm x 20mm tiles were out of stock with a 10 week lead time and
proposed cutting down 600mm x 300mm x 20mm to 297mm x 297mm x 20mm
and:
The cutting charge would be borne [sic] by Rocky and I will coordinate with the local
company who can do this but Rocky would pay them directly.
1104 The Owner’s submits the evidence supports a finding that the Builder agreed
to meet the cost of cutting the tiles to ameliorate a breach of contract in being
unable to reach practical completion by the date for practical completion. This
submission should be rejected. As to the Builder’s alleged agreement to bear the
costs as between it and the Owner, the tile supplier’s email is equivocal. It should
be read as a referring to who would bear the costs as between the Owner/Builder
and the tile supplier. As to the Builder’s supposed motive, the submission is
speculative and would only be likely if this was the only item of work was on the
critical path, which is contrary to the evidence as to progress of the works
generally.
1105 The contention that cutting the tile was obvious work should also be rejected.
It was only required as a ‘work-around’ due to the unavailability of the specified
tiles and in consequence of a late selection by the Owner.
1106 The May 2014 Quotation included this item of work. The Architect accepted
the Builder’s quotation and approved the variation in the amount of $800.00
excluding GST, which the Owner knew from the May 2014 Quotation and October
2014 Variations Schedule.
1107 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the October 2014 Variations Schedule. Clauses J2 and J4 do not apply in the
absence of a written Architect’s instruction (whether in the form of a revised
drawing or otherwise). The absence of any such instruction is not fatal to the
Builder’s claim. No relevant non-compliance with the requirements of section H
of the Building Contract has been shown on the evidence.
1108 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost ($800.00 excluding GST) and 15% ($120.00) as an allowance for
overheads and profit in accordance with clause H2.1.b.2 and item 17 of Schedule 1
of the Building Contract. In the absence of any challenge to the quantum assessed,
the Architect’s assessment of this cost should be accepted as bona fide and a fair
and reasonable price for the works done.
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Extras (l) – Labour to Fit Stone Window Rebates - $1,035.00 ex GST
1109 For the following reasons, the Builder was entitled to the payment made in
the amount of $1,035.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1110 This item was not specifically addressed by any party at trial or in
submissions.
1111 Contract Drawing W05 specifies rendered masonry to window reveals for
windows in the ground floor stonework cladding. The Architect alleges the Owner
requested solid stone rebates be installed instead of the specified rendered
masonry. The Owner does not challenge this allegation, relying on strict
contractual compliance to contend the Builder has no entitlement for the extra
work done at her request.
1112 The May 2014 Quotation quoted $900 ex GST for extra labour for this item.
1113 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the October 2014 Variations Schedule. Clauses J2 and J4 do not apply in the
absence of a written Architect’s instruction (whether in the form of a revised
drawing or otherwise). The absence of any such instruction is not fatal to the
Builder’s claim. No relevant non-compliance with the requirements of section H
of the Building Contract has been shown on the evidence.
1114 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost ($900.00 excluding GST) and 15% ($135.00) as an allowance for
overheads and profit in accordance with clause H2.1.b.2 and item 17 of Schedule 1
of the Building Contract. In the absence of any challenge to the quantum assessed,
the Architect’s assessment of this cost should be accepted as bona fide and a fair
and reasonable price for the works done.
Extras (m) – Rear Verandah Lining Materials - $2,415.00 ex GST
1115 For the following reasons, the Builder was entitled to the payment made in
the amount of $2,415.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1116 This item was not specifically addressed by any party at trial or in
submissions.
1117 Clause G.05.16 of the Architect’s Specification requires the use of New
Zealand Clear Pine or Western Red Cedar for architraves, linings and skirtings.
The Architect’s unchallenged contention is that the Owner requested a change to
the lining of the rear verandah from western red cedar to painted matchboard
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following a discussion between her and the Architect on-site during which the
Owner agreed this would provide at a more timeless finish.
1118 The May 2014 Quotation quoted $2,100.00 ex GST for extra labour for this
item.
1119 The Builder by submission of it quotation for this item has complied with its
obligations under clause H1 and H2, requiring the Architect to assess the claim
made and decide whether to adjust the contract, which the Architect did as is shown
by the October 2014 Variations Schedule. Clauses J2 and J4 do not apply in the
absence of a written Architect’s instruction (whether in the form of a revised
drawing or otherwise). The absence of any such instruction is not fatal to the
Builder’s claim. No relevant non-compliance with the requirements of section H
of the Building Contract has been shown on the evidence.
1120 In assessing the Builder’s claim, the Architect has allowed the amount quoted
as the cost ($2,100.00 excluding GST) and 15% ($315.00) as an allowance for
overheads and profit in accordance with clause H2.1.b.2 and item 17 of Schedule 1
of the Building Contract. In the absence of any challenge to the quantum assessed,
the Architect’s assessment of this cost should be accepted as bona fide and a fair
and reasonable price for the works done.
Extras (n) – Side Fence - $6,220.45 ex GST
1121 For the following reasons, the Builder was entitled to the payment made in
the amount of $6,220.45 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1122 A 6m x 2.2m rendered blockwork fence was constructed by the Builder on
the boundary of the Owner’s Residence and the adjacent neighbour’s land. It is
apparent from the Building Contract this fence was not specified in the Contract
Drawings and not part of the Builder’s scope of works and is an ‘extra’ and not a
variation within the meaning of the Building Contract. Compliance with the
contractual requirements for a variation of the works and adjustment to the contract
price is therefore not required.
1123 This work is the subject of the June 2014 Quotation addressed to the
Architect and the Owner and is shown as approved in the October 2014 Variations
Schedule. The Owner stood by and saw the work done for her benefit without
complaint, knowing the Builder expected to be paid the amount quoted for the
‘extra’ works.
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1124 This variation was incorrectly certified as payable twice in both PPC 11543
and PPC 12.544 Since PPC 11 is not valid and binding, ultimately there is no double
charging by its inclusion in PPC 12.
1125 The Builder has a good claim for this item in quantum meruit. On the
evidence, it is properly a claim for works ‘extra’ to the Building Contract done at
the Owner’s request, which works she has accepted without complaint and has had
the benefit of without payment. In assessing the Builder’s claim, the Architect has
allowed the amount quoted ($5,409.09 excluding GST) and 15% ($811.36) as an
allowance for overheads and profit consistent with clause H2.1.b.2 and item 17 of
Schedule 1 of the Building Contract. In the absence of any challenge to the
quantum assessed, the Architect’s assessment of this cost should be accepted as
bona fide and a fair and reasonable price for the works done.
Extras (o) – Water Feature - $5,842.00 ex GST
1126 For the following reasons, the Builder was entitled to the payment made in
the amount of $5,842.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1127 The Owner’s pleaded challenge that the stone supplied and installed by the
Builder was not the specified colour ‘2’ to ‘3’ fails for the reasons considered in
Part E below. The Owner’s further pleaded challenge that the Builder was not
entitled to payment for a variation under the Building Contract also fails because
the work was an ‘extra’ and not a variation within the meaning of the Building
Contract. Compliance with the contractual requirements for a variation of the
works and adjustment to the contract price was not required.
1128 The evidence given in the Arbitration establishes that the garden water
feature was not part of the Builder’s scope of works under the Building Contract.
It was designed by the landscaping contractor Distinctive Gardens retained
independently of the Builder by the Owner in about March 2014 and part of its
scope of works. The unchallenged finding of the Arbitrator was:545
I further conclude the Builder constructed the footings and the walling of the water feature,
albeit such work was under the direction of Distinctive Gardens and in accordance with
than Owner-approved design prepared by Distinctive Gardens. No evidence has been
presented to me to indicate that the work undertaken by the Builder in regards to
constructing the water feature resulted from an instruction and/or variation order issued by
the Architect. Albeit the Builder did claim an “EXTRAS” cost of $5,842.00 for supplying
the “stone & bricks” and labour for “pointing, bagging & rendering stone & masonry” in
relation to the water feature.
543 In the amount of $5,409.10 excluding GST.
544 In the amount of $5,654.96 excluding GST.
545 Award [444]. Citations omitted.
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1129 Distinctive Garden’s quotation546 expressly refers to the Builder’s additional
scope works being discussed on-site.
1130 The Builder has a good claim for this item in quantum meruit. On the
evidence, it is properly a claim for works ‘extra’ to the Building Contract done at
the Owner’s request, which works she has accepted without complaint (save as to
stone colour and ‘quarry sap’) and has had the benefit without payment. In
assessing the Builder’s claim, the Architect has allowed $5,842.00 excluding GST.
In the absence of any challenge to the quantum assessed, the Architect’s
assessment of this cost should be accepted as bona fide and a fair and reasonable
price for the works done.
Extras (q) - Sealing of Cellar Floor - $667.00 ex GST
1131 For the following reasons, the Builder was entitled to the payment made in
the amount of $667.00 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
1132 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds and further alleges she did not require the floor to be sealed,
but if it was required, it was work specified in clause P.07.05 of the Architect’s
Specification. In closing submissions, the Owner contended that sealing was
required to remediate stains caused by the Builder during construction that could
not be cleaned.
1133 In its defence, the Architect says the work was the subject of an Architect’s
instruction following a discussion with the Owner on 19 May 2014 about options
for finishing it since she was unhappy with it and the work was not specified.
1134 The Architect is correct to say it was not specified work. Clause P.07.05 of
the Architect’s Specification is not applicable. It applies to the sealing of stone
floors. This contention was not pressed by the Owner in closing submissions.
1135 The Owner gave evidence in the November trial that she saw the cellar floor
“encrusted with red clay and rusty marks, rusty spray marks”.547 When regard is
had to what she said next, her evidence does not establish the floor was sealed to
remedy damage to the works during construction, contrary to her unpleaded
contention that it was. Rather, it should be inferred the Owner accepted the
Architect’s recommendation to do it because “Mr Williams said it would look
better it was sealed”548 and anyway “they would be able to clean the marks off the
floor”.549
546 Trial JTB 90.1184 referred to in MFI R53. Whilst not formally received as an exhibit, it should be
treated as one.
547 T1875.38-1876.1.
548 T1876.4-.5.
549 T1876.19-.21.
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1136 The documentary evidence also does not assist her contentions. It shows that
the Architect and Owner discussed sealing the cellar floor with an epoxy, gloss or
semi-gloss varnish at a site meeting on 19 May 2014 and the Builder was instructed
by AI:17 to investigate options for sealing the cellar floor slab. There is no
mention of any complaint about irremediable damage.
1137 The Arbitrator considered the Owner’s claims as regards cracking to the
cellar floor at Award [2:1658] to [2:1679] and in the course of considering
Referred Item CSS 14.5, made findings at Award [2:1162] and [2:1677], [2:1678]
about the applicability of Section D – Concretor of the Architect’s Specification
requiring Type 1 exposed and polished concrete floors.
1138 It is apparent the Arbitrator misread the Architect’s Specification and her
findings at Award [2:1677] and [2:1678] to the effect that sealing was part of the
original scope of works under the Building Contract should therefore not be
adopted as part of this Court’s judgment. This is because clause D.04.09 provides
for the different finishes to be used where specified in the Architectural schedule
of finishes, including exposed and polished concrete (Type 1) and exposed trowel
finished (Type 4). The schedule does not specify any requirements at all for the
cellar floor. However, the Contract Drawings specify a steel trowel finish to the
cellar floor and steps.550 By clause D.04.09, a Type 4 finish is to be used in the
cellar where the concrete surface is to be exposed.
1139 There is good reason not to adopt findings of the Arbitrator that are
inconsistent with this Court’s findings. Not adopting these findings does not affect
the Arbitrator’s other findings as regards CSS Item 15.4 because the Architect gave
instructions to seal the cellar floor as found by the Arbitrator at Award [2:1677].
1140 On the evidence in the Arbitration and the trial, it should therefore be
concluded this is properly a claim for works ‘extra’ to the Building Contract done
at the Owner’s request, which works she has accepted without complaint and for
which has had the benefit of without payment. Moreover, the Owner’s complaints
about cracking were remedied by the cellar floor being re-sealed.
1141 In assessing the Builder’s claim, the Architect has allowed $667.00 excluding
GST. In the absence of any challenge to the quantum assessed, the Architect’s
assessment of this cost should be accepted as bona fide and a fair and reasonable
price for the works done.
Extras (r) – Footings & Reinforcement - Front Fence - $4,996.75 ex GST
1142 For the following reasons, the Builder was entitled to the payment made in
the amount of $4,996.75 excluding GST as approved and certified by the Architect
in PPC 12 for this item.
550 Exhibit R1 Drawings W02A and W07A, Section B.
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1143 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1144 In its defence, the Architect alleges that during the review of the design of
the front fence at the Owner’s request, the engineer advised changes to the size of
the brick piers. The work was additional and the amount allowed appropriate.
1145 No oral or expert evidence was adduced and none of the parties addressed
this issue in closing submissions.
1146 Clause E.28 of the Architect’s Specification provided the requirements for
the front fence including the construction of brickwork to form pillars and walls
forming new masonry generally as shown in the drawings.
1147 The documentary evidence shows that the Architect sent the Builder revised
structural design drawings for the front fence by email on 29 May 2014. This
detail was not in the original drawings. AI:17 dated 3 June 2014 records that the
Architect was to follow up the gate pillar layout among other things. Further
revised drawings showing changes made by the engineer to the dimensions of the
entry gate and end piers and gate posts were sent by the Architect to the Builder
by email dated 6 June 2014.
1148 These emails and drawings constitute written instructions given by the
Architect to vary a dimension of the works, enlivening the Architect’s discretion
to adjust the contract under clause H6 of the Building Contract. The Owner’s
challenge on the No Instruction Ground therefore fails.
1149 In exercise of the discretion conferred by clause H6, the Architect approved
the variation in the amount of $4,996.75 excluding GST, which the Owner knew
from the Variation Schedule she received in October 2014. In the absence of any
challenge to the quantum assessed, the Architect’s assessment of this cost should
be accepted as bona fide and a fair and reasonable price for the works done.
Extras (s) – Additional Mouldings - Front Fence - Nil
1150 For the following reasons, the Builder was not entitled to the payment made
in the amount of $862.50 excluding GST as certified by the Architect in PPC 12
for this item.
1151 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1152 In its defence, the Architect alleges additional mouldings were required as
part of the revised design of the front fence, with her agreement and the amount
allowed is appropriate.
1153 No oral or expert evidence was adduced and none of the parties addressed
this item in closing submissions.
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1154 Clause E.28 of the Architect’s Specification provided the requirements for
the front fence including wrought iron panels as generally shown in the Contract
Drawings. Clause FM.08 provided for allowance of a PC Sum of $30,000.00 to
supply and install selected wrought iron fence panels and gates, with details to be
prepared during construction, with all details to be confirmed with the Architect
on-site prior to commencement of fabrication.
1155 The work the subject of the approved variation if not specified, is a variation
within the meaning of the Building Contract and is covered by the allowance for a
PC Sum.
1156 The documentary evidence shows that the Architect sent the Builder revised
structural design drawings for the front fence by email on 29 May 2014. This
detail was not in the original drawings as is confirmed by clause E.28. AI:17 dated
3 June 2014 records that the Architect was to follow up the wrought iron design
for the front gate/fence among other things. The Architect corresponded with the
Owner by email dated 12 June 2014 about replicating the design of a wrought iron
fence on Strangways Terrace in the front fence, to which the Owner responded
with: 551
Will the fabricator make up a sample of wrought iron spear, twist and knuckle for us to see
before going ahead - all looks good on paper but would like to see sample?
1157 There was further correspondence between the Architect and the Owner on
18 June 2014 confirming the details of the finish, to which the Owner responded
that she appreciated the detailed explanations and recommendations. There is,
however, no separate instruction to the Builder about any change to the moulding
resulting in any additional cost or any evidence of additional cost to the total cost
invoiced by the wrought iron subcontractor that has been assessed as a PC Sum.
1158 The Builder’s claim to be entitled to payment for a variation under the
Building Contract for this approved variation is not proven.
Extras (t) – Moulded Timber Handrail - Nil
1159 For the following reasons, the Builder was not entitled to the payment made
in the amount of $1,725.00 excluding GST as approved and certified by the
Architect in PPC 12 for this item.
1160 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1161 In its defence, the Architect alleges that at an on-site meeting, additional work
was required at the Owner’s request to fit a continuous handrail mouldings. When
an estimate was provided, butt joining the corners was proposed and accepted by
Dr Clarke for the Owner. In closing submissions, the Architect identified
551 Exhibit TP1.3.123.
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documentary evidence proving the Owner initiated the change, knew about the
proposed cost and informally approved the Builder constructing “a wooden
handrail with abutment joins around the hall corners”552 and required an estimate.
1162 The change to the detail of the handrail is a variation within the meaning of
the Building Contract. There is no written instruction under section J of the
Building Contract and no written quotation for the cost in evidence, although there
apparently was one.
1163 The Builder’s claim to be entitled to payment for a variation under the
Building Contract for this approved variation is not proven.
Extras (u) – Additional Pool Items - $13,695.45 ex GST
1164 For the following reasons, the Builder was entitled to the payment made in
the amount of $13,695.45 excluding GST as approved and certified by the
Architect in PPC 12 for this item.
1165 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1166 On 14 February 2013, the Architect instructed the Builder by AI:02 to
proceed with a revised quotation from Mermaid Pools for swimming pool works
priced separately in the Building Contract. After consulting the Owner in writing,
the Architect by AI:02 instructed the Builder in writing to proceed with added pool
options to be supplied by Mermaid Pools totalling $13,100 including GST
comprising a Magnapool System ($1,800 including GST), Cleardeck System
($4,400 including GST) and Automation ($6,900 including GST).
1167 The Owner’s challenge on the No Instruction and Builder’s Non-compliance
Grounds therefore fails.
1168 The Cleardeck System superseded the need for the specified553 solar blanket
and roller or a liquid blanket and chemicals allowed as a PC Sum of $1,500.00.
1169 Under clauses J5 and/or H6 of the Building Contract, the Builder assessed
the Builder’s claim and certified an amount of $13,695.45 excluding GST as
payable. This amount is calculated by taking the GST exclusive price of
$11,909.09 quoted by Mermaid Pools and adding 15% ($1,786.36) as an allowance
for overheads and profit in accordance with clause H2.1.b.2 and item 17 of
Schedule 1 of the Building Contract.
552 Exhibit TPI.3.133.
553 Clause A12.05(e) of the Architect’s Specification.
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Extras (v) – Supply & fix Additional LVL & Fascia - Nil
1170 For the following reasons, the Builder was not entitled to the payment made
in the amount of $1,725.00 excluding GST as approved and certified by the
Architect in PPC 12 for this item.
1171 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1172 In its defence, the Architect alleges the works the subject of the approved
variation was required due to level changes arising from discrepancies between the
survey drawings and the existing floor level of the church hall. The change to the
works was necessary to not have the roof cut through the hall entry door. Further
the Owner approved the work and the amount allowed is appropriate.
1173 None of the parties adduced any oral or expert evidence or made submissions
about this variation.
1174 The change to the works is a variation within the meaning of the Building
Contract. There is no written instruction from the Architect to the Builder under
section J of the Building Contract and no written quotation for this item in
evidence.
1175 The Builder’s claim to be entitled to payment for a variation under the
Building Contract for this approved variation is not proven.
Extras (w) – Additional Plantation Shutters - Nil
1176 For the following reasons, the Builder was not entitled to the payment made
if any amount was approved and certified by the Architect in PPC 12 for this item.
The Builder’s Statement 1229 included an amount of $913.99 excluding GST for
additional shutters to the north window in the church hall. However, this item was
not included in the October 2014 Variations Schedule. It cannot be resolved
whether the Architect approved a variation claim for this item or not as part of the
amount certified for approved variations.
1177 In her pleading, the Owner relies on the No Instruction and Builder’s Non-
compliance Grounds.
1178 The Architect does not address this approved variation in its defence other
than by its generic plea that the cost submitted by the Builder was fair and
reasonable, the Architect was entitled to adjust the contract price under clause H6,
the works done as the subject of an implied or express request of the Owner and
she has had the benefit of that work.554
1179 The Owner correctly submits in closing that the plantation shutters to the
north window of the church hall were specified in the Contract Drawings (W04
554 Architect’s Eighth Defence Annexure A [43].
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and W10). On the evidence, the Builder’s claim for payment should have been
rejected by the Architect as being work within the existing scope of works.
Extras - Summary
1180 On the evidence before the Arbitration and the Court, by reason of the
determinations made above, the Builder was entitled to be paid $59,102.61
excluding GST for the challenged variations approved and certified in PPC 12 as
shown in the table below.555
Extra Description Assessed Determined
(a) Paint waterproofing around foundation $ 575.00 $ 575.00
(b) Supply & Fix 2 LVL Beams $ 632.50 $ 632.50
(c) Additional Steel $ 2,875.00 $ 2,875.00
(d) Add Steel, Reinforcing & Concrete for Stair $ 4,965.13 $ 4,965.13
(e) Boundary Block Wall Extra Height $ 1,667.50 $ 1,667.50
(f) Adjust & Modify Lift Doors $ 1,437.50 $ 1,437.50
(g) Supply & Fit Steel Frame for Safe $ 552.00 $ 552.00
(h) Wall Tiles – Changed to ‘Cotton’ $ 3,176.74 $ 3,176.74
(i) Wall Tiles – Pantry & Laundry $ 575.00 $ 575.00
(j) Additional Moulding to Front Door $ 678.50 $ 678.50
(k) Cut Tiles for Porch & Balcony $ 920.00 $ 920.00
(l) Labour to Fit Stone Window Rebates $ 1,035.00 $ 1,035.00
(m) Rear Verandah Lining – Materials Only $ 2.415.00 $ 2,415.00
(n) Materials & Labour Side Fence $ 6,220.45 $ 6,220.45
(o) Water Feature $ 5,842.00 $ 5,842.00
(p) Not challenged $ 747.50 $ 747.50
(q) Sealing Cellar Floor $ 667.00 $ 667.00
(r) Additional Requirements Front Fence $ 4,996.75 $ 4,996.75
(s) Additional Moulding Front Fence $ 862.50 Nil
(t) Moulded Timber Handrail $ 1,725.00 Nil
Electrical items556 $ 5,428.58 $ 5,428.58
(u) Additional Pool Items $13,695.45 $13,695.45
(v) Supply & Fix Additional LVL & Fascia $ 1,725.00 Nil
(w) Plantation Shutters $ 1,092.50 Nil
Total Validly Approved Variation Claims $59,102.61
1181 It follows that the amount for Approved variations of $59,253.66 excluding
GST certified in PPC 12 was overstated by $151.05.
1182 The Builder’s pleaded contention that errors in the Architect’s certification
for approved variations remain subject to final adjustment in the final certificate is
correct. The Architect should review the issues identified above and make an
adjustment for the overstatement of for Approved variation of $151.05 excluding
GST accordingly.
555 Variation (p) was not challenged.
556 For convenience, addressed with PC Sum Adjustment (p) below.
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PC Sum Adjustments
Pleaded Issues
1183 In her Fifth Defence, the Owner alleges the Builder is not entitled to
adjustments for PC Sum items certified in PPC 12 that increase the contract price
by $18,230.70 excluding GST. The Owner does not challenge any adjustments
assessed and certified in her favour.
1184 The Owner goes further than challenging the amounts certified in the
Builder’s favour in excess of any PC Sum and challenges the Builder’s entitlement
to be paid at all for most PC Sum items557 variously by reason of the Builder’s
alleged failure to provide a quotation as required by clause K2.2 of the Building
Contract, the absence of an Architect’s instruction, and failure to produce tax
invoices to establish the costs incurred.
1185 In effect, the Owner claims a credit for the full amount of PC Sum items
allowed under the Building Contract and the total of the adjustments assessed and
certified in favour of the Builder despite generally such works being done with her
knowledge and approval. Her pleaded summary of claims for PC Sum items totals
$100,582.45 excluding GST.558 These items are all alleged to be losses incurred
by the Owner caused by the Builder’s breach of contract559 or in the alternative,
restitutionary claims to which the Owner is entitled for money had and received.560
1186 In reply, the Builder denies the Owner’s claims and says further each PC Sum
adjustment has been approved by the Architect, has not been disputed by the
Owner under clause A8 and, in the alternative, if the adjustment is not valid under
the Building Contract, the Builder is entitled to an adjustment to ensure the
Defendant is not unjustly enriched.561
1187 The Builder further alleges that if the Architect’s figures or certifications
were in error and not allowed under H6 of the Building Contract, they are subject
to adjustment at final certificate, and by reason of the Owner’s alleged acts of
prevention, the Builder has been prevented for completing the works and the
Architect from issuing a final certificate including notifying the Owner of her
obligation to release any remaining security.562
1188 As against the Architect, the Owner alleges the Architect’s certified contract
price adjustments for PC Sums in PPC 12 to which the Builder was not entitled563
and were not otherwise payable, causing her to suffer loss and damage if she is
557 Fifth Defence [44a]-[56a]. For Airconditioning only the excess of $950 in the Builder’s favour over the
PC Sum is challenged, see [54] and [63hh]. No claim was made for PC Sums for pool tiles and the
water filter.
558 Ibid [63w]-[63jj].
559 Ibid [64].
560 Ibid [65].
561 Builder’s Reply to Fifth Defence [43]-[56].
562 Ibid [66A.2].
563 Ninth Third Party Claim [24b].
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ultimately liable to pay the Builder’s Invoice 540.564 The Owner sets out more
detailed allegations in Annexure D to her Third Party Claim for each PC Sum
adjustment challenged.
1189 In its defence, the Architect denies any breach of retainer or its common law
duty of care, relies on clause A8 as barring any dispute over its certification of PC
Sum adjustments565 and relies on the pleas made in Annexure A to its defence in
response to the Owner’s Annexure D for each specific PC Sum item.
1190 There is no dispute about whether the works for which a PC Sum allowed
were done or not, although the Owners makes some limited complaints about the
quality of some of the relevant work. The dispute is essentially a payment issue
based on contractual terms.
Submissions
1191 The Owner submits, “by parity of the reasoning”566 for approved variations
that the Builder is precluded from claiming any adjustment to PC Sums it is favour
or for payment of any work the subject of a PC Sum unless there has been strict
compliance with the Building Contract for adjustment of the contract price.
1192 In support of her contentions, the Owner first emphasises the requirement in
clause K2.1 that nothing is to be done for which a PC Sum is included in the
contract except in accordance with an Architect’s instruction. She next refers to
the provisions in K2.2 and K4 and submits they are conditions precedent to any
entitlement of the Builder to an adjustment of a PC Sum in its favour. The Owner
alleges the Builder has failed to comply with these provisions and she is therefore
entitled to a credit for all PC Sums because of the Builder’s non-compliances.
1193 The Builder and Architect adopt the same defences as for approved
variations.
Consideration
1194 None of the parties’ contentions address the proper nature of a PC Sum or
the proper construction and application of the relevant provisions of the Building
Contract to their disputes about PPC 12.
1195 Conceptually, PC Sums are estimates of the cost of work or materials
included in a fixed contract price for the purpose of providing a known price for
the whole of the works contemplated by the relevant building contract. PC Sums
are intended to be adjusted when the actual cost is known and instructed to be done
in accordance with the terms of the relevant contract during the course of the
564 Ibid [25a].
565 Eighth Defence [18.5].
566 Owner’s Final Closing [76].
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works. PC Sums are included in the fixed contract price and are to be adjusted in
accordance with the terms of the relevant building contract.
1196 Here, section K of the Building Contract provides for the adjustment of
provisional and prime costs sums for works included in the Builder’s scope of
works and the fixed contract price.
1197 These terms are relevantly defined in the Building Contract as follows:567
.1 A *provisional sum …is a sum exclusive of GST included in the contract for:
a. performance of foreseeable *necessary work including the supply of materials
not fully described by the *contract documents on the date that this contract was
executed.
…
.2 A *prime cost sum … is a sum exclusive of *GST included in the contract for:
a. a foreseeable item of material or equipment, the precise identity of which was not
known or had not been specified as the date of the contract …
1198 PC Sums are not allowances for work that may not be done or contingencies
arising during construction. The latter is expressly provided for clause A.05.10 of
the Architect’s Specification as follows:
Allow the sum specified in the PC Sums for contingencies which may arise during
construction. This is to be deducted wholly or in part if not so used.
1199 Allowances for individual PC Sums included in the Building Contract are
specified in various clauses throughout the Architect’s Specification.
1200 A schedule of the PC Sums included in the Building Contract is found in
clause A.11 of the Architect’s Specification as follows.568
A.11 SCHEDULE OF PRIME COSTS, PROVISIONAL OR OTHER SUMS
CLAUSE ITEM AMOUNT
A.05.10 Contingency Sum $40,000.00
A.12.06 Pool Tiles (supply only) $ 40.00/sqm
A.12.06 Solar Blanket (or similar app) $ 1,500.00
E.12.05 Letter box and street number (supply only) $ 500.00
E.12.08 Repointing Hall stonework $ 3,000.00
E.12.09 Internal wall repairs to Hall $ 1,500.00
FM.08 Wrought iron gates & fence panels $30,000.00
FM.10 Wrought iron balustrade panels $ 6,000.00
FM.11 Wrought iron security doors (supply only) $ 5,000.00
G.19 Window furniture (supply only) $ 500.00
567 Clause K1.
568 The reference to clause A.12.06 should be clause A.05.
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G.24 Door Hardware (supply only) $ 6,000.00
G.27 Cellar wine racks $ 5,000.00
G.29 Stairs to Lobby (old Hall) $ 3,000.00
G.31 Timber repairs to old Hall $ 2,000.00
Hs.06.10 Roof repairs to old Hall $ 1,000.00
J.09.17 Walter filter (supply only) $ 750.00
K.02 Air Conditioning $58,000.00
L.05.10 External Wall Lights (supply only) $ 250.00/fitting
L.05.10 External Wall Lights (supply only) $ 200.00/fitting
T.02 Lift fitout $ 2,000.00
1201 Some PC Sum items are for the supply of materials (such as pool tiles or
handles etc) that must be supplied to complete the works in circumstances where
the design details were not finally decided at the time of entry into the Building
Contract.
1202 Clauses K1.3 and K1.4 provide that the Builder agrees it has made adequate
allowance in the cost of the building works for the PC Sums including but not
limited to its preliminaries, overhead and profit.
1203 Clause K2 provides:
.1 … nothing is to be done for which a *provisional sum or *prime cost sum has been
included in the contract except in accordance with an instruction from the architect.
.2 The architect may instruct the [Builder] to provide a written quotation for anything
for which a *provisional sum or *prime cost sum has been included in the contract.
1204 Clause K2.1 should be read in context and purpose as contemplating that an
instruction may be given by the Architect where it is necessary for work or aspects
only of the works the subject of a PC Sum to proceed or not proceed, as the case
may be.
1205 In some cases, it is clear from the terms of the Architect’s Specification that
a further instruction to proceed with the installation of a PC Sum Item to be
supplied is not required when the item is later provided. This is because all that is
required to proceed is a future design decision, the Owner’ selection of the PC Sum
item to be supplied and its supply. A prime example is PC Sum item E.12.05 for
the letter box and street number. The Builder is obliged to install a letterbox, but
the letterbox is yet to be selected by the Owner.
1206 The requirement that nothing is to be done for a PC Sum item except in
accordance with an instruction from the Architect should not be read as bluntly as
the Owner would have it. It is not a prohibition on doing works the subject of a
PC Sum absent an Architect’s instruction, particularly where the Architect’s
Specification gives express instructions for the works to be done. What is required
by clause K2.1 is that the specified works are to be done in accordance with the
Architect’s instructions. That is consistent (and not inconsistent) with the
Architect’s instructions.
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1207 What further instructions may be required for any PC Sum item to proceed
will depend on the terms of the Architect’s Specification.
1208 Clauses K2.4 and K2.5 then provide for two circumstances in which an
adjustment to the contract price may arise following an instruction from the
Architect for a PC Sum item. The first arises under clause K2.4 where the
Architect agrees with the Builder’s quotation, and then must issue an instruction
to proceed accepting the quotation. The second arises under clause K2.5 where
the Architect does not agree with the quotation or has not instructed the Builder to
provide a quotation, in which case the Architect may instruct the Builder to
proceed and then must issue a decision specifying an adjustment to the contract
price in accordance with clause H4. Clause H4 requires the Architect to issue a
written decision to the parties specifying the adjustment to the contract price
1209 The only mechanism for adjustment for a PC Sum is relevantly provided in
clause K4:569
.1 The architect must adjust the *cost of building work to take account of any difference
between a *provisional sum or *prime cost sum and:
a. the accepted quotation;
b. the architect’s assessment of a claim under subclause K2.5;
…
as applicable. The architect must adjust the *cost of building work in the next
progress certificate.
.2 If the assessed cost of performance of the *necessary work…or supply and
installation is more than the *provisional sum or *prime cost sum, the extra cost will
be increased by [10%]570 and added to the *cost of the building work.
.3 If the assessed cost of performance of the *necessary work…or supply and
installation is less than the *provisional sum or *prime cost sum, the difference will
be deducted from the *cost of the building work.
1210 The scheme of section K is that the Architect’s assessment of an adjustment
(whether an ‘over’ or ‘under’) can only proceed where there is an accepted written
quotation or an assessment made under clause K2.5. Both scenarios require an
Architect’s instruction to be given to proceed with the works the subject of the PC
Sum.
1211 For some PC Sum items, the Architect’s Specification expressly provided for
the PC Sum item to be installed with all details, fitting methods, dimensions and
finished to be discussed and confirmed on-site with the Architect. However, on-
569 Clause S1 defines *cost of building work as the actual net cost of the *works excluding any amounts for
*GST.
570 This is the default percentage shown in item 19 of Schedule 1.
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site instructions do not satisfy the preconditions for an adjustment under section K.
Clause A7 of the Building Contract requires Architect’s instructions to be in
writing and the order of precedence provided by clause B2 favours the general
conditions over the Architect’s Specification.
1212 Absent strict compliance with the scheme of section K, neither party is
entitled to an adjustment in its favour for a difference between a PC Sum where
there is no relevant accepted quotation or clause K2.5 decision following the
Architect’s instruction to proceed, as the case may be.
1213 The result where the preconditions to an adjustment under clause K4 are not
satisfied is that the fixed contract price remains the same and neither party is
entitled to a PC Sum adjustment. This is because the PC Sum is already included
in the fixed contract price and the contractual process in section K is for adjustment
of the contract price for PC Sum works.
1214 In this way the parties’ bargain for the fixed price for the works under the
Building Contract is preserved.
1215 Contrary to the Owner’s contentions, she is not entitled to a credit for a lesser
cost for a PC Sum item where there has been no adjustment in accordance with the
Building Contract. She cannot approbate and reprobate by insisting on contractual
compliance only when it favours her and contend the Builder is disentitled to an
adjustment where the difference is more but still claim an entitlement to an
adjustment where the difference is less.
1216 Finally, it should be appreciated that any failure by the Architect to
administer the contractual process for a PC Sum adjustment strictly (whether by
not giving the requisite instruction to proceed or not proceed or otherwise) may
constitute a breach of the Architect’s retainer and result in liability to the Owner
depending on the circumstances. The Owner’s claims against the Architect for its
failure to strictly comply with the contractual process for an adjustment of a PC
Sum in her favour are addressed in Part G below.
1217 In the absence of a valid adjustment for a PC Sum under the Building
Contract, the remaining question is whether either party has in the relevant
circumstances a claim in restitution.
1218 Having regard to the fundamental principles discussed above that a claim in
restitution is not available where a valid and enforceable contract governs the
parties’ rights to the situation between them, it should be concluded that neither
party can bring a restitutionary claim for adjustments to the contract price for a PC
Sum, whether as a claim for work done or goods supplied or for money had and
received.
1219 Neither the Builder or Owner advanced a claim in waiver or estoppel that
might have provided relief on the proven facts.
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1220 Finally, there is no contractual requirement that the Builder ‘should produce
tax invoices to establish the cost incurred’ as alleged by the Owner. In most cases
here where work has been done by subcontractors or goods supplied, there are
relevant tax invoices in evidence. Accordingly, the point was not pressed at trial
or in closing submissions by the Owner and need not be further addressed.
Facts Generally
1221 In this case, the evidence shows that the Architect gave instructions about
works the subject of PC Sums at site meetings with the knowledge and approval
of the Owner but did not confirm some instructions in writing in accordance with
clause A7.1 of the Building Contract. It follows that any work for which a PC
Sum has been included in the Building Contract and done by the Builder without
an Architect’s (written) instruction constitutes a breach of contract.
1222 Generally this is not the Owner’s complaint. Her claims for PC Sums only
concern adjustments to the contract price and her payment obligations under the
Building Contract where there has not been strict compliance with the
requirements of section K.
1223 As already mentioned, the Owner accepted in evidence that she understood
the concept of prime cost and provisional sums. Her understanding is recorded in
her notes of meeting with the Architect on 30 May 2014:571
UNDERS/OVERS: Awaiting Rocky’s unders/overs
1224 The Owner was aware of the Schedule of PC Sums in clause A11 of the
Architect’s Specification. On 3 June 2014, the Owner asked Ms Crowden to email
her a copy of the PC Sums page from the contract.572
1225 On 13 October 2014, the Architect emailed the Owner its then current
summary of the PC Sums (and variations) (October 2014 PC Sums Schedule)
pending the Builder’s final claim, asking her to telephone if she had any queries
about any of these items. She did not query any of these items, nor issue a clause
A8 notice of dispute.
1226 Ultimately, the Owner’s knowledge and approval of any PC Sum works is
not relevant to the question of contractual compliance absent any pleaded claim of
waiver, estoppel or variation of contract on general principles.
PC Sum Adjustment (a) – Solar Pool Blanket
1227 In the Builder’s Statement 1229 no deduction was made for the PC Sum of
$1,500.00 for a solar pool blanket allowed in clause A.12.06 of the Architect’s
Specification. It was noted as part of the claim for extras (a) of additional pool
items. In assessing the Builder’s related variation claim, the Architect correctly
571 Exhibit R3.117 page 1250.
572 Exhibit TP1.3.118.
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recorded in the October 2014 PC Sums Schedule an adjustment in the Owner’s
favour for the deletion of the solar pool blanket from the scope of works.
1228 As discussed earlier for extras (u) [additional pool items],573 there was a
relevant quotation and Architect’s instruction to proceed with the quoted works
satisfying the precondition for an adjustment under clause K4. A solar pool
blanket was not required by reason of the ‘extra’ Cleardeck System. Its deletion
was correctly assessed by the Architect as a deduction from the cost of the building
work and an adjustment to be made in the Owner’s favour under clause K4.3.
1229 The $1,500.00 PC Sum should have been included in the Architect’s
certification of adjustments for PC Sums made in PPC 12 as a credit in the Owner’s
favour.
PC Sum Adjustment (b) – Letter Box & Street Number
1230 The Architect’s assessment of an adjustment of $644.00 excluding GST in
favour of the Builder is recorded in the October 2014 PC Sums Schedule. This
amount corresponds with the claim made in the Builder’s Statement 1229 and was
calculated by deducting the PC Sum from the claimed cost.
1231 The adjustment was validly assessed and certified under the Building
Contract in the following circumstances.
1232 In clause E.12.05 of the Architect’s Specification a PC Sum of $500.00
excluding GST was allowed for the supply only of a letterbox slot, box and street
numbers. Clause E.28 provided that the Builder is to allow to build into selected
gate pillar the selected letterbox as supplied by Adelaide Letterboxes.
1233 The Builder was therefore obliged to install the PC Sum item by the terms of
the Building Contract. Only the supply of the letterbox selected by the Owner was
necessary for the PC Sum works to proceed.
1234 AI:17 dated 3 June 2014 records the Architect’s instruction that it would
follow up the ‘letterbox’, implicitly referring to the supply of the letterbox slot and
box by the Owner. The Owner by email dated 12 June 2014 approved the details
for additional lettering for the name ‘Rose Hall’ and the positioning of it, the
number and the letterbox. The Architect’s email to the letterbox supplier dated
7 July 2014 confirming the requirements for the letterbox was copied to the
Builder. An email chain sent concerning the supply of the lettering was then
exchanged between the lettering supplier, the Owner, the Architect and the Builder
on 8 August 2014. The Architect’s instruction given on 16 September 2014 of
outstanding items instructs among other things “21.13 Install letterbox”.574
573 See [1166] above.
574 Arbitration Exhibit R15.
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1235 In context of the Builder’s obligations under clause E.28 of the Architect’s
Specification, the 7 July and 8 August 2014 emails and 16 September 2014
Architect’s instruction constitute the requisite instruction from the Architect to the
Builder for the purposes of clauses K2.1 and K2.4 to proceed with the installation
of the letterbox.
1236 There is no evidence that the Builder was instructed to provide a quotation
for the letterbox, numbering or additional lettering, likely because the Architect
and Owner dealt directly with the supplier/s of the letterbox, numbering and
lettering.
1237 The Owner’s complaint in oral evidence that she required a smaller letterbox
should be given no weight in light of the contemporaneous evidence of her
participation in the selection of the letterbox slot, box and numbering.
PC Sum Adjustment (c) - Repointing Hall Stonework
1238 The claim made in the Builder’s Statement 1229 is for a credit of $2,650,00
excluding GST to the Owner calculated by deducting the claimed cost of $350.00
from the PC Sum of $3,000.00.
1239 A PC Sum of $3,000.00 excluding GST was allowed in clause E.12.08 of the
Architect’s Specification for selective repointing of existing stonework to the
Garage 1 section of the church hall generally as directed on-site by the Architect.
The stone mason was to prepare sample panels for the Architect to approve the
mortar mix, technique and finish.
1240 The elevation drawings in the development application submitted to the
Council and approved showed the church hall walls were to be repointed ‘as
required’.
1241 The third addendum to the Building Contract dated 13 November 2012
specified additional works in addition to the required works and PC allowances
allowed in the Building Contract, and as outlined to the scope of works outlined in
‘Extent of Works in Contract for church hall’ as per the special conditions. The
special conditions reiterated that the repair and repoint was to be ‘as required’ and
was the subject of the PC Sum of $3,000.00 excluding GST.
1242 It was expressly provided that the additional works were only to be carried
out after discussions and the approval for the Architect and the Owner.
1243 Ultimately, the Owner challenges the Builder’s entitlement to an adjustment
of the contract price on the basis that the quality of the workmanship was not in
accord with clause A.09.01 of the Architect’s Specification and the relevant
development application. Those issues are addressed in Parts F and G below.
1244 In response, the Architect submits the Arbitrator found the Owner was aware
of and approved the limited repointing work done by the Builder. Whilst that may
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be the case, the question to be addressed here is whether the contractual
requirements for an adjustment for a PC Sum were met.
1245 On the evidence, they were not. Specifically, there was no written instruction
given by the Architect for the works to proceed. Accordingly, neither party is
entitled to an adjustment to the PC Sum for this item because the preconditions to
an assessment under clause K4 have not been satisfied.
PC Sum Adjustment (d) – Church Hall Plastering
1246 The Architect’s assessment of an adjustment of $6,400.00 excluding GST in
favour of the Builder is recorded in the October 2014 PC Sums Schedule. This
amount corresponds with the claim made in the Builder’s Statement 1229 and was
calculated by deducting the PC Sum of $1,500.00 from the claimed cost of
$7,900.00 excluding GST.
1247 A PC Sum of $1,500.00 excluding GST was allowed in clause E.12.09 of the
Architect’s Specification for the selective patching and repairs to the internal walls
of this two story section of the church hall as directed by the Architect on-site.
1248 None of the parties adduced any evidence about this issue at trial. In closing
submissions, the Architect drew the Court’s attention to the findings made by the
Arbitrator that the Owner knew these works were done and claimed as a PC Sum.
Whilst this should be accepted, the question to be addressed is whether the
contractual requirements for a PC Sum adjustment were met.
1249 On the evidence, they were not. Specifically, there was no written instruction
given by the Architect for the works to proceed. Accordingly, neither party is
entitled to an adjustment to the PC Sum for this item because the preconditions to
an assessment under clause K4 have not been satisfied.
PC Sum Adjustments (e) & (f) - Wrought Iron Panels
1250 For the following reasons, the PC Sum adjustments for these items were
validly assessed and certified under the Building Contract.
1251 The Architect’s assessment of an adjustment of $1,750.00 excluding GST in
favour of the Owner for wrought iron gates & fence panels and $220.00 excluding
GST for wrought iron balustrade panels is recorded in the October 2014 PC Sums
Schedule. These amounts correspond with the claims made in the Builder’s
Statement 1229 and were calculated by deducting the claimed costs from the PC
Sum.
1252 It is apparent the Architect’s assessment of the adjustment was made on the
basis of the subcontractor’s invoice for the invoiced cost of $28,250.00 for the
wrought iron for the fence and gate and $5,780.00 for the internal balustrade,
handrail and brackets, both excluding GST.
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1253 Clause E.28 of the Architect’s Specification provided the requirements for
the front fence and gate including wrought iron panels as generally shown in the
Contract Drawings. Clause FM.08 provided for an allowance of a PC Sum of
$30,000.00 to supply and install selected wrought iron fence panels and gates.
Clause FM.09 similarly provided for the supply and installation of wrought iron
balustrading for the front balcony as shown in the Contract Drawings.
1254 Details for both works and supply were required to be prepared during
construction, with all details to be confirmed with the Architect on-site prior to
commencement of fabrication.
1255 Clause FM.10 provided for an allowance of a PC Sum of $6,000.00 to supply
and install wrought iron balustrade panels to the internal stairs in the house and the
stair in the lobby of the church hall. Brackets for the house stair were to be
included in the PC allowance.
1256 The documentary evidence shows the Owner’s close involvement during
May and June 2014 in the design of the wrought iron panels ultimately installed in
the front fence, gates, balcony and House internal stair and church hall balustrading
as referred to above in context of extras (s).575 The Architect drew the Court’s
attention to AI:17 dated 3 June 2014 recording that the Architect was to follow up
among other things, internal balustrade panel and the wrought iron design for the
front fence and gate. In context of the surrounding correspondence, this instruction
should be understood as communicating that the Architect would contacting the
wrought iron subcontractor directly about the design approved by the Owner on
about 18 June 2018.
1257 Architect’s instructions issued between February and August 2015 as regards
defects with the paintwork were tendered in the Arbitration and show the PC Sum
wrought iron was ultimately supplied, installed and (some) remedial works done.
The Owner’s defect claim is addressed separately in Part F below.
1258 In context, AI:17 is an instruction to proceed with the relevant PC Sum works
within the meaning clauses K2.1 and K2.4.
1259 There is no evidence that the Builder was instructed to provide a quotation
for the wrought iron panels. This is not surprising given the direct dealings
between the Architect and wrought iron subcontractor with the Owner’s
knowledge and approval to finalise their design.
1260 As mentioned, the Architect’s assessment of the claim for an adjustment is
recorded in the October 2014 PC Sums Schedule and constitutes a written decision
within the meaning of clause H4 and K2.5 for the purposes of an adjustment under
clause K4.
575 See [1156] above.
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PC Sum Adjustment (h) – Window Furniture
1261 The Builder’s Statement 1229 claims an adjustment of $1,345.00 excluding
GST in favour of the Builder calculated by deducting the PC Sum from the claimed
cost of $1,845.00.
1262 Clause G19.01 of the Architect’s Specification included an allowance for a
PC Sum of $500.00 excluding GST for selected window furniture covering items
such as deadlocks.
1263 The Owner alleges the initially supplied window furniture did not comply
with the specification and were replaced. This not a basis for disputing the
Architect’s adjustment to the PC Sum allowance because ultimately compliant
window furniture was supplied.
1264 No further evidence was adduced by any party and the Builder and Architect
made no submissions on this issue.
1265 On the evidence, the question of compliance with the contractual
requirements for an adjustment to the contract price was not addressed.
Accordingly, neither party is entitled to an adjustment to the PC Sum for this item
because the preconditions to an assessment under clause K4 have not been
satisfied.
PC Sum Adjustment (i) – Door Hardware
1266 The Architect’s assessment of an adjustment of $4,058.55 excluding GST in
favour of the Builder for door hardware is recorded in the October 2014 PC Sums
Schedule. This amount corresponds with the claim made in the Builder’s
Statement 1229 and was calculated by deducting the PC Sum from the claimed
cost.
1267 Clause G.24 of the Architect’s Specification included an allowance for a PC
Sum of $6,000.00 excluding GST for the supply only of door furniture such as
lever sets and pull handles.
1268 No party made any submissions on this topic.
1269 Handles Plus provided the Architect with a quotation for door furniture on
7 May 2014. The quotation is for a total of $7,655.52. On the evidence, it is not
possible to resolve how the quotation relates to the PC Sum and the supply of
handles by the Builder. The documentary evidence about defects shows door
furniture was ultimately supplied.
1270 On the evidence, the question of compliance with the contractual
requirements for an adjustment to the contract price was not addressed.
Accordingly, neither party is entitled to an adjustment to the PC Sum for this item
because the preconditions to an assessment under clause K4 have not been
satisfied.
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PC Sum Adjustment (l) – Timber Repairs to Old Hall
1271 The Architect’s assessment of an adjustment of $450.00 excluding GST in
favour of the Owner for timber repairs to the church hall including new skirtings
is recorded in the October 2014 PC Sums Schedule. This amount corresponds with
the claim made in the Builder’s Statement 1229 and was calculated by deducting
the claimed cost from the PC Sum.
1272 The Architect’s assessment of an adjustment to the contract price of $450.00
excluding GST in favour of the Owner for timber repairs to the church hall
including new skirtings is recorded in the October 2014 PC Sums Schedule. The
adjustment was calculated as the difference between the Builder’s cost of
$1,550.00 and the PC Sum of $2,000.00 excluding GST allowed in clause G.31 of
the Architect’s Specification for this item.
1273 The Owner claims a credit for all of the PC Sum, alleging non-compliance
with the contractual requirements in section K for an adjustment to the contract
price. Further, the Owner alleges that the supply of new skirtings was within the
scope of works under the Building Contract. In its defence, the Architect alleges
that only existing repairs to the church hall were undertaken.
1274 As regards skirtings, the Owner is correct. Clause G31 of the Architect’s
Specification expressly excludes (among other things) skirtings from the PC Sum
allowance for timber repairs to the church hall. Skirtings are specified as to be
supplied throughout the main house and the church hall in clause G.34 of the
Architect’s Specification.
1275 On the evidence, the question of compliance with the contractual
requirements for an adjustment to the contract price was not addressed.
Accordingly, neither party is entitled to an adjustment to the PC Sum for this item
because the preconditions for an assessment under clause K4 or a variation under
section J have not been satisfied.
PC Sum Adjustment (m) - Roof Repairs to Old Hall
1276 The Architect’s assessment of an adjustment of $1,000.00 excluding GST in
favour of the Owner for roof repairs to the church hall is recorded in the October
2014 PC Sums Schedule. This amount corresponds with the deduction allowed in
the Builder’s Statement 1229 and was calculated by deducting the PC Sum from
the claimed cost of $3,245.00 excluding GST for a net claim of $2,245.00
excluding GST.
1277 The PC Sum of $1,000.00 excluding GST is allowed in clause HS.06.10 of
the Architect’s Specification for selected roof repairs such as fixings and silicon
sealing of existing roofing to the church hall.
1278 The Owner alleges the roof repairs were ultimately included in the Builder’s
scope of work and the contract price by Addendum 03 to the Building Contract
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and the Builder should not be allowed to claim against this PC Sum. This
contention should be rejected. The Addendum records that the Builder has allowed
in his tender for reroofing the Clarke’s section of the church hall roof. However,
read properly in context, it is expressly provided that this additional work is
covered by the additional PC allowance of $12,000.00 and is in addition to the
required work and PC allowance of $1,000.00. That is, the works are contemplated
by two PC Sums totalling $13,000.00 including GST.
1279 The Architect’s contention should therefore be accepted that Addendum 03
provided only for a new roof to the Owner’s portion of the church hall to be
included in the contract price and did not detract from the PC allowance provided
in the Architect’s Specification.
1280 On the evidence, the question of compliance with the contractual
requirements for an adjustment to the contract price was not addressed.
Accordingly, neither party is entitled to an adjustment to the PC Sum for this item
because the preconditions to an assessment under clause K4 have not been
satisfied.
PC Sum Adjustment (o) – Airconditioning
1281 The Architect’s assessment of an adjustment of $950.00 excluding GST in
favour of the Owner for airconditioning is recorded in the October 2014 PC Sums
Schedule. This amount corresponds with the amount claimed by the Builder in in
the Builder’s Statement 1229 calculated by deducting the PC Sum from the
claimed cost of $58,950.00 excluding GST.
1282 Clause K.02 of the Architect’s specification allowed a PC sum of $58,000.00
excluding GST for supply and installation of inverter ducted reverse cycle A/C
systems to both the main house and to the upper-level guest suite of the church
hall.
1283 The Owner only disputes the Builder’s entitlement to claim for trenching
over and above the PC Sum allowance.
1284 In its defence, the Architect alleged the charge was appropriate for the air
conditioning supplied and installed in accordance with the contract documents.
1285 No evidence was called by any party about the nature of the work done.
1286 On the evidence, the question of compliance with the contractual
requirements for an adjustment to the contract price was not addressed.
Accordingly, neither party is entitled to an adjustment to the PC Sum for this item
because the preconditions to an assessment under clause K4 have not been
satisfied. The dispute about the additional trenching work is therefore not relevant.
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PC Sum Adjustment (p) – Electrical
1287 The Owner’s pleaded claim is that the Builder is not entitled to a net
adjustment to the contract price in its favour for additional electrical works and a
credit of the PC Sum should have been allowed for external wall lights.
1288 The October 2014 PC Sums Schedule records PC Sum adjustments assessed
in favour of the Owner for two items for external wall lights totalling $1,650.00.
In closing submissions the Owner submits the credit is $350.00 short by reference
to an invoice from Granots Electrical showing $2,000,00 for external wall
brackets. The submission should be rejected. The $2,000.00 amount shown in the
invoice is for extras, not deletions.
1289 These PC Sums are allowed in clause L.05.10.03 of the Architect’s
Specification on a per fitting basis. There is no challenge to the calculation of the
total amounts allowed.
1290 The Builder’s claim in Statement 1229 was for $4,605.75 excluding GST and
calculated by deducting the $1,650.00 for the PC Sums from the total claimed for
electrical variation works of $5,655.00, both excluding GST, plus the 15%
allowance for overheads and profit in accordance with clause H2.1.b.2 and item 17
of Schedule 1 of the Building Contract.
1291 The Builder’s claim for extra electrical works is supported by the Granots
Electrical invoice dated 8 October 2014 relied on by the Owner.
1292 The Owner’s unpleaded contention in closing submissions that $4,200.00
invoiced by Granots Electrical for downlights was in the specified scope of works
should be rejected. Clause L.05.10 of the Architect’s Specification requires the
supply of the downlights as indicated on the drawings. This does not mean the
extra downlights supplied were required to be supplied. The Granots Electrical
invoice should be accepted as indicating more were supplied than originally
specified.
1293 Additional electrical works were instructed by the Architect in AI:11 dated
9 October 2013 referencing a revised upper floor electrical plan as attached. The
varied works appear to correlate in part with work and materials added and deleted
in the Granots Electrical invoice.
1294 Despite the unsatisfactory evidence before the Court, it should be accepted
that the Architect’s instruction given under section J of the Building Contract
enlivens the Architect’s discretion under clause H6 and obligation under K4 of the
Building Contract to assess the variation claim and the related adjustment of a PC
Sum respectively.
1295 In exercise of the discretion conferred by clause H6, the Architect approved
the variation in the amount of $5,428.58 excluding GST, as shown in the October
2014 Variation Schedule sent to the Owner. It should be accepted that the
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Architect’s assessment is bona fide and a fair and reasonable price for the works
done having regard to the Granots Electrical invoice.
1296 The Owner’s challenge to the net amount invoiced by the Builder of
$4,605.75 excluding GST therefore fails.
PC Sum Adjustments (k) & (r) – Miscellaneous Works Old Hall
1297 The Architect’s assessment of an adjustment of $15,384.50 excluding GST
in favour of the Builder for miscellaneous works to the church hall is recorded in
the October 2014 PC Sums Schedule.
1298 This amount corresponds with the amount claimed by the Builder in in the
Builder’s Statement 1229 calculated by deducting the PC Sum of $12,000.00 from
the claimed cost of $27,384.50, both excluding GST.
1299 This PC Sum is provided for in Addendum 03 of the Contract dated
13 November 2012. It is expressly stated to be in addition to the scope of works
outlined in “Extent of Works in Contract for Church Hall”, comprising the
following two pages of the Building Contract. These additional works were
provided to only be carried out after discussions and approval of the Architect and
Owner.
1300 These works were the subject of discussion and agreement between the
Owner, Architect and Builder in August 2013 that resulted in a decision to repair
rather than replace the church hall stair, install new timber flooring in the guest
suite. This agreement followed a process of reviewing the existing PC Sums and
seeking estimates from the Builder for supply of new flooring in the guest suite, a
new solid timber stair versus repair of the existing stair with a steel rod. The
Builder was formally instructed in AI:09 dated 15 August 2013 to provide a
breakdown of costs already spent on the church hall works and a price to repair
and support the existing stair.
1301 The works ultimately instructed to proceed were the subject of a further
Architect’s instruction A1:10 dated 27 August 2013.
1302 The Owner pleaded a generic claim that the Builder was not entitled to the
amount claimed because it had not provided a quote or been instructed to proceed
or provided a tax invoice. Therefore, the preconditions for an adjustment to the
PC Sum under the Building Contract had not been satisfied. This aspect of the
Owner’s challenge fails on the evidence. The Architect’s instruction to adjust the
PC Sum for miscellaneous works to the church hall under K4 was enlivened by the
Architect’s instruction AI:10.
1303 The Owner makes two further challenges to the Builder’s entitlement.
1304 The first concerns the extent that the claimed works were otherwise specified
as works under the Building Contract and therefore not properly covered by this
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PC Sum. The Owner complains of three items described in the Builder’s claim:
removal of the existing lobby floor including white ant spray (G.30); installation
of a new gyprock ceiling (N.04.10); and timber repairs (G.31 and R.06.03(b)). The
Owner’s contentions as regards the lobby floor and new ceiling should be
accepted. The Architect’s instructions require stripping, staining and not clear
finishing or painting/repainting. However, the Architect’s assessment of what was
a fair and reasonable cost for the assessed works should therefore be preferred to
the Owner’s generalised contentions.
1305 On the evidence, it is not possible to resolve the value of the works properly
claimable by the Builder for the miscellaneous church hall works.
1306 The second challenge concerns the PC Sum of $3,000.00 allowed in clause
G.29 of the Architect’s Specification that was recorded in the October 2014 PC
Sum Schedule as ‘DELETED AUG ’13. The Owner’s submissions as to the nature
of the works required by clause G.29 are not relevant. The point is that the works
were formally directed to change in AI:10 and the PC Sum allowed for those works
should be allowed as a further deduction from the Builder’s claim for
miscellaneous church hall works because the PC Sum and item was included as in
the contract price and as necessary works. A credit adjustment of $3,000.00
excluding GST should be assessed in favour of the Owner.
1307 Despite the unsatisfactory evidence before the Court, it should be accepted
that the Architect’s instruction given under section J of the Building Contract
enlivens the both the Architect’s discretion under clause H6 and its obligation
under K4 of the Building Contract to assess the variation claim and the related
adjustment of a PC Sum, respectively. The Owner’s challenge to the net amount
invoiced of $15,384.50 excluding GST by the Builder therefore fails.
PC Sum Adjustments - Summary
1308 On the evidence in the Arbitration and before the Court, for the reasons
discussed above, the Architect should have assessed adjustments to PC Sums in
accordance with section K of the Building Contract and determined an adjustment
in favour of the Builder in the amount of $9,558.50 excluding GST, calculated as
follows:
CLAUSE ITEM PC SUM ADJUSTMENT
A.12.06 Pool Tiles (supply only) $ 40.00/sqm Not in issue
A.12.06 Solar Blanket (or similar app) $ 1,500.00 ($ 1,500.00)
E.12.05 Letter box and street number (supply only) $ 500.00 $ 644.00
E.12.08 Repointing Hall stonework $ 3,000.00 None
E.12.09 Internal wall repairs to Hall $ 1,500.00 None
FM.08 Wrought iron gates & fence panels $30,000.00 ($ 1,750.00)
FM.10 Wrought iron balustrade panels $ 6,000.00 ($ 220.00)
FM.11 Wrought iron security doors (supply only) $ 5,000.00 None
G.19 Window furniture (supply only) $ 500.00 None
G.24 Door Hardware (supply only) $ 6,000.00 None
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G.27 Cellar wine racks $ 5,000.00 Not in issue
G.29 Stairs to Lobby (old Hall) $ 3,000.00 ($ 3,000.00)
G.31 Timber repairs to old Hall $ 2,000.00 None
Hs.06.10 Roof repairs to old Hall $ 1,000.00 None
J.09.17 Walter filter (supply only) $ 750.00 Not in issue
K.02 Air Conditioning $58,000.00 None
L.05.10 External Wall Lights (supply only) $ 250.00/fitting None576
L.05.10 External Wall Lights (supply only) $ 200.00/fitting None577
T.02 Lift fitout $ 2,000.00 None
ADD 3 Misc Works Old Hall $ 12,000.00 $15,384,50
Total Adjustment in favour of Builder $ 9,558.50
1309 It follows that the PC Sum adjustments of $18,230.70 excluding GST
certified in PPC 12 were overstated by $8,672.20.
1310 The Builder’s pleaded contention that incorrect adjustments for PC Sums
remain subject to final adjustment in the final certificate is correct. The Architect
should review the issues identified above and reassess PC Sum items and make
adjustment accordingly, having proper regard to the contractual preconditions for
a valid adjustment to a PC Sum.
Other Claims
Extra Costs – April 2013 - Nil
1311 The Owner claims578 a credit for $6,600.00 including GST paid in cash by
Dr Clarke to the Builder for works described as “Extra Costs for Foundation” in
a letter/invoice dated 10 April 2013.579 The Owner alleges the works should have
been the subject of a variation claim in her favour and were not.
1312 In closing submissions, the Owner submits, among other things, the Builder
has sought to bypass the contractual regime for variations and any work done (if
any) was not at the request of the Clarkes. The Owner relies on the oral evidence
of Dr Clarke as establishing he was asked to pay for extra cement. She submits
the payment was received with a total failure of consideration. The submission that
the work was not done was not pleaded.
1313 There is no dispute the payment was made as the receipt in Dr Clarke’s
handwriting records. However, there is a paucity of evidence on this specific topic
and, the evidence there is, is insufficient to conclude there was anything untoward
about the circumstances of the payment or that it should be regulated by the
Building Contract.
1314 There is no good reason to consider the description of the works in the
letter/invoice receipted by Dr Clarke is not correct. It would be odd for Dr Clarke
to have just paid the Builder for work he did not know had been done. It should
576 Addressed above in the challenge to Builder’s claim for electrical extras.
577 Ibid.
578 Seventh Cross Action [58].
579 Exhibit R3.38.
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be inferred from the receipted letter/invoice that the transaction was legitimate and
the parties to it had reached a binding agreement outside the contract to pay for the
works that were done. The Owner’s allegation it was not done is serious and
should have been pleaded with particularity if it was to be pressed.
1315 Dr Clarke’s evidence shed little light on the circumstances of the payment
beyond what is shown by the document. Indeed, he said he could not actually
remember the exact circumstances or what was said. That is hardly surprising
since the transaction happened in 2013.
1316 The transaction is not so unusual. There is credible evidence that the Owner
and Dr Clarke did on occasion engage in negotiations directly with the Builder and
other contractors to reach agreement for extra works to be done for cash to avoid
the Builder’s margin. The Architect’s closing submissions referred to
unchallenged evidence adduced in the Arbitration to this effect.
1317 Ultimately, the Owner has not proven that the works described were works
within the scope of the Building Contract or a variation within the meaning of the
Building Contract to which sections J and H applied. Nor has the Owner
established that no required works were done in consideration of the payment
made.
Cash Payment – March 2014 - Nil
1318 The Owner claims a credit for $3,000.00 allegedly paid in cash to the Builder
by Dr Clarke in March 2014 for scaffolding for the exterior works to the church
hall that were urgently required to enable the works to proceed without delay. 580
1319 The payment is undocumented.
1320 The Owner’s submission that the Builder implicitly admits the payment was
made should be rejected. The Builder’s generic pleading that payments were
validly made is not a binding admission as to this payment.
1321 The only evidence about this topic was given by Dr Clarke. In examination-
in-chief he recalled handing Mr Cirocco an envelope with $3,000.00 on-site
following him ringing him and saying he wanted an extra $3,000.00 because he
wanted to pay the scaffolding contractor. When challenged in cross-examination
about the detail of this event, Dr Clarke could not date it but accepted the
scaffolding was already erected. He then said that what was alleged in the pleading
to have been said to him about its purpose was not actually said to him. All
Dr Clarke could say was that Mr Cirocco told him he wanted payment for the
scaffolding contractor.
580 Owner’s Seventh Cross Action [59].
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1322 Overall, Dr Clarke’s evidence on this topic is uncompelling and should not
be accepted as reliable account of all that was relevant.
1323 There is no persuasive evidence that the payment was made at all. It is odd
there is no receipt for the transaction, given the Clarkes’ diligent record keeping,
noting the 2013 transaction was receipted. It is also implausible that Dr Clarke
would have agreed to pay the Builder an extra $3,000.00 for work that was
obviously required under the Building Contract in circumstances where the Owner
was astute and fastidious in her oversight of the works and their cost.
1324 The Owner’s claim is not proven.
Distinctive Gardens Direct Payment - Nil
1325 The Owner claims a credit of $17,395.58 on account of the cost of paving
allegedly paid directly to Distinctive Gardens.581 She alleges the Builder was
required to install paving under clause S.02 of the Architect’s Specification and
did not undertake such works. Or, if the Builder did, the work was done by
Distinctive Gardens as the Builder’s subcontractor. The Builder pleads a bare
denial in response.
1326 Her alternative contention must be rejected outright. The Arbitrator’s
unchallenged findings that landscaping was not part of the scope of the Builder’s
works under the Building Contract and the Owner independently engaged
Distinctive Gardens should be accepted as correct. The documentary evidence
shows that in March 2014 the Owner was introduced to two contractors and
ultimately negotiated a landscaping contract with Distinctive Gardens
independently of the Building Contract.
1327 The reference in clause S.02 of the Architect’s Specification is generic and
does not specify where pavers are to be laid. Paving is shown on Contract Drawing
W01. The types of pavers are specified in clause S.04.
1328 A quotation dated 29 September 2012 addressed to the Builder is for the
paving as specified. The Builder was invoiced for some pavers on 9 and 13 May
2014. A comparison to the specification shows there was a reduction in the paving
ordered and supplied by the Builder on these invoices. On the paucity of evidence
it is not possible to draw any further relevant inferences.
1329 Distinctive Gardens provided a quotation for landscaping by email dated
13 March 2014. The quotation makes no allowance for paving surfaces that were
noted as to be discussed with the Builder. Distinctive Gardens updated its
quotation on 20 March 2014 to include an amount of $17,395.58 excluding GST
for paving surfaces with a notation “Rocky’s allowance for the works $21,706.00”.
581 Ibid [61].
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The principal of Distinctive Gardens, Mr Cooper did not give evidence. There is
no explanation as to why he did not.
1330 The Owner submits the Court should infer from the notation on the quotation
that the paving works taken over from the Builder by Distinctive Gardens were
valued at $17,395.58 excluding GST.
1331 The Owner gave oral evidence in the November trial that Distinctive Gardens
carried out the work the subject of the quote and she paid them and did not receive
an adjustment of the contract price under the Building Contract for this paving.
Mr Cirocco gave oral evidence in the Arbitration that he paid Distinctive Gardens
for the works taken over. Mr Cirocco’s evidence that there was an accounting
between the Builder and Distinctive Gardens is consistent with an email sent by
Mr Cooper to Mr Cirocco on 18 May 2014 referring to an accounting between the
Builder and Distinctive Gardens for the works taken over.
1332 Whilst it should be accepted that Distinctive Gardens took over some external
paving works from the Builder, the evidence is insufficient to identify the precise
scope of the works taken over or, more importantly, the critical allegation that the
Owner paid twice. There is no evidence of the amount ultimately invoiced by
Distinctive Gardens to the Owner or of any payments made by either party to
Distinctive Gardens. The Owner has therefore failed to prove any entitlement to a
credit as alleged.
Owner’s Delay Claim - Nil
1333 The Owner claims damages for breach of the Builder’s obligation to bring
the works to practical completion by the contractual date for practical completion,
being 11 April 2014. The quantum claimed is $1,309.00 for storing furniture
between the date for practical completion (11 April 2014) and the date she moved
into the house (31 July 2014).
1334 The Owner’s pleaded claim before trial was for $10,111.00 for additional
rent and storage of a car and furniture from April to July 2014. 582 At trial, the
Owner abandoned the claims for rent and storage of the car. She gave
unchallenged evidence that her furniture was stored beyond the date of practical
completion and identified two invoices for the storage costs.583 From the invoices
it is apparent the amount claimed in closing submissions is overstated. Costs
claimed for periods before 11 April and after 31 July 2014 should not be allowed.
The proper quantum of the Owner’s claim is $1,134.84.
1335 The Builder in its pleaded defence admits it did not bring the works to
practical completion on the date for practical completion but denies any breach of
contract on the basis of generic plea that it progressed the works at a reasonable
pace in keeping with the resolutions at site meeting and the Architect’s
582 Seventh Cross Action [21].
583 Exhibit R3.97 and R3.136.
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instructions.584 This defence as pleaded is untenable. No attempt was made at trial
to prove a positive case of reasonable progress.
1336 The Builder’s second pleaded ground of defence585 is that properly construed,
the Building Contract excluded any common law claim for delay damages by the
Owner. The Builder relied on the express stipulation in the Building Contract that
liquidated damages would apply at the rate of “$--- per calendar day”.586
1337 The Builder and the Owner referred to a number of authorities in submissions
where two competing constructions were found of liquidated damages clauses in
building contracts. These authorities concerned different standard form contracts
and factual circumstances and are of limited assistance in discerning the objective
intention of the parties in this case. The answer here must turn on the proper
construction of the relevant terms of the Building Contract read as a whole. Since
there was no evidence of surrounding circumstances known to both parties relied
upon, that matter is not a relevant consideration.
1338 It should be accepted as the starting point that the principle in Gilbert-Ash587
applies to the construction of the Building Contact so that the Builder must
establish the parties intended by ‘clear and unequivocal works’ in the contract to
exclude the Owner’s right to claim common law (unliquidated) damages.
1339 Clause M9.3 of the Building Contract provides:
The contractor is liable to pay or allow the owner liquidated damages at the rate shown in
item 24 of schedule 1.
1340 As already stated, item 24 of schedule 1 was completed by the parties as
follows.
Item 24 Rate for liquidated damages
Clause M9 $ ------- per calendar day
1341 The ‘dash’ was handwritten and should reasonably be read as meaning no
liquidated damages would be payable for delay.
1342 Thus far, the language of the Building Contract is equivocal and favours the
Owner’s position in the absence of any evidence of the surrounding circumstances
informing a contrary view. The balance is tipped when consideration is given to
clause A10 of the Building Contract which provides as follows:
Where the contractor or the owner is entitled to compensation as determined under this
contract, that compensation, when paid in full, is the sole and complete remedy for the
contractor or the owner under this contract.
584 Defence [20].
585 Ibid [21].
586 Item 22 Schedule 1, clause M9.
587 Op cit.
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1343 Reading clauses M9 and A10 together, it should be concluded that the parties
intended that liquidated delay damages would be the sole remedy for the Builder’s
delay in reaching practical completion and the parties by providing that there
would be no liquidated delay damages payable has the same effect as having
stipulated in item 24 of Schedule 1 a positive sum.
1344 For these reasons the Owner’s delay claim fails.
PART E: THE STONE DEFECTS
The Liability Issues
1345 As to liability for the stone defects, the agreed issues to be determined are as
follows.
1. What stone supply and installation was required by the Building Contract, as
varied?
2. Was the stone installed in accordance with the Building Contract, as varied?
3. If the stone installed was not in accordance with the Building Contract, as
varied, what is the responsibility for any non-conformance of:
3.1 the Supplier?
3.2 the Builder?
3.3 the Architect?
4. If the stone was installed in accordance with the Building Contract, as varied,
was the Architect in breach of any obligation to the Owner?
1346 Before resolving these issues, it is necessary to consider the nature of the
alleged stone defects and then resolve the dispute over the scope of the Owner’s
pleaded case on stone colour.
The Nature of the Stone Defects
1347 The Building Contract required the Builder to supply new stone for external
cladding to the extent shown in the Contract Drawings on the front, west and a
portion of the north-west walls of the house to the height of the projecting course,
the south wall of the garage at the back of the swimming pool area and the four
stone columns to the rear verandah.
1348 The Owner alleges the following aspects of the laid stonework are ‘defects’
in the materials supplied and/or workmanship because they do not conform with
the requirements of the Building Contract, as varied.
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1349 About 60% of the stones are not consistent in colour and within an acceptable
range of the very light coloured Tasmanian sandstone of colours ‘2’ to ‘3’ from
the Stone Supplier’s colour range.
1350 In this regards, there are significant disputes about the Owner’s departure in
her closing submissions588 from her pleaded case on stone colour by reference to
colours ‘2’ and ‘3’ from the Stone Supplier’s colour ranges and, objectively, what
those colours are in fact.
1351 Some of the stones laid is blighted by ‘quarry sap’ that darkens the stone to
black or brown.
1352 Approximately ten stones in a single rear column (known as C4) have surface
damage resulting from attempts to clean the stones.
1353 Approximately 119 of the stones laid are chipped.
1354 The stone is laid with a mortar colour that is too dark and does not match the
selected stone colour.
1355 The stonework laid has variation in the thickness of mortar joints, beds and
perpends up to 3mm.
1356 The mortar joints are not always smooth and well made because too coarse a
mortar sand has been used.
1357 Stones are not vertically and horizontally aligned accurately and are
commonly up to 5mm of out of alignment.
1358 The Owner further claims that the stone is laid with 10mm joints and
therefore is not of the specified ashlar pattern requiring 5mm fine joints by reason
of the AI:07 issued without her authority. The Owner accepts the Builder was
contractually obliged to lay the stone with 10mm joints as instructed by the
Architect and brings her claim for the joint size defect against the Architect only.
The Final Pleadings
1359 Apart from the joint size defect, the same stone defects found the Owner’s
claims for breaches of the Building Contract against the Builder and her claims in
contract and tort against the Architect for breaches of its retainer and common law
duty of care.589
588 Owner’s Stone Closing [121.1] and [122]; Owner’s Final Closing [135]-[167].
589 Despite the important difference in terms of who may be liable, it is convenient to generally refer to all
the alleged stone defects and the joint size defect collectively as the stone defects.
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1360 This point is fundamental and important to understand in considering the
ongoing dispute about the Owner’s attempts at trial and in closing submissions to
depart from her pleaded case on stone colour.
Owner v Builder
1361 As against the Builder, the Owner began the July trial on her Fifth Defence
and Sixth Cross Action. Her final pleading against the Builder is her Fifth Defence
and Seventh Cross Action following amendments allowed on 4 July 2022 to plead
alternative assessments of the cost to remove and replace all the external stone
cladding.
1362 Otherwise, the Owner’s pleaded case on the stone defects had remained
unchanged since July 2020 when the Owner’s case was first expanded beyond
complaints about stone colour to include claims about the quality of the
stonework.590
The Stone Defects and the Builder
1363 The Owner’s pleaded case on stone defects is found in paragraph 19A of the
Seventh Cross Action. The Owner’s claim is only made in contract and for the
stonework not conforming with the alleged contractual requirements.
The Architect’s Specification
1364 Paragraph 19A.1 is the starting point. It sets out parts only of the provisions
in the original Architect’s Specification relied on by the Owner.
• Pursuant to clause A.09.01, materials were to be of the ‘best quality’
and workmanship was to be up to ‘first class’.
• Pursuant to clause E.03.06, the Builder was to supply stone consistent
in colour, texture, density etc, and within an acceptable range in
comparison to the approved stone samples.
• Pursuant to clause E.04.01, the Builder was required to submit samples
of all stone to be used.
• Pursuant to clause E.04.03, the Builder was required to lay stonework
in a random ‘ashlar pattern’ with 5mm fine mortar joints in matching
colour mortar and, prior to commencing on-site, prepare a sample panel
for approval of the Architect and Owner.
1365 Two contextual facts are alleged in paragraphs 19A.2 and 19A.3 so as to
inform the requirements for an ‘ashlar pattern’, ‘up to first class’ workmanship and
590 Cirocco Constructions Pty Ltd v Clarke and Others [2020] SADC 82 (Cirocco No 3).
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‘best quality’ stone materials. First, that the laying of stone in an ‘ashlar pattern’
is stated to be a term of art requiring:591
(i) identical, usually rectangular stones, laid in stretcher bond with a high degree of
accuracy in alignment horizontally and vertically; and
(ii) stonework being laid with 5mm fine mortar joints;
1366 Secondly, as to ‘quarry sap’:
19A.3 In or about November 2012 Robert Williams on behalf of Williams Burton
advised the [Owner] that stone should be selected that was not blighted by quarry
sap, which advice [the Owner] accepted. The effect of the acceptance of the
advice is that stone blighted by or liable to be blighted by quarry sap was not to
be approved.
Selection and Approval of Tasmanian Sandstone
1367 Paragraphs 19A.4 and 19A.5 allege the Owner conveyed her “selection and
approval” of an alternative material, Tasmanian sandstone, orally to Mr Williams
of the Architect and Mr Calabrese of the Stone Supplier on 30 April 2013 at the
Gillman Meeting. It is alleged they viewed the samples identified by Mr Calabrese
“in a range of 1 to 9”colours “with 9 the most orange” and the Owner:592
… selected and thereby instructed the approval of colours 2 to 3, being very light coloured
stone.
1368 The Owner’s selection and approval of Tasmanian sandstone in the specified
colour range at the Gillman Meeting is fundamental to the Owner’s pleaded case
and has been since paragraph 19A was introduced on 14 December 2018. Notably,
it is not alleged that the Owner conveyed her selection and approval to Mr Cirocco
for the Builder.
1369 Paragraph 19A.6 pleads that by AI:04 Mr Williams instructed the Builder
that the stone was to be laid in a random ‘ashlar pattern’ and before commencement
the Builder was to build a sample panel for stone layout, joint sizes and pointing
colour and technique and:593
… stone colour is to be “2” and [that] the stone supplier/mason are to remove any stones
fitting into the “3” colour category.
1370 AI:04 is pleaded as a factual allegation and no plea is made as to its effect.
This is significant and relevant to the dispute arising over the scope of the Owner’s
pleaded case on stone colour as discussed further below.594
591 [19A.2].
592 Emphasis supplied.
593 Emphasis supplied.
594 See [1461]-[1506] below.
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Contractual Requirements
1371 Paragraph 19A.7 pleads the varied Building Contract requirements for stone
by reason of the Owner’s “selection and approval” of Tasmanian sandstone of the
specified colour range in the following terms.595
By reason of the said selection and approval, the [Builder] was required under the contract:
(i) By clause E.03.06 of the specification to purchase and use stone which was
consistent in colour, texture and density and within an acceptable range of the very
light coloured stone, being in the range of colours 2 to 3, of the colour range
identified by Sandstone Select.596
(ii) By clause E.04.01 of the specification, [sic] to submit samples of all stone to be
used.
(iii) By clause E.04.03 of the specification, [sic] to lay stonework in the range of colours
2 to 3 of the colour range identified by Sandstone Select in a random ashlar pattern
with 5mm fine mortar joints in matching colour mortar and prior to commencing
on site prepare a sample panel for the approval of the Architect and the [Owner].
(iv) By clause A.09.01 of the specification, the stone was to be of the best quality.
1372 These pleas correspond to the parts of the clauses in the original Architect’s
Specification relied on and pleaded in paragraph 19A.1: that is, clauses A.09.01 as
to standards of materials and workmanship, E.03.06 as to the source of the
approved stone and its colour, E.04.01 as to samples of the stone to be used and
E.04.03 as to stonework bonding and jointing.
1373 The first observation to be made is that the Owner’s pleaded case on stone
colour depends on only clause E.03.06 of the Architect’s Specification. Whilst
colour is referred to in paragraph 19A.7(iii), clause E.04.03 of the Architect’s
Specification only addresses stonework bonding and jointing and says nothing
about the source or colour of stone. The reference to it describes the specified
colour stone following on from paragraph 19A.7(i).
1374 The elements of the pleaded criteria for the specified colour stone are
threefold: (first) ‘within an acceptable’ range of (secondly) very light coloured
stone that is (thirdly) colours ‘2’ to ‘3’ of the Stone Supplier’s range.
1375 The Owner pleads the Builder was to supply stone within a range of colours.
Notably, there are three referenced ‘ranges’: (first) the range of colours ‘2’ to ‘3’
of (secondly) the Stone Supplier’s range; and (thirdly and most fundamentally) the
specified range of stone that is within an acceptable range of the (first) range of
colours ‘2’ to ‘3’.
595 Emphasis supplied.
596 ‘Sandstone Select’ refers to the Stone Supplier.
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1376 What “within an acceptable range” means is not identified in the pleading.
However, these words derive from the Architect’s Specification and should be
understood as having the same meaning as they do there when properly construed
by reference to the text, context and purpose of that contractual document.
1377 What “identified by Sandstone Select” means in context of the Stone
Supplier’s range has content in context of the evidence that the Stone Supplier
sorts quarried stone by hand into colour categories.
1378 The requirement that the stone be “consistent in colour, texture and density”
is also significant. The Owner ultimately advances a case that the stone walls were
to be consistent in the resultant white or creamy colour.597 The Builder and
Architect contend consistency of colour should be understood in the context of the
requirement that there is to be a ‘range’ of colours and (as the evidence shows)
there is inevitable variation in sandstone as a natural product and this is particularly
the case for Tasmanian sandstone.598
Alleged Breaches
1379 Paragraphs 19A.8 to 19A.14 plead the material facts relied on as constituting
breaches of the varied Building Contract requirements for stone as pleaded in
paragraph 19A.7.
1380 First, that the Builder supplied to site and commenced the stonework without
supplying a sample to the Architect and the Owner for approval,599 and laid the
stonework without first preparing a sample panel for the approval of the Architect
and the Owner.600
1381 Secondly, the Architect issued AI:07 without the Owner’s prior authority,
thereby instructing the Builder to lay the stonework with 10mm nominal recessed
joints for pointing later.601
1382 Thirdly, at the 18 June Meeting,602 the Owner identified that the stones being
laid were either blighted by ‘quarry sap’ or of “a colour darker than samples 2
and 3” and therefore unacceptable.603
1383 Fourthly, at the 18 June Meeting, the Builder and Mr Calabrese assured the
Owner that the discolouration caused by ‘quarry sap’ and the stone colouring that
597 Owner’s Final Closing [138.2].
598 See [809]-[819] below.
599 [19A.8(i)].
600 [19A.8(ii)].
601 [19A.9].
602 There is no dispute this meeting occurred on 18 June 2013, was on-site or who attended it.
603 [19A.11]; emphasis supplied.
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was “darker than the samples 2 and 3” would be remedied by the Builder prior to
completion of the works.604
1384 Fifthly, on 20 June 2013, by AI:08 the Architect instructed the cessation of
the stonework until the stone defect was resolved and the Builder did not do so.605
The stone defect is confined by reference to the pleaded complaints made at the
18 June Meeting to “colours darker than 2 and 3” and ‘quarry sap’.
1385 The fourth and fifth pleaded matters again concern the Owner’s complaints
about stones blighted by ‘quarry sap’ and ‘darkness’ by reference to samples ‘2’
and ‘3’ (not colours ‘2’ to ‘3’). The different language is infelicitous in two
respects. First, the Owner selected and approved colours, not samples, from the
Stone Supplier’s range. Use of the word ‘samples’ is therefore odd and imprecise.
Contextually it should be read as meaning ‘the selected and approved colours’ and
does not matter substantively. Secondly, since each of the Stone Supplier colours
denotes a range and not a definitive colour, the different conjunctions (‘and’ and
‘to’) also do not matter: a range of colours ‘2’ to ‘3’ is the same as a range
comprising colour ranges ‘2’ and ‘3’.
Alternate Bases of Liability
1386 The Owner pleads her case on breach contract on alternate bases.
1387 Her first case is from viewing the stonework as a whole:606
19A.15. In breach of the contract, the defendant supplied and installed:
(i) Stonework which, when the external walls of the building are viewed as a
whole, does not:
• comprise of stonework that is consistent in colour and within an
acceptable range of the very light coloured stone, being in the
range of colours 2 to 3, of the colour range identified by
Sandstone Select;
• comprise stone that is of the best quality in that it was liable to be,
and in due course became, blighted by quarry sap. The stones
blighted by quarry sap are designated “QS” in the Owner’s
Annexure B.
• comprise stonework that is of a first class standard607 in that the
mortar is not matching stone colour in that it is too dark, the joints
beds and perpends are of varying thickness, the joints are not
consistently smooth and the vertical and horizontal alignment of
stones is up to 5mm out of alignment; and/or
604 [19A.12]; emphasis supplied.
605 [19A.13] and [19A.14].
606 Emphasis supplied.
607 Leave to amend to delete “best quality” granted on 6 July 2022. T 13.28-14.14.
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• comprise stonework of first class standards.
1388 Her alterative case is put on a stone by stone basis by reference to each of the
1,927 faces of the individual stones used:608
(ii) In the alternative:
• stones as particularised in the schedule annexed hereto marked Annexure B
are not of the colour required by the contract, to the effect that about 60% of
the stones do not comply with the contract as to colour and about 40% could
reasonably be said to comply with the contract as to colour;
• approximately 10 stones display a damaged stone surface resulting from
attempts to clean the stones by the plaintiff and/or its subcontractors. The
stones that display acid damage are located on the column identified as C4 in
Annexure B and are identified in the summary schedule for C4;
• there are approximately 119 chipped stones. These stones are identified in
Annexure B in the summary schedule column headed “Chipped” and in each
area schedule column headed “Chipped”;
• the mortar colour does not match the stone colour in that it is too dark;
• there is a variation in the thickness of mortar joints, beds and perpends up to
3mm variation;
• mortar sand which is too coarse has been used with the result that joints are
not always smooth and well made; and
• stones are not vertically and horizontally accurately aligned, and are
commonly up to 5mm out of alignment.
1389 The latter ‘stone by stone basis’ of liability is particularised in the Owner’s
Annexure B to the Owner’s primary pleadings for colour, chips and surface
damage (but not the other pleaded defects). Each defective or non-conforming
stone is identified by reference to an area of the stonework and whether it conforms
or not for colour, chips or surface damage. For colour, it is identified whether the
stone is too dark or too light, light grey, or exhibits a distinct sedimentary pattern
or is blighted by ‘quarry sap’. A single stone may be identified as defective or
non-conforming in the Owner’s Annexure B for one or more reasons.
Pleaded Case on the Colour Defect
1390 The Owner’s pleaded case as to the Builder’s contractual obligation as to
stone colour is undisputedly clear. She expressly relies on her selection and
608 Seventh Cross Action [19A.15]; Ninth Third Party Claim [26a Particulars iv and v]. More than one face
is visible for some stones such as corner stones.
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approval of sandstone at the Gillman Meeting and clause E.03.06 of the Architect’s
Specification as requiring the stone and used by the Builder to be stone:609
… consistent in colour and within an acceptable range of the very light coloured stone,
being in the range of colours 2 to 3, of the colour range identified by Sandstone Select.
1391 Three matters warrant emphasis.
1392 First, the only material facts or particulars pleaded in the Seventh Cross
Action (and its predecessors) that objectively identify the characteristics of stone
colours ‘2’ or ‘3’ are those expressly pleaded in paragraph 19A.4. That is, these
colours are “very light coloured stone” and are within the range of colour
categories identified by the Stone Supplier. As will become apparent later,
objective proof of what these colour categories are in fact is a difficulty that
bedevilled the Owner’s case on stone colour from the outset and ultimately, is why
her case on breach fails.
1393 Secondly, the Owners’ case on the stone colour as pleaded in her reply to the
Builder’s defence610 is put differently.
9.7 At the meeting of 30 April 2013, Mrs Clarke said to those in attendance that she
required stone that was “white” because she wished the walls to be consistently
white or very light coloured.
…
9.15 At the meeting in June 2013, Mrs Clarke said that she required the stone to be
consistently “white” or very light coloured and was assured by Mr Calabrese, as
Cirocco Constructions’ stone supplier, that the final outcome would be stonework
that was consistently “white” or very light coloured.
9.16 Following the said meeting, Cirocco Constructions failed to take such steps as were
required to ensure that it constructed the stone walls such that the final outcome was
stonework that was consistently “white” or very light coloured.
1394 In later paragraphs, the selected colour range necessary for contractual
conformance is inconsistently pleaded as ‘1’ to ‘3’ in the context of what was said
at 2015 meetings about remedial work.611
1395 These pleas indirectly touch on a different contractual requirement for
‘consistently white’ stone by comparison to her case of a range of colours ‘2’ to
‘3’ being very light coloured stone in her primary pleading.612 These allegations
are not made in the alternative (either clearly or at all).
1396 The third matter to emphasise, is that AI:04 is not relied on for the colour
defect (either in the clearly pleaded requirements of the revised Building Contract
609 Seventh Cross Action [19A7(i)].
610 Owner’s Reply to Builder’s Defence.
611 [9.22] and [9.23].
612 [19A.7(i)].
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or repeated in their alleged breach).613 This is explicable when two things are
understood. First, the allegations in paragraph 19A.6 were historically never part
of the Owner’s case on stone colour. They were introduced when she amended to
expand her case on stone defects beyond colour to the quality of the stonework.
Secondly, the allegations in 19A.6 are factual, as the Owner acknowledges,614 and
no plea is made as to the effect of AI:04 on stone colour (unlike the pleas for
AI:07).615
1397 Whether the Owner should be permitted to change her pleaded position on
AI:04 on the issue of stone colour is also a matter of significant contention
addressed below.616
Owner v Architect
1398 As against the Architect, the Owner began the July trial on her Eighth Third
Party Claim following the same amendments being made as to the alternative bases
for assessment of stone remedial costs as were allowed in her claim for loss and
damage as against the Builder. Her final pleading against the Architect is her
Ninth Third Party Claim, following amendments that introduced new particulars
as to the alleged circumstances surrounding the issue of AI:07 and the joint size
defect.
1400 Otherwise, as with her pleaded case against the Builder, the Owner’s case on
stone defects had remained unchanged since July 2020 when it was first expanded
beyond stone colour to include claims about the quality of the stonework.
The Same Stone Defects
1401 The stone defects are pleaded in paragraph 18 of the Ninth Third Party Claim
as substantial defects known by the Architect at the date of issue of the penultimate
progress payment certificate (PPC 11) and as particulars of:
a. The failure of Cirocco Constructions to supply and install stone as required by the
specification (“the stone defect”)
1402 They are repeated in paragraph 21 as regards the issue of the final progress
payment certificate (PPC 12).
1403 The pleaded particulars of “the stone defect” mirror the pleas made in
paragraph 19A of the Seventh Cross Action against the Builder.617 This
consistency is as it should be because the Builder’s alleged breaches of the
Building Contract for new stone masonry are the foundation of the Owner’s case
613 [19A.6(iii)].
614 Owner’s Final Closing [141].
615 [19A.9] and [19A.10].
616 See [1461]-[1506].
617 That is, [19A.1] through to [19A.14]. Owner’s opening: T33.2-.14.
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against the Architect for breaches of its retainer and common law duties (save, of
course, for the joint size defect that is only pressed against the Architect).
1404 Accordingly, the same allegations are made with regard to the required
contractual requirements for new stone masonry and breach of the varied Building
Contract. That is, as regards stone colour, the same allegations are made that by
reason of the Owner’s selection and approval of Tasmanian sandstone, the
Building Contract requirements for stone colour relevant to the Architect’s duties
were:618
By clause E.03.06 of the specification to purchase and use stone which was consistent in
colour, texture and density and within an acceptable range of the very light coloured stone,
being in the range of colours 2 to 3, of the colour range identified by Sandstone Select.
1405 There are additional particulars pleaded against the Architect (and not the
Builder) as regards the allegedly unauthorised issue of AI:07.619 Again, this is
because the alleged lack of authority only concerns the Architect.
1406 One plea is different from the corresponding pleas made against the Builder.
Paragraph 19A.8 refers to compliance with AI:04 without pleading in what way.
As to stone colour, the plea corresponds with paragraphs 19A.11 and 19A.12 of
the Seventh Cross Action by the reference to the complaint that the stone laid was
darker than the contractual requirement of stone colour in the range of colours ‘2’
to ‘3’ of the Stone Supplier’s range.620
Cirocco Constructions supplied and laid stone which was apparent from visual inspection
to be darker than the samples 2 and 3 and which did not comply with AI:04.
1407 To avoid ambiguity and inconsistency, it should be read as referring to the
non-compliances with AI:04 that are pleaded against the Builder. That is the
allegations that the Builder commenced laying stone without supplying a sample
to the Architect for approval and did not prepare a sample panel for approval by
Architect and the Owner.621
Pleaded Breaches against the Architect
1408 Two distinct pleas of breach of the Architect’s retainer and its common law
duty of care are made for the stone defects. The first is pleaded in paragraph 24 as
regards the Architect’s failure to certify amounts appropriate to be payable by the
Builder to the Owner on account of the stone defects. The second is pleaded in
paragraph 26 as to the Architect’s alleged failure to ensure the design intent and
content of the working drawings and specifications for stonework were carried out
by the Builder satisfactorily during the contract administration stage of the project.
618 Ibid [18] Particulars a. vi. mirroring [19A.7].
619 Ibid [18] Particulars a. viii.
620 Ibid [18] Particulars a. xiv.
621 19A.8.
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1409 The particulars of breach in paragraph 26 mirror the stone defects pleaded as
breaches of the Building Contract against the Builder in paragraph 19A.15 of the
Seventh Cross Action.622
1410 As to stone colour, the Owner’s pleaded case against the Architect on breach
is the same as pleaded against the Builder: in the range of colours ‘2’ to ‘3’ of the
Stone Supplier’s range. Again, consistency with the case pleaded against the
Builder is as it should be.
1411 The plea of breach pleaded in the particulars to paragraph 24 c. for failure to
certify appropriate amounts for the stone defects relies on AI:04:
iii. Williams Burton failed to undertake any assessment of the amount of a reasonable
allowance for the cost of rectifying the defect in the stonework, namely the failure
of Cirocco Constructions to comply with the Architect’s Instruction 4 dated 1 May
2013 as required by Clause N4.2(b).
1412 If AI:04 is to be relied on as the basis of the Builder’s contractual obligation
for stone colour, this plea introduces ambiguity and impermissible inconsistency
into the Owner’s pleaded case.
1413 This is no pleader’s quibble. There is no foundation for the alleged non-
compliance with AI:04 as to stone colour. It is impermissibly inconsistent with
the Owner’s primary pleading because the Architect’s instructions in AI:04 (for
the stone colour to be ‘2’ and for the supplier/mason to remove any stones fitting
into the ‘3’ colour category) is inconsistent with the pleaded contractual
requirement under the Building Contract: the selection and approval of stone in the
range of colours ‘2’ to ‘3’.
1414 This is not an isolated case of inconsistency. The pleaded contractual
requirement of stone colour in the range of ‘2’ to ‘3’ is expressly pleaded multiple
times by reference to clause E.03.06 of the Architect’s Specification and the
Owner’s approval and selection of Tasmanian sandstone at the Gillman Meeting.
It is pleaded against the Architect and in the Seventh Cross Action (against the
Builder) which this pleading mirrors. The claim is not made in the alternative
(either clearly or at all).
1415 This plea in the particulars to paragraph 24c should not have been made. Its
inclusion is embarrassing to the fair trial of the proceeding in circumstances where
there should be consistency in the Owner’s pleaded case against the Builder and
the Architect on stone defects given it is based on the same terms of the same
Building Contract as the Owner’s counsel emphasised in opening her case.
Whether the Owner should be permitted the rely on AI:04 having any contractual
effect on the issue of stone colour is a matter of significant contention addressed
below.
622 Ibid [26] Particulars a. iv. and v.
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The Owner’s Case in Reply
1416 The Owner’s case in reply to the Architect’s defence on the stone defects
introduces further allegations as to the contractual requirements for stonework
(including as to stone colour) that are similarly problematic.
1417 First, by reference to the range of stone colours selected and approved at the
Gillman Meeting and the Owner’s alleged preference for “lighter coloured
sandstone, which corresponded approximately with the colour classification ‘2’ –
‘3’”,623 the Owner pleads that “stones in the range 2 to 3” are required to be
“wholly in the range white to creamy white/yellow” and ‘‘without yellow, dark
yellow, light orange, orange or dark orange sections, patches, veins or stripes”.624
1418 This is not the same as “consistently white or light coloured” as pleaded in
reply to the Builder.
1419 Then, acceptable stones are alleged to be substantially uniform in colour so
as to give the walls “an even, consistent creamy white appearance”625 and by
clause E.03.06 of the Architect’s Specification, all stones are required to be
consistent in colour.626 These pleas of consistency of colour and a complaint about
overall colour appearance apparently correspond to the Owner’s first alternative
case on breach: that is, if the external walls are viewed as a whole.627
1420 These pleas are objectionable. When it is appreciated that the Stone
Supplier’s categories ‘1’ to ‘4’ are all properly described as light coloured
sandstone, these pleas introduce ambiguity and inconsistency into the Owner’s
case as to what constitutes colours ‘2’ and ‘3’. They should not have been made
for the first time in reply to the Architect’s defence. It is inappropriate for material
allegations upon which a party seeks relief on a key issue to only be made in a
subsequent pleading. These pleas are all the more objectionable when these
allegations have not been pleaded against the Builder at all in circumstances where
the Owner’s case against the Architect is founded on the Builder’s alleged breaches
of the same terms of the Building Contract and there should be consistency
between her pleaded cases on the stone defects.
1421 The Owner then introduces the seeds of an ambiguous and impermissibly
inconsistent pleaded case on stone colour based on AI:04 that “the requirement
that stone was to be colour ‘2’” and that stones fitting into the ‘3’ colour category
(and implicitly any higher category) were to be removed.628 To permit the Owner
to advance a case on stone colour of ‘2’ made in reply would not only involve
internal inconsistency within the Owner’s reply pleading, but would be
623 Eighth Defence [14.1(c)].
624 Owner’s Reply to Architect’s Eighth Defence [2.2].
625 Ibid [2.3].
626 Ibid [2.5].
627 Seventh Cross Action [19A.15(i)]; Ninth Third Party Claim [26] Particulars a. iv.
628 Owner’s Reply to Architect’s Eighth Defence [2.6].
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inconsistent with her clearly pleaded case of stone in the range of colours ‘2’ to ‘3’
that is advanced against the Architect in her primary pleading. Most
fundamentally, this plea is inconsistent with the Owner’s pleaded case against the
Builder when her case on stone defects should be the same.
1422 This allegation should therefore be approached as a factual plea consistent
with the plea concerning AI:04 made in paragraph 19A.6 of the Seventh Cross
Action against the Builder in the absence of any plea of contractual effect.
1423 Further factual allegations are then pleaded as regards the Owner’s
requirements she made known at the 18 June Meeting. It is alleged she said the
colour of the stonework was not acceptable and she required the stone to be as
selected in the colour range of ‘2’629 and Mr Williams of the Architect directed
Mr Cirocco to remove all stones that were coloured (yellow or orange)630 or black
and not creamy white and he refused. Mr Calabrese is then alleged to have said
words to the effect:631
yellow, orange and black colour effects … could be removed by an acid washing process
at the completion of the construction.
1424 Mr Williams and Mr Cirocco are then alleged to have adopted Mr Calabrese’s
suggestion in order to satisfy the Owner that the final outcome would be:632
… a creamy white building with stones in colour range of 2 and without yellow and
orange sections, patches, veins or stripes.
1425 and:633
… the walls would be of colour 2 as required by the Specification.
1426 These pleas are inconsistent with the pleaded version of the facts within the
Owner’s knowledge as alleged in the particulars to paragraph 18 of the Ninth Third
Party Claim (pleas that mirror the Owner’s pleas against the Builder):634
… Mrs Clarke identified that stones were being laid that were either blighted by quarry sap
or of a colour darker than samples 2 and 3.
1427 and:635
… that the discolouration caused by quarry sap and the stone colouring that was darker
than the sample 2 and 3 would be remedied.
629 Ibid [2.10(a)]; emphasis supplied.
630 Ibid [2.10(b)]; emphasis supplied.
631 Ibid [2.10(c)].
632 Ibid [2.10(d)]; emphasis supplied.
633 Ibid [2.10(f)]; emphasis supplied.
634 Ninth Third Party Claim Particulars [18.a. x]; emphasis supplied.
635 Ibid Particulars [18.a. xi]; emphasis supplied.
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1428 Again, inconsistent pleas about factual matters within the Owner’s
knowledge on key issues in dispute should not have been made in a subsequent
pleading. They are contrary to the well-established pleading rules636 and
embarrassing to the fair trial of the proceeding.
1429 The final references to stone colour ‘2’ in the Owner’s Reply to the
Architect’s Defence are new637 and were pleaded without the Court’s leave after
the July trial was heard as a defensive plea to the Architect’s new claim for a set-
off for its unpaid fees. The last reference involves a different formulation again
and refers to “a result in stone consistently of colour 2”.
1430 These latest references to a case on stone colour of ‘2’ are a further attempt
by the Owner to advance a significantly different case to her primary pleaded case
that the required stone was to be in the range of colours ‘2’ to ‘3’ of the Stone
Supplier’s range. This is despite continuing objection from the Builder and the
Architect about the Owner’s attempts at trial to expand her case on stone colour
beyond her pleaded case and the dismissal of her applications to amend her case
on colour during the July trial and for leave to appeal this Court’s ruling.638
1431 These pleas should also not have been made and are embarrassing to the fair
trial of the proceeding. Whether the Owner should be permitted to rely on these
pleas is addressed below in context of the dispute about whether the Owner should
be confined to her (properly) pleaded case on stone colour.
The Owner’s Case on Damages
1432 The Owner claims the same damages against the Builder and Architect for
stone defects, despite making no claim against the Builder for the joint size defect.
1433 The measure of damages claimed are the costs to rectify the defective
stonework on the basis that the stone defects are so extensive that it is necessary
to remove and replace all or substantially all of the external stone cladding of the
house for the stonework to conform to the revised Building Contract requirements
for new stone masonry.
1434 As to quantum, the Owner pleads her claim for rectification costs on four
alternate bases, depending on the date of assessment and varying from 2015 to the
date of trial in 2022.639 She further claims it is necessary to move out whilst the
rectification works are carried out and claims the costs of a professional packer
and removalist and rent of a temporary residence.
636 Uniform Civil Rules 2020 67.2(3)(a) and (c) and predecessor rules 98(6) and (7) of the District Court
Civil Rules 2006.
637 Particulars (c), (e), (f) and (k) to [16.2].
638 The Owner’s Third Reply was filed on 11 November 2022, after her application for leave to appeal this
Court’s dismissal of her applications to amend was dismissed on 8 November 2022.
639 Leave was granted on 4 July 2022 for the Owner to amend her Sixth Cross Action and Seventh Third
Party Statement of Claim to introduce these alternate bases for assessing damages.
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The Builder’s Defences
1435 The Builder’s ultimate case in defence of the stone defects is pleaded in its
Defence to the Seventh Cross Action.640
1436 The essence of the Builder’s case on stone colour and quality is that by the
conduct of the Owner and Architect, the contractual requirements for the supply
and use of Basket Range sandstone were largely superseded (either by variation or
waiver) such that the Builder’s obligation was reduced to using the stone selected
by the Owner and supplied by the Stone Supplier. Further, the Owner and
Architect did not make known to the Builder any particular purpose or desired
result and did not rely on the Builder in selecting Tasmanian sandstone as a
substitute for Basket Range.
1437 As to the alleged breaches, the Builder’s position is that it complied with all
the Architect’s instructions with the result that there are no contractual non-
conformances and therefore no stone defects. In any event, all the attributes of the
built stonework now complained of were expressly approved by the Architect and
the Owner, apart from the acid damaged stones. As for the acid damaged stones,
any damage was caused by the Stone Supplier as part of sealing and cleaning works
that were not part of the Builder’s scope of works under the Building Contract.
1438 The Builder also relies on pleas of estoppel and contractual bars said to arise
under clause A8 or as a result of practical completion or as to defects not identified
for correction in Architect’s instructions. The Builder further relies on defences
of prevention, reasonableness, betterment and apportionment to nullify or reduce
any damages for which it is found liable.
1439 The Builder challenges the Owner’s complaints about mortar, variation in
joint thickness and stone misalignment defects as belated technical breaches raised
in an attempt to secure an uncovenanted profit to establish a countervailing liability
of the Builder to justify non-payment of its invoices.
1440 As for the Owner’s claim for damages for the stone defects, the Builder
contends the only pleaded case it has to meet in one of substantial replacement of
the built stonework. Whilst the Owner’s alternative case on damages pleads
component parts, the Builder contends the Owner has not pleaded such a case in
her plea of breach.
The Architect’s Defences
1441 The Architect’s ultimate case in defence of the Owner’s Ninth Third Party
Claim for stone defects is pleaded in its Eighth Defence.
640 [19A].
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1442 The Architect’s defences are also numerous and convoluted because they
respond to the Owner’s various claims of breaches of duty founded on the stone
defects.
1443 The Architect’s primary defence is that it has not breached any alleged duty
and exercised reasonable care and diligence in the provision of professional
architectural services to the Owner and in issuing progress claim certificates as
concerns stonework.641 This is because (apart from stone blighted by ‘quarry sap’
for which it had issued appropriate instructions to rectify) there are no non-
conformances with the Building Contract requirements for Tasmanian sandstone
on the Architect’s case. The Architect contends the Owner’s case against the
Architect on the stone ends if the Court finds there are no stone defects.
1444 In support of its no stone defects case,642 the Architect relies on the Owner’s
agreement to use Tasmanian sandstone as selected and approved at the Gillman
Meeting and approval of the Kermode Street stonework as the design intent. The
Architect accepts the Owner’s expressed preference at the Gillman Meeting was
for lighter coloured stone corresponding approximately with colours ‘2’ to ‘3’ in
the Stone Supplier’s range but contends the effect of her selection and approval
was not as she now alleges. Rather, the Tasmanian sandstone to be supplied and
used was to be within an acceptable range of her selection, having regard to the
natural characteristics of sandstone (such as veining and colour variation within
individual sandstone blocks). The effect was not to require the stonework to be of
a uniform colour as alleged.643
1445 The Architect further relies on the Owner’s approval of all aspects of the
stonework (both when a sample panel of stonework had been laid on the front
porch and as it continued to be laid until it was finished) as either varying the
Architects’ Specification or, if not, estopping her from further complaint about any
aspect of the stonework or any claim for damages.644 The Architect specifically
relies on her limited complaint about the variation in stone colour in the sample
panel and the outcome following meetings on-site in June 2013.645 It alleges the
Owner agreed that the sandstone installed was within an acceptable colour range
after participating in a discussion about the colour lightening when dried and the
natural qualities and inherent variation in sandstone as a natural product.646
1446 Accordingly, there is a significant factual dispute about the Owner’s alleged
participation in the site meeting foreshadowed in AI:08.
1447 The Owner’s continuing silence about the stone defects is relied on to ground
a defence in estoppel in circumstances where she participated in regular site
641 Architect’s Eighth Defence [18] repeated in [19].
642 Ibid [14.1].
643 Ibid [14.1(e)].
644 Ibid [14.2].
645 Ibid [14.1(k)].
646 Ibid [14.1(o)].
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meetings throughout construction, received Architect’s instructions including
AI:07, took possession of the house on 31 July 2024 and was closely involved in
the preparation of extensive defects list during the six months’ defects liability
period certified by the Architect under the Building Contract.647
1448 The Architect relies on a specific provision in the Building Contract (A.09)
as reserving to it final approval of the stone materials used and the width of joints
and, for workmanship, how far trade customs shall prevail648 as well as an
alternative case implying similar terms into its retainer and the Building
Contract.649
1449 The same provision in the Building Contract (A8) as relied on by the Builder
is relied on for a contractual bar to the Owner disputing the Architect’s issue of the
final two progress payment certificates650 or her alleged lack of approval of
AI:07.651
1450 Finally, the Architect alleges the Owner has suffered no loss on numerous
bases,652 and in the alternative, if she has (which is denied) then its liability should
be limited or apportioned and be wholly the Builder’s responsibility653 or in the
further alternative, set off against the Architect’s unpaid invoices and interest.654
The Third Party Claim
1451 By Third Party Statement of Claim,655 the Builder joined the Stone Supplier
as a third party to the Owner’s cross action on the basis that if the Builder is found
liable for the alleged stone defects it should be compensated by the Stone Supplier.
The Builder relies on causes of action in contract, tort and seeks contribution and
indemnity under Law Reform (Contributory Negligence and Apportionment of
Liability) Act 2001 (the Liability Act).
1452 The Builder also claims that any liability found should be apportioned
between the Builder and the Stone Supplier under either s 72 of the Development
Act 1993 (SA) (the Development Act) or s 8 of the Liability Act. These provisions
limit liability to claimants in defined circumstances and are defences to be set up
against the Owner, not independent causes of action that can be brought against a
third party.
647 Ibid [14.2(c)viii.].
648 Ibid [14.2(c)i. to vi.].
649 Ibid [14.2(c)vii.].
650 Ibid [18.5].
651 Ibid [14.2](c)iii.].
652 Ibid [21].
653 Ibid [22].
654 Ibid [22A].
655 FDN 65.
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The Stone Supplier’s Defences
1453 The Stone Supplier is only sued by the Builder as regards stone colour,
‘quarry sap’ and acid damage caused to the works. The Stone Supplier relies on
its Second Defence to the Builder’s Third Party claim.656
1454 The Stone Supplier’s pleaded position is essentially that there is no legal basis
for a claim for contribution and indemnity against it because the Stone Supplier
has no liability to the Owner for her claim for discoloured sandstone or acid
damage to the works.
1455 Otherwise, the Stone Supplier broadly adopts the position of the Builder and
Architect that there are no proven stone defects, pleading its own version of what
occurred at the Gillman Meeting as to the Owner’s colour selection of Tasmanian
sandstone. It pleads the Owner indicated she liked the stone she saw for another
customer which she selected being “Grade 1 to 4 (being the lightest grade of
sandstone available from Tasmanian Sandstone)”.657 Further, Mr Calabrese
advised: “… sandstone changes colour over time and therefore required a sealant
to be applied.” 658
1456 The Stone Supplier also pleads:659
Sandstone is a natural product which includes characteristic of veining and colour variation
within the blocks. What was to be supplied was against the colour range grade selected.
1457 The Stone Supplier further alleges that sandstone when quarried and sawn in
winter is wet and looks darker until it dries, which was explained to the Owner and
others on-site in about June 2013.660
1458 As regards its contractual obligations to the Builder, the Stone Supplier
pleads that there were limited terms to its verbal contract with the Builder to supply
sandstone in line with the colour selection and supply specified at the Gillman
Meeting by the Owner and after quoting for the square metreage and corners
specified by the Architect.661 Given the Stone Supplier supplied what it was
required to supply under the sandstone contract, it discharged its obligations and
the Builder has no entitlement to any indemnity or contribution for the Owner’s
claims for stone defects.662
1459 In answer to the Owner’s claim for acid damage to the works, the Stone
Supplier pleads it undertook cleaning works under a cleaning contract with the
Builder with due care and skill663 and the Owner has been compensated for any
656 FDN 91 dated 20 April 2020.
657 Ibid [4.1].
658 Ibid [4.2].
659 Ibid [4.4].
660 Ibid [11.3.2] and [11.3.3].
661 Ibid [6].
662 [11].
663 [9] and [11.4.3].
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damage suffered.664 The allegations that the Owner was supplied additional
cleaning acid and it is not responsible for damage caused by the Owner’s cleaning
were not pressed at trial and therefore can be ignored.
1460 In closing submissions, the Stone Supplier conceded that the Builder is
entitled to contribution from it for any liability the Builder has to the Owner for
acid damage to the works.
Scope of the Owner’s Pleaded Case on Stone Colour
Relevant Legal Principles
1461 Generally, relief is confined to that available on the pleadings:
… for a trial is not at large but is of the issues joined by the parties.665
1462 At trial, parties are bound by their assertions and admissions made in a
pleading and not entitled without leave of the Court to go beyond the pleadings by
adducing evidence of unpleaded matters or raising unpleaded issues.666
1463 This is because of the well-established functions served by pleadings. In
Dare v Pulham the High Court said:667
Pleadings and particulars have a number of functions: they furnish a statement of the case
sufficiently clear to allow the other party a fair opportunity to meet it; they define the issues
for decision in the litigation and thereby enable the relevance and admissibility of evidence
to be determined at the trial; and they give a defendant an understanding of a plaintiff’s
claim in aid of the defendant’s right to make a payment into court. Apart from cases where
the parties choose to disregard the pleadings and to fight the case on issues chosen at the
trial, the relief which may be granted to a party must be founded on the pleadings.”
1464 In Banque Commerciale SA (In Liq) v Akhil Holdings Ltd668 Mason CJ and
Gaudron J said to similar effect: 669
The function of pleadings is to state with sufficient clarity the case that must be met.
…
In this way, pleadings serve to ensure the basic requirement of procedural fairness that a
party should have the opportunity of meeting the case against him or her and, incidentally,
to define the issues for decision. The rule that, in general, relief is confined to that available
on the pleadings secures a party’s right to this basic requirement of procedural fairness.
(Citations omitted)
1465 Therefore, although the pleadings are not an end in themselves, a
fundamental purpose of observing the pleadings rules is to facilitate the fair
664 [11.4.6].
665 Water Board v Moustakas (1988) 180 CLR 491 at 496 per Mason CJ, Wilson, Brennan and Dawson JJ.
666 Uniform Civil Rules 2020 r 71 [Effect of Pleadings].
667 (1982) 148 CLR 658 at 664. Footnotes omitted.
668 (1990) 169 CLR 279 at 286.
669 Ibid at 286.
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determination of the real issues in dispute between the parties. Procedural fairness
demands so. Late changes of position may also cause significant prejudice to an
opponent who has conducted its case to trial on a different basis.
Objection to Departure from Her Pleaded Case
1466 At trial, there are limited circumstances in which a departure from the
pleadings is permitted within the discretion of the trial judge. Departure may be
appropriate where adherence to the pleadings would be unjust or unfair because
the parties have by their conduct of the trial chosen to litigate an issue that is not
disclosed on the pleadings.
1467 That is not this case. There has been persistent and clear objection to the
Owner’s attempts to depart from her pleaded case on stone colour. The Owner
was on notice before trial that the Builder had prepared and was running its defence
on the Owner’s pleaded case and not anything else.670 During trial, the Builder
(with the Architect’s support) repeatedly objected to addressing anything other
than the Owner’s pleaded case. These objections must be understood against the
background that the Owner was on notice of the Builder’s and Architect’s
objections to the amendments made to her pleaded case on stone defects in July
2020, and therefore well before trial. Despite the Owner amending her case on
stone defects numerous times, including by as late as an application dated 29 June
2022, she did not address the issues now advanced as her ultimate case.
Nonetheless, the Owner persists in advancing her ultimate case in apparent
disregard to her unsuccessful applications to amend her case on stone colour during
the July trial.
1468 The Owner’s counsel opened the July trial on an unpleaded case on the
Building Contract requirements for stone colour being “in the range of colours 2,
we say up to 3 but not including 3”,671 contrary to her clearly pleaded case that: 672
By reason of the said selection and approval, the [Builder] was required under the contract:
(i) By clause E.03.06 of the specification to purchase and use stone which was
consistent in colour, texture and density and within an acceptable range of the very
light coloured stone, being in the range of colours 2 to 3, of the colour range
identified by [the Stone Supplier].
1469 When this departure from the pleadings was identified, the Owner’s counsel
submitted this was the effect of AI:04. When it was observed that this was not
how she had pleaded breach of the Building Contract, counsel for the Owner’s
unsatisfactory response was this was (now) the Owner’s case.673
670 Builders Stone Closing [3.19].
671 T11.24-.32.
672 Sixth Cross Action [19A.7(i)] and [19A.15(i)]; Eighth Third Party Claim, Particulars a vi, vii and (x)
and (xi) to [18].
673 Ibid.
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1470 The Owner was extensively cross-examined on her pleaded case against the
Builder, including as to the Building Contract requirements for stone colour being
within an acceptable range of Tasmanian sandstone colours ‘2’ to ‘3’. There were
material inconsistencies between the Owner’s pleaded case, her evidence about
stone selection and approval and the claims she made in the contract administration
correspondence, her response to a Notice to Admit674 and the case her counsel had
opened on.
1471 Importantly, the Owner was not cross-examined on the factual basis of the
new unpleaded case on colour opened on by her counsel. 675
1472 After the Owner had given evidence, counsel for the Owner responded to a
question from the bench as to how the Owner alleged ‘stripes’ or ‘variegations’ in
the stone fitted into her pleaded case of a colour range of ‘2’ to ‘3’ and stone that
was too dark. Counsel for the Owner advanced yet a further new unpleaded case:676
Mr dal Cin: I can, stripes is out of 2, it is not within 2.
Her Honour: Your case is now only 2? That’s not what your pleading says.
1473 This exchange occurred in the context of an exchange between the bench and
counsel for the Builder and Architect about their continuing objection to the
relevance of the Danvers reports because the criteria adopted for assessment of
non-conforming stone colour was not the Owner’s pleaded case of colour within
an acceptable range of colours ‘2’ to ‘3’ of the Stone Supplier’s range. The
Owner’s counsel then foreshadowed an amendment to plead colours ‘1’ and ‘3’
but not including ‘3’ (and not a case of only ‘2’).
1474 On 15 July 2022 (the ninth day of the July trial and after the Owner and
Dr Clarke had given evidence and Ms Crowden was interposed), the Owner made
her very late application to amend to plead a new case on colour. She proposed to
amend 19A.4 of the Sixth Cross Action to delete the reference to colours ‘2’ to ‘3’
and plead the selection and approval of colours ‘1’ and ‘2’ at the Gillman Meeting
“thereby instructing the approval of colours fitting into the colour range of ‘1’ up
to but not including ‘3’”. In the plea as to the Building Contract requirements for
colour (paragraph 19A.7) she proposed to delete “2 to 3” and insert “2 up to but
not including 3”. Consequential amendments of the same nature were proposed
as to the balance of paragraph 19A and for those amendments to be replicated in
paragraph 18 of the Seventh Third Party Claim against the Architect.
1475 The amendments proposed were not the only colour ‘2’ case advanced when
the possibility of amendment was foreshadowed.
1476 Again, the Owner’s applications for leave to amend and for permission to
appeal were both unsuccessful. Both this Court and his Honour Justice Stanley
674 Exhibit A7.
675 Clarke v Cirocco Constructions Pty Ltd & Ors op cit [22].
676 T400.25-.26.
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assessed the proposed amendments as a significant change to the Owner’s case on
stone colour,677 made some nine years after the Gillman Meeting in circumstances
where the Owner had been through multiple iterations of her case but consistently
pleaded stone colours being within an acceptable range of colours ‘2’ to ‘3’ from
the Stone Supplier’s range. It was accepted that the Builder and the Architect had
made forensic decisions on the basis of the Owner’s pleaded case and were entitled
to insist on the Owner being confined to her pleadings and would suffer significant
prejudice if the proposed amendments were allowed part way through the trial.
1477 Later during the Architect’s opening, counsel for the Owner attempted again
to resile from the Owner’s pleaded case on colour. He submitted that the words in
clause E.03.06 “within an acceptable range” have no work to do despite being
part of the Owner’s pleaded case because AI:04 has contractual effect,678 although
no contractual effect is pleaded.
The Owner’s Ultimate Case
1478 In closing submissions filed after the November trial, the Owner ultimately
advanced the following case on stone colour:679
138.1 The Builder was required to supply and install sandstone sourced from Tasmanian
Sandstone Quarries Pty Ltd (“TSQ”) or “stone supplier” that was within colour
category “2” and not of category “3” or higher, such that the stone was to be white
or creamy white, without yellow veining; and
138.2 The stone walls were to be consistent in the resultant white or creamy white colour.
1479 The Owner’s closing submissions filed after the July trial (which she
expressly relies on in her final closing submissions) put it a little differently:680
121.1 Stone to be of a consistency which means it all fell within the range which is TSQ
colour category 2, and did not fall within colour category 3.
…
122. As to stone colour, the requirement was for stone colour category 2 as at the time
of laying and as at the date of practical completion.
1480 The departure from the Owner’s pleaded case in the July 2022 submissions
might be explained because they were filed and served before his Honour Justice
Stanley dismissed her application for leave to appeal. Her final closing address
was not and should only advance the Owner’s pleaded case.
677 Clarke v Cirocco Constructions Pty Ltd & at [17].
678 T1312.8-.22.
679 Owner’s Final Closing. Emphasis supplied.
680 Owner’s Stone Closing. Emphasis supplied.
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1481 Against this background, the Owner’ submitted the case she ultimately
advances is disclosed on the pleadings and arises on the evidence to be properly
received and by the manner in which the trial has been conducted.
Conclusion
1482 For the reasons that follow, save as to the allegations of consistency of colour
and whiteness/creamy whiteness, the Owner’s submissions should be rejected, and
the Owner confined to her pleaded case that:681
By reason of the said selection and approval, the [Builder] was required under the contract:
(i) By clause E.03.06 of the specification to purchase and use stone which was
consistent in colour, texture and density and within an acceptable range of the very
light coloured stone, being in the range of colours ‘2’ to ‘3’ of the colour range
identified by the [Stone Supplier].”
1483 Contrary to the Owner’s submissions, a case of colour ‘2’ does not arise on
the evidence, including her own. Colour ‘2’ is not the colour the Owner selected
at the Gillman Meeting or the colour she described in her evidence as acquiescing
in or the colour required at the 18 June Meeting or demanded until it was first put
in her opening at the July trial.
1484 If a different conclusion had been reached, the end result on liability for the
alleged stone colour defect would have been same. There are several reasons for
this. First, the evidence does not support the case as ultimately advanced by the
Owner as to the contractual requirements for stone colour selected and approved
by the Owner. Secondly, the Owner has failed to prove that the stone supplied and
used is stone outside either the criteria for stone colour advanced by her ultimate
case or the pleaded case to which she should be confined.
As to Colour Category
1485 There are a number of points to be made.
1486 First, the submission that the trial was conducted on a different basis to the
Owner’s pleaded case must be dismissed outright. It ignores the repeated
objections of the Builder and Architect to the Owner’s attempts to change her case
on stone colour as discussed above. To now find her pleadings disclose a case on
different criteria for colour when her applications to amend in very similar terms
were considered to be a significant change in her case by both this Court and on
appeal would be anomalous and unjust.
1487 The Owner’s pleaded case on stone colour is clear and significantly different
from the case ultimately advanced. It is not stone within colour category ‘2’ but
not category ’3’ or higher such that the stone was to be white or creamy white,
without yellow veining. It is not a stone colour of ‘2’. The effect of AI:04 is not
681 Seventh Cross Action [19A.7(i)].
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pleaded and was not historically relied on for the revised contractual requirements
for stone colour or their breach in her primary pleadings.
1488 Again, the revised the Building Contract requirements are expressly pleaded
as “within an acceptable range of the very light coloured stone, being in the range
of colours 2 to 3 of the colour range identified by [the Stone Supplier]”.682
Clause E.03.06 of the Architect’s Specification and the Owner’s said selection and
approval of Tasmanian sandstone at the Gillman Meeting are expressly relied on
for the contractual requirements for colour, not AI:04.
1489 The pleaded breach is in the same terms.683 The same case on stone colour is
replicated in the pleaded case against the Architect. Again, it must be because the
terms of the Building Contract cannot be different for the Builder and the Architect
as the Owner’s counsel properly acknowledged in opening the Owner’s case.
1490 Secondly, contrary to the Owner’s submissions, it is simply not open to read
the pleaded range of colours ‘2’ to ‘3’ as ‘2’ up to ‘3’ but not including ‘3’. Nor
can it be read as meaning colour ‘2’ without any range.684 As the Builder submits,
colours ‘2’ to ‘3’ unremarkably means what it says: colours ‘2’ to ‘3’. The
Architect agrees.
1491 Bearing in mind that clause E.03.06 expressly provides for the required stone
to be within an acceptable range in comparison to the sample stones, the Owner’s
submissions are nonsensical.
1492 Further, there is no sense in which the alleged qualifications of “being very
light stone” or “white” can change the pleaded range of colours ‘2’ to ‘3’. It is a
different question as to whether colours ‘2’ or ‘3’ are very light or white colours.
1493 Thirdly, the Builder’s alleged indifference to what occurred at the Gillman
Meeting is beside the point.685 The Builder denies the key allegations comprising
the essential elements of the Owner’s case on the stone colour (that is the requisite
contractual requirements and breach) and advances a positive case to the effect it
was required to use whatever stone was selected, supplied and approved.
1494 Fourthly, contrary to the Owner’s submissions,686 the Architect’s defensive
plea to the effect that the Owner selected and approved “colour classification 2-
3”687 does not assist the Owner pivot her case at the end of the trial to an unpleaded
one.
682 Seventh Cross Action [19A.7(i)].
683 Ibid in [19A.15(1)].
684 Owner’s Final Closing [142].
685 Ibid [140.3].
686 Ibid [140.4].
687 Architect’s Defence [14.1(c)].
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As to AI:04
1495 The Owner’s submissions about her reliance on AI:04 in her pleaded case
and the way the parties’ conducted the trial must also be rejected.688
1496 As previously identified, the Owner does not plead AI:04 as having any
contractual effect.689 The Owner chose to plead the issue of AI:04 as only a
contextual fact as to stone colour despite being on notice from at least June 2020
of the Builder’s objection to the introduction of this plea because there were no
pleaded consequences of AI:04. His Honour Judge O’Sullivan said he permitted
the proposed amendment because he was not in a position to determine what
consequences flowed from it and left the issue for the Trial Judge to determine. 690
1497 Significant consequences flow.
1498 The plea of AI:04 in paragraph 19A.6 is not a plea of effect, it is a plea of
fact, as the Owner reluctantly acknowledges elsewhere in her submissions.691
Again, AI:04 was not pleaded as a contractual requirement for stone colour. It was
not pleaded as being connected to the alleged breach due to the stone being outside
the selected and approved colour range.
1499 It is not connected because the plea about AI:04 was introduced in July 2020
as part of the Owner’s new stone defects case as to the necessary requirements for
an ashlar pattern, joint sizing, alignment and mortar colour.692 Moreover, the
Owner’s pleaded case on stone colour has not changed since it was introduced in
the Owner’s Fifth Cross Action in December 2018.
1500 Contrary to the Owner’s submissions,693 the Builder does not admit the effect
of AI:04 in its defence. The Builder only admits the factual allegation that the
instruction was issued and addresses stonework pattern joining and bonding but
not stone colour.694 This limited admission should be understood in context of the
Builder’s long-standing complaint that there is no pleaded consequence to the issue
of AI:04, the Builder’s primary defence that what it was ultimately required to do
does not depend on AI:04 and its insistence that the Owner be confined to a pleaded
case that does not rely on AI:04.
1501 The admission of the document into evidence is not decisive. The document
does not define the issues and determine what is relevant. Nor is what the parties
said in their openings a compelling reason for permitting the Owner to depart from
her pleaded case when viewed in the context of the Owner’s unsuccessful
688 Owner’s Final Closing [158]-[167].
689 Seventh Cross Action [19A.6]. See [1370]-[1371] and [1396]-[1397] above.
690 Cirocco (No 3)[34].
691 Owner’s Final Closing [141.1].
692 Sixth Cross Action.
693 Owner’s Final Closing [141.2], [142.1] and [159].
694 Builder’s Defence [19A.6].
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application to amend her case on stone colour and appeal. The conduct of the case
should conform to the pleadings and the not the other way around.
1502 Ultimately, it is too late for the Owner to change her pleaded case.
1503 It is not just a question of undue delay in circumstances where a party has
had sufficient opportunity to plead her case. It is about doing justice to the Builder,
the Architect and the Stone Supplier.695 They have conducted their cases on the
basis of the Owner’s long-standing pleaded case on the contractual requirements
for stone colour based on the selection and approval at the Gillman Meeting and
clause E.03.06 of the Architect’s Specification, as they were entitled to do. They
have made forensic decisions both as to whether to defend the Owner’s claim and
about how to defend it on that basis since December 2018 when the first version
of paragraph 19A was introduced into the Owner’s Fifth Cross Action and
replicated in the third party claim against the Architect.
1504 It would be anomalous and unjust to permit the Owner to indirectly amend
her case on colour when her formal application to amend and her appeal were both
dismissed. In the circumstances, to permit the Owner to depart from her pleaded
case and rely on AI:04 having contractual effect would contravene the fundamental
principle that the pleadings should clearly state the case put against a party. This
is because no party ought to be put to loss without having a proper opportunity to
meet the case against them.696
Consistency of Colour
1505 The issue of ‘consistency’ of the required stone colour arises directly on the
Owner’s pleaded case that expressly relies on clause E.03.06 of the Architect’s
Specification. It has been squarely addressed at trial by all opponents, it is not new
and remains an important issue to be determined by the Court.
White and Creamy White
1506 As previously indicated, the inconsistencies in the Owner’s pleadings as to
the nature of the colour categories ‘2’ and ‘3’ and therefore the selected and
approved colour range is problematic. The Owner’s differing positions as to what
in fact these colours are (very light coloured sandstone, white, creamy white,
creamy white/yellow) or not is at best confusing but should be approached as a
factual dispute for the Court to resolve on the evidence.
The Contractual Requirements for Stone
1507 On the basis that the Owner should be confined to her pleaded case as to her
selection and approval of stone colour, the first agreed issue to be determined is
what the parties agreed as to the purchase and use of Tasmanian sandstone.
695 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 [94].
696 Gould v Mount Oxide Mines Ltd (In liq) (1916) 22 CLR 490 at 517 per Isaacs and Rich JJ.
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1508 There is no significant contention about the Builder’s general obligations to
carry out and complete the building works in compliance with the Architect’s
Specification or the applicable clauses for Basket Range sandstone. The dispute
concerns what the parties ultimately agreed when different stone was required and
whether all or just parts of the Architect’s Specification for new stone masonry
were superseded by their agreement.
What were the agreed varied terms for Tasmanian Sandstone?
Intention to be Bound
1509 Plainly, the provisions in the Architect’s Specification for new stone masonry
and thus the terms of the Building Contract were varied by the specification of
Tasmanian sandstone in lieu of Basket Range sandstone. Given the subsisting
contract, there is no question as to the parties’ intention to be bound by the terms
of the variation ultimately agreed. The essential question is what were the agreed
varied terms.
1510 The evidence of the parties’ conduct establishes that they did not simply
agree to a different source of stone and a new supplier being substituted in clause
E.03.06 of the Architect’s Specification so that the balance of the specification for
new stone masonry applied mutatis mutandis.
1511 Instead, the parties embarked upon a process for the selection and approval
of an alternate stone, manifesting a common intention for the requirements in the
Architect’s Specification to be superseded by what they said and did (and did not
say or do) to resolve an important and pressing design issue.
1512 The terms of the varied specification for new stone were agreed by the course
of the parties’ dealings between April and June 2013. Their continuing course of
conduct presents some challenges in precisely identifying the point at which
mutual assent was reached to terms sufficient to create a binding contract on all
aspects of the specification. For some terms (such as stone pattern and joint size)
there were clear points of crystallisation of contractual intent. For others where
the requirements were evolving and changeable (such as stone and mortar colour
and pointing), the parties embarked upon a process of selection and approval, such
that the point of crystallisation of contractual intent did not occur until the final
step in the selection and approval process was completed. The difficulty in the
latter case is identifying what was ultimately agreed as matters evolved.
1513 As to stone colour and stonework (pattern and jointing), the final step was
the Owner’s approval given at the site meeting directed in AI:08. The as built
stonework set the specification against which the stonework is to be assessed for
contractual conformance.
Design Intent
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1514 The specification for new stone under the Building Contract was for Basket
Range sandstone, a light multi-coloured sandstone, to be laid in a random ashlar
pattern with 5mm fine joints, with matching mortar colour in accordance with the
relevant provisions in the Architect’s Specification. There was no requirement for
uniformity of colour and or that the stone not be ‘striped’ as the Owner described
natural sedimentary patterns.
1515 When Basket Range sandstone was unavailable, the overall design intent
changed and the ‘guiding light’ became the stonework viewed at Kermode Street
built of Tasmanian sandstone. The design intent was to replicate every aspect of
the stonework at Kermode Street except the house: that is, colour, pattern and
jointing and overall appearance using Tasmanian sandstone laid in a stretcher bond
pattern with 10mm joints.
1516 Contrary to the Owner’s ultimate submission, the design intent was not white
or creamy white stone without yellow veining of consistent or uniform colour with
fine 5mm joints.
Approved Stone Colour, Pattern and Jointing
1517 The Architect’s Specification addressed the contractual requirements for
stone colour (and the uncontentious features of texture, density etc) in three ways.
1518 First, by specifying the source of the stone as Basket Range sandstone, with
its known appearance and qualities: clause E.03.06. Secondly, by requiring the
Builder to submit samples of the Basket Range sandstone to be used: clause
E.04.01. Thirdly, by requiring stone colour to be consistent and within an
acceptable range of ‘approved stone samples’: clause E.03.06.697
1519 It is implicit that the Architect as designer in consultation with the Owner as
principal would decide which of the samples submitted by the Builder were
‘approved stone samples’ for the purpose of the contractual specification for stone
colour as provided in clause E.03.06.
1520 For Tasmanian sandstone, the selection and approval process provided for in
the Architect’ Specification for new stone masonry was superseded by the parties’
inconsistent conduct and their mutual assent to a materially different process.
Ultimately, there were no approved portable stone samples, stone colour was
selected from viewing the Stone Supplier’s range of colours at its yard and the
colour, pattern and jointing of the stonework were finally approved by the Owner
and Architect at the subsequent June site meeting in the form of built stonework.
1521 The Architect, with the active participation of the Owner and tacit agreement
of the Builder, led the process with the intention of crystallising an agreement
697 See [366] above.
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between the Owner and the Builder as to the contractual specification for an
alternative stone. This process involved the following steps.
1522 First, the Architect and Owner viewed samples of stones from different
sources and suppliers in the Architect’s boardroom. The samples of Tasmanian
sandstone were preferred but Tasmanian sandstone was not finally selected or
approved as the specified stone, let alone was any decision made as to colour. The
viewed samples were not regarded as ‘approved samples’.
1523 The second step taken was the viewing by the Architect and Owner of
examples of built stonework including at Kermode Street. This house was
designed by the Architect and considered by Mr Williams to be built of ‘fairly
handsome’ Tasmanian sandstone in a stretcher bond pattern with 10mm joints.
With the Owner’s favourable approval, the stonework at Kermode Street became
the design intent which the Architect sought to replicate in subsequent instructions
given to the Builder. As happens all too often, the Architect’s subsequent
instructions to the Builder did not exhaustively or correctly record all the agreed
upon detail, such as the uncontroversial change of pattern.
1524 The third step taken was to visit the Stone Supplier’s yard for the purpose of
viewing and making a colour selection from a more extensive assortment of
Tasmanian sandstone, rather than by reference to one or two samples of stone
viewed in isolation. This was a sensible course given the known and obvious
characteristics of Tasmanian sandstone as a natural product and a sedimentary
stone. Because it was a design issue upon which the Architect would later
give instructions, the Builder’s participation was not essential. Mr Cirocco’s
attendance was for convenience and information rather than for any contractual
purpose. He would agree to whatever Mr Williams asked the Builder to do and
the Builder was obliged to do as the Architect instructed in writing.
1525 By the end of the Gillman Meeting, the Owner had made her colour selection
and orally conveyed to Mr Calabrese and Mr Williams her requirement for a range
of colours: colour categories ‘1’ to ‘3’ of the Stone Supplier’s range, which
everyone then knew. When the Builder ordered the stone, he only specified the
quantities because Mr Calabrese already knew from the Owner’s direct
instructions the stone colour to be supplied.
1526 The Owner’s selection at the Gillman Meeting was on her pleaded case the
‘approved’ stone to be purchased and used and the contractual requirement for
stone colour. This contention should be accepted, save that it was subject to any
subsequent instructions given by the Architect to the Builder and the approval of
the Owner and Architect of a sample panel of stonework on-site.
1527 No portable samples of Tasmanian sandstone were taken from Gillman and
kept on-site, or elsewhere, which everyone also knew. Portable samples were not
essential because of the known variability of stone colour within the selected range
and the inherent difficulty of picking representative samples.
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1528 In these circumstances, by their conduct the parties manifested a mutual
assent to depart from the concept of portable ‘approved stone samples’ as
contemplated by clause E.03.06 of the Architect’s Specification.
1529 The final step was the requirement for the Builder to build a sample wall
panel for approval by the Owner and the Architect of the stonework: that is, stone
colour, layout and joint sizes. The latter requirements were expressly directed by
the Architect in AI:04, consistent with its predecessor clause E.04.03 of the
Architect’s Specification. Although stone colour was not mentioned, it was an
obvious and important attribute of the stonework to be viewed and approved. The
Owner said so when she acknowledged in evidence that this was the purpose of
the 18 June Meeting.
1530 It would have been reasonably understood by all the parties that the approval
of the Architect and the Owner of a sample wall panel was essential for the
stonework to proceed beyond that point and would crystallise an agreement for the
final specification for the supply and use of Tasmanian sandstone under the
Building Contract, subject, as always, to further Architect’s instructions.
1531 The requisite approval was given at the site meeting on about 21 or 22 June
2013 in circumstances that finally crystallised an agreement between the parties as
to the approved stone and stonework, and therefore the final specification for stone
colour, pattern and joints for the supplied Tasmanian sandstone.
1532 The parties’ agreement as to the approved stone was made in compelling
circumstances as to its intended effect. The Owner accepted the purpose of her
viewing the built stonework was for her approving all of its discernible aspects
(despite her complaint the stonework viewed was part of the house walls and not
a sample). Everyone knew her approval was required and essential for
construction of the stonework to proceed further in ordinary circumstances.
Everyone knew the Architect had directed construction of the stonework to stop as
a result of the Owner withholding her approval at the 18 June Meeting.
Accordingly, her subsequent approval was all the more necessary for stonework
construction to continue in the circumstances of her objections, which everyone
knew.
1533 In these circumstances, the section of built stonework approved by the Owner
on about 21 or 22 June 2013 defined the contractual specification for stonework as
to stone colour, pattern and jointing and the reference for assessing contractual
conformance for the remainder of the stonework. It is clear the parties mutually
assented to the selection and approval process, intended the outcome to be binding
and comprise the terms of the specification for Tasmanian sandstone to be supplied
and installed on the Owner’s house and garage walls.
1534 In practical terms, there were good reasons for the parties to have agreed a
different process for the selection and approval of an alternative stone than
originally specified. As already stated, there was a pressing design issue to resolve.
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There was significant utility in viewing built stonework and, on the Owner’s
approval, adopting the stonework at Kermode Street as the design intent. The same
can be said of viewing a broader selection of stone at Gillman and finally
approving the new stone by reference to laid stonework. A section of laid
stonework provided better information as to the overall appearance as to colour,
pattern and jointing than a comparison against several approved stone samples and
a dry panel wall. This is all the more pertinent given the known variability of
Tasmanian sandstone within the selected colour range of the Supplier’s stone
categories ‘1’ to ‘3’.
Varied Specification for Stone Colour
1535 It follows that the specified stone colour under the varied Building Contract
is the range of light coloured Tasmanian sandstone laid in the section of stonework
approved by the Owner at the site meeting on about 21 or 22 June 2013, subject to
two qualifications. First, several stones near the front door were required to be
removed (and were removed) and therefore not approved because they were not to
the Owner’s liking. Secondly, the remainder of the stonework was subject to the
Architect’s direction to use the best stone on the front.
1536 The Owner’s approval of the stonework given at the subsequent site meeting
and the direction to use the best stone on the front superseded the Owner’s
selection of colours ‘1’ to ‘3’ from the Stone Supplier’s lighter range of Tasmanian
sandstone.
1537 The specified stone colour was therefore not the case advanced by the Owner
in her pleadings of ‘2’ to ‘3’ or in her closing submissions of “within colour
category ‘2’”698 and not ‘3’ or stone that was “white or creamy white without
yellow veining”699 or consistently white or creamy white walls.700
1538 The specified stone colour under the varied Building Contract is the range of
light coloured stone of varying colours and patterns as evident in the stones
generally shown in the photographs701 taken on 24 June 2013. The selected range
includes stone that had some warmth and movement in it, some sedimentary
veining and other natural markings. The specified stone colour is not uniformly
white or cream, unblemished, unmarked or without natural variations, although
cream is an important feature.
Consistency and Uniformity
1539 The Owner’s ultimate submission was that the varied Building Contract
required consistency of the selected stone colour ‘2’, meaning all of it should fall
698 Owner’s Final Closing [138.1].
699 Ibid.
700 Ibid [138.2].
701 Exhibit R3.421.
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within the Stone Supplier’s colour category ‘2’ and none within category ‘3’.702
Further, the stone walls were to be “consistent in the resultant white or creamy
white colour”, “consistently white or very light coloured” and “substantially
uniform in colour and such as would give the house an even, consistent, creamy
white appearance”.703
1540 The Owner’s contentions as to consistency and uniformity rely on clause
E.03.06 of the Specification continuing to apply so the stone purchased and used
was “consistent in colour, texture and density etc and within an acceptable range
in comparison to the approved stone samples”. 704 Again, there were no issues
about texture or density of the selected stone, but consistency was a significant
issue on the various cases sought to be advanced by the Owner.
1541 The Owner’s contentions as regards consistency and uniformity should be
rejected.
1542 First, there is no foundation in the evidence for any common contractual
intention for the criteria in clause E.03.06 to still apply in circumstances where the
selection and approval process was entirely superseded by a different process.
1543 Secondly, consistency in the sense of uniformity was not apt for the selected
and approved range of Tasmanian sandstone. The stone selected at the Gillman
Meeting comprised a range of colours ‘1’ to ‘3’ and (as the Owner’s pleaded case
acknowledged) each of the Stone Supplier’s colour categories also denoted a range
of colours, reflecting both the natural variability in the colour and pattern of the
stone and the Stone Supplier’s judgment in grading the stone into categories.
1544 As such, the parties knew there was no consistency or uniformity of colour
within the Stone Supplier’s categories (save perhaps to a limited extent at the
lightest or darkest ends of the range) and a range of ‘1’ to ‘3’ might well include
unwanted ‘4’s. The parties knew this from what they had seen at the Gillman
Meeting and because Mr Calabrese had told them it was unrealistic and not
feasible to pick a single colour category. He had recommended the Owner pick a
range, which advice she accepted and followed.
1545 Thirdly, the Owner’s selected range of stone colours was not a uniform white
or creamy white stone, without yellow veining.
1546 When the known characteristics of the selected stone are properly
appreciated, it is anomalous to conceive of the parties’ intending consistency or
uniformity of colour to be an applicable term of the varied specification for stone
colour. The only consideration arguably given to consistency was Mr Williams’
concern to focus on ‘2’s as the centre of the selected colour range of ‘1’ to ‘3’. His
702 Owner’s Stone Closing [121.1].
703 Owner’s Final Closing [138.2], [145.2] and [146.2].
704 See [366] above.
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concern reflected the objective of keeping within the selected range of variably
light coloured stone, not that there be overall uniformity of colour.
1547 Accordingly, there is no foundation in the known circumstances to infer any
intention that the selected stone would be a consistent or uniform colour from the
parties’ words and conduct.
1548 This is both common sense and follows from the evidence of Associate
Professor Danvers about the difficulty generally of any quarry in Australia
achieving supply of absolute uniformity of colour, let alone using Tasmanian
sandstone where diversity of colour is an important characteristic.
1549 Finally, if clause E.03.06 had continued to apply to the Owner’s selection of
Tasmanian sandstone, properly construed it did not require consistency of a single
colour and therefore uniformity of colour. It required the supplied and used stone
to be consistently within an acceptable range by comparison to the selected colour
range of variably light coloured and patterned Tasmanian sandstone.
Pattern and Joint Size
1550 It is common ground that the Builder was required to lay the stone in a
stretcher bond ashlar pattern with 10mm nominal recessed joints for pointing later
as instructed in AI:07. It is uncontentious that the Builder and the Owner are bound
by the Architect’s instructions given in AI:07.705
Mortar Colour
1551 Clause E.04.03 of the Architect’s Specification provided that, generally,
stonework would be laid in matching colour mortar and would be discussed prior
to commencing on-site. Having regard to the parties’ conduct in selecting and
approving an alternative stone, there is no reason to conclude they intended to
depart from this general requirement that the mortar colour would match the
selected and approved stone colour and the final colour would be specified on-site
by reference to the built stonework. Its final specification was an important design
issue reserved to the Architect’s skill and judgment.
1552 As contemplated by clause E.04.03, further instruction for the mortar mix for
pointing were given by the Architect in AI:07 and finalisation of the mix and finish
were to be discussed further on-site by the Builder and Architect before
proceeding. Pointing was to be done later, after the stonework was fully laid.
1553 It follows, the mortar colour was generally required to match the range of
variably coloured light stone colour laid in the section of front house wall approved
by the Owner at the subsequent site meeting, using the mortar mix specified in
705 Clauses A2.1.d, A3.2.a, A4.1.f, A6.3 and A8.
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AI:07, with the mix and finish to be confirmed on-site by the Architect before the
pointing was done.
1554 Mortar was therefore not required to match Tasmanian sandstone colour
category ‘2’ as the Owner ultimately submits. Nor was it required to be the same
or slightly lighter than sample stone ‘SC 135’ or be pure white as Associate
Professor Danvers suggested was often used.
Best Quality
1555 In accordance with clause A.09.01 of the Architect’s Specification, the
Tasmanian sandstone supplied was to be the best quality “of the kind specified”
and subject to the Architect’s approval. The proper construction of this term is
considered below in addressing whether there is a breach by reason of the supply
and use of stone that has become affected by ‘quarry sap’.706
Workmanship
1556 In accordance with clause A.09.01 of the Architect’s Specification, the
workmanship in laying Tasmanian sandstone on the house walls was to be up to
first class standards and the approval of the Architect, with the reservation to the
Architect to decide how far trade custom shall prevail in determining such
approval.
1557 The express reservation to the Architect to determine how far trade custom
shall prevail confers on the Architect a discretion to determine what constitutes the
requisite standard. It follows that the required contractual standard is not an
absolute and is informed by what in the Architect’s judgment constitutes trade
custom and practice as regards the feature of workmanship in issue. The
requirement of the Architect’s approval should nevertheless be construed as
cumulative and not overriding the requirement for a first class standard
workmanship for the reasons discussed below.707
Breach of the Building Contract as Varied
1558 The second agreed issue to be determined is whether the stone was installed
in accordance with the Building Contract as varied.
1559 It is axiomatic that to succeed the Owner must prove that the stone supplied
and laid does not conform with the specification for Tasmanian sandstone under
the Building Contract as varied or if there is conformance, the Architect has
otherwise breached its duties to her.
706 See [1568] below.
707 See [1607] and following below.
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Stone Colour
1560 The Owner has not proved that the colour of the stone supplied and laid on
the house and garage walls does not conform with the specification for Tasmanian
sandstone under the varied Building Contract as found. That is, the Owner has not
proved that stonework does not conform with the colour of the section of built
stonework inspected and approved at the subsequent site meeting.
1561 Nor has she proved the supplied and laid stone does not conform with her
pleaded case for consistent colour within an acceptable range of the stone selected
and approved at the Gillman Meeting of colours ‘2’ to ‘3’ of the Stone Supplier’s
categories708 or her (unpleaded) ultimate case of ‘2’ as advanced in final
submissions.
1562 The evidence also does not support any of the other (inconsistent)
permutations contended for by the Owner at varying times since this dispute began.
It does not support a finding that the stone colour laid on the house and garage
walls as at 18 June 2013, or the subsequent site meeting did not conform with the
Owner’s selection of stone at the Gillman Meeting (whether colours ‘1’ to ‘3’ or
‘2’ to ‘3’).
1563 The evidence also does not support a finding that the colour of the stone
supplied and laid on the house and garage walls when the Owner took possession
of the works or as at the certified date of practical completion or during the certified
defects liability period did not conform with the stone colour selected and
approved by the Owner at the Gillman Meeting (again whether colours ‘1’ to ‘3’
or ‘2’ to ‘3’).
1564 These conclusions inevitably follow from the fundamental gaps in the
Owner’s case. First, she has not objectively proven what constitutes any of the
relevant Stone Supplier’s colour categories or the limits of their individual ranges
or the outside limits of the selected and approved colour range ‘1’ to ‘3’. Secondly,
she has not connected the stone colours laid in the house and garage walls with the
Stone Supplier’s colour categories, whether as pleaded or otherwise contended.
Thirdly, the Owner has not connected her (variable) requirements with the
requirements under the varied Building Contract as found.
1565 Instead, the Owner instructed Associate Professor Danvers to assess the
colour of the stone supplied and laid on the house and garage walls by reference
to a single sample stone ‘SC 135’ that has no proven connection to the Stone
Supplier’s colour categories or the contractual requirements for stone colour as
found or pleaded.
1566 Reliability aside, Associate Professor Danvers’ assessment of conformity by
reference to sample stone ‘SC 135’ is confined by an irrelevant metric, both as to
the reference point and the basis of acceptability being “a reasonably close match,
708 Seventh Cross Action [19A.15(i) first bullet point and (ii) first bullet point].
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very slightly lighter and slightly darker” to the sample stone.709 As Associate
Professor Danvers frankly observed, the characteristics that make Tasmanian
sandstone attractive contradict his instructions as to what was required and make
the alleged specification of colour ‘2’ unachievable.
1567 There is no reliable evidence as to the extent of any departure of stone colour
from the Owner’s pleaded colour range or the range she selected at the Gillman
Meeting and accepted in evidence she did not require to be replaced, let alone the
specification for stone colour in the form of the section of the laid stonework
approved at the subsequent site meeting.
‘Quarry Sap’
1568 The Builder’s supply and use of stones that became affected by ‘quarry sap’
many months after they were laid is not a breach of the Building Contract as varied
for the following reasons.
The Owner’s Pleaded Case
1569 Whilst the Owner’s complaints about ‘brown’ stones and the acid cleaning
are prominent events, her claims about ‘quarry sap’ were not a major focus of her
pleaded case on stone defects.
1570 The Owner’s pleaded case is that the Builder supplied and used stone that is
not of the best quality because it was liable to be, and in due course became,
blighted by ‘quarry sap’.710 The stones allegedly blighted by ‘quarry sap’ are also
identified in the Owner’s Annexure B as non-conforming as to stone colour by
reference to sample stone ‘SC 135’ or as acid damaged on the basis of Associate
Professor Danvers’ opinion expressed in the Second Danvers Report.
The Nature of ‘Quarry Sap
1571 No party adduced an expert report prepared in compliance with the Court
rules as regards the chemistry or scientific basis of the phenomenon of ‘quarry sap’
and its treatment.
1572 There is however admissible evidence given by the witnesses with proven
expertise and/or experience in observing and dealing with this phenomenon as to
their understanding of its nature, how it manifests in sandstone including
Tasmanian sandstone generally and specifically did in this case, and as to its
treatment generally and in this case.
1573 Mr McAllister was the most expert and experienced witness as to stone and
best explained the phenomenon of ‘quarry sap’ he observed on the Owner’s house
and garage walls in September 2015.711 He said the black spotting or staining that
709 First Danvers Report page 2349.
710 Seventh Cross Action [19A.15(i) second bullet point and (ii) first bullet point].
711 The HSR Report, page 2034; T1617.8-.13.
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unpredictably appears on some Tasmanian sandstone is the result of manganese
oxides leaching to the surface of the stone, according to analysis by a number of
Australian quarries. Mr McAllister agreed in cross-examination that in a project
the size of the Owner’s it is inevitable that ‘quarry sap’ would manifest in some of
the stonework.
1574 In evidence Mr McAllister said he had cleaned sandstone (including
Tasmanian sandstone) affected by ‘quarry sap’ with diluted hydrochloric acid and,
in his experience, that had “generally to a degree” been successful.712 It was
implicit from the qualification he made in his oral evidence that he meant in his
experience success in removing ‘quarry sap’ was variable. He made this clear in
the HSR Report when he wrote:713
… a formula of 10% hydrochloric acid to 90% potable water…is applied by spraying or by
brush on the affected area. When the solution is applied, it turns the manganese oxide into
manganese chloride (soluble) and eventually the black staining lightens, generally over 24
hours. Depending on the severity of the staining, the formula may require different
concentrations. There have been many successful case studies with the treatment, however
the manganese oxide can return within weeks or many years later, and there is no known
formula and methodology to permanently remove the manganese oxide.
1575 Mr Calabrese had a great deal of experience and practical knowledge about
‘quarry sap’ in Tasmanian sandstone. His evidence that ‘quarry sap’ was readily
removed should be discounted as a generalisation and, in the circumstances of this
case, an overstatement. His evidence is contradicted by Mr McAllister’s evidence
(whose expertise and experience is to be preferred) and the evidence of the variable
results from the acid cleaning undertaking on ‘quarry sap’ affected stone on the
house and garage walls in this case.
First and Most Severe Manifestation
1576 The Owner’s pleaded allegation714 and her evidence that she identified stones
affected by ‘quarry sap’ at the 18 June Meeting should be rejected for the reasons
discussed above.715 The evidence shows that ‘quarry sap’ was not evident in the
stonework until some ten months after completion of the stonework (April 2014)
when some ‘brown’ stones were noticed and photographed and manifested
unpredictably in different parts of the stonework at different rates.
1577 The most severely affected stones are in two of the four rear columns and
there are seven severely affected stones in total. These seven stones have also been
condemned by Associate Professor Danvers as acid-damaged716 (along with three
others) in the Owner’s Annexure B. These stones are also the subject of the
712 T1618.18-.25.
713 Ibid.
714 Seventh Cross Action[19A.11].
715 See [588]-[590] above.
716 By the code “DS-Acid Damaged”.
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instruction to the Builder to replace them in AI:22A and are described by the
Architect as “severely affected and blackened by quarry sap”.717
1578 Three of the seven stones are in the central rear column.718 Oddly, there was
only one evidently affected by ‘quarry sap’ at first. The Owner’s photograph of
the western and southern faces of the central rear column taken on 23 April 2014
shows a single noticeably dark stone of chocolate brown tones on the western face
(C3-53).719 This is the earliest photographic evidence of ‘quarry sap’.
1579 A photograph taken six months later on 4 October 2014 of the northern and
eastern faces of the same column (whilst Mr Calabrese was spraying the stonework
with diluted acid) shows the northern face of the same dark stone (C3-32). This
stone is not so obviously dark as in the earlier photograph of the main face on the
western side of the column (C3-53). It is not known why this is so. It might be
because of the bright sunlight and distance from which the photograph is taken. It
might also be as a result of the acid cleaning process that was underway, having
lightened it. This issue cannot be resolved on the evidence.
1580 A photograph taken of the western and southern faces of the same column on
1 December 2016720 shows the same dark stone (C3-53) is much lightened, but of
distinctly grey to lighter brown tones in contrast with the surrounding light cream
stone. This was after it being acid cleaned several times. The last photograph of
this stone (C3-53) taken on 10 January 2017 shows it remained similarly
discoloured, but somewhat lighter than when it first darkened and before it was
acid cleaned.
1581 There are a further four stones severely affected by ‘quarry sap’ in the most
eastern rear column.721 A comparison of photographs taken on 21 July 2014,722
9 May 2015723 and 1 December 2016724 shows that the affected stones have
remained dark grey, despite lightening after being acid cleaned several times and
the subject of the cleaning trial by HSR on 6 and 7 September 2016.
Identification of Other Affected Stones
1582 Apart from the seven obviously and severely affected stones, there is
uncertainty and dispute about which individual stones are affected by ‘quarry sap’.
The Owner objected to the rectification works directed in AI:21, AI:22 and AI:22A
on the broad basis that these instructions to the Builder were inadequate in
identifying all the stones requiring replacement by reason of ‘quarry sap’ and/or
colour variation. The Owner asserted a large number required replacement,
717 Exhibit R3.398.
718 Designated Column C3 in Owner’s Annexure B.
719 As designated in Owner’s Annexure B. See [683] above.
720 Exhibit R3.421 page 2944.
721 Designated Column C4 in Owner’s Annexure B.
722 Exhibit R3.421 page 2855.
723 Ibid page 2908.
724 Ibid page 2939.
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without identifying which ones or why until the Owner’s Annexure B was prepared
by Associate Professor Danvers with Ms White’s assistance in late 2019.
1583 Associate Professor Danvers’ assessment of stones affected by ‘quarry sap’
in the Owner’s Annexure B does not resolve the issue.
1584 As already mentioned, Associate Professor Danvers disclaimed expertise in
the chemistry of ‘quarry sap’ and its removal, stating he had not encountered this
phenomenon before. He was therefore unable to say whether stones he described
in the First Danvers Report as pale grey were grey because of ‘quarry sap’ or not.725
In October and November 2019, he assessed grey stones as non-conforming by
reference to the irrelevant metric, sample stone ‘SC 135’ and not necessarily for
being affected by ‘quarry sap’.
1585 In the Owner’s Annexure B, Associate Professor Danvers identified
14 stones as affected by ‘quarry sap’, denoted by the code “QS” meaning:726
Quarry sap discolouration. A stone that is said by the quarry owner to have been
discoloured by the appearance of black staining weeping from the surface, not necessarily
evident when the stone face is freshly cut.
1586 This code should not be read as meaning a stone identified by Mr Calabrese
as affected by ‘quarry sap’. Rather, this is Associate Professor Danvers’
understanding of how ‘quarry sap’ manifests in stone from what Mr Calabrese told
him when they met at Gillman and is the basis upon which he has identified the
14 stones as affected by ‘quarry sap’ in the Owner’s Annexure B.
1587 As already mentioned, Associate Professor Danvers has identified a further
ten stones as having surface damage by attempts to chemically remove ‘quarry
sap’. Together, in his opinion there are a total of 24 stones affected by ‘quarry
sap,’ excluding the grey ones about which he said he cannot express an expert
opinion.
1588 Given his own disclaimer as to expertise and experience with ‘quarry sap’,
Associate Professor Danvers’ identification of stones affected by ‘quarry sap’ in
2019 is unreliable. This conclusion is fortified when regard is had to the stone
identified in September 2015 for treatment by acid cleaning by acknowledged
sandstone expert Mr McAllister of HSR. In the HSR Report 49 stones were
designated as being affected by ‘quarry sap’727 (including the seven most severely
affected stones in the rear columns) because of black spotting or staining. Not only
is the number of stones affected by ‘quarry sap’ different between Mr McAllister’s
and Associate Professor Danvers’ assessments, but there are some differences
725 MFI R3.410 page 2352.
726 Exhibit R3.411 page 2377.
727 Designated in red in the photographs.
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between the stones identified as affected that are not explicable, noting however
that their assessments occurred four years apart.
1589 It also must not be overlooked that Associate Professor Danvers’ assessment
was made in 2019, some six years after the stone was laid. What inferences should
be drawn (if any) about the manifestation of ‘quarry sap’ as distinct from the
natural darkening of light sandstone with grey tones as it ages cannot be resolved
on the evidence.
1590 Mr Burton, a principal of the Architect prepared the final Architect’s
instructions AI:22 and AI:22A following his visit to site and inspection sometime
in about late 2016 or early 2017. Whilst it should be accepted Mr Burton is an
experienced architect, nothing has been proven about Mr Burton’s expertise and
experience in stone and the phenomenon of ‘quarry sap’, its identification and
treatment. Mr Burton identified the affected stones by inspecting and
photographing the stonework and preparing the elevations. There is no evidence
about the basis upon which Mr Burton assessed stones as affected by ‘quarry sap’.
Mr Burton did not give evidence.
1591 Some (unhelpful) inferences can be drawn from a comparison of his
photographs and elevations with the HSR Report. Save for the two rear columns
comprising the seven (obviously) severely affected stones, there are material
differences between the stones Mr Burton has identified as affected by ‘quarry sap’
and the HSR Report. Not only has Mr Burton identified more stones, but he has
also not included the same stones as identified by Mr McAllister. Further,
Mr Burton’s assessment was made more than a year after Mr McAllister’s
inspection in September 2015 and some three and half years after the stone was
laid.
1592 Ultimately, why there are material differences between the assessments of
Mr Burton and Mr McAllister is not able to be resolved on the evidence. It does
not simply follow that there are more stones affected by ‘quarry sap’.
1593 Given Mr McAllister’s superior unchallenged expertise and experience, his
assessment as recorded in the HSR Report should be accepted as the best evidence
of stones affected by ‘quarry sap’ and preferred to Associate Professor Danvers’
assessment in the Owner’s Annexure B and Mr Burton’s assessment in Architect’s
instructions AI:22 and AI:22A where they differ.
1594 As mentioned, and unsurprisingly, all have identified the seven stones in the
rear columns (C3 and C4) as severely affected by ‘quarry sap’ after several
unsuccessful attempts to remove it by acid cleaning.
Is ‘Quarry Sap’ a Defect?
1595 The dispute about whether stone affected by ‘quarry sap’ is a defect within
the meaning of the Building Contract arises in the following context.
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1596 The Builder accepts the seven stones identified in AI:22A for replacement
are severely affected by ‘quarry sap’ and should be replaced for aesthetics.728 The
Builder accepts it is obliged to do the work instructed by the Architect in AI:22A
by reason of clause A2.1.d of the Building Contract but disputes theses seven
stones are a defect for which it is liable and adumbrates it would make a claim for
variation for the replacement work.729 Further, the Builder submits the Owner by
disputing this instruction under clause A8 of the Building Contract, now the
subject of this proceeding, and denying access to the site has effectively prevented
the Builder from undertaking the works instructed in AI:22A.
1597 The Builder’s position is that ‘quarry sap’ is a natural and bespoke
characteristic of the Tasmanian sandstone selected and approved by the Owner that
unpredictably and variably manifests itself in some stones and not others. It has
supplied and used the stone selected with all its inherent characteristics, including
its propensity to darken and/or display ‘quarry sap’. A stone affected by ‘quarry
sap’ is therefore not a defect for which the Builder has liability under the Building
Contract as varied. The Builder contends it is the consequence of the Owner’s
selection of Tasmanian sandstone for which the Owner bears the contractual risk.
1598 The Owner’s case is that stones affected by ‘quarry sap’ are not best quality
materials as required by clause A.09 of the Architect’s Specification, nor do they
conform with the contractual requirement of for stone colour under the varied
Building Contract.730 The Owner submits the Court should accept Associate
Professor Danvers’ assessment that stones that appears previously to have
exhibited ‘quarry sap’ and has been treated became pale grey and is inconsistent
with ‘SC 135’.731 Further, stone affected by ‘quarry sap’ should be replaced
because acid cleaning has not proven successful.
1599 The Architect concurs in part, and (putting aside the seven severely affected
stones) considers ‘quarry sap’ affected stones should only be replaced if further
cleaning is proven to be unsuccessful.
1600 The Builder’s position should be accepted as correct. For the following
reasons it should be concluded that stone affected by ‘quarry sap’ is not a breach
of the Builder’s warranty of best quality under clause A.09 of the Architect’s
Specification or the contractual requirement for stone colour under the Building
Contract as varied.
Clause A.09
1601 The Builder’s warranty of quality under clause A.09 of the Architect’s
Specification is expressly confined to best quality “of the respective kind of
728 Builder’s Stone Closing [34.1].
729 Ibid [28.7].
730 By implication through being designated in Annexure B as not conforming at to colour.
731 Owner’s Stone Closing [169].
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material to be supplied and used”, that is Tasmanian sandstone, and “all subject
to the Architect’s approval”.
Best Quality
1602 The content of the Builder’s warranty of quality depends on the what the
words ‘best quality Tasmanian sandstone’ mean by reference to what a reasonable
person in the position of the parties would have understood them to convey, taking
into account the purpose and object of the contract.
1603 It was known by the parties from what they were told and saw at the Gillman
Meeting that Tasmanian sandstone has, as a natural characteristic, a tendency to
darken that manifests unpredictably and variably as black spotting or staining in
some stones but not others after it is laid and as it ages. There was nothing the
Builder could have done to identify which stones might become affected by
‘quarry sap’ at the time the stone was purchased or laid.
1604 In these circumstances it would not have been within the reasonable
contemplation of the parties that the Builder would assume the contractual risk for
stone that might later be affected by ‘quarry sap’, a known inherent characteristic
of a natural product, Tasmanian sandstone when its selection and approval had
been imposed on the Builder by the Owner. The point is fortified by the fact that
when the parties’ contracted for its supply and use knowing of this phenomenon,
the Owner relying on the Stone Supplier’s assurances about its treatment by acid
cleaning contracted with the Stone Suppler to undertake cleaning and sealing
works (works that were not in the Builder’s original scope of works for Basket
Range sandstone).
1605 Accordingly, contrary to the Owner’s contention, clause A.09 should not be
construed as imposing on the Builder an obligation to supply and use only
Tasmanian sandstone that does not subsequently manifest ‘quarry sap’.
1606 That the Stone Supplier’s assurances have not proven reliable is not a risk for
which the Builder should be responsible in giving its warranty of quality for
Tasmanian sandstone under clause A.09 of the Building Contract.
All Subject to the Architect’s Approval
1607 The Builder’s submissions to the effect that the Architect’s approval of
materials in clause A.09 of the Architect’s Specification is an overriding
requirement as the sufficiency of the quality of the materials used should be
rejected for the following reasons.
1608 First, there is no general principle that the fact of an architect or engineer’s
satisfaction fulfils a builder’s obligation for the works to conform with the
contractual specification when they do not in fact.
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1609 Secondly, read contextually, there is no basis for construing the requirement
of the Architect’s approval in clause A.09 as intended to override the Builder’s
fundamental obligation to complete the works in accordance with the standard and
quality specified in the Building Contract as varied. Clear words would be
required to confer on the Architect a discretion to waive defective works.
1610 Thirdly, a natural and ordinary reading of clause A.09 suggests the
requirements of best quality and the Architect’s approval should be read
cumulatively and intended to be for the protection of the Owner.732 It would be
wrong to read clause A.09 of the Architect’s Specification disjunctively as
conferring on the Architect a discretion to accept material of a lesser quality than
best just because it was approved by the Architect.
Stone Colour
1611 The obvious inconsistent dark colouring of the seven most severely affected
stones by ‘quarry sap’ gives rise to the question as to whether their supply and use
breaches the Builder’s obligation as to stone colour under the varied Building
Contract. These stones are plainly not light coloured sandstone within the range
of colours laid on the section of the Owner’s House walls that was approved by
the Owner at the subsequent site meeting. This has been shown by their obvious
dark colour despite the Owner’s failure to prove what stone colour has been
supplied and used by reference to the contractual criteria.
1612 This question must be resolved by proper regard to the known circumstances
in which the parties contracted for the supply and use of Tasmanian sandstone.
They are the same circumstances that inform the proper construction of clause
A.09 of the Architect’s Specification as to best quality Tasmanian sandstone. That
is, the parties contracted for Tasmanian sandstone in the knowledge that ‘quarry
sap’ was an inherent characteristic and, relying on the Stone Supplier’s assurances,
the Owner contracted with the Builder for additional cleaning and sealing works.
The tendency for a stone to become affected by ‘quarry sap’ was not detectable
until it manifested. The Builder had no expertise in the phenomenon or its
treatment and gave no assurances to the Owner about the effectiveness of acid
cleaning. The Owner did no sue the Stone Supplier for its assurances about
cleaning ‘quarry sap’.
1613 Reasonable persons in the parties’ circumstances would have understood the
parties intended the Owner to assume the risk of dealing with ‘quarry sap’ and not
the Builder. It would be anomalous and unreasonable to infer otherwise and
conclude that the supply and use of stones that became affected by ‘quarry sap’
were a breach of the Builder’s obligation as to stone colour under the Building
Contract as varied.
732 National Coal Board v William Neill & Son (St Helens) Ltd [1985] 1 QB 300.
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‘Orange’ Stones
1614 The Owner’s unpleaded claim that ‘orange’ stones were supplied and used in
the walls of the Owner’s house and garage that were darker than the stone colour
required under the Building Contract has not been proven.
1615 The photographic evidence from June and July 2013 does not indicate any
orange or prominent colour variation when the stone was laid. The only complaint
of colour variation made during construction was made by the Owner at the
18 June Meeting. Her evidence that the saw orange stones in the partially built
stonework was an exaggeration and unreliable. The evidence of Mr Williams and
Mr Titotto is to be preferred and it should be accepted that the Owner’s disapproval
of coloured stones at the 18 June Meeting was confined to the wet stonework
generally and several stones with yellow or iron spots which were later replaced.
1616 Whether the colour of the stone has darkened since it was installed is a
different issue. The Owner submits the Court should reject any contention that the
colour of the stonework is materially different in its appearance between 2014
(practical completion) or 2019 when Associate Professor Danvers inspected it.733
1617 The Owner’s misstates Associate Professor Danvers’ evidence.734
1618 Associate Professor Danvers said in cross-examination “all sandstone
discolours with age”735 and he was certain Tasmanian sandstone discolours with
age because it is not any different from other sandstone. He explained that
sandstone contains minerals that begin to change colour as they oxidise once the
stone is cut. When asked whether such colour changes would be uniform or only
affect some parts of a stone, he recounted his observation that the newer stone at
the Adelaide Magistrates Court was unevenly discoloured. His evidence about the
imperceptibility of any change in colour between 2013 and 2019 was confined to
the sample stone ‘SC 135’ which he considered showed no visible discolouration
from aging.
1619 Mr McAllister gave evidence to similar effect. He said sandstone commonly
discolours as it oxidises, generally within six months. An orange-brown colouring
appears after exposure to the atmosphere.736 As already mentioned,
Mr McAllister’s expertise and experience in stone is unchallenged and should be
accepted unreservedly.
1620 Mr McAllister identified 38 orange stones the Owner did not like as oxidised
in the HSR Report, following his September 2015 inspection of the stonework. It
should be inferred that some of the stone has darkened in colour since installation
and this is a natural phenomenon, characteristic of all sandstone. To the extent the
733 Owner’s Final Closing [168].
734 Ibid [168.1].
735 T932.26-.27.
736 The HSR Report page 2034; see [756] above.
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stone has oxidised, it is not a defect in the works under the Building Contract as
varied for the same reasons ‘quarry sap’ is not.
Mortar Colour
1621 The Owner has not established her pleaded case737 that the mortar colour is
too dark and does not match the required stone colour for the following reasons.
1622 First, it is not a contractual requirement that mortar colour match “the
required light stone colour being TSQ colour category 2”,738 as the Owner
contends.
1623 Secondly, the evidence does not establish that white or off-white mortar
joints were required by the Architect’s Specification regardless. Associate
Professor Danvers’ observation that the mortar colour does not match the required
stone colour by reference to sample stone ‘SC 135’ is not relevant.
Chipped Stones
1624 In her written closing for the July trial, the Owner submitted the Court should
find that 63 stones are chipped as identified by Associate Professor Danvers and
they are therefore not of the best quality material and their use results in stonework
not up to first class standard.739 From her final written closing, it its clear no
concession was intended740 and the Owner’s pleaded case remains that there are
119 chipped stones that require replacing,741 apparently relying on the Second
Danver’s Report.
1625 However, the evidence does not support such a finding. There are serious
questions arising as to when any identified chipping occurred, whether any such
chips are defects and if defects, are they defects for which the Supplier (during
transportation), the Builder (during construction until handover) or the Owner
(after occupation) should be responsible. In the end, the reliable evidence shows
no chipped stones were laid and used and only one stone has been shown to be
noticeably chipped after laying and before the Owner moved into the house.
1626 In the First Danvers Report, Associate Professor Danvers identified
63 chipped stones – “particularly at corners”742 and took three photographs of
chips in 2019.743 Only two show chips. The first chip is prominent but it is difficult
to gauge its size without any reference point. The alleged chip is not apparent in
the third photograph.
737 Seventh Cross Action [19A.15(i) third bullet point and (ii) fifth bullet point].
738 Owner’s Stone Closing [121.3].
739 Ibid [178].
740 Owner’s Final Closing [336.2].
741 Seventh Cross Action [19A.15(ii) third dot point].
742 Page 2347.
743 Pages 2360 and 2361.
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1627 In the Second Danvers Report, 119 stones are identified in the fifth column
of the Owner’s Annexure B as chipped and are referred to in the text as having
chipped edges.
1628 In closing reply submissions, the Owner referred generally to 27 photographs
and to four specifically as showing chipped or scratched stones at various times.744
These photographs do not assist the Owner’s case. ‘Scratched’ stones are not a
pleaded complaint. On close examination, chips are only discernible from two of
the four specifically identified photographs and they both depict the same chip.745
The photographs are of too poor quality or taken from too far away to be of any
assistance in identifying chipped stones. Further, much of the stonework had not
yet been pointed when these photographs were taken and it is unknown whether
any visible chips or imperfections would have been covered up.
1629 Other than these photographs, there is no reliable evidence of the size or
nature of the chipped stones identified by Associate Professor Danvers and it is not
possible to determine how they compare to the imperfections and noticeable chips
evident in the stonework at the Adelaide Magistrates Court that Associate
Professor Danvers considered to be a good example of fine ashlar stonework.746
1630 Associate Professor Danver’s assessment of chipped stones was made from
inspections that occurred in late 2019 (more than five years after the Owner moved
into the house). The relevance of his evidence is further undermined by the early
evidence of chipped stones and the claim made by the Owner in the Scott Schedule
for the replacement of a single stone.
1631 The Owner’s first written complaint about chipping was made in February
2015 referring to “many”747 chipped stones requiring replacement, but identifying
only seven chips in six stones:748
Fix obvious chips in stone, including but not limited to:
(a) Fountain – top stone facing street, bottom edge
(b) Far LHS column facing street, 9th and 10th stone counting from bottom up
(c) Standing at front gate looking to home – far LHS MBR 11th stone from bottom up,
on the edge
(d) Above MBR window, 1 big chip, very obvious
744 Owner’s Reply Closing [26]. Exhibit R3.421 pages 2818 to 2845.
745 Ibid pages 2833 and 2834 and this is the same stone referred to by Mr Tittoto in evidence discussed
below.
746 First Danvers Report page 2345.
747 Exhibit R3.233 page 1587.
748 Ibid page 1591.
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(e) Western boundary – 6th stone up from render, LHS of most northerly window of
sitting room
(f) Above front door – tidy gap between the horizontal stone and door frame and 2 chips
in stone
1632 By contrast, the Architect in correspondence refers to a “couple”749 of
chipped stone blocks, but does not assess them as a defect, recommending that
advice should be sought from a stone mason on repair or replacement options,
expressing concern that remedial works may be a worse outcome.
1633 In the report prepared by Blue Chip Building Consultants dated 24 June 2015
on instruction from the Owner’s solicitors, only a single chipped stone block was
identified at the central porch pier.750 It is the only claim of chipping in the Owner’s
Scott Schedule. This claim for replacement of a single stone was introduced in
December 2015751 as Item 17.19 and amended in July 2020 with a claimed quantum
of $302.00 including GST as follows:752
17.19 Breach
Chipped Stone block at central Porch pier. Damage falls within stonework defect
generally but if all stonework not required to be remediated, then chipped stone will
require remediation.
Finish not to first class standard as required by Specification A.09.01
1634 This stone is not identified as chipped by Associate Professor Danvers and is
therefore not in the Owner’s Annexure B. It is not addressed by the Owner in
evidence at trial or in submissions, despite being an issue referred back by the
Arbitrator to the Trial Judge for decision.753
1635 In October 2015, Mr McAllister observed small chips on the arrises of the
stone in isolated places that he referred to as ‘plucking’ in his report. He advised:754
Tasmanian sandstone is generally sawn as dimensional stone (sawn 6 sides). This
particular stone during the cutting process has fairly sharp arrises (edges of stone). During
transit or on site installation it proves very difficult to maintain the arrises due to the finely
grained and dense stone.
1636 The softness of the sandstone is demonstrated by the stones in evidence
(Exhibit R31) that have not been extensively handled. When they are examined,
it can be seen that all their arises are ‘plucked’ and have small chips of varying
degrees.
749 Exhibit R3.228 page 1550.
750 Exhibit R17 page 2570 item 2.11.
751 Owner’s Cross Action (FDN 33).
752 Sixth Cross Action (FDN 102).
753 See [1896] below.
754 Exhibit TP1.3.307 page 2034.
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1637 The inspections by Blue Chip Building Consultants, Mr McAllister and
Associate Professor Danvers occurred well after the Owner moved into the house
on 31 July 2014. The latter two identified chipping as generally occurring at
corners, giving rise to the likelihood that the chips have been caused by being
knocked after being laid.
1638 Associate Professor Danvers reported that chipped stone was laid,755
presumably on the basis of the Owner’s unsubstantiated allegation that “stones
with obvious chips were chipped prior to laying”756 was true. The evidence does
not support his assumption.
1639 It was Mr Tittoto’s evidence that damaged stone or stone with noticeable
chips was not laid and was discarded and cut up into smaller blocks so as not to
waste the stone. When asked what level of chipping would be the normal range in
laid stone, he said his crew “would’ve looked for the smallest chip that would be
covered by pointing. If they’re too big you discard them”.757
1640 Mr Tittoto’s evidence should be accepted as reliable. The Owner’s allegation
that chipped stones were laid therefore fails.
1641 Again, the evidence shows only one stone was chipped during construction
before the Owner took possession of the house. It is the stone Mr Tittoto said he
photographed because it was chipped after it was laid 758 yet it is not shown in the
Owner’s Annexure B as chipped.759
1642 The evidence otherwise shows steps were taken to mitigate the risk of
chipping during construction. The photographs show the Builder protected the
stonework from accidental damage from being knocked during construction.760
Having regard to when the Owner first complained about chips she observed in the
stonework, the likelihood of damage occurring to corners after occupation and the
possibility of damage being done by the Owner from her and Dr Clarke cleaning
the stonework with a chisel and sponge,761 it cannot be concluded that the Builder
is responsible for any of the chips identified by Associate Professor Danvers.
Workmanship
1643 The Owner’s alternative pleaded cases as to defective workmanship were
introduced into the proceeding by the July 2020 amendments as a result of the
opinions expressed in Associate Professor Danvers’ reports. Both reports are
755 First Danvers Report page 2354.
756 Exhibit R3.238 page 1613.
757 T1291.4-.13.
758 See [561] above.
759 The photograph at pages 2833 and 2834 of Exhibit R3.421 show the chipped stone is at the corner of
the first course at the northern end of the west facade being (WA210) and (N98) of Owner’s Annexure
B but not assessed as chipped by Associate Professor Danvers.
760 Exhibit R3.421 pages 2844 to 2846.
761 Exhibit R3.14 page 1002.
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relied on by the Owner in support of her claims about non-compliant
workmanship.
1644 Her first case is that the stonework viewed as whole does not comprise
stonework of a first class standard as required by clause A.09 of the Architect’s
Specification. The features she complains of are (in combination) mortar colour,
joint beds and perpends of varying thickness, joints not consistently smooth and
the vertical and horizontal alignment of the stones is up to 5mm out of alignment.762
1645 The second alternative is that the workmanship is not of a first class standard
by reason of each of these individual features concerning the construction of the
joints. 763
1646 The Owner submits the Court should adopt the opinion of Associate
Professor Danvers that the variation in joint width across the walls is inconsistent
with the requirements of an ashlar wall and has the effect the walls are not a first
class standard.764 As to workmanship overall, the Owner again relies on the opinion
of Associate Professor Danvers that the stonework is not of a high standard of
finish, submitting these defects “affect 100% of the walls”.765
1647 When proper regard is had to the foundation of the specific opinions relied
on, it is apparent that Associate Professor Danvers’ repeated criticism of the
standard of workmanship is dependent on a combination of defects including most
fundamentally as to stone colour and joint size, as well as every other fault he has
reported.766
1648 His view that all the walls are of an inferior aesthetic and low standard of
finish is expressly stated to be informed by his opinion that only fine 5mm joints
satisfy the requirements for ashlar stonework and therefore first class
workmanship.767 This is a different complaint about the nature of ashlar masonry
and the instructed change in joint size the subject of AI:07 and does not say
anything about the other features of the construction of the joints he criticised in
passing. This issue is not a defect and addressed separately below.768
1649 Having found Associate Professor Danvers’ assessment on stone colour
irrelevant and that joint size was varied with the Owner’s express authority to
replicate the stonework at Kermode Street, the foundation for Associate Professor
Danvers’ opinion as to the standard of workmanship falls away. What is left is an
inadequate foundation upon which to conclude all the stonework was below the
762 Seventh Cross Action [19A.15(i) third bullet point].
763 Ibid [19A.15 (ii) fifth to eighth bullet points].
764 Owner’s Stone Closing [177].
765 Owner’s Final Closing [339].
766 First Danvers Report pages 2348, 2350 and 2351.
767 Ibid page 2351.
768 See [1665] and following below re Ashlar Masonry and Joint Size.
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standard required by clause A.09 of the Architect’s Specification, whether overall
or by reason of any specific feature of its workmanship.
1650 For example, apart from the anomalous joint size that Associate Professor
Danvers considered resulted in all the stonework being defective, he reported:769
The general quality of the stonework as it proceeded was plainly defective in terms of
jointing consistency, chipped stone being used, and poor alignment of stones in beds and
perpends.
1651 In his second report, Associate Professor Danvers noted joint thicknesses
were noticeably irregular – wider or thinner than 10mm770 and some joints
exceeded 10mm by up to 3mm,771 without identifying how many that was or what
proportion of the joints were affected. A single photograph of a 13 mm wide joint
is not compelling evidence that overall the joints are so inconsistent of themselves
as to detrimentally affect the standard of the workmanship for walls in
circumstances when he had already formed the view the built walls were
aesthetically inferior because they were not built with fine 5mm joints, an essential
requirement of ashlar masonry in his view. That, however, was not the contractual
requirement.
1652 The Owner’s claim about chipped stone does not assist. It is a separately
pleaded defect. It has already been addressed and found unproven save for one
stone. There is no basis for concluding that chipped stones were being laid.
1653 As to alignment, Associate Professor Danvers reports not much more than
his observation that the alignment of stones in beds and perpends was poor.772 He
reported that he did not check every stone for vertical and horizontal alignment
and only looked for worst cases, where he used a spirit level and straight edge to
measure the horizontal and vertical offsets between stone faces.773 The only
objective evidence is a single photograph of stone he describes as poorly aligned.774
This is not an adequate basis from which to infer all the stonework was of an
inferior standard of workmanship and not first class.
1654 Absent a defect for joint width, the evidence of all three complaints about the
stonework combined is equivocal. When the evidence about the stonework at the
Adelaide Magistrates Court is taken into account, it is difficult to draw any sensible
conclusions as to what constitutes first class workmanship in all the circumstances.
Indeed, similar imperfections and faults were shown in the stonework at Kermode
Street. In considering the required first class standard of workmanship, it should
be accepted that it is impracticable to build walls of quarried sandstone without
some degree of imperfection and fault. There is substance to the Builder’s
769 First Danvers Report page 2354.
770 Second Danvers Report page 2376.
771 First Danvers Report page 2351.
772 Ibid page 2354.
773 Second Danvers Report page 2376.
774 First Danvers Report page 2361.
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submission that the Owner’s case requires “utter perfection”,775 a higher standard
of quality than that contracted for or is possible.
1655 The Owner unsuccessfully sought to bolster her case on workmanship by
cross-examination of the witnesses with expertise and experience in stone.
1656 When asked whether by saying the standard of the workmanship was good,
he meant it was workmanlike and nothing more or less, Mr McAllister agreed.776
The topic was not explored any further. It is therefore difficult to attribute much
weight to his passing observation when Mr McAllister’s brief was to advise on
discoloured stone and he was not asked to give a considered opinion about the
contractual standard or explain what differentiated good from the contractual
standard, if anything.
1657 Mr Tittoto’s opinion that his work was of the quality as he would have built
for himself and middle to top class777 should also be afforded limited weight as a
bare conclusion. The topic was not explored in sufficient detail to be of much
assistance in resolving the question as to the standard of quality of the stonework.
1658 Finally, reference was made to Mr Penglase’s description of the work as
generally acceptable with some defects that need to be addressed to bring it to a
reasonable standard.778 This was despite the strong criticisms made about the
unreliability of Mr Penglase’s evidence generally and objection to the
admissibility of his opinions on the topic. The Owner’s cross-examination on this
issue was superficial. Mr Penglase’s oral evidence that a reasonable standard is not
first class779 does not make out the Owner’s case on workmanship when proper
regard is had to the context and foundation for the opinion expressed as to whether
the stonework was defective or incomplete. Mr Penglase opinion was sought
about alleged defects as to colour, ‘quarry sap’, chip, mismatched stone, saw and
packaging marks etc. The opinion extracted that the workmanship was at best fair
concerned the joint shown in a single photograph taken by Associate Professor
Danvers.780
1659 These generalised opinions of Mr Penglase should be given little weight on
the issue of the standard of workmanship.
Acid Damaged Stones
1660 For the reasons discussed above,781 the Owner has not proved her pleaded
claim that approximately ten stones display a damaged surface resulting from
775 Builder’s Stone Closing [19.8].
776 T1607.35-1608.6.
777 T1290.21-.33.
778 Second Penglase Report page 2719.
779 T1373.8-.20.
780 T1369.23-1370.7.
781 See [872]-[882] above.
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attempts to clean them by the Builder or its subcontractors. Accordingly, this
alleged breach of the Building Contract as varied is not proven.
Alternative Cases on Breach
1661 Because the Owner has not proven any of the stone defects save for one
chipped stone, it is not necessary to consider the further significance (if any) of the
Owner’s alternative cases on breach: that is when the external walls of the building
are viewed as a whole782 or for each of the independent alleged breaches.783
Other Defences
1662 It is also unnecessary to consider further any of the other defences relied on
by the Builder in answer to the Owner’s allegations about stone defects.
Responsibility for any Breach of the Building Contract as Varied
1663 The Builder should be responsible for defect comprising the single chipped
stone. It was responsible for the works during construction when the damage was
done.
Breach by the Architect
1664 The fourth agreed issue to be determined is if the stone installed was in
accordance with the Building Contract as varied, was the Architect in breach of
any obligation to the Owner. The only issue to be determined concerning the
Architect’s liability for stone is the issue of the joint size instructed in AI:07 that
the Owner accepts binds her and the Builder under the Building Contract, as varied.
Ashlar Masonry and Joint Size
1665 The Owner submits the unapproved change in the joint size instructed by
AI:07 defeats the requirements in clause E.04.03 for fine 5mm joints and for ashlar
stonework generally, relying on Associate Professor Danvers’ evidence.784
1666 For the following reasons, the Owner’s submissions should be rejected and
Mr Penglase’s explanation of the nature of ashlar masonry preferred to Associate
Professor Danvers’ overly narrow views. Furthermore, it should be accepted that
the standard joint width for ashlar masonry in contemporary architecture is 10mm
and joint width is a matter of trade custom reserved to the Architect to determine
by clause A.09.01 of the Architect’s Specification.
1667 In cross-examination Associate Professor Danvers accepted that ashlar
stonework in part referred to dressed stone worked until squared and precisely
cut785 but in his view it also refers to how its assembled. Despite acknowledging
some definitions do not refer to joint width, he considered it also refers to
782 Seventh Cross Action [19A.15(i)].
783 Ibid [19A.15(ii)].
784 First Danvers Report page 2345.
785 T1046.11-1047.13.
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stonework laid with fine 5mm or 6mm joints. Later in evidence it became clear
that his view that ashlar stonework required a fine joint was informed by his view
that joint width makes a significant difference to the quality of the stonework. He
held this view despite accepting that there is a standard of ashlar stonework that
has fine joints and by inference, a different standard that does not. Ultimately,
Associate Professor Danvers accepted that joint size was a customary use, although
he had not thought about it that way before.
1668 Mr Penglase disagreed.786 He gave evidence about the many different types
of ashlar stonework he knew of involving many variations in horizontal and
vertical joints, joint widths and pattern. He explained an ashlar wall as referring
broadly to stonework built with regularly cut stone by hand or machine. Ashlar
masonry did not in his view “talk about the quality of the construction.”787
1669 Mr Penglase brought to Court a document he had identified from the internet
as a reasonably reliable industry statement about ashlar masonry and its types.788
Consistent with Mr Penglase’s evidence about the nature of ashlar masonry, this
document states:
Ashlar masonry is a type of stone masonry which is formed using finely dressed stone of
same size, shape and texture laid together in cement or lime mortar of equal size joints at
right angles together.
The masonry built with ashlar stone is rectangular where cuboid block are laid in horizontal
courses or layers. The joints between the stone are very thin, regular and of uniform
thickness, which makes the ashlar masonry very strong and sturdy.
It takes quite a long time to prepare the finely dressed stones and then build with them:
furthermore the process of construction is expensive. Therefore it’s usually reserved for
large imposing structure like fortification walls, castles, palaces and churches.
1670 The regularity and uniformity of thickness of the joints of ashlar masonry
should be noted in this description, as well as their unspecified thinness. Whilst
the Owner protested strongly about the point being made, it should be accepted
that most persons would not notice the difference between 10mm and 5mm joints
in large sections of stonework like the Owner’s house and garage walls. Indeed,
it was Associate Professor Danvers who first identified joint size as an issue in
2019, not the Owner, the former repeatedly referring to it as an ‘unexplained’
change. The Owner did not communicate any wishes for a 5mm joint size during
the design or construction phase of the project. Her requirement for a fine stone
home was general and not connected to joint size.
1671 Mr Tittoto, an experienced stone mason gave important evidence about what
is trade custom for joint width in ashlar masonry. He said it was not his experience
that 5mm joints were a feature of ashlar stonework and said 10mm was the usual
786 T1372.1-.9.
787 T1372.32-1372.2.
788 Exhibit TP1.34: The Constructor, Building Ideas.
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joint width. He did not consider the joint size an issue because the stonework was
being repointed. When asked to explain what he meant, he said that repointing
hides the joint size and changes the visual appearance.789 He also said quite
practically that joint size depended on the application and the type of joint required,
referring to options of round, square and flushed joints and the required gauge
(number of courses to fit the height of the stonework). Referring to the tolerance,
he described 5mm joints as “a bit tight”.790
1672 Mr Penglase made similar observations to Mr Tittoto about 10mm joints
offering a better outcome in terms of quality given the practical difficulty of
perfectly aligning laid stone. Mr Penglase also expressed the view that a 10mm
joint width was a standard joint for ashlar masonry in contemporary architecture.
In his experience, specification of a 5mm joint was unusual and would be used for
a particular type of building, such as the restoration of a building with existing
5mm joints.
1673 In Mr Penglase’s opinion joint size was a matter of trade custom, and a
construction matter for an architect to use their discretion without the client’s
input.
Approved Samples
1674 No samples were taken of the Owner’s selections of colours ‘1’ to ‘3’ at the
Gillman Meeting.
1675 Mr Penglase agreed in cross-examination that an Architect acting reasonably
would have instructed the Builder to take samples of the stone selected at the
Gillman Meeting to identify it and reflect what was required. He emphasised that
several sample stones would be required in the case of Tasmanian sandstone given
its variability of colour.
1676 Mr Penglase also said that if a sample wall was built, it was not necessary to
have loose samples on-site. He also did not agree that relying on the Stone
Supplier to deliver the colour was selected was unreasonable:791
… in most instances, the vast majority of instances where stonework is laid you wouldn’t
rely on the need for a sample.
1677 The failure to take samples of the stones selected was not a breach of the
Architect’s duties in all the circumstances. The purpose of the requirement for
approved samples in the Architect’s Specification was to provide an objective
reference point for assessing conformance with the colour and texture of the
selected stone on the assumption that the approved stone samples represented the
specification.
789 T1276.5-.24.
790 T1269.8-.16.
791 T1383.31-.33; T1399.38-1400.3.
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1678 In the case of the selection of Tasmanian sandstone, the selection and
approval process adopted by the parties was different, involved selecting stone
from the range on display at the Gillman Meeting and culminated in the Owner’s
approval of a sample panel in the form of the partially built stonework on the front
verandah in June 2013. It was not unreasonable for the Architect to rely on the
Stone Supplier to deliver the range of stone personally selected by the Owner.
Given the variability of colour in the selected range of Tasmanian sandstone, it
was not unreasonable to dispense with the requirement of a handful of portable
samples to be kept on-site as approved samples.
1679 That portable approved samples were not essential is demonstrated by the
approach Associate Professor Danvers took to assessing the colour of the
stonework in 2019. Whilst he stressed the importance of retaining a portable
sample on-site, he did not take any samples of the stones he inspected at Gillman
in 2019 given his interest in the Stone Supplier’s light range. Nor did he seek any
samples for the purpose of his assessment of the colour of the built stonework in
circumstances where he was instructed the Owner’s had selected colours ‘1’ to ‘3’
and ‘SC 135’ was the colour required. Instead, Associate Professor Danvers began
his assessment using a paint swatch he had matched to sample stone ‘SC 135’
which he soon abandoned for his memory of the required colour.
Failure to Document Instructions
1680 There were some important omissions in the Architect’s instructions.
1681 The first was an instruction confirming the decision to change the pattern
from random to stretcher bond. The Owner does not complain about this omission.
1682 The second concerns the Architect’s instruction to continue the stonework
after the decisions made in consultation with the Owner at the site meeting directed
in AI:08. The Architect should have documented the agreed solution to the
Owner’s complaints that led to stonework stopping. The failure to do so is a breach
of the Architect’s retainer and common law duty of care. Whilst it would have
avoided dispute, no loss results is said to arise from this breach and the Owner
makes no complaint about it because she says it did not happen.
The Architect’s Instructions AI:21, AI:22 & AI:22A
1683 In closing submissions the Owner contends the series of Architect’s
instructions issued to address the Architect’s assessment of ‘quarry sap’ as a defect
(AI:21, AI:22 and AI:22A) were each given without her authority and did not arise
out of the Architect having taken any or any reasonable steps to assess the
stonework against the contractual requirements for stone colour, namely as
directed under AI:04.792
792 Owner’s Stone Closing [161].
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1684 These submissions should be rejected. They proceed on false premises.
1685 First, the Owner’s approval was not required for instructions that
communicated the Architect’s assessment of a defect in the stonework. The
Architect was acting as an assessor in giving these instructions and therefore acting
independently and not as agent of the Owner.793 That the Owner disputed each of
these instructions under clause A8 of the Building Contract completely undermines
her submission.
1686 Secondly, the contractual requirements for stone colour are not as the Owner
contends.
1687 Thirdly, the Architect had clearly taken steps to assess the stonework for
conformity to the contractual requirements. The Architect regularly attended on-
site throughout the construction of the stonework and during the certified defects
liability periods after the Owner had taken possession of the house. The Architect
prepared numerous comprehensive defects lists following site inspections and
communications from the Owner providing her own defects lists. Mr Williams
inspected the stonework with Mr McAllister on 7 September 2015 with the Owner
for the purposes of seeking his advice on the discoloured stones. AI:21 was based
on the HSR Report prepared by Mr McAllister. Mr Burton inspected the
stonework again in order to prepare AI:22 and AI:22A.
1688 The Owner’s real complaint is that she disagreed with the Architect’s
assessments in each of these instructions, which she made plain by the notices of
dispute she gave under A8 of the Building Contract and her claims in this
proceeding.
Remedy
Required Remedial Works
1689 Having concluded that apart from one chipped stone, there are no proven
stone defects under the Building Contract as varied, the Builder has no obligation
under clause M11 to correct any other alleged stone defect.
‘Quarry Sap’
1690 Having concluded that the stones affected by ‘quarry sap’ are not a defect
under the Building Contract as varied, the Builder has no obligation under clause
M11 to correct the issue.
1691 If a different conclusion followed and stones affected by ‘quarry sap’ were
found to be a defect requiring correction by the Builder, then the question would
arise as to what remedial works were appropriate to address the stones found to be
793 Clause A6 of the Building Contract.
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affected by ‘quarry sap’ and correct the defect in accordance with clause M11 of
the Building Contract as varied.
1692 As to the seven most severely affected stones in the rear columns, it is
uncontroversial that acid cleaning has not been successful in removing ‘quarry sap’
from them and therefore the only appropriate remediation would be their
replacement as instructed in AI:22 and AI:22A.
1693 As to the other stones identified as affected by ‘quarry sap’ in the HSR
Report, again as mentioned, the evidence does not permit a finding that the acid
cleaning has been entirely unsuccessful as the Owner contends. The appropriate
remedial works would be acid cleaning as recommended by HSR, which works
the Owner effectively prevented by disputing the relevant Architect’s instructions
and denying the Builder and its approved subcontractor access to the site.
Acid Damaged Stones
1694 Whilst seven of the ten acid damaged stones are severely affected by ‘quarry
sap’, the Owner has not proved the ten stones are damaged by acid cleaning. If a
different conclusion had followed, there is no reliable evidence about appropriate
remediation works and why replacement would be the only appropriate solution,
other than for aesthetic reasons.
Chipped Stone
1695 There is one stone chipped stone, on a corner as photographed by Mr Tittoto.
1696 The Owner’s claims chipped stone should be replaced, without substantiating
why that is necessary, practical or reasonable to do so. As already mentioned, the
Architect does not consider a chipped stone a defect. In 2015, the Architect
properly expressed concern that remediation might be worse than leaving a chip
as is. At trial, the Architect contended chips are evident even in the fine ashlar
stonework at the Adelaide Magistrates Court set up as an exemplar of first class
workmanship by Associate Professor Danvers. The Builder took the position that
the chips in the stonework are de minimis and an inherent outcome of working with
sandstone and no stone should be removed because of a chip.
1697 Whilst the single proven chip is de minimis, the chip in this case is
sufficiently prominent to constitute a defect, entitling the Owner to have it
corrected. However, since no evidence has been adduced about the appropriate
remediation for a chipped stone, whether that be repair or entire replacement, no
conclusive finding can be made about the nature of the remedial works required to
correct the chip.
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Damages
Generally
1698 It is not necessary to consider the many issues ventilated by the parties as to
damages in circumstances where the Owner has failed to establish any party is
liable for the stone defects other than the de minimis single chipped stone.
1699 For completeness, both the time of assessment of damages and prevention
should briefly be addressed.
1700 As to the first issue, having regard to the rolling program of defect
remediation works undertaken by agreement between the parties, the time for
assessing contractual conformity should be November 2015, the date at which the
agreed program came to an end due to the stalemate over the stone defects. The
Owner has shown no good reason as to why a later date would ensure fair
compensation for any proven defects.
1701 As to prevention, contrary to the Owner’s submission, the question of
prevention would be a live issue had any substantive stone defects had been
proven.
1702 The Architect recommended seeking specialist advice about the darkening
stone in February 2015, after the Stone Supplier’s attempts to acid wash the
stonework in late 2014. The Owner did not engage in the Architect’s repeated
recommendation until September 2015, when she approved HSR being retained to
advise on the darkening stone. After inspecting the stonework, advice was
provided by HSR in the form of a report that proposed repair works to address
oxidisation of the stone and ‘quarry sap’. The Architect sought the Owner’s
approval to proceed with the HSR repair works as identified in the HSR Report.
The Owner withheld her approval.
1703 Relying on the HSR’s specialist expertise, the Architect issued a formal
instruction for the HSR repair works to be carried out. The Owner gave a formal
notice of dispute under clause A8 of the Building Contract.
1704 The Architect gave two further contractual instructions for remediation of the
stonework affected by ‘quarry sap’ (AI:22 and AI:22A), both of which were the
subject of formal notices of dispute given by the Owner under clause A8 of the
Building Contract.
1705 Whilst the Builder reserved its position to claim an adjustment under the
Building Contract for a variation, the Builder remained ready, willing and able to
carry out the HSR repair works instructed throughout. The Builder took active
steps to carry out these works as instructed. It sought approval to retain as HSR as
the nominated subcontractor to carry out the works, sought a method and price for
the instructed works and the subcontractors’ availability. HSR were approved by
the Architect as a nominated subcontractor.
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1706 The Builder was diligent in repeatedly following up the Architect for
approval from the Owner to commence the HSR repair works.
1707 Consistent with the documentary evidence, the Owner accepted in cross-
examination that she rejected the performance of the HSR repair works. It is clear
she withheld her approval because she insisted all her complaints with the
stonework be addressed before any works were done and thereby prevented the
HSR repair works from being carried out.
The Cost of Remedial Works
Single Chipped Stone - $200.00 excluding GST
1708 Determining the cost of remedial works is problematic in the absence of any
evidence about the nature of the remedial works required. Plainly, replacement of
the entire stone (as opposed to repair) would be the limit of any required remedial
works.
1709 The only reliable and relevant evidence as to the cost of remediation of a
chipped stone is for removal and replacement of a different stone (the allegedly
chipped stone block at the central porch pier) as estimated by quantity surveyor
Mr Adrian Howard of Aquenta. Mr Howard prepared an expert cost report dated
6 August 2015794 on instructions from the Owner’s then solicitors for defects
identified by Blue Chip Building Consultants.
1710 Mr Howard estimated the cost of replacing this single chipped stone at
$302.00 excluding GST.795
1711 Although his estimate is for remedial works that have not been shown to be
necessary or reasonable, for finality’s sake, the remedial costs allowed should be
determined at a substantial part of that cost, say $200.00 excluding GST to allow
for a lesser scope of works than full replacement.
Other Stone Defects
1712 Because there are no other proven stone defects, it is not necessary to
consider the competing evidence as to the cost of remediation in terms of the
different sources and times at which the costings were made, whether for full or
partial replacement of the stonework.
Apportionment
1713 The Builder should bear full responsibility for the single chipped stone.
There is no basis on the evidence for apportioning the Builder’s liability to any
other party.
794 Exhibit R17.
795 Ibid page 2642. The Owner claim $302.00 including GST in her Scott Schedule.
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PART F: THE STATUS AND EFFECT OF THE AWARD
Which parts of the Award should the Court Adopt?
1714 This Court must consider whether to adopt the Award of the Arbitrator as its
judgment on the action for the issues referred to the Arbitration in circumstances
where there are some limited challenges to the Arbitrator’s determinations and
specific issues referred back (Referred Back Issues) for the Court’s consideration
and decision.
1715 Before considering the challenges and Referred Back Issues, it is appropriate
to identify the issues referred to Arbitration and the legal principles relevant to the
adoption of an award in this Court.
Reference to Arbitration
1716 By orders made on 12 October 2020796 as varied on 27 September 2021797 (the
Varied Orders) pursuant to s 33 of the District Court Act 1991 (SA), this Court
referred the following issues (Referred Issues) concerning items (Referred
Items) of alleged defects and incomplete works for determination by the
Arbitrator:798
5.1 whether the item is within the contract scope of work;
5.2 whether the works are defective or incomplete and/or whether the statutory
warranties in s 32(2)(a), (b) and (c) of the Building Work Contractors Act 1995 have
been complied with;
5.3 whether the defect or incompleteness was caused by the Applicant and if not, in
relation to the allegations at paragraphs 26b, 26c, 26ca, 26cb, 26cc, 26cd, 26ce, 26cf
and 26e of Mrs Clarke’s Seventh Statement of Third Party Claim, what is the cause
of the defect or incompleteness;
5.4 in respect of each item found to be a defect or incomplete, the nature of the remedial
work required for the works to comply with the contract;
5.5 in respect of each item found to be a defect or incomplete, the assessment of the cost
of remedial work required for the works to comply with the contract having regard
to betterment; and
5.6 in the event there is an alternative method of rectification and completion which
satisfies the requirements of the contract, the identification of that alternative method
and the cost to perform the rectification work in accordance with that.
1717 Order 6 of the Varied Orders provided that the Referred Issues do not include
the issue of whether the remedial works required for the works to comply with the
796 FDN 114.
797 FDN 143, FDN 147.
798 FDN 114, op cit, as per orders 5 and 6.
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contract are reasonable within the meaning of Bellgrove v Eldridge799 which issue
is reserved to the Court.
1718 The Referred Items were identified in a Compiled Scott Schedule (CSS).800
At trial and in these reasons Referred Items are referred to by both their CSS item
number for consistency and the relevant section of the Award.801
Reserved Issues
1719 In accordance with Order 6 of the Varied Orders, the Referred Issues do not
include the issue as to whether the remedial works required are reasonable within
the meaning of Bellgrove v Eldridge802 and this issue is reserved to the Court. The
applicable legal principles are summarised below.803
The Award
1720 The Award was delivered on 28 June 2022. The Award comprises three
parts. Part 1 addresses the reference out, the arbitration process, the Arbitrator’s
approach to the evidence and the Arbitrator’s ultimate determination.804 The
Owner claimed remedial works costs totalling $1,016,053.92 including GST being
$923,685.39 excluding GST. The Arbitrator found primarily in favour of the
Builder and determined remedial costs of $59,053.09 excluding GST subject to
any decision the Trial Judge may make on the Referred Back Issues.805
1721 Parts 2 and 3 comprise the Arbitrator’s detailed reasons for each of the
Referred Issues and Items.
1722 A tabulated summary of the Arbitrator’s determinations is found in Annexure
A to the Award (Award Annexure A). The headings are self-explanatory, each
column relating to a discrete Referred Issue. Each row addresses a discrete
Referred Item. There are 183 Referred Items, but four repeat earlier items.
Principles as to Adoption of the Award
1723 Section 33(4) of the District Court Act 1991 provides that the Court will,
unless good reason is shown to the contrary, adopt the Award of the Arbitrator as
its judgment on the action or issues referred.
1724 There was no real contention as to the applicable principles for adoption of
the Award. Any dispute concerns their application to discrete Referred Items.
799 Ibid.
800 FDN 120.
801 By [Part: Paragraph].
802 Op cit.
803 See [1983] and following below.
804 Award 14 [The Determination].
805 Award 14.1.5 [1:233].
-- 283 of 362 --
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1725 The principles in relation to the adoption of an award were recently
considered by this Court in Crea v Bedrock.806 The relevant principles are
authoritatively stated by White J in Built Environs Pty Ltd v Saunders International
Limited807 as regards the identically worded s 66(4) of the Supreme Court Act 1935
as follows:808
If one puts to one side the authorities to which the parties referred, I consider that there
would be a good deal to be said for the view that s 66(4) creates a strong presumption in
favour of adoption and that the threshold for the existence of “good reason to the contrary”
is reasonably high. That is because a hearing by an arbitrator following a court-ordered
referral is the trial of the action or issues so referred. It is in effect a delegation of the
conduct of the trial to a person with a particular expertise. As Stephen J observed in Buckley
v Bennell Design and Constructions Pty Ltd:
In such a reference the court’s procedures of adjudication are not abandoned in
favour of extra-curial settlement of the dispute by arbitration. Instead the court
directs that, for a better resolution of the particular proceedings initiated before it,
resort should be had to this special mode of trial which the legislation has made
available.
Further, s 66(4) contemplates that the award of the arbitrator will be adopted by the Court
as its judgment, ie, as a final determination of the parties’ respective rights and liabilities
on the issues referred for arbitration. It is not sensible to suppose that s 66 contemplates
the Court, on an adoption hearing, retrying the issues referred, or that an adoption hearing
should be some form of review at large of an arbitrator’s award.
It is arguable that the remedy of a party who asserts error by an arbitrator is an appeal, once
the award has been adopted as the judgment of the Court, using the same rights of appeal
under s 50 of the SCA as apply to other judgments of the Court. For this purpose the award
adopted as the judgment of the Court is to be treated as the judgment of a single Judge.
On this basis, the circumstances which may constitute “good reason to the contrary” should
be reasonably confined. They would be akin to the circumstances contemplated by s 38(5)
of the CAIRA Act,809 ie, manifest or strong evidence of an error of law or plain error of fact
or misunderstanding of the evidence. If circumstances of that kind are not shown, the
award is to be adopted, and the parties then left to their appeal rights.
1726 His Honour Justice White identified a fundamental different between the
South Australian provision and the provision considered in Buckley which did not
include the words “unless good reason is shown to the contrary”. He considered
these words confine the discretion conferred on the Court and create a positive
presumption in favour of adoption, and, for the Court not to adopt an award, good
reason must be shown:810
I consider that a party wishing to displace the presumption established by s 66(4) must
establish to the level of “strong conviction” in the Court some error by an arbitrator which
has affected materially the outcome of the arbitration. That error may be one of law or
806 Op cit.
807 [2012] SASC 111 (Built Environs).
808 Ibid [11]-[14].
809 Commercial Arbitration and Industrial Referral Agreements Act 1986 (SA).
810 Op cit [25].
-- 284 of 362 --
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principle, a failure to discharge a function of the arbitrator, a plain misapprehension of the
evidence and, perhaps more rarely, may be found in perversity or manifest
unreasonableness in fact-finding. It must be of a kind which makes it quite inappropriate
for the award to be adopted as the judgment of the Court as a court of law. Ultimately,
however, formulations of this kind must not obscure the fact that s 66(4) requires that good
reason be shown for the Court not to adopt the award as its judgment.
1727 In applying these principles, strong regard should be had to the nature and
purpose of the referral to Arbitration of the Referred Issues and Referred Items in
the circumstances of this case.
1728 The selected Arbitrator is an architect with specialist expertise and
experience in arbitrating residential construction disputes. The Referred Issues
and Items were extensive in number and factual complexity, concerning in
substance 179 items, many of relatively low values. The purpose of delegating
their determination to a specialist arbitrator was to facilitate a better mode of trial
of the Referred Issues and Items. ‘Better’ should be understood as more cost-
effectively and expeditiously resolving the disputes between the parties over
alleged defects and incomplete domestic building work than trial by this Court.
1729 Despite this laudable objective, the Arbitration was unduly protracted,
complex and consumed significant time and resources, ultimately delaying the
trial.
1730 The Arbitrator received extensive documentary, oral and (some limited)
expert evidence over the course of 27 days of hearing including a view of the
residence over two days. The Arbitrator took her own photographs of her
observations and provided copies to the parties.
1731 The Award comprises in excess of 750 pages. It comprehensively addresses
the Arbitrator’s general approach to the evidence and determines the Referred
Issues and Items in a thorough and systematic manner. The parties were
represented by counsel and solicitors and provided with a full opportunity to
ventilate all of the Referred Issues and Items.
1732 By reference to the approach adopted by the parties in Built Environs, the
Owner submits the Court may adopt the Award in whole or in part and with, or
without, variation.811 In context of the issues referred back to the Court by the
Arbitrator, the Owner submits the Court has an ‘unfettered’ discretion as to the
course it takes and as to the manner in which that course is to be undertaken.812
The Owner submits the Court should address matters where findings were not
made by the Arbitrator by either remission back to the Arbitrator or by substituting
its own findings.
811 Owner’s Final Closing [394].
812 Ibid [487].
-- 285 of 362 --
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1733 The Owner’s submissions in this regard must be tempered by her onus as the
only party challenging aspects of the Award to establish in the Court a strong
conviction of some error by the Arbitrator materially affecting the outcome of the
Arbitration, such that it is quite inappropriate for the Award to be adopted as the
judgment of the Court as a court of law. The words of White J in Built Environs
must be emphasised: such error may be one of law or principle, a failure to
discharge a function of the Arbitrator, a plain misapprehension of the evidence
and, perhaps more rarely, may be found in perversity or manifest unreasonableness
in fact-finding.813 Again, the threshold is reasonably high.
1734 Finally, where the Arbitrator has not made a finding due to lack of evidence,
in the absence of good reason to interfere, this Court should not simply remit the
matter back to the Arbitrator or substitute its own finding. The parties have had a
full opportunity to present evidence on the issues referred to Arbitration.
Referred Back & Other Issues
1735 The Arbitrator has referred back for determination by the Trial Judge issues
that arose during the course of the Arbitration she considered outside her remit.
These issues are identified in Award [1:235] to [1:248] and largely affect discrete
Referred Items as to liability, quantum or both as also identified in Parts 2 and 3
of the Award.
1736 The Arbitrator expressly referenced in the Award other issues that arose
during the Arbitration for which she resolved a way forward but stated she would
defer to the Trial Judge.
1737 As discussed below, none of these matters constitute good reason not to adopt
the Award generally.
Findings Not Adopted
1738 There are, however, some findings that should not be adopted for the reasons
explained below. It is convenient to deal with these aspects of the Award before
addressing generally the Arbitrator’s approach and challenged and Referred Back
Issues. The findings not to be adopted are set out in Annexure B to these reasons.
Practical Completion
1739 In the background section, the Arbitrator stated:814
The Owner took possession of the Site, moving into the premises on 31 July 2014, thereby
invoking Practical Completion under the Contract.
1740 This statement is loosely worded and involves errors of law and fact that were
propagated by the parties. The statement should be understood as a referring to
the works being treated as having reached practical completion under clause M8
813 Op cit [25].
814 Award [1:60].
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of the Building Contract because the Owner had taken possession, consistent with
the parties’ pleaded positions as to practical completion when the Owner moved
into the house on 31 July 2014.
1741 However, under clause M8 of the Building Contract, deemed practical
completion occurs when the Owner takes possession of the ‘works’, not the site or
part of it.
1742 The evidence is equivocal as to whether the Owner’s moving into the house
constituted possession of the whole site and by implication the whole of the works.
The garage and church hall works were not complete on 31 July 2014 and
apparently accessible from the rear lane, therefore accessible by means other than
through the house. The issue is further complicated by the Architect dividing the
works into two separable portions (the house and attached outdoor areas on the one
hand and the church hall on the other) and treating them as having different dates
of practical completion in correspondence and in the two certificates of practical
completion issued on 1 December 2014. It should be inferred from this evidence
that the Owner did not have possession of the garage and church hall works until
10 October 2014.
1743 Secondly, integral to the contractual scheme for practical completion is the
issue of a notice of practical completion under the Building Contract, whether
under clause M4 or M8. Contractual consequences only flow from issue of the
notice of practical completion, not the underlying event of practical completion, as
discussed above in context of the invalidity of PPC 11.
1744 In any event, the parties’ disputes about practical completion are issues
reserved for the Trial Judge, as is impliedly acknowledged by the Arbitrator.
Accordingly, not adopting this aspect of the Award does not affect any other part
of the Award.
1745 Accordingly, there is good reason not to adopt the words “thereby invoking
Practical Completion under the Contract” in Award [1:60] as part of this Court’s
judgment.
Sealing the Cellar Concrete Floor
1746 For the reasons discussed above in context of the Owner’s challenge to the
Builder’s claim for payment of a variation for sealing the cellar concrete, the
Arbitrator’s finding at Award [2:1677] and [2:1678] that item CSS 14.5 was within
the original contract scope be reason of clause D.04.09 should not be adopted as
part of the Court’s judgment.
The Arbitrator’s Approach
Meaning of Defect
1747 At Award [1:206] and [1:209] the Arbitrator expressed her understanding of
the meaning of a defect or defective work. The Arbitrator’s understanding accords
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with the definition in the Building Contract815 and the parties do not contend
otherwise.
Observations at the View
1748 At Award [1:210], the Arbitrator stated that she proceeded on the evidence
before including her observations at the View (28 and 29 July 2021). During the
Arbitration, the Builder contended her observations may not relate to the condition
of the works of after the certified date of Practical Completion (ie after 1 December
2014) with important implications as to cause and legal liability. This contention
is noted and addressed further below.
Defences Based on DLPs and PC
1749 At Award [1:211] the Arbitrator stated she has proceeded on the basis that
arguments about the validity and currency of the certified defect liability periods
are referred to the Trial Judge for decision. At Award [1:238], the Arbitrator stated
that her remit does not include questions as to whether the issue of notices of
practical completion results in a Referred Items not being defects/incomplete
works.
1750 At Award [1:240], the Arbitrator similarly identified that any issues arising
out of the expiry of any defects liability period is outside her remit. Further, the
Arbitrator stated her remit is confined to the Referred Items identified in the CSS,
and she has taken no account of whether items have been progressively added to
the Scott Schedule to the Owner’s pleading as amended from time to time816 or
whether the item was included in the November 2015 Defects List.817
1751 The Arbitrator’s approach to these issues is correct.
1752 In this regard, the Builder contended that Referred Items first raised as
defects after the end of the two defect liability periods (calculated by reference to
the dates of practical completion certified by the Architect) are not claimable
defects. Further, that the certification of practical completion has contractual
consequences limiting the Owner’s claims as to defects/incomplete works.
1753 In closing submissions at trial, the Builder addressed two defences (among
others) as regards the defects liability period in a shorthand way. The first is ‘not
in Architect’s 20/11/15 list’. The second is ‘introduced after DLP’. 818
1754 These defences should be disregarded as not exculpatory for the following
reasons.
815 See [306]-[309] above.
816 Award [1:236].
817 Award [1:237].
818 Builder’s Final Closing [183].
-- 288 of 362 --
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1755 Firstly, as already discussed,819 the Architect has not issued a valid certificate
of practical completion. Until one is validly issued either pursuant to clause M4
or M8 of the Building Contract, no defect liability period has been validly certified
as running. It is therefore premature to question whether any Referred Item is
barred by clause M14 of the Building Contract.
1756 Secondly, and in any event, by operation of clause M13, the defects liability
period for any defect/incomplete work must be treated as continually extended by
the parties’ engagement in a continuing process of defects correction as is shown
by the series of Architect’s defects lists as reviewed and supplemented by the
Owner’s defects lists. There is tacit acceptance by the parties as shown by their
conduct as regard defects correction that the Builder was not confined to
10 working days as provided in clause M11 of the Building Contract.
1757 Indeed, the Owner in reply closing submissions at least conceded the parties
proceeded on the basis the defects liability period was extended up to and including
the three week period agreed for defects remediation in September/October
2015.820 On the evidence, the Owner agreed to further defects correction work
being undertaken in November 2015.
1758 Thirdly, an Architect’s instruction to correct a latent defect can be given any
time up to final certificate (which has not occurred) under Clause M14.2.
1759 Fourthly, the Builder’s obligation to correct a defect is not limited to defects
the subject of an Architect’s instruction and thus identified in any defects list.
Under clause M14.1, the Builder has a continuing obligation to correct any defect
or incomplete necessary work of which it becomes aware by its own observations.
Ultimately, whether there is a defect or incomplete work is to be determined by
the Court, whether by adoption of the Award or otherwise.
1760 It is therefore not necessary to consider these defences further where the
Builder has raised them in the context of a specific CSS Item.
Clause A.05.06 of the Specification
1761 At Award [1:207], the Arbitrator referred to the contention of the Architect
and Builder that it is within the Architect’s discretion to determine whether there
is a defect or incomplete work, relying on clause A.05.06 of the Architect’s
Specification. Further, they contend any item not identified as a defect or
incomplete work or not instructed to be corrected is therefore not a defect or
incomplete work.
1762 For the reasons discussed above,821 these contentions should be rejected.
Bearing in mind that essentially a defect is work that does not conform with the
819 See [935]-[944] above.
820 FDN 277 at [28].
821 See [378]-[379] above.
-- 289 of 362 --
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Building Contract, the Architect has no authority to waive or excuse non-
conformance with the terms of the Building Contract. That said, an Architect’s
instruction for a variation binds the Builder and the Builder’s compliance with such
instruction ordinarily does not result in any liability for the Builder if the Architect
is not authorised by the Owner to give the instruction.
Clause A.09.01 of the Architect’s Specification
1763 At Award [1:212] to [1:218] the Arbitrator addressed her approach to the
application of clause A.09.01 of the Architect’s Specification. The Arbitrator’s
approach accords with the proper construction of this clause, noting the paucity of
evidence led by the parties as to quality and standards in the Arbitration. The
proper construction of clause A.09.01 was more fully addressed above.822
Defect ‘Caused’ by Builder
1764 At Award [1:219] to [1:221], the Arbitrator explained her approach to the
determination required by Order 5.3 of the Varied Orders: whether an item of
defective or incomplete work was caused by the Builder, and, if not, for the nine
specified allegations (Specified Referred Items),823 what is the cause.
1765 The Arbitrator expressly qualified her determination of a defect/incomplete
work as not involving any other cause (save for the Specified Referred Items). It
follows that the Builder’s Final Closing correctly identifies that the Arbitrator’s
determinations do not consider other concurrent causes for the state of works
assessed as a defect, such as fair wear and tear or lack of maintenance824 or another
party’s liability for the defect.
1766 At Award [1:242], the Arbitrator expressly identified that whether any party
incurs contractual liability for any determination made under Order 5.3 of the
Varied Orders is outside her remit. The question of liability of the Builder (and
Architect) is a question for this Court.825 The Owner acknowledged the Arbitrator
was seized of factual issues in her counsel’s opening to the Arbitrator and that this
Court would determine which party was liable for any required remedial work
found.826
1767 Accordingly, the Builder’s submission that a determination of a
defect/incomplete work caused by the Builder means the item was within scope
and arose from work done or not done by the Builder is correct. The Owner’s
submission that the Arbitrator’s findings were intended to finally determine
liability as against the Builder must therefore be rejected.
822 See [368]-[375] above.
823 That is Owner’s Seventh Third Party Claim [26b], [26c], [26ca], [26cb], [26cc], [26cd], [26ce],
[26cf] and [26cg] (later referred to as 26e in the Varied Orders).
824 Award [1:241].
825 The Owner accepts this is the case for the Specified Referred Items: Owner’s Final Closing [392].
826 P-24 [40]; P-27 [25]-[30].
-- 290 of 362 --
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1768 It follows that the Builder’s liability for items determined ‘as caused by the
Builder’ will depend on proof of concurrent causes (whether fair wear and tear or
lack of maintenance) or other relevant defences for challenged items or items
referred back to the Trial Judge.
1769 The Court cannot determine a general allowance for fair wear and tear or lack
of maintenance and must approach these issues on an item by item basis where
there is cogent evidence. It should be noted the Builder has adopted an item by
item approach in its submissions in addressing its liability for specific challenged
or referred back items.827
Certificates & Payment Issues
1770 At Award [1:239] and [1:247], the Arbitrator correctly identified that any
issues arising from there being no final certificate issued under the Building
Contract is outside her remit and she has not considered issues pertaining to any
progress certificates or related payment issues.
Prevention
1771 At Award [1:243], the Arbitrator correctly identified that any issue as the
Owner allegedly preventing the Builder from correcting defects is outside her
remit.
Remedial Works Required
1772 At Award [1:222] to [1:224], the Arbitrator identified her approach to the
determination of the nature of the remedial works required for any defect or
incomplete works so that the works comply with the Building Contract.
1773 The Arbitrator found the Owner and her former solicitors formulated the
scope of the remedial works allegedly required as costed by Mr Allen, noting the
Owner did not present any independent expert evidence as regards the scope of
remedial works. To the extent the Owner relied on Mr Allen’s opinions as to the
scope of remedial works allegedly required, the Arbitrator placed no weight on
such opinions.
1774 The Architect relied on its assessment under the Building Contract as to the
scope of the remedial works required. Neither the Architect nor the Builder
adduced any independent expert evidence as to the scope of remedial works
required.
827 The Builder accepts there is no good reason for the Court not to adopt the Award for 149 items described
as not justified at all or costing $42,348.57 including GST in 2021 prices if performed by someone to
her than the Builder. Builder’s Final Closing [172]-[174].
-- 291 of 362 --
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Remedial Costs
1775 At Award [1:225] to [1:233], the Arbitrator identified her approach to the
determination of the costs to rectify each Referred Item she found to be a defect or
incomplete works on the basis of the evidence adduced in the Arbitration.
Cost Savings
1776 At Award [1:244], the Arbitrator stated she has not given consideration to
possible cost savings from subcontract trades undertaking works concurrently.
Whether there are any is a question arising on the evidence adduced for any
specific Referred Items at trial, if any.
Compromised Remedial Costs
1777 There are 23 CSS Referred Items for which the Arbitrator did not make a
finding as to the remedial costs. In November 2022, the parties agreed the quantum
of 16 of these items at a total of $21,825.98 excluding GST ($24,008.58 including
GST).828 These amounts are denoted in these reasons as ‘Annexure C - Final
Summary of CSS Item Award Determinations’ with the symbol ‘#’.
The Owner’s Challenges to the Award
1778 The Court directed the parties to give notice of any challenges to the
Award.829 Only the Owner gave such notice and seeks to challenge only limited
aspects of the Award that concern the following four parts of the works:830
• External paving: Item 15.14: Award [2:245] to [2:282]
• Exhaust fans: Items 2.9, 5.3, 13.3, 25.10: Award [2:1137] to [2:1167]
• Cellar Vent: Item 14.4: Award [2:1168] to [2:1188]
• Internal stairwell plaster: Item 9.2: Award [2:1541] to [2:1567]
• Church hall plaster: Item 19A.1: Award [3:105] to [3:155]
1779 The other parties join issue on the Owner’s challenges to the Award. They
contend the Award should be adopted in its entirety because the Owner has not
shown there is good reason not to adopt the Arbitrator’s challenged findings.
Issues For the Trial Judge
Approach
1780 To complicate matters, the challenged items involve Referred Back Issues.
It is therefore convenient to address the challenged Referred Back Issues and
Referred Items on an item by item basis, starting with the insurance proceeds issue
828 They are itemised in the Owner’s Final Closing at [542]-[543].
829 FDN 229.
830 FDN 236.
-- 292 of 362 --
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affecting acid damaged items. Thereafter, all issues concerning specific CSS Items
are addressed in ascending item order.
1781 It is also convenient to address liability and quantum for specific CSS Items
together and any question of apportionment arising as between the Builder and the
Architect.
Acid Damaged CSS Items – Insurance Proceeds – Credit $18,900.00 ex GST
The Referred Issues
1782 At Award [2:28] and [2:74], the Arbitrator formed the view that issues arising
from the Owner’s receipt of an interim settlement sum of $25,121.20 including
GST (the Interim Settlement Sum) from the Stone Supplier’s liability insurer,
and a further settlement offer of $6,922.46 including GST that was not accepted or
paid (the Further Settlement Offer) for acid damaged CSS items are outside her
remit and are referred back to the Trial Judge for decision.
1783 The referred issues arise in the following context.
1784 At Award [2:1] to [2:470], the Arbitrator addressed CSS Items allegedly
damaged as a result of acid washing undertaken by Mr Calabrese for the Stone
Supplier.
1785 The Arbitrator determined total remedial costs of $8,872.21 excluding GST
in consequence of acid damaged CSS items 1.2, 1.4, 15.2, 15.4, 15.7, 16.19,
16.24.1 and 17.16. The Arbitrator made no finding as to the cost of remedial works
determined for CSS Items 15.14 [Bluestone pavers] and 16.18 [Pool fence fixings]
and referred these items back to the Trial Judge for decision.831
1786 Before considering the individual CSS Items, the Arbitrator sets out in detail
the factual chronology of the cleaning works, the resulting damage from the acid
spray and the dealings between the parties regarding the remedial works the Owner
claimed should be undertaken. The Arbitrator found certain acid damage remedial
works were undertaken and some were incomplete or inadequately performed and
determined the reasonable cost of the remedial works.
1787 The Arbitrator’s factual chronology includes the parties’ dealings with regard
to the claim made on the Stone Supplier’s liability insurance policy. In summary,
the Arbitrator found the insurance claim was initially facilitated by the Architect,
who liaised with the Builder and its subcontractors and the Insurer’s loss adjuster,
with the Owner’s knowledge to obtain quotations for the claimed remedial works.
The claimed remedial costs were summarised in a schedule compiled by the
Architect and sent to the insurer.
831 CSS Items 15.13, 16.24.2 and 31.3 were found not to be defects at Award [2:322]-[2:324]; [2:172]-
[2:174] and [2:432]-[2:438].
-- 293 of 362 --
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1788 The Owner expressed strong complaint about the acid damage despite its
superficiality and was overly demanding in her requirements for remediation. The
Architect acted in the Owner’s interests to expedite the remedial works and
facilitate the claim on the Stone Supplier’s insurer and instructed certain remedial
works to be undertaken without the express authority of the Stone Supplier’s
insurer.
1789 The Owner subsequently contacted the insurer’s loss adjuster directly and
offered to take over the claim (saying she had lost confidence in the Architect and
the Builder), including obtaining further quotations, overseeing and paying
contractors for the remedial works with the insurance proceeds. She did not inform
the Builder or the Architect of these dealings at the time. It was only in December
2015, that the Architect was informed by letter from the insurer’s loss adjuster
Crawford that the insurer had paid all painting costs to the Clarkes many months
ago on completion of a discharge and they were responsible for paying the painting
costs.832
1790 In March 2015, an initial interim settlement offer of $21,382.45 including
GST was made to the Architect on behalf of the Owner. The offer was made on
the basis that it was a reimbursement of remedial costs paid or payable as per the
Architect’s schedule of claimed remedial works. The offer was not acted on.
1791 In April 2015, the insurer made the Interim Settlement Sum directly to the
Owner. The Owner accepted the offer on 9 April 2015 and signed a discharge of
the Stone Supplier’s liability in partial settlement of her demands in connection
with the acid overspray damage without admission of liability. She was paid the
Interim Settlement Sum on 22 April 2015.
1792 The insurer’s offer to the Owner was made by Crawford in a letter dated
8 April 2015. The Interim Settlement Sum was calculated by reference to items in
the enclosed spreadsheet ‘Claimant’s Cost Summary’ and made on the basis that
the Owner would attend to payment of the contractor’s invoices directly. The
spreadsheet was based on the schedule of damaged items compiled by the
Architect and submitted to the insurer on behalf of the Owner.
1793 In October 2015, the insurer made the Further Settlement Offer for further
remedial works. The insurer reiterated this offer on 12 April 2016. The Owner
did not accept it. The Architect was aware of the payment of the Interim Settlement
Sum to the Owner and in the November 2015 Defects List the Architect assessed
the remaining acid damaged items as not being defects the Builder should correct
but items for the Owner to use the previous or available insurance claim payout to
organise rectification. Neither the Owner, nor the Builder, disputed the Architect’s
assessment as to the use of insurance proceeds notified in the November 2015
Defects List.
832 Arbitration Exhibit TP52.
-- 294 of 362 --
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Parties’ Submissions
1794 Issues arising from the Owner’s receipt of insurance proceeds for acid
damaged CSS items first arose in cross-examination of the Owner in the
Arbitration. Accordingly, the Owner’s complaints about this issue not being
properly pleaded and embarrassing the trial process are without foundation. The
topic was pressed in the trial for legitimate reasons. Whilst the detail is also
relevant to the issue of the Owner’s credit, it is primarily relevant to the
determination as to what account should be taken, if any, of the Interim Settlement
Sum and the Further Settlement Offer in adopting the Award.
1795 For the acid damaged CSS items, the Builder submits the Owner has been
compensated by the Interim Settlement Sum and would have been further
compensated had she accepted the Further Settlement Offer. Therefore, it submits
the Owner cannot seek compensation from the Builder for these items.
1796 The Architect submits the Interim Settlement Sum and the Further Settlement
Offer should be set off against the total remedial costs found for outstanding acid
damaged CSS items because the Builder and its subcontractor have successfully
and effectively completed most of the remedial works at the Builder’s liability.
1797 The Owner submits the insurance settlement is an arrangement between the
Stone Supplier, its insurer and her. Further, her agreement with those parties to
disburse funds to any third party contractor is a matter between her and those
parties. The Builder and Architect are not privy to the arrangement and have no
entitlement to the Interim Settlement Sum. She submits the Further Settlement
Offer is not relevant because she did not accept it.
1798 In her closing submissions, the Owner properly concedes she cannot recover
from the Builder for any acid damaged item that has been rectified and, for any
item that is outstanding, she accepts the cost of remedial works should be reduced
to the extent she has received some money from the Stone Supplier’s insurer
attributable to that item.833
Consideration
1799 The answer to the Referred Back Issue turns on the antecedent question as to
the Builder’s liability to the Owner, if any, for the damage caused by the Stone
Supplier’s acid cleaning works.
1800 In submissions, the Builder contends the Stone Supplier was not its
subcontractor for the acid cleaning and sealing works.834 The position taken is
833 Owner’s Final Closing [501].
834 Builder’s Stone Closing [37].
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inconsistent with its pleaded case against the Stone Supplier,835 and not sustainable
on the available evidence.
1801 The Builder correctly submits that the cleaning and sealing works to be
undertaken by the Stone Supplier were not part of its original scope of works under
the Building Contract. However, this changed when Tasmanian sandstone was
selected instead of Basket Range sandstone.
1802 The Architect in AI:04 instructed the Builder to negotiate the ‘sealing’ of
finished stone faces “as part of the contract supply”836 and advise of any costs
exceeding the tender/contract price. As discussed above, in context of the
discussion at the Gillman Meeting about the desirability of acid cleaning and
sealing Tasmanian sandstone, ‘sealing’ should be understood as referring to both
acid cleaning and sealing works.
1803 This instruction records the parties’ clear intention that the Stone Supplier
would perform the cleaning and sealing works as the Builder’s subcontractor,
consistent with the parties’ agreement for the supply of Tasmanian sandstone.
1804 There is no evidence about what negotiations occurred about price. The
dealings between Mr Calabrese and Mr Cirocco were principally oral.
1805 On 3 June 2014, the Builder was instructed by AI:17 to arrange for the
cleaning and sealing works to be done by the Stone Supplier. Mr Calabrese first
attended site on 23 July 2015 to begin the acid cleaning. When he left a mess, the
communication about cleaning it up occurred via Mr Cirocco, who attended the
next day to wash down the site. Mr Cirocco then participated in the site meeting
held on 3 October 2014 to discuss the further cleaning works. Mr Cirocco’s
participation and oversight is consistent with a subcontracting relationship
between the Builder and the Stone Supplier.
1806 Viewed in context of other evidence, that Mr Calabrese undertook the further
cleaning works absent the Builder’s direct supervision or that he made
arrangements directly with the Owner to attend is an insufficient basis to conclude
there was a direct contractual relationship between the Owner and the Stone
Supplier. Their direct dealings reflect the informal and generally co-operative
relations between the parties prior to the acid cleaning works and the Owner’s
propensity to deal directly with the trades.
1807 The direct dealings between the Architect and Owner and the Stone
Supplier’s broker and the loss adjuster for its insurer do not establish any direct
contractual relationship between the Owner and the Stone Supplier either. These
dealings reflect their shared common interest in an expeditious settlement of the
claim on the Stone Supplier’s insurance so the remediation works could be done.
835 Builder’s Third Party Claim [29].
836 See [509] above.
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1808 Accordingly, it should be concluded that the Stone Supplier was the Builder’s
subcontractor for the acid cleaning works and the Builder was liable in contract to
the Owner for the damage caused by the Stone Supplier’s failure to take adequate
steps to protect the works whilst carrying out these works. Whilst the Owner also
had a claim in tort against the Stone Supplier, she did not sue the Stone Supplier.
Instead she brought her claim in the proceeding against the Builder for acid
damaged CSS items that allegedly were not remediated adequately or at all.
1809 It follows that the Stone Supplier, as the Builder’s subcontractor, is liable in
contract to the Builder for loss and damage suffered in consequence of the damage
caused by the Stone Supplier’s acid overspray.
1810 Initially, it was the Architect who facilitated the Stone Supplier’s insurance
claim and the remedial works with the objective of expediting the acid remediation
works to the Owner’s satisfaction. As the Arbitrator found and sets out in detail,
extensive remedial works were undertaken successfully by the Builder’s various
subcontractors.
1811 The Owner then approached the loss adjuster for the Stone Supplier’s insurer
directly with a proposal to take over supervision of the remedial works. She
privately negotiated payment of the Interim Settlement Sum on the basis that she
would pay the contractors directly, yet in this proceeding denies she engaged them
to undertake the remedial works and is not responsible for paying them. The
Owner gave unchallenged evidence that she paid one contractor (Stone & Tile
Solutions: $1,100 including GST).
1812 The Owner cannot approbate and reprobate. She negotiated and was paid the
Interim Settlement Sum on the basis that she would pay the contractors directly.
She did not pay all of them. The Owner cannot in a principled way say that receipt
of the proceeds is not relevant and no business of the Builder because it was not
privy to the settlement and at the same time deny a credit to the Builder but claim
(both then and now) that it was the Builder’s contractual responsibility to pay the
contractors because she did not engage them. Indeed, she paid the minor
contractor, Stone & Tile Solutions, whose invoice was addressed to Mr Calabrese.
Conclusion
1813 Having concluded the Stone Supplier was the Builder’s subcontractor and
liable to the Owner for the acid damaged CSS items and, under the Building
Contract the Builder was both obliged and entitled to correct damage to the works
done by its subcontractors. The contractors engaged to do the remedial works were
in substance the Builder’s subcontractors, regardless as to whom they addressed
their tax invoices.
1814 The subcontractors’ invoices were addressed to the Stone Supplier because
the parties accepted the Stone Supplier was ultimately liable for the acid damaged
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CSS items and expected that either it or its insurer would be responsible for paying
the Builder’s subcontractors for carrying out the remedial works.
1815 In principle, where the Owner has received insurance proceeds specifically
referable to remedial works performed by a subcontractor of the Builder who has
not been paid directly by the Owner, the Owner should account to the Builder for
the allocated insurance proceeds referrable to its liability to its subcontractors by
way of a credit adjustment in the Builder’s favour against the allowance for the
cost of rectifying defects to be made in the final certificate yet to be issued by the
Architect.
1816 On the evidence there are two unpaid subcontractors: Emu Glass Polishers
($7,500.00 excluding GST) and Scope Painting ($12,000.00 excluding GST).
A reduction of 5% should be made for the incomplete painting works and the
Builder’s liability to the Owner for the total costs of remedial works found should
be reduced by the total of $18,900.00 excluding GST.
1817 The Builder should then pay these subcontractors and discharge its liability
to them for the remedial works they carried out on its instructions if it has not
already done so.
1818 As to the Further Settlement Sum, no adjustment is required. No monies
were paid and received. A substantial proportion of the amount offered was on
account of cleaning the acid damaged pavers, works that were not undertaken. The
Owner’s refusal to accept further cleaning instead of replacement of some pavers
has been vindicated by the Arbitrator.
1819 Having addressed the acid damaged CSS items in this way, it is not necessary
to consider the Builder’s shorthand defence ‘insurance payment received by the
Owner’ in context of any specific CSS Item.
CSS Item 15.14 – Acid Damaged Pavers - $4,015.00 ex GST
The Issues
1820 At Award [2:5] to [2:40] and [2:245] to [2:282] the Arbitrator addresses the
Owner’s claim for replacement of all the external bluestone paving tiles relying on
the evidence of Mr Allen as the cost of remedial works of $38,120.06 including
GST for replacement or $37,813.60 including GST for Jos cleaning, 128 m2 of
paving.
1821 At Award [2:273] the Arbitrator stated she was unable to make a finding as
the cost of remedial works for this item and at [2:274] suggested for the Court’s
assistance that once the precise number of pavers and tiles are calculated, the Court
may be assisted by the rates used in the Allen Report. In addition, the Arbitrator
referred back the insurance proceeds issue to the Trial Judge for consideration and
decision.
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1822 The Builder submits the Arbitrator in rejecting Mr Allen’s evidence has done
what a decision maker should do when faced with questionable evidence. The
Builder refers to and relies on the Arbitrator’s ruling on the inadmissibility of
Mr Allen’s purported expert reports, his “hopeless confusion” about the difference
between a quote and an estimate in evidence, his relative lack of experience in
quantity surveying and demonstrated lack of independence. The Builder further
points to the dramatic unexplained increases in prices in his estimates, prior and
direct dealings with the Owner, lack of workpapers and inexperience and lack of
expertise.
1823 The Architect takes the same position, relying on the Arbitrator’s rulings on
the voir dire and her specific findings at Award [2:261] to [2:271], that culminate
in the challenged findings. The Architect submits the challenged findings arise
from a broader finding about Mr Allen’s lack of independence and unreliability.
Challenged Findings
1824 The Owner challenges the Arbitrator’s specific findings at Award [2:269]
and [2:273].
1825 The Owner’s submission that it is not necessary for the Court to be satisfied
that the Arbitrator has made an error because questions of the cost of the remedial
work has been referred back to the Court should be rejected. The challenge has
been made and must be addressed. The referred issue is a separate question.
1826 For the following reasons, the Owner’s challenges to the Arbitrator’s findings
at Award [2:269] and [2:271] fail. No error, perversity or manifest
unreasonableness has been shown.
1827 The Owner submits the Arbitrator erred at Award [2:269] in concluding that
Mr Allen changed his assessment of the work required on the instructions of the
Owner to encompass replacement of virtually all the paving. The Arbitrator is said
to have misconstrued Mr Allen’s evidence.
1828 The Owner’s challenge to this finding should be rejected. The Arbitrator has
found precisely what the Owner claims. That is, Mr Allen was instructed by the
Owner that the acid damage affects virtually all the pavers and changed his earlier
measure made from the Contract Drawings. This finding makes no difference to
the outcome because the Owner relies on other evidence for her claim as to the
extent of the paving requiring replacement. Mr Allen’s evidence should properly
be confined to proof of the costs of remedial works, not the scope of remedial
works.
1829 The Owner then challenges the Arbitrator’s finding at Award [2:271] that
“Mr Allen’s evidence contained a number of anomalies which caused her to afford
little or no weight to it.”
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1830 Having regard to Mr Allen’s evidence in the Arbitration and the November
trial concerning his pricing of replacement pavers or Jos cleaning, the Arbitrator’s
finding is well founded. As discussed earlier, Mr Allen’s methodology, the nature
of his pricing and the unexplained significant escalation in his costs warrant
caution about his evidence on this topic. His involvement with the Owner and
obvious partisanship to her interests properly informed the Arbitrator’s adverse
assessment of his evidence more generally.837
Quantum of Remedial Costs
1831 As to the referred back question of the quantum of remedial costs, the Owner
submits the Court has reliable evidence of the costs of the replacement of the
entirety of the bluestone paving from Mr Allen. She contends the Arbitrator has
found the defective pavers are those found by Mr Fisher (marked on his plan),838
and should interpret the dots as indicative of an area (not a single paver) given the
extent of the damage shown by the photographs and the Owner’s evidence. If the
Court were to consider something less than entire replacement was required, the
Owner submits a broad brush assessment should be made as is appropriate.
1832 The Builder submits the Court can fix the quantum of remedial costs by a
broad brush assessment of 128m2 x $350/m2 @ 20% for a total quantum of
$8,960.00. The Architect takes a different approach and refers to the Arbitrator’s
guidance at [2:258] and [2:274], contending the appropriate quantum should be
calculated from Mr Fisher’s identification of 55 acid damaged stones x $73 per
paver excluding GST,839 using Mr Allen’s per paver rate for replacement for CSS
Item 15.2.840
1833 The Arbitrator properly rejected Mr Allen’s opinion on the quantum of the
remedial costs for replacement because it was based on his instruction from the
Owner as to the extent of the acid damaged pavers (128 m2), being nearly all the
paving. The earlier measure of 110 m2 was taken from the Contract Drawings
which was allegedly less than the as built measure because the paving works
changed.
1834 A principled approach based on the evidence should be taken rather than
some ‘broad brush’ fixing of quantum. Weight should be given to the Arbitrator’s
guidance, referring the Court to Mr Fisher’s plan identifying 55 acid damaged
stones. The Owner’s contention Mr Fisher referred to areas, not stones should be
rejected on the evidence as not sustainable.
1835 Accordingly, the remedial cost for replacing acid damaged pavers should be
assessed at $4,015.00 excluding GST and are a liability of the Builder.
837 See [130] above and following.
838 Arbitration Exhibit 130A.
839 That is, $80 including GST.
840 Award [2:236].
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CSS Item 16.18 – Pool Fence Fixings - Nil
1836 At Award [2:5] and [2:347] to [2:385], the Arbitrator addresses the Owner’s
claim for acid spray damage to the exterior of stainless steel fitting and fixings on
the pool fence.
1837 The Arbitrator found that replacement was not required and the nature of
remedial works would be further cleaning to remove the white residue she
observed in July 2021. The Arbitrator was unable to determine the cost of remedial
cleaning works because the only evidence adduced by the parties was for full
replacement.
1838 The Owner submits this Court should adopt a broad brush approach and
assess remedial cleaning costs at $2,500 having regard to evidence of House glass
cleaning. The Builder submits the Court should assess the costs at nil or nominal
damages since the Owner has made a forensic decision to only prove full
replacement cost. The Builder further relies on its shorthand defence ‘time of
assessment’. The Architect submits the item should be assessed at nil for similar
reasons, relying on the reason for the insurer declining to pay for this item. It
submits the Owner has not only failed to prove her claim but relies on irrelevant
evidence.
1839 The Owner’s claim should be assessed at nil. The Owner had a full
opportunity to prove an alternative claim for cleaning in the Arbitration but did
not. The evidence referred to in the Owner’s Closing is not relevant and excessive
for the nature of the works and not conservative as the Owner claims.
1840 In any event, this Court is required to determine the Builder’s defence arising
from the time of assessment by the Arbitrator. The Arbitrator observed white
powder on the fitting nearly seven years after the acid over spraying occurred. The
evidence does not establish any damage to the stainless steel fittings having regard
to Crawford’s assessment and report in early 2015 that stainless steel fittings were
not susceptible to damage from acid overspray because they were commonly
cleaned with oxalic acid.
Acid Damaged CSS Items – Conclusion
1841 The total quantum of the acid damaged CSS items as found by the Arbitrator
and this Court are as follows.
CSS Item Description Award (ex GST) Award/
Judgment
1.2 Window casements. $2,241.80 A[2:119]
1.4 Compressible seals to doors
and windows. $1,178.37 A[2:164]
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15.2 Rust stains to bluestone
pavers. $145.45 A[2:243]
15.4 Downpipes paint finish. $1,260.09 A[2:142]
15.7 Slate sills $1,667.20 A[2:314]
15.14 Bluestone pavers $4,015.00 J[1835]
16.18 Pool fence fixings Nil J[1839]
16.19 Steel pool fence $1,174.80 A[2:424]
16.24.1 Dining slate threshold $831.60 A[2:346]
17.16 Water spout – front garden
water feature $372.90 A[2:469]
Total $12,887.21
CSS Item 1.3 – Movement Cracks/Painting - $1,805.10 ex GST
1842 At Award [2:572] to [2:583], the Arbitrator addressed the Owner’s claims
about movement cracks generally and painting of tops of doors and operable
windows.
1843 The Arbitrator determined that remedial works were required to address the
defects/incomplete works found but was unable to determine the cost of remedial
works on the evidence and referred the issue back to the Trial Judge at Award
[2:583], drawing the Court’s attention to the potential of doubling up with other
CSS Items that may be costed on an individual basis.
1844 The Owner submits this Court should assess the remedial costs somewhere
in between the assessments of Mr Allen and Mr Paddick, suggesting of $5,800.00,
on the incorrect premise that Mr Paddick’s assessment was $4,805.10, (it was
$1,805.10 excluding GST).
1845 The Builder refers to the potential for double up between this item and the
painting determined at Award [2:784] and submits no or a nominal amount should
be assessed because the Owner has failed to prove her case on quantum for this
item. The Architect takes the position that the Court should assess the quantum on
a ‘broad brush’ approach, suggesting $3,500.00 excluding GST as a fair amount.
1846 The Arbitrator gave Mr Allen’s costing no weight because it was not based
on any definitive itemised scope of work. This leaves as the only relevant costing
evidence Mr Paddick’s costing. It was found not to encompass the entire scope of
the remedial works determined and the potential for double up was drawn to the
Court’s attention.
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1847 The Court is no better position than the Arbitrator to determine the cost of
the determined remedial works. Since the Owner has proved quantum only to the
extent of Mr Paddick’s costing, it is appropriate to determine the amount of
remedial costs in that amount: $1,805.10 excluding GST.
CSS Items 1.11/26.21 – Door Thickness - $3,880.80 ex GST
1848 At Award [2:893] to [2:943], the Arbitrator addressed the Owner’s
complaints about the supply and installation of doors and door frames. At Award
[2:932] and [2:939], the Arbitrator found the Architect was responsible for the
Builder’s failure to install doors DG16 and DG19 of the specified thickness in
accordance with amended architectural drawings during the contract
administration stage and referred the issue of liability back to the Trial Judge for
decision.
1849 The Builder did not specifically address this item at trial.
1850 The Owner’s and Architect’s submission that the Arbitrator erred in law in
making this finding should be accepted. The Arbitrator’s finding that the defect is
a result of the Architect failing to uphold the design intent is on the evidence
unfounded. The Builder did not install compliant doors and is therefore liable for
the defect for which the Arbitrator has determined a remedial cost of $3,880.80
excluding GST.
CSS Items 2.9, 5.3, 13.3 & 25.10 – Exhaust Fans - $2.089.80 ex GST each
1851 At the start of the November trial, the Owner’s challenges to these items were
compromised in the amount of $2,089.80 excluding GST each,841 with the effect
that this is the quantum to be included in the Award to be adopted by the Court.
CSS Item 9.2 – Internal Stair Plaster – Nil
The Issues
1852 At Award [2:1541] to [2:1567] the Arbitrator addressed the Owner’s
complaint about the finish of the plasterwork to the middle flight of stairs between
the ground and upper level has uneven, horizontal lines to the external (east) wall
and Ros’ Study/Master Bedroom (south) wall and the finish is not in accordance
with clause A.09.01 of the Architect’s Specification.
1853 The Owner challenges the Arbitrator’s findings at [2:1542] that the north wall
and east walls of the lift were not issues identified in CSS Item 9.2 and accordingly
made no findings or determination as regards these issues. The Owner contends
the Arbitrator erred by taking too narrow a view of the Referred Item and therefore
did not deal with the full scope of the defects in the stair wall.
841 Owner’s Final Closing [430]; Builder’s Final Closing [180]; Architect’s Final Closing [165].
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1854 The Arbitrator found at [2:1556] that the Builder has constructed the works
in accordance with the Contract Drawings which do not provide for a horizontal
control joint at the junction of the upper level concrete floors and the respective
east and south walls of the stair. The observed cracking is the result of differential
movement that could have been mitigated by the installation of a control joint.
1855 The Arbitrator at Award [2:1557] found that the remedial work required was
the installation of a control joint to the affected areas, removal and re-plastering of
plasterwork and re-painting the affected area to match the existing colour.
1856 The Arbitrator at Award [2:1558] was unable to make a finding as to the cost
of the remedial work required because she formed the view the costings evidence
did not correlate with the scope of the remedial works required and referred the
issue back to the Trial Judge for decision.
1857 The Arbitrator at Award [2:1563] having found the defect was not caused by
the Builder, referred the issue of liability to the Trial Judge for determination.
Parties’ Submissions
1858 In support of her challenges to the Arbitrator’s narrow finding as to the scope
of the Referred Item, the Owner relies on the Arbitrator’s recorded observations of
cracking in the north and east wall of the lift and submits the pleaded scope
includes all walls.
1859 In the alternative, the Owner submits that if the stair plaster finish north and
east wall are not Referred Items, the Court should now deal with them so as to
determine all issues as between the parties.
1860 As to quantum, the Owner submits the Court should assess the costs of
remediating all four walls without the installation of a control joint as proportion
of the assessment of Mr Allen or as the cost assessed by Mr Paddick.
1861 The Builder notes the Arbitrator’s observation that no engineering evidence
was adduced for this item and it was the Builder who proposed a control joint be
installed but it was not instructed to do so by reason of the Architect’s or Owner’s
choice made at a site meeting in September 2015. Further, the remedial works
would constitute a variation for which the Builder would be entitled to an
adjustment to the contract price. Accordingly, the Owner has suffered no loss.
1862 The Architect opposes the Owner’s challenge, pointing out the Arbitrator
made her own assessment of the defect and its cause and the other cracking
concerns rooms not mentioned in the CSS. As to liability for the defect, the
Architect refers to the evidence before the Arbitrator and her findings as to the
September 2015 site meeting and contends the Owner is responsible for the
remedial works proposed by the Builder not being carried due to her refusal to
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have a control joint on a wall where she wished to display art. Further, her refusal
is a failure to mitigate her loss.
Consideration
1863 The Owner’s challenge to the Arbitrator’s finding as to the scope of the
Referred Item should be rejected. First, CSS Item 9.2 expressly refers to only the
external (east) and the study (south) walls and remedial work on the eastern and
south walls. Secondly, the Arbitrator was careful not to record any observations
about the other walls, addressing the defects manifesting in the plaster of the south
and east walls and the likely root cause. The Owner misstates the Arbitrator’s
findings at Award [2:1541].
1864 Next, there is no good reason why this Court should deal with unpleaded
defects. In any event, the evidence is insufficient for the Court to make any
findings about the nature, cause or responsibility of any party for whatever
unpleaded alleged defect was drawn to the Arbitrator’s attention on the view.
1865 As to liability, the Owner’s submission that the Arbitrator found the Builder
liable is incorrect. At Award [2:1557] and [2:1563] the Arbitrator expressly finds
the Builder constructed the works in accordance with the Contract Drawings and
did not cause the defect. The defect is on the Arbitrator’s findings is as a result of
differential movement of the structure. There is no structural engineering evidence
or otherwise sufficient to establish any breach of duty on the Architect’s part.
Moreover, it is apparent from the evidence in the Arbitration that the Owner
refused the Architect’s advice to accept the Builder’s recommendation to install a
control joint with a decorative moulding that on the Arbitrator’s finding could have
mitigated the damage to the plaster.
1866 Next, the Builder’s submission should be accepted that the required remedial
works constitute a variation, and if instructed would entitle the Builder to an
adjustment of the contract price. The Owner therefore cannot establish she has
suffered any loss should she have had a successful claim against the Builder.
1867 As to quantum, no further evidence was adduced as to the quantum of the
remedial works determined by the Arbitrator to be required. The Court is in no
better position that the Arbitrator to determine remedial costs for the scope of
works found to be required. There is no principled basis on the evidence to assess
the cost of the required remedial works.
1868 It is therefore not necessary to address the Builder’s defence of betterment.
CSS Items 14.4 – Cellar Vent - $2,089.80 ex GST
1869 At Award [2:1168] to [2:1195] the Arbitrator addressed the Owner’s
complaint that one uPVC ventilation pipe and powder coated aluminium grille face
to the cellar vent and inline fan were installed and not two in accordance with
clauses F12, J.09.19 and L.05.05 of the Architect’s Specification.
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1870 The Owner challenges the Arbitrator’s findings at Award [2:1185] and
[2:1186] that, on the balance of probability, the Builder was instructed to vary the
number and size of uPVC exhaust ducts to the cellar vents and fans. She contends
the Arbitrator’s findings are manifestly wrong and inconsistent with the weight of
the objective evidence and the contractual requirement for variations to be
instructed in writing.
1871 At the start of the November trial, the Owner’s challenge to the quantum of
this item was comprised in the amount of $2,089.80 excluding GST,842 with the
effect that this is the quantum to be included in the Award to be adopted by the
Court if liability is found in favour of the Owner.
1872 The Builder submits that since the Arbitrator finds the work is not defective
by reason of an Architect’s instruction there is no good reason not to adopt the
Arbitrator’s findings. The Builder further challenges the agreed quantum on the
shorthand grounds ‘Builder’s cost to rectify’ and ‘time of assessment – should be
discounted to 2015 prices’. The Builder was on-site in September 2015 but not
instructed to correct any defect.
1873 The Architect submits the evidence does not establish the as built design is
defective and relies on Dr Clarke’s evidence that he has not had cause to remove
or dispose of any wine stored in the cellar. The Owner led no evidence about the
deleterious effect of the as built cellar vent on the store wine and has not
established any loss by reason of the alleged breach of contract. The Architect
further relies on clause A.05.06 of the Architect’s Specification as to the finality
of the Architect’s decision on true intent and meaning of the drawings and the
specification.
1874 The Owner’s challenge to the Arbitrator’s finding on liability should be
accepted. That said, there is no good reason not to accept the Arbitrator’s finding
on the evidence that the Architect directed a variation on-site. However, in the
absence of a written instruction from the Architect to vary the works, the Builder
was required to construct the cellar vent in accordance with the Architect’s
Specification. The evidence establishes the cellar vent works are a defect because
the works do not conform with the Building Contract.
1875 Accordingly, the Arbitrator erred at Award [2:1185]843 and [2:1186] in
finding there was a valid contractual direction to vary the cellar vent works and
therefore no defect. These parts of the Award should not be adopted as part of the
Court’s judgment in the proceeding.
1876 The following findings should be substituted for the Arbitrator’s findings for
CSS Item 14.4.
842 Owner’s Final Closing [430]. Architect’s Final Closing [165].
843 Dot points 8, 9 and 10.
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1877 As regards Award [2:1190], the works for CSS Item 14.4 are defective works
and partially incomplete (provision of second ventilation duct (air supply)).
1878 As regards Award [2:1191], the works for CSS Item 14.4 did not comply
with the statutory warranties in s32(2)(a) to (c) of the Building Work Contractors
Act.
1879 As regards Award [2:1192], the incomplete works for CSS Item 14.4 were
caused by the Builder.
1880 As regards Award [2:1193] and [2:1194], the parties have agreed the cost of
remedial works for CSS item 14.4 as being $2,089.80 excluding GST.
1881 The Architect’s contentions that the Owner has not established any loss is
relevant to the question as to whether the proposed rectification works are
reasonable to undertake. This question is addressed below and determined in the
Owner’s favour.844
CSS Item 15.17 – Verandah Nosing Profile - Nil
1882 At Award [2:1814] to [2:1836], the Arbitrator addressed the Owner’s
complaints about Mintaro slate door sills and verandah/porch nosing profile.
1883 At Award [2:1826], [2:1827] and [2:1836], the Arbitrator found she was
unable to determine the costs of alternative remedial works for the verandah/porch
nosing profile item and referred the issue back to the Trial Judge for decision.
1884 The Arbitrator found at Award [2:1825] that the perimeter nosing to the front
verandah/porch is a defect because it has an arris edge treatment (instead of the
specified pencil round). The Arbitrator found at Award [2:1826] full replacement
of the perimeter nosing was not required and alternative lesser scope of remedial
works involving grinding the arris edge to that of a pencil round should be
undertaken instead.
1885 The only costings evidence before the Arbitrator and this Court is for full
replacement of the perimeter nosing.
1886 The Owner did not adduce any relevant costing evidence in the Arbitration
or the trial. She addresses the issue in closing by submitting that it is not necessary
to make a separate award for this item because all the pavers on the verandah/porch
require replacement for acid damage anyway. However, this is not the conclusion
reached as regards acid damaged paving remedial works.
1887 The Architect’s and Builder’s submissions that this item should be assessed
at nil should be accepted. The Owner has not proven any loss. The Court is in no
better position to assess the quantum of the Owner’s claim for the non-conforming
844 See [1985] and following below.
-- 307 of 362 --
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nosing profile than the Arbitrator. There is no evidentiary basis for approaching
the issue by taking a ‘broad brush’ approach and guessing the quantum.
1888 If a different conclusion had been reached, the difference between arris and
pencil round edging would only ever be an aesthetic defect that would be
unreasonable to correct in all the circumstances. There is no evidence of any
special value to the Owner of the specified treatment or diminution of her
contractual expectation, bearing in mind that the Owner first complained about this
defect in July 2020, six years after she occupied the house, saw the works being
done and likely was closely involved in the informal decision to change the edge
treatment ultimately adopted.
CSS Item 16.1 - Paving Drainage - Nil
1889 At Award [2:1233] to [2:1242], the Arbitrator addressed the Owner’s
complaint about the outdoor dining paving not draining and pooling water. At
Award [2:1240], the Owner found the Owner’s claims unsubstantiated, the
contract documents did not specify the falls for the outdoor dining areas and
returned to the Trial Judge for consideration and decision any argument regarding
liability for the provision of falls.
1890 The Owner did not adduce any evidence on this item, nor make any
submission about it in the Arbitration or at trial. Neither did the Builder.
1891 The Architect’s submission that there is no basis upon which this Court can
make any further finding should be accepted as correct.
CSS Item 16.5 – Church hall Window Masonry Cracks - $2,219.80 ex GST
1892 At Award [3:302] to [3:326], the Arbitrator addressed the Owner’s claims
about cracks in the church hall first floor window masonry. At Award [3:316], the
Arbitrator found the Builder’s remedial works were inadequate and at Award
[3:319] and [3:326] determined the cost of the remedial works as $2,219.80
excluding GST.
1893 The Arbitrator referred back the issue as to whether the works were the
subject of a PC Sum at Award [3:319] and [3:326].
1894 The issue of the PC Sum is not relevant. The point is the Arbitrator found
the Builder’s works were inadequate and should be remediated. The Architect’s
submissions misconstrue the Arbitrator’s findings as to the extent of the remedial
works determined and should be disregarded as beside the point.
1895 The Builder’s defence of betterment should be rejected as misconceived. The
work done was defective (whether the subject of a PC Sum or not) and there is no
basis for finding the proposed remedial works a betterment.
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CSS Item 17.19 - Stone Block at Central Porch Pier – Not Considered
1896 The Architect’s conclusion at Award [2:1955] that this item concerns the
stonework and is not part of her remit is correct.
CSS Item 19.1.1 - Repointing Church Hall - $350.00 ex GST
The Issues
1897 At Award [3:367] to [3:437], the Arbitrator addressed the Owner’s claims
that selective repointing of the external walls of the church hall in accordance with
‘Extent of Works to church hall’ and clauses E.12.08 and A.09.01 of the
Architect’s Specification and that remedial works is required to areas of the
stonework repaired during construction.
1898 The Architect referred back to the Trial Judge four issues. First at Award
[3:424], the validity or otherwise of DA2011845 and whether any particulars of it
were not or should have been including in the Building Contract. Secondly, at
Award [3:426] the issue of liability for the use of a cementitious instead of lime-
based mortar mix contrary to the conditions of DA2011. Thirdly, at Award [3:428]
the issue of liability for incomplete works to the northern church hall wall with
holes and missing mortar/pointing. Fourthly, the determination of the cost of any
remedial works applicable to CSS Item 19.1.1.
DA2011
1899 The Owner submits the Arbitrator correctly found at Award [1:35], [1:39]
and [3:380] that DA2011 applied to works to the church hall such that development
plan consent condition 3 also applied as is relevant as follows:
2. As required, re-pointing of original façade should be undertaken by an experienced,
accredited stonemason using lime rich mortar (St Astier Natural Hydraulic Lime);
3. All re-pointing mixes should be NHL 3.5 1:3 Ration of line:sand;
1900 The Architect submits the Arbitrator erred in finding DA2011 applied
because it was an approval given to others after the Building Contract was signed
for the development of four two-storey dwellings that did not proceed. The Builder
takes no interest in this issue and make no submissions, other than to observe that
whatever re-pointing work was required was additional to the scope of works under
the Building Contract for a PC Sum item.
1901 The Arbitrator’s conclusion that DA2011 applied to the church hall works is
correct. On close examination of the two approvals, it is evident that two
development approvals apply to the Residence (referred to as lots 2 and 3 in
DA2011). Development approval for DA2011846 was granted on 20 November
2012 for stage 1 of alterations and building works to the church hall for lots 2 to 6.
845 As defined at Award [1:23].
846 Exhibit R3.6 at pages 302-303.
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Development approval for the DA2012847 was granted on 24 October 2012 for the
two-storey building dwelling, garage, alfresco, swimming pool, porch and front
fence for lots 2 and 3.
1902 The correspondence between the Architect and Burnside Council show the
church hall works were packaged together for the purposes of assessment for full
development approval. This approval ran with the land and not ownership.
1903 The Arbitrator correctly concluded at Award [3:421] that the Building
Contract does not specify the mortar mix required by DA2011.
1904 However, it is not necessary to consider whether any particulars of DA2011
as relevant to re-pointing should have been included in the Building Contract to
determine any relevant question of liability. Clause E.08 of the Architect’s
Specification flexibly provided for selective re-pointing of existing stonework to
the garage as directed on-site by the Architect, allowing a PC Sum of $3,000.00.
The stonemason was to prepare sample panel for assessment and approval of the
mortar mix, technique and finish. Clause E.03.04 similarly provided that the
mortar for re-pointing of existing stonework shall be discussed and confirmed on-
site with the Architect prior to proceeding:
....- but shall generally match existing original pointing colour and technique.
1905 The provisions of the Building Contract are not inconsistent with DA2011
when ‘existing original pointing’ is understood as referring to the original mortar
used in construction in the 1800s that was lime-based (and not to the extensive re-
pointing subsequently undertaken to a low-level of workmanship using a
cementitious mix).
Use of Cementitious Mortar Mix
1906 The Arbitrator found at Award [3:421] and [3:426] that the Builder was
instructed by the Architect to undertake re-pointing works commensurate with the
existing pointing using a cementitious mortar mix and therefore the Architect’s
instruction was the cause of non-compliance with the requirement in DA2011 for
a lime-based mortar mix.
1907 However, the Builder was obliged in carrying out the works to comply with
all relevant legislation848 and warranted the works would be performed in
accordance with all statutory requirements.849 The Builder was therefore obliged
to comply with DA2011, regardless of the Architect’s instructions.
1908 The failure of the repointing works carried out by the Builder to comply with
the requirements of DA2011 for mortar mix is therefore the liability of both the
847 Exhibit TP1.3.7 page 476.
848 Clause A2.1.g.
849 Clause A3.2.c.
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Builder and the Architect. The Architect’s liability is further considered below in
Part G in context of the Owner’s claim for direct liability as pleaded in her Ninth
Third Party Claim [26b]. An issue of apportionment of liability to the Owner arises
between the Builder and the Architect and is also addressed below.
Scope of Re-pointing Works
1909 At Award [3:427], the Arbitrator found there was no requirement under the
Building Contract or the conditions of DA2011 to remove all existing cementitious
pointing and replace it with new lime-based mortar mix as specified in DA2011.
However, at Award [3:328] the Arbitrator found there was incomplete repair and
re-pointing works in the northern wall of the church hall because the Architect
failed to direct the Builder to repair and repoint this part of the stonework. The
works are therefore incomplete.
1910 As already mentioned, the selective repointing of the church hall was the
subject of a PC Sum. Section K of the Building Contract contemplates the
Architect instructing PC Sums item works to proceed or not and provides that
nothing was to be done for a PC Sum item except in accordance with an instruction
given by the Architect. The Arbitrator found at Award [3:424] that the nature and
extent of the repointing works was decided by the Architect and agreed to by the
Owner during at least one site meeting. There was no written Architect’s
instruction in evidence.
1911 In the absence of a written Architect’s instruction, the Builder had no
obligation to undertake the repointing work it was informally instructed to do on-
site (limited work using a cementitious mortar mix) or any other repointing work
and no entitlement to an adjustment in its favour for the cost of any work done.
The Architect’s liability for CSS Item 19.1.1 is further considered in Part G below.
Remedial Costs
1912 The Arbitrator at Award [3:429] considered costings evidence adduced for
CSS Item 191.1 and found the estimate of $60,927,75 including GST opined by
Mr Allen was for the complete removal and repointing of all church hall walls, a
scope of works contrary to her findings that would result in a betterment to the
Owner. The required remedial works comprising the replacement of missing
stonework and reporting holes in the north gable wall of the church hall is different
in nature, a significantly lesser scope of works and therefore not comparable work.
1913 This Court is in no better position than the Arbitrator to determine the cost of
the required remedial works. The Owner has failed to prove the cost of the
required remedial works.
1914 In any event, it is not necessary to quantify the costs of carrying out the
limited remedial works to the north wall of the church hall because the Builder was
not required to carry out works the subject of a PC Sum in the absence of a written
-- 311 of 362 --
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Architect’s instruction to proceed. If one were given, the Builder would be entitled
to an adjustment for a prime cost item in its favour under section K of the Building
Contract. No question of betterment arises.
CSS Item 19.2(d) – Paintwork on Verandah Soffit – Nil
1915 At Award [3:494] to [3:505] the Arbitrator addressed the Owner’s claim
about paint bubbling in the verandah soffit but was on the costings evidence unable
to determine the scope of the remedial works required and therefore remedial costs
and returned the issue to the Trial Judge.
1916 As to the quantum of remedial costs, the Court is in no better position than
the Arbitrator to determine the cost of the required remedial works. The Owner
has failed to prove any relevant measure of remedial costs.
CSS Item 19A.1 & 20.12 – Church Hall Render - Nil
The Issues
1917 At Award [3:105] to [3:142] the Arbitrator addressed the Owner’s claims that
all internal walls of the church hall (CSS Item 19A.1) and garage (CSS Item 20.12)
required patching, repair and re-painting as specified in the ‘Extent of Works in
Contract for Church Hall’ in Architect’s Specification and the Contract Drawings.
At Award [3:143] to [3:155], the Arbitrator addressed the specific Referred Item,
CSS Item 19A.1.
1918 The Owner challenges the Arbitrator’s finding as to part of the internal wall
works of the church hall at Award [3:118] that the crack to the north-west corner
of the Guest Suite was rectified but on the balance of probability, re-appeared over
time.
1919 At Award[3:106], the Arbitrator recorded her observations during the view
including as is relevant to the guest suite, that there was cracking to junction of
walls and ceiling in north-west corner and cracking to west wall generally. The
Arbitrator reported at Award [3:107] no definitive answer was provided to her
inquiry as the extent of new versus exiting plasterwork to the internal walls of the
guest suite.
1920 At Award [3:108] and [3:141], the Arbitrator observed the Building Contract
provides for a PC Sum of $1,500.00 for selective patching and repairs to the
internal wall of the church hall and does not specify their complete replacement.
Whilst the method of remedial work is not specified, the Arbitrator found the
method of repairs was discussed and agreed between the parties at one or more site
meetings and the instructed work exceeded the amount allowed in the PC Sum
because of the previously unknown condition of the existing plaster.
1921 The Arbitrator considered the expert evidence of Associate Professor
Danvers and Mr Penglase and concluded they agreed on a large number of issues
-- 312 of 362 --
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including the impacts of opined structural movements on the cracking and that it
will likely continue over time and evidence of previous repairs having been
undertaken. The Arbitrator concluded that the severity of cracks and emergence
of new cracks has increased between the times the Builder last attended the site to
undertake works, the experts attended site and the view in July 2021.
1922 At Award [3:143], the Arbitrator found incomplete work only in relation to
the church hall stairwell plaster and no defect in the plaster to the north-west corner
of the Guest Suite for the reasons stated at [3:118]. That is, the crack had been
previously repaired and re-appeared over time.
1923 At Award [3:143], the Arbitrator found the remedial work required is
treatment in accordance with the less costly recommendations of the architectural
expert witnesses (chemical injection).
1924 However, the only costings evidence adduced was from Mr Allen. He opined
on the cost of completely removing and reinstating all plasterwork to all existing
internal walls of the church hall contrary to the scope of work identified in the
Building Contract. The Arbitrator concluded at Award [3:144] such work would
result in betterment for the Owner and was unable to determine the costs of the
limited remedial work required for the stairwell plaster. The Arbitrator referred
the issue of the remedial costs back to the Trial Judge for decision.
1925 Having concluded the works pertaining to CSS Item 19A.1 were the subject
of a fully expended PC Sum, the Arbitrator concluded any further remedial work
should not be attributed to the Builder and defers to any contrary view of the Trial
Judge.
Parties’ Submissions
1926 In support of her challenge to the finding at Award [3:118], the Owner
submits the Arbitrator has identified no evidence to support her conclusion and
this Court should find her conclusion unsupported. As to the quantum of the
remedial costs for the stairwell plaster, the Owner suggests Mr Allen’s estimate is
available as a guide and submits the Court should take a broad brush approach and
make an assessment of one fifth ($10,050.00) to one quarter ($12,500.00) of
Mr Allens’ estimate.
1927 The Builder submits no loss has been established. There is no relevant
quantum evidence and the repair work is a PC Sum item.
1928 The Architect first points out that the Arbitrator made her Award based on
her assessment on the view of the cracking observed. The relevant works were the
subject of a fully expended PC Sum and additional works to remediate ongoing
cracking would attract additional payment. Finally, there is no logical or evidential
basis for this Court to assess the required remedial works on the basis of Mr Allen’s
unreliable assessment.
-- 313 of 362 --
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Consideration
1929 The Owner’s challenge to the Arbitrator’s finding at Award [3:118] should
be rejected. The Owner’s contention that there is no evidence to support this
finding and her conclusion is unsupported is not correct. The Arbitrator makes it
plain she assessed the cracking she observed on the view as having been repaired
and re-appeared over time. Her conclusion was supported by the evidence of both
architectural experts who opined on the continuing emergence of cracks over time.
1930 The Owner has not established any good reason to not adopt this finding.
1931 As to the quantum of remedial costs, the Court is in no better position than
the Arbitrator to determine the cost of the required remedial works. The Owner
did not adduce any evidence on the less costly injection treatment recommended
by the expert architects in the November trial. Mr Allen’s estimate is not of any
assistance to the Court. It is for an entirely different scope of works, both in nature
and extent. The Owner has failed to prove any relevant measure of remedial costs.
1932 Finally, the Arbitrator is correct in concluding that the incomplete remedial
works are the subject of a PC Sum. However, for the reasons discussed above,850
there is no basis for concluding the PC Sum has been expended by an adjustment
to the contract price in the absence of any written instruction from the Architect to
carry out the works the subject of the PC Sum. If there was such an instruction,
there would be no basis for an adjustment of the PC Sum in favour of the Owner
because the required remedial works would be in addition to the costs of the works
already carried out in excess of the nominated PC Sum.
1933 No question of betterment arises.
CSS Item 20.10 - Church Hall Timber Trims - Nil
1934 At Award [3:747] to [3:766] the Arbitrator addressed the Owner’s claim
about incomplete works being missing timber trims to the existing fretwork at
ceiling level in garage 1. At Award [3:764] and [3:765] the Arbitrator determined
remedial works comprising the installation of painted timber trims is required by
an Architect’s instruction issued to the Builder in August 2015 and determined the
cost of the remedial works to be $381.00 excluding GST, subject to the Trial
Judge’s decision.
1935 At Award [3:751] and [3:758], the Arbitrator referred back for consideration
and decision by Trial Judge the issues as to whether the cost of this item has been
claimed against the PC Sum of $2,000.00 for timber repairs to the church hall.
1936 The Builder submits this item is within the scope of the PC Sum. The
Architect submits that if the incomplete works had been done, then the Builder’s
850 See [1246]-[1249] above.
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claim for a contract adjustment under section K of the Building Contract would
have increased and the Owner would have to pay for the works to be done.
1937 The Owner submits the PC Sum is not relevant because the work is defective.
1938 Contrary to the Owner’s submission, the Arbitrator did not find the work was
defective, she found it was incomplete. The issue of the PC Sum is therefore
relevant.
1939 Accepting that the remedial works were within the scope of the PC Sum, in
the absence of Architect’s instruction to proceed with the works, under section K
nothing was to be done. There is no evidence adduced about this item or the
parties’ compliance with section K.
1940 If the works were not within the scope of the PC Sum, the Architect’s
instruction to carry out the incomplete works would entitle the Builder to claim a
contract price adjustment for a variation.
1941 It follows the Builder has no obligation to carry out the remedial works
identified as necessary to complete the incomplete works and the Owner has not
suffered any loss.
CSS Item 20.16 - Finial - $4,945.45 ex GST
The Issues
1942 At Award [3:787] to [3:822] the Arbitrator addressed the Owner’s claim that
the church hall finial was not repaired in accordance with the ‘Extent of Works to
church hall’ and clause A.12.06 of the Architect’s Specification.
1943 At Award [3:804], the Architect found the finial works required under the
Building Contract were incomplete and caused by the Builder’s failure to carry out
the works as a result of a verbal instruction from the Architect issued at a site
meeting on 8 May 2014 with Dr Clarke’s agreement. The Arbitrator found at
Award [3:800] and [3:810] Dr Clarke was not a nominated representative of the
Owner under the Building Contract and did not have the requisite authority of the
Owner to instruct them not to proceed with the finial works. The Arbitrator
expressly deferred the issue of authority to the Trial Judge should she take a
different view.
1944 The Arbitrator further referred the issue of liability for the verbal instructions
given to the Builder to the Trial Judge at Award [3:813], having found the
Architect’s instruction was the cause of the incomplete works and varied the
requirements of the Building Contract and DA2011. The Arbitrator further
referred the validity of DA2011 and whether its conditions should have been
included in the Building Contract to the Trial Judge at Award [3:810].
DA2011
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1945 The Architect’s contention that DA2011 does not apply should be rejected
for the reasons already discussed above in the context of the church hall repointing
works.
1946 The Arbitrator’s finding at Award [3:810] is correct. DA2011 contained a
condition that the finial should be carefully removed, cleaned, treated for rust
damage, sealed and replaced in its original location. This work was required to be
done and should have been included in the Building Contract as necessary works
or instructed by the Architect instead of the work provided for in clause 12.06 of
the Architect’s Specification (that is, more limited works of in situ repairs as
required).
1947 The Architect should have ensured the specification of the finial works under
the Building Contract complied with the conditions of DA2011 as relevant and
instructed the Builder accordingly. On the evidence it should be inferred the
Builder was unaware of the condition of DA2011.
1948 Questions of the Architect’s direct liability and any apportionment between
the Builder and the Architect are addressed below.
Dr Clarke’s Authority
1949 The Builder and Architect submit Dr Clarke’s instruction to the Architect not
to proceed with the finial works bind the Owner.
1950 Whilst it should be accepted on the evidence that the parties conducted
themselves generally on the basis that Dr Clarke was authorised to instruct the
Architect on her behalf from time to time, the evidence in the case of the finial
works is equivocal. It follows, there is no good reason not to accept the
Arbitrator’s finding that Dr Clarke’s instruction was given in the absence of the
Owner or the Owner’s unchallenged evidence that she had not given her full
authority to Dr Clarke to deal with issues on her behalf in her absence.
1951 There is no dispute that Dr Clarke was not an authorised representative under
the Building Contract.
Builder’s Liability
1952 Under the Building Contract, the Builder was only obliged to comply with
the Architect’s written instructions. The Builder was obliged by clause 12.06 of
the Architect’s Specification to undertake such in situ finial repairs as necessary.
In the absence of any written instructions as to the finial works, the Builder had no
obligation under clause A2.1.d of the Building Contract to do any repairs to the
finial. However, the Builder was obliged in carrying out the works to comply with
all relevant legislation851 and warranted the works would be performed in
851 Clause A2.1.g.
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accordance with all statutory requirements.852 The Builder was therefore obliged
to comply with DA2011, regardless of the Architect’s verbal instructions.
Remedial Costs
1953 The Arbitrator’s finding at Award [3:814] as to the cost of the required
remedial finial works was qualified subject to the Trial Judge’s decision. In the
absence of any further relevant evidence, no good reason has been shown not to
adopt the Arbitrator’s determination of remedial costs for CSS Item 20.16 as
$4,945.45 excluding GST.
CSS Item 20.21 – Plastering West Wall Garage – Nil
1954 At Award [3:902] to [3:924] the Arbitrator addressed the Owner’s claims that
the plaster finish was bagged not smooth on the west wall of the garage and found
the works were not defective. The Arbitrator made findings at Award [3:918] and
[3:919] as to the scope of the works under the Building Contract subject to the
Trial Judge’s decision. Since no party challenged the Arbitrator’s findings or made
submissions about this item, it is not necessary to consider it further.
CSS Items 29.1 – Bin Store Masonry Wall – Nil
CSS Item 29.5 - Bin Store Varnish Coating – Nil
CSS Item 29.6 - Bin Store PVC Pipes - Nil
1955 At Award [2:2098] to [2:2114], the Arbitrator addressed the Owner’s
complaint that the rendered masonry wall to the Bin Store was not painted and
therefore incomplete works.
1956 At Award [2:2146] to [2:2166], the Arbitrator addressed the Owner’s
complaint that the varnish coating to the timber screen of the Bin Store is
inadequate.
1957 At Award [2:2167] to [2:2185], the Arbitrator addressed the Owner’s
complaint that the PVC pipes near and within the Bin Store are not painted.
1958 At Award [2:2106] and [2:2113], [2:2158] and [2:2165] and [2:2177] and
[2:2184] respectively, the Arbitrator determined alternative costs of the remedial
works and referred to the Trial Judge the issue of betterment in circumstances
where the items did not form part of the Builder’s scope of works under the
Building Contract and there was no evidence that the Owner had paid for the
incomplete works to be done.
852 Clause A3.2.c.
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1959 At the start of the November trial, the parties compromised the quantum of
these item in the amounts of $74.80, $215.60 and $74.80 all excluding GST,853
subject to the Trial Judge’s decision on betterment.
1960 The Architect submits the Owner has failed to discharge her onus and prove
that these works were an instructed variation for which she has paid. The Builder
concurs and contends that any obligation to carry out the remedial works would
constitute a betterment. The Owner makes no submissions on these items.
1961 In the circumstances found by the Arbitrator, the incomplete works are not a
defect and the Owner has suffered no loss by reason of the Builder not carrying
out the works instructed in a defects list. No question of betterment arises.
Other Award Issues: Prevention by the Owner
Legal Principles
1962 Generally, a party to a contract cannot rely on the failure of the other party
as a breach where the other party has prevented their performance. The
‘prevention principle’ was expressed in Built Environs Pty Ltd v Tali Engineering
Pty Ltd in the following terms: 854
A party generally cannot rely upon non-fulfilment of a condition the performance of which
has been prevented by the that party’s own breach of contract.
1963 Quite apart from this general principle, the Building Contract addresses the
Builder’s opportunity to correct defects and therefore the Owner’s entitlement to
damages for an unremedied defect in circumstances where the Owner has allegedly
prevented the remediation works.
1964 Firstly, the Owner was expressly obliged to act reasonably, cooperate in all
matters and avoid obstructing the Builder.855
1965 Secondly, the Builder was both obliged and entitled to correct any defect or
incomplete works in accordance with the scheme provided in section M of the
Building Contract.
1966 A builder’s contractual opportunity to correct defects under clause M11 and
M12 of an ABIC SW-2008 contract was considered in Bedrock v Crea.856 After
considering the reciprocity of obligation and opportunity in contractual regime for
addressing defects in the defects liability period, Doyle JA (Livesey and Bleby JJA
agreeing) expressed the view that the builder’s contractual opportunity to rectify
853 That is, $82.28, $237.16 and $82.28 all including GST. Owner’s Final Closing [543].
854 [2013] SASC 84 at [152] per Blue J.
855 Clause A1.
856 Op cit Fn 138 at [130].
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defects was not expressly or impliedly constrained by any notion of
reasonableness:857
… The owner, Mr Crea, was required to afford the builder this contractual opportunity to
rectify in order to be entitled to recover damages referable to the cost of a third party to
rectify the defects. It was not enough that the builder was afforded some other “reasonable”
opportunity. I do not think there is any room, in the face of the express contractual
provisions for addressing defects, for the existence of some wider common law right to
recover damages of that nature. Such a right would cut across the contractual regime agreed
between the parties.
CSS Item 10.2 – Wrought Iron Panel Upper Church Hall - Nil
CSS Item 17.32 – Front Balcony Wrought Iron Balustrade - Nil
1967 For the following reasons, it should be concluded that the Owner is not
entitled to claim damages or compensation for the costs of remediating these items
in circumstances where he breach of the Building Contract is the cause of the
Builder’s failure to correct defective works.
1968 At Award [2:1006] to [2:1036], the Arbitrator addressed the Owner’s claims
about the paint finish to the wrought iron panel in the upper church hall being CSS
Item 10.2.
1969 At Award [2:1025], the Arbitrator determined the CSS Item 10.2 works
defective and required removal, re-painting and reinstallation works. At Award
[2:1028] and [2:1035] the Arbitrator determined the cost of remedial works to be
$710.00 excluding GST subject to the Trial Judge’s decision on the issues
regarding alleged prevention of access to the site referred back at Award [2:1026].
1970 At Award [2:1037] to [2:1074], the Arbitrator addressed the Owner’s claims
about the paint finish to the wrought iron panels of the front balcony balustrade
being CSS Item 17.32.
1971 At Award [2:1063] and [2:1069], the Arbitrator determined CSS Item 17.32
works were defective and required in-situ preparatory and re-painting work. At
Award [2:1065] and [2:1073] the Arbitrator determined the cost of remedial works
to be $3,721.30 excluding GST subject to the Trial Judge’s decision on the issues
regarding alleged prevention of access to the site and insurance referred back at
Award [2:1062].
1972 In her closing submissions, the Owner recites a chronology of the ‘plenty’ of
opportunities the Builder has had since AI:19 dated 17 October 2014 was issued
instructing correction of the defect identified, contending the Builder has
exhausted its contractual opportunities to remediate under clause M11 and no issue
of prevention arises. In her reply closing submissions, the Owner submits it was
857 Ibid.
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entirely reasonable for the Owner to require the work to be done on a weekday and
her refusal of access on a Saturday morning does not establish prevention.
1973 The Builder submits the Owner has in the circumstances found by the
Arbitrator on the evidence of Mr Raschella, the wrought iron contractor, breached
her obligations to act reasonably, co-operate and not obstruct the Builder and by
preventing the Builder’s subcontractor access to carry out the works at no cost
cannot claim as damages the costs of others doing the work.
1974 The Architect approaches this item in terms of both prevention and failure to
mitigate, referring to the specialist paint report obtained from Dulux for the
purpose of rectifying the paintwork in-situ.
1975 The evidence in the Arbitration demonstrates the Builder’s contractual
entitlement to correct the wrought iron paint defects had not been exhausted when
the Builder’s subcontractor attended the Residence to carry out the remedial works
instructed by the Architect in November 2015. Arrangements were in train
following the obtaining of a specialist paint report for the remedial paint works to
be carried out to the front fence, front balcony balustrade and church hall panel
together. Moreover, the works for the front fence were weather dependent.
Indeed, the Owner acknowledged in correspondence with the Architect on
9 October 2015 about the proposed remedial works that she was prepared both for
the wrought iron contractor to attend to do work on a Saturday and to wait for day/s
of optimum conditions.858
1976 On 1 November 2015, the Owner contacted the wrought iron contractor
directly by email seeking his availability to commence and install the external and
internal balustrade now the weather was suitable. When first contacted by the
Architect to confirm a time, she was unable to accommodate the following
weekend because of an interstate guest. When the following Saturday,
21 November 2015 was nominated, she said she was prepared to be available for
the gate only but preferred a weekday. The Saturday was nominated otherwise
there would be further delay into January. The Arbitrator found the Architect
wrote back to the Owner asking if she had changed her mind. She did not respond.
1977 Mr Raschella attended on the following Saturday, attended to the front fence
works and then knocked on the front door. The Owner answered and he asked her
if he could go upstairs to paint and do the rest of the work. He described her
response as follows:859
She turned around not happy. “I’m sick of tradesmen coming to my house. No make
another appointment” and slammed the door. Well, shut the door aggressively.
1978 Applying Bedrock v Crea, it is not a question of the Owner’s reasonableness
in all the circumstances. The Owner was required to do more than afford a
858 Exhibit R3.306.
859 Arbitration T1901.22-1907.12.
-- 320 of 362 --
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reasonable opportunity to the Builder’s subcontractor in carrying out the wrought
iron rectification works. She was contractually obliged to give the subcontractor
access to the works when the subcontractor presented to do the required remedial
works. No good reason has been shown for her refusing the subcontractor access
when he had attended on-site to do related works and was ready, willing and able
to do the necessary remedial works.
1979 The Owner’s refusal of access to the Builder’s subcontractor is all the more
unreasonable in context of her request for him to attend because the weather was
now opportune and he was there after a (second time) for him to attend when she
was available had been arranged (although was not preferred), yet she would
permit only the front gate works to be done. That it was a Saturday does not matter.
The Owner was previously agreeable to the work being done on a Saturday.
1980 If a different conclusion had been reached such that the Builder had
exhausted its contractual right to correct the wrought iron defects, it would then
have been concluded that the Owner’s refusal of access to the subcontractor to
carry out the remedial works was unreasonable in all the circumstances. It is also
no answer to say the Owner was amenable to the work being undertaken in 2016
and 2018 when the opportunity for the Builder’s subcontractor to do the work at
no cost to the Builder had been lost.
1981 Finally, the issue of insurance needs to be addressed. It is uncontentious that
the Owner did not accept the Further Settlement Offer that included an amount for
repainting the wrought iron balustrade.
1982 The Architect’s criticisms of the Owner’s conduct in seeking recovery from
the Stone Supplier’s insurer of $1,760 at the same time as maintaining a claim
against the Builder for $3,724 as assessed by Mr Allen should be accepted as
reflecting adversely on the Owner’s credit. That said, the Owner’s position is
legally correct. For the reasons already discussed, her failure to accept the Further
Settlement Offer does not require any adjustment to the remedial costs determined
for acid damaged CSS items.
Other Award Issues: Reasonableness
The Legal Principles
1983 The relevant legal principles are addressed above.860
Generally
1984 The question of whether any remedial works required for the contractual
conformity are reasonable within the meaning of Bellgrove v Eldridge861 was
860 See [266]-[275] above.
861 Op cit FN 133.
-- 321 of 362 --
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reserved to the Trial Judge by Order 6 of the Varied Orders. Ultimately, it was
only ventilated in closing submissions as regards the following items.
CSS Item 14.4 – Cellar Vent
1985 The Architect submits a question arises on the evidence as to whether
carrying out rectification of this defect is a reasonable course to adopt applying the
principles in Bellgrove v Eldridge.862
1986 This item is a defect because it does not conform with the Architect’s
Specification. However, on the evidence, it was submitted that the defect is not
deleterious to the functional performance of the cellar. To the contrary, Dr Clarke
gave evidence that he has not had any cause to remove or dispose of any wine
stored in the cellar. It was also emphasised that there is no evidence of any
aesthetic choice or amenity weighing in favour of the reasonableness of the
rectification works as being necessary to achieve conformity with the contractual
specification or of the Owner’s intentions to carry out the remedial works.
1987 However, the quantum is modest and has not been shown to be
disproportionate or an unreasonable measure of damages for the defect found.
1988 Weighing the evidence, it should be concluded that the ordinary rule applies
such that damages should be assessed as the cost to bring the cellar vent works into
contractual conformance.
CSS Item 15.17 – Verandah Nosing Profile – Nil
1989 The Builder’s challenges to the reasonableness of this item is addressed
above.863
CSS Item 15.12 – Clothesline – Nil
1990 The Builder having relinquished in November 2022 to the Owner the
clothesline the subject of CSS Item 15.12, remedial costs of $105.20 excluding
GST determined by the Arbitrator are now to be determined as ‘nil’.
Acid Damaged CSS Items – Stone Supplier’s Liability
1991 The Stone Supplier concedes liability to the Builder for acid damaged CSS
items to the extent the Owner has succeeded against the Builder.864
1992 The Builder’s liability to the Owner for Acid Damaged CSS items is
$12,887.21 excluding GST.865 The Builder should have judgment against the Stone
Supplier in this amount.
862 Ibid.
863 See [1888] above.
864 Stone Supplier’s Final Closing [2.c] and [28].
865 See [1841] above.
-- 322 of 362 --
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319
1993 The amount of $18,900.00 excluding GST to be credited in the final
certificate does not affect the Stone Supplier’s liability to the Builder for acid
damaged CSS items. It is an adjustment to account for the Builder’s liability to
the subcontractors who undertook remedial works at the Architect’s direction but
were not paid by the insurance proceeds received by the Owner for that purpose.
Remedial Works at Builder’s Cost
1994 The Builder’s contention that any damages or compensation payable to the
Owner should be limited to the cost the Builder and its trades would have incurred
if they had performed the remedial works is not without merit in principle.
However, the Builder has not adduced any evidence to prove what those costs
would have been or how they would compare to the costings evidence adduced in
the Arbitration and before the Court.
1995 The Arbitrator noted at Award [1:226] that the Builder maintained that if it
or its subcontractors had been or were permitted to return to site, the cost to the
Builder would be ‘nil’ and therefore remedial costs should similarly be quantified
at ‘nil’.
1996 The Arbitrator was unconvinced by this proposition as is the Court. No
evidence was led in support of the Builder’s contention and no costings expert
retained on its behalf. The Court is therefore unable to resolve any adjustment to
the determined remedial costs in the Builder’s favour to take account of the
Builder’s lesser cost than another contractor in carrying out remedial works.
1997 The Builder’s contention that its costs of remedying any defective work in
2015 would have been ‘nil’ should be rejected.
Damages - Time of Assessment
1998 The Builder submits the time at which damages should be assessed for any
breach of contract found against it in favour of the Owner for defects and
incomplete works is December 2015.866 This is the date when the Builder failed to
follow the Architect’s instruction to remedy defects in the November 2015 Defects
List that were not deferred until sandstone work had been completed.
1999 The Builder further submits that where there is evidence of 2015 remedial
costings the Court may rely on it. Further, the costings evidence adduced by the
Owner from Mr Altamura is based on 2021 prices, and no adjustment has been
proven.
2000 In these circumstances, the Builder contends December 2015 is the date of
(alleged) breach and, in the absence of any good cause, the date at which damages
should be assessed on general principles.
866 Builder’s Final Closing [226]-[235].
-- 323 of 362 --
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2001 The Architect takes the position that the remedial costs determined by the
Arbitrator are the appropriate measure of loss.
2002 The Owner submits the issue at which damages ought to be assessed for
Referred Items does not now arise because the Arbitrator was required by the terms
of Varied Order 5.5 to have regard to betterment in assessing the cost of any
required remedial works.
2003 In absence of evidence of 2015 remedial costings, the position to the Owner
and Architect should be accepted as correct, subject to this Court’s determination
of challenged and Referred Back Issues. The terms of Order 5.5 are plain and the
Arbitrator acknowledges at Award [1:234] that betterment is part of her remit.
2004 In any event, the Builder had the opportunity to adduce 2015 remedial
costings evidence but did not do so. There is simply no evidentiary foundation for
making the adjustment for which the Builder contends in closing submissions.
Apportionment
Generally
2005 The Builder867 and the Architect868 rely on s 72 of the Development Act or
s 8 of the Liability Act for a limitation or apportionment of any liability to the
Owner found against them for defects other than stone.
2006 Any issue of limitation or apportionment only arises where the Owner has
succeeded in proving a defect.
2007 The questions to be decided for each found defect are first, whether either of
the statutory provisions is engaged and secondly, if so, what limitation or
apportionment of the Builder’s and Architect’s liability ought to be made between
them in all the circumstances. The evaluation of what apportionment should be
made is fact specific. Since the Liability Act does not apply to liability subject to
apportionment under s 72 of the Development Act, it is convenient in each case to
first consider whether s 72 applies before considering apportionment under the
Liability Act.
2008 It is necessary for the Builder or Architect to plead and prove that the other’s
wrongful conduct was also a legal cause of the Owner’s loss and damage, together
with their own conduct. It is not sufficient to merely show the other’s conduct was
a contributing cause to the Owner’s loss and damage together with their own
wrongful conduct. The other person’s legal liability to the Owner must be proven.
In other words, the Court is required to apportion legal responsibility between the
Builder and Architect as concurrent wrongdoers according to their culpability and
is not merely apportioning factual causation between them.
867 Builder’s Fifth Defence [19D].
868 Architect’s Defence [22].
-- 324 of 362 --
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2009 Obviously, it is for the Builder and the Architect to make and prove their
apportionment defences. It is not for the Court to determine who the concurrent
wrongdoers might be independently of the pleadings or in a factual vacuum.
2010 The Owner’s case as to defects other than stone is that the Builder is primarily
liable for any defective works and an issue only arises as between the Builder and
the Architect where the Owner successfully maintained a case of breach of its
retainer and common law duties against the Architect for specific CSS items.
2011 Ultimately at trial only four direct claims were pressed against the Architect869
and the Owner only succeeded against the Architect on two CSS items: repointing
the church hall (CSS Item 19.1.1 and 19.1.2) 870 and the finial (CSS Item 20.16).871
The Owner submits that apportionment arises for three other Referred Back CSS
items without explaining why they are to be distinguished from any other CSS
Item on which she succeeded.
2012 The Architect having taken the position that the Owner has not established
any liability against the Architect, makes no substantive submissions on the issue
of apportionment.
2013 The Builder only addresses the facts of the Referred Back CSS items, further
contending any defect not in the November 2015 Defects List should be the
Architect’s liability because it would have attended to it at no cost if it had been
instructed to correct the defect.
Acid Damaged CSS Items - $12,887.21 ex GST – No Apportionment
2014 The first question to ask is whether s 72 of the Development Act is engaged
on the proven facts. It is not for the following reasons.
2015 The Owner sues the Builder in contract for the loss and damage suffered from
the property damage caused to the works by acid overspray from the stone cleaning
process carried out by its subcontractor, the Stone Supplier. Having found the acid
cleaning as part of the Builder’s scope of works and the Stone Supplier was the
Builder’s subcontractor, the Builder is liable to the Owner for the resulting loss
and damage in contract. No cause of action in tort alleging the Builder’s
negligence was relied on by the Owner or otherwise alleged or proven against the
Builder for the acid damaged items.
2016 On the evidence, the Stone Supplier would have been found liable to the
Owner if sued in tort for failing to adequately protect the works while carrying out
the acid spraying works.
2017 Whilst the acid cleaning is building work within the meaning of s 72 of the
Development Act, and the acid damage result in defects in the works by reason of
869 Owner’s Final Closing [613].
870 Ninth Third Party Claim [26(b)].
871 Ibid [26(cd).
-- 325 of 362 --
[2024] SADC 150
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the damage to other parts of the works, the Builder and the Stone Supplier are only
severally liable for damage and loss resulting. For s 72 to be engaged, the liability
of the wrong doers must be joint and several.
2018 The next question is to ask is whether s 8 of the Liability Act is engaged on
the proven facts. It does not because the Builder’s liability is not an apportionable
liability within the meaning of the Liability Act. That is, the Builder’s liability
does not arise from its negligent wrongdoing, that is a breach of a duty of care in
tort or contract or under a statute.872
2019 The Builder’s defences under s 72 of the Development Act and s 8 of the
Liability Act for Acid Damaged Items therefore fail.
CSS Item 1.3 - Movement Cracks/Painting – No apportionment
2020 The Builder in submissions raises the question of apportionment as to
between it and “the Supplier”.873 The Builder has not alleged or proved how any
supplier has any liability to the Owner for this defect. No issue of apportionment
arises.
CSS Item 14.4 – Cellar Vent - $2,089.80 ex GST – 60% Builder/40% Architect
2021 The Builder’s liability for this defect arises from the Builder’s breach of
contract in not complying with the Architect’s Specification in reliance on a verbal
Architect’s instruction given on-site, contrary to the requirements of the Building
Contract for Architect’s instructions to be in writing.
2022 The building work is defective and arises from the wrongful acts of defaults
of the Builder and the Architect who would be jointly and severally liable for the
defect but for s 72 of the Development Act in circumstances where the Owner has
brought an action against the Builder and the Architect to recover damages.
Therefore s 72 is engaged and the Court may only give judgment against the
Builder and the Architect for such amount as may be just and equitable having
regard to the extent the which they contributed to the Owner’s loss or damage.
2023 Having regard to the circumstances resulting in this defect, a just and
equitable apportionment should be 60% to the Builder ($1,253.88 excluding GST)
and 40% to the Architect ($835.92 excluding GST). The Builder was primarily
liable for not complying with the Architect’s Specification and not seeking a
written instruction for a variation following an on-site instruction. The Architect
was liable for not complying with the contractual process for a variation to the
works and informally instructing the Builder absent the Owner’s approval.
872 As defined in s 3(1) of the Liability Act.
873 Builder’s Final Closing [185.8].
-- 326 of 362 --
[2024] SADC 150
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CSS Item 16.5 – Church Hall Window Masonry Cracks – No Apportionment
2024 The Arbitrator found the Builder is liable to the Owner for inadequate
remedial works. The Builder asserts in closing submissions its liability to the
Owner is apportionable “all to Owner”874 without alleging, let alone proving, why
that would be the case. Accordingly, there is no proven basis for apportioning the
Builder’s liability to the Owner.
CSS Item 17.32 – Wrought Iron Painting – No Apportionment
2025 The Builder asserts in final submissions that its liability for this defect is
apportionable “all to Supplier” (whether that be the wrought iron or the paint
supplier)875 without alleging, let alone proving, why that would be the case.
Accordingly, there is no proven basis for apportioning the Builder’s liability to the
Owner.
CSS Item 19.1.1 – Repointing Church Hall - $350.00 ex GST – 100% Architect
2026 The Builder asserts in final submissions that its liability for this defect is
apportionable “all to Owner”876 without alleging, let alone proving, why that
would be the case.
2027 The apportionment issue arising on the pleadings and the evidence is between
the Builder and the Architect in the circumstances where the limited repointing
works done were undertaken by the Builder at the Architect’s direction using the
wrong mortar mix in breach of the requirements of DA2011.877
2028 In the found circumstances, s 72 of the Development Act is engaged and the
Court may only give judgment against the Builder and the Architect for such
amount as may be just and equitable having regard to the extent the which they
contributed to the Owner’s loss or damage. The Architect should bear all the
liability to the Owner for its negligence in instructing the use of the incorrect lime
mortar in circumstances where it prepared DA2011 and DA 2012, knew the
requirements for a lime mortar mix and failed to instruct the Builder accordingly.
A just and equitable apportionment would be 100% to the Architect despite the
Builder’s technical breach of its contractual obligations.
CSS Item 20.16 - Finial - $4,945.45 ex GST – 20% Builder/80% Architect
2029 The apportionment issue arising on the pleadings and the evidence is between
the Builder and the Architect in the circumstances where the Builder and the
Architect are both liable to the Owner for the failure to carry out repairs required
by DA2011.
874 Builder’s Final Closing [195.7].
875 Builder’s Final Closing [204.5].
876 Builder’s Final Closing [205.5].
877 See [1897]-[1914] above and [2092]-[2093] below.
-- 327 of 362 --
[2024] SADC 150
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2030 In the circumstances found, s 72 of the Development Act is engaged and the
Court may only give judgment against the Builder and the Architect for such
amount as may be just and equitable having regard to the extent to which they
contributed to the Owner’s loss or damage. The Architect should bear the primary
liability to the Owner for its negligence in ensuring the specification of the finial
work complied with DA2011, of which the Builder was unaware. The Builder
should share some responsibility for not carrying out the finial repairs in reliance
on a verbal Architect’s instruction given at a site meeting, contrary to the terms of
the Building Contract. Having regard to the circumstances resulting in this defect,
a just and equitable apportionment should be 20% to the Builder ($989.09
excluding GST) and 80% to the Architect ($3,956.36 excluding GST).
Other CSS Items Determined in Favour of the Owner
2031 The Builder’s generic defence ‘not in Architect’s 20/11/15 list’ where
asserted does not properly give rise to a question of apportionment between the
Builder and the Architect of any proven liability of the Builder to the Owner for a
defect. Apportionment is a limited defence and not simply a question of factual
causation. In any event, the Builder has not established the Architect’s liability to
the Owner for any defect not in the November 2015 Defects List and therefore how
the relevant statutory provisions would be engaged to limit the Builder’s liability
and if so engaged, the evidentiary basis on which the Court would evaluate a just
apportionment.
2032 Nor did the Builder draw to the Court’s specific attention any issues relevant
to the question of apportionment for the CSS items in the November 2015 Defects
List or other CSS Items determined in favour of the Owner in the Award. In the
circumstances, absent any established basis for engaging the relevant statutory
provision or any evidentiary foundation for apportionment, it is unnecessary to
consider the question further.
Result after Apportionment
2033 Liability to the Owner for the remedial costs of CSS Referred Items under
the Award to be adopted by this Court as part of its judgment that are to be
apportioned between the Builder and Architect are as follows.
CSS Item Total
Remedial Cost
Builder to
Owner
Architect to
Owner
Cellar Vent CSS 14.4 $2,089.80 $1,253.88 $835.92
Church Hall Repointing
Mortar CSS Item 19.1.1
$350.00 $350.00
Finial CSS Item 20.16 $4,945.45 $989.09 $3,956.36
Total $7,385.25 $2,242.97 $5,142.28
-- 328 of 362 --
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Contribution
Acid Damaged CSS Items - $12,887.21 ex GST – 100% Stone Supplier
2034 The Builder makes a claim of contribution and/or indemnity against the Stone
Supplier for any liability to the Owner for the acid damaged CSS items and in the
alternative, seeks an apportionment of any liability to the Owner.878
2035 The Stone Supplier properly concedes in its closing submissions that the
Builder is entitled to contribution to the extent the Owner succeeds against the
Builder (or Architect) for acid damaged CSS items.879 Section 6 of the Liability
Act is engaged in the found circumstances for the acid damaged CSS items where
the Owner has succeeded against the Builder in the amount of $12,887.21
excluding GST.880
2036 Having regard to circumstances of the acid cleaning works and the respective
parties’ roles and responsibility to the harm suffered by the Owner, it is fair and
equitable that the Stone Supplier’s contribution be an amount equal to 100% of the
Builder’s liability for acid damaged CSS items. The real culpability lay with
Mr Calabrese of the Stone Supplier and his continuing failure to take appropriate
precautions to protect the works and wash down any overspray properly, despite
instructions from the Architect and the Builder about the necessity of doing so after
the mess he made on his first attendance. The Builder cleaned up his mess and
attended to extensive acid remediation works as instructed by the Architect.
Conclusion – Adoption of the Award
2037 Save for the findings set out in Annexure B, the Award should be adopted as
part of this Court’s judgment for the reasons set out in this Part F.
2038 After determination of challenged and Referred Back Items and taking
account of the compromised remedial costs, the total cost of remedial works under
the Award as adopted is $69,216.19 excluding GST as shown in ‘Annexure D -
Final Summary of CSS Item Award Determinations’ to these reasons.
2039 The Builder’s liability to the Owner for CSS referred Items under the Award
is $45,173.91 excluding GST, calculated by:
• setting off against the total cost of remedial works under the Award the
amount of $18,900.00 excluding GST for the insurance proceeds paid
directly to the Owner referrable to the Builder’s liability to its
subcontractors for acid spray remedial works performed for the Owner;
and
878 Builder’s Third Party Claim [34], [35]-[38].
879 Stone Supplier’s Final Closing [28].
880 See [1841] above.
-- 329 of 362 --
[2024] SADC 150
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• reducing the Builder’s liability by the amount of $5,142.28 excluding
GST for the total liability for which the Architect is liable to the Owner
and for which the Builder would have otherwise been liable but for s 72
of the Development Act.
2040 It follows that the Architect’s liability to the Owner for CSS Referred Items
under the Award as adopted is $5,142.28 excluding GST and the Stone Supplier’s
liability to the Builder is $12,887.21 excluding GST.
PART G: OWNER’S OTHER CLAIMS AGAINST THE ARCHITECT
Owner’s Claim against the Architect for PPC 11
2041 For the reasons stated above in Part D,881 the Owner has no claim against the
Architect for its certification of PPC 11. PPC 11 is invalid, not binding and she
has not paid it. Although the certification as wrong, the Owner has not shown the
certification was negligently made or that she has suffered any loss by reason of
the Architect’s certification of PPC 11.
Owner’s Claim against the Architect for PPC 12
2042 The Owner’s largely unsuccessful challenges to the approved variations, PC
Sums and other claims were considered in Part D above.882
Introduction
2043 There is no real contention that the Architect owed the Owner contractual
and tortious duties to administer the Building Contract in accordance with its terms
and her instructions, including when approving variation claims, assessing PC Sum
items, issuing contractual notices, certifying payment claims and assessing defects.
2044 The real issue as regards the Owner’s other claims against the Architect is
whether and to what extent she has breached her duties and if so, what loss has she
suffered.
Approved Variations – $151.05 ex GST plus Interest
2045 Ultimately, the Owner has succeeded in showing the Architect’s certification
of approved variations was overstated in PPC 12 by the nominal amount of
$151.05 excluding GST.883 This overstatement is de minimis and should be
corrected in the final certificate to be issued by the Architect.
2046 Since the Owner paid PPC 12 on 18 August 2015 with interest, the question
arises as to whether in all the circumstances the Owner is entitled to any adjustment
for any loss arising from the overpayment. The parties should be heard on this
881 Issue 1.
882 Issue 3.
883 See [1182] above.
-- 330 of 362 --
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issue if they are otherwise unable to resolve it between them given the nominal
quantum and disproportionate cost of further disputing the matter.
2047 The Owner’s contention that these variations were not available must be
rejected as should her contention that variation claims were not meaningfully and
therefore negligently assessed.
2048 When proper regard is had to the Architect’s November 2013 and October
2014 Variation Schedules and documentary evidence relevant to the specific
variation claims, it is apparent the Architect did consider the Builder’s quotations
and engage in a process for approving variation claims from time to time and the
Owner knew that. She knew because the Architect informed the Owner of the
Builder’s claims by providing copies of the Builder’s quotations and the
Architect’s running Variations Schedule to her from time to time. The Owner also
knew about the specifics of the individual claims because she was intimately
involved in the decisions to vary the works, albeit informally at meetings or in
correspondence with the Architect.
2049 It follows that the Owner’s claim that the Architect certified payment for
approved variations that were not available generally has no foundation and fails
substantively.
PC Sum Adjustments - $8,670.00 ex GST plus interest
2050 It is appropriate to address this issue generally before considering the
Owner’s claims for specific PC Sum adjustments.
2051 To the extent the PC Sum adjustments were validly made in accordance with
section K of the Building Contract, the Owner’s claims against the Architect must
also fail.
2052 To the extent the Owner’s claims as to adjustments for PC Sums have
succeeded, the way is open for the Architect to be liable for any loss suffered by
the Owner in consequence of any proven breach of contract or negligence on the
part of the Architect.
2053 The net overstatement of PC Sum adjustments certified in PPC 12 in breach
of contract or duty as found above in Part D is $8,672.20 excluding GST and
should be corrected in the Final Certificate.884
2054 On the evidence, the overstatement arose by reason of the Architect’s failure
to administer PC Sums strictly in accordance with section K of the Building
Contract. Specifically, the Architect failed to confirm in writing verbal
instructions given on-site to proceed (or not proceed) with works the subject PC
884 See [1309] above.
-- 331 of 362 --
[2024] SADC 150
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Sum items, generally in circumstances where the Owner knew and agreed to the
works proceeding (or not proceeding).
2055 These failures constitute a breach of the Architect’s retainer and/or duty to
take reasonable care in administering PC Sum items and adjustment in accordance
with the requirements of section K of the Building Contract.
2056 The Architect did not plead a defence of estoppel in answer to the Owner’s
claims about PPC 12 (or PPC 11). It is therefore not necessary or appropriate to
address the Architect’s submissions made in its closing on this issue.885
2057 These breaches only sound in damages when the adjustment that should have
been made but was not, was in the Owner’s favour.
2058 Put differently, to the extent the Builder is disentitled to the PC Sum
adjustment assessed and certified by the Architect in PPC 12 in breach of contract
or duty, the Architect must correct it in the final certificate and the Owner will then
suffer no loss, save as to interest.886
2059 Where the Architect’s breach of contract or duty has resulted in the Owner
being disentitled to an adjustment in her favour because the cost of the work done
is less than the PC Sum or no work was done at all, she has suffered loss and should
be compensated by the Architect for such loss. If the Owner were to be awarded
damages in the amount of the whole of the PC Sum allowance, she would on
general principles as to the assessment of damages be over-compensated for her
loss.
2060 As to the specific PC Sum adjustments, there are four relevant items that
sound in loss to the Owner by reason of the Architect’s breaches of duty. They are
as follows.
Clause Item PC SUM887 Determined
E.12.08 Repointing Hall stonework $ 3,000.00 None
FM.11 Wrought iron security doors (supply only) $ 5,000.00 None
G.31 Timber repairs to old Hall $ 2,000.00 None
T.02 Lift fitout $ 2,000.00 None
2061 In each case, the Architect’s failure to administer the PC Sums strictly in
accordance with section K of the Building Contract results in the Owner being
denied total credit adjustments of $8,670.00 excluding GST on the basis that the
loss is the difference between the PC Sum and the cost claimed by the Builder as
assessed by the Architect.
885 Architect’s Final Closing [322] and [328].
886 Loss of use of money is not pleaded or proven.
887 Excluding GST.
-- 332 of 362 --
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Clause Item Cost888 Credit889
E.12.08 Repointing Hall stonework $ 350.00 $2,650.00
FM.11 Wrought iron security doors (supply only) Nil $5,000.00
G.31 Timber repairs to old Hall $ 1,550.00 $ 450.00
T.02 Lift fitout $ 1,430.00 $ 570.00
Total $8,670.00
2062 The Owner’s contention that the Architect simply came up with a list of items
in October 2014 and approved them is contrary to the documentary evidence
referred to in Part D above. There were multiple iterations of the Architect’s
running Schedule of Variations and PC Sums during construction. The Builder
was instructed on occasion to send an updated schedule of variation and PC Sum
adjustments. AI:17 dated 3 June 2014 instructed the Builder to meet with the
Architect to discuss PC Sum adjustments to date.
2063 It is appropriate in all the circumstances to assess the Owner’s loss by
reference to the difference between cost assessed by the Architect and the specified
PC Sum. This is for two reasons. First, it should be inferred from the Architect’s
expertise and experience and role in administering the works it specified that it
knew what was a fair and reasonable cost for unremarkable and minor claims.
Secondly, there is no evidence showing the Architect’s assessment was not a fair
and reasonable price for works that were done with the Owner’s knowledge and
approval having regard to the relevant circumstances of each PC Sum item.
Contrary to the Owner’s submission, there was no onus on the Architect to prove
its assessment of the Builder’s claimed costs was fair and reasonable and the
Owner’s suggestion given the quantum of the PC Sums in issue is unreasonable.
2064 The Owner should be heard as to interest.
Other Claims - Nil
2065 It is not necessary to consider the Architect’s alleged liability for the Owner’s
other claims in circumstances where she has failed on these claims.
Assessment of Defects - Nil
2066 The Owner contends the Architect in certifying PPC 12 should have reduced
it to nil because of the open-ended and unascertained cost of the remediating the
known defects. Her contentions must be rejected when proper regard is had to the
proven facts.
2067 It first should be emphasised that whether the Architect’s allowance for
remedying defects was reasonable is to be considered in the known circumstances.
2068 At 3 November 2014, whilst the list of defects and incomplete works was
long, the majority were minor and not of significant value. The Builder was
888 Ibid.
889 Ibid.
-- 333 of 362 --
[2024] SADC 150
330
entitled to correct the defects and had demonstrated that it was ready, willing and
able to correct the defects. The defect rectification process was well underway.
The acid damage caused by the Stone Suppler, although extensive, was superficial.
The Builder and its subcontractors were attending to corrective works and the
value likely to be within the remaining retention sum.
2069 The Owner’s complaints about stonework were limited to concern about
some ‘brown’ stones, her first complaints about colour variation being first made
in February 2015. As already mentioned, the contention that the Architect should
have known the acid cleaning had not caused the stone to be the required colour is
entirely without foundation.
2070 The Owner’s claim against the Architect for not certifying a nil value in PPC
12 on account of defects fails.
CSS Items Not Pressed
2071 Ultimately, the Owner did not press at trial her claims made against the
Architect directly for CSS Item 6.6 [kitchen splash back],890 CSS Item 16.5 [church
hall Window Masonry Cracks]891 and CSS Item 21.7 [Rose Hall Stairs]892 in view
of the Arbitrator’s findings that were not challenged.893
CSS Item 19.1.1 - Repointing Church Hall - $350.00 ex GST
The Issues
2072 In closing, the Owner contends the Architect breached its contractual and
common law duties in respect of the cost of now having to repoint the entirety of
the external walls to the church hall in circumstances where had the Architect
properly exercised reasonable case, the repointing would have been undertaken
during the construction in 2014. The Owner claims damages should be assessed
at $60,000 (based on Mr Allen’s estimate) with an allowance of perhaps 10% for
the possibility the Owner would have incurred some cost.
2073 The Owner’s complaint about defective and incomplete repointing church
hall works is pleaded as CSS Item 191.1.1, alleging breaches of clauses A.09.01
and E.12.08 of the Architect’s Specification, a failure to repair and repoint the
exterior of the church hall as required and use of a cement and not a heritage
mortar.
2074 The Owner’s pleaded case against the Architect is found in her Ninth Third
Party Claim:
If the works alleged at item 19.1. and 19.1.2 of the Scott Schedule are found not to be
defective works in respect of which [the Builder] is liable on ground that [the Architect]
890 Ninth Third Party Claim [26(ca)].
891 Ninth Third Party Claim [26(cb)].
892 Ninth Third Party Claim [26(ce) and (cf)].
893 Owner’s Final Closing [613].
-- 334 of 362 --
[2024] SADC 150
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had not directed [the Builder] to remove existing cement pointing on the north, west and
south elevations of the Church Hall and replace with traditional lime mortar, then [the
Architect failed] to direct [the Builder] to remove and replace such mortar which required
repair.
2075 The Architect denies any alleged failure to ensure the design intent of the
working drawings and specification for the development was carried out by the
Builder in a satisfactory manner with high levels of workmanship, the Owner has
suffered no loss because had the works been undertaken the contract price would
have been higher and the works were the subject of a PC Sum.
2076 The issues arising were the subject of detailed evidence and consideration by
the Arbitrator in context of her determination of the Referred Issues for CSS Item
191.1. The issues referred back to the Trial Judge are considered and determined
above,894 leaving issues as to the Architect’s direct liability for consideration in this
Part.
2077 Having regard to the issues determined by the Arbitrator and this Court, there
are essentially three alleged breaches to address. First, the Architect’s alleged
failure to advise and direct full repointing works be undertaken. Secondly, the
instructed use of a cement rather than lime-based mortar mix for the limited works
undertaken. Thirdly, the failure to direct the limited remedial works to the north
wall the Arbitrator determined as required.
2078 It is unprincipled to conflate these issues as the Owner attempts to do in
closing submissions.
Full Repointing
2079 The Owner’s claim against the Architect for failure to direct a full repointing
of the church hall fails on a number of levels.
2080 First, the requirement by DA2011 to use a lime-based mortar for required
repointing does not make it necessary to repoint all exterior walls of the church
hall. There is no logical reason advanced as to why this is so. On the evidence, it
possibly created an aesthetic issue with regard the mismatch of mortar mixes.
2081 Secondly, at Award [3:418] the Arbitrator resolved the dispute between the
expert architects as to the required scope of repointing and preferred Mr Penglase’s
evidence. Mr Penglase’s evidence that the Architect’s approach to selective
repointing was appropriate in the circumstances, particularly if structural issues
were not fully addressed, should be accepted. There is no good reason to now
prefer Associate Professor Danvers’ contrary opinion that it was an unacceptable
decision not to rake out all of the existing cement mortar and repoint all walls using
lime mortar and find that Architect should have advised and directed so.
894 See [1897]-[1914] above.
-- 335 of 362 --
[2024] SADC 150
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2082 Thirdly, at Award [3:396] the Arbitrator rejected the Owner’s evidence that
there was no discussion, advice or request for her instructions as regards the extent
of the church hall repointing works. It is unprincipled for the Owner to now
contend that her evidence should be preferred to Mr Williams’ evidence and urge
this Court to reach conclusions contrary to the Arbitrator’s unchallenged findings.
2083 Finally, as the Architect points out, the church hall repointing works were the
subject of a limited PC Sum allowance. The Arbitrator found at Award [3:424]
that the Owner knew this and that the scope of works did not include all walls in
their entirety and she agreed to the extent of repointing during at least one site
meeting at which the issue was discussed. From the evidence in the Arbitration, it
should be inferred that the Owner did not wish to fully repoint the church hall,
knowing that it would have involved her incurring of significant additional cost.
No Loss re Full Repointing
2084 In any event, since church hall repointing works were the subject of a PC
Sum allowance, the Owner is unable to establish any loss by reason of any liability
of the Architect for failing to advise and direct full repointing works.
2085 The Owner contends she is entitled to damages of $60,000.00 (based on
Mr Allen’s estimate) with perhaps an allowance of say 10% for the possibility that
the Owner would have incurred some cost if the Builder had been instructed to
carry out the full repointing works.
2086 The reasons advanced by the Owner for her position in her closing
submissions should be rejected.
2087 The starting point is the nominal PC Sum of $3,000.00 allowed for selected
repointing. If the Builder was directed to proceed with full pointing, the analysis
of what loss the Owner would suffer should be approached on the assumption the
parties would comply with their obligations under the Building Contract. The
contention that Builder would have carried out the works and not complied with
the contractual requirements for an adjustment for a PC Sum such that the Owner
would not have to pay for significant additional works is not an appropriate basis
on which to proceed.
2088 It follows that whatever might be determined as a reasonable cost for carrying
out full repointing works in 2014, the Builder would have been entitled to a PC
Sum adjustment under section K of the Building Contract that would have
increased the contract price payable by the Owner.
2089 The contentions that the cost to the Owner of the Builder carrying out the
works in 2014 would have been less than if a different contractor had carried out
the works (on Mr Allen’s estimate) or involved reduced scaffolding are
unsubstantiated by any evidence. It is not a question of onus.
-- 336 of 362 --
[2024] SADC 150
333
2090 The Owner has not proved she would suffer any loss arising from the
Architect’s alleged breaches of duty concerning full repointing the church hall.
Incomplete North Wall Works
2091 The same analysis applies to the Architect’s failure to direct the Builder to
complete the north wall repair and repointing works. In any event, there is no
relevant costings evidence to determine the cost of the required remedial works.
Again, the has not proved she would suffer any loss arising from the Architect’s
alleged breaches of duty concerning failure to direct the repair and repointing
works be done.
Use of Incorrect Mortar - $350.00 ex GST
2092 The issue of the Owner’s loss arising from the Architect’s failure to take
reasonable care in instructing the Builder to use a lime-based mortar mix in
accordance with DA2011 was not addressed by the Owner in her closing
submissions.
2093 There is however relevant evidence as to the cost of remediating the defective
works undertaken by the Builder at the Architect’s direction. Damages against the
Architect for its breaches of duty should be assessed in the amount of $350.00
excluding GST based on the Builder’s costs of $350.00 excluding GST as claimed
in the Builder’s Statement 1229 for the selected repointing works undertaken.
CSS Item 20.16 – Finial - $4,945.45 ex GST
2094 Issues deferred and referred to the Trial Judge for consideration and decision
as to the church hall finial were considered above and determined in the Owner’s
favour but not as a liability of the Builder.895
2095 The Owner’s pleaded claim against the Architect is as follows:896
26(cd) If the works alleged at item 20.16 of the Scott Schedule are found to be a defect
for which [the Builder] is not liable on grounds that [the Architect] directed or
approved [the Builder] that no repairs be undertaken to the finial, then [the
Architect] is liable for giving such direction or approval.
2096 In the circumstances found by the Arbitrator, the Owner’s claim against the
Architect is made out because the Architect approved the Builder not making any
repairs to the finial. In short, as determined above, the Architect should have
ensured the specification for the finial works under the Building Contract complied
with the conditions of the DA2011 as relevant and instructed the Builder
accordingly.
895 See [1942]-[1953] above.
896 Ninth Third Party Claim.
-- 337 of 362 --
[2024] SADC 150
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2097 The Architect’s pleaded defences should be rejected.897 It is not the case that
the Owner has suffered no loss for incomplete works included in the contract price.
That the Architect has not given its final approval of the works and issued a final
certificate is beside the point. Further, the Owner’s alleged review and approval
of the Architect’s Specification does not ground a good defence of estoppel in
circumstances where it was the Architect’s responsibility to ensure that the
Architect’s Specification complied with all relevant laws.
2098 Damages for the Architect’s breaches of duty should be assessed in the
amount of the remedial costs determined by the Arbitrator of $4,945.45 excluding
GST and liability apportioned between the Builder and Architect on the basis of
20% to the Builder and 80% to the Architect for the reasons given above.898
Other Claims
CSS Item 9.2 – Stair Plaster - Nil
2099 As for the stair plaster, CSS item 9.2, the Owner’s further contentions that
the Builder and the Architect are in part liable for the cracking visible in the stair
should be rejected.
2100 As the Arbitrator found, the Builder has no primary liability for the cracking
in circumstances where the works were constructed in accordance with the
Contract Drawings. The Builder’s failure to remediate the cracking does not sound
in any loss to the Owner by reason that the remedial works would constitute a
variation, entitling the Builder to an adjustment to the contract price.
2101 As to the Architect, the Owner’s bare unpleaded allegation first made in
closing submission is that it should have advised in favour of and directed the
installation of a control joint is not made out on the evidence. The evidence shows
the Architect did so advise at the September 2015 site meeting but the Owner
disagreed for aesthetic reasons.
CSS Item 14.4 – Cellar Vent - $2,089.80 ex GST
2102 As for the cellar vent, CSS Item 14.4, following the Owner’s successful
challenge to the Arbitrator’s findings, it is only necessary to address the Owner’s
unpleaded allegations against the Architect first made in closing submissions that
it breached its duties by giving a direction to vary the cellar vent works contrary
to the Architect’s Specification for the purposes of considering the issue of
apportionment of liability between the Builder and the Architect. This issue is
addressed above in context of the Owner’s challenge to the Arbitrator’s
determination of the Builder’s liability and the Builder’s defence of apportionment
between it and the Architect.899
897 Eighth Defence [20.9].
898 See [2030] above.
899 See [1819]-[1881] and [2021]-[2023].
-- 338 of 362 --
[2024] SADC 150
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CSS Item 19.1 - Church Hall Windows - Nil
The Issues
2103 In closing, the Owner contends the Architect should be found in breach of its
duties to the Owner for not having caused the Builder to construct church hall
windows WG16, WG17, WG18 and WU09 as directed in Architect’s instruction
AI:06. The Owner relies on findings made by the Arbitrator as to CSS Item 19.1
at Award [3:328] to [3:366].
2104 No party challenged the Arbitrator’s findings. No issues were referred back
or deferred to the Trial Judge for consideration and determination.
2105 The Architect submits in closing this item has been resolved as to liability
and quantum by the Arbitrator, the Arbitrator’s finding have been challenged and
therefore its reintroduction is invalid and should not be permitted. The Architect
otherwise addresses the merits of the Owner’s claim by reference to the
Arbitrator’s unchallenged findings. The Builder takes no position on the issue.
Consideration
2106 The Owner’s new and unpleaded contentions as regards the Architect’s
liability for the Church windows should not be entertained at this late stage. If
they were, it should be concluded that they are not sustainable on the unchallenged
findings of the Arbitrator.
2107 First, it should be acknowledged that the Owner’s claims as regards CSS Item
19.1 were determined by the Arbitrator both as to liability and quantum. The
Architect’s submission in this regard is correct.
2108 The Arbitrator ultimately found at Award [3:381] that the Architect
instructed the Builder to undertake changes to the Church windows with the
knowledge, agreement and approval of the Owner. Accordingly, the Owner’s
pleaded claim for CSS Item 19.1 was unsuccessful (save for the non-provision of
a sill with a determined remedial cost of $400.00 excluding GST).
2109 The Arbitrator’s findings as Award [3:357] also resolved the Owner’s
pleaded case against the Architect: 900
If the works alleged at item 19.1 of the Scott Schedule are found to be a defect for which
[the Builder] is not liable on the ground [the Architect] directed or approved the subject
works in a manner non-compliant with Drawings W03, W04 and W09, then [the Architect]
is liable for giving such direction or approval.
2110 In short, this was because the Owner knew about the directed changes and
agreed and approved them.
900 Ninth Third Party Claim [26(cc)].
-- 339 of 362 --
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2111 The Owner’s ultimate contentions made in closing submissions are a new
complaint: the Architect should have caused the Builder to construct the windows
as directed by AI:06. This is a new unpleaded case. As a result, no opportunity
was afforded to the Architect to adduce further evidence or cross-examine the
Owner in the November trial. It is not just and fair for the Owner to advance new
unpleaded contentions in closing submissions.
2112 In any event, the Owner’s new contentions that the windows were not
constructed in accordance with AI:06 is inconsistent with the unchallenged
findings of the Arbitrator that the Owner purportedly relies on.
2113 Specifically, the Arbitrator found at Award [3:355] that the requirements in
the Contract Drawings were varied by AI:06 with the Owner’s knowledge and
approval including that the Owner approved the fixing of window WG17, there
was no reason for flyscreens for non-operable windows and double glazing was
not provided by reason of the upper portion of windows having arch frames.
2114 It is not necessary to consider the Architect’s pleaded defences to this claim.
Assessment of Damages
2115 Issues as to the assessment of damages for alleged breaches of the Architect’s
duties as found have already been addressed in this Part in context of the specific
issues.
PART H: OTHER MATTERS
2116 There are two further agreed issues to be determined. First, whether and to
what extent the Court should order the Builder to perform remedial works.
Secondly, whether the Court should set off any liability of the Architect against its
unpaid fees.
Builder’s Entitlement to Do Remedial Works
The Issues & Consideration
2117 The question arises under s 37(6) of the Building Work Contractors Act as to
whether the Court should order the Builder perform remedial works or pay the
Owner an amount by way of compensation for breaches of or failures to perform
or fulfil the Building Contract including any statutory warranty.
2118 The Court’s power to order the performance of remedial building work is
conditioned on the Court’s satisfaction that it is practicable for the breach or failure
to be remedied by the performance of building work.
2119 In this case, there is no real dispute that an order for the Builder to perform
remedial building work is not practicable (even if the Builder is contractually
entitled to correct defects). The Builder’s principal, Mr Cirocco is semi-retired
and in ill-health. Too many years have passed in circumstances where the
-- 340 of 362 --
[2024] SADC 150
337
relationship between the parties has irretrievably broken down. The Owner
publicly expressed a loss of confidence in the Builder and Architect in March 2015
when she wrote to Crawford proposing to take over management of the claim
against the Stone Supplier’s insurer and in May 2015 swore an affidavit in this
proceeding to that effect.
2120 The appropriate order is for payment of an amount by way of compensation
under s 37(6)(b) of the Building Work Contractors Act or an award of common
law damages.
Architect’s Set Off - $13,647.90 ex GST
The Issues
2121 The Architect claims an equitable set off against any loss and damage for
which it is liable to the Owner for unpaid fees of $13,647.90 excluding GST
($15,012.70 including GST) invoiced901 on 18 June and 10 November 2014 and
interest.902 The Architect claims interest on unpaid fees on the terms provided in
its retainer.903 That is, at a rate of its current maximum bank overdraft interest rate
plus 2% running from 30 days after the fees were due. The invoiced fees were due
for payment with 14 days of invoice.
2122 The Owner denies the Architect’s claim for equitable set off on two
grounds.904 First, the Architect abandoned its entitlement (if any) to payment of its
unpaid invoice by not seeking payment of its invoices until about October 2022
when it amended its defence. Secondly, in the alternative, the Architect did not
earn the payment of fees the subject of its retainer by the Owner because it in fact
administered the Building Contract for the substantial benefit of the Builder and in
a manner as the de facto against of the Builder.
Consideration
2123 The Architect relies on the principle that claims for money due under a
contract and for damages for breach of contract may be set off against each other
where the equity of the case requires it should be so, citing D Galambos & Son Pty
Ltd v McIntyre:905
… This will depend upon how closely the respective claims are related, particularly as to
time and subject matter. The general conduct of the respective parties will, as always, be
relevant to the granting of such equitable relief.
2124 The Architect’s unpaid fees are for part of its fixed percentage contract sum
for its services in designing, documenting and administering the construction of
901 Exhibit TP1.12.
902 Eighth Defence [22A].
903 Exhibit R3.1, clause 5.4.
904 Owner’s Reply to Eighth Defence [16].
905 (1974) 5 ACTR 10 at 25-26 per Woodard J. Citations omitted.
-- 341 of 362 --
[2024] SADC 150
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the Owner’s Residence. Its claim for set off of fees is closely connected to the
Owner’s claims against the Architect for breaches of its retainer and common law
duties both in time and subject matter. An equitable set off is in principle available.
2125 In closing, the Owner submits the Court should decline to apply the set off
because the Architect did not raise its claims for fees as a set off or substantive
claim for many years whilst it has been a party to this proceeding. Further, the
substantive claim is statute barred.
2126 In the circumstances of this case, where the parties have been engaged in
protracted litigation since this proceeding began in 2015, the inference does not
readily arise that the Architect had abandoned its claim for set off of unpaid fees.
It is not inequitable for the Architect to claim an equitable set off for a debt that is
otherwise statute barred in long tail litigation, particularly where the Owner is the
primary claimant. This ground of defence should be rejected.
2127 As to her alternative contention, the Owner relies on allegations regarding
the Architect’s alleged conduct in acting for the substantial benefit off the Builder.
The allegations concerning the Stone Issues are without foundation and should be
rejected for the reasons addressed in detail in Part C above.
2128 The allegations as to the Architect’s failure to administer the Building
Contract in strict accordance with its terms as to claims for variations and PC Sums
are relevant considerations. However, the issues considered and determined in
Part D as regards the Owner’s challenges to approved variations, PC Sums and
other claims were largely resolved in the Builder’s favour as were the Owner’s
defect claims, both as determined by the Court as regards the Stone Issues and, in
the Arbitration and adopted as part of this Court’s judgment.
2129 The Owner’s unpleaded allegations made in closing submission should not
be entertained.906 These allegations are also without foundation for the reasons
found above in context of the specific issues.907
2130 The Owner is to be compensated for her successful claims against the
Architect directly as regards the lost PC Sum credits, repointing the church hall
and the finial in accordance with the cardinal compensatory principle.
Accordingly, there is no basis for her to be compensated further by declining a set
off of the Architect’s fees as against the damages awarded in her favour. Such
result would not be just and equitable in all the circumstances.
2131 The Architect’s claim for contractual interest must be dismissed as unproven.
The Architect did not adduce any evidence of the relevant bank overdraft rate in
support of its contractual claim for interest.
906 Owner’s Final Closing [856.4] and [856.9].
907 See Parts and E as to Stone Issues and Part F for Acid Damages Items.
-- 342 of 362 --
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PART I: CONCLUSION AND FORM OF JUDGMENT
2132 Declarations should be made to the effect that PPC 11 and the certificates of
practical completion issued on 1 December 2014 are invalid and of no effect, in
consequence of which the Owner has no obligation to pay PPC 11 under the
Building Contract and there is no certified date of practical completion until the
Architect issues a valid notice of practical completion under clause M4 strictly in
accordance with the requirements of the Building Contract.
2133 The Builder’s claim against the Owner for payment of PPC 11 and the
Owner’s claims against the Architect for certifying PPC 11 should both be
dismissed for the reasons set out in Part D above.
2134 The Owner’s challenges to the Builder’s entitlement to payment of approved
variations and PC Sum adjustments certified in PPC 12 should be allowed in part
for the reasons set out in Part D above. Declarations should be made to the effect
that in the final certificate to be issued by the Architect in accordance with the
terms of the Building Contract credits should be allowed in the Owner’s favour in
the amounts of $151.05 and $8,672.00 for approved variations and PC Sum
adjustments respectively, both excluding GST.
2135 For the reasons set out in Part G above, the Owner’s claim against the
Architect for failure to administer PC Sum adjustments should be allowed with
damages assessed at $8,670.00 excluding GST without any apportionment being
allowed. The Owner’s other claims against the Architect for contract
administration should otherwise be dismissed.
2136 For the reasons set out in Parts E and F above, the Owner’s claims against
the Builder for the stone defects should be dismissed save for acid damaged CSS
items and chipped stone with damages assessed at $12,887.21 and $200.00
respectively, both excluding GST and without any apportionment being allowed.
2137 The Builder’s claim for contribution against the Stone Supplier for acid
damaged CSS items should be allowed with damages assessed in the amount of
$12,887.21 excluding GST for the reasons set above in Part F above.908
2138 The Owner’s claims against the Architect for the stone defects and the
Builder’s claims for contribution against the Stone Supplier for the stone defects
should be dismissed as should be the Builder’s and Architect’s claims for
contribution and apportionment (other than the Builder’s claim for contribution
against the Stone Supplier for acid damaged CSS items).
2139 Save for the findings set out in Annexure B, the Award should be adopted for
the reasons set out in Part F above, with total remedial costs determined of
$69,216.19 excluding GST.
908 See [1991]-[1993] above.
-- 343 of 362 --
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2140 Ultimately, the Owner’s claims against the Builder for common law damages
or in the alternative, compensation under 37(6)(b) of the Building Work
Contractors Act for defective or incomplete domestic building works as
determined by the Award adopted by the Court in Part F and for chipped stone as
set out in Part E should be allowed in part with total damages or compensation
assessed in the amount of $45,373.91 excluding GST,909 after allowing for
apportionment between the Builder and the Architect under s 72 of the
Development Act910 and a credit for the Owner’s receipt of insurance proceeds for
the unpaid acid damaged remedial works done by the Builder’s subcontractors.911
2141 For the reasons set out in Part G above, the Owner’s claims against the
Architect for breaches of its retainer and common law duties of care for defective
or incomplete domestic building works as determined by the Award adopted by
the Court in Part F should be allowed in part with damages assessed in the amount
of $7,385.25 excluding GST912 before any apportionment is allowed. The Owner’s
claim against the Architect are otherwise dismissed. After allowing for
apportionment between the Architect and the Builder under s 72 of the
Development Act, damages for the Architect’s breaches of its retainer and common
law duties should be assessed at $5,142.28 excluding GST.913
2142 For the reasons set out in Part H above, the Architect’s claim for equitable
set-off against the total loss and damage of $13,812.28 excluding GST914 for its
liability to the Owner should be allowed in the amount of $13,647.90 excluding
GST ($15,012.70 including GST).
2143 The parties should be heard on the form of the proposed declarations, orders
and judgment, interest and the question of costs.
909 $69,216.19 - $18,900.00 - $5,142.28 + $200.00.
910 $5,142.28 to the Architect.
911 $18,900.00.
912 $2,089.80 + $350.00 + $4,945.45.
913 $835.92 + 350.00 + $3,956.36.
914 $8,670.00 + $5,142.28.
-- 344 of 362 --
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ANNEXURE A – FINAL TRIAL PLEADINGS
Builder’s Statement of Claim FDN 2 16 April 2015
Builder’s Statement of Third Party
Claim
FDN 65 19 July 2018
Stone Supplier’s Second Defence to
Cross Action
FDN 91 20 April 2020
Owner’s Rejoinder (Revision 1) to the
Reply to Fifth Defence and Reply
(Revision 1) to the Defence to Sixth
Cross Action
FDN 116 22 December 2020
Builder’s Reply to Fifth Defence and
Defence to Seventh Cross Action
FDN 144 7 September 2021
Owner’s Fifth Defence and Seventh
Cross Action
FDN 201 6 July 2022
Owner’s Ninth Third Party Statement of
Claim
FDN 216 20 July 2022
Architect’s Eighth Defence to Ninth
Third Party Statement of Claim
FDN 248 26 October 2022
Owner’s Reply (Revision 3) to Eighth
Defence to Ninth Third Party Statement
of Claim
FDN 268 11 November 2022
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ANNEXURE B – AWARD FINDINGS NOT ADOPTED
Practical Completion
2144 Award [1:160] : “thereby invoking Practical Completion under the Contract”.
CSS Item 1.11 - Doors
2145 Award [2:932] and [2:939], that for CSS Item 1.11 the Architect was
responsible for the Builder’s failure to install doors DG16 and DG19 of the
specified thickness.
CSS Item 14.4 – Cellar Vent
2146 The findings in Award [2:1185]915 and [2:1186] that there was a valid
contractual direction to vary the cellar vent works and therefore no defect should
not be adopted and substituted by the Following findings.
2147 As regards Award [2:1190], the works for CSS Item 14.4 are defective works
and partially incomplete (provision of second ventilation duct (air supply)).
2148 As regards Award [2:1191], the works for CSS Item 14.4 did not comply
with the statutory warranties in s 32(2)(a) to (c) of the Building Work Contractors
Act.
2149 As regards Award [2:1192], the incomplete works for CSS Item 14.4 were
caused by the Builder.
2150 As regards Award [2:1193] and [2:1194], the parties have agreed the cost of
remedial works for CSS item 14.4 as being $2,089.80 excluding GST.
CSS Item 14.5 – Cracking to Cellar Floor
2151 Award [2:1677] and [2:1678] : that item CSS 14.5 was within the original
contract by reason of clause D.04.09.
915 Dot points 8, 9 and 10.
-- 346 of 362 --
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ANNEXURE C – FINAL SUMMARY AWARD DETERMINATIONS
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
1 GENERALLY -
INTERNALLY
1.1 Integrated or separate
heat shrouds
YES NO N/A COMPLIES N/A N/A N/A N/A 2-290
1.2 Window casements –
acid spray
YES N/A YES (part) COMPLIES YES YES 2,241.80 N/A 2-1, 2-22, 2-
30
1.3 Movement around
second fix
items/Painting items
YES YES YES (part) NO:
s32(2)(a)
YES YES 1,805.10 N/A 2-130, 2-134
1.4 Compressible door &
window seals
YES N/A YES (part) COMPLIES YES YES 1,178.37 N/A 2-1, 2-40
1.6 Warranties, Certificates,
Guarantees
YES N/A YES (part) NO:
s32(2)(a) &
(c) (part)
YES (part) YES NIL N/A 2-292
1.7 Marble cut outs NO N/A NO COMPLIES N/A N/A N/A N/A 2-111
1.9 Sealing marble & stone
surfaces
YES N/A NO COMPLIES N/A N/A N/A N/A 2-111, 2-115
1.10 Insulation over ceiling
manholes
YES N/A NO COMPLIES N/A N/A N/A N/A 2-305
1.11
Pl:
26e
Doors & door frames YES YES (part) N/A NO:
s32(2)(a)
(part)
YES (part)/
ARCH / TJ
YES 3,880.80 N/A 2-196
1.12 Wrought iron doors &
insect mesh
YES N/A NO COMPLIES N/A N/A N/A N/A 2-220
2 MAIN BEDROOM &
ENSUITE
2.1 Painting of PVC pipes NO NO NO Complies N/A N/A N/A N/A 2-212
-- 347 of 362 --
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
2.2 Geberit unit YES YES N/A NO:
s32(2)(a) &
(b)
YES NIL 132.00
(Owner
reimbursement)
N/A 2-238
2.3 Acoustic window
system
Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
2.4 Raven acoustic seals YES NO N/A COMPLIES N/A N/A N/A N/A 2-308
2.5 Caulking to bath apron
packers
YES YES N/A NO:
s32(2)(a)
YES YES 78.98 N/A 2-310
2.6 Vanity basin cracked NO NO N/A COMPLIES N/A N/A N/A N/A 2-313
2.7 Painted edge ceiling
strip
YES YES N/A NO:
s32(2)(a)
YES YES 106.48 N/A 2-315
2.8 Plaster under towel rail YES NO N/A COMPLIES YES
(remediated)
NIL NIL N/A 2-318
2.9 # Ducting for exhaust fan
& whirlygigs
YES N/A YES (part) NO:
s32(2)(a),
(b), (c) (part)
YES YES 2089.80 N/A 2-257
3 ENTRY HALL
3.1 Plastering of internal
walls
YES YES N/A NO:
s32(2)(a)
YES YES 532.40 N/A 2-320
4 SITTING/FORMAL
DINING
4.1 Painting of double entry
doors
YES YES N/A NO:
s32(2)(a)
YES YES 360.45 N/A 2-170, 2-172
4.2 Paint to skirting join YES YES N/A NO:
s32(2)(a)
YES YES 95.48 N/A 2-130, 2-143
4.3 Window shutter YES YES N/A YES YES YES 56.98 N/A 2-215
4.4 Chimney plastering YES NO NO YES YES
(remediated)
NIL NIL N/A 2-323
5 POWDER ROOM
5.1 Geberit unit YES YES N/A NO:
s32(2)(a) &
(b)
YES NIL Refer CSS 2.2 N/A 2-238
5.2 Mirror installation YES YES N/A NO:
s32(2)(a)
YES YES 320.10 N/A 2-325
-- 348 of 362 --
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
5.3 # Ducting for exhaust fan
& whirlygigs
YES N/A YES (part) NO:
s32(2)(a),
(b), (c) (part)
YES YES 2089.80 N/A 2-257
6 LIVING/DINING/KITCH
EN
6.1 Movement cracks to
skirtings, architraves
YES YES N/A NO:
s32(2)(a)
YES YES 53.90 N/A 2-130, 2-141,
2-144
6.2 Finish to window frame NO N/A N/A N/A N/A N/A N/A 2-130, 2-164
6.6
Pl:
26(ca
)
Marble splashback YES NO N/A COMPLIES N/A N/A N/A N/A 2-111, 2-119
6.8 Plaster wall finish YES YES N/A NO:
s32(2)(a)
YES YES 330.00 N/A 2-239
6.9 Grain of timber window
frame
YES YES N/A NO:
s32(2)(a)
YES YES 82.50 N/A 2-332
6.10 Movement lines to
wall/ceiling junctions
YES YES N/A NO:
s32(2)(a)
YES YES 143.88 N/A 2-130, 2-137,
2-140
7 PANTRY
7.2 Shelving cracks YES YES N/A NO:
s32(2)(a)
YES YES 89.76 N/A 2-130, 2-155
7.3 PVC flange to hot water
pipe
YES N/A NO COMPLIES N/A N/A N/A N/A 2-335
7.4 PVC waste pipe finish NO NO NO COMPLIES N/A N/A N/A N/A 2-212
8 LAUNDRY
8.1 Waste pipe finish NO NO NO COMPLIES N/A N/A N/A N/A 2-212
8.3 Control joint finish YES YES N/A NO:
s32(2)(a)
YES YES 206.80 N/A 2-130, 2-155,
2-156
8.4 Crack to window frame YES YES N/A NO:
s32(2)(a)
YES YES 101.20 N/A 2-130, 2-137,
2-138
8.6 Movement gap between
joinery and wall/ceilings
YES YES N/A NO:
s32(2)(a)
YES YES 155.10 N/A 2-130, 2-155,
2-159
8.7 Supply and installation
of high-level windows
Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
9 STAIR
9.2 Plaster finish YES YES N/A COMPLIES NO / TJ
(liability)
YES NIL N/A 2-337
10 UPPER HALL
10.2 Wrought iron panel YES YES N/A NO:
s32(2)(a) &
(b)
YES YES NIL N/A 2-220, 2-225
10.6 Movement cracks to
cornice
YES YES N/A NO:
s32(2)(a)
YES YES 477.27 N/A 2-130, 2-137
10.7 Movement crack to
Bedroom
door/architrave
YES YES N/A NO:
s32(2)(a)
YES YES 70.62 N/A 2-130, 2-143,
2-145
10.8 Movement crack to
Study door/architrave
YES NO N/A N/A N/A N/A N/A N/A 2-130, 2-143,
2-146
10.9 Movement crack to
Study door/architrave
YES NO N/A N/A N/A N/A N/A N/A 2-130, 2-143,
2-147
10.10 Nail indentations to
cornice
YES YES (part) N/A NO:
s32(2)(a)
YES YES 98.70 N/A 2-344
11 ROS’S STUDY
11.1 Movement crack to
architrave
YES YES N/A NO:
s32(2)(a)
YES YES 70.62 N/A 2-130, 2-143,
2-148
11.2 Splintering of wood
frame of balcony doors
YES YES N/A NO:
s32(2)(a)
YES YES 127.60 N/A 2-130, 2-164,
2-165
11.3 Cracking of window
ledge and frame
YES YES N/A NO:
s32(2)(a)
YES YES 371.80 N/A 2-130, 2-162
11.4 Cracking to architrave of
Storeroom door
YES YES N/A NO:
s32(2)(a)
YES YES 70.62 N/A 2-130, 2-143,
2-150
11.5 Cracking of balcony
door architrave
YES YES N/A NO:
s32(2)(a)
YES YES 70.62 N/A 2-130, 2-164,
2-166
11.9 White plaster staining YES YES N/A NO:
s32(2)(a)
YES YES 82.50 N/A 2-347
11.10 Caulking to side of
cupboards
YES YES N/A NO:
s32(2)(a)
YES YES 149.60 N/A 2-130, 2-155,
2-160
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
11.11 Hall/Study door warped YES YES N/A NO:
s32(2)(a) &
(b)
YES YES 154.66 YES /
1,202.27
2-349
11A IAN’S
STUDY/BEDROOM 2
11A.1 Window shutters YES YES N/A COMPLIES YES YES 127.60 N/A 2-215
12 GUEST BEDROOM/
BEDROOM 3
12.1 Cracking of cornices YES YES N/A NO:
s32(2)(a)
YES YES 206.80 N/A 2-130, 2-137,
2-141
12.2 Crack to window ledge YES YES N/A NO:
s32(2)(a)
YES YES 69.52 N/A 2-130, 2-165,
2-168
12.4 Cracking between
architrave and skirting
YES YES
(remediated)
N/A COMPLIES YES
(remediated)
NIL NIL N/A 2-130, 2-143,
2-151
12.5 Window shutters YES YES N/A COMPLIES YES YES 56.98 N/A 2-215
13 BATHROOM
13.1 Geberit unit YES YES N/A NO:
s32(2)(a) &
(b)
YES NIL Refer CSS 2.2 N/A 2-238
13.2 Finish to door edge YES YES N/A NO:
s32(2)(a)
YES YES 164.56 N/A 2-353
13.3 # Ducting for exhaust fan
& whirlygigs
YES N/A YES (part) NO:
s32(2)(a) &
(b) (part)
YES YES 2089.80 N/A 2-257
14 CELLAR STAIR &
CELLAR
14.4 # UPVC Cellar vent pipes YES YES YES (part) NO YES YES 2,089.80 N/A 2-257, 2-265 60%
Builder
40%
Architect
14.4A Cellar door YES NO N/A COMPLIES N/A N/A N/A N/A 2-356
14.5 Cracking to cellar floor YES NO N/A COMPLIES YES
(remediated)
NIL N/A N/A 2-358
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
14.5A Waterproofing of cellar
walls
YES (part) N/A YES (part) COMPLIES NO YES NIL N/A 2-365
14.6 Ceiling insulation YES NO NO COMPLIES N/A N/A N/A N/A 2-370
15 EXTERNALLY -
GENERALLY
15.2 Rust stains to bluestone
paving
YES YES N/A NO:
s32(2)(a)
YES YES 145.45 N/A 2-1, 2-46, 2-
60
15.3 Paint to Viscourse YES YES (part) N/A NO:
s32(2)(a)
(part)
YES YES 846.36 YES / 540.00 2-372
15.4 Downpipes YES N/A YES (part) NO:
s32(2)(a) &
(b)
YES YES 1,260.09 N/A 2-1, 2-22, 2-
34
15.5 Control joint YES N/A YES (part) NO:
s32(2)(a)
(part)
YES YES 159.50 N/A 2-378
15.7 Damaged slate sills YES (part) YES (part) N/A COMPLIES YES YES 1,667.20 N/A 2-1, 2-71, 2-
74
15.8 Gaps under window Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
15.12 Retractable clothesline YES N/A YES (part) NO:
s32(2)(a)
(part)
YES (part) YES NIL N/A 2-382
15.13 Acid damage to front
door threshold
YES NO N/A COMPLIES N/A N/A N/A N/A 2-1, 2-71, 2-
78
15.14 Acid damage to paving YES (part) YES (part) N/A COMPLIES YES YES 4,015.00 N/A 2-1, 2-46, 2-
62
15.15 Bluestone paving
selection
NO N/A N/A N/A N/A N/A N/A N/A 2-271, 2-281
15.16
#
Footing render YES YES N/A NO:
s32(2)(a) &
(b)
YES YES 750.00 N/A 2-387
15.17 Mintaro slate door sills/
Verandah edge
YES YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) N/A NIL YES/
UTD/TJ
2-392
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
15.18 Gas pipes YES NO N/A COMPLIES N/A N/A N/A N/A 2-398
16 EXTERNAL – REAR
16.1 Paving drainage YES (part) NO N/A COMPLIES N/A N/A N/A N/A 2-271, 2-282
16.2 Refer 16.1 Repeats
CSS 16.1
N/A N/A N/A N/A N/A N/A N/A 2-400
16.5
Pl:
26(cb
)
Cracks to window
masonry of church hall
YES N/A YES NO:
s32(2)(a)
YES YES 2,219.80 N/A 3-74
16.6 Timber boards to Hall
link
Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
16.7 Paint spillage to
bluestone paving
YES YES N/A NO:
s32(2)(a)
YES YES UTD N/A 2-400
16.8 Joint between new
Garage & Hall
YES NO N/A COMPLIES N/A N/A N/A N/A 2-403
16.14 Gap between pavers
and Dining Room
French doors
NO N/A N/A N/A N/A N/A N/A N/A 2-271, 2-285
16.16 Wrought iron gate Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
16.18 Fixings to glass pool
fencing
YES YES (part) N/A COMPLIES YES YES NIL N/A 2-1, 2-83
16.19 Pool fencing YES YES N/A NO:
s32(2)(b)
YES YES 1,174.80 N/A 2-1, 2-83, 2-
92
16.20 Rendering to west
boundary wall
NO N/A N/A N/A N/A N/A N/A N/A 2-271, 2-287
16.24
.1
Acid damage to
threshold
YES (part) YES (part) N/A COMPLIES YES YES 831.60 N/A 2-1, 2-71, 2-
80
16.24
.2
Aluminium strip to
threshold of Formal
Dining
YES NO N/A COMPLIES N/A N/A N/A N/A 2-1, 2-40, 2-
44
16.24
.3
Downpipe threaders Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
16.24
.4
Glazing bead to central
window
NO NO N/A COMPLIES N/A N/A N/A N/A 2-407
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
16.24
.5
Painting to rendered
external masonry Living
Room wall
YES N/A YES NO:
s32(2)(a)
YES YES 678.70 N/A 2-409
16.25 COURTYARD & REAR
VERANDAH
16.25
.4
Timber fascias to
Outdoor Entertaining &
Hall link
YES YES N/A NO:
s32(2)(a)
YES YES 262.90 N/A 2-175, 2-192
17 EXTERNAL – FRONT
& SIDE
17.4 Moulding to front fence
plinths & pillar caps
YES YES N/A NO:
s32(2)(a) &
(b)
YES YES 506.00 N/A 2-175, 2-177
17.5 Paint around lettering to
fence pillars
YES YES N/A NO:
s32(2)(a)
YES YES 66.00 N/A 2-175, 2-192,
2-194
17.6 Colour of silicon around
letterbox
YES N/A YES COMPLIES YES YES 47.96 N/A 2-175, 2-184
17.7 Colour of silicon around
letterbox
Repeats
CSS 17.6
N/A N/A N/A N/A N/A N/A N/A 2-175, 2-184,
2-186
17.8 Silicon around letterbox YES N/A YES COMPLIES YES YES 47.96 N/A 2-175, 2-184,
2-187
17.12
#
Gaps between stone
piers & lintels
YES N/A YES (part) NO:
s32(2)(a)
YES YES 442.15 N/A 2-175, 2-184,
2-188
17.13
#
Paint to aluminium C-
sections
YES YES (part) N/A NO:
s32(2)(a)
YES YES 60.98 N/A 2-412
17.14 Bluestone paving scope NO
Refer CSS
16.14
N/A N/A N/A N/A N/A N/A N/A 2-271, 2-285,
2-289
17.15 Perpend weepholes
under Sitting Room
windows
YES NO N/A COMPLIES N/A N/A N/A N/A 2-416
17.16 Spout to water feature YES (part) YES N/A COMPLIES YES YES 372.90 N/A 2-1, 2-105
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
17.17
#
Crack between
boundary wall & main
residence
YES YES N/A NO:
s32(2)(a) &
(b)
YES YES / TJ 576.36 N/A 2-175, 2-177,
2-179
17.18 Render on front fence,
pillars & gate pillars
YES YES N/A NO:
s32(2)(a)
YES YES 973.50 N/A 2-175, 2-177,
2-182
17.19 Stone block at central
Porch pier
N/A / TJ N/A / TJ N/A / TJ N/A N/A / TJ N/A N/A N/A 2-418
17.32 Paint finish to wrought
iron balustrade
YES YES N/A NO:
s32(2)(a) &
(b)
YES NO NIL N/A 2-220, 2-231
17.34 Caulking to vertical joint
of fence
NO N/A N/A N/A N/A N/A N/A N/A 2-175, 2-184,
2-190
17.35 Drainage sumps YES (part) N/A NO COMPLIES NO NIL N/A N/A 2-418
18 EXTERNAL -
BALCONY
18.1 Plaster to rebate around
French doors to Ian’s
Study
YES N/A YES COMPLIES YES YES 178.90 N/A 2-424
18.2 Slate sills YES N/A YES NO:
s32(2)(a)
YES YES 240.30 N/A 2-428
18.3 Painting of head of
Study door frame
YES YES N/A NO:
s32(2)(a)
YES YES 95.48 N/A 2-432
19 ROSE HALL
EXTERNAL
19.1
Pl:
26(cc
)
Double glazed GF
windows & insect
screens
YES N/A YES (part) NO:
s32(2)(a)
(part)
YES (part) YES 400.00 N/A 3-80
19.1.
1
Pl:
26b
Selective re-pointing YES NO YES COMPLIES NO/ARCH /
TJ (liability)
NIL/YES/TJ 350.00 N/A 3-92 100%
Architect
19.2 External Entry &
Courtyard
3-116
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CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
(a) Cracking of window
moulding #
YES YES N/A NO:
s32(2)(a)
YES YES 551.10 N/A 3-438, 3-452
(b) Blue packing YES N/A YES NO:
s32(2)(a)
YES YES 27.00 N/A 3-438, 3-466
(c) Plaster finish
dampness/ Graffiti
YES (part) YES (part) N/A NO:
s32(2)(a)
YES (part) YES 543.18 N/A 3-438, 3-479
(d) Paintwork on
Verandah soffit
YES YES N/A NO:
s32(2)(a)
YES YES NIL N/A 3-438, 3-494
(e) Mintaro slate
threshold #
YES N/A NO COMPLIES N/A NIL / TJ 443.18 N/A 3-438, 3-506
19.3 Memorial Stone
• Rendering to side of
window
YES YES N/A NO:
s32(2)(a)
YES YES 68.18 N/A 3-134
• Silicone around
memorial stone
YES N/A N/A N/A N/A N/A N/A N/A 3-134
• Building debris YES N/A N/A N/A N/A N/A N/A N/A 3-134
• Sill & glazing YES N/A N/A N/A N/A N/A N/A N/A 3-134
19.4 Cracking of door frame YES NO N/A N/A N/A N/A N/A N/A 3-1, 3-4
19.8 Cracks to moulding
adjacent door from
church hall Lobby into
Garage
YES NO N/A N/A N/A N/A N/A N/A 3-1, 3-4, 3-5
19.9 # NZ Clear Pine skirting
boards
YES YES (part) YES (part) NO:
s32(2)(a) &
(b)
YES YES 2,000.00 N/A 3-139
19.10 Crack between glass
frame & architrave
YES YES (part) N/A NO:
s32(2)(a)
YES YES 53.90 N/A 3-1, 3-4, 3-6
19.12 Paint finish to black
floorboards
YES YES (part) YES (part) NO:
s32(2)(a) &
(b)
YES YES 1,567.27 N/A 3-37, 3-51
19.13 Gap under Lobby
entrance door
YES N/A YES NO:
s32(2)(a)
YES YES 354.55 N/A 3-143
19.14 STORE UNDER
STAIRS
-- 356 of 362 --
[2024] SADC 150
353
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
19.14
.1
Cracking around door to
Storeroom
YES YES N/A NO:
s32(2)(a)
YES YES 76.45 N/A 3-1, 3-4, 3-8
19.14
.2
Cracking in door
moulding of Storeroom
door
YES YES N/A NO:
s32(2)(a)
YES YES 76.45 N/A 3-1, 3-4, 3-9
19.14
.6
Stair stringer YES N/A YES NO:
s32(2)(a)
YES YES 333.18 N/A 3-37, 3-55
19.14
.7
Crack between glass
frame & architrave
Repeats
CSS 19.10
N/A N/A N/A N/A N/A N/A N/A 3-1, 3-4, 3-11
19A ROSE HALL
INTERNAL -
GENERAL
19A.1
Pl:
26c
church hall internal wall
repairs, painting
YES N/A YES (part) NO:
s32(2)(a)
(part)
YES YES NIL N/A 3-21, 3-34
19A.2 Striker plates, door
keeps, storm moulding
3-147
• Door 16 Lobby church
hall (DG16)
YES (part) YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) YES 913.00
(Total of all sub-
items)
N/A 3-147, 3-151
• Garage 02 Entry door
(DG19)
YES (part) YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) YES N/A 3-147
• Door 19 Repeats
above
N/A N/A N/A N/A N/A N/A 3-147, 3-152
• Garage 01 Entry door
(DG17)
YES (part) YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) YES N/A 3-147, 3-152
• Door keeps church
hall/Garage (DG16 -
DG18; DU 10 – DU12)
YES (part) YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) YES N/A 3-147, 3-152,
3-153
• Striker plate Powder
Room door (DG13)
YES (part) YES N/A NO:
s32(2)(a)
YES YES N/A 3-147, 3-149
-- 357 of 362 --
[2024] SADC 150
354
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
• Locks & latching
external doors to
Kitchen/Living/ Dining
(DG03 – DG05)
YES (part) YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) YES N/A 3-147, 3-149,
3-150
19A.3 Church hall first floor
manhole & Garage 02
manhole
YES NO YES (part) NO:
s32(2)(a)
YES NIL N/A N/A 3-156
20 ROSE HALL GROUND
LEVEL/GARAGE 01
20.2 Door 16 sidelight &
Lobby entry door
YES N/A YES NO:
s32(2)(a)
YES YES
Refer also
CSS19.2
56.98
Refer also
CSS19.2
N/A 3-162
20.3 Plastering around
Garage door/step
YES YES N/A NO:
s32(2)(a)
YES YES 171.09 N/A 3-165
20.4 Render finish to edges
of step & corners
Garage door/landing
YES YES N/A NO:
s32(2)(a)
YES YES 155.10 N/A 3-169
20.5 Raven RP4 door seals NO NO NO COMPLIES N/A N/A N/A N/A 3-173
20.7 Rendering of projecting
course at top of stone
walls
YES N/A YES NO:
s32(2)(a)
YES YES 6,273.64 N/A 3-175
20.9 Window sills & frames YES YES N/A NO:
s32(2)(a)
YES YES 1,903.40 N/A 3-1, 3-16
20.10 Timber trims YES N/A YES NO:
s32(2)(a)
YES YES NIL N/A 3-180
20.11 Concrete rebate at
segmental door
YES YES N/A NO:
s32(2)(a)
YES YES 100.10 N/A 3-184
20.12 church hall internal wall
repairs, painting
YES N/A YES NO:
s32(2)(a)
YES YES NIL N/A 3-21, 3-35
20.14 Cracks to wall/ceiling
junctions
YES N/A YES NO:
s32(2)(a)
YES YES 585.20 N/A 3-1, 3-14
20.16
#
church hall finial repairs YES N/A YES NO:
s32(2)(a) &
(c) / TJ
NO/ARCH /
TJ (liability)
YES / TJ 4,945.45 N/A 3-188 20%
Builder
-- 358 of 362 --
[2024] SADC 150
355
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
Pl:
26(cd
)
80%
Architect
20.17 Cleaning & painting
Garage floor
YES (part) N/A YES (part) COMPLIES YES YES NIL N/A 3-197
20.18 Concrete slab adjacent
boundary wall
YES N/A YES NO:
s32(2)(a)
YES YES 100.10 N/A 3-202
20.19 Curved timber moulding
at Garage door
YES N/A YES NO:
s32(2)(a)
YES YES 149.60 N/A 3-205
20.20 Rendered band around
exterior Garage opening
YES YES N/A NO:
s32(2)(a)
YES YES 2,193.40 N/A 3-208
20.21 Plastering west wall of
Garage
YES NO N/A COMPLIES N/A N/A N/A N/A 3-212
20.22 Stonework above
Garage door
YES N/A YES NO:
s32(2)(a)
YES YES 198.18 N/A 3-216
20.23 Raven RP4 door seals Repeats
CSS 19.13
N/A N/A N/A N/A N/A N/A N/A 3-219
20.24 Additional mouldings to
door
YES NO N/A COMPLIES N/A N/A Refer CSS 1.11 N/A 2-196, 3-220
21 CHURCH HALL
STAIRS
21.3 Miscellaneous
carpentry repairs
YES N/A YES NO:
s32(2)(a)
YES YES 201.30 N/A 3-37, 3-57
21.6 Hall Stair and landing YES YES (part) N/A NO:
s32(2)(a) &
(b)
YES YES 270.45 N/A 3-37, 3-60
21.7
Pl:
26(ce
)
Pl:
26(cf)
Repairs to Stair
structure
YES NO NO COMPLIES N/A N/A N/A N/A 3-37, 3-64
23 WALK IN ROBE
-- 359 of 362 --
[2024] SADC 150
356
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
23.1 # Dressing Room wall and
cracks to
bulkhead/joinery &
joinery/existing wall
YES (part) YES (part)
(remediated)
YES (part) NO:
s32(2)(a)
(part)
YES (part)
(remediated)
YES (part) 176.74 N/A 3-1, 3-17
24 1st FLOOR
ROOM/GUEST
24.1 Moulding to sides of
Entry door
YES NO N/A N/A N/A N/A N/A N/A 3-1, 3-4, 3-11
24.6 Bird-proofing of roof YES N/A YES NO:
s32(2)(a) &
(b)
YES YES 1,036.60 N/A 3-220
25 ENSUITE 2
25.1 Geberit unit YES YES N/A NO:
s32(2)(a) &
(b)
YES NIL Refer CSS 2.2 N/A 2-238. 3-225
25.3 Moulding to sides of
Entry door
YES YES N/A NO:
s32(2)(a)
YES YES 91.96 N/A 3-1, 3-4, 3-12
25.8 Cost of additional
shutters to Guest Suite
YES N/A NO COMPLIES N/A N/A N/A N/A 3-225
25.9 Finish to shower waste
pipe
Not Pressed
(View2)
N/A N/A N/A N/A N/A N/A N/A N/A
25.10
#
Ducting for exhaust fan
& whirlygigs
YES N/A YES (part) NO:
s32(2)(a) &
(b) (part)
YES YES
2089.80
N/A 2-257
26 GARAGE 02
26.1 Raven RP4 door seals YES N/A YES NO:
s32(2)(a)
YES YES 354.55 N/A 2-434
26.7 Moulding to sides of
Entry door
YES YES N/A NO:
s32(2)(a)
YES YES 76.45 N/A 2-130, 2-165,
2-169
26.8 # Render around door
frame
YES YES N/A NO:
s32(2)(a)
YES YES 228.92 N/A 2-130, 2-143,
2-152
26.9 Cracks in door frame YES YES N/A NO:
s32(2)(a)
YES YES 101.20 N/A 2-130, 2-165,
2-170
-- 360 of 362 --
[2024] SADC 150
357
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
26.11 Cracks between render
and Garage door frame
YES YES N/A NO:
s32(2)(a)
YES YES 107.80 N/A 2-130, 2-143,
2-154
26.17 Leak in Garden Store
Room
YES NO N/A COMPLIES N/A N/A N/A N/A 2-437
26.19 Timber fascia east end
Garage
YES YES N/A NO:
s32(2)(a) &
(b)
YES YES 375.10 N/A 2-440
26.20 Bagged wall finish
Garage 2
YES NO N/A COMPLIES N/A N/A N/A N/A 2-443
26.21 Door DG21 [DG19] YES YES (part) N/A NO:
s32(2)(a)
(part)
YES (part) N/A Refer CSS 1.11 N/A 2-196
29 BIN STORE
29.1 Painting of surfaces YES N/A YES COMPLIES YES YES NIL N/A 2-445
29.2 Control joints over
Garage 2 roof
YES NO N/A COMPLIES N/A N/A N/A N/A 2-448
29.3 Painting of gutter to Bin
Store
YES YES N/A NO:
s32(2)(a)
YES YES 149.60 N/A 2-450
29.5 Varnish coating & screw
fixings
YES N/A YES (part) COMPLIES YES YES NIL N/A 2-453
29.6 Ground level PVC pipe YES N/A YES COMPLIES YES YES NIL N/A 2-457
30 REAR LANE
30.1 Drainage and
stormwater installation
YES N/A YES COMPLIES YES YES NIL N/A 2-460
30.2 Double cast iron pipes
or cast iron box section
Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
31 LAP POOL AND
WESTERN WALL
31.1 Completion of pool
works
Not Pressed N/A N/A N/A N/A N/A N/A N/A N/A
31.3 Acid damage to lid &
exterior fixings
YES NO N/A COMPLIES N/A N/A N/A N/A 2-1, 2-83, 2-
103
TOTAL (excluding GST) = $69,216.19
-- 361 of 362 --
[2024] SADC 150
358
CSS
Item
No
Item Details 5.1
Within
Contract
Scope
5.2 Workmanship 5.3
Defect Caused
by Builder
/Other
5.4
Remedial
Work
Required
5.5
Cost of Remedial
Work
$/c (Ex GST)
5.6
Alternative
Solution:
Rectification/
Cost
Award Page/
Judgment
Paragraph
Liability
Defect Incomplete
Work
Statutory
Warranties
-- 362 of 362 --