Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85

SUPREME COURT OF QUEENSLAND CITATION: Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85 PARTIES: CIVIL MINING & CONSTRUCTION PTY LTD (ABN 18 102 557 175) (plaintiff) v WIGGINS ISLAND COAL EXPORT TERMINAL PTY LTD (ABN 20 131 210 038) (defendant) FILE NO/S: No BS6050/13 DIVISION: Trial PROCEEDING: Trial ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 19 May 2017 DELIVERED AT: Brisbane HEARING DATES: 23, 24, 25, 26, 27, 30 and 31 May 2016 1, 2, 3, 6, 7, 8, 9, 10, 13, 14, 15, 16 and 17 June 2016 8, 9, 11, 15, 16, 17, 18, 19, 29, 30 and 31 August 2016 26, 27, 28, 29 and 30 September 2016; Plaintiff’s Post Hearing Written Submissions filed 10 October 2016; Corrigenda to the Plaintiff’s and Defendant’s Written Submissions filed 8 December 2016 JUDGE: Flanagan J ORDER: I will hear the parties further as to final orders and further directions including in respect of: (a) The quantification of the Delay Claim (Variation 17); (b) WICET’s Counterclaim as to the Delay Claim (Variation 17); (c) The Bank Guarantee; (d) The quantification of the final certificate; and (e) Interests and costs. CATCHWORDS: CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – VARIATIONS – where the -- 1 of 304 -- 2 plaintiff was a Queensland-based construction company – where the defendant was involved in the business of constructing coal and export facilities – where the plaintiff was a contractor of the defendant – where the plaintiff and defendant entered into a bulk earthworks contract for a package of construction works – where the plaintiff engaged subcontractors to carry out certain construction works – where variations and directions affected the contract works – where practical completion was delayed – where the contract works were varied – whether the plaintiff was overpaid as a result of variations and delay to the contract works CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – SETTLEMENT OF DISPUTES – where dispute arose in relation to a bulk earthworks project – where certain claims were already the subject of statutory adjudication process – whether the plaintiff was required to repay the defendant any amount that the defendant already paid to the plaintiff – where the defendant counterclaimed CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – DETERMINATION OF COSTS where variations and directions affected the contract works – where the defendant counterclaimed – where the defendant alleged overpayments to the plaintiff under the contract works – where the defendant claimed liquidated damages – whether terms of contractual construction entitle the plaintiff to additional payments for delay – whether the plaintiff was entitled to additional payments for variations to the contract works – whether the defendant was entitled to claw back any amounts already paid under the contract CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – PERFORMANCE OF WORK – GENERAL – where variations and directions affected the contract works – where the contract works were ultimately different to those contemplated under the contract– where the contract works were varied – whether the plaintiff was entitled to amounts already paid for works which the plaintiff did not complete – whether the plaintiff was entitled to additional amounts to those initially contemplated under the contract - whether the defendant was entitled to claw back any amounts already paid under the contract as a result of the variations CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – REMUNERATION – -- 2 of 304 -- 3 CERTIFICATES – FINALITY OF CERTIFICATE - Construction and effect of final certificates issued under General Conditions of AS2124 – where the parties issued its final certificate, obliging the plaintiff to pay the defendant $12,269,507.88 with respect to its claimed progress payment — where the defendant claims the amount of the final certificate less the items otherwise the subject of these proceedings – where the plaintiff served notice of dispute under contract with respect to final certificate – whether the plaintiff was overpaid under the contract as a result of amounts re-valued in the final certificate CONTRACTS – BUILDING ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where adjudication decision made in favour of the plaintiff under Building and Construction Industry Payments Act 2004 (Qld) — whether the defendant is entitled to recover amounts the plaintiff successfully claimed through statutory adjudication Building and Construction Industry Payments Act 2004 (Qld) Coastal Protection and Management Act 1995 (Qld) Competition and Consumer Act 2010 (Cth), Schedule 2 Fisheries Act 1994 (Qld) Queensland Building and Construction Commission Act 1991 (Qld) Queensland Building and Construction Commission Regulation 2003 (Qld) Queensland Building Services Authority Act 1991 (Qld), s 67V Sustainable Planning Act 2009 (Qld) Alstom Limited v Yogokawa Australia Pty Ltd & Anor (No 7) [2012] SASC 49, cited Alucraft Pty Ltd (in liq) v Grocon Ltd (Unreported, Supreme Court of Victoria, Smith J, 22 July 1993 – 15 February 1994, 22 April 1994), distinguished Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99, cited Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345, cited Chaplin v Hicks [1911] 2 KB 786, distinguished City Inn v Shepherd Construction Limited (2008) 24 Const LJ 590, cited CMA Assets Pty Ltd v John Holland Pty Ltd (No 6) [2015] WASC 217, cited Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, cited Collins v The Queen (1975) 133 CLR 120, cited -- 3 of 304 -- 4 Commonwealth of Australia v Verwayen (1990) 170 CLR 394, cited Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QSC 179, cited Cooke v Commissioner for Taxation (2002) 51 ATR 223, cited Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1163, cited Currie v Dempsey (1967) 69 SR (NSW) 116, cited Danidale Pty Ltd v Abigroup Contractors Pty Ltd [2007] VSC 391, cited Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, cited Donnison v The Employers’ Accident and Live Stock Insurance Co Ltd (1897) 24 R 681, cited DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423, cited Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99, cited Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) (2013) 29 BCL 19, cited Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, cited Eric Preston Pty Ltd v Euroz Securities Ltd (2011) 274 ALR 705, cited Hawker Noyes Pty Ltd v New South Wales Egg Corporation (Unreported, Supreme Court of New South Wales, Brownie J, 11 November 1988), distinguished Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2000] BLR 247, cited Industrial Installations & Relocations Pty Ltd v Leiner Davis Gelatin International Ltd (Unreported, Supreme Court of Victoria, Rolfe J, 5 May 1998), cited Jones v Dunkel (1959) 101 CLR 298, distinguished Macdonald v Longbottom (1860) El. & El. 977; 120 E.R. 1177, cited Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, cited Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QCA 329, applied Monadelphous Engineering Pty Ltd & Muhibbah Construction Pty Ltd trading as Monadelphous Muhibbah Marine v Wiggins Island Coal Export Terminal Pty Ltd [2015] QSC 160, cited Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, applied Murphy v R (1989) 167 CLR 94, cited North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595, cited Nosic v Zurich Australian Life Insurance Ltd [1997] 1 Qd R 67, cited -- 4 of 304 -- 5 Paino v Paino [2005] NSWSC 1313, cited Penvidic Contracting Co Ltd v International Nickel Co of Canada Ltd [1976] 1 SCR 267, cited Prenn v Simmonds [1971] 1 WLR 1381; [1971] 3 All ER 237, cited Skilled Group Ltd v CSR Viridian Pty Ltd & Anor [2012] VSC 290, distinguished Stockland (Constructors) Pty Ltd v Darryl I Coombs Pty Ltd [2004] NSWSC 323, distinguished Thiess Watkins White Construction Ltd v Commonwealth (1992) 14 BCL 61, cited Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253, distinguished Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862, cited Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604 WMC Resources Ltd v Leighton Contractors Pty Ltd [1999] WASCA 10, distinguished Yorkshire Water Authority v Sir Alfred McAlpine & Son (Northern) Limited (1985) 32 BLR 114, distinguished COUNSEL: B D O’Donnell QC with S J Webster for the plaintiff D Kelly QC with J J Baartz and M G Lyons for the defendant SOLICITORS: Thomson Geer for the plaintiff Corrs Chambers Westgarth for the defendant -- 5 of 304 -- 6 Introduction ............................................................................................................................ 10 Issues ........................................................................................................................................ 12 Relevant Terms of the Contract ............................................................................................ 13 CMC’s primary lay witnesses ............................................................................................... 18 (a) Ben Vance.................................................................................................................. 19 (b) Manish Pancholi ........................................................................................................ 22 (c) John Henderson ......................................................................................................... 23 (d) Matthew Grey ............................................................................................................ 23 (e) Veronika Haber.......................................................................................................... 23 (f) James Barry ............................................................................................................... 23 WICET’s primary lay witnesses ........................................................................................... 23 (a) Andre Miroshnikoff ................................................................................................... 23 (b) David Enright ............................................................................................................ 24 (c) Scott Karandrews ....................................................................................................... 25 Jones v Dunkel inferences ...................................................................................................... 26 Approach to findings of fact .................................................................................................. 27 CMC’s challenge to the expertise of Mr Abbott.................................................................. 27 CMC’s challenge to the expertise of Mr Tsipis ................................................................... 30 Earthworks Claim (Variation 141) ....................................................................................... 33 (a) The Nature of the Claim ............................................................................................ 33 (b) The Delay Events....................................................................................................... 37 (i) Directions – Delay to Commencement .................................................................. 37 (ii) Directions – Delay to the Construction of the Haul Road ..................................... 45 (iii) Directions – Cultural Heritage and Flora ............................................................... 49 (iv) Directions - Soft Spot and Tertiary Bund .............................................................. 52 (v) Direction – Truck Bogging (Stop Work Direction) ............................................... 54 CMC’s Contractual Basis for the Earthworks Claim ........................................................... 57 Measurement of the Delay ................................................................................................... 70 Quantum ............................................................................................................................... 77 The GPN Borrow Pit (alternative claim) ............................................................................. 80 Piling claim (Variation 142) .................................................................................................. 87 Direction 1 – Beales Creek waterway barrier permit ........................................................... 88 Direction 2 – Non-conformance report 01 (NCR01) ........................................................... 99 Direction 3 – Postponement of Rail Receival Piling Works .............................................. 105 Direction 4 – Suspension Direction ................................................................................... 108 Direction 5 – Suspension due to Specification Uncertainty ............................................... 110 -- 6 of 304 -- 7 Direction 6 – Stop Work Direction .................................................................................... 117 Direction 7 – Piling Hammer Claim .................................................................................. 121 Quantum – Piling Claim ..................................................................................................... 128 (i) Quantum – Directions 1 - 6 .................................................................................. 128 (ii) Quantum – Piling Hammer Claim ....................................................................... 131 Pyealy Creek Bebo Arch Claim (Variation 103) ............................................................... 135 (a) Factual Findings ...................................................................................................... 135 (b) The Variation Claim ................................................................................................ 146 Item 9 – Drop Structure .................................................................................................. 149 Item 11 – Blinding Layer under Bebo Arch footings..................................................... 149 Item 12 – Concrete Class 40Mpa/20 in Bebo Arch footings ......................................... 150 Item 14 – Supply and install Bebo Arch sections .......................................................... 151 Item 15 – Concrete class 40Mpa/20 in Bebo Arch wingwalls ....................................... 151 Item 16 – Supply and install a spandrel ......................................................................... 152 Item 17 – Concrete Class 32 MPa/20 in spoon drain ..................................................... 153 Item 18 – Guardrail with beam ...................................................................................... 153 Quantum total for Bebo Arch Variation 103 ...................................................................... 154 Delay Claim (Variation 17).................................................................................................. 155 Issue 1: Qualifying cause of delay ..................................................................................... 157 (i) Delay Event 10 – Financier consent delay ........................................................... 157 (ii) Delay Event 11 – Flood damage delay ................................................................ 160 Expert evidence .................................................................................................................. 161 Issue 2: Methodology and programs .................................................................................. 165 Methodology .................................................................................................................. 165 Programs......................................................................................................................... 166 Issue 3: Critical Path Analysis .......................................................................................... 182 Surcharge settlement ...................................................................................................... 182 Delay Event 1 – Beales Creek Permit Delay.................................................................. 185 Delay Event 2 – Rail Receival Permit ............................................................................ 187 Delay Event 3 – NCR 01 ................................................................................................ 187 Delay Events 4 and 5 ...................................................................................................... 187 Delay Event 6 – Stop Work Direction ........................................................................... 187 Delay Event 7 – Hammer Direction ............................................................................... 187 Delay Event 8 – Pyealy Creek Bebo Arch redesign delay ............................................. 187 Delay Event 9 – Bebo Arch additional work delay ........................................................ 188 Delay Event 10 – Financier Consent .............................................................................. 191 Delay Event 11 – Flood Damage Delay ......................................................................... 191 -- 7 of 304 -- 8 Issue 4: Concurrent Delays ................................................................................................ 192 Issue 5: Other non-compliances with clause 35.5 .............................................................. 193 Findings of fact for Issue 5 ............................................................................................. 194 Waiver ............................................................................................................................ 197 Quantum – Delay Claim ..................................................................................................... 201 Environmental Management Claim (Variation 90) .......................................................... 211 Geolon 600 Claim (Variation 63) ........................................................................................ 217 Bank Guarantee.................................................................................................................... 220 Interest................................................................................................................................... 221 Interest under the Contract ................................................................................................. 221 Interest under the QBCC Act ............................................................................................. 222 (a) Pavement works for the Rail Receival Bulk Earthworks Package .......................... 223 (b) Pavement Works for the Rail Receival Access Road .............................................. 225 (c) Pavement Works for the Overland Conveyor Platform package ............................ 225 (d) Fauna Bridges .......................................................................................................... 226 WICET’s Counterclaim ....................................................................................................... 226 (a) Adjudication Fees and Interest ................................................................................ 227 (b) OLC Claim (Variation 30) ....................................................................................... 228 Final Certificate and Scott Schedule .................................................................................. 231 WICET’s Primary Claim .................................................................................................... 231 The Alternative Claim to Re-valuation .............................................................................. 237 Cell 1 – Variation 65: 104 Raise the Bunds ................................................................... 239 Cell 12 – Variation 56 – Additional Topsoil Quantities ................................................ 240 Cell 13 – V32 PVMi5 GC08 Scope Transfer OLC works – Variation 32 ..................... 243 Cell 14 – 075 PVN 578 Rail Receival Basins on Hold – Variation 51 .......................... 245 Cell 15 – Filling Reclamation Bunds Area C – Item 89 ................................................ 247 Cell 17 – Granular Material OC South – Ch 0 to Ch 3803 – Item 94 ............................ 249 Cell 18 – 124 Quantity Increase in Piling – Variation 75 .............................................. 251 Cells 21 and 24 – Bridge Abutment Protection – Type 4 Abutment B – Item 66 and Abutment A – Item 65................................................................................ 251 Cell 25 – 079 Additional Pavement Testing – Variation 54 .......................................... 252 Cell 32 – 028 Ground Surface Treatment Omitted Item – Variation 45 ........................ 253 Other omitted items ............................................................................................................ 255 Cells 3 to 11.................................................................................................................... 255 Cell 20 – 004 Dynamic Testing of Piles ........................................................................ 256 Cell 27 – 029 Supply and Install Expansion Joint ......................................................... 257 Cell 52 – 072 Bearing Pedestals ..................................................................................... 257 -- 8 of 304 -- 9 Cell 54 – 131 Omitted Item – Evaporation Compound ................................................. 258 Lack of Evidence – Cells 39, 41, 47, 50, 60, 61 and 62 ................................................. 258 Cells 39 and 41 – OC Access Roads – Items 114 and 119 ............................................ 258 Cell 47 – 002 Bridge Work Design ................................................................................ 258 Cell 50 – Item 91 – Clay Liner ....................................................................................... 259 Cell 60 – Variation 77 .................................................................................................... 259 Cell 61 – Variation 43 .................................................................................................... 259 Other Items ......................................................................................................................... 259 Cell 16 – Variation 62 – 099 Piling Specification Change ............................................ 259 Cell 22 – 101 Reclamation C Drop Board Structure – Variation 63.............................. 259 Cells 23, 26 and 35 – 074 Fencing Drawing Amendment Cost – Variation 50 – Items 122 and 123 .......................................................................................................... 260 Cell 28 – Item 87 Exc-box-out for pavements ............................................................... 261 Cell 34 – 083 Drainage Blanket on OLC and Rec C ..................................................... 261 Cell 94 – Granular Material ........................................................................................... 262 Cell 97 – Item 81 ............................................................................................................ 262 Conclusion – Final Certificate and Scott Schedule ............................................................ 262 Disposition ............................................................................................................................. 262 Annexure “A” ....................................................................................................................... 264 Relevant General Conditions and Schedules ..................................................................... 264 C-3 Contract Price Schedules ......................................................................................... 280 C-4 Rates for Pricing Variations .................................................................................... 291 Appendix F2 ....................................................................................................................... 302 -- 9 of 304 -- 10 Introduction [1] This case concerns a dispute between the defendant, Wiggins Island Coal Export Terminal Pty Ltd (WICET) as principal and the plaintiff, Civil Mining & Construction Pty Ltd (CMC) as contractor arising from a bulk earthworks contract performed between September 2011 and March 2013 near Gladstone in Queensland. [2] CMC is a Queensland-based construction company which builds earthworks, roads, bridges and drainage works. [3] WICET carried on a business principally involved in the construction of a new coal export facility located at Golding Point as part of the Port of Gladstone.1 The facility is known as the Wiggins Island Coal Export Terminal. [4] On 7 September 2011 CMC entered into a contract (the Contract) with WICET for the performance of a package of construction works south of Hanson Road titled “GC09 Bulk Earthworks and Civil Works (South of Hanson Road)” (the GC09 Project). [5] CMC’s construction package was for, inter alia, the construction of the following elements of the GC09 Project: (a) the Reclamation C Bunds, being large earthen bunds designed to drain dredged spoil through three ponds before being released into the Calliope River (Reclamation C Bunds); (b) the Overland Conveyor, being the earthworks component of the flat conveyor platform from the Rail Receival area to Hanson Road (OLC); (c) Beales Creek Bridge, being a piled bridge over Beales Creek for the OLC (Beales Creek Bridge); (d) Pyealy Creek Bebo Arch, being a concrete culvert over Pyealy Creek for the OLC (Pyealy Creek Bebo Arch); (e) earthworks and road works at the Rail Receival Platform and Reid Road; and (f) the Rail Receival Overpass, being a piled bridge over the rail line for traffic from Reid Road (Rail Receival Bridge), (together, the Contract Works). [6] CMC’s work under the GC09 Project was one of more than 20 packages of work that WICET was seeking to have completed by various contractors.2 The GC09 Project was among the first substantial packages of work to commence.3 1 Eighth Further Amended Statement of Claim, [2](b); Further Amended Defence and Counterclaim, [1]. 2 T16-36, lines 24-29. 3 T23-17, lines 37-42; T23-25, lines 5-13. -- 10 of 304 -- 11 [7] The firm Worley Parsons was engaged by WICET to manage the GC09 Project (and other packages) and individuals from it were nominated to act as the Representative of the Principal’s Representative under the terms of the Contract (PRR).4 [8] Aurecon Hatch was engaged by WICET to provide the design and ongoing design services for the GC09 Project (and other packages). [9] In carrying out the Contract Works for the purposes of the GC09 Project CMC engaged subcontractors. CMC’s subcontractor for the earthworks was AE Group. CMC’s piling subcontractor, which performed the piling on the Beales Creek Bridge and the Rail Receival Bridge, was Avopiling. [10] On 6 October 2011, Worley Parsons provided CMC with a formal notice to proceed with the Contract Works.5 [11] On 31 October 2011, Worley Parsons approved CMC’s Baseline Program. Both the approved Baseline Program, and the Contract, provided that the Date for Practical Completion was 30 August 2012.6 [12] On CMC’s case, during the project a series of directions (from WICET via Worley Parsons) and events significantly affected CMC’s progress and changed the character and extent of CMC’s work in carrying out the Contract Works, including: (a) a direction from WICET to mobilise in relation to bulk earthworks notwithstanding that WICET had failed to obtain a clearing permit sufficient to allow CMC to construct haul roads to access the Reclamation C Bunds; (b) the removal of a substantial quantity of material from the part of the borrow pit (the GPN Borrow Pit) from which CMC was to source fill for the construction of the Reclamation C Bunds; (c) a series of directions from WICET which altered and prolonged CMC’s work in constructing the Reclamation C Bunds; (d) a direction to mobilise from WICET in relation to piling activities in circumstances where WICET had failed to obtain a waterway barrier permit necessary for the construction of the piling pad at Beales Creek, which was a prerequisite for the piling work; (e) a series of directions from WICET which restricted and varied the piling work being carried out on the Site; and (f) a complete redesign of the Pyealy Creek Bebo Arch due to the fact that the drawings issued to CMC failed to match existing site conditions. 4 Court Book Vol 2, Contract, Section E – General Conditions of Contract, clause 24, p 32, CMC.508.001.1651 at .1687. 5 Exhibit 2, CMC.503.023.2606 and CMC.503.023.2607. 6 Exhibit 1, CMC.513.002.0055; Exhibit 2, CMC.505.072.6016; General Conditions clause 35.2 and Annexure A, p 4. -- 11 of 304 -- 12 [13] As a result of the abovementioned issues, inter alia, CMC ultimately achieved Practical Completion on 26 March 2013. The last activity finished was the Pyealy Creek Bebo Arch.7 Issues [14] CMC claims about $14.5 million arising from four major claims: (a) a claim for variations and directions which affected the bulk earthworks on the Reclamation C Bunds, in the sum of $5,889,858.89 (the Earthworks Claim also referred to as Variation 141); (b) a claim for variations and directions which affected the piling works for the Beales Creek Bridge and the Rail Receival Bridge, in the sum of $1,636,316 (the Piling Claim also referred to as Variation 142); (c) a claim for variations to the design of the Pyealy Creek Bebo Arch, in the sum of $1,371,249 (the Pyealy Creek Bebo Arch Claim also referred to as Variation 103); (d) a claim for delay costs for the works as a whole (the Delay Claim also referred to as Variation 17). [15] There are also two smaller, discrete, claims in respect of which CMC claims about $310,000 (approximately half of which remains in dispute) as variation costs relating to increased environmental management (the Environmental Management Claim) and a change from the installation of Geolon 400 to the installation of Geolon 600 (the Geolon 600 Claim). CMC also has an alternative claim for payment of damages for additional costs incurred in relation to a latent condition or misrepresentation, concerning the GPN Borrow Pit (the GPN Borrow Pit Claim). This claim is an alternative claim to the Earthworks Claim. [16] WICET itself has brought a counterclaim for $12.5 million including: (a) alleged overpayments made to CMC under the Building and Construction Industry Payments Act 2004 (Qld) (the BCIP Act); (b) liquidated damages (which is relevant to the Delay Claim); and (c) repayment of amounts WICET alleges it overpaid CMC under the Contract which have been re-valued in the Final Certificate (the Final Certificate Claim). [17] I consider CMC’s claims in the following order: (a) Earthworks Claim (Variation 141); (b) Alternative Claim (GPN Borrow Pit); (c) Piling Claim (Variation 142); (d) Pyealy Creek Bebo Arch Claim (Variation 103); 7 T11-56, lines 24-26. -- 12 of 304 -- 13 (e) Delay Claim (Variation 17) including WICET’s claim for liquidated damages; (f) Minor claims: (i) Environmental Management Claim (Variation 90); (ii) Geolon 600 Claim (Variation 63); and (g) Interest and bank guarantee. [18] Because the issues in relation to each of these claims are numerous they are best identified when dealing with the individual claim. Similarly, any relevant findings of fact are also dealt with in respect of each claim. The starting point however, for a consideration of both the claims of CMC and WICET, is the relevant terms of the contract. Relevant Terms of the Contract [19] The Contract comprises the following parts:8 (a) a formal instrument of agreement; (b) modified AS2124-1992 General Conditions of Contract (the General Conditions); (c) Section C – Contract Schedules;9 (d) Section F – Special Conditions of Contract (including numerous lengthy appendices); and (e) Section D – Scope of Work (including appendices which comprised Contract Drawings, Specifications (Aurecon Hatch), Scope of Works, 3D Model, Department of Main Roads Drawings and Department of Main Roads Specifications). The Contract is lengthy and is found in Volumes 2 to 6 of the Court Book. The General Conditions are based on the standard AS2124 provisions. The parties did, however, agree on relevant variations to some of the standard provisions, including clause 36 which deals with delay or disruption costs. [20] The parties differ as to the proper construction of numerous contractual clauses. In identifying in this section of the judgment the relevant clauses of the contract I highlight, on a preliminary basis only, the primary construction issues. I resolve these issues when dealing with the individual claim. The Contract is a commercial contract. It should therefore be construed in accordance with the principles identified by French CJ, Nettle and Gordon JJ in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd.10 A number of the relevant clauses and schedules are lengthy and have therefore been incorporated into this judgment as Annexure A. 8 Exhibit 2A, Court Book, Vols 2-6. 9 Exhibit 2, CMC.508.001.1786. 10 (2015) 256 CLR 104 at 47-51 and 116-117. -- 13 of 304 -- 14 [21] The formal instrument of agreement, in clause 5.1, states an order of precedence for the various contractual parts. This order of precedence follows the order of the parts identified in [19] above. Clause 5.2 of the formal instrument of agreement refers to the order of precedence in the following terms: “Without limiting any part of the General Conditions of Contract, if there is any ambiguity, conflict, discrepancy or inconsistency between the documents comprising the Contract, the order of precedence listed in Clause 5.1 above applies.” [22] Clause 3 of the formal instrument of agreement deals with payment of the contract sum: “Subject to the Contractor properly performing its obligations under the Contract, the Principal shall pay the Contractor the Contract Sum in accordance with the Payment Schedule which appears in Section C of the Contract.” The term “Contract Sum” is defined in the General Conditions to mean – “where the Principal accepted a lump sum, the lump sum; (a) where the Principal accepted a lump sum, the lump sum; (b) where the Principal accepted rates, the sum ascertained by calculating the products of the rates and the corresponding quantities in the Bill of Quantities or Schedule of Rates; (c) where the Principal accepted a lump sum and rates, the aggregate of the sums referred to in paragraphs (a) and (b), including provisional sums but excluding any additions or deductions which may be required to be made under the Contract.” [23] The term “Payment Schedule” in clause 3 of the formal instrument of agreement is not a defined term in the General Conditions. [24] Section C contains contract schedules.11 C-3 is the contract price schedule. C-3.1 contains a summary of the Contract Sum. C-3.2 identifies lump sum prices and C-3.3 contains the schedule of rates. C-3.4 deals with provisional sums. Schedule C-3 is set out in Annexure A. [25] Clause 33 of the General Conditions deals with the progress and programming of the works. Clause 33.1 provides that the Contractor shall not suspend the progress of the whole or any part of the work except where the suspension is directed or approved by the Principal’s Representative under clause 34. Clause 33.1 relevantly provides that if compliance with the direction causes the Contractor to incur more or less cost than otherwise would have been incurred had the Contractor not been given the direction, the difference shall be valued under clause 40.5. 11 CMC.508.001.1783; Court Book Vol 3, tabs 5.1 and 5.2. -- 14 of 304 -- 15 [26] Clause 33.2 concerns the construction program. Clause 33.2 provides that a “construction program” is a statement in writing showing the dates by which, or the times within which, the various stages or parts of the work under the Contract are to be executed or completed. Clause 33.2 requires the Contractor to furnish to the Principal’s Representative a construction program within the time and in the form specified in the Special Conditions of Contract at Appendix F2 and to revise the construction program as specified in those Special Conditions. Clause 2.2 of the Special Conditions contained in Appendix F2 requires the Contractor’s program to be developed using Critical Path Method and presented on a time-scaled bar chart fully continuous in logic that clearly highlights the critical path(s) throughout the network. Pursuant to clause 2.5 of Appendix F2, CMC submitted a construction program that was approved as suitable by WICET. This program became the Baseline Program. Clause 2.5 provides that it is the Baseline Program against which actual time performance will be measured and further, that no changes would be made to the Baseline Program without the prior agreement, in writing, of the Principal’s Representative. It is common ground that there was only one Baseline Program approved by WICET and no revised Baseline Program was ever approved by WICET.12 [27] Clause 34 of the General Conditions deals with suspension of the works. Clause 34.1(b) provides that if the Principal’s Representative considers that the suspension of the whole or part of the work under the Contract is necessary for the protection or safety of any person or property, the Principal’s Representative shall direct the Contractor to suspend the progress of the whole or part of the work under the Contract for such time as the Principal’s Representative thinks fit. Clause 34.4 deals with the cost of such a suspension. Any cost incurred by the Contractor by reason of a suspension under clause 34.1 or 34.2 is borne by the Contractor. However, if the suspension is due to an act or omission of the Principal, the Principal’s Representative or an employee, consultant or agent of the Principal and the suspension causes the Contractor to incur more or less cost than otherwise would have been incurred but for the suspension, the difference shall be valued under clause 40.5. This wording is similar to clause 33.1, which also provides that if the Contractor has incurred more or less cost than otherwise would have been incurred had the Contractor not been given the relevant direction, the difference is also valued under clause 40.5. [28] Clause 35 of the General Conditions deals with the time for commencement and Practical Completion. Clause 35.2, when read with Schedule C-5 “Key Dates”,13 identifies the date for Practical Completion as 30 August 2012. [29] Clause 35.5 concerns extensions of time for Practical Completion. Clause 35.5 provides that if the Contractor is or will be delayed in reaching Practical Completion by one of the causes identified in (a) or (b), then it is entitled to give the Principal’s Representative a written claim within 28 days after the delay occurs, seeking an extension of time for Practical Completion. The causes include delays caused by the Principal or the Principal’s Representative and an increase in actual quantities of work being greater than the quantities determined by reference to the upper limit of accuracy stated in the annexure. The annexure identifies the limits of accuracy applying to quantities for which the Principal accepted a rate or rates (clause 3.3(a)) as being an upper limit of 20% and a 12 T32-6, lines 26-31. 13 CMC.508.001.1594; Court Book Vol 3, tab 5.4. -- 15 of 304 -- 16 lower of 20%.14 Another cause identified by clause 35.5(b)(iv) is a variation directed under clause 40 of the General Conditions. There are, however, limitations to CMC’s ability to claim an extension of time. First, the cause of the delay must be a cause listed in the fourth paragraph of clause 35.5. Further, CMC is required to demonstrate that the activities delayed are on the critical path in the construction program referred to in clause 33.2. A further restriction is that where more than one event causes concurrent delays in achieving Practical Completion and the cause of at least one of those events but not all of them, is not a cause referred to in the fourth paragraph then to the extent that the delays are concurrent, CMC is not entitled to an extension of time for Practical Completion. Clause 35.6 is the liquidated damages clause. Clause 35.7, when read with the annexure, places a limit on liquidated damages of 10% of the Contract Sum. The full text of clause 35 is set out at Annexure A. [30] Clause 36 concerns delay or disruption costs. It is contingent on the Contractor having been granted an extension of time under clause 35.5 for any delay caused by an event listed in clause 35.5(b)(i), relevantly delays caused by the Principal or the Principal’s Representative or agent. The Principal is required to pay to the Contractor “such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay and for on-Site overheads attributable to the delay valued by the Principal’s Representative under Clause 40.5”. The Principal’s Representative’s valuation is required to exclude any off-Site overheads or profit. The term “Direct Costs” is defined in clause 2 to mean costs that are reasonably and necessarily incurred by the Contractor and which do not include any profit, loss of profit or off-Site overheads. The full text of clause 36 is set out in Annexure A. [31] Clause 40 deals with variations. Clause 40.1 identifies variations to the work as including directions by the Principal Representative to the Contractor to either increase, decrease or omit any part of the work under the Contract or to change the character or quality of any material or work or to execute additional work. Clause 40.3 provides that unless the Principal’s Representative and the Contractor agree upon the price for a variation, the variation directed or approved by the Principal’s Representative under clause 40.1 shall be valued under clause 40.5. Clause 40.5 is not only the basis for valuing a variation; it is also the clause referred to in clauses 33.1, 34.4 and 36. It is an important provision in the determination of the present dispute: “40.5 Valuation Where the Contract provides that a valuation shall be made under Clause 40.5, the Principal shall pay or allow the Contractor or the Contractor shall pay or allow the Principal as the case may require, an amount ascertained by the Principal’s Representative as follows– (a) if the Contract prescribes specific rates or prices to be applied in determining the value, those rates or prices shall be used; (b) if Clause 40.5(a) does not apply, the rates or prices in a Priced Bill of Quantities or Schedule of Rates shall be used to the extent that it is reasonable to use them; 14 CMC.508.001.1746. -- 16 of 304 -- 17 (c) to the extent that neither Clause 40.5(a) or 40.5(b) apply, reasonable rates or prices shall be used in any valuation made by the Principal’s Representative; (d) in determining the deduction to be made for work which is taken out of the Contract, the deduction shall include a reasonable amount for profit and overheads; (e) if the valuation is of an increase or decrease in a fee or charge or is a new fee or charge under Clause 14.3, the value shall be the actual increase or decrease or the actual amount of the new fee or charge without the regard to overheads or profit; (f) if the valuation relates to extra costs incurred by the Contractor for delay or disruption, the valuation shall include a reasonable amount for overheads but shall not include profit or loss of profit; (g) if Clause 11(b) applies, the percentage referred to in Clause 11(b) shall be used for valuing the Contractor’s profit and attendance; and (h) daywork shall be valued in accordance with Clause 41.” [32] The term in clause 40.5(b) “Schedule of Rates” is defined in clause 2 of the General Conditions to mean: “any schedule included in the Contract which, in respect of any section or item of work to be carried out, shows the rates or respective rates of payment for the execution of that work and which may also include lump sums, provisional sums, other sums, quantities and prices.” [33] I have already dealt with the Schedule of Rates contained in C-3.15 There is no dispute between the parties that Schedule C-3 constitutes a “Schedule of Rates”. Schedule C-4 deals with rates for pricing variations.16 It provides that variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s Representative. Schedule C-4.2 deals with the Daywork Rates. Schedule C-4.2 lists a schedule of Daywork labour rates.17 Immediately behind this Schedule is a document entitled “Schedule of Daywork, Indirect Personnel and Facilities Rates”. This document gives a rate which is described as “Overall Composite Daily Rate (includes Staff and facilities)” of $38,000 per day.18 There is a dispute between the parties as to whether Schedule C-4 constitutes a “Schedule of Rates” for the purposes of clause 40.5(b) and in particular Schedule C-4.2. The full text of clause 40, together with relevant extracts from Schedule C-4 are set out in Appendix A. There is a further dispute as to whether the Overall Composite Daily Rate constitutes a contractually prescribed specific rate for the purposes of clause 40.5(a) in valuing a claim for delay and disruption under clause 36. 15 CMC.508.001.1560. 16 CMC.508.001.1570. 17 CMC.508.001.1578. 18 CMC.508.001.1580. -- 17 of 304 -- 18 [34] Clause 41 deals with Dayworks. The full text of clause 41 is set out in Annexure A. The Principal’s Representative may direct that variations under clause 40 shall be carried out as Daywork. [35] Clause 42 deals with certificates and payments, including in clause 42.8 the Final Certificate. The full text of clause 42 is set out in Annexure A. [36] There are a number of construction issues that arise for consideration. WICET submits that it is important for the Court to precisely identify whether the delay events for CMC’s Earthworks Claim (Variation 141) should be viewed as variations under clause 40.1, directions under clause 33.1 or suspensions under clause 34. This is because these clauses prescribe different things which are to be valued. This raises for consideration the proper construction of clause 40 and in particular what constitutes a variation for the purposes of clause 40.1. Further, if the delay events for the Earthworks Claim are to fall within clauses 33.1 or 34 rather than 40.1, WICET submits that they should be valued on the basis of cost. CMC however, submits that whether it has incurred more or less cost is a threshold question, not the measure of CMC’s entitlement. Once that threshold question is overcome the valuation, according to CMC, proceeds (similar to a variation) in accordance with the mechanisms set out in clause 40.5. This raises for consideration the proper construction of clauses 33.1 and 34.4 and in particular the words “to incur more or less cost than otherwise would have been incurred” (but for the direction or suspension). [37] As to clause 36, WICET submits that money claimable under this clause in respect of the Delay Claim (Variation 17) is to be calculated only by reference to cost which would not have been incurred at all, but for the delay. WICET further submits that there must be a causal link between the delay event and cost incurred. CMC’s Delay Claim is only for on-Site overheads it says are attributable to the delay. CMC construes clause 36 to permit these on-Site overheads to be valued by the Principal’s Representative pursuant to clause 40.5. This, according to CMC, would permit the Overall Composite Daily Rate of $38,000 found in Schedule C-4.2 to apply to each day of any extension of time. WICET disputes this contention. WICET also disputes CMC’s submission, that by reference to pre-contractual negotiations, the Overall Composite Daily Rate constitutes an agreed rate of CMC’s on-Site overheads to be used should CMC be granted any extension of time. [38] These and other contractual construction issues are addressed in more detail in respect of the relevant individual claim. CMC’s primary lay witnesses [39] CMC called among other witnesses: (a) Mr Ben Vance, the Project Manager until September 2012;19 (b) Mr Manish Pancholi, the Project Manager from September 2012 until Practical Completion;20 19 T7-58, lines 9-11. 20 T16-3, lines 35-47. -- 18 of 304 -- 19 (c) Mr John Henderson, the Senior Engineer responsible for the construction of the Beales Creek Bridge and the Rail Receival Bridge; (d) Mr Matthew Grey, the Senior Engineer responsible for the Pyealy Creek Bebo Arch; (e) Ms Veronika Haber (Goreva), the engineer with responsibility (under the supervision of Mr Henderson and then Messrs Vance and Pancholi);21 for the Beales Creek Bridge and Rail Receival Bridge; and (f) Mr James Barry, CMC’s Project Superintendent. [40] Apart from Mr Barry all of the primary witnesses called by CMC were engineers who worked on the Project. Apart from Mr Barry, none of CMC’s primary witnesses now work for CMC and none have any financial interest in the outcome of the litigation.22 (a) Ben Vance [41] Mr Vance was the on-Site Project Manager for CMC from the start of the project until September 2012. He is an experienced earthworks project director and engineer. By the time he took up his post as Project Manager he had some 12 years’ experience in senior roles on construction projects and had a further eight years of experience working as an engineer. He has significant experience in working on projects involving bulk earthworks and the construction of bridges.23 [42] Mr Vance gave evidence over a period of eight days including being cross-examined for approximately two days. He gave detailed evidence, by reference to contemporaneous documents, as to the progress of the works undertaken by CMC pursuant to the Contract, including the delays and variations the subject of CMC’s claims. I deal with the details of his evidence below in relation to the specific claims. In observing Mr Vance in giving evidence over the course of eight days I formed a favourable view of his credit and considered him an impressive witness. He demonstrated a good recollection of events, which reflected his close involvement in those events. [43] WICET submits however, that Mr Vance was not a witness of credit and was “an advocate for CMC who was necessarily defensive of a job, the profit margin for which was under continual scrutiny”.24 Senior counsel for WICET went further in oral submissions suggesting that “some parts of [Mr Vance’s] evidence … are not the answers of an honest witness …”25 [44] WICET seeks to support these submissions by reference to discrete pieces of Mr Vance’s evidence and certain internal emails, some of which I deal with below. My preliminary observation however, is that there is very little dispute of fact in this case. Whether delays or variations to the GC09 Project were the fault of WICET rather than that of CMC may 21 T15-14, lines 21-23. 22 CMC’s Written Closing Submissions, [27]. 23 CMC’s Written Closing Submissions, [33]; T2-56, lines 37-39; T2-59, lines 30-45; T2-56, lines 20-24. 24 WICET’s Written Closing Submissions, [21]. 25 T32-41, lines 12-13. -- 19 of 304 -- 20 be largely resolved by reference to contemporaneous documents, uncontested evidence and of course, the relevant terms of the Contract. [45] In paragraphs 23 to 65 of its written closing submissions, WICET identifies 10 aspects of Mr Vance’s evidence which are said to reflect poorly on his credit. Given that I consider below Mr Vance’s evidence in detail in respect of each relevant claim it is sufficient to deal with three aspects raised by WICET. [46] The first is in relation to Variation 6 which is not a variation in dispute in the present proceedings. In respect of this variation CMC, by a letter signed by Mr Vance,26 claimed an additional amount for “Fauna Spotter/Catcher (not Habitat Tree Related)”. This was in circumstances where CMC had in fact included an amount for Fauna Spotters/Catchers in its tender allowance.27 WICET submits that the following exchange in cross-examination shows that Mr Vance was “evasive” and “dishonest”:28 “You’d already allowed for cost of $17,135 for fauna spotter/catchers, but you were making this claim as if no such allowance had been made?--- The advice from our commercial department was that we’d allowed that in error and that our claim should be based on the – on the contract, which this did not require us to do this.”29 “I want to put to you squarely that to the extent that you deleted the reference to the budget allowance of $17,135, that was an act of dishonesty on your part?--- I wouldn't agree with that, and I’ll explain why, if you don’t mind. At the end of the day if we miss something we have no chance of recovering that cost. If we accidentally include something and give that back, there is absolutely no chance that if we fail to include something we should have, like miss a roller out of earthworks, that we will ever recover that cost. So the view taken was that this is a contractual matter, not a matter of exactly what we did or didn’t allow for.”30 [47] In my view, these passages do not support WICET’s submission that Mr Vance was “evasive” and “dishonest”. His evidence was to the effect that even though, in his opinion, CMC had internally allowed for this item, he ultimately deferred to his commercial managers on a question of contractual entitlement. [48] Another aspect identified by WICET which is said to reflect adversely on Mr Vance’s credit is his response to an email sent by Mr Ahern (an owner of CMC). Mr Ahern’s email was in relation to Variation 104 which concerned raising the Reclamation C Bunds. Whilst work commenced on Variation 104 it was ultimately abandoned. In the relevant email Mr Ahern enquired of Mr Vance: “Surely you and Jamie (Mr Barry) can come up with an option/solution to profiteer immensely out of the situation?”31 Mr Vance responded: “Working on it; As I said this situation suggests better opportunities than 10%.”32 26 Exhibit 99, CMC.503.020.7425. 27 T7-51, lines 18-20. 28 WICET’s Written Closing Submissions, [27]. 29 T7-52, lines 35-39. 30 T7-52, line 43 – T7-53, lines 1-3. 31 Exhibit 107, CMC.502.027.2218. 32 Exhibit 107, CMC.502.027.2218. -- 20 of 304 -- 21 [49] In cross-examination Mr Vance suggested that his response to Mr Ahern’s email was “fair comment”: “I think that’s a – a fair comment. I mean, we’ve done a lot of day works on this job and made, basically, nothing out of it. This is a variation. You’d hope to do better than that.”33 [50] WICET submits that this evidence reveals that Mr Vance was looking for profit for CMC rather than applying the terms of the Contract.34 Mr Ahern gave evidence and explained his email which uses the word “profiteering” as follows: “What did you mean by that email Mr Ahern?--- I meant by – you know, we’re a commercial entity and attempting to increase our profit on a variation because we – well, essentially the project had been – this is at a point in time where the project staff were becoming quite frustrated with the continuous changing and we were being delayed and disrupted and, you know, we work on relatively fine profit margins in relation to the actual activity cost and with – it doesn’t take long for a delay or disruption or change in methodology for our margin to be eroded. So we were attempting to try and claw back some profitability through a change in scope. However, bearing in mind we have a contract, we have schedule rates for each work activity, we have variation rates and day work rates, which we have to abide by, and we’ve got Worley Parsons administering the contract. So the opportunity to profiteer immensely isn’t all that great.”35 [51] It was suggested to Mr Ahern in cross-examination that his email reveals CMC’s attitude to the whole of the Contract. Mr Ahern rejected this suggestion stating that CMC had suffered a significant loss on the Project.36 [52] The reference to “profiteering” in Mr Ahern’s email may therefore be understood as CMC seeking to increase its profit margin in relation to Variation 104 in order to recoup losses that had already been incurred from delays and disruptions. Mr Ahern’s use of the word “profiteering” in his email and Mr Vance’s response does not, in my view, adversely reflect on Mr Vance’s credit. [53] WICET also seeks to impugn Mr Vance’s credit by reference to his email response dated 4 December 2012 to Mr McGilvray, who was formulating CMC’s Earthworks Claim.37 The methodology used by Mr McGilvray to calculate this claim is referred to as “the measured mile”. This methodology requires a consideration of actual production rates. Mr McGilvray, rather than examining production rates over a period of time, sought to use the best week on the project.38 Mr Vance did not agree with McGilvray’s approach. His responses in cross-examination on this topic rather than reflecting poorly on his credit demonstrate that Mr Vance was willing to make appropriate concessions: “And I want to put some propositions to you: what the reality – or what’s happening here with this email is that the commercial manager of CMC is telling you, as the project manager, to make adjustments to the claim which 33 T7-76, lines 25-27. 34 WICET’s Written Closing Submissions, [37]. 35 T15-77, lines 1-12. 36 T15-77, lines 40-43. 37 CMC.502.020.0348. 38 T8-31, lines 1-7. -- 21 of 304 -- 22 have enormous significance in terms of dollars?--- If you look at the date, on the 4th of December I wasn’t the project manager. I agree with the rest of what you’re saying. And you’re making those adjustments?--- I’ve made that in the spreadsheet and sent it back to him. I disagreed with those adjustments, but it was not my call. … And I want to suggest to you that this email – your alteration to the figures, in the way you did, is dishonest?--- As I said, I agree it’s the wrong thing to do. But what period you take for the measured mile is probably something people can disagree about. I wouldn't have submitted the claim in that form, but it was not my call at the time. I guess with measured mile you’ve got a choice between a larger claim, or a stronger claim, which has a better basis. Using a shorter period generates a larger claim, but in my opinion it doesn’t represent what happened or the – a fair answer. So I would tend to agree with you that that claim is inflated by what’s been done there.”39 [54] This was not the only concession made by Mr Vance. As I discuss below in considering the Earthworks Claim, CMC now accept in light of Mr Vance’s evidence, that any period of delay in the construction of the Reclamation C Bunds ceased on or about 18 February 2012. This evidence of Mr Vance which significantly shortened the period of delay claimed by CMC in relation to the Earthworks Claim, was forthcoming in evidence-in-chief.40 Mr Vance made other concessions in cross-examination which included the fact that he was being paid by CMC for his time in giving evidence41 and further, that while he had no problems with his initial Worley Parsons’ counterpart, Matthew Knowles, Mr Vance’s relationship with Mr Knowles’ replacement, Andre Miroshnikoff, was not good.42 [55] Ultimately this case does not rest on an assessment of the credibility of the relevant witnesses. To the extent however that WICET seeks to impugn Mr Vance’s credibility I am not persuaded that I should depart from my initial favourable assessment of Mr Vance’s creditworthiness. (b) Manish Pancholi [56] Mr Pancholi was CMC’s Project Manager from September 2012 until March 2013. He is an experienced engineer. I found Mr Pancholi to be an honest and forthright witness. I accept CMC’s submissions that Mr Pancholi’s evidence should be accepted as reliable.43 39 T8-31, lines 40-47; T8-32, lines 19-27. 40 T3-50, lines 31-36; T3-62, lines 12-15. 41 T7-58, lines 37-41. 42 T7-58, lines 24-31. 43 CMC’s Written Closing Submissions, [45]. -- 22 of 304 -- 23 (c) John Henderson [57] Mr Henderson was the Senior Engineer responsible for the construction of the Beales Creek Bridge and the Rail Receival Bridge. There was no real challenge to his credibility and I accept his evidence as reliable. (d) Matthew Grey [58] Mr Grey was CMC’s Senior Engineer responsible for the Pyealy Creek Bebo Arch. There is no dispute between the parties that the variations to the design of the Pyealy Creek Bebo Arch (Variation 103) constitute a variation under the Contract. The cost of these variations to the design and the time taken to construct the redesigned Pyealy Creek Bebo Arch are however matters of dispute between the parties. Mr Grey was cross-examined in relation to the delay concerning the construction of the redesigned Bebo Arch. I deal with his evidence in this respect when considering the Delay Claim (Variation 17). Having observed Mr Grey, he was in my view, a witness of credit who did not seek to exaggerate any aspect of his evidence. He demonstrated a detailed knowledge of the effect of the redesign of the Bebo Arch on both the delay to and cost of construction. (e) Veronika Haber [59] Ms Haber (Goreva) was CMC’s engineer with responsibility (under the supervision of Mr Henderson and then Messrs Vance and Pancholi) for the Beales Creek Bridge and Rail Receival Bridge. Her evidence was primarily relevant to the Piling Claim (Variation 142). Ms Haber impressed me as a witness who gave careful consideration to each question posed. Her answers were direct and to the point. I accept her as both a truthful and reliable witness. (f) James Barry [60] Mr Barry who was CMC’s Project Superintendent was also a credible witness. There was no serious challenge to the reliability of his evidence. WICET’s primary lay witnesses (a) Andre Miroshnikoff [61] Mr Miroshnikoff is an experienced Senior Project Engineer/Project Manager.44 He was employed by Worley Parsons in April 2012 as a package manager for three contracts, namely GC07, GC08 and GC09.45 Mr Miroshnikoff was not therefore solely involved in the GC09 Project, nor did his involvement cover the first seven months of the GC09 Project from September 2011 to March 2012.46 He was not located on the GC09 site, although he visited and drove through it with some regularity.47 Mr Miroshnikoff had an 44 T17-40, lines 1-40. 45 T17-42, lines 21-23 and lines 40-42. 46 CMC’s Written Closing Submissions, [59]. 47 T18-37, line 38 – T18-38, lines 16-17; CMC’s Written Closing Submissions, [59]. -- 23 of 304 -- 24 “Inspector/Surveillance Officer”, namely Mr Scott Karandrews.48 Mr Miroshnikoff reported to the Construction Manager, Mr David Walls. [62] In mid-2013 Mr Miroshnikoff was seconded to WICET and was subsequently employed full time with WICET from about April 2014 to November/December 2015.49 [63] I accept CMC’s submission that there were significant gaps and errors in Mr Miroshnikoff’s recollection.50 There are two ready explanations for these deficiencies. First the mere passing of time.51 The second and more compelling explanation however is that unlike CMC’s witnesses, Mr Miroshnikoff was responsible for three rather than one contract and had a divided focus. Not only were there gaps in his recollection, there were also obvious errors he made in valuing claims and in particular in relation to the Bebo Arch.52 [64] His evidence must be approached with some caution given his limited involvement with the GC09 Project. (b) David Enright [65] Mr Enright is presently employed as a project manager and commercial manager with Worley Parsons.53 He commenced with Worley Parsons as a senior contracts administrator in or around March 2011.54 He is not an engineer but has a Bachelor of Science in information systems and a Masters degree in business and project management.55 He was involved in compiling the tender documents and co-ordinating site visits during the tender period.56 [66] Mr Enright’s evidence was limited to discrete topics which included meetings between WICET and CMC representatives in respect of access across Beales Creek and the pre-tender site visit to the GPN Borrow Pit. He did not have a good recollection of specific discussions that occurred on those occasions.57 Nor did Mr Enright have a good recollection of what occurred during the site visit on 10 February 2011 in relation to the GPN Borrow Pit.58 CMC submits that Mr Enright’s inability to recollect specific discussions reflects poorly on his general credit.59 The fact that Mr Enright did not have a good recollection is, as WICET submits, unsurprising given that the matters in question occurred over five years ago.60 It remains the case however that Mr Enright’s evidence was of limited assistance. 48 T17-43, lines 1-10. 49 T17-41, line 42 – T17-42, lines 8-9. 50 CMC’s Written Closing Submissions, [60]. 51 WICET’s Reply Submissions, [34]. 52 T18-68, line 34 – T18-70, line 29; CMC’s Written Closing Submissions, [60](b). 53 T16-35, lines 6-7. 54 T16-35, line 45, T16-36 lines 1-2. 55 T16-35, lines 10-12. 56 T16-36, lines 30-40. 57 See for example T16-41, lines 4-10; T16-47, lines 13-17; T16-63, lines 25-32; T16-64, lines 1-17 and T16-66, lines 30-39. 58 T17-13, line 39 – T17-14, line 2. 59 CMC’s Written Closing Submissions, [58]. 60 WICET’s Reply Submissions, [32]. -- 24 of 304 -- 25 (c) Scott Karandrews [67] Mr Karandrews has 14 years’ experience working as a superintendent in the construction industry.61 He is a plumber and drainer by trade.62 He was employed by Worley Parsons as a client superintendent to oversee the GC09 package of works.63 In evidence-in-chief he stated that he performed that role from in or about October 2011 to 22 December 2012.64 He clarified this evidence in cross-examination. He actually commenced with Worley Parsons in July 201165 but was on-Site in October 2011.66 CMC, by reference in part to Mr Karandrews’ clarification of his commencement date with Worley Parsons, submits that his evidence shows a lack of attention to or disregard for detail.67 I do not accept this submission. I view his answers given in cross-examination as to when he commenced with Worley Parsons as nothing more than an appropriate clarification of his evidence-in-chief. [68] Apart from when he was on leave, Mr Karandrews was on-Site every day.68 Initially he reported to Matthew Knowles and David Walls and subsequently to Andre Miroshnikoff and Chris Cilliers.69 Mr Karandrews maintained a hard copy daily diary and subsequently, at Worley Parsons’ request, an electronic diary.70 [69] Given that Mr Karandrews was on-Site on a daily basis I had the expectation that he would be able to assist the Court by giving detailed evidence of relevant events. His evidence was however more general in nature.71 While I accept him as a truthful witness he was, on occasions, unable to recollect important events or conversations. For example, in relation to the delay to CMC’s work at the Reclamation C Bunds arising from a cultural heritage issue, Mr Karandrews’ evidence was as follows: Now, do you recall an issue arising with scar trees giving rise to a cultural heritage issue?--- Yes. And are you able to say in relation to what area of the site that issue arose?--- The scar tree? Yes?--- I can’t recall, sorry. Do you have – recall having any discussion with any representative of CMC about that issue when it arose?--- Yes. I believe it was Mr Vance. And today do you have any recollection of that discussion?--- I’m having trouble remembering back that far. All right. Could I ask if you could be shown WIC.504.030.3408 at 3426. Now, Mr Karandrews, is this an extract of what you refer to as your electronic diary?--- Yes. That’s correct. 61 T21-3, lines 29-30. 62 T21-3, line 27. 63 T21-3, lines 45 – T21-4, line 1. 64 T21-3, lines 42 – T21-4, line 2. 65 T21-58, line 24. 66 T21-59, lines 5-7. 67 CMC’s Written Closing Submissions, [63]. 68 T21-4, lines 10-11. 69 T21-4, lines 13-15. 70 T21-4, lines 20-33. 71 See for example T21-38, line 10 – T21-39, line 43. -- 25 of 304 -- 26 And it’s a page of your electronic diary for 9 January 2012?--- Yes. Would it assist your recollection as to when the cultural heritage issue was resolved to have regard to your electronic diary?--- Yeah. With your Honour’s leave? HIS HONOUR: Yes. Thank you. MR KELLY: I’d ask you, having regard to that extract from your electronic diary, are you able to say to the court when you recall the issue as to what I’ve termed the cultural heritage issue was resolved?--- Yeah. So the cultural heritage issue was resolved that day. So after reading this diary I now understand the area in which we’re talking about. So it was the cultural heritage area that was at access B on the rec C bunds. Yes. Can I ask you to – I’ve taken you through a period of time with the no-go zone maps and you’re now familiar with the period of the cultural heritage issue?--- Yep. In terms of your observations of CMC’s plant and equipment during that period of time of the no-go zone areas and the cultural heritage issue?--- Yep. How often were you on site during those periods?--- Every day that I was on roster. And during that period did you observe CMC’s plant on site?--- Yes, I did. And do you have any particular recollection today of observing CMC’s plant being on standby or not operating during this period?--- I don’t recall it being on standby. I believe the plant was working towards the rec C bunds and also on the overland conveyor corridor.”72 [70] Mr Karandrews’ difficulties in recollecting conversations that occurred in 2012 is unsurprising. It is the case however that the more detailed recollection of the witnesses called by CMC, such as Mr Vance, Mr Henderson, Mr Grey and Mr Barry, is largely uncontested. Jones v Dunkel inferences [71] Both parties submit that the other party has failed to call certain witnesses. For example, WICET submits that CMC’s failure to call Mr Storrier, who was a programmer for CMC during the GC09 Project, gives rise to a Jones v Dunkel inference.73 [72] Similarly, CMC submits that as WICET did not call the majority of the senior engineers and employees involved in the GC09 Project and who were directly involved in extensive conversations and written correspondence about which evidence has been given, that the relevant inference should be drawn. That is, the Court should draw the inference that nothing that any of these witnesses had to say would have assisted WICET’s case and, to 72 T21-17, line 15 – T21-18, line 15; to similar effect see T21-21, lines 20-25. 73 WICET’s Closing Submissions, [73] – [79]. -- 26 of 304 -- 27 the extent there is doubt or ambiguity in the evidence, the Court should resolve it against WICET.74 [73] As WICET correctly submits, no inference may be drawn unless evidence is given of facts requiring an answer. The rule only applies where a party is required to “explain or contradict” something.75 The evidence of the missing witness must be such that would elucidate a particular matter.76 Accordingly, rather than seek to apply the inference generally as submitted by CMC, I will have regard to any Jones v Dunkel inference only to the extent that it is necessary for me to make a relevant finding of fact. I would observe however, that WICET’s failure to call a number of senior engineers involved in the GC09 Project and in particular Mr Vance’s counterpart Mr Matthew Knowles, means that much of CMC’s evidence was uncontested and may be accepted. This observation does not require the drawing of any Jones v Dunkel inference, rather it is apparent from WICET’s case as presented. Approach to findings of fact [74] Given the thousands of documents tendered and the number of claims, I requested the parties to identify the specific findings of fact sought. CMC, in accordance with this request, has specified the findings of fact which it seeks in its written closing submissions and in Exhibit 429 which is entitled “Findings of Fact Sought by the Plaintiff (Variations 141, 142 and 17)”. As I have already observed, much of the evidence in this case is uncontested. To the extent that WICET takes issue with a particular finding of fact sought by CMC, this is noted in the third column of Exhibit 429. [75] Where a finding of fact is not disputed and based on my own assessment of the evidence, I have adopted the finding of fact sought by CMC. I refer to my own assessment of the evidence because of WICET’s qualification noted on Exhibit 429, namely that: “Where a reference to the Defendant’s Submissions is included in the third column, that reference identifies where the Defendant takes issue with the finding sought. Where no such reference is included, it should be taken that the Defendant does not admit the finding sought. Paragraphs within the identified range but which are not referred to in the table below are agreed.” CMC’s challenge to the expertise of Mr Abbott [76] Two experts were called to give programming evidence in respect of the delay events relevant both to the Earthworks Claim (Variation 141) and the Delay Claim (Variation 17). Mr Gerard King was called as the expert programming witness for CMC, while Mr Stephen Abbott was called as the expert programming witness for WICET. [77] These experts gave their evidence concurrently. Prior to the commencement of this concurrent evidence CMC filed written submission77 challenging Mr Abbott’s expertise. Mr Abbott has produced an expert report on delay dated 2 November 2015, a joint expert 74 CMC’s Written Closing Submissions, [28] and [29]; WICET’s Reply Submissions, [6]-[29]. 75 Jones v Dunkel (1959) 101 CLR 298 at 321; WICET’s Reply Submissions, [9](a). 76 Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at [169], [248]-[249], [266]; WICET’s Reply Submissions, [9](b). 77 CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016. -- 27 of 304 -- 28 report on delay with Mr King dated 28 April 2016, an expert report on earthworks dated 3 February 2016 and a joint expert report with Mr King on earthworks dated 20 May 2016. [78] In response to CMC’s written submissions, WICET filed written submissions dated 15 August 2016 and was granted leave to read and file an affidavit of Mr Abbott sworn 14 August 2016. After conducting a voir dire in which Mr Abbott gave evidence, I ruled that his expertise in programming had been established. I indicated that I would give reasons in my judgment. These are my Reasons.78 [79] CMC submits that Mr Abbott does not hold any qualification as an engineer generally or as a programmer specifically. In addition to the absence of a formal qualification of this kind, his CV does not disclose any significant study of, or direct experience in, a programming task. According to CMC what Mr Abbott’s CV discloses is experience in the construction industry, in the roles of carpenter, building foreman, project manager and state building manager. The construction works in which Mr Abbott has had direct experience involved the construction of buildings (as distinct from earthworks, bridges or roads). Most significantly, according to CMC, Mr Abbott’s CV does not identify any or any substantial work in programming.79 CMC therefore submits, by reference to the relevant authorities, that Mr Abbott has not demonstrated that by reason of specified training, study or experience he has become an expert.80 [80] CMC submits that the fact that a person has extensive involvement in aspects of construction does not make them an appropriately qualified expert to give evidence in specific sub-disciplines. CMC relies on the decision of Einstein J in Stockland (Constructors) Pty Ltd v Darryl I Coombs Pty Ltd.81 His Honour stated at [9] – [11]: “There is no doubt that Mr Farrant is, by his training, study and experience, shown to have acquired specialised knowledge in certain areas permitting him to express opinions wholly or substantially based upon that knowledge. In this regard he has acquired specialised knowledge in the following areas: ● quantity surveying expertise; ● the ability to read and understand architectural and building design drawings; ● construction and project management of construction projects including the overseeship of the construction process ● the making of arrangements for consultant specialists to prepare documents; ● the making of arrangements for the calling and letting of tenders. He has also had an extensive involvement in the programming of construction projects, the budgeting of those projects, site inspections of such projects, 78 T24-26, line 45 – T24-27, line 2 and T24-29, lines 1-5. 79 CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016, [8]. 80 CMC’s Submissions on Objections to Expert Reports of Mr Abbott dated 11 August 2016, [2], [3], [4] and [6], citing Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 744, Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 at [37], Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 3) (2013) 29 BCL 19 at [98] and Murphy v R (1989) 167 CLR 94 at 111. 81 [2004] NSWSC 323. -- 28 of 304 -- 29 contract administration and related activities. This is however essentially the role of an overseer. … Mr Farrant is not, however, a programmer with programming expertise in terms of the ability to assess the timing, the logic and methodology of the design and construction processes to be in a position to assess and determine with precision how the various disciplines and the works may be managed to create the ultimate ‘as built’ construction, but his construction and project management experience has permitted him to gain some general knowledge of some of these processes.” [81] Einstein J identified that Mr Farrant’s evidence purported to address 17 different areas of specialised knowledge. This included programming. His evidence was that he was “involved in the programming of projects”. Einstein J held that the witness was not qualified to express opinions in relation to matters of architecture, engineering, structural steel detailing and programming.82 As is evident from the discussion below, Mr Abbott’s experience in programming is entirely different to that of the expert considered by his Honour. [82] Whilst it is true that Mr Abbott does not have any formal qualifications in programming, the evidence reveals that he has extensive experience in the programming of construction projects. He has been involved in the construction industry for 36 years. As a result of that experience he has developed detailed knowledge of the construction process that he uses in the planning and programming of major construction projects. He was first exposed to formal planning and programming software in or about 1990. He has extensively used this programming software.83 Since 1990 he has provided planning and programming services in relation to major construction projects across Australia.84 In his affidavit Mr Abbott in paragraphs 7 to 25 details, in a non-exhaustive way, his programming experience from 1989 to the present. This includes the creation of contract programs for major projects and the review and critique of hundreds of construction programs. [83] He has personally provided forensic, planning and programming services on numerous construction projects across Australia in the various sectors of the industry including building construction, civil, mining, rail and oil and gas sectors.85 [84] In the voir dire, whilst Mr Abbott accepted that he was not “a specialist programmer”, he stated that the roles he has held in the industry have involved programming as an inherent part of those roles.86 Mr Abbott’s evidence was that he has the ability or the expertise to compile construction programs and is familiar with the relevant computer software.87 Mr Abbott’s established expertise therefore falls into a completely different category to that of the expert considered by Einstein J in Stockland. 82 At [14] and [15]. 83 Affidavit of Stephen John Abbott sworn 14 August 2016, [5](a), (c) and (d). 84 Affidavit of Stephen John Abbott sworn 14 August 2016, [5](e). 85 Affidavit of Stephen John Abbott sworn 14 August 2016, [22]. 86 T24-12, line 32 – T24-13, line 26. 87 T24-22, line 20 – T24-24, line 16. -- 29 of 304 -- 30 [85] I am satisfied from Mr Abbott’s reports, including his joint reports with Mr King, his affidavit sworn 14 August 2016 and his evidence given on the voir dire that he has substantial experience in the programming of construction projects. [86] CMC also seeks to challenge the admissibility of Mr Abbott’s expert reports on the basis that he was assisted in preparing the reports by a specialised programmer, Mr Wigginton. CMC submits that Mr Wigginton’s involvement leads to the problem identified by Stone J in Cooke v Commissioner for Taxation,88 namely that it was not possible to tell from the report which parts of it, if any, were prepared solely by the relevant expert. As her Honour noted: “To be admissible, an expert opinion must be wholly or substantially based on the expert witness’s specialised knowledge. … This requirement clearly cannot be met if it is partly based on the knowledge or opinions of someone else.” (citations omitted).89 [87] CMC’s submission should be rejected. The evidence of Mr Abbott given in the voir dire shows that in the compilation of his expert reports he was involved in instructing Mr Wigginton and reviewed his work.90 As Mr Abbott supervised and reviewed Mr Wigginton’s programming work for the purpose of compiling the report, coupled with the fact that Mr Abbott has the necessary programming knowledge to review Mr Wigginton’s work, I accept that the opinions expressed in the reports are those of Mr Abbott. [88] CMC makes further discrete objections to various paragraphs of Mr Abbott’s reports. On 17 May 2016, CMC delivered objections to the various paragraphs of the reports of Mr Abbott. On 11 August 2016, CMC expanded upon those objections by delivery of written submissions containing a schedule of detailed objections. Those objections constitute Annexure A to CMC’s written closing submissions and are pressed. WICET’s response to those objections constitutes Annexure D to its written closing submissions.91 Where it is necessary I deal with those specific objections when I come to consider in more detail Mr Abbott’s expert evidence. It may be generally observed however, that to the extent that Mr Abbott bases his opinion on an unproven assumption, instruction or fact, I treat his opinion in that respect as irrelevant.92 CMC’s challenge to the expertise of Mr Tsipis [89] Mr George Tsipis was called by WICET as its quantum expert. Mr Tsipis produced four reports dated 16 November 2015, 3 December 2015, 18 February 2016 and 16 May 2016 together with a joint expert report on quantum with CMC’s quantum expert, Mr Paul Roberts, dated 18 July 2016. [90] On 17 May 2016 CMC delivered objections to various paragraphs of the reports of Mr Tsipis. On 16 August 2016, CMC expanded upon those objections by delivery of 88 (2002) 51 ATR 223. 89 Cooke v Commissioner for Taxation (2002) 51 ATR 223 at [38]; see also Paino v Paino [2005] NSWSC 1313. 90 T24-13, lines 33-44; T24-14, lines 10-14; T24-9, lines 35-40. 91 See CMC’s Written Closing Submissions, [2388]; WICET’s Written Closing Submissions, [2162]. 92 See Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 per Heydon J at [66]; Eric Preston Pty Ltd v Euroz Securities Ltd (2011) 274 ALR 705 at [171]; Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QSC 179 per Martin J at [298] – [301]. -- 30 of 304 -- 31 written submissions with a schedule of detailed objections. Those detailed objections are included at Appendix B of CMC’s closing submissions and are pressed. WICET’s response to the objections to specific paragraphs of Mr Tsipis’ reports are set out in Annexure E to WICET’s written closing submissions.93 Similar to my approach in relation to the objections to specific paragraphs of Mr Abbott’s reports, I deal with CMC’s objections to Mr Tsipis’ reports when I consider the issue of quantum in relation to each claim. As a preliminary observation, however, where either Mr Tsipis or Mr Roberts as quantum experts express an opinion in relation to the proper construction of the Contract all parties accept that this is a matter for the Court. [91] CMC’s primary objection to the admissibility of Mr Tsipis’ reports is that he does not hold any qualifications in the field of quantity surveying (such as Bachelor of Science (Quantity Surveying) or a Bachelor of Applied Science (Quantity Surveying)).94 On 29 August 2016 I ruled that Mr Tsipis’ reports were admissible.95 These are my Reasons for that ruling. It may be accepted that quantity surveyors are recognised as having a skill set that relate to contracts and cost, particularly cost estimation and control, on construction projects.96 This does not mean, however, that a qualified engineer experienced in costing cannot also give a relevant expert opinion. This however would appear to be the basis of CMC’s objection. CMC submits: “It is accepted that Mr Tsipis is a qualified engineer and has broad experience in the construction industry and in preparing expert reports. But what is required is demonstrated expertise in the specialised field of quantity surveying.”97 [92] I accept WICET’s submission that the flaw in CMC’s objection is that it assumes that one must be a quantity surveyor in order to express the opinions which Mr Tsipis expresses. [93] Mr Tsipis is a qualified civil engineer with over 29 years’ experience in the design, procurement and construction of projects located in Australia, New Zealand and Asia. For the last 21 years, he has worked as a consultant to contractors, owners and lawyers in all aspects of contractual claims. This includes the assessment and formulation of variation, delay, prolongation, disruption and acceleration claims and the preparation of expert reports for dispute resolution proceedings including facilitation, mediation, adjudication, arbitration and litigation proceedings.98 [94] On 29 August 2016 I gave leave to WICET to read an affidavit of Mr Tsipis sworn 17 August 2016.99 In paragraph 5 of his affidavit Mr Tsipis gives an overview of his qualifications and experience. He refers to being a member of the Australian Cost Engineering Society and the Association for the Advancement of Cost Engineering. From evidence filed by CMC it appears that it is not difficult to obtain such 93 CMC’s Written Closing Submissions, [2389]; WICET’s Written Closing Submissions, [2164]. 94 CMC’s Submissions on Objections to Expert Reports of Mr Tsipis, [4]. The first degree is held by CMC’s expert Mr Roberts and the second degree is held by Mr Tsipis’ assistant, Mr Eric Lien. 95 T29-37, lines 34-38. 96 See Dura (Australia) Constructions Pty Ltd (in liq) v Hue Boutique Living Pty Ltd (No 3) [2012] VSC 99, affirmed on appeal in (2013) 41 VR 636. 97 CMC’s Submissions on Objections to Experts Report of Mr Tsipis, [7]. 98 See Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, Appendix A. 99 T29-7, lines 22-25. -- 31 of 304 -- 32 membership.100 Putting to one side Mr Tsipis’ membership of those organisations, his affidavit details extensive experience as a cost consultant and quantum expert in over 75 matters in the last 20 years. This experience commenced in or about 1986 when he carried out cost assessments while working for Evans Deakin Industries Ltd. In his affidavit Mr Tsipis explains that between 1986 and 1994 he progressed through the roles of assistant site engineer, site engineer, project engineer, project engineer and project manager and project engineer and design manager on a series of significant projects. He explains that during this period he gained: “… substantial on-site experience in a wide range of building, construction, engineering, mining, infrastructure and civil construction projects, including projects which involved works similar to the works carried out by CMC on the GC-09 works which are the subject of these proceedings, namely, bulk earthworks including the construction of earthen bunds and ponds, concrete foundations, bridgeworks, road construction and drainage works.”101 [95] From 1994 to the present Mr Tsipis was a principal at Evans & Peck and then E3 Advisory. In those roles, he has prepared claims for contractors, provided advice in relation to claims and provided independent quantum assessment services.102 Mr Tsipis explained that his professional qualifications as a registered professional engineer permit him to interpret designs, design changes, changes in materials and quantities and changed construction methodologies.103 This was emphasised by Mr Tsipis in response to certain questions in cross-examination on the voir dire: “And I don’t see here – correct me if I’m wrong – that you identify any professional experience in estimating costs or quantities for tenders?--- Estimating quantities. That’s all part of the process of putting together documents. Well, you haven’t been specifically employed in a role in your affidavit for estimating costs or quantities for tenders?--- But that’s what you do as an engineer.”104 [96] From both his evidence and reports and in particular his contribution to the joint report with Mr Roberts, I am satisfied that Mr Tsipis is qualified to give expert opinion in respect of the valuation of the claims the subject of these proceedings. [97] CMC also sought to challenge the admissibility of Mr Tsipis’ reports on the basis that he was assisted in the preparation of these reports by two other persons with formal qualifications and/or formal professional experience working as quantity surveyors, namely Mr Scott Echberg and Mr Eric Lien.105 Mr Tsipis stated in cross-examination in the voir dire however, that whilst he was assisted by Mr Lien, it was Mr Tsipis who assessed the claim.106 Mr Tsipis was personally involved in calculating and assessing cost.107 Mr Tsipis emphatically denied that Mr Lien and Mr Echberg had drafted virtually 100 See Affidavit of Shannon Carl Schwarz filed by leave on 29 August 2016. 101 Affidavit of George Zaharias Tsipis filed 29 August 2016, [5(d)]. 102 Affidavit of George Zaharias Tsipis filed 29 August 2016, [21]; see also [11], [12], [19] and [20]. 103 Affidavit of George Zaharias Tsipis filed 29 August 2016, [23]. 104 T29-15, lines 10-16. 105 CMC’s Submissions on Objections to Expert Reports of Mr Tsipis, [10], [11] and [12]. 106 T29-21, lines 34-40. 107 T29-23, lines 26-35 and T29-24, lines 16-24. -- 32 of 304 -- 33 all of his original reports.108 He also emphatically rejected any suggestion in cross-examination in the voir dire that he did not review all of the underlying calculations and work of both Mr Lien and Mr Echberg.109 Ultimately in oral submissions CMC accepted that Mr Tsipis was in fact heavily involved with the production of his reports.110 Earthworks Claim (Variation 141) (a) The Nature of the Claim [98] Pursuant to the Contract CMC was required to complete the bulk earthworks described in Section 7.3 of Part 5 of the Scope of Works. This included the construction of the Reclamation C Bunds. These bunds were earthen walls constructed for creating ponds for the placement of dredged spoil. Three sets of bunds were to be constructed, namely the primary bund, the secondary bund and the tertiary bund. Each of these bunds was to be comprised by a number of connected earthen retaining walls.111 [99] The basic method of construction of the bunds involved:112 (a) the placement of geofabric by way of light machinery and labour; (b) the placement of a layer of drainage rock (which had been excavated and hauled by CMC from the GPN Borrow), which was a limited push of about 30 metres by a small bulldozer; (c) the wrapping of a second layer of geofabric; (d) the placement of approximately 500 millimetres of general fill (which has been excavated and hauled by CMC from the GPN Borrow) pushed out by a small bulldozer; and (e) the placement of subsequent layers of general fill, subject to a construction design limit of 0.5 metres per week maximum and hold of two weeks for every one metre of lift.113 When complete the bunds stood up to 30 metres wide and covered some 6.6 lineal kilometres. [100] CMC’s planned method of construction of the bunds involved:114 108 T29-25, lines 46-47. 109 T29-26, lines 5-14. 110 T29-29, lines 10-12. 111 Eighth Further Amended Statement of Claim, [132A] and [132B]. 112 T3-4, lines 2-29; T3-8, lines 24-47; T3-9, lines 1-18; T14-36, line 13 – T14-37, line 6. 113 On 8 February 2012, Worley Parsons issued CMC with revised drawings for the Reclamation C Bunds which revised the wait periods on construction of the layers of the Reclamation C Bunds. This revised limit did not have an impact on CMC’s construction of the “footprint” but improved productivity with respect to the placement of subsequent layers on the Reclamation C bunds. 114 T3-4, lines 13-45; T3-9, lines 20-44, T3-10, lines 9-14; T14-37, lines 1-41, T14-38, lines 2-39, T14-39, lines 1-34. -- 33 of 304 -- 34 (a) rapidly building the entire “footprint” of the bunds, being the bottom layers of drainage rock and first general fill, which could then be used for vehicles throughout the bunds; (b) cycling activities on top of this footprint to avoid delays by the construction design limit on the placement of general fill; and (c) cycling the activities involved with the process of placing geofabric, drainage rock and general fill in order to keep all labour and plant occupied and productive. [101] Adopting this method of construction, CMC planned to haul and lay 4,000m3/day of fill material utilising two teams. Each team was a geographic workfront being operated by a bulldozer, water carts, compactors and geofabrics team, with haul trucks placing material where it was needed at any given time.115 Mr King described a team as “a geographical area” on the bund.116 Mr Barry’s evidence was that CMC had enough machinery and men to form two teams.117 Mr Roberts’ understanding of what constituted a team was that there was one set of resources which would move from one location to various others. [102] Where CMC was able to work unimpeded, the target production of 4,000m3/day was feasible.118 CMC’s production records show that:119 (a) from March 2012, CMC was able to achieve production of more than 5,000m3/working day;120 (b) from May 2012, CMC was able to achieve production of more than 6,000m3/working day.121 [103] CMC worked on the bunds on a 14 day roster and would work on Sundays when the work required it.122 As the job progressed and the interference with CMC’s work lessened, CMC mobilised additional equipment to site. Exhibit 32 is an accurate representation of the plant, labour, equipment and facilities mobilised by CMC to construct the Reclamation C Bunds and the dates on which they were mobilised.123 The plant was not demobilised until after the Reclamation C Bunds were completed.124 As to CMC working on Sundays when the work required it, Mr King and Mr Abbott in their joint expert report on earthworks agreed that CMC did not work all Sundays during the construction of the Reclamation C Bunds.125 They further agreed that whilst the contemporaneous records indicate that CMC completed some works on some Sundays, by reference to CMC’s 115 T3-12, lines 35-47. 116 T26-105, line 37. 117 T14-45, lines 35-36. 118 T4-12, lines 13-19; T4-24, lines 3-22;. T14-36; T14-37; T14-38; T14-39. 119 Exhibit 22, CMC.514.002.0008; T3-60, lines 27-47; T3-61; T3-62; T3-63; T3-64. 120 T3-62, lines 25-27. 121 T3-62, lines 35-42. 122 T14-62, lines 40-45. In and from January 2012 CMC created target production charts. The target production numbers contained within these documents reflected the limitations which CMC was aware of at the time, including access issues, Cultural Heritage Directions and soft spots: T4-11, lines 28-47; T4-12, lines 1-11. 123 Exhibit 32, CMC.514.002.0006; T4-24, lines 46-47; T4-25; T4-26, lines 1-15. 124 T4-27, lines 4-17. 125 Addendum to Court Book, Vol 17, Joint Expert Report on Earthworks by Stephen Abbott and Gerard King dated 20 May 2016, Item 2.6. -- 34 of 304 -- 35 target production charts, CMC did not plan to and, for the most part, did not execute the main bulk earthworks on Sundays.126 [104] CMC did not achieve a 4,000m3/working day prior to 18 February 2012.127 [105] Given the size, nature, design and methodology of construction of the Reclamation C Bunds, CMC’s ability to duly progress its construction was dependent upon:128 (a) the start date for access to the Reclamation C Bunds; (b) the availability of two access points into the Reclamation C Bunds; and (c) the operation of multiple workfronts within the Reclamation C Bunds. [106] On 7 September 2011, Mr Walls and Mr Enright of Worley Parsons and Mr Vance, Mr Ahern and Mr Semmler of CMC attended a meeting. At this meeting CMC explained its planned access methodology and the requirement for multiple workfronts to construct the Reclamation C Bunds.129 [107] The Baseline Program approved by Worley Parsons on 31 October 2011,130 records the parties’ recognition that CMC would:131 (a) access the Reclamation C Bunds by 14 October 2011; (b) have two access points into the bunds. WICET was under no contractual obligation to provide two access points to the bunds, nominated by CMC or otherwise. The parties did however contemplate two points of access; (c) utilise two teams at these access points to construct specifically identified bunds on pre-assigned workfronts; and (d) complete the Reclamation C Bunds on or before 19 March 2012. [108] CMC had earlier given a marked-up drawing (Marked-Up Bund Drawing)132 to Mr Knowles of Worley Parsons identifying the areas in which each team would work and the access points.133 CMC had also formally identified its required access points in September 2011.134 [109] Reading the Baseline Program together with the drawing CMC’s approach was:135 126 Addendum to Court Book, Vol 17, Joint Expert Report on Earthworks by Stephen Abbott and Gerard King dated 20 May 2016, Item 4.4. 127 T3-62, lines 12-15. 128 T3-4, lines 2-45; T3-8, lines 24-47; T3-9; T3-10, lines 1-40; T14-50, lines 15-47; T14-51; T14-52, lines 1-5; T14-56; lines 30-34. 129 T3-5; T3-6, lines 1-35; T3-7, lines 30-39. This evidence was not challenged. 130 Exhibit 2, CMC.505.072.6016; T3-14, lines 27-47; T3-15, lines 1-7. 131 Exhibit 1, CMC.513.002.0055; T3-10, lines 42-47; T3-11; T3-12; T14-36, lines 13-47; T14-37; T14-38; T14-39, lines 1-34. 132 Exhibit 2, CMC.501.024.8968. 133 T3-7, lines 41-46; T3-8, lines 1-22; T3-15, lines 9-19. 134 Exhibit 2, CMC.502.009.9002. 135 T3-12, lines 23-47. -- 35 of 304 -- 36 (a) to undertake the works with two teams (each with its own workfront); (b) the teams were assigned specific access points, being: (i) Bund Team 1 Start Access to Bunds Ks1 from Access A; and (ii) Bund Team 2 Start Access to Bund Kn from Access C (also referred to as Access B). (c) the teams were assigned to specific bunds, being: (i) Bund Team 1 – Bunds Ks, J, N, P, O (Team 1 Bunds) 3510m; and (ii) Bund Team 2 – Bunds Kn, Km, Mn, Ms, L (Team 2 Bunds) 2865m. (d) the teams were assigned start and end dates as follows: (i) Team 1 Bunds – start on 14 October 2011 and finish on 17 March 2012; (ii) Team 2 Bunds – start on 14 October 2011 and finish on 19 March 2012. [110] CMC did not in fact commence construction of the Reclamation C Bunds until 23 November 2011 and they were not completed until 4 July 2012.136 [111] CMC’s case is that its work in constructing the bunds was seriously impeded by WICET issuing a series of directions under the Contract. CMC alleges that these directions resulted in a significant delay in the overall time taken to complete the bunds. CMC identifies these impediments as falling into four main categories with the following features: “Delay to commencement (a) Although CMC was given notice to proceed with the contract works on 6 October 2011, WICET failed to obtain a clearing permit until 24 October 2011, and directed CMC not to begin even limited clearing until 4 November 2011. Delay in completing haul roads (b) Although WICET approved CMC’s Baseline Program which identified two access points on 19 September 2011, it did not obtain (or even seek) clearing approval to construct the access point closest to the Borrow Pit for many months. (c) WICET did not obtain a “species management plan” – necessary for clearing many habitat trees located in the region of the haul roads – until 11 November 2011. That meant that CMC had to clear around the habitat trees – and initially only to the more distant access point. Delay from cultural heritage direction (d) Just after CMC constructed a second access from the main haul road into the area of the bunds, that area became unavailable because cultural 136 Exhibit 2, CMC.013.004.0196; T3-32, lines 23-28. -- 36 of 304 -- 37 heritage artefacts were discovered. WICET had to carry out cultural heritage preservation activities for some time and CMC did not regain access until 9 January 2012. Delay from soft spots (e) CMC was directed not to travel beyond two different points on the bunds in December 2011 and February 2012 respectively. This limited the areas in which CMC could productively work and contributed to the prolongation of the work.”137 [112] CMC’s case is that the combination of these various directions amounted to a variation to the works, imposed by WICET, which (at least) changed the character of the works138 – from the operation contemplated in the Baseline Program of having two points of access and multiple workfronts (on and from 14 October 2011) to a different animal.139 Alternatively, CMC submits that the various directions which WICET gave amounted to directions to vary the order and timing of the works or to suspend a part of the works for which CMC is also entitled to a valuation and payment under clause 40.5 of the General Conditions. The claim is one for non-critical delay in respect of which an extension of time is not sought. (b) The Delay Events (i) Directions – Delay to Commencement [113] CMC was required to construct an access road from the GPN Borrow Pit to the Reclamation C Bunds to be used for it to haul material for the construction of the bunds.140 The construction of the haul road involved the clearing of native vegetation, including significant species. WICET was required to obtain a Clearing Permit under the Nature Conservation Act 1992 (Qld) prior to clearing works starting.141 [114] On 19 September 2011, CMC requested the utilisation of existing access tracks to construct the haul road to the Reclamation C Bunds by way of a Request for Information (RFI) emailed by Mr Grey of CMC to Mr Knowles of Worley Parsons.142 [115] CMC would have started construction of the Reclamation C Bunds from the GPN Borrow to Access B first and started construction of the bunds while finishing the haul road to Access A.143 [116] On 6 October 2011, CMC received a letter dated 5 October 2011 from WICET which instructed it to proceed immediately in undertaking all work under the Contract.144 137 CMC’s Written Closing Submissions, [80]. 138 See General Conditions, clause 40.1(b). 139 CMC’s Written Closing Submissions, [81]. 140 Exhibit 2, CMC.501.001.1990, Contract, Part 5, Section D “Scope of Work”, clause 4.6. 141 Appendix F7.1A to the Contract, Flora and Fauna Management Plan, clauses 2.2, 2.3 and Item A2 of Table 5.1; Exhibit 2, CMC.508.001.0771. 142 Exhibit 2, CMC.502.009.9001, CMC.502.009.9002, CMC.502.009.9004; T3-16, lines 19-46; T10-65, lines 25-44; T10-66, lines 1-25. 143 T3-17, lines 4-26. 144 Exhibit 2, CMC.503.023.2607. -- 37 of 304 -- 38 [117] At meetings between representatives of CMC, Worley Parsons and Aurecon Hatch on 7 October 2011 and 12 October 2011, representatives from Worley Parsons stated that WICET would obtain the Clearing Permit shortly and encouraged CMC to mobilise equipment to the Site.145 [118] On 12 October 2011, WICET, by way of an email from Mr Knowles, informed CMC that Worley Parsons did not expect a Clearing Permit for access to the Reclamation C Bunds for two months and directed CMC to re-prioritise the Contract Works in the absence of the Clearing Permit.146 [119] CMC identifies the following directions as delaying the commencement of work at the Reclamation C Bunds which was to commence by 14 October 2011:147 (a) a Start Works Direction issued 6 October 2011; (b) a Permit Direction issued 12 October 2011; and (c) a Limited Clearance Instruction issued 2 November 2011. [120] CMC submits that the effect of these directions was to vary the Contract Works (or direct the timing of the Contract Works) and caused additional cost to CMC, which was unable to start construction of the haul road to the Reclamation C Bunds due to the lack of a clearing permit, delaying the completion of the Reclamation C Bunds. Specifically: (a) The Start Works Direction was a formal notification pursuant to clause 8(b) of the Instrument of Agreement to CMC to immediately proceed with all of the Contract Works.148 If not for the Start Works Direction, CMC would not have mobilised plant and equipment to the Site from that date and would not have incurred the costs of this plant and equipment mobilised to Site whilst unable to work on the Reclamation C Bunds. (b) The Permit Direction directed CMC to re-sequence and re-program the Contract Works in the absence of the Clearing Permit. (c) The Limited Clearance Instruction directed CMC to: (i) construct the haul road in accordance with the Clearing Permit (necessitating survey coordinates);149 (ii) changed the haul route by directing CMC to construct the haul road to Access A only (contrary to the Baseline Program);150 145 T3-19, lines 20-46; T3-21; T3-22, lines 1-11; Exhibit 7, CMC.022.007.0055, CMC.007.004.0219. 146 Exhibit 2, CMC.503.023.2317; T3-22, lines 38-46. 147 CMC’s Written Closing Submissions, [186]. 148 Eighth Further Amended Statement of Claim, [136A]; Exhibit 2, CMC.503.023.2606; CMC.503.023.2607. 149 T3-25, L6-31. The application from Aurecon Hatch (on behalf of WICET) to the Department of Environment and Resource Management (as it then was) (DERM) for the clearing permit identified these access areas. See Exhibit 2, CMC.503.023.0976, CMC.503.023.0983; See also clause 28.1 of the General Conditions with respect to WICET’s obligations to set out the Works. 150 See T3-16, L36-46; T3-17, L1-39; T9-63, L13-16. -- 38 of 304 -- 39 (iii) construct the haul road without removing the specified habitat trees until the Species Management Plan had been approved. CMC submits that these directions were directions pursuant to clauses 40.1 or 33.1 of the General Conditions, either changing the sequencing or methodology of the Contract Works or alternatively, directing the time and manner in which the clearing works for the haul road should be performed. CMC pleads that the effect of these three directions was to cause additional cost to CMC by restraining it from starting construction of the haul routes required for Team 1 and Team 2 to construct the Reclamation C Bunds by 22 days from 14 October 2011 to 4 November 2011.151 [121] WICET however, submits that it is not liable for this alleged delay event. WICET identifies three problems with CMC’s claim: (a) the directions upon which CMC bases its claim are not directions pursuant to clauses 33, 34 or 40.1; (b) the claim presupposes that CMC’s access to the specific haul road to the bunds was a contractual risk allocated to WICET under the Contract when it was not; and (c) for all or most of the alleged period, there were concurrent causes of delay for which CMC was responsible, such that there is no or very little “additional” cost attributable to any delay caused by WICET.152 [122] As to the first matter, I consider WICET’s submissions below where I deal with CMC’s contractual basis for the Earthworks Claim. [123] As to the second problem, WICET emphasises CMC’s attempt to give significance to the fact that it was not provided access to the top and bottom of the bund (which WICET refers to as access A (top) and access C (bottom)) as sought in RFI 0002.153 WICET submits that CMC uses the absence of the access at Access C as the basis for asserting that the access given to it by WICET amounted to a variation (an alleged change in “character” of the works).154 It is common ground that WICET was not contractually obliged to give CMC access via Access A and Access C. It is also common ground that CMC does not plead that WICET ought to have provided access to the bunds exactly where CMC wanted. What is pleaded however by CMC is that the Baseline Program always contemplated multiple access points. It also contemplated two teams working on the bunds on multiple fronts.155 CMC’s case is that the effect of not providing access in accordance with the Baseline Program was that a change in methodology as to the construction of the bunds was required. It is this change in methodology that is said to constitute a variation which prolonged the construction of the bunds. WICET did ultimately provide two access points, namely Access A (top) and Access B (intermediate access). Access B was approximately 300 metres further up the western side of the Reclamation C Bund than Access C. There were however delays in relation to Access B being available and capable of being utilised. These are discussed below but include the Cultural Heritage Direction and further Flora Directions. The restrictions arising from 151 Eighth Further Amended Statement of Claim, [137C]. 152 WICET’s Written Closing Submissions, [1201]. 153 Exhibit 2, CMC.502.009.9002. 154 CMC’s Written Closing Submissions, [81]; WICET’s Reply Submissions, [101](a). 155 Eighth Further Amended Statement of Claim, [132F]. -- 39 of 304 -- 40 the Cultural Heritage Direction, for example, lasted until 9 January 2012. CMC alleges that from 14 October 2011 to 9 January 2012 (a period of approximately three months) it was limited to just one point of access for the purposes of constructing the Reclamation C Bunds because of directions given by WICET through Worley Parsons. [124] Whilst there is no dispute that it was WICET which obtained the clearing permit for the haul road, WICET nevertheless submits that it was not contractually obliged to do so. This is because CMC, pursuant to the Contract, was responsible for designing and constructing temporary works.156 Further CMC was, by the Scope of Work, responsible for the construction of haul roads. CMC was required to make use of existing haul routes and make due allowance to upgrade when necessary.157 In my view however, by reference to the wording of the Flora and Fauna Management Plan which forms part of the Contract,158 it was WICET’s responsibility as the Principal, to ensure all necessary permits and approvals relevant to terrestrial flora and fauna were obtained prior to construction commencing.159 [125] As to the third problem, WICET seeks to identify a number of concurrent causes of delay for which it alleges CMC is responsible. These include a failure on the part of CMC to comply with its contractual obligation to give two weeks’ notice of carrying out clearing works. This contractual obligation arises under Appendix A to the General Conditions which contains the Flora and Fauna Management Plan. Item A4 of Table 5.1 required CMC to give notice to WICET prior to commencing any clearing within the project area. The fauna spotter/catcher had to ensure that load reduction trapping occurred during the two weeks prior to commencement of clearing in any area. This trapping was simply to reduce the amount of terrestrial fauna that was present in a given clearing area prior to the main clearing event occurring.160 Item A5 of Table 5.1 required CMC to give the spotter/catcher two weeks’ notice prior to clearing works commencing. WICET submits that CMC failed to give this notice. Accepting that there was such a failure, the question is whether such a failure constitutes a concurrent delay event. I accept CMC’s submission that it was WICET’s own conduct which prevented CMC complying with its contractual obligation to give two weeks’ notice. The reality was that CMC was waiting for the Clearing Permit and instructions from WICET to start the clearing works and both parties were aware of this fact.161 Mr Vance explained the reason why the two weeks’ notice had not been given: “We certainly didn’t on this occasion because we didn’t know that we were getting that site instruction to commence – to allow us to commence clearing.”162 [126] The Clearing Permit was obtained by WICET on 24 October 2011. It was however conditional upon the approval of the Species Management Plan.163 CMC had no advance notice of the day the Clearing Permit would be obtained by WICET. As an interim 156 Clauses 8.11 and 8.18.2 of the On-Site Civil Works - Supplementary Technical Specification; Exhibit 2, CMC.502.075.9087. 157 Clauses 2.2.2 and 4.6, Exhibit 2, WIC.104.001.0402 at 0735 and at .0741; WICET’s Written Closing Submissions, [1206]. 158 Exhibit 2, CMC.508.001.0771 at .0773 and Item A2 of Table 5.1 at .0794. 159 See Item A2, CMC.508.001.0794; Item A5, CMC.508.001.0795 and Item A7, CMC.508.001.0796. 160 CMC.508.001.0795. 161 CMC’s Written Closing Submissions, [192] – [193]. 162 T8-54, lines 14-16. 163 Exhibit 2, CMC.503.023.0968; CMC.503.023.0970. -- 40 of 304 -- 41 measure however, Aurecon Hatch produced a series of “No Go Zone” maps to manage CMC’s access to the Site and permit limited clearing pending the approval of the Species Management Plan. This resulted in the Limited Clearance Instruction of 2 November 2011. On 2 November 2011, CMC was issued with a site instruction to “proceed with clearing as shown on an attached map”.164 The map attached to the Limited Clearance Instruction is a “No Go Zone” map, which relevantly indicated (schematically):165 (a) areas which CMC was not permitted to access – by red hatching; and (b) habitat trees which CMC was not permitted to clear – by yellow squares. The clearing could not however commence until the clearing boundaries for the haul road were provided by WICET. [127] The Clearing Permit and Limited Clearance Instruction did not include survey points to enable CMC to properly set out the works by identifying the precise extent of where clearing was permitted and not permitted.166 In order to start clearing, CMC required electronic survey coordinates of the boundaries of the areas in the No Go Zone map.167 These coordinates for the boundaries were not provided until the afternoon of 4 November 2011, with clearing works commencing on 5 November 2011. These details were confirmed by Mr Vance in an email to Mr Knowles dated 28 November 2011.168 [128] WICET submits however, that the evidence shows that the survey coordinates were not an impediment to CMC clearing.169 I do not accept WICET’s submission. Mr Grey’s evidence was that without the survey coordinates CMC would not know whether it was clearing within the restricted area.170 Mr Grey’s recollection was that CMC commenced clearing either on 5 or 6 November 2011. His evidence was to the effect that CMC was not permitted to clear outside the boundary, as a result of which it needed to know the exact limits.171 I accept this evidence. [129] Mr Vance’s evidence was to the same effect, namely that CMC required the survey coordinates prior to clearing.172 Mr Vance accepted in cross-examination that some minor clearing took place on 4 November 2011. He maintained however, that CMC did not do any clearing until it had survey coordinates “because otherwise you’re at quite significant risk.”173 In cross-examination it was suggested to Mr Vance that his evidence was inconsistent with a prior statement he had made in an email dated 17 January 2013.174 In this email in response to a statutory declaration of Mr Enright of Worley Parsons Mr Vance stated: 164 Exhibit 2, CMC.503.022.9410. 165 T3-29, lines 9-35; T10-67, lines 28-46. 166 Compare clause 28.1 of the General Conditions. 167 T3-30, lines 13-19; T10-68, lines 6-46; T10-69, lines 29-39. 168 Exhibit 2, CMC.502.045.3404. 169 WICET’s Written Closing Submissions, [1234]. 170 T10-68, lines 5-20; Exhibit 191, CMC.505.036.1563 and 1564. 171 T10-69, lines 25-45. 172 T3-30, lines 13-16. 173 T7-65, lines 34-40. 174 Exhibit 103, CMC.502.020.1052. -- 41 of 304 -- 42 “I agree with him, we only put these in because Ian was of the view they show the incompetence of these guys, don’t believe this actually had any impact on the earthworks, other than ongoing irritation …” [130] Mr Enright’s statutory declaration in paragraph 19(b) alleged that adequate advance survey information was duly provided to facilitate all clearing activities.175 Mr Vance explained the alleged inconsistency between his evidence at trial and what he had stated earlier. He explained that Mr Enright was referring to other areas of the Site apart from the haul road. Mr Vance’s evidence was that the lack of survey coordinates for the initial haul road had a significant impact.176 I accept Mr Vance’s explanation. It is consistent with Mr Grey’s evidence. Further, Mr Vance’s statement in the 17 January 2013 email was in response to a general observation of Mr Enright rather than specifically in relation to the survey coordinates for the haul road. [131] Two further concurrent delays identified by WICET are the lack of availability of CMC’s earthmoving fleet until the end of October 2011 and the failure of CMC to obtain an excavation/penetration permit until 3 November 2011.177 The evidence does not, in my view, support WICET’s submission that either of these matters constitute concurrent delays caused by CMC. [132] Mr Vance’s evidence was that WICET requested CMC on or about 11 or 12 October 2011 to be ready to commence once the clearing permit was obtained: “In fact, at one of these meetings Dave Walls, who was their construction manager, stated that he wanted us to have a dozer parked this far off a tree, leaning on a tree ready to go. That was where they wanted us to be when we got this permit – or when they got this permit and were able to provide it to us.”178 He continued: “I was concerned about doing that given we didn’t have the permits, because once I mobilised plant there are substantial costs involved. So we’ve warned them verbally in the meeting and I emailed Mathew Knowles after this meeting putting my concerns down as well. We weren’t – we weren’t as anxious to move buildings and people and everything onto site when we couldn’t touch trees, as they were for us to do it because, obviously, that starts costing you money immediately.”179 The email referred to by Mr Vance in the above passage is from him to Mr Knowles dated 13 October 2011.180 In that email Mr Vance relevantly stated: “As per discussions, we have not at the moment slowed down any mobilisation, and are looking instead to utilise resources in other areas of the work and render the assumption that by the time they arrive the clearing permit will be in place and we will be able to commence. 175 Exhibit 101, CMC.501.001.0095 at .0099. 176 T7-63, lines 10-19. 177 WICET’s Written Closing Submissions, [1237] – [1243]. 178 T3-20, lines 26-30. 179 T3-22, lines 5-11; Exhibit 7, CMC.007.004.0219 and CMC.002.007.0056. 180 Exhibit 8, CMC.505.089.4651. -- 42 of 304 -- 43 Where we to put on hold on any heavy plant that is coming, which we have not, there would them be the potential for further delays if that plant where to become occupied elsewhere (which it would in the current market).” (sic) [133] Mr Knowles had emailed Mr Vance the previous day (12 October 2011), informing CMC that Worley Parsons did not expect a clearing permit for alternative access to the western side of the Reclamation C Bunds for two months. The email directed CMC to re-prioritise the Contract Works in the absence of the Clearing Permit.181 [134] On 20 October 2011, Mr Vance sent a Notice of Delay to Mr Knowles which provided notice of the delay to the start of construction of the Reclamation C Bunds due to the lack of the Clearing Permit.182 [135] On 21 October 2011, Mr Cole of Aurecon Hatch applied for the Clearing Permit for access to the Reclamation C Bunds via Access A and an Intermediate Access not provided for on the Baseline Program and not requested by CMC.183 [136] On 24 October 2011, Ms Cook of Aurecon Hatch emailed a copy of the Clearing Permit to individuals at WICET and Worley Parsons. On the same date Mr Knowles forwarded the email and Clearing Permit to Mr Vance at CMC.184 The email from Ms Cook states that: “… the clearing approved under this permit is still conditional upon the approval of the Species Management Program.” [137] The receipt of the Clearing Permit did not permit work to commence. CMC was directed that until WICET obtained approval for its Species Management Program no substantial clearing could commence.185 In particular, Mr Knowles told CMC that a Species Management Plan was required prior to the start of construction of the haul road.186 [138] The consequence of the Permit Direction was that CMC was not permitted to access the Bunds at Access B as it had requested, but would have to build the access road to Access A and the new Intermediate Access.187 [139] CMC started mobilisation of plant, facilities and equipment to the Site on or about 25 October 2011.188 Had the Clearing Permit been in place earlier, CMC could have mobilised plant and equipment to the Site earlier and been ready to commence work on the bunds on 14 October 2011.189 In particular, CMC originally planned to carry out the clearing work using its own equipment or that of a contractor other than its main earthworks subcontractor.190 181 Exhibit 2, CMC.503.023.2317. 182 Exhibit 2, CMC.505.070.7915; T3-24, lines 10-20. 183 Exhibit 2, CMC.503.023.0976 and CMC.503.023.0983; T3-25, lines 4-22. 184 Exhibit 2, CMC.503.023.0968; CMC.503.023.0970. 185 T3-25, lines 24-27. 186 T3-25, lines 33-45; Exhibit 2, CMC.022.006.0326, Item 7.2. 187 T3-25, lines 27-31. 188 T3-26, lines 41-46; T3-27, lines 1-6. 189 T3-27, lines 10-14. 190 T10-44, lines 6-22. -- 43 of 304 -- 44 [140] At a meeting between representatives of CMC, Worley Parsons and Aurecon Hatch on 2 November 2011, representatives from WICET stated that the Species Management Plan was forecast to be completed by WICET “within the next week” and that in the meantime, “Go” and “No Go” clearing maps would be issued for use around areas of significant species.191 [141] In spite of Mr Vance’s stated intention to mobilise, referred to in [132] above, WICET refers to evidence suggesting that CMC’s earthmoving fleet was not available until the end of October 2011 and was not mobilised sufficient for construction until 2 November 2011. As such, WICET submits that CMC would not have been able to start work in any event.192 In CMC’s Monthly Progress Report Number 1, November 2011193 under the heading “Overview”, “Mobilisation” the following notation appears: “Mobilisation sufficient for construction was completed on 02 November 2011, no significant work where allowed by the principal contractor prior to agreeing mobilisation was sufficient to commence.” I note that the same report identifies the top five problems as including: “Clearing permits, species management plane [sic] and cycads have held up clearing and commencing hauling material.” [142] Whilst Mr Vance accepted that the statement in the report concerning mobilisation was correct, his answer was qualified by his belief that CMC had enough “gear to start the works at the start”.194 CMC’s “Plant, Machinery and Light Vehicle Site Access Approval Form Register” shows that a subcontractor of CMC did not have a dozer on-Site until 3 November 2011.195 CMC’s subcontractor’s (AE Group’s) “Schedule of Plant/Labour/Equipment used for Reclamation C Bunds”196 shows plant required for hauling (that is, dump trucks) being available from 28 October 2011. These documents only evidence when CMC’s subcontractors mobilised particular pieces of equipment to the Site. They do not evidence CMC’s own capacity to mobilise the necessary plant and equipment to construct the haul road had WICET obtained a clearing permit that was not subject to the approval of a Species Management Plan or that required the identification of No Go Zones. Mr Vance’s evidence was that CMC had the ability to have machinery on-Site so as to commence work earlier than the end of October 2011: “Well, for a start, Alexanderson’s original contract didn’t include the haul roads. The original intent was to build the haul roads – haul roads, site access, whatever you want to call them, there’s been a couple of bits of language used – but their contract included building the access roads around the borrow pit, whatever they needed to do in the area of the borrow pit they were going to work in, but the access roads down to the bunds CMC were going to perform, and we had access to other plant from other plant hire contractors, as well as our own plant, in this period if the work had become available. I – we never 191 Exhibit 2, CMC.501.023.6006 (Item 1.1.3). 192 WICET’s Written Closing Submissions, [1238]. 193 Exhibit 2, CMC.501.023.3782. 194 T8-48, lines 15-18. 195 Exhibit 190, CMC.508.002.1459. 196 Exhibit 32, CMC.514.002.0006. -- 44 of 304 -- 45 put real pressure on Alexanderson to change this because, clearly, we didn’t have access to site.”197 [143] Mr Vance’s evidence was that CMC was able to bring a dozer to site within a day or so of having an area which CMC could clear.198 I therefore find that had an unconditional clearing permit been in place, CMC was in a position to mobilise the necessary equipment to site for the construction of the haul road. [144] The second concurrent delay event is CMC’s failure to obtain an excavation/penetration permit until 3 November 2011. Such a permit was required by section 9.3 “Permit to Work” of Appendix F6 to the Contract.199 The Clearing Permit obtained by WICET on 24 October 2011 was, as I have already observed, conditional upon the approval of a Species Management Plan. Mr Grey first submitted the permit to excavate for the GC09 haul road to Worley Parsons on 1 November 2011.200 Mr Grey explained the nature of an excavation permit. It is for the purpose of identifying any existing services, such as underground services or overhead services, to make sure that construction activities do not cause damage to those services. The permit in effect seeks permission from Worley Parsons to carry out the relevant construction activities.201 On 3 November 2011 Worley Parsons requested Mr Grey to provide a sketch showing the area to be cleared. This was provided by Mr Grey on the same day. The permit was approved by Worley Parsons on 4 November 2011.202 Mr Vance referred to an excavation permit in the following terms: “These things are done in every area you open up and they’re usually redone at intervals during a project. So it’s one of those standard documents that is carried out on a regular basis during the construction. A tick and flick, essentially. … It’s a permit from Worley Parsons. We fill it in, it went to Dave Coker, he signed it off the same day and sent it back.”203 [145] Mr Vance explained the permit has nothing to do with Government and that the permit did not hold up the commencement of construction of the haul road.204 I do not consider in light of this evidence, that the submission of the excavation permit by CMC on 1 and 3 November 2011 constitutes a concurrent delay. It was an internal document as between CMC and Worley Parsons not involving any third party agencies. It was a permit that was able to be approved within a short time-span. There is no evidence that any failure on the part of CMC to apply earlier for the excavation permit or to provide other documents was an impediment to the start of works.205 (ii) Directions – Delay to the Construction of the Haul Road [146] CMC’s pleaded case is that on 5 November 2011 it commenced clearing and grubbing activities for the purpose of constructing haul routes from the GPN Borrow Pit to the 197 T10-44, lines 13-22. 198 T8-56, lines 34-46 and T8-57, lines 1-11. 199 Exhibit 2, WIC.104.001.0806. 200 Exhibit 2, CMC.505.035.7510. 201 T10-72, lines 9-16. 202 Exhibit 2, CMC.505.025.4603. 203 T3-31, line 46 – T3-32, line 5. 204 T3-32, lines 9-12. 205 CMC’s Written Closing Submissions, [208]; T3-26, lines 29-35. -- 45 of 304 -- 46 Reclamation C Bunds.206 CMC pleads that the construction of the haul route from the GPN Borrow Pit should have taken seven calendar days. This is the assumption made by Mr King in his expert report on the Earthworks Claim. CMC alleges that because of two “No Go Zones” Directions given on 8 November 2011 and 18 November 2011 the construction of the haul road was delayed by 12 days.207 CMC’s pleaded delay period is between 7 November 2011 and 23 November 2011. [147] It is common ground that the haul road took 19 days in total to construct. The assumption made by Mr King in his report on instructions, that the haul road should have only taken seven days, is not supported by the evidence. Mr Vance’s evidence was as follows: “It’s approximately half the length if we’d been able to access at access point B. So it would reasonable to assume that – about half the duration to build that haul road. That means our five days in our baseline program was probably a little bit optimistic. So nine – eight, nine days to do that would have been a reasonable sort of assumption to get access at point B, and you then could have started the bunds while you finished the haul road to point A on the drawings I was using earlier.”208 This is a general estimate made by Mr Vance. [148] Mr Grey’s evidence was that the yellow squares on the No Go Zone plan showing habitat trees affected the construction of the haul road because they constituted “obstacles in the way which the road had to go around, or narrowed the lane width to allow access”.209 His evidence, which I accept, was that it would have been much quicker to clear a track without any limitations. His evidence was that without these limitations the haul road could have been constructed within 10 days, enabling CMC to gain access to the Reclamation C Bunds.210 Mr Grey had involvement in the planning and construction of the haul road and was the person who submitted the RFI regarding the haul road and also permits for clearing for the haul road.211 Given this involvement, I accept his estimate of 10 days over Mr Vance’s general estimate of between eight and nine days. This reduces any period of alleged delay between 7 November 2011 and 23 November 2011 to nine rather than 12 days. Nor is it readily apparent, given that the first No Go Zone Direction was issued on 8 November 2011, why CMC is entitled to claim that the delay period commenced on 7 November 2011. Worley Parsons did issue a site instruction dated 2 November 2011212 which attached maps showing hollow and habitat trees.213 It is, however, no part of CMC’s pleaded case that the Limited Clearance Instruction of 2 November 2011 caused any delay between 5 to 7 November 2011. This pleading point has been taken by WICET.214 WICET submits that CMC has not pleaded the cause of the delay prior to the issue of the No Go map on 8 November 2011. CMC’s submissions accept the pleaded delays from 7 November 2011 but do not otherwise address WICET’s 206 Eighth Further Amended Statement of Claim, [137E]. 207 Eighth Further Amended Statement of Claim, [137I]. 208 T3-32, lines 33-44. 209 T10-69, lines 40-45. 210 T10-70, lines 5-21. 211 T10-65, lines 16-24. 212 CMC.503.022.9410. 213 CMC.503.022.9411 and CMC.503.022.9412. 214 WICET’s Written Closing Submissions, [1251] – [1253]. -- 46 of 304 -- 47 point.215 CMC’s pleaded period of delay should therefore be reduced from nine to eight days. [149] WICET submits that CMC’s claim in relation to this delay event must fail because: (a) the No Go Zone maps are not directions under clauses 33, 34 or a variation under clause 40 of the Contract; (b) any delay caused by the habitat trees was negligible because – (i) the habitat trees only appeared on the site of the haul road, and (ii) the habitat trees could be cleared by 11 November 2011; and (c) further, and in any event, CMC should have programmed 17 days to build the haul road.216 I consider the submission in (a) above when I deal with CMC’s contractual basis for its claim. I do not accept WICET’s submissions made in (b) and (c). [150] The map attached to the Limited Clearance Instruction was the first “No Go Zone” map issued to CMC. The No Go Zone maps detailed areas of the site which CMC could and could not access by way of: (a) red hatching showing areas CMC was not allowed to access as they were to be assessed; (b) yellow squares representing habitat/hollow trees which could not be removed until a Species Management Plan had been approved;217 and (c) green dots representing grass trees, which were a protected species which were relocated. This No Go Zone map permitted CMC to start clearing the access road from the GPN Borrow Pit to the Reclamation C Bunds to Access A only. [151] I have already referred to Mr Grey’s evidence as to how the No Go Zone Directions affected the construction of the haul road. Mr Vance’s evidence as to the effect is as follows: “Primarily, because we ended up building a bund on either side of the haul road, the narrowness of the haul road and the fact that we were leaving trees effectively in what should have been haul road was part of the reason that I believe we were instructed to build those bunds on that part of the haul road. Those bunds slowed construction of the haul road.”218 215 CMC’s Written Closing Submissions, [218] – [219]. 216 WICET’s Written Closing Submissions, [1250]. 217 T3-29, lines 9-35 (Vance examination); T10-67, lines 26-46 (Grey examination). 218 T3-33, lines 2-6. -- 47 of 304 -- 48 [152] Mr Vance did however accept in cross-examination that the instruction to build the side berms on the haul road was not received until 23 November 2011.219 Mr Barry’s evidence was that the requirement to go around habitat trees whilst constructing the haul road added “at least a week, if not more” to the time it took to construct the haul road.220 Accepting that Mr Vance was mistaken as to the timing of the instruction to construct the side berms to the haul road the evidence of Mr Grey and Mr Barry, which I accept, supports a finding that the No Go Zone Directions given on 8 and 18 November 2011 did affect the time it took to construct the haul road and gain access through Access A to the Reclamation C Bunds. [153] In respect of the 18 November 2011 No Go Zone Direction221 WICET submits that the issue preventing clearance of the habitat trees was approval of the Species Management Plan. That occurred on 10 November 2011. Accordingly, from that date there ought to have been no delay caused by the habitat trees. Further, that Mr Grey’s evidence to the effect that the habitat trees could not be cleared until the process document was agreed with WICET (which was issued on 18 November 2011) does not constitute a sufficient explanation as to why the habitat trees could not be cleared from 11 November 2011.222 I do not accept this submission. The Species Management Plan provided to CMC on 11 November 2011223 was a detailed document, 50 pages in length plus attachments. I accept Mr Grey’s explanation that the implementation of this Plan required a process document to be agreed before habitat trees could be removed. I further note that the email from Mr Knowles to Mr Vance of 18 November 2011 enclosing No Go Zone map (Version 3) also enclosed the process for clearing habitat trees. This version of the No Go Zone map stated that CMC could start clearing habitat trees. This instruction was only given on 18 November 2011. [154] As to WICET’s submission that CMC should have programmed 17 days to build the haul road, this is based on Mr Abbott’s opinion as to the appropriate time that should have been programmed for the construction of the haul road. Even though the Baseline Program only provided five days for the construction of the haul road, CMC’s own evidence supports the finding that the haul road would have taken something in the order of 10 days to construct. I do not however accept Mr Abbott’s opinion that it would have taken 17 days to construct the haul road in the absence of the No Go Zone Directions. Mr Abbott’s analysis is based on certain assumptions as to road width and composition having regard to his experience. His analysis was also based on further assumptions as to how the haul road would be constructed. These assumptions cannot be reconciled with how the haul road was in fact constructed. CMC submits that the Court should accept evidence from the witnesses who built the haul road, which contradict Mr Abbott’s opinion.224 I accept that the haul road Mr Abbott assumed that CMC constructed bears little relationship to the haul road that was actually constructed on-Site. [155] Both experts, Mr Abbott and Mr King, proceeded on the basis that the Baseline Program did not provide an activity for the construction of the haul road. Mr Vance’s evidence, which I accept, was to the effect that the entry “construction access tracks, quarry and reclamation area” were the words used in the program for the construction of haul roads 219 T9-10, line 45 to T9-11, line 25; Exhibit 136, CMC.505.088.8777. 220 T14-41, lines 27-28. 221 CMC.022.007.0181. 222 WICET’s Written Closing Submissions, [1262(b)]. 223 Exhibit 2, CMC.501.001.9395. 224 CMC’s Written Closing Submissions, [223]. -- 48 of 304 -- 49 for gaining access to the Site.225 Mr Vance and Mr Grey identified some of the differences between how the road was actually constructed and Mr Abbott’s assumptions: (a) a road base layer was not placed by CMC on the formation;226 (b) there was no compaction of the sub-base or base;227 (c) no wearing course was placed.228 Mr Grey described CMC’s method of haul road construction as being “a little bit more simplistic” than that proposed by Mr Abbott.229 (iii) Directions – Cultural Heritage and Flora [156] On 23 November 2011 CMC completed the haul road to the furthest access point to the Reclamation C Bunds, namely Access A, and began construction of the Team 2 bunds from the northwest corner near Hanson Road, being the bunds marked Kn, M and L on the marked-up bund drawing.230 As from 23 November 2011 CMC was able to commence the construction of the Team 2 bunds from Access A. CMC’s claim however is that by various directions, including the Cultural Heritage Direction, CMC did not gain access via Access B (the intermediate access) until 19 January 2012. This according to CMC disrupted and delayed the Team 1 Works by 57 calendar days from 24 November 2011 to 19 January 2012.231 [157] The first direction was the issuing of a plan entitled “No Go Zones” (Version 4) on 5 December 2011.232 The red shading on this plan shows that approximately 30% of the Reclamation C Bunds were marked as No Go Zones.233 [158] The Cultural Heritage Directions were given by WICET on 14 and 17 December 2011.234 According to Mr Barry, it took CMC two weeks to clear an access to Access B to the Reclamation C Bunds. This involved a clearing operation leaving the habitat trees in place and a subsequent operation to remove the habitat trees.235 The second access was achieved sometime in mid-December.236 CMC could not, however, commence the Team 1 construction of the Reclamation C Bunds because upon arrival at this access point it was informed that the area had not been investigated for cultural heritage artefacts.237 Mr Barry met with Mr Karandrews and Ms Johnson, who was WICET’s cultural heritage representative. This meeting occurred where Access B meets the tidal area of the Reclamation C Bunds. Mr Barry was informed by Ms Johnson that CMC could not commence the second front because of cultural heritage concerns. Mr Barry recalls 225 T3-27, lines 31-36. 226 T3-34, lines 23-24. 227 T3-34, line 43. 228 T10-71, lines 40-45. 229 T10-71, lines 30-35. 230 T3-39, lines 11-32; CMC.504.006.2106. 231 Eighth Amended Statement of Claim, [160AD]. 232 Eighth Amended Statement of Claim, [159B], Exhibit 2, CMC.501.011.0886 and CMC.501.011.0887. 233 T3-43, lines 12-14. 234 Eighth Amended Statement of Claim, [159]. 235 T14-43, lines 16-20. 236 T14-43, line 27. 237 T14-43, lines 30-35. -- 49 of 304 -- 50 informing Mr Karandrews and Ms Johnson that the direction would cause a “severe impediment to progress”.238 The ultimate result according to Mr Barry was that a No Go Zone area was in place for weeks.239 CMC had machinery in place at Access B when the Cultural Heritage Direction was given.240 This machinery was intended by CMC to go straight out to the Reclamation C Bunds to commence construction.241 The Cultural Heritage Direction prevented CMC from opening a second access to the Reclamation C Bunds at this point and affected CMC’s production at the Reclamation C Bunds. [159] On 14 December 2011, CMC sent a notice of delay to Worley Parsons requesting urgent clarification of the locations of the Reclamation C Bunds affected by the Cultural Heritage Direction.242 [160] After the oral Cultural Heritage Direction was given on 14 December 2011 Ms Johnson, after being prompted by Mr Barry, sent through emails on 17 December 2011 outlining concerns that had been raised in relation to a considerable number of artefacts that had been identified during previous work in the area subject to the construction of the Reclamation C Bunds.243 [161] On 17 December 2011, Mr Barry received two emails from Ms Johnson which forwarded two emails from Mr Gall of Archaeo Group:244 (a) the first email from Mr Gall attached a map identifying cultural artefacts located in the vicinity of Access B at the Reclamation C Bunds;245 and (b) the second email attached additional maps from Mr Gall identifying cultural artefacts and Mr Gall’s email which stated (inter alia) that:246 “In summary, there is a very high risk that activities currently occurring west Hanson rd as part of the WICET project will cause harm to cultural heritage. As per my previous advice email to yourselves and Terry Forsyth following my site inspection of Friday last week it is my professional opinion that work on these bund walls should cease until a systematic survey and mitigation/collection program can be undertaken by a team of PCCC representatives and an archaeologist. It is understood that this needs to occur as a matter of urgency and as such we have an archaeologist currently on standby to go to Gladstone to assist as required.” [162] On 17 December 2011, Mr Vance sent a letter to Mr Walls which stated that the Cultural Heritage Direction had caused delay by limiting the number of work fronts CMC could work on and attached a map identifying the location of the affected area at Access B.247 238 T14-44, lines 10-27. 239 T14-44, lines 35-39. 240 T14-45, lines 14-22. 241 T14-45, lines 29-31. 242 Exhibit 2, CMC.505.070.7135. 243 CMC.503.022.6045, CMC.503.022.6050, CMC.503.022.6051, CMC.503.022.5963, CMC.503.022.5966, CMC.503.022.5967. 244 T14-45, lines 38-46; T14-46, lines 1-38. 245 Exhibit 2, CMC.503.022.6045, CMC.503.022.6050. 246 Exhibit 2, CMC.503.022.5963, CMC.503.022.5966, CMC.503.022.5967. 247 Exhibit 14, CMC.504.002.0120; T3-44, lines 14-27. -- 50 of 304 -- 51 [163] On 9 January 2012 the suspension relating to the Cultural Heritage Directions ended and CMC was able to access the Reclamation C Bunds by way of the haul road through Access B.248 [164] On 14 January 2012 WICET issued CMC with a plan entitled “No Go Zones” (Version 5).249 On 19 January 2012 WICET issued CMC with a further plan entitled “No Go Zones” (Version 5) which removed the access restrictions to CMC due to the further Flora Directions.250 Mr Barry accepted in cross-examination that this No Go Zone map had no impact on CMC’s works within the bunds.251 He accepted that by 14 January 2012 the No Go Zone Map (Version 5) had little impact on CMC’s work on the Reclamation C Bunds.252 [165] CMC submits that the effect of these directions was to vary the Contract Works (or direct the timing of the Contract Works) and cause additional cost to CMC by restraining CMC from starting construction of the Team 1 Bunds. As to the No Go Zone Maps (Version 4 and Version 5) issued by WICET on 5 December 2011 and 14 January 2012, CMC submits that these resulted in No Go Zones over approximately 30% of the Reclamation C Bunds being the southern and western parts of the Reclamation C Bunds and most, if not all, of the Team 1 Bunds. CMC alleges that the Cultural Heritage Directions prevented it from utilising a second access to the bund marked K on the marked-up bund drawing and progress a second work front at the Reclamation C Bunds. The practical effect was to keep CMC to one access into the bunds (Access A) until about 9 January 2012. [166] WICET submits that this claim is flawed in a number of respects. First, CMC has no contractual entitlement arising from the Cultural Heritage Directions or the issuing of the No Go Zone Maps (Version 4 and Version 5). I deal with this submission in considering CMC’s contractual basis for the Earthworks Claim. WICET also raises a defect in CMC’s pleaded claim as well as identifying concurrent delays. [167] As to the pleading point, WICET submits that CMC’s claimed delay period incorrectly commences on 24 November 2011. The claim is for disruption and delaying the Team 1 Works by 57 calendar days from 24 November 2011 to 19 January 2012. This is in circumstances where the No Go Zone Map (Version 4) was not issued until 5 December 2011. This according to WICET produces a defect in CMC’s pleading.253 CMC submits, however, that this is not a defect as CMC’s claim for delay to the start of the Team 1 Works only correctly starts on the date that CMC accessed the bunds and started the Team 2 Works.254 The difficulty I have with CMC’s submission is that it is not readily apparent how the delay to the commencement of the Team 2 Bund Work impacted on the ability of Team 1 to commence at Access B. As WICET correctly submits, CMC has not pleaded that the No Go Zone maps issued on 8 and 18 November 2011 continued to impact the work until 5 December 2011. That case has not been pleaded.255 As to the end date of the delay, the Cultural Heritage Direction was lifted on 9 January 2012. No Go Zone 248 Eighth Further Amended Statement of Claim, [160AB]. 249 Exhibit 2, CMC.503.022.1929. 250 Eighth Further Amended Statement of Claim, [160AC]; Exhibit 268, CMC.502.072.7976. 251 T14-84, lines 30-33. 252 T14-55, lines 9-14; Exhibit 2, CMC503.022.1929. 253 WICET’s Written Submissions, [1274] – [1275]. 254 CMC’s Written Closing Submissions, [231]. 255 WICET’s Written Closing Submissions, [1276]. -- 51 of 304 -- 52 Map (Version 4) issued on 5 December 2011 was, however, still in place. It was not until the issuing of No Go Zone Map (Version 5) on 14 January 2012 that, as acknowledged by Mr Barry in the evidence referred to above, Team 1 was in effect unrestricted in constructing the bunds. CMC was however able to access the Reclamation C Bunds through Access B from 9 January 2012. It follows that the period of delay for these directions is not 57 days between 24 November 2011 and 19 January 2012, but rather between 5 December 2011 and 9 January 2012. The delay period now claimed by CMC in terms of valuing the Earthworks Claim for the period between 24 November 2011 to 18 February 2012 is 30 days.256 [168] In respect of the concurrent delays, WICET submits that the issue of fleet size and truck breakdowns in January 2012 was a significant issue for CMC during this period.257 This concurrent delay has, however, been taken into account by CMC in its valuation of the Earthworks Claim. Mr Vance took this issue into account and considered an appropriate allowance for any excessive maintenance issues during this period as being three days.258 Mr Roberts has also made an adjustment to his valuation for these breakdowns. I accept CMC’s submission that the evidence from Mr Vance, Mr Grey and Mr Barry was all to the effect that whilst there was an unusual number of breakdowns in January 2012 for a period of up to 10 days, it was not an ongoing problem and was not a significant cause of productivity losses on the project.259 The minutes of the CMC weekly project team meeting number 3, dated 13 January 2012260 records the following: “Program slipping on earthworks both Excavation and Bund placement productivities. Major contributory factor is AE plant fleet size and number of breakdowns, consistently 4 trucks down. CMC opinion is 12 trucks minimum required to meet targets.” [169] Mr Vance, however, did not accept that the blame for the loss of productivity up to 13 January 2012 could be laid at the feet of Alexanderson.261 Mr Vance identified the delay from truck breakdowns as being for a defined period in January 2012.262 To similar effect was Mr Barry’s evidence that truck breakdowns contributed “very little” to the length of time the Reclamation C Bunds took to construct.263 (iv) Directions - Soft Spot and Tertiary Bund [170] CMC’s pleaded case is that on 19 December 2011 WICET instructed CMC not to perform filling or traverse piezometer location SP-C-17 at the Reclamation C Bunds as the ground was too soft for filling to continue and the trucks to traverse.264 This is referred to as the First Soft Spot Direction. CMC alleges that the effect of the First Soft Spot Direction 256 Exhibit 426. 257 WICET’s Written Closing Submissions, [1294]; see Exhibit 116, CMC.027.004.0435; T4-7, lines 17-27; Exhibit 117, CMC.501.022.6068. 258 T10-46, lines 7-18. 259 CMC’s Written Closing Submissions, [252]. 260 Exhibit 116, CMC.027.004.0435. 261 T8-28, lines 12-17. 262 T10-45, lines 2-11. 263 T14-63, lines 5-11. 264 Exhibit 2, CMC.503.022.5905; Eighth Further Amended Statement of Claim, [160AF]. -- 52 of 304 -- 53 was to cease work beyond the location of SP-C-17 and prevent CMC from progressing past SP-C-17 on the perimeter bund, which had an impact on CMC’s productivity.265 The combined effect of the cultural heritage restriction and the First Soft Spot Direction was to limit CMC to one point of access into the bunds, and to a relatively small area in the north-west corner of the bunds for the first few months. [171] On 3 February 2012, WICET instructed CMC to prioritise the completion of the tertiary bund cell (Team 1 Bunds) and construct a temporary hauling access from Access B to the “finger” bund. This is referred to as the Tertiary Bund Direction.266 [172] On 7 February 2012, WICET instructed CMC not to perform filling or traverse piezometer location SP-C-11 at the Reclamation C Bunds as the ground was too soft for filling to continue. This is referred to as the Second Soft Spot Direction.267 The First Soft Spot Direction and Second Soft Spot Direction are each recorded contemporaneously by a CMC Daily Costing Sheet dated 8 February 2012,268 and in a meeting between representatives of CMC, Worley Parsons and Aurecon Hatch on the same date.269 [173] On 26 April 2012, WICET issued CMC with Site Instruction number 0056, which instructed it to install temporary stabilisation bunds at piezometer location SP-C-17, and prevented it from undertaking bulk fill on the primary bund until completed. This is referred to as the Third Soft Spot Direction.270 [174] CMC pleads that the effect of the Soft Spot Directions was to cause additional cost to it by: (a) preventing CMC from performing bulk earthworks at or past piezometer location SP-C-17 until 18 April 2012; and (b) delaying the Team 2 Works by 73 calendar days from 7 February 2012 to 18 April 2012 and on 1 May 2012.271 [175] Whilst this is CMC’s pleaded case, CMC concedes both in its written closing submissions and in oral submissions272 that if Mr Vance’s evidence as to the establishment of multiple fronts for the construction of the Reclamation C Bunds by 18 February 2012 is accepted, then the Soft Spot Directions and the Tertiary Bund Direction did not cause a substantial delay to the construction of the Reclamation C Bunds. By reference to CMC.503.021.9523 Mr Vance identified temporary access tracks that had been constructed by CMC across the primary bund which permitted construction on four separate fronts. The progress thereafter, according to Mr Vance, was “spectacular”: “So from what point would you say your progress started to improve spectacularly? What event? … The last week of February when – there was a hiccup on this bund, a – a little bit of pumping, we had to put another layer of material on it to use it effectively as a haul road, but once we were across 265 T3-45, lines 1-38; T14-47, lines 40-47; T14-48, lines 1-21. 266 Exhibit 2, CMC.505.087.0887 at .0890; Eighth Further Amended Statement of Claim, [160AFA]. 267 Exhibit 2, CMC.513.001.0123; Eighth Further Amended Statement of Claim, [160AG]. 268 Exhibit 2, CMC.013.004.0012; T3-47, lines 32-44. 269 Exhibit 15, CMC.501.022.2827 (Item 4.1); T3-48, lines 1-14. 270 Exhibit 2, CMC.503.020.9110; Eighth Further Amended Statement of Claim, [160AH]. 271 Eighth Further Amended Statement of Claim, [160AL]. 272 CMC’s Written Closing Submissions, [470]; T33-46, line 33 - T33-47, line 30. -- 53 of 304 -- 54 here and we got a few of these fronts happening – put it this way, there was never a problem putting our trucks to work again.”273 The date put on this event by Mr Vance was 18 February 2012. It was at or about this time that CMC in the construction of the Reclamation C Bunds achieved for the first time 4,000m3 per day.274 [176] Although both WICET and CMC made extensive submissions in relation to the Soft Spot Directions and the Tertiary Bund Directions275 CMC has in effect abandoned this delay event. As stated by Senior Counsel for CMC in oral submissions: “We say the soft spots did have an effect but their effect was reduced once multiple workfronts were opened up in the tertiary bunds. So we don’t say they had no continuing effect, but they did reduce – the practical constraints on the work were significantly reduced once multiple workfronts were opened up.”276 [177] As WICET correctly submits, although CMC appears to accept that this claim has no merit, CMC’s submissions still seem to assert that the Soft Spot Directions had an impact on the work to be compensated for by some insignificant amount. However the impact has not been identified nor has the insignificant amount been quantified.277 In light of the way CMC seeks to ultimately value the Earthworks Claim, it is unnecessary for me to deal further with this alleged delay event. The delay period between 24 November 2011 to 18 February 2012 is now limited by CMC to 30 days for Team 1 in respect to the Cultural Heritage and Flora Directions.278 No part of the delay between 24 November 2011 and 18 February 2012 is referrable to any delay to the construction of the Reclamation C Bunds by Team 2 as a result of the Soft Spot Directions or the Tertiary Bund Directions. [178] CMC has also abandoned its pleaded claim for delay due to rain and Easter events.279 [179] There is, however, a separate and further event that delayed the construction of the Reclamation C Bunds. This was a Stop Work Direction given on 8 March 2012 which is referred to by the parties as the “truck bogging”. (v) Direction – Truck Bogging (Stop Work Direction) [180] On 8 March 2012, by email from Mr Walls to Mr Vance, CMC was instructed to stop all works.280 The email identified the reason for the instruction as: 273 T3-50, lines 30-36. 274 T3-62, lines 12-15. 275 WICET’s Written Closing Submissions, [1306] – [1356] and CMC’s Written Closing Submissions, [254] – [290]. 276 T33-46, lines 34-38. 277 WICET’s Reply Submissions, [116]. 278 Exhibit 426. 279 Eighth Further Amended Statement of Claim, [160AT] – [160AV]; WICET’s Reply Submissions, [119] – [124]. 280 Exhibit 2, CMC.503.021.9327. -- 54 of 304 -- 55 “Yesterday afternoon WP Superintendent Scott Karandrews and AH representative Bindu Madhava had advised the trucks to only haul over the drainage layer side of the bunds. At approximately 4pm this afternoon, it was observed that a 50T truck had become bogged on its right side in the area previously instructed.” [181] The bogging occurred on the bund on the boundary between the tertiary and secondary bund, being the bund marked “N” on the marked-up bund drawing, within the Team 1 Bunds.281 [182] It is common ground that the Stop Work Direction issued on 8 March 2012 constituted a suspension of the works pursuant to clause 34 of the General Conditions. Such a suspension may be given under clause 34.1 if the Principal’s Representative considers that the suspension of the whole or part of the work under the Contract is necessary for the protection or safety of any person or property. In those circumstances clause 34.4 provides that any cost incurred by the Contractor by reason of a suspension under clause 34.1 shall be borne by the Contractor. If the suspension is, however, due to an act or omission of the Principal, or the Principal’s Representative, employee, consultant or agent and the suspension causes the Contractor to incur more or less cost than otherwise would have been incurred but for the suspension the difference shall be valued under clause 40.5. [183] CMC pleads that the effect of the Stop Work Direction was to cause it additional cost by delaying the Team 1 Works by four calendar days and 1.5 hours for the period 8 March 2012 to 12 March 2012.282 WICET pleads that the reason the instruction was given was because of the Principal Representative’s concern in respect of overall site safety. The bogging of the truck was the second serious safety incident that had happened in two days. It had occurred in direct contravention of the Principal Representative’s direction of 7 March 2012 that CMC was only to operate the haulage trucks on the drainage side of the bunds.283 WICET admits that CMC undertook no work over the claimed days. However, as the direction was properly characterised as a direction as to safety or as a result of an act or omission of CMC, it does not entitle CMC to a valuation of additional cost under clause 34.1.284 CMC submits that WICET has provided no evidence of a second serious safety incident as alleged and in CMC’s submission, the incident was not of a kind to reasonably justify a four day shutdown. Relevantly, much of the Reclamation C Bunds (and the entire site) was soft and muddy ground, with more than 20 separate bogging incidents occurring, and CMC had a practice in place to remove bogged vehicles. This was the only bogging which resulted in an order to stop work from WICET. CMC therefore submits that it was unnecessary to stop the entire Contract Works, or, in fact, any works except in the immediate vicinity of the bogged truck for half a day and it was unnecessary to stop the entire Contract Works for the duration of four days.285 [184] I do not accept CMC’s submission as it relates to the suspension of work at the Reclamation C Bunds. In my view, the evidence supports WICET’s submission that it was not the cause of the suspension because a suspension was necessitated by either: 281 T3-57, lines 43-45. 282 Eighth Further Amended Statement of Claim, [160AO]. 283 Sixth Further Amended Defence and Counterclaim, [113AI(d)]. 284 WICET’s Written Closing Submissions, [1367]. 285 CMC’s Written Closing Submissions, [297]. -- 55 of 304 -- 56 (i) the protection or safety of any person or property; or (ii) an act or omission of CMC (by itself or its subcontractor).286 [185] The email of 8 March 2012 from Mr Walls to Mr Vance foreshadowed a full investigation of the incident: “WP expect a full investigation into this incident, and works can only resume when the Contractor can fully demonstrate that the contractor undertake works in a safe manner ensuring the protection and safety of all personnel and property on site.” Mr Wall in his email specifically referred to clause 34.1(b) and the suspension being imposed for “the protection or safety of any person or property”. [186] There are photographs of the bogged truck which show that when it was bogged it was on a “major lean”.287 The driver of the truck had to jump out of the cabin. Mr Barry admitted CMC had been told not to drive on the drainage side of the bunds but drew a distinction between whether the discussion involved an “instruction” or was simply a “conversation” or “discussion”.288 I accept WICET’s submission that the distinction drawn by Mr Barry is artificial. The real issue is whether CMC (and its subcontractor) was doing something it was advised against. Mr Barry in an email to Mr Vance dated 13 March 2012 referred to the “instruction/advice” received on Wednesday, 7 March. This email concludes: “At the end of the day the truck driver and dozer operator went against all instructions/procedures/methodologies we have in place and as a result has become bogged all be it quite a bad one.”289 [187] An incident investigation report was prepared following a meeting between representatives of the relevant subcontractor, CMC, Worley Parsons and WICET on 10 March 2012.290 This report referred to a supervision instruction that was given “not to access back that far on the bund”. Mr Vance accepted that the bogging on 8 March 2012 was “the worse bogging (CMC) had on site”.291 Having looked at the relevant photographs, I do not accept CMC’s submission that the suspension was issued without apparent cause and was unreasonable. Even though Mr Walls was not called to explain the reasons for suspending all work on-Site, it must be accepted that the suspension, at least in relation to the Reclamation C Bunds, was based on safety considerations. Whether the suspension should have been Site-wide is dealt with below in respect to the Piling Claim (Variation 142). The fact that the suspension was based on safety considerations is highlighted by what occurred during the four days of the suspension. Mr Karandrews who advised Mr Walls to issue the suspension stated that over the four days CMC conducted reviews of the work method statements with their crews at their site office and considered how safety could be improved on-site. Mr Karandrews sat in on 286 WICET’s Written Closing Submissions, [1366]. 287 T21-25, lines 26-27. 288 T14-64, lines 2-4. 289 Exhibit 2, CMC.501.021.6261. 290 Exhibit 158, CMC.502.015.1089. 291 T10-7, lines 38-44. -- 56 of 304 -- 57 these meetings. The work method statements under consideration did not only relate to trucks but all aspects of the work.292 [188] The site instruction to stop works was lifted on 12 March 2012 by way of an email from Mr Walls to Mr Vance.293 CMC’s Contractual Basis for the Earthworks Claim [189] CMC’s primary submission is that the combined effect of the series of directions discussed above constitutes a variation for the purposes of clause 40.1. The direction had the effect of preventing CMC from following the planned and contractual methodology and sequencing for the construction of the Reclamation C Bunds.294 The directions are therefore ones which “change the character … of any work”.295 [190] Clause 40.1 uses the language that the Principal’s Representative “may direct” the Contractor to change the character of any work. Similarly, the language of clause 40.3 speaks of “the variation directed”. None of the directions could be described as express directions to change the character of the work. Clause 40.1 does not speak in terms of a direction or any combination of directions having a particular effect. Rather, it is the direction itself which requires the relevant variation. There is, in my view, nothing in the language of clause 40.1 when read with clause 40.3 which supports CMC’s submission that it is permissible to have regard to the combined effect of directions for the purposes of determining whether a variation has been directed. [191] Even if one was permitted to have regard to the combined effect of the directions, they do not constitute a variation. This is because there has been no change in the “character of any work”. As to the meaning of the word “character” in clause 40.1(b), CMC refers to a number of dictionary definitions.296 Consistent in these dictionary definitions is the concept of the character of something or someone being “distinct”. CMC submits that these dictionary definitions are mainly directed to a human being or to an inanimate object or thing. Here the word is used in clause 40.1(b) in reference to work, an activity.297 By reference to clause 40.1(a) and (c) it may be accepted that the character of work may vary even if there is no increase, decrease, omission, change in levels, lines, positions or dimensions of any part of the work. This is because clause 40.1(b) must have an independent and additional operation to those types of variations contemplated in 40.1(a) and (c). CMC’s submission is that directions which prevent the Contractor following the contractual methodology and sequencing of work come within the description of directions that change the character of work under clause 40.1(b). [192] CMC emphasises by reference to the definitions of “work under the Contract” and “Works” that under clause 40.1 a variation includes any increase, change to the character of or change to the positions of any part of the (broadly expressed) “works under the 292 T21-26, lines 11-24. 293 Exhibit 2, CMC.501.020.5067. 294 T33-36, lines 42-47. 295 Clause 40.1(b) of the General Conditions. 296 The Macquarie Dictionary, 3rd edition; Collins Dictionary of the English Language, 2nd edition; Oxford Dictionary of English, 2nd edition; Shorter Oxford English Dictionary, 5th edition. 297 T33-41, lines 40-47. -- 57 of 304 -- 58 Contract” – including changes to the use of Constructional Plant and changes to work even if it is not to be handed over to the Principal.298 [193] CMC submits and I accept that the planned methodology for the construction of the Reclamation C bunds can be discerned from the Contract itself. The methodology may be gleaned from the drawings for the bunds and from the approved Baseline Program. Both form part of the contractual documentation.299 The methodology included two separate access points with two teams working on multiple work-fronts. The methodology was to lay a first footprint comprised of a layer of drainage rock and the first layer of fill on top. The entire first footprint (once completed) would service a roadway throughout the bunds, giving access to all parts of the bunds, and allowing the entirety of each succeeding layer to be laid down at one time. CMC submits that the combined effect of the various directions given to it was that: (a) it could not commence work on the bunds until 23 November 2011; (b) for the first two-and-a-half months it had only one access into the bunds (until 9 January 2012); (c) for the first few months it was confined to working in one corner of the bunds, being the north/east corner; (d) the limited area in the north/east corner available for work was further restricted by the First Soft Spot Direction on 19 December 2011, and by the cultural heritage restriction on 14 December 2011, which effectively limited work to one bund (being bund M); (e) progress was further impeded by the Second Soft Spot Direction on 7 February 2012, which effectively closed off further access on bund M. The practical effect was that CMC was confined to entering through the intermediate access point, down the finger bund (bund O), giving it effectively one passageway into the bunds; and (f) it was not until CMC completed the finger bund (bund O), and the temporary haul road across the tertiary bund (which was a continuation of the finger bund across) to bund P, that the Contractor was able to open up multiple work-fronts, such that the men and machines on-Site were fully engaged. That was approximately 18 February 2012.300 CMC therefore submits that the net effect of these directions was an inability to pursue the planned methodology. That changed the “character” of the work in constructing the bunds, within the meaning of clause 40.1(b) of the General Conditions. [194] CMC refers to Yorkshire Water Authority v Sir Alfred McAlpine & Son (Northern) Limited.301 The Court held that the work method statement was a method of construction under the contract and that a direction to change the method of works was a variation. In that case the method statement (like the Baseline Program in the present case) was duly incorporated into the agreement as a contract document. It therefore became a specified 298 CMC’s Written Closing Submissions, [165] – [167]. 299 CMC’s Written Closing Submissions, [169]. 300 CMC’s Written Closing Submissions, [173]. 301 (1985) 32 BLR 114. -- 58 of 304 -- 59 method of construction by agreement between the parties. The Court held that where there was a specified sequence or method of construction which could not be followed because of impossibility, the contractor was entitled to a variation.302 The Court recognised, however, that this question turned solely on the proper construction of the particular contract.303 The variation clause in Yorkshire Water Authority was in different terms to clause 40.1: “The Engineer shall order any variation to any part of the Works that may in his opinion be necessary for completion of the Works and shall have power to order any variation that for any other reason shall in his opinion be desirable for the satisfactory completion and functioning of the Works. Such variations may include additions omissions substitutions alterations changes in quality form character kind position dimension level or line and changes in the specified sequence method or timing of construction (if any).” [195] The variation clause in Yorkshire Water Authority expressly contemplated a variation as being constituted by a change in the specified sequence method or timing of construction. The Court was not concerned with the issue of whether a change in program constituted a change in the “character of the Work”.304 [196] CMC also relies on Alucraft Pty Ltd (in liq) v Grocon Ltd305 where, the Court stated that: “I can see no reason, however, why in a particular case a programme might not become a contractual document with contractual force. Much would depend on the terms of the contract and the conduct of the parties. … The issue I must consider is the contractual effect of CL1.4 in the circumstances that a sub contract programme was agreed to by the parties. The contractual obligations upon Alucraft is spelt out in CL1.4. Once the parties agreed upon a sub contract programme the provisions of that clause imposing the obligation upon the sub contractor to “‘complete the subcontract works in accordance with the sub contract programme”’ could operate and the obligation imposed on the sub contractor by the express term crystallised. If the sub contract programme was later varied, so the obligation would vary.” [197] I accept WICET’s submission that this case does not assist CMC. The part of the judgment quoted above was in relation to a contention by the subcontractor that a term should be implied into the contract. The term sought to be implied was that the builder would afford to the subcontractor sufficient access to the site to enable it to complete the works in accordance with the approved program. The Court upheld the implication of that term. WICET submits that the fact that the subcontractor had to rely on an implied term to advance a breach claim supports WICET’s position that a mere change in methodology and sequencing does not constitute a variation because it does not change the character of any work. The bunds as-built substantially reflected the bunds as planned. 302 (1985) 32 BLR 114 at 126. 303 (1985) 32 BLR 114 at 123. 304 WICET’s Reply Submissions, [59]. 305 (Unreported, Supreme Court of Victoria, Smith J, 22 July 1993 – 15 February 1994, 22 April 1994) 28. -- 59 of 304 -- 60 [198] CMC’s alternative submission is that the Permit Direction, the Limited Clearance Direction, the No Go Zone Directions and the Cultural Heritage Directions were directions under clauses 33.1 or 34.1 or both – to vary the order and timing of the works or to suspend a part of the works.306 WICET accepts that a direction which has the effect of changing the sequencing of work may give rise to an entitlement under clause 33.1.307 [199] The Start Works Direction is relied on by CMC for the purposes of identifying WICET’s instruction to CMC to proceed with all of the Contract Works. It was this instruction that led to CMC mobilising plant and equipment to the site from that date. The Start Works Direction itself does not constitute a direction under clause 33.1 because it is not a direction as to what order or at what time the various stages or parts of the work under the Contract shall be performed. Rather, it is a notice that instructs the Contractor to do the work specified in the Contract with no stipulation as to timing or order.308 The Start Works Direction however, informs and gives context to both the Permit Direction and the Limited Clearance Direction. WICET submits that neither the Permit Direction nor the Limited Clearance Direction constitute directions to CMC to perform various stages or parts of the works under the Contract in a particular order and at specified times under clause 33.1. All the directions did was to require CMC to plan around the constraint, not to perform the stages or parts of the work in a particular order or at specified times.309 I do not accept this submission. These directions required CMC to change the sequencing of the Contract Works by directing the manner in which the clearing works for the haul road should be performed. The sequencing of the work was altered by the Limited Clearance Direction in that it directed CMC to construct the haul road in accordance with the Clearing Permit and change the haul route by directing CMC to construct the haul road to Access A only (contrary to the Baseline Program). Similarly the two “No Go Zones” Directions given on 8 and 18 November 2011 altered the sequencing and the timing of the construction of the haul road. The No Go Zone maps identified by way of yellow squares habitat trees on the haul road to the Reclamation C Bunds which CMC was not permitted to remove until approval of the Species Management Plan. CMC could only remove habitat trees from the haul road after 18 November 2011 when No Go Zone Map 3 was issued. These directions therefore fall within clause 33.1. [200] Similar considerations apply to the No Go Zone Map (Version 4) issued by Worley Parsons on 5 December 2011. [201] As to the Cultural Heritage Directions given by WICET on 14 and 17 December 2011 whereby CMC was directed not to commence any work at Access B, these directions not only altered the sequencing of the work on the Reclamation C Bunds, but also constituted a suspension of part of the work under the Contract pursuant to clause 34.1. The relevant act or omission of the Principal for the purposes of this clause was the failure of WICET to have previously dealt with these cultural heritage issues. It does not matter whether the relevant directions fall under clause 33.1 or 34.1 because both clauses deal in the same way with the costs of such directions. In both instances if the direction causes the Contractor to incur more or less costs than otherwise would have been incurred but for (the direction or the suspension), the difference is valued under clause 40.5.310 Clause 306 CMC’s Written Closing Submissions, [180]. 307 WICET’s Reply Submissions, [63]. 308 WICET’s Written Closing Submissions, [1214]. 309 WICET’s Written Closing Submissions, [1219] and [1230]. 310 See clause 33.1 and 34.4 of the General Conditions. -- 60 of 304 -- 61 40.3, which deals with pricing a variation, relevantly provides that the variation directed under clause 40.1 shall be valued under clause 40.5. At first blush, it appears that whether the directions constitute a variation under clause 40.1 or directions or a suspension under clauses 33.1 and/or 34.1 makes no difference because all roads lead to a valuation under clause 40.5. WICET however, submits that directions under clause 33.1 or clause 34.1 are to be valued on the basis of costs. This is because both clauses 33.1 and 34.1 (and 34.4) refer to the directions or suspension causing the Contractor to incur more or less costs than otherwise would have been incurred had the Contractor not been given the direction or suspension. It is the “difference” which is valued pursuant to clause 40.5. According to WICET, CMC must establish whether the direction or suspension caused CMC to incur more or less costs than would otherwise have been incurred. CMC, however, submits that whether it has incurred more or less costs is a threshold question to allow it a valuation pursuant to clause 40.5, not the measure of CMC’s entitlement.311 WICET’s submission apparently extends to “actual costs” in that it pleads that CMC did not pay any additional costs to its subcontractor in relation to the alleged delay in respect of the Permit Direction, the Limited Clearance Direction and the No Go Zone Directions and is therefore not entitled to any amount.312 [202] CMC submits that all that needs to be established under clauses 33.1 and 34 is that, as a threshold matter, it incurred some extra costs. The word “costs” should be interpreted liberally since it stands in contrast to the term “Direct Costs” which is a defined term.313 [203] CMC’s position is that if it was WICET’s intention that the valuation mechanism for claims under clauses 33.1 and 34.4 was to be based on the “costs that were reasonably and necessarily incurred by the Contractor” (that is, a costs incurred basis), WICET would have amended clauses 33.1 and 34.4 to include and rely upon the concept of “Direct Costs”, as is the case for clause 36. Rather, clause 33.1 and 34.4 provide for the valuation mechanism set out in clause 40.5, which refers to the use of rates. [204] Similarly, the concept of “Direct Costs” is not introduced into clause 40.5, which is the valuation clause under the Contract. CMC submits that this supports the proposition that if it was the parties’ intention that the valuation mechanism for claims under clause 40.1 was to be limited to the “costs that were reasonably and necessarily incurred by the Contractor” (that is a costs incurred basis), the parties would have amended clause 40.5 also to include and rely upon the concept of “Direct Costs” as is the case for clause 36.314 [205] Once that threshold matter has been established, the valuation proceeds (similar to a variation) in accordance with the mechanism set out in clause 40.5. That valuation does not involve a consideration of actual costs (for that would involve no valuation at all – simply an inquiry into invoices) – but rather proceeds on the basis of contractual rates (clause 40.5(a) and (b)) or reasonable rates (clause 40.5(c)). There is good commercial sense to this because it limits the significant uncertainty which would arise if liability was merely a function of actual cost.315 311 CMC’s Written Closing Submissions, [411]. 312 Sixth Further Amended Defence and Counterclaim, [113AU(b)]. 313 See clauses 2 and 36 of the General Conditions. 314 CMC’s Written Closing Submissions, [417] - [418]. 315 To take the present claim as an example, it would mean that WICET’s liability to CMC may depend on, inter alia the outcome of an adjudication between CMC and its subcontractor – in which WICET could play no role and which could result in a very large award in favour of the subcontractor. In those circumstances, WICET would obviously not wish to pay the “actual costs” incurred. -- 61 of 304 -- 62 [206] According to CMC, the rates at Schedule C-4 are rates intended to capture all costs associated with particular types of work, labour or plant in a fixed, agreed amount. [207] There is no dispute that CMC paid additional costs to its subcontractor in relation to the Cultural Heritage Directions. Nor can it be really disputed that CMC has incurred additional costs in respect of the other directions.316 [208] WICET submits that the incurring of additional costs is not a threshold question, but rather the measure of entitlement. What is called for is a “costs differential assessment”.317 In support of this submission, WICET refers to various clauses of the Contract which contemplate two types of valuations under clause 40.5. The valuations under clauses 3.3, 11, 14.1 and 40.1 are valuations of work or variations to the work (that is a price-based valuation). This is to be contrasted to valuations on the basis of costs or the difference in costs (a costs-based valuation) as contemplated by clauses 8.1, 14.3, 27.5, 28.2, 28.3, 33.3, 34.1 and 36. From this analysis WICET submits that it is clear that the incurrence of cost is not a threshold issue to valuation, but rather identifies that which is to be valued. [209] WICET refers to Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd.318 This case is relied on as highlighting the distinction between cost-based claims and price-based claims. The case was concerned with a claim by a builder for its additional costs incurred due to a change in sequence. The builder sought these additional costs as a variation. Clause 9 of the relevant contract provided that all variations were to be valued and the sum involved to be added to or deducted from the contract sum. The valuation of a variation was in accordance with three rules. First, the variation was priced by reference to a bill of quantities, or if no such bill of quantities had been provided appropriate current rates. Second, where there were no appropriate current rates, a fair valuation of the variation according to measurements adopted by the architect was to be made. Finally, if in the opinion of the architect the valuation of the variation could not be ascertained by either of the above methods, the builder upon notification to that effect could proceed with the works and present in such form as the architect may direct a correct record of the cost of the variation, together with evidence supporting the same. Any certificate issued to the builder by the architect pursuant to the clause was to include a reasonable allowance for overhead and profit. Stephen J319 stated: “In my view cl. 9 does not concern itself with the case of any increased cost to the builder of doing the contract work or supplying the contract materials and which is said to flow from delays or difficulties encountered in the course of construction; such a situation is only dealt with, in certain circumstances, in cl. 1(e) of the conditions, to which I will later return. The theme running through the whole of cl. 9 is that of valuation; its first paragraph calls for the valuation of variations by the architect, followed by alteration to the contract sum. Its second paragraph then provides for the machinery applicable to that task of valuation; … The third rule applies where the architect concludes that the two preceding rules cannot be applied, in 316 See CMC’s Written Closing Submissions, [419] - [420]. 317 T32-21, line 21. 318 (1972) 127 CLR 253. 319 At 284-285. -- 62 of 304 -- 63 which case the works are to be proceeded with and the builder is to present to the architect ‘a correct record of the cost of the variations’.” [210] His Honour concluded that the third rule in clause 9 was not applicable to a claim for increased cost due to delays and change of sequence. Such a claim could have been covered by clause 1(e) which provided: “If compliance with Architect’s Instructions involves the Builder in loss or expense beyond that provided for in or reasonably contemplated by this contract, then unless such instructions were issued by reason of some breach of this contract by the Builder, the amount of such loss or expense shall be ascertained by the Architect and shall be added to the Contract Sum.”320 [211] Stephen J drew a distinction between clause 9 and clause 1(e) as follows: “This sub-clause is expressly aimed at compensating the builder for loss due to matters unforeseen at the time of the making of the contract, and when the draftsman directs himself to this task he does not refer to valuation or to measurements and is not concerned with the issue of certificates or with allowance for overhead and profit. Instead the architect is given the task of ascertaining the amount of loss or expense in which the builder has been involved beyond that provided for in or contemplated by the contract; the amount so ascertained is to be added to the contract sum. The present claim might readily enough fall within cl. 1 (e) had there been an architect's instruction, as defined in cl. 1 (a). The contrast between its terms and those of cl. 9 emphasizes the inapplicability of cl. 9 in the present case.”321 [212] From the above passages WICET submits that the case provides an example of where the High Court has identified the conceptual difference between the valuation of cost-based claims and price-based claims under construction contracts. Whilst that may be accepted, clause 1(e) considered by Stephen J in Tuta is differently worded to clauses 33.1 and 34.4. Both clauses expressly refer to a valuation under clause 40.5 of any difference in cost. That is, the very distinction drawn by Stephen J cannot be drawn in the present case because “the theme” running through clauses 33.1 and 34.4 (similar to clause 9 considered by Stephen J in Tuta) is that of valuation. The reference to valuation means that CMC is not entitled to claim its actual or incurred cost caused by a direction under 33.1 or a suspension under 34.1. What CMC is entitled to is a valuation of additional cost. If WICET’s construction was to be accepted it would mean in effect that the actual cost difference incurred by the Contractor because of the relevant direction or suspension would be fully calculated and then valued in accordance with clause 40.5. The exercise contemplated by clause 40.5 is one of valuation by reference to either prescribed specific rates or prices or a schedule of rates or by reference to reasonable rates or prices. What clause 40.5 does not contemplate is the auditing of actual costs by reference to this valuation methodology. [213] What is to be valued under clause 40.5 is the additional cost incurred by CMC as a result of complying with WICET’s direction and/or suspension. CMC’s case as articulated in oral submissions is that the additional costs incurred by CMC that are to be valued is the provision of workers and machines for the two delay periods. The first delay period is 320 Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 285-286. 321 Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 286. -- 63 of 304 -- 64 from approximately 14 October 2011 to 23 November 2011. The second delay period (in respect of the Cultural Heritage Directions) is from 5 December 2011 to 9 January 2012.322 It is the provision of workers and machines during these delay periods that CMC seeks to have valued pursuant to clause 40.5. [214] The parties also differ as to the proper construction and application of clause 40.5. I have quoted this clause and the definition of “Schedule of Rates” in [31] and in [32] above. The Contract as I have already observed, contemplates a valuation being undertaken under clause 40.5 in a number of scenarios quite apart from clauses 33.1, 34.4 and 40.3.323 [215] CMC submits that on a plain meaning of the terms in clause 40.5 the valuation mechanism under the Contract is mechanical and not discretionary. It does not envisage regard to subsidiary factors in producing a valuation such as actual costs or Direct Costs. Clause 40.5(a) is the first valuation criteria in the cascading regime. It provides that where the Contract prescribes specific rates or prices for determining the value of the work, then those rates or prices shall be used. Pursuant to clause 40.5(a) a valuation must principally be based on prescribed contract rates or prices. CMC’s position is that whether a direction is made pursuant to clause 40.1, 33.1 or 34.1, clause 40.5(a) refers to the specific Contract rates contained in Schedule C-4.324 [216] According to WICET, if CMC’s submission that clause 40.5(a) refers to the specific contract rates contained in Schedule C-4 was to be accepted, the price vs. cost distinction “carefully and deliberately drawn in the Contract” would be of no consequence. Further, CMC’s submission does not recognise that Schedule C-4: (a) is concerned with price-based valuations of variations; (b) confers upon the Principal’s Representative the sole discretion to order a variation on a Dayworks basis. [217] According to WICET this is important because variations on that basis provide no disincentive to the Contractor to perform inefficiently as they are compensated on the basis of time not production, with the consequence that it is in the Principal’s interest to monitor such works more carefully. This is reflected in the Contract by the additional administrative requirements which apply to Daywork variations (that is requiring verification and signature from the Principal’s Representative).325 [218] Clause 40.5(a) expressly identifies which rates or prices shall be used. They are specific rates or prices which are “prescribed” under the Contract to be applied in determining the value. If the value to be determined is that of a variation, then the C-4 rates for pricing variations would fall within clause 40.5(a). This is because the Contract by Schedule C-4 prescribes specific rates or prices to be applied in determining the value of a variation. If the Principal’s Representative under clause 41 directs that a variation should be carried out as Daywork, Schedule C-4.2 would fall within clause 40.5(a) as prescribed specific rates or prices under the Contract to be applied in determining the value of a variation that is directed to be undertaken as Dayworks. Schedule C-4 does not, however, prescribe specific rates or prices to be applied in valuing compliance by the Contractor with a 322 T33-48, line 16 – T33-49, line 19. 323 See [208] above. 324 CMC’s Written Closing Submissions, [428] – [429]. 325 WICET’s Reply Submissions, [145(b)]. -- 64 of 304 -- 65 direction under clauses 33.1 or 34.1. Such directions are not variations, let alone variations directed to be carried out as Dayworks. It follows that I accept WICET’s submission that a valuation under clause 40.5(a) in respect of a direction given under clause 33.1 or clause 34.1 does not permit such a valuation to be conducted by reference to Schedule C-4. The rates and prices in Schedule C-4 are not contractually prescribed specific rates and prices for valuing costs under clauses 33.1 or 34.4. [219] WICET raised another construction issue in respect of Schedule C-4 in oral submissions. WICET submits that Schedule C-4 does not fall within clause 40.5(a) because the schedule does not prescribe the rates or prices to be applied. Schedule C-4 is headed “Rates for pricing variations”. The second paragraph reads: “Variations shall be performed on a Units Rate or a Daywork Rates basis at the sole discretion of the Principal’s Representative.” [220] According to WICET, this discretion permits a choice of rates. As such the rates and prices in Schedule C-4 are not prescribed rates to be applied in determining the value.326 Reference is made to clause 62 of the General Conditions which states in clause 62(a) that the Principal’s Representative may exercise their discretions and rights under the Contract in their absolute discretions. In my view, the mere fact that the Principal’s Representative has an absolute discretion whether variations shall be performed on a Units Rate or Daywork Rates does not mean that these rates are not prescribed. They are prescribed in the sense that if the variations are directed to be performed on a Dayworks Rates, then the rates in Schedule C-4.2 are to be applied. The discretion to be exercised, whilst absolute, is limited to a choice of prescribed rates. Under clause 40.3 the Principal’s Representative and the Contractor remain free, of course, to agree upon the price for a variation. Unless they do agree upon a price, the variation directed or approved by the Principal’s Representative under clause 40.1 is to be valued under clause 40.5. In the present case, the discretion was never exercised by the Principal’s Representative to direct any variations to be performed on a Daywork Rates basis. [221] As the Contract does not prescribe rates or prices for the valuation of the cost differential arising from a direction given under section 33.1 or 34.1, the next cascading clause that requires consideration is clause 40.5(b). This clause requires the rates or prices in a Schedule of Rates to be used to the extent that is reasonable to use them. By reference to the definition of “Schedule of Rates” CMC submits that Schedule C-4 falls within this definition. CMC submits that the criteria for clause 40.5(b) includes the application of the schedules of rates found in both Schedule C-3 and Schedule C-4 to the Contract to the extent that it would be reasonable to use them.327 [222] As a preliminary point it may be accepted that clause 40.5(b), when it speaks of using a Schedule of Rates “to the extent that it is reasonable to use them”, is not inviting an inquiry as to whether the rates and prices in the Schedule of Rates are high or low. The inquiry, rather, is whether it is reasonable to use the rates and prices in the Schedule of Rates. That is, it is the reasonableness of using the rates and prices, and not the reasonableness of the prices or rates, which has to be considered.328 326 T32-25, lines 3-14. 327 CMC’s Written Closing Submissions, [431] – [432]. 328 Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2000] BLR 247 at 257 per Beldam LJ. -- 65 of 304 -- 66 [223] WICET submits that Schedule C-4 is not a “Schedule of Rates” as defined for the following reasons: (a) the “Schedule of Rates” in the Contract is Schedule C-3; (b) for Schedule C-4 to be a “Schedule of Rates” it must be a schedule “in respect of any section or item of work to be carried out”. Schedule C-4 arguably does not fit this definition because it provides rates without reference to the work to be carried out (quantities). Its rates are on a unit or hourly basis; (c) a “Schedule of Rates” is a well-known term within the construction industry. It has been described as a schedule which “stipulate[s] quantities of work to be performed, and the rates at which such work is to be performed so that, in the event that more or less work is actually involved, the total price will vary”;329 (d) Schedule C-4 does not contain rates with reference to quantities of works; (e) CMC’s construction of clause 40.5(b) “makes a mockery” of the cascading regime in clause 40.5 for the valuation of variations. Schedule C-4 is a schedule which, by its title, is specifically for “pricing variations”. That is why, pursuant to clause 40.5(a), Schedule C-4 rates can be applied for variation work (if there is a specific rate or price in Schedule C-4 for the varied work). If it is determined that Schedule C-4 does not contain a specific rate for the variation, it would seem odd to nevertheless apply a rate from that schedule. The better interpretation is that, if there is no specific price for a variation in Schedule C-4, the contract rate in Schedule C-3 (which obviously still includes profit) might be reasonable to use; (f) by its interpretation, CMC is trying to enliven the application of Schedule C-4 rates “through the back door”. It should not be permitted to do so.330 [224] I accept WICET’s submission that Schedule C-4 is not a “Schedule of Rates” as defined. There are two primary reasons for this conclusion. First, an examination of Schedule C-4 (in particular as compared to Schedule C-3) is not a schedule in respect of any section or item of work to be carried out. Schedule C-4 does not show “the rate or respective rates of payment for the execution of that work”. Schedule C-3, by comparison, gives a description of the work to be carried out under the Contract, the quantity, the units and the relevant rate, so as to arrive at an amount. Schedule C-3 therefore reflects the definition of “Contract Sum” which provides in (b): “where the Principal accepted rates, the sum ascertained by calculating the products of the rates and the corresponding quantities in the Bill of Quantities or Schedule of Rates.” The definition of “Contract Sum” includes provisional sums but excludes any additions or deductions which may be required to be made under Contract. WICET therefore submits and I accept that the Contract establishes that the schedule of rates is what is to be used to price the work to be carried out under the Contract.331 WICET’s submission 329 Vassallo Constructions Pty Ltd v Andergrove Lakes Pty Ltd [2014] FCA 862 at [14]. 330 WICET’s Written Closing Submissions, [1451]; WICET’s Reply Submissions, [145(c)], [224] and [338(b)]. 331 T32-26, lines 30-37. -- 66 of 304 -- 67 is also consistent with clause 3.3 which is headed “Adjustment for Actual Quantities – Schedule of Rates”. Clause 3.3 relevantly states: “Where otherwise than by reason of a direction of the Principal’s Representative to vary the work under the Contract, the actual quantity of an item required to perform the Contract is greater or less than the quantity shown in the Schedule of Rates; and where the Principal accepted a rate for the item the rates shall apply to the greater or lesser quantities provided that where limits of accuracy are stated in the Annexure the rate shall apply to the greater or lesser quantities within the limits and quantities outside the limits shall be valued under clause 40.5 as if they were varied work directed by the Principal’s Representative as a variation.” The term “Schedule of Rates” as used in clause 3.3 can only be read as a reference to Schedule C-3. [225] The second reason for accepting WICET’s submissions is that the valuation regime established under clause 40.5 is a cascading regime. Schedule C-4 contains prescribed specific rates or prices to be applied in determining value in particular circumstances. In order to ascertain an amount the Principal’s Representative only applies clause 40.5(b) if clause 40.5(a) does not apply. If CMC’s submission was to be accepted, it would mean that the prescribed specific rates or prices which could not be applied in determining the value of, for example, the cost differential arising from a direction given under clause 33.1 or 34.1, may nevertheless be used under clause 40.5(b) to ascertain an amount. This would in effect defeat the cascading regime established by clause 40.5. [226] Where neither clauses 40.5(a) nor 40.5(b) apply clause 40.5(c) states that reasonable rates or prices shall be used in any valuation made by the Principal’s Representative. In Danidale Pty Ltd v Abigroup Contractors Pty Ltd332 Habersberger J stated that a reasonable rate is assessed by having regard to what a party would have had to pay under a normal commercial arrangement and to the cost of the work actually performed. CMC submits that clause 40.5(c) properly construed requires, as far as possible, adaption of rates and prices otherwise included in the Contract. CMC refers to Sergeant and Wieliczko, “Construction Contract Variations”333 where the authors argue that the rates and prices contained in the Contract are crucial when valuing any change. They further suggest that, where possible, contract rates should be extrapolated to value different items of work: “They are used for valuing variations when the extras are simple ‘more of the same’ but are also normally relevant when valuing dissimilar work. It may be possible to derive rates from certain items of work in the contract sum breakdown when valuing a quite different item of work.” [227] CMC also refers to the following passage in Hudson’s Building and Engineering Contracts to support the argument that where a “reasonable rate” must be derived, it can be derived from the contractual rate. The authors also emphasise the sanctity of rates in that parties should not be permitted to argue that certain rates are too profitable or unprofitable as a reason for not using them to value claims: 332 [2007] VSC 391 at [127]. 333 Michael Sergeant and Max Wieliczko, Construction Contract Variations, (Rutledge, 2014) 330. -- 67 of 304 -- 68 “… variation valuation clauses require an initial adherence to the quoted rates or prices in any bills or schedules forming part of the contract, or the use of an ‘analogous’ price derived from those prices … if no sufficiently similar priced items units are available for ‘analogous’ prices to be derived from them, most valuation clauses then provide for ‘reasonable’ or ‘suitable’ or ‘applicable’ or ‘fair’ rates and prices or valuations to be used, but rarely if ever expressly do more to define the criteria to be applied in that situation. In accordance with what has been called the ‘shopping list principle’, such ‘reasonable’ or ‘fair’ rates or prices or valuations should have regard to the Contractor’s general level of pricing, disregarding any element of profitability or unprofitability, just as in the case of the Contractor’s ‘prices’ or any ‘analogous’ prices derived from them … there seems no logical reason for a possibly very different price level to apply simply because no sufficiently similar item is to be found.”334 [228] By reference to Hawker Noyes Pty Ltd v New South Wales Egg Corporation335 and WMC Resources Ltd v Leighton Contractors Pty Ltd336 CMC submits that clause 40.5 does not permit an unfettered exercise of discretion in ascertaining a valuation. Rather, there is a fixed, standard and objective criteria on which valuation should be made. The words of the clause and the intention of the parties indicate the valuation under clause 40.5(c) is to be based, as far as possible, on contractual rates or prices, adapted if necessary to meet particular circumstances.337 [229] Both cases and both texts to which CMC refers concern the valuation of variations. I have found, however, that the relevant directions do not constitute a variation but fall within clauses 33 and 34. It is not readily apparent why a Principal’s Representative in seeking to apply reasonable rates or prices would necessarily have reference to prescribed specific rates or prices applicable to variations, including those directed to be performed on a Daywork Rates basis. Further, as I have found that Schedule C-4 does not constitute a “Schedule of Rates” as defined, if CMC’s submission is accepted it would permit the application of the Schedule C-4 rates and prices in circumstances where such application would not be permitted by either clause 40.5(a) or 40.5(b). CMC’s construction would in effect neutralise the cascading regime established under clause 40.5. The situation is different if what is being valued is a variation. In such a case it may be permissible to have regard to Schedule C-4 for the purposes of ascertaining a reasonable rate under clause 40.5(c). [230] WICET further submits that the rates for plant referred to in Schedule C-4.3338 are inclusive of profit. CMC submits that Schedule C-4.2 simply deems these rates to be inclusive of profit. This does not therefore mean that these rates actually include profit. The deeming provision simply operates, according to CMC, as a “cap” to prevent any additional cost to be added to any variation claims. The purpose of the clause is to ensure that the agreed rates (and no more or no less) would be used to value the claim for the item.339 The relevant rates in Schedule C-4.3 however have been expressly agreed to 334 Alfred Arthur Hudson and Ian Norman Duncan, Hudson’s Building and Engineering Contracts (Thomson Reuters, 13th ed, 2015) [5-056]. 335 (Unreported, Supreme Court of New South Wales, Brownie J, 11 November 1988). 336 [1999] WASCA 10. 337 CMC’s Written Closing Submissions, [434] – [438]. 338 These rates have been applied by Mr Roberts in valuing the Earthworks Claim. 339 CMC’s Written Closing Submissions, [483]. -- 68 of 304 -- 69 include profit. It is not a deeming provision. Clause 4.2.2 of Schedule C-4.2 simply states that the rates for constructional plant specified in Schedule C-4.3 are inclusive of profit. This is to be contrasted with clause 4.2.1, which states that the labour rates specified in Schedule C-4.2 “shall be deemed” to include profit. [231] As will become clear below when I consider the valuation exercise carried out by Mr Roberts and Mr Tsipis, there is in any event, very little difference between a valuation carried out by applying the rates in Schedule C-4 as opposed to the application of reasonable rates by reference to the rates charged by CMC’s relevant subcontractor for constructing the Reclamation C Bunds, namely AE Group. I do not however accept that the use of reasonable rates under clause 40.5(c) for a valuation concerning a direction given under clauses 33.1 or 34.1 should exclude profit. [232] Clause 40.5(f) states that if the valuation relates to extra costs incurred by the contractor for delay or disruption, the valuation shall include a reasonable amount for overheads but shall not include profit or loss of profit. WICET submits that as the proper mechanism for the valuation of the costs is pursuant to clauses 33.1 or 34.4, the proper approach under the Contract for a valuation of costs under clause 40.5 is to conduct the valuation pursuant to clause 40.5(f) or clause 40.5(c) having regard to clause 40.5(f). WICET submits that because CMC’s Earthworks Claim is for delay, the valuation must observe the requirements of clause 40.5(f) and include a reasonable amount for overheads, but exclude profit. CMC’s entitlement, therefore, is limited to any extra cost in overheads incurred as a result of complying with the directions.340 I do not accept this submission. Clause 40.5(f) refers to extra costs incurred by the Contractor for delay or disruption. Such costs are contemplated by clause 36 which deals with delay or disruption costs. Clause 36 deals with the situation where the Contractor has been granted an extension of time under clause 35.5, that is an extension of time for Practical Completion. The Earthworks Claim is not one for delay or disruption costs in the context of an extension of time for any delay caused by an event listed in clause 35.5(b)(i). CMC’s claim as pleaded is that the combined effect of the directions amounted to a variation or, alternatively, were directions pursuant to clause 33.1 and 34. For reasons stated above, I do not accept that the directions constitute a variation for the purposes of clause 40.1. CMC’s Earthworks Claim may, however, be described as a claim under clause 33.1 and 34.4, measured by reference to the delay caused to the progress of the Reclamation C Bunds.341 As CMC submits, there is a difference between a delay measurement and a delay claim. Delay is the measurement of late completion of works.342 According to CMC, the nature of the directions was to result in delayed progress and so delay is the appropriate measure to determine CMC’s entitlement pursuant to clause 40.5. [233] Clause 40.5(f) is, in my view, only referable to a delay or disruption claim pursuant to clause 36. Where such a claim is made clause 40.5(f) requires the valuation to include a reasonable amount for overheads but not include profit or loss of profit. Clause 40.5(f) does not state how one is to value the quantum of a delay or disruption claim. Rather, it identifies specific items that may or may not be included in a valuation undertaken, for example, pursuant to clauses 40.5(a), (b) or (c). Clause 40.5(f) does not therefore apply to the valuations contemplated by clauses 33.1 and 34.4. 340 WICET’s Written Closing Submissions, [1378] – [1382]. 341 CMC’s Written Closing Submissions, [305]. 342 CMC’s Written Closing Submissions, [302] – [303]. -- 69 of 304 -- 70 Measurement of the Delay The Pleaded Case [234] CMC by paragraph 137C of its eighth further amended statement of claim pleads that the effect of the Start Works Direction, Permit Direction and Limited Clearance Direction was to cause additional costs to CMC by restraining it from starting construction of the haul routes required for Team 1 and Team 2 to perform the bulk earthworks by 22 calendar days from 14 October 2011 to 4 November 2011. From my findings above, I accept that the Permit Direction and the Limited Clearance Direction resulted in a delay of 22 days. [235] Paragraph 137I pleads that the No Go Zone Directions caused additional cost to CMC by delaying the construction of the haul route from the GPN Borrow Pit to the Reclamation C Bunds by 12 calendar days between 7 November 2011 and 23 November 2011. I have found that the delay period was 8 rather than 12 days. [236] Paragraph 160AD pleads that the effect of the Cultural Heritage Directions and Further Flora Directions was to cause additional cost to CMC by: (a) suspending the construction of the haul road from the GPN Borrow Pit to the Reclamation C Bunds at Access B until 19 January 2012; and (b) disrupting and delaying the Team 1 Works by 57 calendar days from 24 November 2011 to 19 January 2012. As I have already observed, CMC now only claims 30 days in relation to this period in accordance with Exhibit 426. [237] CMC submits that the effect of the directions and their measurement of impact on the time taken to complete the Reclamation C Bunds involved disruption which produced a prolongation of the job.343 CMC has sought to measure the additional days that CMC’s plant and equipment were on the Site to construct the Reclamation C Bunds. CMC submits that it is open to the Court to utilise any measure provided to it in order to make the factual determination of how many days the Reclamation C Bunds were delayed. [238] WICET refers to the Society of Construction Law Protocol which defines “prolongation” as “the extended duration of the works during which costs are incurred as a result of a delay.”344 According to WICET, prolongation is quantified by identifying the cost incurred during the extended duration of the works. Mr Vance estimated that CMC’s work in completing the bunds was prolonged by approximately three months: “The combination of late access and the impediments to access or the areas we couldn't work in in November, December, January and February didn’t prevent some work happening, but it did not allow us to achieve the productions we needed – or the work fronts we needed to carry out the project. Now, prior to doing this analysis I would have said around three months in terms of how much we were delayed. That’s more of a feeling and the fact that in those three months we didn’t achieve an awful lot of work. And 343 CMC’s Written Closing Submissions, [306]. 344 Exhibit 414, CMC.514.002.0579 at Appendix A. -- 70 of 304 -- 71 having done this analysis? … Having done this analysis – what did I come up with – around 78 days or something, which is a little bit less than three months.”345 [239] Mr Barry’s evidence was that the various restrictions added to the length of time it took to complete the Reclamation C Bunds by two months.346 [240] Both CMC and WICET have made extensive submissions as to the measurement of the delay. These submissions canvas the expert evidence of Mr King and Mr Abbott and an exercise carried out by Mr Vance347 which the parties refer to as the “Vance Measurement”. Many of these submissions deal with delay events that are no longer pressed by CMC. The delays to the commencement of the works (22 days) and to the construction of the haul road (8 days) and delays caused by the Cultural Heritage and Further Flora Directions (30 days) may be generally viewed as delays to CMC having access to the Reclamation C Bunds. These delays in access led CMC’s plant and equipment being on the Site to construct the Reclamation C Bunds longer than was anticipated. WICET does not dispute as a general proposition that for some periods of time particular parts of the work could not progress. Delays to access would generally fall within this category. WICET submits however, that it does not follow from that basic proposition that CMC incurred additional costs.348 WICET submits that the Earthworks Claim must fail for the following reasons: (a) Mr King did not undertake any productivity analysis and should have done so; (b) Mr King’s analysis ignores what would have occurred but for the directions; (c) The Vance Measurement which purports to demonstrate lost productivity and prolongation was objected to and does not constitute part of CMC’s pleaded case. [241] For reasons which follow, I am satisfied that CMC has established, through Mr King and Mr Vance (together with the evidence of Mr Barry referred to above) that it has incurred additional costs as a result of the directions by being required to have plant and equipment on-Site for an additional period of 60 days. [242] As to (a), CMC accepts that Mr King did not perform a disruption measurement of CMC’s resources at the Reclamation C Bunds. CMC submits, however, that this could not possibly be fatal to its claim or “make it impossible to quantify” as alleged by WICET.349 WICET submits that Mr King does not assess prolongation because the delay he identified is delay during the course of the work (not delay to the end of the job).350 I accept, however, as CMC submits, that Mr King assessed delay events to the Reclamation C Bunds which impacted the Reclamation C Bunds as a whole.351 The methodology adopted by Mr King is outlined in his Earthworks Report:352 345 T4-21, lines 5-16. 346 T14-60, lines 4-7. 347 Exhibits 22 and 31. 348 WICET’s Written Closing Submissions, [1142]. 349 CMC’s Written Closing Submissions, [330]. 350 WICET’s Written Closing Submissions, [1139]. 351 CMC’s Written Closing Submissions, [329]. 352 Exhibit 2A, Court Book Vol 9, Expert Report of Stephen King on Earthworks dated 2 September 2016, [57]. -- 71 of 304 -- 72 “In reaching my opinions as to the extent of delay to the progress of the earthworks to the Reclamation C bunds, I have: (a) considered the planned rate of progress of the earthworks to the Reclamation C bunds; (b) considered the actual rate of progress of the earthworks to the Reclamation C bunds by reference to the Lot Register data; (c) identified that the completion of Layer 1 to the bunds as performed by both Team 1 and 2 was delayed by over 6 months; (d) identified that the execution of the remaining work to the bunds after completion of Layer 1 was performed in a shorter duration than planned by both Team 1 and Team 2; (e) identified (by reference to the assumptions that I have been given and the contemporaneous records) what delay events impacted on the completion of Layer 1 of the Reclamation C earthworks; and (f) reached an opinion as to the duration of the delaying events which impacted Layer 1 of the Reclamation C earthworks.” [243] This methodology does not, in my view, lead to WICET’s conclusion that Mr King’s report does not permit an examination of additional costs. Conceptually I have no difficulty in finding that the delay to commencement of 22 days and the delay in constructing the haul road (8 days) prolonged the completion of the Reclamation C Bunds by 30 days. Similarly in relation to the Cultural Heritage Direction and Further Flora Directions, this delayed the commencement of Team 1 Works at Access B. CMC had machinery in place at Access B when the first Cultural Heritage Direction was given. This machinery was intended by CMC to go straight out to the Reclamation C Bunds to commence construction. The Cultural Heritage Directions prevented CMC from opening a second access to the Reclamation C Bunds at this point and affected CMC’s production at the Reclamation C Bunds.353 WICET, however, submits that Mr King ought to have considered the overall progress of the works and whether resources employed on delayed activities were employed to other productive work. This means in the context of the Cultural Heritage Directions that Mr King should have analysed whether the plant and machinery delayed at Access B could have been utilised to increase production at Access A. Mr King did not accept that the reallocation of resources to another bund would mean that the work would finish any earlier.354 [244] In the course of cross-examination Mr King stated that he had departed from a “measured mile” loss of productivity analysis conducted in respect of a previous pleading because the records did not support it. Because of the level of detail of the information he was unable to draw an accurate measured mile analysis that was sustainable.355 [245] I accept CMC’s submission that in determining the number of days that the Reclamation C Bunds were delivered late, it is acceptable to perform an analysis of the factual matters 353 See [158] above. 354 T26-112, lines 24-30. 355 T26-103, lines 31-33. -- 72 of 304 -- 73 in the claim, including dates from which CMC experienced access issues and (as Mr King has done) measure these events against actual progress.356 [246] As to (b), WICET criticises Mr King for failing to undertake the same task as Mr Abbott, where he set up a potential framework for “additional cost” by correcting errors in CMC’s Baseline Program to identify how long the Reclamation C Bund works would have taken in any event. According to Mr Abbott’s analysis, even without the alleged directions, the works would have continued past the alleged delay events. Mr Abbott’s Adjusted Baseline Program shows a completion date for the Reclamation C Bunds of 21 July 2012. This represents a completion date that is 124 days later than CMC’s Baseline Program. Mr King is criticised by WICET for not considering the veracity of CMC’s Baseline Program when completing his assessment. [247] WICET summarises Mr Abbot’s revisions to the Baseline Program as follows: (a) Mr Abbott identified that the Baseline Program did not comply with the technical specifications in the Contract: the construction constraints for the placement of bund material in layers were not properly reflected, which meant that the Baseline Program contained logic and sequencing flaws; (b) Mr Abbott changed the duration of activities based on the stated productivity of 2,000m3 per day and the proper quantity of material to be placed at the bund; (c) Mr Abbott made further changes to the duration of activities based on CMC’s realistic (revised) production rate; and (d) Mr Abbott made changes to reflect CMC’s planned working week and calendar.357 [248] For the reasons set out in paragraphs [365] – [384] of CMC’s closing submissions I do not accept and cannot rely on Mr Abbott’s analysis. The flaws in Mr Abbott’s analysis may be summarised as follows: (a) a significant number of factual assumptions made by Mr Abbott about the Contract Works are inconsistent with what actually occurred on-Site as demonstrated by the evidence in particular of Mr Vance, Mr Grey and Mr Barry, whose evidence I generally accept. Mr Abbott, for example, adjusts the Baseline Program by allowing an extra 21 calendar days for the construction of the haul road. This is because Mr Abbott asserts the Baseline Program did not include an activity for the construction of the haul road. Mr Abbott’s assumption is not correct. Mr Vance’s evidence was that the construction of the haul road was provided for in activity 4RCL-1005.358 Mr Abbott assumes that the construction of the bunds would not have commenced before 24 November 2011. Mr Vance’s evidence, which I accept, was that CMC intended to commence construction of the Reclamation C Bunds by 14 October 2011. Further adjustment is made by Mr Abbott to the Baseline Program on the basis that CMC never planned to achieve the productivity used in the Baseline Program. He asserts that CMC only ever planned to achieve the lower levels of productivity recorded in its target production charts provided with its 356 CMC’s Written Closing Submissions, [334]. 357 WICET’s Written Closing Submissions, [1158]; Exhibit 2A, Court Book Vol 10, Expert Report on Earthworks by Stephen Abbott dated 3 February 2016, section 6.4 and 6.5. 358 T3-27, lines 16-36; T3-34, lines 17-20. -- 73 of 304 -- 74 monthly reports. By reference to these charts he extends the duration for construction of the bunds by a further 41 days. This is unsupported by the evidence.359 (b) Mr Abbott’s analysis was a theoretical exercise undertaken by him in circumstances where his experience is in constructing building projects such as apartments, hospitals and stadiums. Mr Abbott has limited experience in major earthworks projects. WICET did not call any evidence such as engineers experienced in earthworks to say that the methodologies and planning involved in Mr Abbott’s Adjusted Baseline Program were appropriate. (c) A key part of Mr Abbott’s analysis of planned productivity is reliance on the target figures listed by CMC and CMC’s target production charts provided with its monthly reports in January 2012. This was during a period impacted by the delays to the Reclamation C Bunds. They should not have been used by Mr Abbott in recalculating CMC’s productivity rate to be 2,878m3 per day for all resources. As explained by Mr Vance in relation to Mr Abbott’s use of these production charts: “When that figure was put in there was a target in early January it was done at that time on the basis of the access we had at that time, which was not the access A and B that appear in the program, and at that time we were impacted by soft spots and cultural heritage issues. It was a target to try to set the earthworks team to achieve with the constraints that we had at the time. It’s not a replacement for the baseline program, it’s a target based on the actual conditions we were encountering at that time. … Targets like this are set up to try and give the team a bit of motivation, give them something to try and achieve. They’re generally a realistic target that you believe you can achieve at the time … So the way he’s using it is incorrect.”360 [249] It is convenient at this stage to make some preliminary observations in relation to the expert evidence of Mr King and Mr Abbott. For reasons that are developed in more detail below in dealing with the Delay Claim, I generally prefer the evidence of Mr King over that of Mr Abbott. These experts gave their evidence concurrently. In retrospect, the giving of concurrent evidence was a mistake. This was primarily for two reasons. First, there were too many fundamental points upon which Mr King and Mr Abbott differed which detracted from the effectiveness of them giving their evidence concurrently. Secondly and more fundamentally, my view is that Mr Abbott adopted the role of being an advocate for WICET. For example, paragraphs 180 to 186 of Mr Abbott’s Earthworks Report contained opinions express by Mr Abbott as to CMC’s state of mind: “180. The evidence indicates that CMC either simply ignored the construction delivery plan that was encompassed by its Baseline Program or that it made a conscious decision to change its delivery plans. In my view, the reasons behind the change are irrelevant. What is clear, however, is that by the adoption of the Target Production Charts and the new (lower than stated in the CMC Baseline Program) production rates set out therein, CMC had apparently embarked on a delivery plan for construction of the Bunds that was fundamentally different to that shown in the CMC Baseline Program. … 359 T4-11-12. 360 T4-11, lines 16-41; T4-12, lines 1-11. -- 74 of 304 -- 75 185. In my view, this is indicative that CMC had little if any regard to its own Baseline Program when executing the Bund construction works and, in fact, it is evident from the Target Production Charts that CMC established a new methodology by which to manage construction and document progress.” [250] The difficulty I have with Mr Abbott expressing his opinion in these terms is that there was an obvious reason CMC had to adopt a different methodology than that contemplated in the Baseline Program. CMC was initially delayed in gaining access to the Reclamation C Bunds which, instead of being through two access points, was restricted to one. When a second access point opened up, namely Access B, the Cultural Heritage Directions and Further Flora Directions deprived CMC of its ability to use this access for the purposes of opening up multiple fronts as contemplated by the Baseline Program. To ignore this obvious explanation for an initial change in methodology and to in effect suggest that CMC never intended to follow this methodology and to achieve the production rates in the Baseline Program demonstrates a lack of objectivity. [251] As to (c), it is first necessary to explain the Vance Measurement. Mr Vance’s approach by reference to exhibits 22 and 31 was to: (a) identify CMC’s actual daily work and the duration to construct the bunds; (b) identify the period during which CMC was minimally affected in carrying out the work – April, May and June 2012; (c) calculate a theoretical daily production on the basis of the average production during April, May and June 2012 at 4,600m3; (d) exclude days in which CMC did not work (on the basis of actual production records), excepting the truck bogging incident; (e) make deductions to account for periods in which Mr Vance would have expected lower production; (f) identify that CMC, if unimpeded, would have placed the volume of material sufficient to complete the Reclamation C Bunds by 28 May 2012; and (g) make a deduction of three days for normal truck breakdowns in January 2012. [252] Mr Vance has calculated that CMC completed the Reclamation C Bunds 73.5 days later than it could have if not impacted by the events pleaded by CMC. WICET objected to CMC providing this evidence from Mr Vance and continues to do so in its closing submissions.361 First, WICET submits that the Vance Measurement is not part of CMC’s pleaded claim. WICET submits that Mr Vance’s analysis does not fit within the pleaded periods of delay. This is not correct. Mr Vance’s estimate is within rather than greater than the pleaded periods of relevant delay that are pressed. I accept CMC’s submission that the final calculation of the correct period of delay is a matter which is dependent on all of the evidence and ultimately to be determined by the Court. From the evidence of Mr Vance, Mr Grey and Mr Barry I accept that the relevant directions did prolong the construction of the Reclamation C Bunds. The initial delay was to the commencement of work. Mr Vance and Mr King both measured this delay being from 14 October 2011 to 361 WICET’s Written Closing Submissions, [1182] – [1199]. -- 75 of 304 -- 76 23 November 2011. The only difference is that Mr Vance has not deducted any days for presumed haul road construction as his evidence is that these roads were intended to be constructed under the Baseline Program prior to this date. As for the delays caused by the Cultural Heritage Directions and Further Flora Directions, the Vance Measurement fits within the delay events as identified by Mr King. WICET submits, however, that Mr Vance’s measurement does not fit within the pleaded periods of delay because Mr Vance has determined that, if CMC was unimpeded, it would have moved the necessary volume of material by 28 May 2012 (from 23 November 2011). Because CMC completed the works on 4 July 2012, Mr Vance considered that the works had been delayed by a total of 37 days. That is, Mr Vance identified a period of prolongation being from 28 May to 4 July 2012. That period of prolongation does not sit with any of the pleaded delay periods. Further, CMC’s attempt to insert the Vance prolongation period into Team 1 for the Cultural Heritage and Further Flora Directions is, according to WICET, “opportunistic and plainly untenable”:362 “It is untenable because the delays identified by the Vance prolongation period were not limited to the matters the subject of DE3. This is acknowledged in CMC’s submissions, and by Mr Vance in his evidence. For example: (i) at [290], CMC submits that the impact of the soft spot directions (which are ultimately abandoned), is ‘taken into account in the Vance Measurement’. If that is the case, then inserting the Vance prolongation period into DE3 overstates the true impact of DE3; (ii) Mr Vance’s evidence is to the effect that the key impacts on productivity lasted until the end of February 2012. DE3, as pleaded, is a delay between 23 November and 19 January. If Mr Vance’s evidence is that delays occurred at least up until the end of February 2012, it is improper to put his prolongation period into DE3 only.”363 [253] I do not accept this submission. The case that is advanced by CMC does fit within the case pleaded. The delay caused by the Cultural Heritage Directions and Further Flora Directions were ones which in effect deprived CMC of a second access point. Until those cultural heritage issues were dealt with, CMC was unable to operate on multiple fronts using two teams. It was this inability to do so which had a direct impact on CMC’s production rates. As noted in [162] above, on 17 December 2011 Mr Vance sent a letter to Mr Walls which stated the Cultural Heritage Directions had caused delay by limiting the number of work fronts CMC could work on and attached a map identifying the location of the affected area at Access B. It was only on 9 January 2012 that the suspension relating to the Cultural Heritage Directions ended and CMC was able to access the Reclamation C Bunds by way of the haul road through Access B. The practical effect of the directions, therefore, was to keep CMC to one access into the bunds (Access A) until about 9 January 2012. The period of delay in relation to these directions is now much less than the period pleaded. The 30 days now sought in relation to this period of delay fits within the pleaded period. [254] I have considered the further submissions outlined in [92] – [100] of WICET’s reply submissions which deal with CMC’s contention that the Vance Measurement has not been 362 WICET’s Reply Submissions, [88] – [89]. 363 WICET’s Reply Submissions, [90]. -- 76 of 304 -- 77 properly challenged. In spite of WICET’s objections to the Vance Measurement, I am content to rely on it. The Vance Measurement is simply an assessment by him as to how much earlier the Reclamation C Bunds would have been finished but for the relevant directions given by WICET. The main source material used by Mr Vance in compiling Exhibit 31 is contained in a document to which no objection was taken. The Vance Measurement ultimately confirmed Mr Vance’s and Mr Barry’s evidence as to the effect of the directions on the completion of the Reclamation C Bunds. This is evident from the following exchange: “Mr O’Donnell: Mr Vance, just ignoring the graph that’s on the screen for the moment, could I ask you this: apart from your work on the graph, if I asked you to estimate had you had the access that you asked for from the start for the reclamation C bunds and had you not had the various impediments in your work on the bunds about which you’ve given evidence, would the work in completing the bunds have finished earlier and if so, by how much?--- Yes, it would have finished earlier. I don’t believe there was any possible doubt about that, really. By how much? I have carried out a calculation as requested and I can take you through it, if you like. All right. But I was asking you before you did the graph, if I’d asked you that question, what would have your best estimate have been?--- I would have said about three months.”364 The graph to which Senior Counsel was referring was Exhibit 31. [255] CMC accepts that the precise duration of the delay caused by WICET’s conduct is difficult to perfectly measure. By reference to Chaplin v Hicks365 and Penvidic Contracting Co Ltd v International Nickel Co of Canada Ltd366 CMC submits that a difficulty in ascertaining its entitlement must be dealt with by this Court making the best assessment possible on the evidence. If the Court is satisfied that directions given by WICET affected CMC’s work and that, on the balance of probabilities a delay of a particular order of magnitude resulted, it is not necessary for CMC to mathematically demonstrate the exact length of the delay (indeed it would be impossible for any plaintiff to do so).367 [256] Whilst it is correct, as WICET submits, that Chaplin v Hicks is not addressing an issue of causation I am satisfied that the relevant directions did prolong the construction of the Reclamation C Bunds by at least 60 days. The fact that my assessment aligns with Mr Barry’s estimate is coincidental. His evidence does, however, generally support this finding. Mr Barry was the person on-Site. Quantum [257] The two quantum experts Mr Roberts and Mr Tsipis gave concurrent evidence. I found the evidence of both Mr Roberts and Mr Tsipis helpful. Both were willing to concede points and both sought to reach common ground. The major difference in their approach 364 T4-20, lines 30-43. 365 [1911] 2 KB 786 at 795. 366 [1976] 1 SCR 267. 367 CMC’s Written Closing Submissions, [451] – [456]. -- 77 of 304 -- 78 ultimately was based on the proper construction of the Contract, in particular clause 40.5, which was acknowledged to be a matter for the Court. [258] Mr Roberts’ valuation approach to the Earthworks Claim was to examine the actual plant, equipment and labour utilised by CMC to construct the Reclamation C Bunds by reference to the delay periods identified by Mr King. Mr Roberts’ exercise included: (a) identifying the plant used to excavate, haul and fill the material at the Reclamation C Bunds by reference to actual mobilisation dates and the fact that the plant was not demobilised until the Reclamation C Bunds were completed. These mobilisation dates were largely agreed between Mr Roberts and Mr Tsipis;368 (b) a productivity adjustment of 85% to the plant to account for maintenance and breakdowns; (c) identifying the geofabric labour and plant required to place geofabric at the Reclamation C Bunds and the actual dates of construction by reference to CMC’s records; and (d) the site facilities required to build the Reclamation C Bunds. [259] Mr Roberts then applied rates contained in Schedule C-4.2 being Daily Rates applicable to variations. As I have found that the Earthworks Claim is not a variation and that Schedule C-4.2 is not a “Schedule of Rates” the valuation by Mr Roberts using this schedule is not permissible under clause 40.5(a) or (b). Mr Roberts, however, undertook an alternative valuation under clause 40.5(c) using reasonable rates or prices. He has adopted CMC’s subcontractor rates plus 12.5% for overheads and profit. WICET submits that even on Mr Roberts’ alternative approach, the calculation does not reflect cost because Mr Roberts uses the subcontractor’s rates and adds 12.5% for profit and overheads. Mr Tsipis also adopted the rates set out in the AE Group subcontract. He considered they provided a reasonable basis of the cost incurred by CMC. Mr Tsipis, however, has excluded any reasonable amount for profit because of clause 40.5(f). I have construed clause 40.5(f) as imposing terms on a valuation carried out under either clause 40.5(a), (b) or (c) in respect to a delay or disruption claim brought pursuant to clause 36. It follows that I accept Mr Roberts’ approach as being correct in respect to the alternative claim. [260] Mr Tsipis’ primary valuation, however, is based on an assessment of the costs incurred by CMC in relation to the AE plant, geofabric installation and facilities claims. Mr Tsipis values this claim at nil because he found no evidence of payment by CMC to its subcontractor AE Group for the claimed plant or additional payment in respect of the other claimed categories. This, however, is based on a construction of clauses 33.1 and 34.4 as requiring an assessment based on actual cost. I have rejected this construction above. It is irrelevant to a valuation exercise conducted pursuant to clause 40.5(c) in respect of directions given under clauses 33 and 34 whether CMC has actually paid its subcontractor additional amounts. What is contemplated under clause 40.5(c) is a valuation exercise by reference to reasonable rates or prices, not an assessment of actual 368 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 May 2016, [288]-[290]; T30-97, lines 3-41. -- 78 of 304 -- 79 costs. I am satisfied that Mr Roberts’ valuation is of the difference in costs incurred by CMC as a result of the directions given by WICET pursuant to clauses 33 or 34. [261] CMC’s valuation for the Earthworks Claim is summarised in Exhibit 426. Dealing first with the delay to commencement and construction of the haul roads, I have arrived at a delay of 30 days. Mr Roberts’ alternative valuation for this delay period based on 34 days is $271,820.25. By dividing $271,820.25 by 34 days and multiplying this figure by 30 days, I assess the quantum for this period at $239,850. As to the delay caused by the Cultural Heritage Directions and the Further Flora Directions, CMC now only seeks a period of delay of 30 days. Mr Roberts’ alternative valuation is in fact higher than his valuation by using Schedule C-4.2 rates. The figure I have arrived at, however, is that contained in Item 3(a) of Exhibit 426 being an amount of $1,309,659. [262] This was described in oral submissions as a “more conservative” alternative.369 CMC explained this “more conservative” approach as follows: “[Mr Vance’s] evidence would suggest the delay was spread over the period. But we’ve included it as a sort of more conservative analysis because your Honour might recall the evidence is that as the job progressed, more equipment was brought onto site. And so the later you go on the job, and indeed, the later you go into January and February, the more value each day is worth: because there’s more equipment on site, so if it’s a delay day, there’s more equipment to value. So the averaging approach in a sense gives equal weighting to delay early and late.”370 This approach is in my view, more consistent with my findings made in paragraphs [163], [164] and [165] above. The disruption from the Cultural Heritage Directions and the Further Flora Directions had largely resolved by 9 January 2012. [263] The 30 day period identified by CMC is inclusive of adjustments made by Mr Vance for truck breakdowns in early January and the truck bogging incident. Given my findings in relation to the truck bogging incident, I have made no allowance for the Site suspension imposed by WICET. The figure of $1,309,659 is not only a more conservative approach, it also takes into account a 15% discount imposed by Mr Roberts. This reflects the productivity adjustment of 85% referred to above. [264] In oral submissions in reply WICET suggested that I should further discount these figures and treat the claim as essentially one for loss of opportunity. A discount was submitted to be appropriate because any assessment relies on the Vance Measurement. That is, no expert gave the Court the benefit as to whether there were any shortfalls or limitations in the approach adopted by Mr Vance. The Vance Measurement is, however, only part of the totality of the evidence upon which I have relied in assessing whether the relevant directions prolonged the construction of the Reclamation C Bunds. The figures should not be further discounted. [265] I therefore assess the quantum of the Earthworks Claim at $1,549,509. I deal with the question of interest later in these reasons. 369 T35-28, line 34. 370 T35-28, lines 25-34. -- 79 of 304 -- 80 The GPN Borrow Pit (alternative claim) [266] This claim is an alternative claim to the Earthworks Claim because both the GPN Borrow Pit Claim and the Earthworks Claim relate to (largely) the same plant (dump trucks, excavators) over the same period of time. This position has been taken by CMC in order to avoid any suggestion of double counting.371 As this claim is an alternative claim, given my findings in relation to the Earthworks Claim, it is not strictly necessary to determine it. I will however, set out my findings. [267] CMC claims the actual cost it incurred to its subcontractor, AE Group (plus an allowance for 12.5% for overheads and profit), for additional work made necessary because significant material was removed from the GPN Borrow Pit between tender and CMC’s arrival on-Site. [268] CMC pleads that on 1 November 2011, the physical condition of the GPN Borrow Pit was materially different from the condition it was in at the time of an earlier inspection. This inspection occurred on 10 February 2011 and was carried out by Mr Semmler on behalf of CMC. Mr Webb and Mr Enright were also present representing WICET. CMC pleads that the difference in the condition which is referred to as the “latent condition”, was as follows: (a) material had been removed from the northern area of the GPN Borrow Pit; (b) the surface level of the material in the northern area of the GPN Borrow Pit was materially different from the surface level at the time of the inspection; (c) there was approximately 334,000 BCM less material in the GPN Borrow Pit, including the northern area, than at the time of the inspection.372 On 1 November 2011 CMC notified WICET that the GPN Borrow Pit did not, at that time, have the volume of material present at the time of the submission of its tender and gave formal notice of encountering a latent condition. [269] As a result of this latent condition and certain representations made by WICET in documents and at the inspection, CMC alleges that substantial material had to be removed from more distant and more difficult to access locations in the GPN Borrow Pit and it was required and did pay its subcontractor an additional sum of $515,728. [270] The basis for CMC’s claim is either as a latent condition under clause 12 of the General Conditions of the Contract or for damages for misleading or deceptive conduct arising from misrepresentations made to CMC by WICET before it entered into the Contract pursuant to Schedule 2 of the Competition and Consumer Act 2010 (Cth). [271] Clause 12.1 defines latent conditions as: “(a) physical conditions on the Site or its surroundings, including artificial things but excluding weather conditions, which differ materially from the physical conditions which should reasonably have been anticipated 371 CMC’s Written Closing Submissions, [538]; T33-68, lines 17-44. 372 Eighth Further Amended Statement of Claim, [66L]. -- 80 of 304 -- 81 by an experienced and competent contractor at the time of the Contractor’s tender if the Contractor had – (i) examined all information made available in writing by the Principal to the Contractor for the purpose of tendering; and (ii) examined all information relevant to the risks, contingencies and other circumstances having an effect on the tender and obtainable by the making of reasonable enquiries; and (iii) inspected the Site and its surroundings; and (b) any other conditions which the Contract specifies to be Latent Conditions.” [272] Clause 12.3 provides that if a latent condition causes the Contractor to carry out additional work, use additional constructional plant or incur extra costs which an experienced and competent Contractor could not reasonably have anticipated at the time of tendering, a valuation shall be made under clause 40.5. The valuation in the present case was one conducted under clause 40.5(c) by reference to the additional sum paid to the subcontractor plus a 12.5% uplift for overheads and profit. [273] By reference to a diagram of the GPN Borrow Pit373 Mr Vance explained in evidence what was involved in CMC winning material from an area further back in the pit. This diagram shows a green haul road and a red haul road. In respect of the green haul road Mr Vance stated that approximately 70% of the material came from that area of the GPN Borrow Pit and approximately 30% through the red haul road route. Mr Vance in a letter to Worley Parsons dated 1 November 2011 outlined that material had been removed from the GPN Borrow Pit between the time of tender and the time of the awarding of the Contract. This letter attached a survey plan of the pit comparing levels from pre-tender documents to then current GPN Borrow Pit levels which revealed approximately 335,000m3 of material had been removed. According to Mr Vance, this meant that trucks had to travel a longer distance along haul roads which had quite steep grades.374 [274] CMC planned to exploit a particular area of the GPN Borrow Pit which was shown in its Borrow Pit Management Plan submitted with its tender, and again shortly after the Contract was executed.375 Attached to the Borrow Pit Management Plan was a schematic drawing of CMC’s contractual plan for extracting material from the GPN Borrow Pit. Mr Vance accepted that the diagram was schematic in nature and was not meant to be exact. He accepted in cross-examination that at the time of writing the Borrow Pit Management Plan, CMC did not have a plan for haul routes within the GPN Borrow Pit area. As explained by Mr Vance, however, this was because CMC was planning to “pretty much take it from the front here”.376 Mr Vance also accepted that whilst CMC intended to extract material from the red hatched part of the schematic diagram, it did intend to go beyond the red hatched area.377 373 Exhibit 95, CMC.502.076.8347. 374 T7-39, lines 34-40. 375 Exhibit 92, CMC.501.011.7435 and Exhibit 93, CMC.501.024.2983 and CMC.502.092.5684. 376 T10-30, lines 15-20. 377 T10-30, lines 29-35. -- 81 of 304 -- 82 [275] CMC’s primary witness for this claim was Mr Semmler. He worked as an estimator for CMC. His role was to price the project and examine the tender documents for this purpose. The GPN Borrow Pit was where the majority of CMC’s material was to come from to construct the project and in particular, the Reclamation C Bunds and the OLC. This material included general fill material, drainage rock material and clay. [276] By reference to the Borrow Pit Management Plan378 and a diagram entitled GC09 GPN Borrow Pit Area Layout Plan (which was a document he created) Mr Semmler showed where the resource was proposed to be worked with one working face connected by an internal haul road to the working platform where the drainage material would be produced. [277] Prior to creating the Borrow Pit Management Plan, Mr Semmler made a site visit on 10 February 2011. He was accompanied by ten other contractors who were tendering for the GC09 and GC10 Contracts. The GC10 works were largely works to be carried out on the other side of Hanson Road. Mr Semmler was taken along with the other contractors by bus to the site. The site visit included the GPN Borrow Pit. Whilst Mr Semmler did not take notes of the inspection, he did take photographs.379 Mr Semmler observed an operator already carrying out extraction work at the Borrow Pit. This was the Gladstone Ports Corporation which was carrying out quarrying works. [278] Mr Semmler recalls Mr Webb saying that the GC09 Contract would be awarded first and the successful contractor would have to establish into the Borrow Pit so that they would generally have “first bite” at the Borrow Pit in terms of where they wished to set up and work from. The GC09 Contractor would then negotiate with the GC10 Contractor. By reference to one of the photographs, CMC.507.001.0125, Mr Semmler recalls Mr Webb indicating the area where the successful GC09 Contractor could extract material. According to Mr Semmler, what he saw at the site visit of the GPN Borrow Pit and what was said to him by Mr Webb constituted the basis for CMC’s tendering.380 He also had reference after the site visit to a geotechnical report.381 A subsequent document was supplied containing an assessment of the GPN Borrow Pit around 2 March 2011.382 This document depicted an area which, in Mr Semmler’s view, fitted “very well” with the area indicated in the course of his site visit.383 This is the area in the top part which lies between the red dotted outline and the black line that divides the pit in half.384 By reference to Exhibit 95, which shows the various coloured haul roads in the GPN Borrow Pit which was referred to by Mr Vance, Mr Semmler stated that no part of CMC’s tender contemplated using the area to the left-hand side where the red and green haul roads terminate.385 [279] WICET called Mr Webb and Mr Enright. As at 2011 Mr Webb was employed as a construction manager for Worley Parsons for the WICET Project. He was based in Brisbane and left Worley Parsons in June 2011. He is a qualified engineer. He recalls attending the site visit on 10 February 2011. Whilst he had been to the site once before, 378 CMC.501.011.7435. 379 Exhibit 270, CMC.507.001.0124, CMC.507.001.0125, CMC.507.001.0126 and CMC.507.001.0214. 380 T15-8, lines 12-18. 381 Exhibit 280, CMC.503.023.3138. 382 CMC.507.001.0127. 383 T15-9, lines 5-12. 384 CMC.507.001.0127 at .0132. 385 T15-9, line 37 – T15-10, line 2. -- 82 of 304 -- 83 Mr Webb had never previously visited the GPN Borrow Pit. By reference to a photograph,386 Mr Webb stated that this photograph showed a considerably larger cleared area than what there was at the time of the inspection. His recollection was that at the time of inspection the left-hand side of the cleared area shown in the photograph was treed.387 Mr Webb recalled that the Gladstone Ports Corporation was operating a quarry from the GPN Borrow Pit. He does not recall whether there was any quarrying operation on the date of the inspection. He did not have a specific recollection of where the quarrying operation was being carried out. He recalls that a representative of the Gladstone Ports Corporation was present at the inspection in order to give the site visitors some information on access into the GPN Borrow Pit and the area that was going to be available to them if they were the successful contractor. His general recollection is that the area that was going to be made available to the successful contractor was, effectively, uncleared.388 Mr Webb could not, however, recall any discussions he had with the potential contractors during the site visit. He does not recall indicating an area in the north part of the GPN Borrow Pit. If he did say anything to the potential contractors, it would simply have been repeating what was said by the Gladstone Ports Corporation representative.389 [280] Mr Enright recalls attending the inspection. Mr Lano from BMD, which was a potential contractor, took notes of the inspection, which were circulated.390 Mr Enright recalls responding to Mr Lano’s email containing his minutes, giving some qualifications to certain notes that he did not entirely agree with.391 Mr Enright recalls observing plant and equipment carrying out quarrying operations in the Borrow Pit at the time of the site visit. Mr Enright prepared a document shortly before giving evidence392 where in red hatching he indicated the area he believed the quarrying activities were being carried out on the date of the visit, 10 February 2011. Mr Enright has no recollection of Mr Webb, during the inspection, saying words to the effect that an area would be used by the successful bidder for the project, whilst indicating a northern area of the Borrow Pit.393 Mr Enright did not have any specific recollection of discussions during the inspection. He doubted whether the GC10 Contractor would need to negotiate with the successful bidder regarding the use of the GPN Borrow Pit. Like Mr Semmler and Mr Webb, this was also Mr Enright’s first visit to the GPN Borrow Pit. Mr Enright does not recall inspecting the Borrow Pit after 10 February 2011. Mr Enright was, however, able to mark a red-hatched area on a document a week before his evidence which essentially showed the northern area (that is the area CMC alleges Mr Webb said was available to the successful tenderer) as being the area he observed quarrying activities taking place on the date of the inspection. [281] The Aurecon Hatch Report394 at figure 1.1 shows the area which had not yet been exploited as the northern area. Figure 1.1 shows the area then currently being exploited as the “southern section”. Figure 1.1 is therefore generally consistent with what Mr Webb is alleged to have explained to Mr Semmler and others. It is, however, inconsistent with 386 Exhibit 270, CMC.507.001.0214. 387 T23-8, lines 27-32. 388 T23-11, lines 10-13. 389 T23-12, lines 17-21. 390 WIC.500.011.0062. 391 Exhibit 313, WIC.500.011.0817. 392 Exhibit 314, WIC.118.013.0002. 393 T16-47, lines 13-17. 394 CMC.507.001.0127. -- 83 of 304 -- 84 Mr Enright’s recollection that the area being exploited for quarrying at the time of the inspection was the northern area. The Aurecon Hatch Report is dated 24 November 2010 but was not issued to the tenderers until March 2011, approximately a month after the inspection. [282] It is evident from the discussion of Mr Semmler, Mr Webb and Mr Enright’s evidence above that Mr Semmler had the better recollection of what was said at the site inspection. Mr Webb was apologetic for being unable to recall the specifics of any conversation. Mr Enright had little or no recollection of what was said in relation to the area to be used for extracting material by the successful tenderer. It is unsurprising that Mr Semmler would have the clearest recollection given that he was attending the inspection as CMC’s estimator. He was an experienced estimator who was ultimately responsible for drafting CMC’s Borrow Pit Management Plan. This plan and in particular the areas identified for material to be extracted is consistent with what Mr Semmler had been told by Mr Webb. Mr Semmler was the only person (of the three witnesses) who took photographs on the day. Further as CMC submits, Mr Semmler, unlike Mr Enright and Mr Webb, was only concerned with tendering for the GC09 Contract, whereas Mr Webb and Mr Enright were conducting a site visit in relation to GC09 and GC10. WICET criticises Mr Semmler for not taking any contemporaneous notes of the site visit. He did, however, take photographs. The fact that the notes of another potential contractor who attended the site visit do not record the representations is not an obstacle to Mr Semmler’s evidence being accepted. As CMC submits, the notes of Mr Lano from BMD are very brief for an inspection which lasted four or five hours. They cannot therefore be considered comprehensive notes. Mr Lano also represented a party who was tendering for both GC09 and GC10. [283] Mr Semmler’s evidence is also consistent with the formal tender document from Aurecon Hatch issued after the site visit. WICET submits, however, that neither the Aurecon Hatch Report or the Geotech Report should be interpreted as asserting that the “northern area” (or any area of the pit) would remain untouched.395 Whilst Mr Semmler, Mr Webb and Mr Enright appreciated that quarrying was being carried out in the GPN Borrow Pit by Gladstone Ports Corporation, the Aurecon Hatch Report was issued without qualification and was not subsequently withdrawn or corrected by WICET. It was a document that both Mr Enright and Mr Webb had responsibility for compiling or reviewing.396 Further, no concerns were raised by either Mr Enright or Mr Webb, who were involved in reviewing CMC’s Borrow Pit Management Plan as part of CMC’s tender submission. This plan also identified the northern area as the relevant area for extracting materials. [284] I therefore find that the representations pleaded in paragraph 65D of the eighth further amended statement of claim were made. The representations were made in the context of a site visit organised by WICET to facilitate tenderers inspecting the site, including the GPN Borrow Pit. [285] WICET submits however, that CMC could not have relied on the representations to form a view that the northern area of the pit would remain in the condition it was at the time of the inspection. This is because quarrying work was being undertaken at the time of the inspection. This submission ignores that the representation identified an area for the 395 WICET’s Written Closing Submissions, [1606]. 396 CMC’s Written Closing Submissions, [519(a)]. -- 84 of 304 -- 85 extraction of material for the successful tenderer. The representation given in the context of a site inspection for tenderers, which would include an estimator such as Mr Semmler, unsurprisingly resulted in him relying on the representation for the purposes of pricing the tender. Further, it is not clear how CMC could have conducted its own survey prior to tender in circumstances where the site was privately held. [286] CMC summarises the consequences of the removal of the material from the area in which CMC were planning to exploit as follows: (a) the material that was left was hard and rocky; (b) the general fill needed to build the bunds was basically gone from the front area; (c) CMC instead had to win the majority of the material from the “back end” of the Borrow Pit; (d) as a result CMC had to build longer haul roads and trucks had to travel longer distances at slow speeds because of the grade of the roads.397 [287] To fall within the definition of “latent conditions” a condition must differ materially from the physical conditions which would reasonably have been anticipated by an experienced and competent contractor at the time of the contractor’s tender if the contractor had carried out those matters in clauses 12.1(a)(i) to (iii). I am satisfied that these requirements are met. [288] WICET submits that CMC has mistaken the relevant requirements of clause 12. In paragraph 66L of the eighth further amended statement of claim CMC pleads that on 1 November 2011 the physical condition of the GPN Borrow Pit was materially different from the condition it was in at the time of the inspection. WICET therefore submits that CMC does not allege that the physical condition of the GPN Borrow Pit was materially different to the condition at the date of its tender or revised tender, which is the language of clause 12.1. CMC does plead, however, in paragraph 65K: “In the premises of paragraphs 64 to 65J above, an experienced and competent contractor at the time of the original tender and further and alternatively, at the submission of the Revised Tender Price, would reasonably have anticipated that the Northern Area of the GPN Borrow Pit would remain substantially in the condition it was in at the time of the Inspection.” [289] In compliance with clause 12.2 CMC gave notice of the latent condition. I accept CMC’s submission that under clause 12.3 it is entitled to a valuation under clause 40.5 for the extra costs it incurred. Such a valuation is pursuant to clause 40.5(c) being for reasonable rates and prices. [290] Had it been necessary I would also have found that, for the reasons above, CMC has also established its misleading or deceptive conduct claim.398 397 CMC’s Written Closing Submissions, [524]. 398 CMC’s Written Closing Submissions, [535] – [537]; WICET’s Written Closing Submissions, [1650] – [1652]. -- 85 of 304 -- 86 [291] CMC submits that a valuation of the extra cost it has incurred as a result of the latent condition is the additional amount it paid to its subcontractor AE Group. This claim was made on 19 July 2012.399 Item 9.2 of AE Group’s claim is entitled “GPN Cut to Reclamation Bunds and OLC Fill”: “As outlined in this submission, the Subcontractor has been required to haul material from areas of the GPN borrow area to the West of that envisaged at tender time. Total Volume sourced from western parts of GPN and hauled to bunds including increased haul distances to bunds and OLC is 86,300 m³ (estimated and subject to final survey being provided by the Contractor). Appendix C details the calculation of actual cost of Excavation and Filling from the GPN for a representative sample. Additional costs are as follows: (a) Excavation Total volume to date 86,300 m³ (subject to survey) Cost rate $10.80/m³ Contract rate (composite) $6.66/m³ Extra over rate $4.14/m³ Claim to date $357,282 (b) Filling Total volume 86,300m³ (subject to survey) Less losses (15%) 12,945m³ Nett volume 73,355m³ Cost rate $5.91/m³ Contract rate $3.75/m³ Extra over $2.16/m³ Amount $158,446 Total $515,728 [292] CMC claims a mark up on this amount of 12%. WICET submits that it is apparent that the amount claimed covers not just haulage distances within the GPN Borrow Pit but alleged additional haulage to the Reclamation C Bunds and to the OLC. WICET therefore submits that it is not possible to determine from AE Group’s claim which of the alleged costs relate to the distances travelled in the Borrow Pit and which relate to the haul to the Bunds and the OLC. In these circumstances, even if CMC has established the existence of the latent condition, it has failed to establish the additional costs for its alleged increased haul distances within the GPN Borrow Pit. 399 Exhibits 2, CMC.503.019.7521 at .7539. -- 86 of 304 -- 87 [293] Mr Roberts did not value this claim. Mr Tsipis valued this claim at nil or alternatively at between $65,000 and $95,000. The reasons for this nil valuation are outlined in [1646] of WICET’s Written Closing Submissions. CMC explains that the only significance of the fact that the subcontractor was hauling to two locations, namely the Reclamation C Bunds and the OLC, is that CMC could perhaps have disentangled part of the claim (the part relating to the OLC haul) and advanced it concurrently with the Earthworks Claim. CMC submits that because it has done so does not prejudice WICET or undermine CMC’s claim. [294] AE Group’s claim is referrable to the requirement to source materials from a different location in the GPN Borrow Pit. The claim as summarised by the subcontractor is as follows:400 “6.3 GPN Cut to Reclamation Bunds and OLC Fills From February to now the subcontractor has been, on occasion, required to source materials from the GPN well to the west of that part of the GPN which would have been reasonably expected at tender time. 9.2 GPN Cut to Reclamation Bunds and OLC Fill As outlined in this submission, the Subcontractor has been required to haul material from areas of the GPN borrow area to the West of that envisaged at tender time… The total claim by the contractor in respect of Mass-Haul from the GPN Cut is $515,728.” [295] The subcontractor’s claims does, in my view, reflect CMC’s claim. [296] I do not accept Mr Tsipis’ alternative valuation. It is based on an inaccurate factual assumption as to the percentage of materials which are to be extracted from different areas in the GPN Borrow Pit. In particular he underestimates the use that CMC actually made of the longest haul route. This is dealt with Mr Vance in his evidence.401 [297] I therefore make a precautionary assessment of quantum on the alternative claim at $580,194.90.402 Piling claim (Variation 142) [298] Part of the works which CMC was required to carry out under the Contract comprised piling works at Beales Creek and the Rail Receival Bridge. CMC’s case is that WICET, by itself or through Worley Parsons, issued a series of seven directions to CMC from 26 January 2012. These directions are pleaded to have had the effect of: (a) prolonging, interrupting, increasing and changing the character of the Beales Creek piling work and the Rail Receival piling work; and (b) increasing the cost and expense of the Beales Creek piling work and the Rail Receival piling work.403 400 Exhibit 2, CMC.503.019.7521 at .7536 and .7539. 401 T7-40, lines 8-26. 402 Eighth Further Amended Statement of Claim, [71]. 403 Eighth Further Amended Statement of Claim, [161](a). -- 87 of 304 -- 88 [299] There is no dispute that CMC complied with these directions. CMC asserts that it is entitled to have the additional cost and expense arising as a result of these directions valued pursuant to clause 40.5 and to be paid the amounts so valued. The amount claimed is $1,636,316.20. This is on the basis that the directions constitute either a variation pursuant to clause 40.1 or directions pursuant to clauses 33 or 34. The directions are also relevant to the Delay Claim (Variation 17). CMC relies on each of the seven directions as entitling it to an extension of time for Practical Completion giving rise to a claim for delay or disruption cost pursuant to clause 36. [300] The written submissions in respect of the Piling Claim are extensive.404 I deal first with each of the seven directions. Direction 1 – Beales Creek waterway barrier permit [301] The analysis commences with a direction to mobilise CMC’s piling subcontractor, Avopiling, to Site to carry out the Beales Creek piling works in the absence of an appropriate permit to enable Avopiling to carry out those works. As to this direction and the other six directions, CMC submits that whilst they are discrete in a number of ways, the repeated underlying cause (as with other aspects of the case) was the dysfunctional relationship between Aurecon Hatch and Worley Parsons.405 In relation to this first direction CMC identified in oral submissions that, for the purpose of the Variation 142 Claim, the focus is on the direction given by WICET to CMC to mobilise Avopiling, as justifying a claim for the cost of the subcontractor. As an event relevant to the Delay Claim, however, the focus is on the absence of the waterway barrier permit as being something that was needed in order to progress the piling at Beales Creek.406 One of the first issues to be determined is whether on or about 26 January 2012 CMC was directed by WICET to mobilise Avopiling to carry out the Beales Creek piling work notwithstanding that WICET had not obtained a waterway barrier permit sufficient for this work to be carried out. WICET submits that neither it nor Worley Parsons issued a direction to mobilise. It simply confirmed that there was nothing preventing mobilisation. CMC’s claim, based on the alleged direction, should therefore be rejected. [302] The starting point is Mr Vance’s evidence. The direction to mobilise, on CMC’s case, was given in the course of a conversation between Mr Knowles and Mr Vance. The conversation was by telephone. It took place in the context that there had been delays in commencing the Beales Creek piling work. CMC was about to mobilise Avopiling. Mr Vance recalled the conversation with Mr Knowles as follows: “Is there anything you know of that would prevent us doing that? Was what I said to him. It might have been – not have been those exact words, and his response was that we should mobilise and that any little issues there were would come out in the wash. We needed to start the bridge.”407 404 CMC’s Written Closing Submissions, [546] – [973]; WICET’s Written Closing Submissions, [624] – [1126]; WICET’s Reply Submissions, [166] – [222]. 405 CMC’s Written s Closing Submissions, [550]. 406 T34-41, lines 22-29. 407 T4-35, lines 30-34. -- 88 of 304 -- 89 [303] The mobilisation referred to in this conversation was Avopiling mobilising to drive piles at Beales Creek.408 Mr Vance stated that Mr Knowles wanted CMC to go ahead with mobilisation and his view was that any issues “would come out in the wash, that we’d sort them out”. After this conversation a direction was given by CMC to Avopiling to mobilise to Site. The mobilisation occurred on or about 2 February 2012. Mr Vance was not cross-examined as to his recollection of this conversation, nor was Mr Knowles called by WICET. [304] CMC refers to clause 23 of the General Conditions of the Contract. Clause 23 relevantly provides: “Except where the Contract otherwise provides, the Principal’s Representative may give a direction orally but shall as soon as practicable confirm it in writing. If the Contractor in writing requests the Principal’s Representative to confirm an oral direction, the Contractor shall not be bound to comply with the direction until the Principal’s Representative does so. If the Principal’s Representative gives a direction in relation to the work under the Contract or the Contract, the Contractor shall comply with the direction.” [305] In the present case WICET did not confirm the direction to mobilise in writing nor did CMC request written confirmation of the oral direction. Clause 23 does however, contemplate the giving of an oral direction with which CMC would be required to comply. WICET submits that the proper interpretation of Mr Vance’s conversation with Mr Knowles is that: (a) Mr Vance told Mr Knowles that CMC was mobilising and sought confirmation of any matters which prohibited it from doing so; (b) Mr Knowles confirmed that there was nothing which prohibited mobilisation.409 [306] I do not construe the conversation in this way. It constitutes, in my view, a direction from Mr Knowles that CMC should mobilise Avopiling. Both Mr Knowles and Mr Vance would have appreciated that cost would be incurred upon mobilisation. Mr Knowles specifically referred in this conversation to any issues “coming out in the wash” once mobilisation occurred. I therefore find that Mr Knowles did give an oral direction to Mr Vance to mobilise Avopiling for the Beales Creek piling work. [307] WICET submits that CMC would have mobilised Avopiling irrespective of any direction from WICET. WICET refers to evidence which reveals that Avopiling was mobilising at CMC’s request prior to the date of the alleged direction to mobilise given on 26 January 2012. WICET points to contemporaneous documents which show that from 11 January 2012 onwards, there were detailed communications between CMC (by Mr Henderson) and Avopiling (by Mr Lewis) in relation to the timing of mobilisation. WICET submits that these documents show that at least from 24 January 2012, Avopiling was committed to mobilisation and CMC was aware of that commitment and acting on the basis that Avopiling was mobilising. The contemporaneous documents referred to by WICET are summarised in its written closing submissions at [646]. These documents include an email from Mr Lewis to Mr Henderson dated 20 January 2012 which stated: 408 T4-35, lines 30-38. 409 WICET’s Written Closing Submissions, [62]. -- 89 of 304 -- 90 “As it stands we are currently planning to mobilise to site on 30-31st Jan 2012 and most of our guys have completed a medical. With the public holiday and associated RDO’s next week we need to start bringing in transport from Tuesday to get kit preloaded. This is where we start to spend money. As per discussion last night we kindly request that you offer a directive by Monday COB on whether we are to continue to plan to mobilise for w/c 30.1.12 or else advise on what course of action we take on the pile treatment.”410 [308] The significance of the email is that it was sent on 20 January 2012, approximately six days prior to any direction to mobilise. [309] Another contemporaneous document referred to by WICET is an email from Mr Lewis to Mr Henderson dated 24 January 2012 which states: “Plant and materials are going to be loaded out soon and this is needed to firm up details with our transport providers.”411 [310] Mr Henderson forwarded this email internally. He was cross-examined in relation to this email. He agreed that the email was consistent with the suggestion that Avopiling was beginning to mobilise as at 24 January 2012.412 This is not surprising given that there had been a considerable delay in relation to the Beales Creek Bridge already. It is uncontroversial that extensive preparations were already underway to mobilise Avopiling. The purpose of Mr Vance’s call to Mr Knowles on 26 January 2012 was however, to confirm whether there were any issues which would prevent mobilisation of Avopiling. Any decision on the part of CMC to mobilise Avopiling was one for Mr Vance to make. [311] I accept Mr Vance’s evidence that in spite of the preparations to mobilise as evidenced in the contemporaneous documents, he would not have proceeded unless Mr Knowles had directed CMC to mobilise Avopiling. Mr Vance’s evidence was that the final decision to mobilise was taken in late January after he had spoken to Mr Knowles about the readiness and whether CMC should mobilise.413 It was the conversation that he had with Mr Knowles that influenced his final decision.414 I accept Mr Vance’s evidence that CMC would not have mobilised Avopiling without Mr Knowles’ confirmation. Mr Vance’s evidence in this respect was not challenged. [312] CMC’s case is that the practical effect of the direction to mobilise was that it incurred the cost of having its subcontractor Avopiling on-Site for a period between 3 February and 17 February 2012, during which time no work was able to be carried out because the piling pad could not be built. In order to carry out the piling work CMC intended to construct a temporary piling pad in Beales Creek itself. This required a sufficient waterway barrier permit. An issue is which party was contractually obligated to obtain the relevant permit. The issue is resolved upon a proper construction of the Contract. The starting point is clause 56(d) of the General Conditions of the Contract. This provides that the Contractor shall obtain all approvals or licences required by any of the requirements referred to in clause 14.1(a) to (d) applicable to the work under the Contract, 410 CMC.504.002.3126 411 Exhibit 252, CMC.504.003.9838. 412 T13-59, lines 9-13. 413 T10-51, lines 25-27. 414 T10-52, lines 30-39. -- 90 of 304 -- 91 except those listed in Annexure Part A. Clause 56(d) therefore provides an exception to CMC being obligated to obtain all approvals or licences. Appendix A refers to Appendix F7 which contains Environmental Management Requirements. Annexure A page 5 in the last item refers to approvals the Contractor is required to obtain (clause 56) as being those detailed in Part 4 – section F Special Conditions of Contract, Appendix F7. Appendix 1 to Appendix F7 is entitled “Construction Environmental Management Plan”. Table 2.2 of Appendix 1 contains a summary of environmental approvals required. One of the approvals is “Development permit for operational works (tidal works) and the disturbance of marine plants for the Beales Creek Bridge and Reclamation Area C Outlet”. Under the column headed “status” it refers to a development permit obtained 24 January 2011. Under the column “responsibility for obtaining approval” it shows “Principal”. CMC submits that by reference to these clauses and appendices, WICET was responsible for obtaining all permits required for Beales Creek Bridge. This is to be contrasted with other approvals in table 2.2, which identify the Contractor as being the entity responsible for obtaining the relevant approval. [313] WICET, by reference to the “status” column in table 2.2 of Appendix 1 to Appendix F7, submits that it has fulfilled its contractual obligation. It obtained a permit on 24 January 2011 in relation to the permanent works at Beales Creek. WICET submits that Appendix F7 does not oblige it to obtain the amended permit. According to WICET, given Appendix F7 does not resolve the matter, it is necessary to have regard to other contractual provisions relating to permits. The On-Site Specification is incorporated into the Contract by the Scope of Work.415 Clause 6.3 of the Specification states: “6.3 Permits and Approvals The Contractor shall comply with the conditions and requirements of all relevant permits and approvals. The Principal will obtain permits and approvals to allow certain construction activities to be undertaken. The Principal shall supply the Contractor with a copy of all permits and approvals obtained by the Principal. The Contractor shall obtain any permits and approvals not provided by the Principal that are required to carry out the construction works, including but not limited to: additional environmental permits and approvals. … The Contractor shall maintain copies of all permits and approvals on site, and make this information available to the Principal on request.” [314] WICET submits that clause 6.3 expressly notes that it would obtain approvals to allow certain construction activities to be undertaken. Consistent with that position, WICET obtained the approval on 24 January 2011 which, by its terms, provided for, in terms of waterway barriers, the barriers which would be established by the permanent structure. I do not accept this submission. [315] Table 2.2 not only identifies the relevant approvals that are required, but also the legislation pursuant to which they are required. The legislation for the relevant approval for which WICET was responsible included the Sustainable Planning Act 2009 (Qld), the Coastal Protection and Management Act 1995 (Qld) and the Fisheries Act 1994 (Qld). Table 2.2 does not in any place make the Contractor responsible for approvals under the 415 Exhibit 2, WIC.104.001.0402 at .0753 (Contract, section D – Scope of Work, clause 10). -- 91 of 304 -- 92 Coastal Protection and Management Act nor the Fisheries Act. CMC submits that table 2.2 should be read as making it the Principal’s responsibility to obtain all permits for that activity under that legislation. The “status” column merely details what had so far occurred, that is, the current status of the exercise of obtaining permits under that legislation. The “status” column does not however, exhaust the Principal’s obligation. I accept this submission.416 Further, as a matter of construction, the Contract only obliged CMC to obtain those permits listed in Appendix F7, and no more. Where any permit or approval was not so listed (including the waterway barrier permit), it became WICET’s responsibility. [316] I also accept CMC’s submission that nothing in clause 56 or Appendix F7 suggest that permits are limited to “permanent works”. When one examines the permits CMC was to obtain, including permits in relation to the storing of chemicals, abrasive blasting and regulated waste and transport these were plainly not permits for permanent works.417 [317] As to clause 6.3 of the On-Site Specification, this would suggest that contractually WICET was responsible for obtaining permits and approvals. Where those permits and approvals were not obtained by WICET, then clause 6.3 states that CMC shall obtain any permits and approvals not provided by WICET that are required to carry out the construction works. This extends to additional environmental permits and approvals. If clause 6.3 of the On-Site Specification was to operate as WICET submits, it would be inconsistent with the contractual obligations in the principal clauses of the Contract. Clause 56(d) imposes responsibility on CMC to obtain some construction approvals and on WICET to obtain all other construction approvals. Clause 6.3 purports to shift responsibility onto CMC to obtain any approvals “not provided by the Principal”. Under the Contract however, CMC is only ever responsible for obtaining the approvals identified as its responsibility pursuant to clause 56(d) read with Appendix F7. On WICET’s construction, clause 6.3 of the On-Site Specification could bring about a situation where contractual responsibility fell to CMC to obtain approvals, merely by WICET not performing its own contractual obligation to obtain those approvals.418 It follows that I do not accept WICET’s submission that clause 6.3 of the On-Site Specification informs rather than conflicts with clause 56(d) and Appendix F7.419 [318] I therefore find, as a matter of construction, that WICET was contractually obligated to obtain the waterway barrier permit to allow CMC to carry out the Beales Creek piling work. [319] WICET submits that even if it was its responsibility to obtain the permit it did not become aware of CMC’s construction methodology using a temporary piling pad until 18 January 2012. Before considering the relevant evidence in relation to this issue and making my factual findings it is helpful to set out some of the relevant chronology. On 13 May 2010, Aurecon Hatch on behalf of WICET applied to the Department of Environment and Resource Management (DERM) for a development permit for the construction of the Beales Creek Bridge. WICET obtained this approval on 15 September 2010 which was a development approval for operational work including the construction or raising of waterway barrier works associated with the construction of the Beales Creek Bridge. 416 T34-44, lines 15-24. 417 CMC’s Written Closing Submissions, [604]. 418 CMC’s Written Closing Submissions, [607(c)]. 419 WICET’s Written Closing Submissions, [668]. -- 92 of 304 -- 93 Also obtained was a permit to construct a waterway barrier across Beales Creek. The parties referred to this as the Decision Notice. The Decision Notice did not permit CMC to carry out the Beales Creek piling works. A further permit was ultimately required to accommodate CMC’s proposed work methodology. Aurecon Hatch on behalf of WICET obtained the further permit. This was not granted until 19 April 2012.420 WICET alleges that CMC did not inform it of the proposed methodology until the issue of RFI 0121 on 10 January 2012.421 This RFI stated that CMC proposed to construct a temporary crane and piling pad on the north and south banks of Beales Creek to facilitate piling and bridge works. RFI 0121 was approved by WICET on 18 January 2012. The necessity for a permissible change to the Decision Notice was not known, on WICET’s case, until March 2012. [320] CMC alleges that it confirmed with WICET that it would adopt a construction method using a temporary piling pad in post-tender meetings starting from 5 April 2011. Both Mr Semmler and Mr Ahern of CMC gave evidence to the effect that: (a) during the post-tender meetings, CMC and WICET held discussions about CMC’s construction methodology for Beales Creek Bridge. These discussions included CMC explaining the use of a piling platform in the bed of the creek in order to carry out piling at Beales Creek. (b) CMC and WICET also discussed an alternative construction methodology, involving the construction of a full platform across Beales Creek with a concrete culvert in the middle to allow tidal flow. This alternative methodology would have enabled trucks to cross Beales Creek to provide another access point to the Reclamation C Bunds, but would also allow piling from the platform. (c) CMC asked the Worley Parsons representatives (either Mr Enright, Mr Webb or Mr Powell) whether Worley Parsons had obtained all environmental permits to allow CMC to construct the piling platform across Beales Creek. Either at that meeting or at a subsequent meeting held shortly afterwards, one of Worley Parsons’ representatives confirmed that Worley Parson had received all environmental permits required, including the waterway barrier permit. [321] WICET submits that both Mr Semmler and Mr Ahern are mistaken in their recollection. Both witnesses gave evidence of conversations which had occurred many years earlier and in respect of which they had not kept any contemporaneous record. CMC submits however that Mr Semmler’s and Mr Ahern’s evidence is supported by contemporaneous documents. The agenda for the meeting conducted on 5 April 2011 provided at Item 7 that the parties planned to spend 90 minutes discussing “review of technical proposals” including “all key execution details of the project” and “the Scope of a Work and all key technical details of the project.” The spreadsheet entitled “GC 09 Meeting Linton Notes (05042011)” which was prepared in advance of the meeting as “talking points” for discussion during the meeting and was then subsequently provided to CMC states at Item 10 that: “Maintaining access at Pyealy Creek during bridge construction (tidal effects without disrupting normal tidal flows) and post-construction due to load limits for plant on the bridge and single lane capacity on Beales 420 Eighth Further Amended Statement of Claim, [172AA]; the approval is Exhibit 2, CMC.505.084.3608. 421 CMC.502.010.9154. -- 93 of 304 -- 94 Creek Bridge. How does the contractor plan to remove the piling/form work/crane platforms after bridge construction; if an alternative access for traffic past the work site is proposed when will this be removed given width/loading restrictions of the bridge?”422 [322] WICET suggests that it is not clear that this notation is referring to a piling platform rock pad within the creek. Item 10 is however generally supportive of Mr Semmler’s and Mr Ahern’s recollection. [323] Mr Enright gave evidence in respect of this topic. He did not recall any discussion about piling methodology in the pre-contract meetings. He recalls CMC’s work methodology being discussed in a “broad sense”, but not in any particular detail. He recalls the access across Beales Creek being discussed post-contract, but not prior. Mr Webb did not have any recollection of the proposed Beales Creek methodology. Mr Enright took minutes of this meeting. Item 38 states “Permit/approvals – CMC confirm none of the obligations/permits/approvals prevent CMC from using their propose methods of construction”. Mr Enright’s handwritten notes from the same meeting state “environmental approvals – tidal works bridges … no permit blocking works based on CMC intended methods of construction etc.”423 CMC refers to Mr Enright’s handwritten notes as supporting the evidence given by Mr Semmler and Mr Ahern that it was WICET which confirmed that it had obtained all permits required by CMC to construct the Beales Creek Bridge including, by necessary implication, the relevant waterway barrier permit. Mr Enright’s evidence was that the reference to “no permit blocking works” was a reference to a statement made on behalf of CMC by either Mr Ahern or Mr Semmler that the planned construction methodologies were achievable based on “the current permitting”.424 Mr Enright’s evidence was that if the issue of the piling pad and permits was discussed he would have minuted it. [324] WICET submits that there is no reason for the Court not to accept the evidence of Mr Enright as it is cogent and reliable. It submits that the difficulty with the evidence of Mr Semmler and Mr Ahern is that it bears all the hallmarks of reconstruction many years after the event. In respect of Mr Ahern the date of his witness summary (18 May 2016) was the first time that he had provided instructions as to his recollection of the meeting which occurred in 2011. I do not accept these submissions. [325] Mr Ahern was and remains a pre-contract manager at CMC and also a director of CMC. Since graduating he has had 22 years of experience as a pre-contract manager. It was Mr Ahern who drafted the agenda for the meeting of 5 April 2011. He was able to recall with some detail what was discussed at the meeting. As is evident from Item 7 of the agenda there was to be a detailed discussion in respect of CMC’s construction methodology including the Beales Creek Bridge. He recalled that the methodology of using a platform in the creek so that piling rigs could access the central piers was discussed. He referred to the use of a piling platform within the creek as constituting “standard practice”. The piling pad was something that had to be removed. Mr Ahern specifically recalled that there was discussion of a waterway barrier permit at the meetings. What was discussed was whether the construction methodology proposed would fit within the waterway barrier permit. His recollection is that it was a WICET 422 Exhibit 294, CMC.503.015.3098, Item 10. 423 WIC.118.013.0003 at .0007. 424 CMC’s Written Closing Submissions [557] - [558]; T16-39, lines 45-47. -- 94 of 304 -- 95 representative who stated that the permit would allow this option to be constructed. Mr Ahern could not recall which WICET representative made this statement. Mr Ahern explained that the reason he had a good recollection of the meetings was because CMC’s construction methodology was being explained in detail.425 [326] It was not suggested to either Mr Ahern or Mr Semmler in cross-examination that their recollection of these discussions was a reconstruction. I accept that it was a WICET representative who stated that the waterway barrier permit covered the construction of the piling pad in Beales Creek. At the time of the meeting of 5 April 2011 CMC was not in possession of the Decision Notice in relation to Beales Creek that had been obtained by WICET. No representative of CMC at the meeting was therefore in a position to say whether the construction methodology was covered by the Decision Notice. Secondly, as CMC submits, the issue of lack of or inadequate environmental permits was a central issue to a tendering contractor. Mr Ahern described it as the “number 1 risk on this project”.426 I accept that it was therefore inherently likely that the issue would be raised in meetings called for the purpose of clarifying issues during the tender process and that CMC would seek assurances from WICET that sufficient approvals had been obtained. Whilst WICET called Mr Webb and Mr Enright who attended the meeting, it did not call Mr Cronk and Mr Powell both of whom had engineering or construction backgrounds to give evidence. Their absence was not explained. CMC submits it should be inferred that their evidence would not assist WICET. I do not need to draw such an inference to make the necessary factual findings. [327] I accept the evidence of Mr Semmler and Mr Ahern and find that WICET was aware, as early as the pre-contract meetings, that the waterway barrier permit was required to cover a construction methodology that included a piling pad in Beales Creek. [328] On 13 October 2011 CMC was provided with the Decision Notice for the construction of the Beales Creek Bridge. Upon receipt Mr Vance reviewed the Decision Notice and promptly passed it on to Mr Henderson and Mr Gilltrap for further review. On 19 October 2011 Mr Gilltrap notified Mr Vance that he did not think the Decision Notice allowed for the construction of temporary works at Beales Creek. Mr Vance gave evidence of a conversation he had with Mr Knowles in which he notified him that CMC was concerned that the Beales Creek approval and permit may not allow temporary works to be carried out, including for the installation of the temporary piling platform. WICET submits that Mr Vance’s evidence of this conversation “was too vague to be of any real assistance to the Court” and that his recollection “was extremely vague”.427 Mr Vance’s evidence-in- chief referred to concerns being expressed to Mr Knowles about whether the waterway barrier permit enabled the construction of a culvert and the piling platform. I note that the Notification of Potential Delays sent by Mr Vance to Mr Knowles on 20 October 2011 only refers to the culvert rather than the piling platform: “It does not appear to us from the documents we have received to date that the water way barrier approvals for either Beales Creek or Pyealy creek with [sic] allow the construction of temporary access culvert to facilitate construction and in particular bulk earthworks.”428 425 T15-75, lines 15-22. 426 CMC’s Written Closing Submissions [559](b); T15-78, lines 18-30. 427 WICET’s Closing Submissions at [701(b)] and [709(c)]. 428 CMC.003.006.0387. -- 95 of 304 -- 96 [329] This letter does not directly corroborate Mr Vance’s recollection of his conversation with Mr Knowles. Mr Vance was cross-examined in relation to this conversation. He did not accept that the first time CMC informed WICET of the construction methodology for Beales Creek Bridge was RFI 0121 sent on 10 January 2012. He referred to his conversation with Mr Knowles in relation to the waterway barrier permit. Mr Knowles was not called by WICET to give evidence in relation to this or any other conversation. I accept Mr Vance’s evidence that he had raised CMC’s proposed construction methodology using a piling platform with Mr Knowles on 19 October 2011 in the context of the adequacy of the waterway barrier permit. [330] On 4 November 2011 CMC issued an updated construction program with its weekly report which included an activity for 60 days duration for WICET to obtain the waterway barrier permit allowing the temporary works at Beales Creek.429 The program under the heading “Beales Creek Temp Works Waterway Barrier Permit” at Item CP-1180 records “Waterway barrier permit approval for temp works … 60 days … 5 November 2011 to 14 January 2012”. This program therefore contemplated that WICET would obtain the necessary waterway barrier permit by 14 January 2012. The creation of this program and the issuing of it to WICET is generally consistent with Mr Vance having raised the issue with Mr Knowles. [331] WICET refers to two alleged concurrent delays. First it submits that CMC contributed to the delay in WICET obtaining the waterway barrier permit and secondly WICET asserts that CMC did not have any compliant pile liners for the Beales Creek Piling Works in any event. As to the first alleged concurrent delay event the permit which allowed the works to be performed in accordance with CMC’s piling methodology was granted on 19 April 2012. WICET alleges that it did not know that a further permit would be required until around 21 March 2012 once DERM had considered a work method statement prepared by CMC. The original Decision Notice stated in condition 3: “The work method statements must be provided to DERM at least 30 days prior to construction works beginning. Any comments or further information required by DERM within 20 days of the statements being submitted must be actioned by the applicant to DERM’s satisfaction.” The applicant referred to was WICET. [332] WICET submits that by clause 14.1(d) of the General Conditions of the Contract CMC was required to comply with the requirements of “permits, approvals, and requirements of persons acting in the exercise of statutory powers.” That obligation, properly construed, according to WICET, required CMC to comply with condition 3 of the Decision Notice. CMC sent a work method statement relating to the Decision Notice to WICET on 10 January 2012. According to WICET the problem for CMC is that the document provided on 10 January 2012 was not a work method statement of the type required by the Decision Notice. It was an RFI which purported to explain, from an engineering perspective, CMC’s proposed design for the temporary crane and piling pads. [333] An environmental manager from Aurecon Hatch, Ms Marr, gave evidence that the work method statement required by condition 3 had to include information about environmental controls. The controls would be measures to mitigate risk such as water quality 429 Exhibit 35, CMC.025.005.0037. -- 96 of 304 -- 97 monitoring, erosion and acid sulphite soil. On 2 February 2012 on request from Ms Marr, CMC provided further work method statements. Ms Marr still considered these documents to be inadequate because they did not contain environmental controls for works. On 3 February 2012 Ms Marr sent an email to Mr Bignell of CMC to ask whether a risk assessment had been prepared for the placement of rock and geofabric in the creek. Later on 3 February 2012, following a further discussion with Ms Marr, CMC representatives provided a number of documents in relation to the piling at Beales Creek. On 6 February 2012 Aurecon Hatch sent DERM a series of emails to supplement the RFI provided on 25 January 2012. On 17 February 2012, DERM approved the work method statement, but noted that CMC’s proposed methodology for a temporary crane pad design in the waterway was potentially not included in the existing approval. DERM requested further information in relation to the temporary crane pad design. This further information was provided on 27 February 2012. The issue as to whether the crane pad design was within the existing approval was not resolved until 17 March 2012. Another government department, DEEDI, ultimately required a permissible change application which was sent by WICET on 5 April 2012 and approved on 19 April 2012. The application for permissible change explained that it was the proposed construction methodology for piling which was the impetus for the application. [334] In the above circumstances, WICET’s submits that CMC has no entitlement to a valuation of the claimed plant and labour for the period 3 to 18 February 2012. This is because the timing of CMC’s work method statement meant that it would have incurred the claimed amounts in any event. Secondly, CMC caused the delay in obtaining the permissible change to the permit. [335] WICET’s submissions are however, premised on CMC being contractually obligated to provide the work method statements to DERM pursuant to condition 3 of the Decision Notice because of clause 14.1(d) of the Contract. I do not accept this as a correct premise. Schedule C-10 to the Contract deals with work method statements and requires CMC to provide general and contract specific work method statements within the time specified in Appendix D1. The approval and permit constituting the Decision Notice were obtained by and issued to WICET. CMC’s obligation to provide work method statements under the Contract is different from a requirement in the Decision Notice for work method statements to be provided to DERM. There was no contractual obligation for CMC to do so. As CMC submits, its contractual obligation to provide work method statements for the piling pad in Beales Creek was complied with at the beginning of January 2012. These work method statements were approved by WICET on 18 January 2012. No obligation under clause 14.1(d) for CMC to comply with the requirements of permits imposed on it a requirement to provided work method statements to DERM in accordance with condition 3 of the Decision Notice. The permit having been issued to WICET and obtained by WICET it was ultimately WICET’s responsibility to provide the work method statements required by condition 3. [336] I have found that CMC’s construction methodology of using a piling pad in Beales Creek had been communicated to WICET at the post-tender meetings and in Mr Vance’s conversation with Mr Knowles. WICET was also in receipt of CMC’s updated construction program dated 4 November 2011 which specifically referred to an activity of WICET obtaining a waterway barrier permit allowing the temporary works at Beales Creek. WICET was therefore in a position to seek any information it required from CMC for the purposes of complying, in a timely fashion, with condition 3 of the Decision Notice. WICET had received the Decision Notice as early as January 2011 and was aware -- 97 of 304 -- 98 of the requirements of condition 3. Once WICET became aware, even in a general way, of a proposal for a temporary piling pad in Beales Creek it or its representatives could have liaised with DERM and CMC to ensure that condition 3 was fulfilled. [337] WICET pleads that a waterway barrier permit was in any event unnecessary on the ground that the piles for the Beales Creek Bridge could have been constructed in a manner which did not require a waterway barrier permit. [338] Mr Vance’s evidence was that it was not practical to carry out the piling work at Beales Creek without having to build a temporary piling pad in the middle of the creek.430 A barge could not be used to drive the central piles because Beales Creek was a tidal estuary. It was not wide and turned into a little gully with mud in the bottom at low tide. Nor was it practical to seek to use a Junttan Rig with a 9 tonne hammer from the sides of Beales Creek because the hammer needed to be within a metre or two of the piles being driven.431 Mr Vance was of the view that using a crane from the sides of the creek would require a “massive crane” and there would be significant safety concerns. WICET submits however that Mr Vance’s evidence on this issue should be rejected because a proposal was provided by Avopiling for use of a temporary bridge. This document was shown to Mr Vance in cross-examination. He could not ascertain how it was relevant. His evidence as to the feasibility of other possible construction methods apart from using a piling pad remained unchallenged. As CMC correctly submits, no evidence was led by WICET that the piling could have been carried out using a temporary bridge/platform under the existing development approval (nor that the design was practical in the circumstances). That is, there is no evidence that a similar issue of the insufficiency of the permit would not have arisen with a temporary bridge.432 [339] Mr Vance’s evidence was that during a meeting on or around 17 February 2012 Mr Walls asked whether there was any alternative method of constructing the Beales Creek Bridge. Mr Vance’s recollection is that he stated there was no alternative method and was supported in this respect by Mr Karandrews.433 I therefore find that there was no alternative methodology which was available to CMC that would not have required the revised waterway barrier permit. [340] The second concurrent delay relied on by WICET is the allegation that CMC did not have compliant pile liners during 3 to 18 February 2012 and would not have therefore been able to carry out the Beales Creek piling works even had the necessary waterway barrier permit been obtained by WICET. The liners did not arrive on-Site until around 10 February 2012. They were discovered to be defective and had to undergo testing. Six liners were found not to be defective. The liners did not pass all the relevant testing until around early March 2012. WICET therefore submits that even if it had obtained a waterway barrier permit which allowed the construction of the piling pad CMC would not have been able to continue with the substantive works in any event. I do not accept this submission. It was never put to any of CMC’s witnesses that the defect in the pile liners would have otherwise delayed the Beales Creek Bridge piling work had there been a waterway barrier permit. Whilst the onus of proof remains on CMC to establish its claim, to the extent that WICET relies on the defects in the liners as constituting a 430 T4-40, lines 15-20. 431 T4-40, lines 29-34. 432 CMC’s Written Closing Submissions, [620(b)]. 433 T4-41, lines 10-41. -- 98 of 304 -- 99 concurrent delay WICET, in my view, carries at least an evidentiary onus of establishing the concurrent delay. There is, as CMC submits, a complete absence of evidence.434 As all parties knew that no waterway barrier permit was in place there was no urgency in relation to the defective pile liners. There is no evidence as to what CMC would have done in relation to the defective liners had a waterway barrier permit been in place. There is therefore no sound basis to conclude that any defects in the Beales Creek pile liners would have caused any actual delay in the piling works. [341] I find that the direction to mobilise was a direction under clause 33.1 entitling CMC to a valuation under clause 40.5. The valuation is pursuant to clause 40.5(c) without reference to clause 40.5(f). Direction 2 – Non-conformance report 01 (NCR01) [342] WICET issued NCR01 on 14 February 2012.435 NCR01 referred to MRTS 78 which is the Main Roads Structural Steel specification. NCR01 stated: “Welding Procedure Specifications (WPS) defining the method, preparation and sequences to be adopted are required for all weld types. It is the Contractors responsibility to ensure that all processes which require pre- qualified procedures and/or work methods are tested and qualified before work begins.” [343] NCR01, in effect, required CMC to test the Rail Receival liners prior to their installation. The practical effect of NCR01 was that CMC was obliged to suspend the Rail Receival piling works until “non-destructive testing” had been carried out on the Rail Receival steel liners. [344] CMC alleges that it was subsequently agreed in a meeting attended by CMC, Worley Parsons and Aurecon Hatch personnel that testing would only be required if the liners were confirmed by Aurecon Hatch to be structural. They were not structural. The testing found no defects and the liners were used “as is”. [345] CMC claims a price for plant (Avopiling) and labour unable to work in the period from 24 February to 6 March 2012 being the period which CMC asserts it was unable to work while the testing was occurring. [346] There is a dispute as to whether the claim is properly characterised as being made under clauses 33.1, 34.1 or 40.1 of the Contract. CMC’s case is that NCR01 constituted a variation under clause 40.1 because it imposed an additional requirement on CMC which did not form a part of its original scope of works, namely to carry out testing on the liners for the Rail Receival Bridge before proceeding with piling. It did so because WICET proceeded on the wrong basis that CMC was required to comply with the Main Roads Structural Steel specification (MRTS78) in respect of the Rail Receival pile liners. MRTS78 was a specification for structural steel. CMC asserts that in reality: 434 T34-54, line 1. 435 Exhibit 2, CMC.026.007.0214. -- 99 of 304 -- 100  it was not required to comply with MRTS78 in relation to the fabrication of these liners, which were non-structural and governed by a different specification, MRS11.63; and  in any event, at the time NCR01 was issued, WICET had not issued MRTS78 as a contractual document, despite requests by CMC (and contrary to WICET’s obligations under clause 8.3 of the General Conditions of Contract). [347] WICET submits however:  there was no variation because the testing required by NCR01 was part of CMC’s Scope of Work under the Contract;  CMC has no entitlement to the price claimed for plant and labour on standby for the relevant period because the amounts were only incurred because CMC had not complied with its contractual obligation with respect to welding and testing of the Rail Receival liners. [348] WICET submits that the effect of the application of NCR01 to the Rail Receival liners was that CMC was obliged to comply with its contractual obligation and weld and test the Rail Receival liners to the structural standard. CMC ultimately undertook the testing required. It confirmed the testing on 6 March 2012. The test results for the Rail Receival liners were delivered on 12 March 2012. NCR01 was closed-out on 15 March 2011 because all of the Rail Receival liners passed the relevant requirements. [349] WICET further submits that it does not matter that MRTS78 had not been issued formally under the Contract. This is because any failure by WICET to formally issue the standard did not alter CMC’s contractual obligation. The Contract, by the Rail Receival drawing, directed CMC to the standards. These standards were publically available. [350] For reasons which follow I find that NCR01 constituted a direction pursuant to clause 40.1 of the Contract to increase part of the work under the Contract, namely an additional requirement for non-destructive testing on the Rail Receival liners. This variation resulted in CMC being unable to proceed with the Rail Receival piling work. [351] My conclusion arises in the context of the following factual findings. [352] The methodology for installation of the pile liners at the Rail Receival Bridge was as follows: (a) holes were bored into the earth using the bored piling rig, and the steel liners were advanced into the holes until reaching the desired depth; (b) once they had reached that depth, an area beneath the bottom of the liners was excavated (referred to as the “socket” or “base”); (c) following excavation of the socket, the hole was filled with re-enforcement and concrete to create the concrete pile, all the way to the bottom on the socket; and (d) as a result, the socket was intended to transfer the weight of the bridge into the surrounding rock and earth, rather than the steel pile. -- 100 of 304 -- 101 [353] This is contrasted with the piling at the Beales Creek Bridge, where the methodology was as follows: (a) the steel liners were hammered, or driven, into the ground to the desired depth using the piling hammer rig; (b) the earth inside the steel piles was then excavated to a certain depth part way down the piles using the bored piling rig; (c) the steel pile was filled to that depth (part way down the steel pile) with re-enforcement and concrete; and (d) as a result, the steel pile itself was expected to transfer the weight of the bridge into the surrounding rock and earth. [354] Given these contrasting methodologies, the steel liners at Beales Creek were “structural”, in that they were intended to support a weight, whereas the steel liners at the Rail Receival were “non-structural, in that they did not support weight. [355] The fact that the Rail Receival liners were non-structural is not only an admitted fact436 it is also consistent with the evidence from the witnesses and with the email from Mr Knowles of 6 March 2012.437 In his email Mr Knowles stated: “The intent of the design is a temporary sleeve that becomes sacrificial once the piles are complete”.438 [356] Dane King was employed by WICET as a quality field inspector. His main responsibility was in respect of quality control and quality assurance. He would verify whether the Contractor had complied with project specifications, Australian Standards and the relevant drawings. The pile liners for the Beales Creek piling work arrived on-Site on about 9 - 10 February 2012. According to Mr King the Rail Receival liners did not arrive on-Site until 14 February 2012.439 Mr King’s recollection of the date however was in response to a leading question. There is a contemporaneous document that evidences the liners for the Rail Receival piling work arrived on-Site on 24 February 2012,440 (which is the beginning of the delay period for this direction alleged by CMC). [357] Shortly after the pile liners for the Beales Creek piling works arrived on-Site, namely 9 - 10 February 2012 Mr King attended CMC’s Site office and said, inter alia, that the liners “had to be rejected because some of the paper work wasn’t submitted” referring to “MRS1178”. The two CMC engineers who were present in the site office objected to Mr King’s statement. The two CMC engineers present were Mr Hale who was the site engineer and Ms Haber (Goreva) who was the engineer responsible for the Beales Creek Bridge and Rail Receival Bridge. Ms Haber produced a copy of RFI 0029 dated 25 October 2011 to Mr King showing that CMC had requested the issuance of amongst other specifications, Main Roads specification, MRS11.78.441 Ms Haber confirmed in evidence that the specification had not been issued at the time of this conversation, despite 436 Sixth Further Amended Defence and Counterclaim, [182(a)]. 437 CMC’s Written Closing Submissions, [636]-[639]. 438 CMC.503.021.9505 at .9506. 439 T22-12, lines 4-5. 440 Exhibit 2, CMC.501.021.9505. 441 CMC.503.023.0842. -- 101 of 304 -- 102 the passage of approximately three and a half months and despite Worley Parson having responded to RFI 0029 on or about 10 November 2011. [358] Following the conversation, Mr King discussed the issue with Mr Piper who was a qualified welding expert and Mr King’s direct supervisor. It was decided that a non-conformance report would be issued. This led to NCR01 being issued on 14 February 2012. [359] According to CMC, a number of the details in NCR01 were inaccurately expressed: (a) first, despite the drawing reference in NCR01 being drawing 1532-B-DR-0002 REV 1 which comprised the general notes related to the construction of the Beales Creek Bridge, NCR01 was in fact directed (and treated as applying) to both the Beales Creek and Rail Receival liners. (b) secondly, despite the reference in NCR01 to MRTS78, CMC had been directed on about 1 November 2011 to construct the Works in accordance with the third edition of the Main Roads specification, otherwise referred to as the MRS11 series. Consequently, the reference to the fourth edition MRTS78 in NCR01 should properly have been a reference to MRS.11.78 (the corresponding third edition). (c) thirdly, despite the fact that NCR01 was notionally issued under MRTS78, Mr King in fact took the requirements including in the “details” of the NCR from a different document, Australian Standard 1554, not MRTS78. [360] On 29 February 2012 a number of CMC and Worley Parsons personnel met to discuss NCR01 and the topic of welding rectification and testing. Present at the meeting for CMC was Mr Henderson, Mr Tiltman, Ms Haber and Mr Hale. Mr King, Mr Knowles, Mr Piper and Ms Alexander were present for Worley Parson. There are two sets of Minutes for this meeting. The original Minutes were prepared by Ms Alexander who had an administration role. Mr King read and checked these Minutes before distributing them. To the best of his recollection the original Minutes constitute a true and correct record of what was discussed.442 The original Minutes record that MRS78 had not been issued. The Minutes further record: “ in reference to NCR Piles, CMC failed to submit MRS 78 prior to commencement.  overall CMC are now required to submit: 1. Procedure Cert, Mill cert (Steel origin), NDT, Spec 0006 Welding Procedures.  CMC raised the issue, is this structural steel or temp steel, documents they referred to and provided to the supplier was the Bill of Quantity in which does not reference to Structural Steel. DP advised J1554-1 leads to Spec - 78 & Visa [sic] versa.  CMC required clarification if this is structural or temp (Aurecon/Hatch will decide). Currently manufactured to non structural terms.  DP advised all Welding on Site is to refer to 0006 specification.” 442 T22-13 lines 35-37; Exhibit 396, CMC.505.101.1061. -- 102 of 304 -- 103 [361] The reference to DP is to Mr Piper of Worley Parsons. The reference to “Spec0006” is to the Aurecon Hatch steel specification. Ms Haber took handwritten notes during this meeting and immediately following the meeting, sent an email to the various attendees including the Worley Parsons’ representatives reflecting what had been agreed. At point 7 of that email it states: “(non-destructive testing) if required (WP/AH to confirm whether the liners are structural steel or temporary works). All the welding tests to be done as per specs WIG-1000-S-SP-00006 Rev.1 as well as MRS 11.78 clause 15.54.1 if the liners are confirmed to be structural steel …” [362] The views expressed in that email were not challenged at the time by Worley Parsons.443 Ms Haber’s evidence was that in the meeting of 29 February 2012, it was stated that if the Rail Receival liners were permanent, non-destructive testing was to be performed but if the liners were temporary, then the testing was not required.444 CMC confirmed at the meeting that the liners for the Rail Receival Bridge were temporary works. Ms Haber stated that the reason CMC held this view was because the pile drawings for the Rail Receival Bridge in the general notes made a distinction between cast-in-piles in which it referred to cast-in-piles having to be done in accordance with MRTS63. This specification referred to cast-in-piles only and not to structural steel.445 This was the view ultimately expressed by Mr Knowles in his email of 6 March 2012. [363] WICET submits that Ms Haber’s recollection is not supported by the original Minutes. The original Minutes according to WICET, indicate that Mr Piper held and expressed the view that the pile liners had to be welded to a structural standard, even if they were not structural. Mr Piper was not called as a witness. Irrespective of whether he was called, it is a matter of construction as to which standard applied. If it is accepted that Mr Piper did express this opinion at the meeting it is simply his opinion. To the extent there is any conflict between the original Minutes and Ms Haber’s notes I accept the accuracy of her notes. The original Minutes whilst having been checked by Mr King were drafted by Ms Alexander whose only involvement was apparently to take the Minutes. Ms Haber was a qualified engineer with an appreciation for the issues relating to NCR01.446 While Mr King gave evidence that he checked the Minutes prior to sending them to CMC that review occurred several days after the meeting and without reference to any contemporaneous notes. In contrast, Ms Haber’s handwritten notes were taken during the meeting and her email was sent immediately following the meeting. Both these documents are consistent with her corrected Minutes. Mr Henderson also gave evidence that Ms Haber’s corrected Minutes more accurately reflected what had been discussed. More importantly no one from Worley Parsons challenged at the time, Ms Haber’s account of what had occurred at the meeting on 29 February 2012. [364] As I have already observed, whether the requirement for non-destructive testing of the liners for the Rail Receival piling work contained in NCR01 was a contractual requirement is a matter of construction. [365] WICET by reference to paragraph 7.1 of Appendix F3, drawing 1513-B-DR-0002 (REV 1) (Note S2 and S6) and structural steel specification (WIG-1000-S-SP-0006): MRTS78 443 CMC.502.094.8309; CMC.501.021.8887. 444 T15-47, lines 1-5; T15-48, lines 9-13. 445 T15-49, lines 5-9; Exhibit 159, CMC.013.002.0160. 446 CMC’s Written Closing Submissions, [660]. -- 103 of 304 -- 104 alleges in paragraph 182 of the sixth further amended defence and counterclaim that the Rail Receival liners were required to be tested. CMC highlights that no part of WICET’s defence relies upon non-compliance with Australian Standard 1554. Irrespective of whether WICET has properly pleaded its reliance on AS1554 or whether the relevant Main Roads specifications had been issued under the Contract, NCR01 should not have been issued in respect of the Rail Receival liners. This conclusion arises from a consideration of the Contract, the drawings and the relevant standards and specifications. For the Rail Receival Bridge the Aurecon Hatch drawing447 identified requirements for “Piles” and “Steel” under discrete headings. [366] WICET refers to items S2 and S6 under the heading “Steel”. S2 refers to welding to conform to AS1554.1 and MRTS78 fabrications of structural steel work. Item S6 states that steel work is to be grade 350 and fabricated to the requirements of MRTS78 fabrication of structural steel work. CMC submits however, that the correct note in the Aurecon Hatch drawing for the Rail Receival Bridge which governs pile liners is item P5 under the heading “Piles” which states “cast-in-place piles shall be constructed in accordance with MRTS63 cast-in-place piles.” I accept CMC’s submission that requirements falling under the heading “Steel” should be interpreted as governing the structural steel forming part of the Rail Receival Bridge. The reference to the requirements of MRTS78, “Fabrication of Structural Steel”, supports this interpretation because MRTS78 only governs the requirements for structural steel. Structural steel work is referred to in both item S2 and item S6. It is an admitted fact that the pile liners for the Rail Receival piling work were not structural. This interpretation is also consistent with the opinions of two CMC engineers namely Ms Haber and Mr Henderson. [367] Whilst the Court is permitted to have reference to this evidence for the purposes of interpreting the specifications in the Aurecon Hatch drawing it is in my view, unnecessary to do so. The wording of the requirements relating to “Steel” as compared to the requirements relating to “Piles” supports CMC’s interpretation. Further if S2 and S6 were to apply as well as P5 this would give rise to inconsistent obligations for the same item namely non-structural liners. This is because item S6 requires the contractor to comply with MRTS78 whereas item P5 requires the contract to comply with MRTS63. [368] Accepting that item P5 is applicable, the specification referred to is MRTS63. This specification does not impose a requirement that welding accord with MRS11.78.448 Rather it imposes a requirement that welding be as per Australian Standard 1554. AS1554 did not require testing to be carried out on the finished welding product.449 More importantly as CMC submits, there is no hold point in Australian Standard 1554. That is, there is no entitlement under AS 1554 to stop work until compliance is achieved unlike MRS11.78, which does have a hold point.450 WICET accepts that AS1554 does not contain any “hold points” requiring the cessation of work until a step has been carried out. WICET however refers to section 4.1.1 of the Standard which provides that a welding procedure may be approved on the welding procedure sheets by a representative of the principal. Properly construed, this non-mandatory obligation, according to WICET, when coupled with the requirement for approval set out in section 10.14 of the Aurecon Hatch 447 CMC.013.002.0160. 448 Exhibit 231, WIC.004.002.0711, paragraph 7.1. 449 CMC’s Written Closing Submissions, [684]; WICET’s Written Closing Submissions, [752]. 450 T34-59, lines 2-9; T22-35, lines 19-23; CMC’s Written Closing Submissions, [678]. -- 104 of 304 -- 105 specification WIG-1000-S-SP-0006 provides a hold point.451 I do not accept this submission. Section 10.14 simply does not provide for any “hold points”. [369] WICET also relies on clause 7.1 of Appendix F3 of the Contract which provides: “Where the Contractor’s Scope of Work includes fabricated weldments Welding Procedure Specifications (WPS) defining the method, preparation and sequences to be adopted to achieve a satisfactory welded joint shall be provided for all weld types required in the execution of the Contractor’s scope.” [370] I accept CMC’s submission that this requirement only applies where welding was required to be carried out by CMC within the scope of works required under the Contract. That is, where CMC’s Scope of Work required welding. The Scope of Work did not require welding of the liners to be carried out by CMC. Accordingly, this requirement did not apply.452 [371] In relation to NCR01 I therefore conclude that it constitutes a variation. The effect of the issuing of NCR01 was that CMC was required to carry out testing on the Rail Receival pile liners which it did not have to carry out under the Contract. NCR01 also caused the works to cease from 24 February 2012 until that testing had been carried out (6 March 2012), and necessarily prolonged and interrupted the works. NCR01 therefore either constituted a direction pursuant to clause 40.1(d) of the Contract to “execute additional work” or was a direction to “increase … any part of the work” pursuant to clause 40.1(a). It is irrelevant to a consideration of whether NCR01 is a variation that CMC claims the cost of plant and labour being on standby while the testing was carried out.453 I therefore do not accept WICET’s submission that the claim is more properly characterised as one under either clauses 33.1 (direction regarding timing of the work) or clause 34.1 (direction to suspend the work) of the Contract. Direction 3 – Postponement of Rail Receival Piling Works [372] It is common ground that on 22 February 2012 CMC was instructed by WICET, through Worley Parsons, to postpone the Rail Receival piling work until WICET had obtained an approval from Queensland Rail (QR) of CMC’s work method statement. [373] By 22 February 2012 Avopiling had mobilised from the Beales Creek Bridge site to the Rail Receival Bridge site to commence piling at Abutment A. Abutment A was not within the rail corridor. [374] On the same date, a direction was given by Mr Karandrews of Worley Parsons that CMC cease all piling works at the Rail Receival Bridge until an approval from QR had been obtained. Mr Karandrews’ direction was confirmed by Mr Knowles in a subsequent conversation with Mr Vance. Mr Vance’s recollection of this conversation is that Mr Knowles expressed concern that CMC did not have permission from QR “to work there”. Mr Vance informed Mr Knowles that he did not believe this would be an issue 451 WICET’s Reply Submissions, [187(b)(ix)]. 452 CMC’s Written Closing Submissions [689] – [691]. 453 CMC’s Written Closing Submissions [693] – [695]; WICET’s Written Closing Submissions, [722]. -- 105 of 304 -- 106 because CMC was not working within the rail corridor. Mr Knowles supported Mr Karandrews’ direction that work should stop until the issue had been put to QR.454 [375] The direction is recorded in the minutes of a Contract Progress Meeting on 22 February 2012:455 “WP noted that there was to be no piling until approval granted QR.” [376] Mr Enright gave evidence in relation to this notation in the minutes. His recollection was that it related to work method statements for the piling within the rail corridor and WICET required QR approval before the works could proceed.456 The effect of Mr Enright’s recollection is that the direction to cease piling was limited to piling in the rail corridor. WICET therefore submits that as the piling at Abutment A did not fall within the rail corridor the direction should not have delayed the Rail Receival piling works. There is no other suggestion in the evidence that Mr Karandrews’ direction as discussed between Mr Vance and Mr Knowles suspending piling work at the Rail Receival Bridge was in any way limited to piling in the rail corridor. Nor, in my view, do the minutes record any such limitation. Further this limitation is not pleaded in WICET’s defence. By paragraph 187 of the sixth further amended defence and counterclaim WICET alleged that the relevant direction was given because CMC by its subcontractor Avopiling, mobilised plant and equipment across the QR rail crossing on 21 and 22 February 2012 without an approval work method statement from QR or from Worley Parsons. It is common ground that Avopiling used a public crossing for this purpose and as such no approval from QR was required nor any provision of a work method statement. [377] As I observed in [66] above Mr Enright did not have a good recollection of specific discussions that occurred in the pre-tender site visit to the GPN Borrow Pit. I accept, as WICET submits, that this is unsurprising given the matters in question occurred over five years ago. It is therefore surprising that Mr Enright would have a specific recollection enabling him to expand on the meaning of a minute taken on 22 February 2012. As there is no other evidence which would support the direction being limited to piling work in the rail corridor I am not prepared to act on Mr Enright’s recollection. My finding is that the direction as communicated by Mr Karandrews, and as later discussed between Mr Vance and Mr Knowles, extended to all piling work at the Rail Receival Bridge. [378] CMC complied with the direction. On 23 February 2012, QR confirmed that it did not need to approve CMC’s work method statement. [379] CMC alleges that as a result of the direction it was unable to carry out the Rail Receival piling work on 22 and 23 February 2012, a delay of approximately two days. WICET however submits that there was no delay because the Avopiling records of 22 and 23 February 2012 suggest that Avopiling was doing preparatory work which had to be done anyway and there was therefore no hold up of piling.457 WICET refers to photographs of the plant on 22 February [2.33pm] and 24 February [7.22am].458 The photos show the equipment in its pre (22 February) and post (24 February) rigged state. WICET submits that from a comparison of the two photographs work was performed on 454 T4-46, line 7 – T4-47, line 10. 455 Exhibit 2, WIC.502.034.4610 at .4613. 456 T16-58, lines 35-38. 457 WICET’s Written Closing Submissions, [813] – [821]. 458 CMC.510.001.0737 and Exhibit 45, CMC.511.001.0942. -- 106 of 304 -- 107 23 February 2012 to establish the rig as stated in the Avopiling and CMC daily records. Mr Vance conceded that Avopiling undertook work on 22 and 23 February 2012. His evidence was however that the work Avopiling was able to carry out on those days was minimal. No piling was able to be undertaken and the impact of the direction was to hold up the works for approximately a day and a half. He stated that the activities that were carried out were not very productive and could have been done while piling.459 Mr Vance’s evidence was not challenged in cross-examination. As CMC correctly submits his evidence is not inconsistent with the contemporaneous documents. There is no suggestion in the contemporaneous documents that any actual piling occured on 22 and 23 February 2013. Mr Vance’s evidence was that some (not all) of the activities could have been carried out in parallel with the piling works.460 The Avopiling daily report sheets record that all piling equipment was on standby for the whole of the two days. Mr Vance’s assessment was that the direction resulted in a delay of about a day and a half rather than two days. The contemporaneous photographs and documents referred to by WICET do not in my view constitute a proper basis for rejecting Mr Vance’s unchallenged evidence. [380] WICET further submits that if CMC was unable to undertake work on 23 February 2012, the requirement for an excavation permit and a pad certificate was likely the cause. WICET refers to the evidence of Mr Karandrews. His evidence was that for the piling work at Abutment A at the Rail Receival Bridge, CMC would require an excavation permit to do any earthworks in preparation for the crane pad which itself had to be certified. A crane could not be lifted on to a crane pad until the certificate had been issued.461 Mr Vance in cross-examination was shown an Avopiling document462 relating to access and permits. Mr Vance did not have any recollection of this topic. Mr Vance was also shown the Avopiling daily report sheet for 23 February 2012. Under the heading “Delays/Instructions from Client/Variations” it notes “3.30pm verbal confirmation of excavation permit and pad certificate Abutment A rail bridge”.463 Mr Vance assumed that the reference to the excavation permit was the same standard document CMC did with Worley Parsons all the time. As to the pad certificate he stated that it was something that would be needed prior to actually operating the crane.464 [381] As to CMC’s allegation that it was unable to carry out the Rail Receival piling work on 22 and 23 February 2012 by reason of the direction465 WICET pleads that CMC’s inability to carry out the piling work was caused by an act or omission of CMC for the reasons set out in paragraph 187 of the Defence, discussed at [376] above.466 Paragraph 187 of the Defence does not refer to any failure of CMC to obtain an excavation permit or pad certificate as constituting concurrent delay events. Neither was any such failure put to Mr Vance as constituting concurrent delay events. The documents in themselves do not permit a finding in the light of Mr Vance’s evidence that the excavation permit and pad certificate were concurrent delay events. 459 T4-49, lines 7-45. 460 T4-49, lines 38-40. 461 T21-29, lines 5-18; T21-32, lines 25-29; WICET’s Written Closing Submissions, [828] – [829]; WICET’s Reply Submissions, [191]. 462 CMC.016.003.0185. 463 CMC.016.003.0186. 464 T9-38, lines 10-28. 465 Eighth Further Amended Statement of Claim, [179B]. 466 Sixth Further Amended Defence and Counterclaim, [189B(b)]. -- 107 of 304 -- 108 [382] CMC submits that the issuance of the direction increased the work it had to carry out, within the meaning of clause 40.1(a) of the Contract, and was therefore a variation. The additional work referred to is that on 22 February 2012 CMC was required to organise a meeting with representatives of QR and on 23 February 2012 CMC’s representatives were required to attend the meeting with QR and following that meeting the Rail Receival piling work could recommence. The direction in my view, constitutes one pursuant to clause 34.1. The proper characterisation of the direction was that it was a suspension of part of the work under the Contract, namely a suspension of the Rail Receival piling work. The direction was given by Mr Karandrews and confirmed by Mr Knowles on a mistaken basis namely that CMC required, but had not obtained, QR approval of a work method statement. I accept Mr Vance’s assessment that the delay that resulted from the direction to suspend was one and a half days. Direction 4 – Suspension Direction [383] This Direction was a Site-wide suspension of all work following the truck bogging incident in the Reclamation C Bunds. I have already dealt with this Direction in [180] to [188] above. The Direction was issued on 8 March 2012. CMC complied with the Direction and was not able to carry out the Rail Receival piling work between 8 March 2012 and 12 March 2012. I have concluded that WICET was not the cause of the suspension at the Reclamation C Bunds. CMC submits, however, that WICET should not have suspended the Rail Receiving piling work. [384] WICET pleads that the reason the Suspension Direction was given was because of concerns held by Worley Parsons as to overall Site safety due to the bogging of the truck: (a) being the second serious safety incident in two days; and (b) occurring in direct contravention of a direction of 7 March 2012 that CMC was only to operate the haulage trucks on the drainage sides of the Bunds. [385] CMC submits that the Suspension Direction was, insofar as it caused the Rail Receival piling work to cease, plainly unnecessary. Mr Vance gave evidence that there was no connection between the Suspension Direction and the works being carried out at the Rail Receival Bridge because: “The Rail Receival Bridge is a different subcontractor, different team, different people operating in a different area. It’s difficult to see any connection at all there, from my point of view.”467 [386] In an email exchange between Mr Vance and a CMC estimator (Mr Webster) in April 2012, Mr Vance in effect confirmed that the Site was shut down for four days based on “safety”. He also suggested that the four day shutdown could have been prevented by an earlier intervention by CMC after the first minor bogging.468 [387] The bogging of the truck on 8 March was the “worse bogging (CMC) had on Site”.469 The serious bogging followed a bogging earlier that day. As set out in Mr Walls’ direction 467 T4-56, lines 13-17. 468 WICET’s Written Closing Submissions, [861] to [865]. 469 T10-7, lines 38-44. -- 108 of 304 -- 109 to suspend on 8 March 2012 the truck bogging had followed a long term injury (LTI) on 29 February. A man had the end of his thumb crushed when he got it stuck between chains lifting a small engine of a caravan CMC had on the Reclamation C Bunds.470 [388] There is no evidence to suggest that the suspension was imposed for anything other than safety concerns. Whilst the truck bogging incident and LTI only occurred in the C Bunds and involved a different CMC subcontractor to the one carrying out the Rail Receival piling work, I accept that the cause of the Site-wide suspension was a concern about CMC’s safety practices. This is evident from the Incident Investigation Report.471 The Report refers to the fact that various safety statements were in place for the task being performed at the Reclamation C Bunds on 8 March 2012. The Report also noted that the driver of the truck had no previous experience with the soft soil section of the project. The Report further noted that whilst safety procedures were in place they had not been followed. The Report referred to “poor management of risk associated with tasks being performed”. The author of the Report made the following recommendations: 1. Reinduct all project employees; 2. JSEA and change management interactive toolbox; 3. Fatigue management toolbox; 4. Laminated charts for trucks and crib sheds; 5. Positioning of bollards to highlight dump area for trucks; 6. Placement of bollards for Bund edge delineation; 7. Permit boards placed at work fronts; 8. Restart with all supervisors to ensure all required SWMS and JSEA’s prior to commencing; 9. Follow up feedback on effectiveness of risk assessment review. [389] Whilst some of these recommendations are specific to works at the Reclamation C Bunds the recommendations had a wider application which included reinducting all project employees. [390] As I have observed in [187] above, during the four days of the suspension CMC conducted reviews of the work method statements with its crews at the Site office and considered how safety could be improved on-Site. Mr Karandrews sat in on those meetings. The work method statements under consideration did not only relate to trucks but all aspects of the work.472 There is no evidence that at the time CMC objected to conducting this review. In its own Notice of Suspension to AE Group dated 11 March 2012 CMC referred to the fact that works had been suspended due to “health and safety concerns”.473 470 T10-3, lines 31-39 and T14-99, lines 24-29. 471 Exhibit 158, CMC.502.015.1089. 472 T21-26, lines 11-24. 473 Exhibit 2, CMC.501.012.5953. -- 109 of 304 -- 110 [391] CMC submits that in circumstances where Mr Walls was not called, the real reasons for suspending all work on the Site were never satisfactorily explained. WICET did however, call Mr Karandrews who was the person who advised Mr Walls to direct the suspension. That advice was only given on the basis of Mr Karandrews’ safety concerns. WICET cannot in my view, be criticised for not calling Mr Walls. The reasons for the suspension are revealed in Mr Walls’ email in which he specifically refers to clause 34.1(b) of the General Conditions of the Contract which deals with a direction to suspend for the protection or safety of any person or property. The email foreshadowed a full investigation of the incident stating that works could only resume when CMC could fully demonstrate that it would undertake works in a safe manner ensuring the protection and safety of all personnel and property on-Site. [392] I therefore find that WICET was not responsible for the cause and extent of the Site-wide suspension. CMC therefore has no entitlement to a valuation for the suspension. It also follows that CMC is not entitled to an extension of time for the Suspension Direction in respect of its Delay Claim. Direction 5 – Suspension due to Specification Uncertainty [393] In order to understand CMC’s claim in respect of this direction, it is necessary to set out the chronology of events. I have taken this chronology largely from the evidence of CMC’s primary witness in respect of this direction, Mr Henderson. He was CMC’s senior engineer responsible for the construction of the Rail Receival Bridge. The alleged direction is in respect of the certification of the pile sockets for piles A5 to A8 located at Abutment A at the Rail Receival Bridge site. [394] On 25 February 2012 Mr Henderson had a telephone conversation with Mr Knowles of Worley Parsons. Mr Henderson instigated the telephone call because there were two relevant specifications in relation to piles. First was the Aurecon Hatch “Bored Piles Wiggins Island Coal Terminal Gladstone Ports Corporation” document dated 8 December 2009 revision B.474 Section 6 of this document dealt with pile construction. Clause 6.2 relevantly provided: “Each pile boring shall be inspected by the Principal’s representative prior to the placing of concrete in it. This inspection shall be carried out from the ground surface using reflected sunlight or a suitable electric light to check that the foundation material is as specified over the base area and the socket length and that the excavation is free of water. The Contractor shall provide all equipment necessary to make a complete inspection of the pile.” [395] The second specification was a Main Roads specification, MRS11.63 of 1999. The specification was in respect of cast-in-place piles. In Table 1 of the specification standard work items were identified. These included item 7412 which dealt with the excavation below toes of liners. The Work Operations incorporated in item 7412 for a Contractor included the excavation of material, disposal of excavated material, dewatering and provision of temporary liners if required. Item 7412 as drafted in the 1999 specification did not refer in terms to a Contractor being required to engage a geotechnical engineer. [396] Clause 10.3 of MRS11.63 of 1999 relevantly stated: 474 CMC.021.001.0540. -- 110 of 304 -- 111 “Sockets are to be logged, inspected and verified by the Contractor using a qualified geotechnical engineer prior to casting of concrete. Such inspection shall ensure that the minimum socket length and diameter have been achieved and the classification of the rock into both lithological and weathering type has been undertaken. A strength classification is not be undertaken to ensure that the required friction and base capacities have been achieved. Approval of the socket prior to concreting is a Hold Point 3.” [397] Mr Henderson appreciated that the Aurecon Hatch specification contemplated that each pile boring would be inspected prior to the placing of concrete in it. He also appreciated that the Main Roads specification required pile sockets to be logged, inspected and verified by the Contractor using a qualified geotechnical engineer prior to the casting of concrete. In spite of the reference to the “Contractor” in clause 10.3 of MRS11.63 of 1999, as the Pay Item 7412 did not refer to a geotechnical engineer, Mr Henderson was of the opinion that the Main Roads specification did not make it the Contractor’s responsibility to engage a geotechnical engineer.475 I note that the Aurecon Hatch specification only refers to each pile boring being “inspected” by the “Principal’s representative”. Clause 6.2 does not expressly require the Principal’s representative to be a geotechnical engineer. Although Mr Henderson gave evidence as to his understanding as to how the specifications operated, their proper construction is a matter for the Court. Mr Henderson’s opinion does however, give some context as to why he telephoned Mr Knowles on 25 February 2012. [398] Mr Henderson had a general recollection of his conversation with Mr Knowles. He identified the purpose of calling Mr Knowles was to confirm that Worley Parsons or Aurecon Hatch would be performing the role as the Principal’s Representative identified in clause 6.2 of the Aurecon Hatch specification.476 As the conversation is an important one and is alleged by CMC to constitute a direction given by Worley Parsons,477 I will set it out in full: “What was the substance of what you said? … To establish that the requirement to inspect the sockets and the pile excavations would be carried out by Worley Parsons and Aurecon Hatch. Did you identify what sockets and what pile excavations? … Yes … Or where on site? … Yes Do you recall what you said about that? … That we were working at abutment A on rail receival bridge and that we’d be progressing with works down there now that the NCR was lifted. And what was said about having a geotechnical engineer present? … Matt responded by telling me that Scott and Bindu would be performing the role of the inspection, and it made sense to me, being that Scott would ordinarily sign off our hold points in different parts of the works, and also that Bindu was Aurecon’s geotechnical engineer. 475 T13-21, lines 31-34. 476 T13-22, lines 13-14. 477 Eighth Further Amended Statement of Claim, [183FF]; CMC’s Written Closing Submissions, [751]. -- 111 of 304 -- 112 All right. So after he said that, did you make any response to him? … No, other than confirming that we would – we would maintain communications with Scott regarding when we required him to be present. All right. And was anything more said in the conversation? … Not that I recall, no.”478 [399] Mr Knowles was not called by WICET to give evidence. It is however, unnecessary to draw a Jones v Dunkel inference. As I have observed in [57] above, there was no real challenge to Mr Henderson’s credibility and I accept his evidence as reliable. Mr Henderson’s recollection of the conversation and the context in which it occurred does not however support CMC’s pleaded case. Paragraph 183FF of the eighth further amended statement of claim pleads that on 25 February 2012 WICET’s agents, Worley Parsons, instructed CMC that in accordance with the Aurecon Hatch specification, agents of the Principal’s representative would “certify” the pile bases at Abutment A of the Rail Receival piling works. This instruction is particularised by reference to Mr Henderson’s telephone conversation with Mr Knowles on 25 February 2012. No mention is made of certification in this conversation as recalled by Mr Henderson. Mr Henderson was seeking confirmation from Mr Knowles that Worley Parsons or Aurecon Hatch would be performing the role of the Principal’s Representative for the purposes of clause 6.2 of the Aurecon Hatch specification. There is no requirement for such an inspection to be conducted by a geotechnical engineer under clause 6.2. The inspection contemplated by clause 6.2 is one to be carried out from the ground surface using reflected sunlight or a suitable electric light. The purpose of the inspection is also quite limited, namely “to check that the foundation materials is as specified over the base area and the socket length and that the excavation is free of water.” The mere fact that Mr Knowles identified two persons, one of whom was a geotechnical engineer, to carry out the inspection does not constitute an instruction that Dr Bindu Madhava (Dr Bindu) would certify the pile borings at Abutment A. According to Mr Henderson’s recollection, Mr Knowles responded by telling him that Scott Karandrews and Dr Bindu would be performing the role of inspection.479 This conversation simply amounted to Mr Knowles confirming the Worley Parsons and Aurecon Hatch personnel who would be the Principal’s representative for the purposes of clause 6.2 of the Aurecon Hatch specification. In my view, nothing said expressly or arising by implication in the course of this conversation relieved CMC of otherwise complying with the requirements of MRS11.63 of 1999. Those requirements in clause 10.3 of that specification not only required inspection but also logging and verification. [400] On 27 February 2012 Mr Henderson sent an email to Mr Knowles: “Confirming our conversation on Saturday 25th February regarding the certification of the pile bases and that this will be completed by Scott and Bindu and the hold point released accordingly. We will maintain our ongoing coordination with Scott in regards to the release of hold points.”480 The reference to “hold points” can only be understood as a reference to Hold Point 3 in paragraph 10.3 of MRS11-63 of 1999. Whilst this is a contemporaneous document, it does not reflect Mr Henderson’s own recollection of his conversation with Mr Knowles 478 T13-22, lines 25-47. 479 T13-22, lines 36-37. 480 CMC.505.002.2075. -- 112 of 304 -- 113 of 25 February 2012. The email refers to “certification” which was not mentioned in the conversation. Further, the conversation, as recalled by Mr Henderson, was for the purpose of Mr Knowles confirming the Principal’s representatives for the purposes of clause 6.2 of the Aurecon Hatch specification. Mr Henderson’s email of 27 February 2012 did not and could not unilaterally alter CMC’s contractual obligations to comply with MRS11-63 of 1999 in undertaking the piling work at the Rail Receival Bridge site. [401] Mr Henderson handed over to Mr Hale, a CMC site engineer, the responsibility for arranging a process for inspections.481 Mr Hale was generally responsible for Quality Assurance for which the release of hold points formed part. Mr Hale was thereafter to be responsible for liaising with Mr Karandrews directly in regards to inspection timing. [402] Avopiling made a request to CMC on 6 March 2012 requesting a geotechnical engineer to be present at 12 pm the following day in relation to piles being bored at Abutment A. [403] On 6 March Mr Hale sent an email to Mr Karandrews: “We will be looking to get the geotech (Bindu John tell me) out around 11:00am tomorrow to start looking at the piles for certification purposes.”482 [404] Mr Knowles emailed Mr Henderson on 8 March 2012 in respect of the 25 February 2012 conversation:483 “The conversation was that Scott and Bindu would be in attendance to visually inspect the bases. The Contractor still has an obligation to MRS11.63 Cast In Place Piles – ‘Actual foundation levels shall be determined by the Contractor using a qualified geotechnical engineer …’” Mr Knowles attached MRS11.63 of 1999.484 At the time this email was sent neither Mr Karandrews nor Dr Bindu had attended Abutment A in order to inspect the piles. Mr Henderson did not know whether any attempts had been made to contact Mr Karandrews and/or Dr Bindu for this purpose.485 [405] Having received this email Mr Henderson rang Mr Knowles. Mr Henderson recalls that he said words to the effect that he understood that Worley Parsons and Aurecon Hatch “were performing the inspections” and that was how CMC went about its business but it had now changed. Mr Knowles’ response was that the specification required the Contractor to provide that certification.486 Mr Henderson may have expressed some annoyance. [406] Mr Knowles then sent a further email on 8 March 2012.487 In this email Mr Knowles again referred to MRS11.63 of 1999 and also MRS11.68. He stated that if CMC were having difficulty securing a qualified geotechnical engineer from Coffey, he suggested they contact Golder Associates in Gladstone. Mr Knowles’ email also referred to the fact that Mr Vance at that time was absent. 481 T13-23, lines 12-16. 482 CMC.505.001.6371. 483 CMC.503.021.9335. 484 CMC.503.021.9337. 485 T13-24, lines 40-45. 486 T13-25, lines 34-44. 487 CMC.502.046.8799. -- 113 of 304 -- 114 [407] By 13 March 2012 CMC had bored piles A5-A8 at Abutment A. The next part of the works was the concreting of the piles. Clause 10.3 of the Main Road’s specification required the pile sockets to be logged, inspected and verified by CMC using a qualified geotechnical engineer prior to casting of concrete. Approval of the pile sockets prior to concreting constituted Hold Point 3. CMC had arranged for its own geotechnical engineer Mr Tully of Golder Associates to attend the Site. Mr Tully was unable to attend the Site until 9 am on 13 March 2012. As matters transpired, Mr Tully could not certify the boring piles. This meant that the holes could not be filled with concrete and remained exposed and open to the elements. [408] Mr Vance attempted to resolve the situation on about 13 March 2012 by first ringing Mr Knowles and subsequently elevating his request to Mr Sharples of WICET. Mr Vance asked Mr Knowles whether Dr Bindu could certify the piles as he was a geotechnical engineer. Mr Knowles replied that he did not have the authority to request Dr Bindu to do that and it was unlikely. Mr Knowles suggested that Mr Vance ring Mr Sharples to request Dr Bindu to carry out the certification. Mr Vance’s conversation with Mr Sharples did not resolve the issue.488 Mr Sharples in effect said it was up to Mr Vance whether CMC proceeded with concreting the pile sockets. [409] CMC refers to Mr Vance’s conversation with Mr Knowles on 13 March 2012 in paragraph 183F of the eighth further amended statement of claim. This conversation constitutes the particulars of an allegation that CMC was instructed by Worley Parsons to cease the Rail Receival piling work as WICET was uncertain as to the Main Road specifications which CMC should follow with respect to the piling works and accordingly who had responsibility to inspect the pile sockets. This is referred to in the pleading as the March Rail Receival Instruction. This instruction is said to constitute a direction either pursuant to clause 40.1, 33.1 or 34.1 of the Contract. CMC pleads that between 14 March 2012 and 27 March 2012 it was not able to carry out the Rail Receival piling work by reason of the March Rail Receival Instruction.489 The particulars of paragraph 183F of the eighth further amended statement of claim state that Mr Knowles gave Mr Vance an oral instruction to the effect that the pile sockets would not be signed off or inspected by agents of WICET. Mr Vance’s recollection of this conversation with Mr Knowles does not support CMC’s pleaded case.490 The reason CMC could not continue with the piling work at Abutment A was that Mr Tully was not in a position to certify the pile sockets. [410] When Mr Tully of Golders arrived on-Site on 13 March 2012 Mr Henderson instructed him to inspect the materials being generated by the excavations and to log those materials.491 Mr Henderson gave this instruction because it accorded with the requirements of MRS11.63 of 1999.492 The Main Road’s specification also required the geotechnical engineer to “verify” the pile sockets. [411] This distinction was recognised by Mr Tully in an email he sent to Mr Henderson on 15 March 2012: “Logs of bored pile sockets A5-A8 are attached. As requested I have logged the holes only. Whoever is providing approval/certification of the pile should 488 T4-60, lines 43-47; T4-61, lines 1-46. 489 Eighth Further Amended Statement of Claim, [184A]. 490 WICET’s Written Closing Submissions, [896] – [902]. 491 T13-28, lines 10-11. 492 T13-28, lines 10-17. -- 114 of 304 -- 115 do their own calculations, based on materials encountered during the drilling.”493 [412] In spite of Mr Knowles’ emails of 8 March 2012 Mr Henderson still believed that Worley Parsons or Aurecon Hatch would provide the certification of the piles.494 [413] On 16 March 2012 CMC instructed Avopiling not to place concrete within bored pile A5-A8 until further notice. This was stated to be “due to outstanding geotechnical certification of the pile bases”.495 [414] On 16 March 2012 Mr Knowles emailed Mr Henderson seeking confirmation that CMC were following the specification requirements for MRS11.63 in respect to the Rail Receival piling work. This was not a reference to MRS11.63 of 1999 but rather to MRS11.63 of 2009.496 Mr Henderson stated in evidence that the requirements in the 2009 version of the specification are “slightly” different to the 1999 version.497 In the 2009 version, work item 7412 had been expanded to include the following: “(f) Inspection by Contractor’s Geotechnical Engineer; (g) Geotechnical certification of socket; and (h) Geotechnical certification of pile base.” Clause 10.3 of the 2009 version relevantly stated: “Actual foundation levels and socket dimensions shall be determined by the Contractor on the advice of the Geotechnical Assessor subject to the minimum requirements shown on the drawings. Sockets are to be logged, inspected and certified by a geotechnical engineer prior to casting of concrete. The Geotechnical Assessor shall certified that the factored geotechnical strength is greater than the design loads shown on the drawings in accordance with AS 5100.3 and the socket complies with the minimum requirements shown on the drawings. Geotechnical Assessor certification of the socket and or pile base prior to concreting is a Hold Point.” [415] By reference to clause 10.3 of the 2009 version it would appear that when Mr Knowles was quoting from MRS11.63 in his emails of 8 March 2012 he was actually quoting from the 2009 rather than the 1999 version of the specification. CMC had been previously directed on 28 October 2011, to construct “Works under the Contract”, in compliance with the third edition Main Road’s specification MRS11-1999.498 [416] In Mr Henderson’s view the requirements in the 2009 specification required the Contractor to provide the geotechnical engineer.499 Irrespective of the changes made to 493 CMC.505.001.5701. 494 T13-28, lines 33-34. 495 CMC.016.003.0323. 496 CMC.502.017.2190. 497 T13-29, lines 38-39. 498 Eighth Further Amended Statement of Claim, [183FA]; Sixth Further Amended Defence and Counterclaim, [194A]. 499 T13-30, lines 33-34. -- 115 of 304 -- 116 the 1999 specification, the fact that Mr Karandrews and Dr Bindu were to undertake an inspection as the Principal’s Representative in accordance with clause 6.2 of the Aurecon Hatch specification did not relieve CMC of its contractual obligation to comply with MRS11.63 of 1999. Clause 10.3 of the 1999 specification in my view, made it the responsibility of CMC to have the sockets logged, inspected and verified by a qualified geotechnical engineer prior to the casting of the concrete. Further, the change in wording between the 1999 and 2009 specification from “verify” to “certify” is not significant. [417] On or about 20 March 2012 a meeting was conducted between representatives of Worley Parsons, Aurecon Hatch, CMC and Golder in relation to the issue of certification. The persons in attendance included Mr Knowles, Mr Vance, Mr Henderson and Mr Tully. Dot point 3 of the notes of the meeting state: “Golder logged and viewed drill samples that were taken by CMC,  Cannot verify as did not witness samples being taken, also gaps in samples.  4 piles were drilled to 1m from socket depth  Geotech normally in attendance for drilling of sockets.”500 [418] The notes record that two options were considered for “verifying/certifying” the open sockets. The notes also record that the sockets had not been certified and that Golder could not “verify/certify” the sockets as they were not on-Site to witness the extraction of materials. The notes record that Golder were to review MRS11.63 to confirm whether the suggested options would satisfy the requirements to certify. It is also recorded that future piles would be constructed/installed in accordance with MRS11.63 of 2009. Mr Henderson accepted that these notes were an accurate record of what was discussed at the meeting.501 The notes refer to the normal practice of a geotechnical engineer being in attendance for the drilling of sockets. There was no suggestion in Mr Henderson’s conversation with Mr Knowles on 25 February 2012 that Dr Bindu would or should be in attendance for the drilling of the pile sockets. Mr Henderson could not recall any discussion at this meeting regarding any distinction between the concepts of “verifying” as opposed to “certifying” sockets.502 [419] As the piles on Abutment A had to await certification, CMC gave a site instruction to Avopiling on 20 March 2012 to mobilise to Abutment B. It took approximately two days for Avopiling to mobilise to Abutment B. [420] CMC’s case in respect of Direction 5 fails. CMC, on the evidence, has failed to establish the alleged instruction pleaded in paragraph 183FF or the March Rail Receival instruction pleaded in paragraph 183F of the eighth further amended statement of claim. Mr Knowles never gave an instruction to Mr Henderson that Dr Bindu would “certify” the pile sockets at Abutment A. Nor was any instruction given that Dr Bindu would “log” or “verify” the pile sockets for the purposes of the relevant hold point to be released. The suggestion that Mr Knowles revoked this instruction by his email of 8 March 2012 is not supported by the evidence. There was no such instruction given. Even on Mr Henderson’s own recollection of the conversation of 25 February 2012 it cannot be accepted, as CMC 500 CMC.503.021.6126. 501 T13-31, lines 9-10. 502 T14-14, lines 23-26. -- 116 of 304 -- 117 submits, that Mr Knowles said that Dr Bindu and Scott Karandrews would “inspect and certify” the pile bases with the hold point then released.503 [421] As CMC remained contractually bound to apply MRS11.63 of 1999 to the Rail Receival piling work, any delay caused by a failure to comply with the requirements of clause 10.3 rest solely with CMC. Direction 6 – Stop Work Direction [422] On 16 May 2012 WICET instructed CMC, by an email from Mr Miroshnikoff to Mr Vance to stop all works. As a result of this direction CMC was not able to carry out the Rail Receiving piling work on either 16 or 17 May 2012. [423] CMC pleads that the Stop Work Direction was a direction either pursuant to clause 40.1, 33.1 or 34.1 of the General Conditions of the Contract.504 [424] The direction arose in the following circumstances. CMC remobilised Avopiling from Abutment A of the Rail Receival Bridge to Abutment B from 20 March 2012. Following works having been completed at Abutment B, Avopiling mobilised to Pier 1 by about 16 April 2012 and then back to Abutment A on 24 April 2012. Once work recommenced at Abutment A, it became apparent that, as a result of the extended time in which the bored holes had been left open to the elements, piles A5 and A6 had substantially collapsed. In accordance with the instructions from the geotechnical engineer CMC had engaged on-Site, Mr Tully, Avopiling proceeded to backfill the piles with low strength concrete and rebore. On 4 May 2012 Dr Bindu emailed Mr Miroshnikoff505 (who had taken over from Mr Knowles) in the following terms: “We understand that the excessive caving of ‘socket material’ was occurred in three piles of Abutment A. Please advise the Contractor’s Geotechnical Engineer to submit a detailed report on geotechnical issues with time line. The report shall include following background, ground profile of each pile, possible cause and extent of caving, remedial measure adopted and certified geotechnical capacity of pile. Please provide a copy of recording of borehole camera for all piles for our records.” [425] On 8 May 2012 CMC issued NCR16.506 The description of non-conformance in NCR16 was: “Piling to Abutment A Piles A5, A6, A7, A8 commenced without a geotechnical engineer present. CMC were of the understanding that piling for this project would be certified by the Principal Contractor (Worley Parson). The Principle [sic] did not advise CMC that this was not the case and that piling would be undertaken MRS11.63 [Sept 09] until piles A5, A6, A7, A8 were within 2m of their design toe. This specification MRS11.63 (Sept 09) had not been issued at this time in the works.” 503 CMC’s Written Closing Submissions, [759]. 504 Eight Further Amended Statement of Claim, [191B]. 505 Exhibit 2, WIC.502.084.2089. 506 Exhibit 2, CMC.011.001.0737. -- 117 of 304 -- 118 [426] The NCR identified as the relevant corrective action the engagement of Golder Associates by CMC to log and certify the piles as per MRS11.63. The preventative action identified was that a site instruction had been issued clarifying the specifications and issue dates. On 16 May 2012 at 8.48am Mr Miroshnikoff emailed Mr Vance as follows: “Scott advises that piling is to re-commence today, with a concrete pour this afternoon. Further to our discussions on Monday, we discussed that your geotech was to submit a proposal to AH for comment, as part of the NCR process. A meeting between your geotech and AH (Bindu) was to occur today. The outcome of this meeting was for AH to review the methodology in order for them to signoff the NCR, and proceed with piling once all agreed. This has not happened. As a result we cannot allow piling to continue until the NCR has been reviewed and methodology agreed. Please stop all works until this is closed out.”507 [427] From this email it would appear that Mr Miroshnikoff did not action Dr Bindu’s request of 4 May 2012 until on or about Monday 14 May 2012. [428] Mr Vance replied to Mr Miroshnikoff’s email at 10.32am on the same day:508 “My recollection of the discussion is that we were going to organise a meeting ASAP, however, Bindu was not available until today. (we don’t believe this is a practical level of staffing for a project of this size). There is no NCR which would prevent these works proceeding; There is no clarity on what we would report on, we are proceeding in line with our geotechnical advice and they are people who certify this works, they are very confident of how they are proceeding, as are our specialist contractor. Further, to date, of 16 NCR’s raised on this project and submitted WP for closure, one has been closed, we are not sure where in the system the rest are, they are in your court. I have tried to call you twice, I will take this as an instruction to cease work, this would be a change under clause 33.1, formal correspondence will follow in due course.” [429] Mr Vance gave evidence that prior to receiving Mr Miroshnikoff’s email on 16 May 2012, he had not received any written communication requiring CMC to answer particular concerns or produce any report concerning the procedure to be followed in filling the bored holes.509 507 CMC.503.020.7322. 508 Exhibit 2, CMC.502.027.2159. 509 T5-8, lines 35-44. -- 118 of 304 -- 119 [430] On 16 May 2012 Dr Bindu again emailed Mr Miroshnikoff stating that Aurecon Hatch would like to review the Contractor’s geotechnical remedial measures before proceeding with the construction to ensure the design intent.510 [431] Colin Walker, who was Dr Bindu’s superior at Aurecon Hatch, emailed Dr Bindu on 17 May 2012 suggesting that Aurecon Hatch should not make any formal request or demand for information from Worley Parsons.511 He referred to the list he had prepared as being based on requirements outlined in the specification and key information that he believed would be required if Aurecon Hatch was requested to assess the piles. Mr Walker stated that he was not concerned with contractual issues, such as approval of construction procedure by Worley Parsons but included it to outline the process of the specification. He further stated that acceptance of the piles was the responsibility of Worley Parsons, but in order to provide any technical advice, he believed Aurecon Hatch would require construction records and the constructor’s proposed remedial measures. [432] On the same day Mr Karandrews wrote to Mr Vance identifying what Worley Parsons required to move forward “on this situation”. Mr Karandrews then repeated Dr Bindu’s original request for a detailed report covering the same issues as Dr Bindu had previously identified.512 [433] Mr Vance in responding to Mr Karandrew’s email expressed his frustration with this request:513 “You don’t certify piles until you do them, that’s why you inspect with camera etc. on the day. They will decide whether it is acceptable or not once we are at full depth and they have examined the borehole. We have not got there yet. We can provide those records, however, Is or is there not a problem with the methodology we have been using and have already used on other signed off piles on site? This Methodology is a standard way of treating the situation encountered, do they have a problem with it or not? This is pretty standard procedure stuff.” [434] On the same day, 17 May 2012, Mr Vance, Mr Henderson and Mr Tully met with Mr Miroshnikoff, Mr Karandrews, Dr Bindu and Mr Walker to discuss the issue. Mr Vance gave evidence that at this meeting Mr Walker said words to the effect that if Golders was happy with the proposed remediation works, Aurecon Hatch did not have a problem with it.514 [435] WICET submits that this evidence should not be interpreted as signifying that a report was not to be provided prior to the recommencement of work. I accept Mr Vance’s recollection of what was said by Mr Walker. Mr Miroshnikoff was unable to recall whether he attended the meeting. Dr Bindu accepted an account of what was said by Mr Walker at the meeting which was consistent with Mr Vance’s evidence.515 Dr Bindu was an entirely truthful witness. Mr Walker was not called to give evidence by WICET. Mr Walker’s alleged statement at this meeting is however consistent with his email to 510 Exhibit 376, WIC.502.091.6752. 511 CMC.502.016.2412. 512 CMC.502.016.2414 at .2415. 513 CMC.502.016.2414 at .2415. 514 T5-9, lines 24-41. 515 T20-47, line 42 – T20-48, line 2. -- 119 of 304 -- 120 Dr Bindu of 17 May 2012 in which he suggested that Aurecon Hatch should not make any formal request or demand for information from Worley Parsons. This was in the context that Aurecon Hatch were not certifying the piles. This role was being undertaken by Golders. As to how Golders dealt with the partially collapsed piles was a matter for it as the certifier. The methodology which had been adopted by Golders was described by Mr Vance in his email as “a standard way of treating the situation encountered”. The Stop Work Direction arose because Dr Bindu had requested information from Worley Parsons. This RFI was ultimately not supported by Dr Bindu’s superior, Mr Walker. [436] I do not accept, as WICET submits,516 that there was a connection between NCR16 and the remedial action in relation to the piles. NCR16 does not relate to the issue of the collapsed piles. The NCR concerned the failure of CMC to have a geotechnical engineer present at the commencement of piling. This is evident from the description of the non- conformance and the corrective action identified in the NCR. Once the corrective action had been taken there was no longer any suggestion that Aurecon Hatch would be certifying the piles. This was to be undertaken by Golders having been engaged by CMC. [437] WICET submits that CMC was under a contractual obligation to supply a geotechnical report as requested.517 The contractual obligation identified by WICET is clause 9 of Appendix AF3 to the Contract “non-conforming materials, products and services”. This clause establishes the procedure for a NCR. Clause 9.2 requires corrective action. Clause 9.1 requires all closed out NCRs to be “verified and approved by the PR representative”. This submission fails for two reasons. First it is not pleaded in WICET’s defence. More importantly clause 9, properly construed, does not give the PRR the power to require something to be done over and above the Contractor’s contractual obligations.518 CMC in carrying out the Rail Receival piling work was required to comply with both the Aurecon Hatch specification and MRS11.63 of 1999. There was no contractual obligation for the certifying geotechnical engineer engaged by CMC to provide a report to Worley Parson or Aurecon Hatch. [438] CMC submits that the effect of the Stop Work Direction was to impose an additional obligation on CMC that was not imposed by the Contract. This was accepted by Mr Miroshnikoff in cross-examination: “The effect of your stop work was to impose, I’m suggesting, a dual obligation on the contractor; not only to have its geotechnical engineer certify for the final geotechnical capacity of the piles, but also for the contractor to satisfy WICET’s geotechnical engineer as to the method being used in using these collapsed holes? … That’s correct.”519 [439] Irrespective of how Mr Miroshnikoff construed the Stop Work Direction any determination of the contractual basis for the direction is a matter for the Court. CMC submits that the Stop Work Direction constitutes a variation for the purpose of clause 40.1. It submits that the impact of the direction was that: (a) CMC’s work on the piling was interrupted and prolonged; 516 WICET’s Written Closing Submissions, [957]-[958]. 517 WICET’s Reply Submissions, [204]. 518 T34-71, lines 30-37. 519 T18-47, lines 41-45. -- 120 of 304 -- 121 (b) CMC’s construction methodology was changed; and (c) CMC was required to carry out additional work (such as arranging for Mr Tully to produce a report on its methodology for approval by Aurecon Hatch) which it was not otherwise required to carry out under the Contract.520 [440] CMC did provide a geotechnical report by email to Worley Parsons from Mr Henderson in the mid-afternoon of 17 May 2012.521 The document was a memorandum from Golders which, in general terms, described how the sockets had been redrilled, filled with concrete and tested for stability. Later on 17 May 2012 Mr Miroshnikoff emailed Mr Henderson and Mr Vance to the effect that CMC could continue with the piling works. He had consulted with Aurecon Hatch and received confirmation that the material provided by CMC was suitable to allow the works to progress.522 The Stop Work Direction is better characterised as a direction to suspend part of the work under the Contract. Whilst it may be argued that the requirement for the additional report falls within clause 40.1(d) namely a direction to execute additional work, the direction was to stop all work until the report was supplied. That is, even if there was an additional contractual obligation imposed by WICET on CMC, the actual direction given was one to suspend piling work at Abutment A. A direction may only be given under clause 34.1 if the Principal’s Representative considers it necessary because of an action or omission of the Contractor, subcontractor or an employee or agent of either.523 WICET submits that the Stop Work Direction was issued because of an omission of CMC: a failure to deliver corrective action required to close out an NCR in relation to the collapsed pile walls at Abutment A. I do not accept this submission. There was no contractual obligation which required the provision of a report from Golders. The responsibility for certifying the piles, which would include determining the appropriate remedial action, was a matter for Golders not Aurecon Hatch. Even though Mr Miroshnikoff in his email of 16 May 2012 sought to link NCR16 with the provision of the report, NCR16 did not relate to any remedial action in respect of the partially collapsed piles. Even if WICET sought a greater oversight of CMC’s rectification work it was not necessary, in order to achieve this oversight, to give the Stop Work Direction. Nor was this desire for greater oversight an action or omission of CMC, Avopiling or Golders for the purposes of clause 34.1(a)(ii) of the Contract. I find that the suspension was therefore due to an act or omission of Worley Parsons. CMC is therefore entitled to a valuation under clause 40.5 pursuant to clause 34.4. Direction 7 – Piling Hammer Claim [441] In order to carry out the Beales Creek piling work, CMC utilised a 9 tonne hammer. On 8 June 2012 CMC was instructed by WICET to change the hammer apparatus used to carry out the Beales Creek piling work to achieve the geotechnical capacity specified in the contractual design drawings and specifications. The issue is whether that instruction constituted a variation pursuant to clause 40.1 of the General Conditions of the Contract. I make the following findings of fact. [442] On 16 November 2011, Aurecon Hatch issued as part of the Contract the Annexure to Main Roads Specification MRS11.66 (MRS11.66.1) which provided, inter alia, that the 520 CMC’s Written Closing Submissions, [836]. 521 Exhibit 2, CMC.502.045.9176; CMC.502.045.9179. 522 T17-59, lines 14-23. 523 Clause 34.1(a) of the Contract. -- 121 of 304 -- 122 piling hammer was to be “proposed by the Contractor and accepted subject to Superintendent approval”.524 [443] A 9 tonne hammer was proposed by CMC on 12 January 2012 by way of ATP48 containing CMC’s “Process Procedure for Driven Steel Tubes”, nominating a Junttan PM26 piling rig with a Junttan HHK7/9SS Hydraulic Impact Hammer to carry out the Beales Creek piling works.525 [444] WICET accepts that it approved the use of the 9 tonne piling hammer. WICET, alleges however, that CMC issued a “wave equation analysis” which “in effect, demonstrated that a 9 tonne hammer could perform the work to the design”. The wave equation analysis is only an estimation based upon input data which is unknown at the time of the analysis. This is evident on the face of the document. For example, the analysis states that it is "based on mathematical models which… [u]nder certain conditions… only crudely approximate, often complex, dynamic situations" and "should be used with prudence".526 [445] The initial wave equation analysis was conducted on 4 October 2011 by Dynamic Pile Testing Australia Pty Ltd (DPTA) and predicted that the ultimate geotechnical capacity would be achieved with a set of about 10 mm per 10 blows from a maximum stroke of 1.5 m of the 9 tonne hammer.527 That analysis was caveated by DPTA stating that PDA testing undertaken during the early stages of piling would provide "further verification on the parameters adopted in this analysis". [446] That initial analysis prompted CMC to issue RFI 0210 on 18 April 2012 which raised concerns held by CMC that, as a result of the "very small set mm per 10 blows forecast as required to achieve the ultimate capacity", the piles would not be able to achieve the minimum pile toe levels specified in the drawings and that attempts to reach those levels had potential to damage the pile liners.528 [447] Ultimately, the response from Aurecon Hatch to that RFI was given on 25 May 2012 relaxing the required pile toe levels to a minimum of -20 m RL.529 [448] Further wave equation analysis was carried out on 21 May 2012 by DPTA and approved by WICET on 29 May 2012.530 The effect of that analysis was that DPTA predicted, based on certain assumed input data (including geological conditions), that the pier piles would achieve the required ultimate geotechnical capacities at sets of 28 mm per 10 blows from a hammer stroke of 1.5 m by a 9 tonne hammer.531 [449] Following Aurecon Hatch having obtained the permissible change to the original Decision Notice (allowing the construction of the temporary piling pad) on 19 April 524 Exhibit 2, CMC.024.008.0062 525 Clause 6.1 and Appendix A of Exhibit 2, CMC.503.022.4521. 526 See Exhibit 2, CMC.503.021.1611 at .1613. 527 See Exhibit 2, CMC.503.021.1611 at .1612. 528 Exhibit 2, WIC.502.097.1254. 529 Exhibit 2, WIC.502.097.1254 at .1256. 530 Exhibit 2, CMC.505.073.2066 and CMC.505.073.2067. 531 Exhibit 2, CMC.505.070.4735 at .4736. -- 122 of 304 -- 123 2012,532 construction on the piling pad commenced from about 26 April 2012 and was largely completed by late May 2012.533 [450] Avopiling completed piling at the Rail Receival Bridge area and remobilised back to Beales Creek to commence driving piles there by about 25 May 2012.534 [451] Following initial driving with the 9 tonne hammer, on 31 May 2012, DPTA carried out PDA testing on pile P4 (at Pier 2). Mr Henderson emailed the results of that testing to Mr Miroshnikoff noting that CMC were achieving the set required by the wave equation analysis, however the tests did not show the pile achieving the required ultimate geotechnical capacity and requesting direction and input from Aurecon Hatch and Worley Parsons on continuing to drive the piles.535 The test results attached to that email showed that the measured geotechnical capacity was 6,446 kN (as compared to the required ultimate geotechnical capacity of 8,340 kN) and noted that:536 The less than 2 mm set recorded on both tests suggests that the pile was not fully resistance activated during testing and the solution provided is representative only of the activated and not the ultimate geotechnical capacity of the pile at the time of testing. [452] On 2 June 2012, Mr Taylor emailed Mr Henderson providing a response from Aurecon Hatch to the pile test results provided by CMC. The response, in effect, was that: (a) the hammer being used had “insufficient energy transfer to achieve the required ultimate capacity”; (b) CMC should undertake further pile driving using “suitable piling apparatus that can provide the required hammer energy”; (c) the requirements for acceptance of the piles were that: (i) they achieve the geotechnical capacity specified on the design drawings/specification; and (ii) the length of galvanised pile extend to a minimum of 1m below the base of the concrete pile infill.537 [453] On the same day, Mr Walker of Aurecon Hatch emailed Mr Miroshnikoff stating that Aurecon Hatch had undertaken a review of the pile analysis provided by CMC and found an error in the hammer efficiency adopted. The email stated: “The GRLWEAP analysis indicates that the hammer currently being used appears to have insufficient energy transfer to achieve the required ultimate capacity and therefore reference made to pile refusal measured by set is not relevant. The pile capacity can be confirmed by re-strike or provided by further pile driving, using suitable piling apparatus that can provide the 532 Exhibit 52, WIC.102.002.0328 at .0331. 533 Exhibit 52, WIC.102.002.0328 at . 0331; Exhibit 39, CMC.511.001.0293; Exhibit 53, CMC.511.001.0320. 534 Exhibit 2, CMC.013.006.0092. 535 Exhibit 2, CMC.503.020.5783); T5-22, lines 18-35. 536 Exhibit 2, CMC.503.020.5785. 537 Exhibit 2, CMC.503.020.5692. -- 123 of 304 -- 124 required hammer energy. The piles must achieve the geotechnical capacity specified on the design drawing/specification to be acceptable. The length of galvanised pile shall extend to a minimum of 1m below the base of the concrete pile infill to be acceptable.” [454] Mr Taylor’s email to Mr Henderson was followed by Site Instruction 63 issued on behalf of WICET on or about 8 June 2012. This instruction stated: “The contractor is instructed to use suitable piling apparatus that can provide the required hammer energy to achieve the geotechnical capacity specified on the design drawing/specification for the construction of Beales Creek bridge, the length of galvanised pile shall extend to a minimum of 1m below the base of the concrete pile infill.” It is this instruction that CMC alleges constitutes a variation. [455] On 18 June 2012 Mr Vance wrote on the instruction CMC’s view that the direction constituted a variation. Mr Vance signed and returned the instruction.538 CMC on the same day issued a direction to Avopiling to mobilise a larger hammer to Site. [456] On 15 June 2012 Avopiling raised concerns regarding the cost and risk of mobilising the larger hammer to Site.539 CMC then issued RF1 231 to Worley Parsons which, inter alia, noted that “only a fraction of the ultimate base resistance would be achieved during driving and testing” and that “additional driving may only increase resistance…[which]…may be insufficient to achieve the required design resistance”. That RFI also enclosed an email from Mr Dunstan of Coffey Geotechnics which set out a detailed analysis of the pile testing results.540 [457] On 19 June 2012, Avopiling provided CMC with a detailed analysis of the pile results from Dr Ng. Included within that email was Dr Ng’s opinion that: One thing for sure is that the actual capacity of the pile is a lot more than what has been currently demonstrated. To achieve full ultimate capacity of the pile, it need [sic] to move by about 1% of its diameter i.e. 10mm per blow. It wouldn't be hard to imagine that any hammer that can do that would likely be crushing the pile in the process. [458] That email was passed on to Mr Miroshnikoff and Mr Taylor on the same date.541 [459] CMC then attempted to arrange for the mobilisation of the larger hammer to Site. Mr Vance gave evidence that piling hammer rigs are not necessarily available when needed and are often occupied on other jobs.542 CMC directed Avopiling to mobilise the piling hammer to Site and sought to expedite the mobilisation of the hammer.543 However, Avopiling had to cross-hire the larger hammer from another firm and, at the time, it was being utilised on another job, which became delayed.544 538 Exhibit 2, CMC.503.020.4665. 539 Exhibit 242; Exhibit 261, CMC.503.020.4825. 540 Exhibit 2, CMC.505.001.9880 at .9883. 541 Exhibit 64, CMC.502.024.1760; CMC.502.024.1761. 542 T5-29, lines 28-32. 543 T5-29, lines 34-38. 544 T5-29, lines 40-43. -- 124 of 304 -- 125 [460] WICET submits that it should not have taken CMC from the date of the direction (8 June) to the date of mobilisation (23 August) to obtain a new hammer. WICET identifies as the primary reason for this delay Avopiling’s reluctance to mobilise a larger hammer because it did not want to take the perceived risk of using the larger hammer. Those concerns were expressed to CMC by Avopiling in writing soon after CMC had directed Avopiling to mobilise a larger hammer to Site.545 Mr Vance’s evidence, which I accept, was to the effect that CMC did all it could to procure the larger hammer as soon as possible, including by having conversations, writing letters and holding meetings.546 His evidence was that the delay was caused by Avopiling not possessing a larger hammer, and having to hire one from a third party on a job which ran late. There is contemporaneous correspondence which supports the proposition that Avopiling could not obtain a hammer because of availability concerns. In mid-June 2012 Avopiling was sourcing quotes for a hammer. In July Avopiling stated that the availability concerns meant that the hammer could not be delivered until 18, then 23, then 30 July 2012. Avopiling did however continue to express concerns as to the use of the larger hammer. On 12 July 2012 Avopiling sent an email to CMC which stated: “The crux of the issue from our perspective is that they [Worley Parsons or Aurecon Hatch] will need to take on board these risks of using the bigger hammer. We are on record (and I state it again here for the avoidance of doubt), as saying that we will not take on board any responsibility for either the costs, programme implications of using this hammer or equally as important the risk of structural damage to the piles that may result.” [461] WICET refers to further correspondence from Avopiling to CMC and meetings that occurred from 24 July 2012 through to 17 August 2012 from which it makes the submission that the primary and overriding driver of the delay in procuring the hammer was CMC’s subcontractor not wanting to take the risk of the piling.547 These submissions are also relevant to any valuation of the Piling Hammer Claim. I further consider the parties’ submissions concerning Avopiling’s delay in mobilising the larger hammer to Site in considering the quantum of this claim. [462] On 18 July 2012, a meeting was convened on-Site for the parties to discuss the methodology of driving with the 14 tonne hammer.548 At that meeting, CMC expressed the view that the size of the hammer was not the issue with the pile driving, but rather the thickness of the pile walls or the ground conditions.549 Also discussed was galvanising and the other options available to rectify the galvanising issue.550 [463] On that date, Ms Haber also sought provision of a revised steel pile driving construction methodology from Avopiling for use of the 14 tonne hammer.551 [464] Initially, Avopiling had confirmed the hammer would be available to be mobilised to Site by 18 July 2012, however that was progressively delayed.552 In addition, Avopiling sought to abrogate the risk of mobilising the larger hammer by requiring CMC to provide 545 Exhibit 162, CMC.026.007.0125; Exhibit 242; Exhibit 261, CMC.503.020.4825. 546 T5-29, lines 34-38; T5-31, lines 18-24, lines 40-45. 547 WICET’s Written Closing Submissions, [1091] – [1092]. 548 Exhibit 2, CMC.501.018.2978. 549 T13-47, lines 17-20. 550 T13-47, lines 39-45. 551 Exhibit 244, CMC.504.004.2729. 552 Exhibit 2, CMC.505.001.7855; Exhibit 59, CMC.505.082.5919 and CMC.505.082.5920. -- 125 of 304 -- 126 guidelines on the energy to be imparted into the hammer and refused to mobilise the hammer until those guidelines were provided.553 [465] Subsequently, another meeting was held in Brisbane on 17 August 2012554 where it was discussed and agreed that Dr Bindu would be on-Site full time assisting Mr Karandrews and that the drop heights would commence at 0.5m and be increased incrementally.555 Following that meeting, the14 tonne Piling Hammer Rig was mobilised to Site by about 23 August 2012. [466] As to the driving of the piles with the 14 tonne hammer, CMC seeks a factual finding that during the driving of the piles using the 14 tonne hammer, Dr Bindu and Mr Karandrews communicated to CMC their proposals for the appropriate drop heights to be used with the 14 tonne hammer. The communications were made by Mr Karandrews based upon advice from Dr Bindu. Those drop heights were then recorded by CMC’s supervisor, Mr Downey. Ms Haber gave evidence that Dr Bindu was advising as to how to proceed and the hammer height drop.556 Dr Bindu accepted that he would nominate the drop height of the hammer to Mr Karandrews which Mr Karandrews would then communicate to CMC and Avopiling.557 Dr Bindu was on the telephone to a number of Aurecon Hatch personnel in Brisbane, including Mr McCarthy, Mr O’Connor and Mr Kemp.558 WICET has extracted relevant parts of the evidence in respect of this issue at [1110] of its Written Closing Submissions. This includes the evidence of Mr Miroshnikoff. In cross- examination Mr Miroshnikoff would not accept that Dr Bindu was directing at what height the hammer would be dropped. The distinction drawn by Mr Miroshnikoff however, appears to be between Dr Bindu giving a direction as opposed to offering comments about the drop height. The distinction is unimportant. Irrespective of whether Dr Bindu and Mr Karandrews’ involvement was more in the nature of working with CMC and Avopiling, I find that the drop heights of the hammer were those provided by Dr Bindu. I therefore make the factual finding sought by CMC. [467] The piling works were completed by CMC obtaining a report from a third party, namely Dr Seidel of Foundation Specialists Group. Dr Seidel reached his conclusion by applying a different “radiation dampening factor” to the test results he reviewed. [468] As at the commencement of driving of the piles, the relevant contractual pile driving requirements were as follows: (a) that the piles be drive to a minimum depth of -20 metres RL;559 (b) that the piles achieve the Ultimate Geotechnical Pile Capacity specified in Drawing WIG-1532-B-DR-0006 Rev 2 (Pile Details Plan); and (c) that the piles be driven to a depth sufficient to ensure that the galvanising portion of the piles extend to at least one metre past the “in situ RC toe level”.560 553 Exhibit 60, CMC.505.085.5554. 554 Exhibit 286, CMC.514.002.0136 at .0159 and .0160. 555 T15-52, lines 38-45; T15-53, lines 5-7. 556 T15-54, lines 5-9. 557 T20-35, lines 29-40. 558 T20-36, lines 30-46. 559 Exhibit 2, CMC.001.006.0443; Exhibit 2, WIC.502.097.1254. 560 Exhibit 54, CMC.505.086.2383. -- 126 of 304 -- 127 [469] It is uncontroversial that the piles were driven to the minimum toe depth required.561 [470] The piling experts (Mr Simmons and Mr Shaw) jointly agree that all the piles had, in fact, achieved the required ultimate geotechnical pile capacities when being driven by the 9 tonne hammer. They also agree that the PDA testing carried out at the time significantly under represented the actual ultimate geotechnical pile capacity of the piles.562 [471] At paragraph 6.3.9 of his report dated 30 November 2015, WICET’s piling expert, Mr Shaw, states that: Tables 5 and 6 show that, for the depths to which the piles were actually driven to, the required ultimate geotechnical pile capacity was achieved using both static design methods (Decourt & Poulos) and dynamic design methods based on the results of PDA testing (Hiley). [472] In cross-examination, he also stated:563 MR O’DONNELL: And that leads to your conclusion in 6.3.9 that, in your opinion, under the driving of the piles by the 9-tonne hammer, the required ultimate geotechnical capacity was, in fact, achieved? DR. SHAW: That’s correct. [473] Similarly, at paragraph 79 of his report dated 5 August 2015, CMC’s piling expert, Mr Simmons, states: My calculations of Ultimate Geotechnical Pile Capacity with depth and the Ultimate Geotechnical Pile Capacities using the Hiley pile driving formula informed me that the as-driven piles had reached the specified Ultimate Geotechnical Pile Capacities. [474] Pursuant to the drawings, galvanising for the pile liners for Beales Creek were initially required to extend the full length of the pile liners.564 CMC queried this design by issuing RFI 0016 on about 30 September 2011.565 WICET’s response varied the design such that the galvanising was only required to extend to 1m past the “in situ RC toe level”.566 [475] CMC adopted that design, with the consequence that when the piles were unable to be driven to the anticipated depths, the galvanising was similarly left short. [476] During the meeting on 18 July 2012, the parties discussed potential alternatives if the galvanising depths could not be achieved.567 Ultimately, the piles were never able to be driven to a sufficient depth to achieve the galvanising requirement, which WICET dealt with by setting off a sum calculated as being equivalent to the reduction in design life of the piles.568 561 Sixth Further Amended Defence and Counterclaim, [205A(b)]. 562 T28-42, line 1 – T28-43, line 14; Exhibit 2A, Court Book Volume 7, Expert Report of John Simmons dated 5 August 2015, [77]. 563 T 28-45, lines 31-35. 564 Exhibit 2, CMC.009.003.0167. 565 Exhibit 54, CMC.505.086.2383. 566 Exhibit 54, CMC.505.086.2383. 567 T6-3, line 25 – T6-4, line 7. 568 Exhibit 2, CMC.505.016.9347; T18-57, line 11-17. -- 127 of 304 -- 128 [477] CMC submits that the 8 June 2012 instruction to mobilise a larger hammer constitutes a variation. The equipment CMC was contractually obliged to provide in order to drive the piles at Beales Creek was a 9 tonne hammer. The relevant contractual specification was MRS.11.66.1.569 It is common ground that this specification constitutes a contractual document. Clause 6.5 of the specification required that the hammer used for driving shall be equivalent to the type nominated in Clause 1 of Annexure MRS11.66.1 and shall be capable of delivering the minimum energy input per blow stated in Clause 2 of Annexure MRS11.66.1. The relevant annexure provided that the proposed hammer shall be proposed by the Contractor and accepted subject to superintendent approval. CMC proposed a 9 tonne Junttan hammer. This was approved by WICET.570 [478] While CMC accepts that it remained contractually responsible for the pile driving requirements, WICET’s instruction of 8 June 2012 went beyond WICET simply insisting that CMC achieve the contractual pile driving requirements. By the instruction WICET sought to have CMC achieve these requirements by use of a larger hammer. CMC submits that it was quite another thing for WICET to direct CMC how it was to go about achieving the contractual requirements. [479] There is a dispute between the parties as to whether the 14 tonne hammer had any impact on or provided any benefit in terms of achieving the pile driving requirements. It may be accepted that the depth of galvanising was not achieved by the 14 tonne hammer. Whether the ultimate geotechnical capacity had already been achieved by the 9 tonne hammer or was subsequently achieved by the 14 tonne hammer is not an issue I need to resolve. The issue of geotechnical capacity was ultimately resolved by the provision of Dr Seidel’s report. In determining whether the instruction of 8 June constitutes a variation, it is irrelevant whether it was reasonable and logical for WICET to seek to resolve the problem by instructing that a larger hammer be mobilised. [480] In my view, the instruction does constitute a variation. It falls within clause 40.1(a), namely a direction to increase any part of the work under the Contract. The term “work under the Contract” is defined to mean a number of matters including “Constructional Plant”. This term itself is defined to mean appliances and things used in the execution of the work under the Contract but not forming part of the Works. The 8 June instruction required CMC to mobilise to Site Constructional Plant which it was not otherwise contractually required to mobilise. By clause 40.3 of the Contract the variation is to be valued under clause 40.5. Quantum – Piling Claim [481] The parties dealt with the issue of quantum in respect of Directions 1 to 6 separately from the Piling Hammer Claim. I have adopted the same approach. (i) Quantum – Directions 1 - 6 [482] In light of my findings above, the issue of quantum only arises in relation to Directions 1, 2, 3 and 6. I have found that only one of these directions (Direction 2) constitutes a 569 CMC.502.052.0545 at .0554, paragraph 6.5. 570 CMC.505.074.0306. -- 128 of 304 -- 129 variation under clause 40.1. The other directions were given pursuant to clauses 33.1 or 34.1. [483] WICET submits that for Directions 1, 3 and 6 the relevant test is whether CMC has incurred more cost by reason of the direction. In accordance with this submission WICET’s quantum expert Mr Tsipis’ primary valuation for the piling claim in relation to these directions is nil. This is because CMC has not, in fact, paid its subcontractor Avopiling anything for the claims in respect of these directions. WICET submits that CMC’s Piling Claim seeks only the cost of Avopiling’s resources being on standby. Whilst Avopiling claimed against CMC two items relating to standby the fact that CMC did not pay these claims means that it has not incurred any actual cost. I have already rejected WICET’s submissions in this respect. A further factor is that WICET has not pleaded that CMC had “not paid any additional cost to its subcontractor”. Nowhere in the Contract is CMC’s entitlement to a valuation under clause 40.5 capped by reference to what CMC has actually paid its subcontractor. If CMC incurred more costs as a result of a direction under clauses 33.1 or 34.1 its entitlement under the Contract is to a valuation under clause 40.5 pursuant to clause 33.1 or 34.4. A valuation under clause 40.5 does not expressly or impliedly limit such a valuation to the amount actually paid by CMC to its subcontractor. Mr Tsipis’ primary valuation should therefore be rejected. [484] Similarly for reasons I have already stated Mr Roberts use of Schedule C-4.3 pursuant to clause 40.5(a) should also be rejected. Mr Roberts’ approach was, pursuant to clause 40.5(a), to use the Schedule C-4.3 rates for items the subject of the piling claim or where there were no rates in Schedule C-4.3 use the Avopiling subcontractor rates plus 12.5% for profit and overheads. It is not appropriate for Mr Roberts to use the rates in Schedule C-4.3 in valuing the claims in respect of Directions 1, 3 and 6. The rates in Schedule C-4.3 prescribed specific rates referable to valuing a variation directed to be undertaken as Daywork. Directions 1, 3 and 6 did not constitute variations let alone variations directed as Daywork under clause 41. Nor was the variation constituted by Direction 2 directed to be undertaken on a Daywork basis. CMC however submits: (a) in relation to the valuation of Daywork under the Contract, clause 40.5(h) and clause 41 do not contemplate the use of Schedule C-4.2; (b) clause 41 specifically lists six different items to be used to value work performed on a Daywork basis; (c) the rates in Schedule C-4.2 are not Daywork rates in the sense described in clause 41. They are better understood as “daily” or “hourly” rates that may be used for variation work; (d) CMC does not rely on clause 41 for its entitlement to value the works pursuant to Schedule C-4. Clauses 33.1 and 34.4 expressly take the party to clause 40.5. The order of precedence as set out in clause 40.5 takes you to the agreed rates in Schedule C-4 (either under clause 40.5(a), 40.5(b) or as a proxy for reasonable rates under clause 40.5(c)).571 [485] I do not accept this submission. Under the cascading regime of clause 40.5 the rates in Schedule C-4.2 and Schedule C-4.3 do not constitute prescribed specific rates to be 571 CMC’s Written Closing Submissions, [886]. -- 129 of 304 -- 130 applied in determining the value of directions given under clause 33.1 or 34.1 or variations not directed to be undertaken as Daywork. The rates are prescribed specific rates for a variation directed as Daywork. Nor are the Schedule C-4.3 rates engaged by clause 40.5(b). Schedule C-4.3 does not constitute a “Schedule of Rates”. The rates may be applied under clause 40.5(a) where a variation is directed to be undertaken as Daywork. Whilst it may be accepted that neither clause 40.5(h) or clause 41 expressly refer to the rates in Schedule C-4.2 or Schedule C-4.3 both clauses generally refer to the Daywork rates contemplated by the Schedule. Clause 40.5(h) states that Daywork shall be valued in accordance with clause 41. Clause 41 contemplates the Principal’s Representative directing that a variation be carried out as Daywork. Schedule C-4 similarly provides that “variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s Representative.” Both clause 41 and Schedule C-4 contemplate the keeping of records by the Contractor for verifying the work actually performed by the Contractor. Under clause 41 for example, the Contractor is required to record each day, particulars of all resources used by the Contractor for the execution of the Daywork and each day furnished to the Principal’s Representative particulars and copies of timesheets, wages sheets, invoices, receipts and other documents evidencing the cost of the Daywork. The Principal’s Representative under clause 41 may direct the manner in which matters are to be recorded. Under Schedule C-4 the Contractor is similarly required to provide timesheets, payroll records and such other information as the Principal’s Representative may require for varying the work actually performed by the Contractor. Whilst clause 40.5(h) and 41 do not expressly refer to the use of Schedule C-4.2 or C-4.3 there is a commonality in not only subject matter (Daywork), but also the Daywork being directed by the Principal’s Representative and the requirement for the Contractor to maintain daily records. [486] The appropriate valuation for the relevant directions is in my view, to be undertaken pursuant to clause 40.5(c) which refers to reasonable rates or prices. Both Mr Roberts and Tsipis have undertaken alternative valuations by reference to reasonable rates. Mr Roberts has estimated what constitutes a reasonable rate by reference to Avopiling’s rates plus 12.5% for profit and overheads. There is little difference in the valuations arrived at by Mr Roberts and Mr Tsipis by reference to reasonable rates. [487] Mr Roberts has also by amendments to his report572 provided a further alternative valuation. Some of the directions in respect of the Piling Claim are also covered in CMC’s Delay Claim. In the event that the Court decides that the Delay Claim for the period covering the Piling Claim succeeds, and that the Avopiling rates apply, Mr Roberts has included an alternative amount using 5% in lieu of 12.5% in order to remove 7.5% for overheads. This is because if the Delay Claim succeeds to the extent that a period within which the Piling Claim is included, then there would be double counting on the overheads. The quantum of the Delay Claim encompasses the claim for overheads. In dealing with the Delay Claim below I find that Directions 1, 2, 3 and 6 are relevant delay events. Accordingly, Mr Roberts third alternative valuation which does not include overheads should be adopted. [488] For Direction 1, the Beales Creek piling permit, Mr Roberts’ third alternative valuation using Avopiling rates as reasonable rates plus 5% for profit is $141,593. Mr Tsipis’ valuation is $96,675. The difference is that Mr Tsipis excludes the period 3 to 8 February 2012. Mr Tsipis is of the view, by reference to the Avopiling daily report sheets, that 572 Exhibit 416. -- 130 of 304 -- 131 Avopiling was still completing an enabling process and was therefore not able to start work in any event. WICET submits that as the claim is based on duration based cost (for example stand by), CMC’s entitlement should be reduced to the extent it caused the delay.573 Mr Roberts’ valuation should not be reduced as WICET submits. There is no pleading by WICET that CMC’s entitlement in respect of Direction 1 is to be reduced on account of the enablement process. The quantum of CMC’s claim is identified in paragraph 192A(b) of the eighth further amended statement of claim and Annexure D1. WICET did not seek further and better particulars of CMC’s quantum claim in this respect. [489] The only other relevant dispute between Mr Roberts and Mr Tsipis concerns concurrent delay in respect of Direction 5 dealing with specification uncertainty. As CMC has failed in this claim the dispute as to a concurrent rain event does not need to be resolved. [490] I therefore assess quantum in respect of events 1, 2, 3 and 6 of the Piling Claim as follows: Direction 1 – Beales Creek waterway barrier permit $141,593 Direction 2 – NCR01 $73,868 Direction 3 – Postponement of Rail Receival Piling Work $22,680 Direction 6 – Stop Work $6,930 Total: $245,071 (ii) Quantum – Piling Hammer Claim [491] I have determined that this claim constitutes a variation under clause 40.1 of the Contract. The valuation of the variation must therefore be carried out pursuant to clause 40.5. [492] For reasons already expressed the proper approach under the Contract is to conduct a valuation pursuant to clause 40.5(c) using reasonable rates. Both Mr Roberts and Mr Tsipis have undertaken alternative variations using reasonable rates plus an allowance of 12.5% for profit and overheads. Both experts have quantified the claim by reference to the “Hammer Piling Schedule” which is Avopiling’s claim against CMC for cost associated with the additional hammer.574 CMC has paid its subcontractor Avopiling $749,831.63 in respect of this claim because of a statutory adjudication process. A valuation under clause 40.5(c) is not however limited to this amount. By reference to the joint expert report of Mr Roberts and Mr Tsipis,575 the experts have been able to agree on the quantum for various items falling within the Piling Hammer Claim: (a) Mobilisation and demobilisation of hammer $32,625 (b) Hire of 14 tonne hammer $97,200 (c) Pile testing with 14 tonne hammer $80,718.75 573 WICET’s Written Closing Submissions, [1080] – [1090]. 574 CMC.508.001.2209 at .2215. 575 Addendum to Courtbook, Vol 17, Experts’ Joint Report on Quantum of George Tsipis and Paul Roberts dated 18 July 2016, pages 14 - 15. -- 131 of 304 -- 132 (d) Extension of liners and weld test cost $31,381.31 (e) Testing and engineering advice $30,749.06 CMC’s claim of $2,081.25 for hammer hire, mechanic and flights is no longer pressed. [493] In spite of the agreement of the experts as to quantum for items (c), (d) and (e), WICET submits that these amounts should not be allowed or, in the case of the testing and engineering advice, reduced. As to pile testing with the 14 tonne hammer this claim includes a cost referred to as “Establishment for PDA testing” and “PDA test”. WICET in relation to this item and a number of other items questions whether there is a sufficient nexus between the hammer direction and the various items claimed as part of the variation.576 Mr Tsipis and Mr Roberts agree that the PDA testing was a consequence of the Hammer Direction, and have therefore included the item in their valuation. WICET submits that these costs should not be included in any valuation because the PDA testing was required under the Contract. I do not accept this submission. The PDA testing required under the Contract was substantially increased as a result of the Hammer Direction. As a result of the Hammer Direction, substantial and repeated PDA testing was required to be carried out. The PDA testing claimed is that claimed by CMC’s subcontractor as being required due to the Hammer Direction and is therefore properly claimable by CMC.577 [494] As to the agreed amount of $31,381.31 for the extension of liners and weld test costs this claim arises as a result of CMC having to extend and weld the liners due to the damage caused to the piles from the use of the 14 tonne hammer. I have found that WICET was responsible for the instructions as to the drop heights for the 14 tonne hammer. The driving of the piles using the 14 tonne hammer damaged the piles such that sections were required to be cut off and rewelded.578 I find that WICET is responsible for the extra cost arising from this damage. I reject WICET’s submission that the damage to the piles was caused by a failure on the part of Avopiling to strike the piles concentrically. This allegation is not pleaded by WICET nor is it supported by the evidence.579 [495] WICET submits that there is a difference between the cost incurred in relation to the sufficiency of the 14 tonne hammer and the cost incurred in relation to resolving the issue of geotechnical capacity. The former are incurred in relation to the 14 tonne Hammer Direction. The latter would have been incurred in any event without the Direction because it was necessary for CMC to achieve geotechnical capacity.580 CMC produced all invoices in relation to these costs. Mr Vance gave evidence that these costs “were all related to the issues around what hammer and what to do to resolve these piles”.581 I therefore adopt the agreed amount of the experts for this item. [496] Mr Tsipis in the joint report suggests a deduction of $83,268 in respect of the Junttan Rig. WICET now accepts that the deduction suggested by Mr Tsipis should not be made.582 576 WICET’s Written Closing Submissions, [1086(a)]. 577 CMC’s Written Closing Submissions, [946]. 578 T6-27, lines 36-43. 579 CMC’s Written Closing Submissions, [932]-[933]. 580 WICET’s Written Closing Submissions, [1123]. 581 T6-27, lines 30-31. 582 WICET’s Written Closing Submissions, [1093(d)]. -- 132 of 304 -- 133 [497] In the joint expert report there are two entries relating to the APL crane. The first is for the period that the crane was used during the piling work with the 14 tonne hammer and the second entry concerns the period the crane was on-Site awaiting the mobilisation of the 14 tonne hammer. In the joint report Mr Roberts uses the terms APL crane and APL Liebherr L873 crane interchangeably. In each instance the reference is to the same crane. I have already dealt in part with WICET’s submission that CMC is substantially responsible for the delay in procuring the hammer. The case sought to be advanced by WICET is that in spite of CMC immediately requesting Avopiling to mobilise a large crane to site (on 8 June 2012), the real reason for Avopiling’s delay in mobilising, known to CMC, was unresolved issues as to who would assume the risk of driving the piles with the larger hammer. Whilst some of the contemporaneous documents to which I have already referred evidence Avopiling expressing those reservations, it remains the case that Avopiling did not itself own a 14 tonne hammer. It had to source the hammer from a third party supplier. The 14 tonne hammer was being used on a different project. The evidence is that it was simply not available until it was mobilised to site. Mr Vance rejected the suggestion that the delay in mobilisation occurred because Avopiling did not want to accept the risk of damage being caused to the piles by a bigger hammer. His evidence, which I accept, was that the hammer was delayed on another project.583 I find that CMC is not responsible for the delay in mobilising the 14 tonne hammer to Site. CMC not only directed Avopiling to mobilise the 14 tonne hammer but had numerous conversations and sent correspondence seeking to achieve mobilisation. CMC also explored whether another piling contractor was available to perform the works however no one was available. Another difficulty with WICET’s submission is that it is no part of WICET’s pleaded case that CMC is not entitled to a valuation for this item because it was responsible for the delay in bringing the 14 tonne hammer to Site.584 [498] As to the use of the APL crane it is uncontroversial that the 14 tonne hammer was suspended from the crane when used. The crane therefore had to be on-Site while the hammer remained on-Site. It follows that the period of use of the 14 tonne hammer necessarily included the use of the APL crane. WICET also submits that there ought to be a deduction to account for the time that the APL crane would have spent on-Site finalising the works with the 9 tonne hammer. Mr Vance gave evidence to the effect that, without the Hammer Direction, the APL crane would have demobilised when the 9 tonne hammer left Site. WICET submits however that there is presently no evidence as to how long the crane would have remained on-Site with the 9 tonne hammer. This submission ignores the fact that the work of the 9 tonne hammer had effectively finished at the time the Hammer Direction was given. [499] WICET further submits that CMC has not established through the evidence that the APL crane was required to remain on standby between the date of the Hammer Direction and the recommencement of piling on 23 August 2012. There was however evidence from Mr Vance as to why the crane remained on-Site. His evidence was that: (a) had the Hammer Direction not been issued, the crane would have been demobilised; (b) the crane remained on-Site for the entire period until mobilisation of the 14 tonne hammer to Site; 583 CMC’s Written Closing Submissions, [916]; T10-18, lines 19-23. 584 Eighth Further Amended Statement of Claim, [191M] – [191MA]; Sixth Further Amended Defence and Counterclaim, [205FA], [205H] and [206]. -- 133 of 304 -- 134 (c) it would have been costly to derig, demobilise, remobilise and rerig the crane, in the order of $100,000; and (d) at the time, CMC expected that the 14 tonne hammer would be mobilised much sooner that ultimately eventuated.585 [500] Mr Vance’s evidence in this respect was not challenged and may be accepted. [501] Using Mr Roberts’ alternative valuation as identified in Appendix 5.2 of his report586 I assess quantum for the use of the APL crane at $86,785.71. For the standby of the APL crane from visit 1 to visit 2 with the 14 tonne hammer I assess quantum in the amount of $98,111.25. [502] The experts were unable to agree in relation to a further item of quantum in respect of the Bored Piling Rig R416. It is common ground that the Bored Piling Rig was required to be on-Site for the 14 tonne hammer works. WICET submits that the demobilisation and remobilisation of the Bored Piling Rig occurred at the convenience of CMC. CMC was however obliged under the Contract to take steps to mitigate the impact of any delays. Mr Vance’s evidence was that: “I think we have an obligation to protect the principal where possible from cost. Having that rig sit there for an unknown period till you got a hammer would not have been economical.”587 [503] I accept Mr Vance’s evidence. I also accept Mr Vance’s evidence that the Bored Piling Rig was required to remain on-Site for the final stage of the Beales Creek piling works. His evidence was that once the piles were certified the Bored Piling Rig was used to finish the work. This work required the piles to be bored in order to clean them and apply reinforced concrete. Mr Vance could not suggest any way the standby of the Bored Piling Rig could have been avoided.588 I therefore assess quantum for this item on the basis of Mr Roberts’ alternative valuation at $181,687.50. [504] CMC also claims the cost of having to move the 14 tonne hammer between the banks of Beales Creek on two occasions. Moving equipment such as a 14 tonne hammer rig around Site required the use of a semi-trailer referred to as a “float” which resulted in additional cost. WICET does not contend that these relocations did not occur, or that CMC did not incur cost as a result, but alleged there is an absence of evidence to support the fact the relocations were required due to the Hammer Direction. I accept CMC’s submission that if the Hammer Direction had not been issued, those costs would not have been incurred.589 [505] I therefore assess quantum in relation to the Bored Piling Rig R416 Item at $181,687.50. [506] I assess quantum for the Piling Hammer Claim as follows:  Mobilisation/demobilisation of hammer $32,625.00 585 CMC’s Written Closing Submissions, [930]. 586 Exhibit 2A, Court Book Vol 13, Expert Report on Quantum by Paul Roberts dated 6 April 2016, Appendix 5. 587 Clause 35.5(B) of the General Conditions of the Contract; T6-24 line 35 – T6-25 line 32; CMC’s Written Closing Submissions, [951]. 588 T6-24, line 35 – T6-25, line 16. 589 CMC’s Written Closing Submissions, [957]. -- 134 of 304 -- 135  Hire of 14 tonne hammer $97,200.00  Use of APL crane $86,785.71  Pile testing with 14 tonne hammer $80,718.75  Bored Piling Rig R416 including mobilisation, standby and intra-float moves $181,687.50  Extension of liners and weld test cost $31,381.31  Standby of APL crane $98,111.25  Testing and engineering advice $30,749.06 Total: $639,258.58 Total for Piling Claim: $639,258.58 $245,071.00 __________ TOTAL $884,329.58 ____________ Pyealy Creek Bebo Arch Claim (Variation 103) [507] CMC’s Contract Works included the construction of a pre-cast arch culvert in Pyealy Creek as part of the construction of the OLC. The parties agree that WICET issued CMC with revised drawings for the construction of the Bebo Arch which constituted a direction pursuant to clause 40.1 of the General Conditions to vary the Contract Works. The parties also agree that CMC performed these works.590 [508] The Bebo Arch is relevant to CMC’s claim for a valuation for the variation pursuant to clause 40.5 and CMC’s Delay Claim. I make the following factual findings in relation to the construction of the Bebo Arch. (a) Factual Findings [509] The Baseline Program provided for all of the elements of the structure and their planned duration, and sets out that the Bebo Arch structure:591 (a) planned to start on 14 November 2011; (b) planned to finish on 8 February 2012; and (c) had a total duration of 75 days. 590 CMC’s Written Closing Submissions, [975]; WICET’s Written Closing Submissions, [1442]. 591 Exhibit 1, CMC.513.002.0055 at .0062; T6-32, lines 24-33. -- 135 of 304 -- 136 [510] The Baseline Program provided that the Bebo Arch structure had a significant amount of float,592 accordingly, it could be started 79 days late and meet the milestone date for the OLC and was not a priority structure in late 2011 and early 2012.593 [511] The construction of the structure did not start as planned in November 2011 due to:594 (a) clearing permit issues, including the no go zones and removal of habitat trees; and (b) the prioritisation of the construction of the OLC to meet early objectives, which resulted in a temporary access being constructed and used through Pyealy Creek, creating a safety issue for any works within Pyealy Creek. It is not suggested (or pleaded) that CMC was responsible for the decision to postpone starting work on the Bebo Arch at this time. [512] On 11 April 2012, by a RFI sent by Mr Henderson to Worley Parsons (RFI 0195), CMC identified that the design of the Bebo Arch structure footings did not include design details (including reinforcement) for the pedestal footing and requested these details.595 [513] In mid-April 2012, CMC stopped hauling trucks through the temporary access over Pyealy Creek to the OLC and prepared to start the construction of the Pyealy Creek Bebo Arch.596 This included a survey which determined that the design for the Pyealy Creek Bebo Arch did not match Pyealy Creek. The creek was materially deeper and on a different alignment than that provided for in the design drawings.597 [514] On 23 April 2012, by a letter from Mr Vance to Mr Walls, CMC provided a notice of delay in relation to the difference between the design of the Bebo Arch and Pyealy Creek.598 [515] On 24 April 2012, by a RFI sent by Mr Henderson to Worley Parsons (RFI 0217), CMC stated that:599 “The Bebo arch situates in Pyealy creek is misaligned with the existing creek bank. This misalignment will mean significant cut quantities outside of the project boundaries exposing significant and in places vertical batter faces. The design fish passage location additionally appears to be positioned on the incorrect side of the creek. The design creek invert is significantly higher than that found on site, meaning an effective 'step up' to the new structure together with significant changes being required to the drains which run into the structure from the OLC. Attention must be drawn to previously submitted RFI-0105 where the previous design fill levels already exceeded that allowable above the specified arch. Should the design require lowering of the arch in its entirety a 592 Exhibit 1, CMC.513.002.0055 at .0062. 593 T6-53, lines 44-45; T6-54, lines 1-17. 594 T6-32, lines 37-47; T6-33; T6-34, lines 1-26; T10-76, lines 8-13. 595 Exhibit 2, CMC.504.001.9878. 596 T6-36, lines 13-20. 597 T6-43, lines 43-46; T6-35, lines 11-38; T10-76, lines 15-18. 598 Exhibit 2, CMC.503.020.9251. 599 Exhibit 2, CMC.503.020.9214. -- 136 of 304 -- 137 'cover slab' will be required to maintain the allowable fill levels above the arch within the manufacturers specification. Please refer to the attached sketches for further details.” [516] The issues raised in RFI 0217 were addressed in a meeting between representatives of CMC, Worley Parsons and Aurecon Hatch:600 (a) the creek levels were deeper by 1.5 metres, meaning that the current design was for the structure to be in mid-air and not feasible to construct; (b) the actual alignment of the creek meant that it would not go through the Bebo Arch as designed; and (c) the entire structure had to be redesigned to match existing conditions. [517] On 27 April 2012, Mr Mower of Aurecon Hatch provided a formal response to RFI 0217 and stated that Aurecon Hatch were mobilising resources to provide a revised design and drawings at the earliest opportunity.601 Despite this assurance, CMC would not receive the final design drawings for all aspects of the Bebo Arch until 19 September 2012, some 19 days after the Date for Practical Completion of 30 August 2012. [518] Without the revised design CMC could not start construction work to the structure at the Pyealy Creek Bebo Arch.602 But for the need for a changed design, CMC could have started construction works in April 2012 and would have completed the construction of the structure before Practical Completion.603 [519] On 16 May 2012, Worley Parsons issued CMC with preliminary design drawings for the revised Pyealy Creek Bebo Arch, which were not issued for construction (the 16 May Drawings).604 [520] On 21 May 2012, CMC provided a notice of delay in relation to the lack of design for the Pyealy Creek Bebo Arch.605 [521] On 29 May 2012, Mr Vance sent an email to Mr Miroshnikoff attaching marked up versions of the 16 May Drawings identifying issues and mistakes in the preliminary design drawings.606 [522] On 30 May 2012, by an email from Mr Miroshnikoff to Mr Vance, Worley Parsons issued CMC with further preliminary design drawings for the revised Pyealy Creek Bebo Arch (the 30 May Drawings).607 As at 30 May 2012, CMC did not have a drawing or design from which it could start construction of the Pyealy Creek Bebo Arch.608 600 Exhibit 198, CMC.503.020.8341; T10-74, lines 40-46, T10-75, lines 1-43. 601 Exhibit 2, WIC.502.075.7302; T6-35, lines 44-46; T6-36, lines 1-5. 602 T6-36, lines 7-11. 603 T6-36, lines 18-28; T10-76, lines 20- 29. 604 Exhibit 2, CMC.503.020.7295, CMC.503.020.7297, CMC.503.020.7298, CMC.503.020.7299, CMC.503.020.7300 and CMC.503.020.7009. 605 Exhibit 2, CMC.503.020.6587. 606 Exhibit 81, CMC.505.089.8404 and CMC.505.089.8405; T6-37, lines 26-37. 607 Exhibit 82, CMC.505.088.7722, CMC.505.088.7727, CMC.505.088.7728, CMC.505.088.7729 and CMC.505.088.7730. 608 T6-38, lines 38-39. -- 137 of 304 -- 138 [523] On 4 June 2012: (a) By a RFI sent by Mr Grey to Worley Parsons (RFI 0228), CMC provided marked up copies of the 30 May Drawings identifying missing details in the design.609 (b) By a letter from Mr Vance to Mr Walls dated 2 June 2012, CMC provided a notice of delay in relation to the outstanding design issues at the Pyealy Creek Bebo Arch.610 [524] On 8 June 2012, Mr Vance sent an email to Mr Miroshnikoff providing notice that CMC may need approval to clear outside the clearing boundaries for the construction of the northern end of the Pyealy Creek Bebo Arch.611 [525] On 14 June 2012, Mr Grey sent an email to Mr Taylor attaching drawings to determine the clearing coordinates for the construction of the upstream end of the structure,612 and Mr Taylor sent an email to Mr Vance confirming that the Pyealy Creek Bebo Arch structure may be outside of the clearing permit.613 [526] In mid-June 2012, CMC started general excavation at Pyealy Creek to create safety benching and a crane pad for the construction of the structure.614 [527] On 18 June 2012: (a) Ms Marr of Aurecon Hatch sent an email to Mr Grey stating that Aurecon Hatch was in the process of establishing whether an amendment to the clearing permit would be required to allow additional clearing works.615 (b) Mr Cunniffe of CMC sent an email to Ms Marr identifying the area and trees which were required to be cleared for the construction of the Pyealy Creek Bebo Arch.616 (c) By a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the clearing boundary at the Pyealy Creek Bebo Arch.617 [528] On 22 June 2012, CMC's geotechnical engineer visited the Site and calculated the bearing capacity for the in-situ material beneath the Bebo Arch footings. On the same date, Mr Grey sent an email to Mr Walker of Aurecon Hatch requesting design details for the mass concrete to be placed beneath the footings.618 [529] On 28 June 2012, by way of a RFI sent by Mr Grey to Worley Parsons (RFI 0236), CMC noted that its geotechnical engineer had rated the in-situ material at less than the 609 Exhibit 2, CMC.503.020.5556 610 Exhibit 2, CMC.505.070.4808. 611 Exhibit 2, CMC.505.087.7576 and CMC.505.087.7577; T6-38, lines 41-45; T6-39, lines 1-11. 612 Exhibit 2, CMC.505.081.5196; CMC.505.081.5204; T11-8, lines 30-46; T11-9, lines 1-19. 613 Exhibit 2, CMC.503.020.4856, CMC.503.020.4857; T6-39, lines 16-30. 614 Exhibit 208, CMC.514.002.0141. 615 Exhibit 83, CMC.503.020.4785; T6-39, lines 32-45. 616 Exhibit 2, CMC.503.020.4719, CMC.503.020.4720, CMC.503.020.4721, CMC.503.020.4722, CMC.503.020.4723 and CMC.503.020.4724. 617 Exhibit 2, CMC.503.020.4713. 618 Exhibit 200, CMC.503.020.4296 and CMC.503.020.4297; T11-11, lines 13-31. -- 138 of 304 -- 139 required kPa required for the revised Bebo Arch footings and requested dimensions and limits for the blinding layer of mass concrete.619 [530] On 3 July 2012, Worley Parsons responded to RFI 0236 by instructing CMC to excavate founding material, place 150mm mass blinding concrete for the footings and 50mm mass blinding layer for other working areas for the Bebo Arch.620 This site instruction was a change to the works as it required:621 (a) CMC to excavate an addition 100mmm of material in the footings; (b) placing 150mm blinding concrete in the footings; and (c) placing 50mm of blinding concrete on other working areas. [531] On 2 July 2012, Mr Grey sent an email to Mr Taylor seeking details of the spandrel pedestal for the footings as requested in RFI 0228.622 CMC needed this information to construct the footings for the Bebo Arch.623 [532] On 11 July 2012: (a) Ms Marr sent an email to Mr Grey requesting a drawing highlighting the area of vegetation required to be cleared to construct the Bebo Arch for the purposes of amending the clearing permit.624 Mr Grey responded on the same date providing this drawing.625 (b) By a RFI sent by Mr Grey to Worley Parsons (RFI 0242), CMC referred to all prior RFI’s in relation to Pyealy Creek Bebo Arch and sought resolution of:626 (i) the outstanding inconsistencies between the pre-cast and in-situ elements of the structure; and (ii) the clearing permit to the upstream and of the structure. (c) By a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the design issues and change in construction methodology to the Pyealy Creek Bebo Arch.627 (d) CMC did not have a design from which it could begin construction of the Pyealy Creek Bebo Arch.628 619 Exhibit 2, CMC.504.006.8272. 620 Exhibit 2, CMC.503.020.0012; T6-41, lines 42-47; T6-42, lines 1-41. 621 T6-42, lines 26-42; T6-64, lines 14-35; T11-12, lines 1-6; T11-45, lines 31-45. 622 Exhibit 2, CMC.503.020.3880 and CMC.503.020.3882. 623 T11-4, lines 22-34. 624 Exhibit 2, CMC.503.019.9736. 625 Exhibit 2, CMC.505.036.3243 and CMC.505.036.3244; T11-9, lines 29-47. 626 Exhibit 2, CMC.503.019.9693, CMC.503.019.9632, CMC.503.019.9643, CMC.503.019.9600, CMC.503.019.9581 and CMC.503.019.9566; T11-5, lines 6-17. 627 Exhibit 2, CMC.503.019.9539; T6-42, lines 43-44 – T6-43, lines 1-3. 628 T6-43, lines 5-7. -- 139 of 304 -- 140 [533] In or about July 2012, in discussions between Mr Miroshnikoff,Mr Taylor and Mr Vance:629 (a) Mr Miroshnikoff expressed frustration at the time it was taking to get the design for the structure and asked if CMC could engage a designer to design the works in order to start construction of the structure; and (b) Mr Taylor stated that there was an issue of payment between WICET and Aurecon Hatch. [534] On 20 July 2012, by a letter from Mr Vance to Mr Bourke, CMC proposed to engage a designer to design the pedestal for the spandrel requested in RFI 0195 on 11 April 2012 and an in-situ concrete slab for the wingwalls.630 [535] On 25 July 2012, by an email from Mr Taylor to Mr Grey, CMC received revised drawings which permitted CMC to begin construction of the footings.1356 However, at this date: (a) the clearing permit had not been approved for the northern third of the structure;631 and (b) the design for the wingwalls was still outstanding.632 [536] The revised designs received by CMC required it to construct a considerably more substantial structure than that provided for in the original design, including because:633 (a) the footings were wider; (b) the footings were increased in height from 750mm to 1600mm, necessitating additional formwork and the installation of a working platform to facilitate working at the height requirements for their construction; and (c) the reinforcement within the footings had become more complex and larger (from 24mm to 28mm); (d) tie beams were required to be constructed perpendicular to the footings, connecting them together. [537] On 26 July 2012, CMC commenced digging out the base of Pyealy Creek for the concrete footings.634 This excavation did not include the upstream end of the structure which was subject to the clearing permit amendments.635 The lack of a clearing permit to the upstream of the structure affected the efficiency in the construction of the Pyealy Creek Bebo Arch footings.636 629 T6-43, lines 31-47 – T6-44, lines 1-4. 630 Exhibit 2, CMC.503.019.8995. 631 T11-8, lines 22-24. 632 T11-1, lines 16-17. 633 T6-65 – T6-66; T11-46. 634 Exhibit 208, CMC.514.002.0141; Exhibit 2, CMC.013.007.0055; T6-44, lines 22-29; T6-45, lines 34-47 – T6-46, lines 1-8. 635 T6-44, lines 31-41. 636 T6-44, lines 43-47; T6-45, lines 1-3. -- 140 of 304 -- 141 [538] From 26 July 2012 to 3 September 2012, CMC constructed the blinding layer, and footings for two-thirds of the Pyealy Creek Bebo Arch from the downstream end of the structure.637 [539] On 10 August 2012, Mr Taylor sent an email to Mr Grey attaching a copy of the amended clearing permit for the construction of the northern (upstream) end of the Pyealy Creek Bebo Arch.638 This permit included the obligation to perform fauna relocation activities.639 [540] On 15 August 2012, by an email from Mr Karandrews to Mr Vance, Worley Parsons confirmed that the fauna trapping at the northern end of Pyealy Creek had commenced on 14 August 2012 and would be complete by 17 August 2012.640 [541] On 17 August 2012 and 18 August 2012, by a letter from Mr Bourke to Mr Vance dated 16 August 2012 and an email from Mr Miroshnikoff to Mr Vance, Worley Parsons alleged that CMC was able to start works in an unobstructed manner and that CMC had dedicated minimal resources to the works.641 [542] These allegations were incorrect as:642 (a) CMC was unable to clear the upstream end of the structure due to the lack of a clearing permit until 18 August 2012;643 (b) further resources would not have assisted with the speed of construction due to this constraint; and (c) CMC had more resources on-Site than alleged by Worley Parsons. [543] On or about 17 August 2012, Mr Vance telephoned Mr Bourke about the letter dated 16 August 2012 and was informed by Mr Bourke that he "wasn’t close enough to the facts to know, he just signed the letter.”644 [544] On 18 August 2012: (a) CMC had access to begin clearing and excavation to the northern end of the Pyealy Creek Bebo Arch, and started these works.645 (b) By a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the revised design and clearing permits.646 637 Exhibit 208, CMC.514.002.0141. 638 Exhibit 2, CMC.503.019.7112 and CMC.503.019.7114. 639 T6-41, lines 34-45; T6-41, lines 1-6; T11-10, lines 25-34. 640 Exhibit 2, CMC.502.042.1592. 641 Exhibit 2, CMC.501.018.0041; Exhibit 85, CMC.502.022.2042; Exhibit 86, CMC.501.018.0032. 642 T6-48, lines 27-47; T6-49, lines 1-47; T6-50, lines 1-41; Exhibit 2, CMC.502.042.1575, CMC.502.042.1579, CMC.502.042.1580 and CMC.502.042.1593; T11-42, lines 20-37. 643 T11-10, lines 40-47 – T11-11, lines 1-7. 644 T6-51, lines 11-19. 645 T6-41, lines 12-13; Exhibit 208, CMC.514.002.0141. 646 Exhibit 2, CMC.505.087.3127; T6-50, lines 19-33. -- 141 of 304 -- 142 [545] From 18 August 2012 to 18 September 2012, CMC excavated, constructed the blinding layer, and footings for the last one-third of the Pyealy Creek Bebo Arch from the upstream end of the structure.647 [546] With respect to the construction of the footings:648 (a) They were constructed in two longitudinal segments due to the late delivery of the clearing permit, and this process was slower than if CMC had been provided with unimpeded access to the entire area for construction.649 (b) They were constructed with one crew of resources due to uncertainty with respect to the timing of the provision of the clearing permit.650 (c) They were constructed with two separate concrete pours, being the base and vertical components.651 (d) They took 42 working days to complete. [547] The original design for the structure included the supply and placement of pre-cast concrete wingwalls in Pyealy Creek. This process is almost always faster and generally less expensive than an in-situ concrete pour.652 Due to the change in design to the structure, the pre-cast supplier was required to fabricate a specialised mould for the wingwalls and as this fabrication was expected to be slower, a decision was made to change the design to cast in-situ wingwalls.653 [548] As at 24 August 2012, CMC had not received drawings which would have allowed it to commence construction of the wingwalls for the Pyealy Creek Bebo Arch.654 [549] On 28 August 2012, Mr Miroshnikoff sent an email to Mr Vance attaching drawings for the Pyealy Creek Bebo Arch wingwalls and instructing CMC to commence works on the excavation of wingwalls footings, testing for bearing capacity, blinding layer and reinforcement scheduling (28 August Drawings).655 [550] The 28 August 2012 drawings did not provide the dimensions to allow CMC to commence construction of the wingwalls, or procure the materials to do so.656 In particular, the correct dimensions were needed to schedule and order reinforcement for the structure.657 [551] On 30 August 2012: 647 Exhibit 208, CMC.514.002.0141. 648 Exhibit 204, CMC.514.002.0055; T11-20, lines 28-46; T11-21, lines 1-24. 649 T11-11, lines 9-11. 650 T11-21, lines 26-30. 651 T11-17, lines 34-47; T11-18, lines 1-24; T11-19, lines 1-46. 652 T6-29, lines 24-39. 653 T11-12, lines 8-12. 654 CMC.501.016.7895 at .7898; T6-51, lines 31-45; T6-52, lines 1-2. 655 Exhibit 2, CMC.503.019.4924, CMC.503.019.4926, CMC.503.019.4928 and CMC.503.019.4933. 656 Exhibit 2, CMC.505.089.4303; T6-52, lines 4-30. 657 T6-52, lines 38-44; T11-12, lines 43-46; T11-13, lines 1-12. -- 142 of 304 -- 143 (a) By a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the design issues due to the lack of sufficient design information for the wingwalls to the Pyealy Creek Bebo Arch.658 (b) At a meeting between representatives from Worley Parsons, CMC and Aurecon Hatch, CMC reiterated that it could not start works on the wingwalls until the dimensions were provided.659 [552] On 31 August 2012, Mr Miroshnikoff emailed Mr Vance forwarding wingwall design drawings with dimensions for the wingwalls (31 August Drawings).660 [553] Those dimensions were plainly incorrect and would have resulted in CMC building an absurd structure.661 On 1 September 2012, Mr Grey sent an email to Mr Walker at Aurecon Hatch stating that the length of the wingwalls provided must be incorrect as the specified length was only 1.504m, which could not be correct.662 [554] On 3 September 2012, Mr Walker sent Mr Grey an email confirming that he would have the dimensions on the 31 August Drawings checked.663 On this date, CMC did not have sufficient design details to begin procuring steel reinforcements for the wingwalls.664 [555] On 10 September 2012: (a) By a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the design issues for the wingwalls to the Pyealy Creek Bebo Arch.665 (b) CMC still could not begin procuring reinforcement for the construction of the wingwalls for the Pyleay Creek Bebo Arch.666 [556] On 12 September 2012, Mr Taylor sent an email to Mr Grey attaching further drawings for the Pyealy Creek Bebo Arch, including wingwalls (12 September Drawings).667 [557] On 13 September 2012: (a) Mr Miroshnikoff sent an email to Mr Vance, which attached the 12 September Drawings indicating that they were preliminary and directing CMC to proceed with the drawings and to advise if further details were required.668 (b) Mr Grey sent an email to Mr Taylor providing comments on the 12 September Drawings, identifying errors and inconsistencies in dimensions.669 658 Exhibit 2, CMC.503.019.4777. 659 Exhibit 2, CMC.505.081.7161; T14-29. 660 Exhibit 2, CMC.503.019.4631. 661 T10-22, lines 42-47. 662 Exhibit 201, CMC.503.019.4598; CMC.503.019.4602; T11-13, lines 31-47. 663 Exhibit 203, CMC.505.086.6317. 664 T11-14, lines 19-22. 665 Exhibit 2, CMC.503.019.3815. 666 T6-55, lines 20-25. 667 Exhibit 2, CMC.503.019.3851, CMC.503.019.3852, CMC.503.019.3853, CMC.503.019.3854, CMC.503.019.3855, CMC.503.019.3856 and CMC.503.019.3857. 668 Exhibit 2, CMC.503.019.3803; T6-55, lines 39-42. 669 Exhibit 2, CMC.505.036.3246; T11-14, lines 45-47; T11-15, lines 1-4. -- 143 of 304 -- 144 [558] On 14 September 2012, by a letter from Mr Vance to Mr Bourke, CMC provided a notice of delay in relation to the design issues for the wingwalls to the Pyealy Creek Bebo Arch, identifying issues on the 12 September Drawings which prevented CMC from ordering reinforcing steel.670 [559] On 18 September 2012, by a RFI sent by Mr Grey to Worley Parsons (RFI 0266), CMC requested that WICET address the issues identified on the 12 September Drawings.671 [560] On 19 September 2012, Mr Miroshnikoff sent an email to Mr Vance attaching further design drawings for the Pyealy Creek Bebo Arch wingwalls (19 September Drawings).672 The 19 September Drawings (finally) resolved all outstanding issues with the wingwalls and allowed CMC to proceed with their construction (including ordering reinforcement).673 [561] The revised design for the wingwalls changed the methodology, character and type of works performed, specifically:674 (a) each pre-cast wingwall was to be installed as a single unit onto compacted base material, whereas the new design required CMC to construct an in-situ footing, then an in-situ wall; (b) the associated works with pouring concrete in-situ, including the placement of reinforcement and formwork for six metre high walls. [562] Between 14 September 2012 and 10 October 2012, CMC:675 (a) installed the rock mattress; (b) constructed the pedestal for the spandrel; (c) performed granular backfilling works to the sides of the footings; (d) installed the arch segments and spandrels by crane; and (e) secured the spandrels for the concrete pout of the wingwalls. [563] The revised design for the Pyealy Creek Bebo Arch changed the installation methodology of the pre-cast arch segments as:676 (a) CMC had originally planned to utilise a small crane to install the arches from the middle of Pyealy Creek; (b) however, with the changes to the revised design, specifically the increased height of the footings and additional tie beams, the original methodology could not be 670 Exhibit 2, CMC.503.019.3603; T6-55, lines 44-46; T6-56, lines 1-12. 671 Exhibit 2, CMC.505.087.4586; T11-15, lines 9-16. 672 Exhibit 2, CMC.503.019.3146, CMC.503.019.3148, CMC.503.019.3149, CMC.503.019.3150, CMC.503.019.3151. 673 T6-56, lines 21-36; T11-15, lines 35-44. 674 T6-66, lines 20-46; T6-67; T11-47. 675 Exhibit 208, CMC.514.002.0141. 676 T6-47, lines 38-46; T6-48, lines 1-2. -- 144 of 304 -- 145 followed. CMC installed the pre-cast segments by a larger (more expensive) crane on the bank of Pyealy Creek. [564] With respect to the construction of the wingwalls:677 (a) CMC started on 10 October 2012 and finished on 11 November 2012;678 (b) The wingwall footings (horizontal components) took 17 days to complete (including formwork and tying reinforcement).679 (c) The wingwall footings were poured on two separate days (upstream and downstream).680 (d) The wingwall walls (vertical components) took 31 days to complete (including formwork and tying reinforcement).681 (e) The wingwall walls were poured in two lifts per pour on each end of the structure.682 (f) Due to the increased height of the wingwalls, the formwork had to be certified by an engineer, and anchor blocks had to be constructed to support the formwork, which materially changed the duration of construction.683 [565] From 4 December 2012 to 9 January 2013, CMC performed backfilling works to Zone B.684 With respect to the placement of material at Zone B (being three metres to the lower sides of the arch above the granular material), the volume of material was not significant, but the time taken for construction was substantial as:685 (a) the backfill was placed in layers with a bobcat or similar; (b) after each layer was placed, it had to be tested;686 (c) the level difference between either side of the arch could not exceed 600mm due to a design constrain; and (d) the area closest to the arch had to be hand compacted on both sides. [566] From 10 January 2013 to 21 January 2013, CMC performed backfilling works to Zone C.687 Due to the change in design, the volume of material excavated and backfilled in this zone increased substantially.688 With respect to the backfilling in this zone CMC used a grader to spread material and padfoot to compact it.689 677 T11-22, lines 27-47. 678 Exhibit 208, CMC.514.002.0141. 679 Exhibit 205, CMC.514.002.0128. 680 T11-22, lines 40-46; T11-23, lines 1-2. 681 Exhibit 206, CMC.514.002.0129. 682 T11-23, lines 15-43; T11-24, lines 6-12. 683 T11-25, lines 4-13. 684 Exhibit 208, CMC.514.002.0141. 685 T11-26, lines 16-47; T11-27, lines 1-11. 686 T18-66, line 33. 687 Exhibit 208, CMC.514.002.0141. 688 T11-27, lines 31-36. 689 T11-29, lines 21-28. -- 145 of 304 -- 146 [567] From 22 January 2013 to 15 February 2012, CMC did not perform works at the Pyealy Creek Bebo Arch. WICET had failed to obtain its financier’s consent to the variation works.690 [568] Further, during this period, from 24 January 2013 to 27 January 2013, the Site experienced inclement weather.691 As a result, after the financiers’ consent was provided on 11 February 2013,692 CMC performed flood reinstatement works to the Pyealy Creek Bebo Arch. This was completed by 20 February 2013.693 [569] From 21 February 2012 to 5 March 2012, CMC finished backfilling works to Zone C.694 [570] From 6 March to 23 March 2013, CMC constructed the OLC on top of Pyealy Creek including subbase layers and performed drainage works such as the drop structure and spoon drain.695 The revised design to the Pyealy Creek Bebo Arch changed these works as the depth and reinforcement of the spoon drain changed.696 [571] Between 23 March 2013 and 26 March 2013, CMC:697 (a) installed the guardrail and fencing over Pyealy Creek; and (b) placed hydromulch on top of the arch structure. [572] The revised design to the Pyealy Creek Bebo Arch changed these works as the guardrail increased in length and changed to include a tight radius bend that was required to be manufactured specially.698 (b) The Variation Claim [573] CMC’s variation claim in respect of the Bebo Arch is comprised of 20 items relating to different parts of the work for the Bebo Arch. Twelve of the items are agreed.699 The difference between the parties on three of the disputed items namely 11, 17 and 18 is less than $20,000. In respect of the remaining items, the experts disagree variously on rate, quantity and pricing methodology. In determining the quantum of these remaining items there are four contractual construction issues that arise. [574] First, as the parties are agreed that Variation 103 constitutes a variation under clause 40.1, the variation, by clause 40.3 is to be valued under clause 40.5. The cascading regime under clause 40.5 requires an amount to be ascertained first by reference to specific rates or prices prescribed by the contract pursuant to clause 40.5(a). Schedule C-4 deals with rates for pricing variations. Schedule C-4.1 which contains Unit Rates for variations falls within clause 40.5(a) in that it prescribes specific rates or prices to be applied in 690 T11-43, lines 28-36; see [628] to [634] below. 691 Exhibit 208, CMC.514.002.0141; T11-43, lines 38-40. 692 Exhibit 2, CMC.001.003.0043, CMC.001.003.0044, WIC.207.056.1242 and WIC.207.056.1243. 693 Exhibit 208, CMC.514.002.0141; T11-43, lines 40-47; T11-44, lines 1-15; see [635] to [639] below. 694 Exhibit 208, CMC.514.002.0141. 695 Exhibit 208, CMC.514.002.0141; T11-44, lines 29-35. 696 T11-48. 697 Exhibit 84, CMC.514.002.0056 at .0080 and .0081; T11-25, lines 32-46. 698 T11-48, lines 43-47; T11-49, lines 1-26. 699 Items 1 to 8, 10, 13 and 19 to 20, Eighth Further Amended Statement of Claim, Annexure A. -- 146 of 304 -- 147 determining the value for a variation. If an item is able to be valued by reference to specific rates or prices then under the cascading regime of clause 40.5 the valuation is conducted by reference to the Unit Rates in Schedule C-4.1. [575] Secondly, if there is no specific rate or price to be applied in determining the value under Schedule C-4.1 a valuation cannot be made under clause 40.5(b). I have already determined that Schedule C-4 does not constitute a “Schedule of Rates” and cannot therefore be used for a valuation under clause 40.5(b). [576] Thirdly, clause 40.5(c) which applies when neither clause 40.5(a) or 40.5(b) apply permits the valuation by reference to “reasonable rates or prices”. In [226] above I have already referred to the decision of Habersberger J in Danidale Pty Ltd v Abi Group Contractors Pty Ltd where his Honour stated that a reasonable rate is assessed by having regard to what a party would have had to pay under a normal commercial arrangement and to the cost of the work actually performed. Here the use of reasonable rates and prices is for valuing a directed variation. WICET submits that if it is determined that Schedule C-4 does not contain a specific rate for the variation, it would seem odd to nevertheless apply a rate from that schedule. The better interpretation according to WICET, is that if there is no specific price for a variation in Schedule C-4, the contract rate in Schedule C-3 (which still includes profit) might be reasonable to use.700 CMC however, submits that there is nothing improper about adjusting the rates in Schedule C-4 pursuant to either clause 40.5(b) or 40.5(c). As to 40.5(b) as Schedule C-4 does not constitute a “Schedule of Rates” it cannot be used to the extent that it is reasonable to use it for a valuation under clause 40.5(b). Such a conclusion also would prohibit carrying out a valuation under clause 40.5(b) by adjusting the rates in Schedule C-4. [577] The important question however is whether in valuing a variation under clause 40.5(c) by reference to reasonable rates and prices, adjusted rates in Schedule C-4 may be utilised? WICET accepts that there is nothing, in principle, improper about adjusting a Schedule C-3 or Schedule C-4 rate for the purpose of a valuation pursuant to clause 40.5(c) for a directed variation. That clause permits a valuation by reference to “reasonable rates”. WICET submits however that as the test is whether the rate in either Schedule C-3 or Schedule C-4 is “reasonable” clear evidence would be required in order to demonstrate that a Schedule C-4.1 Unit Rate is reasonable. WICET submits that those rates are much higher than the Contract Price for the work as revealed in Schedule C-3.701 I do not accept WICET’s submission that a reasonable rate, for the purposes of clause 40.5(c), may not be arrived at by adjusting a Unit Rate in Schedule C-4.1. Any differences in rates in valuing a variation between Schedule C-3 and Schedule C-4.1 may be explained by reference to the subject matter that these schedules address. Schedule C-3 contains the Contract Price Schedules. Schedule C-4.1 contains rates for pricing variations. Importantly, the Unit Rates contained in Schedule C-4.1 are agreed rates as between the parties. If an adjustment of these Unit Rates results in an application of “reasonable rates or prices” for the purposes of clause 40.5(c) then a variation may be valued accordingly. This is to be contrasted with valuing a direction, for example under clause 33.1 or 34.1 or an extension of time under clause 36. [578] Fourthly, WICET submits that additional or increased quantities arising from a variation will only attract Unit Rates to the extent the quantity is outside the upper limit of accuracy 700 WICET’s Reply Submissions, [224(b)]. 701 WICET’s Reply Submissions, [225]. -- 147 of 304 -- 148 stated in Annexure Part A to the Contract. The stated “limit of accuracy” rate in Annexure Part A to the Contract is 20%.702 WICET’s interpretation is that where there is a variation, and the variation results in increased quantities, it is only the quantity over and above 120% of the original quantity to which the rates in Schedule C-4.1 can be applied. CMC’s interpretation is that where there is a variation then the whole of the variation is to be valued under clause 40.5, and that allows the application of the Unit Rates to the whole of the valuation.703 [579] I do not accept WICET’s construction. WICET relies on clause C-4.1.3 of Schedule C-4 which states: “Unless specifically stated otherwise in this Schedule the unit rates shall apply to work that is additional or with increased quantities (outside the upper limits of accuracy stated in the Annexure Part A) and to work that is deleted or with reduced quantities (outside the lower limits of accuracy stated in the Annexure Part A) under the Contract.” [580] The “limit of accuracy” rate in Annexure Part A has its genesis in clause 3.3 of the General Conditions of the Contract which relevantly states: “Where otherwise then by reason of a direction of the Principal’s Representative to vary the work under the Contract, the actual quantity of an item required to perform the Contract is greater or less than the quantity shown in the Schedule of Rates; and where the Principal accepted a rate for the item the rate shall apply to the greater or lesser quantities provided that where limits of accuracy are stated in the Annexure the rate shall apply to the greater or lesser quantities within the limits and quantities outside the limits shall be valued under clause 40.5 as if they were varied work directed by the Principal’s representative as a variation.” [581] The opening words of clause 3.3 contain a carve out, “where otherwise than by reason of a direction of the Principal’s Representative to vary the work under the Contract”. Variation 103 falls within this carve out. I accept CMC’s submission that the effect of clause 3.3 is that if the quantity is increased because of a directed variation, then the below/above 120% difference in rates dictated by clause 3.3 has no application. In that event, because there is a variation, the whole of the variation must be valued under clause 40.5. This is mandated by clause 40.3 which requires “the variation directed” to be valued under clause 40.5.704 Clause 4.1.3 of Schedule C-4 mandates the application of the Unit Rates both to work that is additional (that is a variation) or with increased quantities (outside the upper limits of accuracy stated in Annexure Part A). Consequently, to the extent that they are applicable, the Unit Rates in Schedule C-4.1 should be applied to work that is a variation. Contrary to WICET’s submission, its construction does not permit clause 3.3 of the General Conditions and clause 4.1.3 of Schedule C-4 to operate in harmony so as to give effect to both.705 This is because the 120% difference does not apply to directed variations pursuant to clause 3.3 but WICET would have clause 4.1.3 of Schedule C-4 operate so as to apply to a directed variation. 702 WICET’s Written Closing Submissions, [1452] – [1457]; WICET’s Reply Submissions, [226]. 703 CMC’s Written Closing Submissions, [1066(c)]. 704 CMC’s Written Closing Submissions, [1066(c)]. 705 WICET’s Written Closing Submissions, [1456] – [1457] citing Australian Broadcasting Commission v Australian Performing Right Association Ltd (1973) 129 CLR 99 at 109 per Gibbs J. -- 148 of 304 -- 149 [582] The resolution of these four construction issues largely resolves the valuation of the remaining eight disputed items. Item 9 – Drop Structure [583] The Drop Structure is the feature which drains water from the OLC on top of the Pyealy Creek Bebo Arch into the creek. CMC constructed it by spraying a shotcrete on reinforced mesh on to the bank of Pyealy Creek. The dispute relates to the applicable rate to apply to a quantity of 182.2m³ of sprayed shotcrete. CMC applies the rate of $1,800 per m3 based on Schedule C-4.1 item 2.1.9 “spraycrete”. WICET applies a rate of $1,244 per m3 based on Schedule C-3 item 70 “shotcreting”. Mr Roberts applied the rate at item 2.1.9 of Schedule C-4.1 on the basis that he was instructed to do so. Mr Tsipis stated that “shotcrete” is the term usually used to describe pneumatically applied mortar or concrete used for slope and surface protection, swimming pool construction, tunnel lining, special architectural features, and renovating existing structures, in lieu of cast-in-place concrete. Whereas “spraycrete” is a term used for sprayed mortar for decorative or minor surface protection where large-aggregate mortar or concrete for structural purposes is not required.706 Mr Tsipis did however, accept in cross-examination that the terms “spraycrete” and “shotcrete” can be used interchangeably and can both be used to described decorative work or minor surface protection work. It was common ground that there was no decorative or minor surface protection work contemplated under the Contract for CMC to carry out. Mr Tsipis also accepted that where sprayed concrete is being used for purposes other than minor decorative work or surface protection work, such as under a contract for major civil works, it is more typical to use cubic metres when measuring that work. The rate in Schedule C-4.1 for spraycrete is in cubic metres. CMC submits, and I accept, that this is indicative that the works contemplated by Schedule C- 4.1 of the Contract were not in the nature of minor decorative work. The rate in Schedule C-4.1 is a rate specifically agreed to be used for variations. Whilst Mr Tsipis conceded that the more typical measurement for minor decorative was square metres, he had seen such work measured both in square metres and cubic metres. [584] As the terms may be used interchangeably and the shown rate was in cubic metres, it is appropriate to value item 9 by reference to the Schedule C-4.1 rate of $1,800 per m3. The appropriate value for item 9 is therefore $327,960. Item 11 – Blinding Layer under Bebo Arch footings [585] The parties agree that the applicable quantity for this item is 39.32m3.707 Mr Roberts uses the rate of $1,000 per m3 from item 2.1.2 in Schedule C-4.1. This item refers to 10MPa in blinding layer. WICET criticises this approach on the basis that the concrete strength used by CMC on-Site was 20MPa. Both parties accept that the difference is nominal. Even if item 2.1.2 does not constitute a prescribed rate for the purposes of clause 40.5(a) I am satisfied that it may be used in a valuation as a reasonable rate pursuant to clause 40.5(c). 706 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, [610]; Exhibit 2A, Court Book Vol 14, Expert Report on Quantum of George Tsipis dated 16 May 2016, [153]. 707 Eighth Further Amended Statement of Claim, Annexure A; Sixth Further Amended Defence and Counterclaim, [99(c)]. -- 149 of 304 -- 150 [586] The appropriate value for Item 11 is therefore $39,320. Item 12 – Concrete Class 40Mpa/20 in Bebo Arch footings [587] Both parties accept that the design of the footings changed. Mr Tsipis valued the item at $548,607.60. Mr Roberts valued the item at $1,047,480. The difference between the experts is not only the rate to be applied to the work but also the extent to which that rate is to be applied to the quantity of the work. [588] Mr Tsipis considered that the revised design of the Bebo Arch footings did not change the nature of the footings and only caused an increase in quantity. Therefore, the Schedule C-3 item 173 rate applies up to the 20% upper limit of accuracy above the Contract quantity. For the quantity above the upper limit, the Schedule C-4.1 item 2.1.3 rate is applicable. Mr Tsipis has therefore applied the Schedule C-3 item 173 rate of $960.50 per m3 to the Contract quantity of 226 m3. He has applied the same rate to the quantity within the 20% upper limit of accuracy above the Contract quantity that is 45.2 m3. Mr Tsipis has then applied the Schedule C-4.1 item 2.1.3 rate of $2,800 per m3 to the quantity above the 20% upper limit of accuracy above the Contract quantity that is 102.9 m3. [589] Mr Roberts however considered that the revised design changed the nature of the work. Mr Roberts values this variation by reference to clause 40.5(a). Schedule C-4.1 item 2.1.3 is a specific rate which is applicable namely “40MPa structural – footings”.708 [590] As a matter of contractual construction I have already determined that the valuation approach of Mr Tsipis is not appropriate. The upper limit of accuracy of 20% is not applicable to a valuation of a variation. [591] Mr Tsipis in his third supplementary Quantum Report dated 16 May 2016709 at [169] stated: “… the revised design changed some aspects of the footing dimensions and reinforcement of the Contract design, plus added the tie beams. In my opinion, the taller footing pedestal and tie beams caused CMC to carry out more-labour intensive work than the Contract footing design, that is more extensive form work and more difficult concrete placement. Accordingly, I consider that the Schedule C-4.1 Item 2.1.3 rate of $2,800 per cub metre should apply to the aspects related to the more labour/intensive work. However, the rate cannot be applied to the unchanged Contract design.” [592] Mr Tsipis however, in cross-examination did not hold to the opinions he expressed in paragraph 169 of his Report. He acknowledged that it was not possible to separate out how the C-4 item 2.1.3 rate applies to the changed Contract design or the unchanged Contract design.710 What would be required is for Mr Tsipis to identify the actual variation and then identify the cost of that variation. Mr Tsipis has not undertaken that valuation exercise.711 He does however summarise the salient features of the revised design in paragraphs 681 to 683 of his report dated 16 November 2015.712 708 Exhibit 2A, Court Book Vol 11, Expert Report on Quantum by Paul Roberts dated 6 April 2016, [159]. 709 Exhibit 2A, Court Book Vol 14. 710 T30-23, line 27 – lines 30-24 line 20; CMC’s Written Closing Submissions, [1092]. 711 T30-24, lines 16-20. 712 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015. -- 150 of 304 -- 151 [593] Whilst Mr Tsipis is a qualified civil engineer I prefer the evidence on this topic of Mr Grey. Mr Grey was CMC’s Senior Engineer responsible for the Pyealy Creek Bebo Arch. He had a detailed knowledge of the effect of the redesign of the Bebo Arch. He was specifically asked to address WICET’s proposition that the new design of the footings represented, in effect, an increase in quantities rather than a change in character: “I think that that argument would be true if the length of the structure increased and kept the same cross-section as this. If that was the same then you perhaps could, but by changing the cross-section of the structure and the steel then I’d disagree.”713 [594] I accept CMC’s submission that the changes to the footings were wholesale and fundamental and plainly far more extensive than a mere increase in quantities. [595] Item 12 should therefore be valued at $1,047,480. Item 14 – Supply and install Bebo Arch sections [596] The only remaining aspect of this item that is disputed is the amount to be deducted for the access road. The amount in dispute is minus $46,778.22. WICET in its written closing submissions submits that given the state of the evidence, I should simply adopt a midpoint in respect of the minus $46,778.22. There was however evidence from Mr Vance and Mr Grey that the additional cost to upgrade the access ramp would be between $10,000 and $15,000. CMC submits and I accept that the higher of these figures should be adopted. [597] The appropriate value for item 14 is therefore $348,841.63 being: (a) $267,153.60 for Schedule C-3 item 184, as agreed by the parties; (b) Less $28,000 for the non-use of a 90 tonne crane as agreed by the experts; (c) Less $3,221.78 for pavement to the access road into Pyealy Creek as agreed by the experts; (d) Less $15,000 for upgrading the access ramp; (e) Plus $10,412 for construction of the crane pad as agreed by the parties; (f) Plus $117,497.81 for the 280T crane as agreed by the parties. Item 15 – Concrete class 40Mpa/20 in Bebo Arch wingwalls [598] The revisions to the Pyealy Creek Bebo Arch design changed the wingwalls from pre-cast elements (which included footings) to a design where they were constructed in-situ. The parties agree that the applicable quantity for this item is 76.88 m3. The dispute is in relation to the applicable rate to be applied to this quantity. 713 T11-46, lines 42-35; CMC’s Written Closing Submissions, [1095]. -- 151 of 304 -- 152 [599] Mr Roberts is of the opinion that the Schedule C-4.1 item 2.1.8 rate of $3,200 per m3 for 50Mpa structural concrete less an adjustment of $20 per m3 for the difference in concrete strength is the most appropriate rate for these variation works. Mr Roberts’ valuation relies on clause 40.5(a) or 40.5(b). [600] Mr Tsipis is of the opinion that: (a) Schedule C-4 item 2.1.8 is not applicable because it applies to 50MPs structural items; (b) No rates in Schedule C-3 are applicable to this item; (c) A rate that is 25% higher than item 134 of Schedule C-3 of $1,800 per m3 is a reasonable rate for this item. [601] Mr Tsipis has therefore valued this item under clause 40.5(c). [602] Mr Roberts cannot value item 15 pursuant to clause 40.5(a) because there is no specific rate in Schedule C-4.1 for 40 MPa concrete. Nor can Mr Roberts value the item pursuant to clause 40.5(b) as Schedule C-4.1 does not constitute a “Schedule of Rates” as defined. WICET submits that Mr Tsipis is the only expert who has given evidence of a reasonable rate pursuant to clause 40.5(c). It is however ultimately a task for the Court to determine the valuation of this item. A reasonable rate for the purpose of clause 40.5(c), in the context of valuing a variation, may be arrived at by reference to a similar agreed rate in Schedule C-4.1 as adjusted. It is irrelevant that Mr Roberts did not undertake this valuation exercise by reference to reasonable rates under clause 40.5(c). I am content to adopt the valuation of Mr Roberts (impermissibly carried out under clause 40.5(a) and 40.5(b)) as constituting a reasonable rate for the purposes of clause 40.5(c). [603] The appropriate value for item 15 is therefore $244,478.40. Item 16 – Supply and install a spandrel [604] The amount in dispute in relation to item 16 is $35,475.21. [605] CMC was required to install two pre-cast spandrels either end of the Pyealy Creek Bebo Arch. The dispute turns on whether the spandrel is an omitted item from Schedule C-3 for which CMC is entitled to additional payment. [606] Clause 3.3 of the General Conditions (as amended) states “if the Schedule of Rates omits an item which should have been included, the item shall be valued under clause 40.5 as if it was extra work directed by the Superintendent Principal’s Representative as a variation.” Clause 3.4 of the General Conditions states: “Notwithstanding any other provision in the Contract, minor items not expressly mentioned in the Contract but which are necessary for the satisfactory completion and performance of the work under the Contract shall be supplied and executed by the Contractor. The cost of such minor items shall be deemed to be included in the Contract Sum.”714 714 See also the Preambles to Schedule C-3: WICET’s Written Closing Submissions, [1536]. -- 152 of 304 -- 153 [607] There is no specific line item for spandrels in Schedule C-3. For this reason, Mr Roberts concludes that it must be an omitted item for which CMC’s is entitled to payment. Mr Tsipis however concludes that spandrels were part of the Scope of Work by reference to drawings and specifications. That CMC was entitled to a further allowance for spandrels was in fact accepted by WICET (through Mr Miroshnikoff) in the Final Certificate – where CMC was given an entitlement to $40,746.62. WICET now resiles from that position. [608] CMC does not dispute that spandrels are included in its Scope of Works. The question is whether the spandrels “should have been included” as a separate item in Schedule C-3 to the Contract. [609] CMC identifies the key factors suggesting that the spandrels should have been included as a separate item in Schedule C-3 as follows: (a) The spandrels are heavier than the majority of the original pre-cast wingwalls components, and these components had day separate items. They cannot be regarded as “minor items”. (b) Item 187 which relates to the supply and installation of Bebo Arch sections, is not a lump sum item, but a rate per arch segment. It is difficult conceptually to understand this as extending to spandrels. The number of spandrels would always stayed fixed – at two – whereas the number of arch segments could conceivably vary up or down. In those circumstances, if the rate actually included spandrels it would either under- or over-compensate CMC. (c) If the spandrels were included in item 187, then the number of “items” CMC should have been paid for is not 21 (which were all arch segments), but 23 (to account for the additional spandrels).715 [610] These keys factors do, in my view, lead to a conclusion that the spandrels were a “non-minor” item omitted from Schedule C-3. [611] Accordingly, the appropriate value for item 16 is $35,475.21. Item 17 – Concrete Class 32 MPa/20 in spoon drain [612] CMC conceded this item in its pleading. Item 18 – Guardrail with beam [613] The revisions to the Pyealy Creek Bebo Arch increased the length of the guardrail and added two tight radii at two locations near the upstream end of the Pyealy Creek Bebo Arch. Mr Grey’s evidence was that the revised radii was a special item which was manufactured separately. Mr Roberts is of the opinion the revised radii has changed the character of the work and that it is reasonably to apply the cost charge by CMC’s supplier for these items plus an uplift of 12.5%. Mr Roberts’ use of a reasonable rate pursuant to clause 40.5(c) arose because he does not consider that Item 329 of Schedule C- 3 “Steel 715 CMC’s Written Closing Submissions, [1141]. -- 153 of 304 -- 154 beamed guard rail, w beam (MC22)” was an appropriate rate for the guardrail at the Bebo Arch. Mr Tsipis did however consider this an appropriate rate and applied it pursuant to clause 40.5(b). I accept Mr Grey’s evidence as to the changes to the guardrail. The revised radii was a special item which was manufactured separately. Mr Roberts’ reasonable rate under clause 40.5(c) should therefore apply. [614] WICET however objects to the admissibility of the invoice relied on by CMC in relation to this item. WICET submits that the invoice is subject to its hearsay objection and should not be relied upon by the Court.716 The document may however, in my view be relied upon. It is an invoice dated 21 March 2013 issued to CMC and more specifically to Mr Grey. It is stated to be for “GC09 guardrail – Bebo Arch scope change.” [615] I therefore value item 18 at $31,230. Quantum total for Bebo Arch Variation 103 Item 1 $192,545.40 Item 2 $23,382.93 Item 3 $64,984.20 Item 4 $37,946.55 Item 5 $82,524.69 Item 6 $21,109.76 Item 7 $20,826.00 Item 8 $48,610.17 Item 9 $327,960.00 Item 10 $83,985.99 Item 11 $39,320.00 Item 12 $1,047,480.00 Item 13 $310,464.00 Item 14 $348,841.63 Item 15 $244,478.40 Item 16 $35,475.21 Item 17 Nil 716 WICET’s Written Closing Submissions, [1572]. -- 154 of 304 -- 155 Item 18 $31,230.00 Item 19 $13,904.00 Item 20 Nil TOTAL $2,975,068.93 [616] CMC concedes that the amount paid to CMC with respect to Variation 103 by WICET was $2,152,589.18. Accordingly, CMC is entitled to an additional payment of $822,479.75. [617] WICET in its counterclaim pleads a claw back in respect of Variation 103 on the grounds that the value of the work was “$1,979,689.83” in circumstances where it had paid to CMC $2,152,589.18 for the work in relation to the Bebo Arch. WICET does not press its counterclaim in respect of Variation 103. Delay Claim (Variation 17) [618] CMC relies on 11 Delay Events. The first seven relate to the Piling Claim. The remaining four relate to delays in respect of the Bebo Arch Variation and include WICET’s alleged delay in obtaining its financier’s consent. The total delay from these 11 events as pleaded by CMC is 243 days 21.5 hours.717 The original date for practical completion under the Contract was 30 August 2012. The actual date of practical completion was 26 March 2013. CMC therefore completed the works 208 days after the original date for practical completion. CMC accepts that even though the delay period pleaded is approximately 243 days any entitlement to an extension of time pursuant to clause 35 of the General Conditions of the Contract should be capped at 208 days. CMC makes a primary and alternative submission as to the proper construction of clause 36 of the General Conditions of the Contract. The primary submission is that clause 36 provides for an assessment of the extra cost and on-Site overheads by reference to the extended time it took CMC to achieve practical completion; that is, the difference between the date for practical completion and the actual date of practical completion. CMC’s alternative submission is that clause 36 permits the assessment of the cost to be at the time of the relevant delay. On this alternative submission CMC seeks the cost in relation to the full 243 days. CMC’s primary submission is that the “delay” referred to in clause 36 should be construed as a reference to any delay in achieving practical completion. I proceed on the basis that any extension of time should be capped at 208 days. Where a Delay Event has not been caused either by WICET, its representatives or agents, the period of that Delay Event should be subtracted from the total of 243 days and 21.5 hours.718 [619] WICET has previously granted CMC extensions of time under the Contract for a total of 18 days. Whether CMC is entitled to an extension of time for any of the Delay Events depends on whether it can bring itself within the contractual requirements of clause 35.5. The full text of clause 35.5 is set out in Appendix A to these Reasons. 717 Eighth Further Amended Statement of Claim, [193]. 718 T34-17, lines 13-19. -- 155 of 304 -- 156 [620] WICET submits that clauses 35.5 and 36 of the Contract pose a number of hurdles which all need to be determined in CMC’s favour before it can establish the claimed entitled to an extension of time and delay compensation.719 [621] CMC’s entitlement to an extension of time for each Delay Event depends on the following: (a) First, whether CMC was, in fact, delayed by a “qualifying cause” (being a cause listed in the fourth paragraph of clause 35.5 of the General Conditions). A qualifying cause includes delays caused by WICET, its representatives or agents and also variations directed under clause 40; (b) Secondly, the methodology that should be applied to properly analyse the impact of the Delay Event. WICET identifies this issue as being which delay analysis methodology reflects the contractual requirements for an extension of time; (c) Thirdly, (applying that methodology) whether the activities delayed are on the critical path in the construction program; and (d) Fourthly, whether CMC has met the requisite contractual preconditions to its entitlement to an extension of time arising.720 [622] WICET identifies a further issue namely, if the claimed delays are on the critical path and were caused by WICET, are there concurrent causes of delay? CMC is not entitled to an extension of time if more than one event causes concurrent delays and the cause of at least one of those events is not a cause referred to in the fourth paragraph of clause 35.5 of the Contract. [623] CMC's position is that the delays to completion of the Contract Works were as follows:721 Event Description Dates of Impacted Delay EOT Duration 1 Beales Creek Piling Permit 12 January 2012 – 17 February 2012 34 days 2 Rail Receival Permit Delay 22 – 23 February 2012 2 days 3 NCR1 Delay 24 February 2012 – 6 March 2012 10 days 6 Hours 4 Suspension Direction Delay 8 – 12 March 2012 4 days 1.5 hours 5 Specification Uncertainty 14 March 2012 – 27 March 2012 13 days 7 hours 6 Stopwork Direction Delay 16 May 2012 – 17 May 2012 1 day 7 hours 7 Beales Creek Piling Hammer Direction Delay 16 June 2012 – 28 June 2012 13 days 8 Pyealy Creek Bebo Arch Redesign Delay 29 June 2012 – 25 July 2012 26 days 9 Pyealy Creek Bebo Arch Additional Work Delay Various 111 working days 10 Financier Consent Delay 22 January 2013 – 11 February 2013 21 days 719 WICET’s Written Closing Submissions, [91]. 720 CMC’s Written Closing Submissions, [1170]; WICET’s Written Closing Submissions, [92] – [96]. 721 See Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, [1]. -- 156 of 304 -- 157 11 Flood Damage Delay 13 February 2013 – 20 February 2013 8 days Total 243 Days 21.5 Hours [624] CMC contends for a total extension of time for practical completion to 30 April 2013.722 Issue 1: Qualifying cause of delay [625] As to the first seven Delay Events I have already determined in considering the Piling Claim that Delay Events 1, 2, 3, 6 and 7 constitute a “qualifying cause” on the basis that they were either caused by WICET, its representatives or agents or constituted directed variations. I have also determined that Delay Events 4 and 5 are not qualifying causes. This reduces CMC’s total delay from 243 days 21.5 hours to 226 days 13 hours. [626] As to Delay Events 8 and 9 the Pyealy Creek Bebo Arch Delays, WICET admits that both of these Delay Events were caused by “qualifying causes” within the meaning of clause 35.5(b). [627] WICET disputes that Delay Events 10 and 11 constituted qualifying causes. (i) Delay Event 10 – Financier consent delay [628] CMC’s pleaded cased is that by reason of the failure of WICET to obtain the consent of its Financier earlier than 11 February 2013 CMC did not undertake the variation works at the Bebo Arch between 22 January 2012 and 11 February 2012 and was delayed in its performance of the Works under the Contract for that period.723 The claim arises from WICET's alleged failure to obtain the consent of its financier, CBA Corporate Services (NSW) Pty Limited (Financier), for variation works including, in particular, variation works associated with the Bebo Arch. As a result of WICET's delay in obtaining the relevant consent, CMC ceased to undertake the variation works, which resulted in the delayed completion of the Bebo Arch. [629] I make the following findings of fact in relation to this Delay Event: (a) Part E of the Annexure to the General Conditions of the Contract contains a Tripartite Deed between CMC, WICET and the Financier (Tripartite Deed).724 Pursuant to the Tripartite Deed WICET was required to obtain the consent of the Financier for variation work and CMC was not permitted to undertake variation work without the consent of the Financier.725 (b) On or about 7 December 2012 CMC issued a payment claim to WICET pursuant to the BCIP Act.726 The payment claim included amounts for variation works. In response, WICET issued a payment schedule on 21 December 2012.727 The payment schedule relevantly stated that the Contractor had agreed that variation 722 Eighth Further Amended Statement of Claim, [194]. 723 Eighth Further Amended Statement of Claim, [211]. 724 Exhibit 2, CMC.001.001.0249. 725 See clause 4.3 of Exhibit 2, CMC.001.001.0249 at .0263. 726 Exhibit 2, CMC.002.005.0003. 727 Exhibit 2, CMC.007.005.0003 and CMC.007.005.0007. -- 157 of 304 -- 158 claim items in excess of $10million were deemed not to be variations and therefore could not be the subject of a variation claim. CMC then lodged an adjudication application on 4 January 2013.728 (c) By way of adjudication response on 11 January 2013 WICET notified CMC that the Financier had not provided its consent to variation works being undertaken by CMC and that variation works should not be carried out until that consent was obtained.729 This included existing variation claims, the most prominent being the construction of the Bebo Arch that was in progress at the time.730 (d) On 21 January 2013 CMC notified Worley Parsons731 that it would suspend the variation works at 5.00pm on 22 January 2013 until such time as the Financier confirmed its consent to the variation works (which included the Bebo Arch Variation) and a commensurate increase in the total amount payable by WICET under the Contract. CMC’s notification attached a letter from CMC to Worley Parsons which, in particular, referenced paragraph 26 of WICET’s adjudication response. (e) Accepting that consent was required for the variation works and in accordance with its obligations under the Tripartite Deed WICET sought the consent of the Financier on 22 January 2013.732 (f) On 22 January 2013 (having not received confirmation that consent had been obtained) CMC informed Worley Parsons733 that all work on variations (including the Bebo Arch) had ceased pending the provision of the Financier’s consent.734 (g) From 22 January 2013 to 15 February 2013, CMC did not perform works at the Pyealy Creek Bebo Arch due to the lack of the Financier’s consent.735 (h) During the period 24 January 2013 to 27 January 2013, the Site experienced inclement weather.736 The period of delay between 22 January 2013 and 11 February 2013 was 21 days.737 On 14 February 2013 CMC notified Worley Parsons that:738 (i) The suspension of work caused by WICET’s failure to obtain the Financier’s consent (prior to the issue of the Bebo Arch Variation) had directly impacted the critical path works. (ii) CMC claimed an extension of time of 22 days (from 22 January 2013 to 13 February 2013). 728 Exhibit 2, CMC.002.001.0002. 729 Exhibit 2, CMC.007.005.0200 at .0207, [26]. 730 See Exhibit 2, CMC.007.005.0200 at .0207, [26(b)]. 731 Exhibit 2, CMC.505.016.7761, CMC.505.016.7762 and CMC.505.016.7763; T16-4, line 26 – T16-5, line 8. 732 Exhibit 2, WIC.205.016.1226. 733 T16-5, lines 30-38. 734 Exhibit 2, CMC.007.001.0184. 735 T11-43, lines 28-36. 736 Exhibit 208, CMC.514.002.0141; T11-43, lines 38-40. 737 T16-8, lines 22-42. 738 Exhibit 2, CMC.007.001.0176; T16-7, lines 8-14. -- 158 of 304 -- 159 (i) On 8 February 2013, CMC received a facsimile from the Financier.739 The facsimile referred to the request for consent by WICET on 22 January 2013, and provided its consent to the variation work. The facsimile did not attach the particular variations to which consent had been provided and as such CMC was unable to proceed with the relevant variation work. (j) On 11 February 2013 the Financier provided its consent to the variation works.740 On 12 February 2013 CMC confirmed to Worley Parsons741 that: (i) the Financier had provided consent to the variation works (which included the works at the Bebo Arch). (ii) CMC had commenced remobilisation on 11 February 2013 to recommence the variation work. [630] CMC submits that on the proper construction of clause 4.3(c) of the Tripartite Deed: (a) WICET was required to determine if the relevant variation work required the consent of the Financier; (b) WICET was required to notify CMC if the relevant variation work required the consent of the Financier; and (c) CMC was not required to request that WICET obtain the consent of the Financier or serve notice prior to complying with the direction to undertake the variation.742 [631] WICET accepts that practically it had the obligation under the Tripartite Deed to obtain the relevant consent. WICET had the relationship with the Financier and therefore the ability to obtain the consent required. WICET however submits that on a proper construction of the Tripartite Deed, if CMC considered there was a variation which would have resulted in the relevant thresholds being exceeded, it ought to have taken steps (for example, by informing WICET) so that the requisite consent could be obtained. I do not accept WICET’s submission. [632] There is no express obligation in the Tripartite Deed as contended by WICET. Nor would such an obligation need to be implied to give the Deed business efficacy.743 As CMC correctly submits, the existence of such an implied term fails on almost every basis. The only party in a position to know whether the Financier’s consent would be required (and to obtain that consent) was WICET. This is because: (a) WICET’s representative (at the direction of WICET) was the only party in a position to issue directions to vary the works under the Contract – therefore, WICET was the party in a position to decide whether to issue particular variations; (b) WICET’s representative was the only party in a position to value the variation works under the Contract; and 739 Exhibit 2, CMC.001.003.0043 and CMC.001.003.0044; T16-6, lines 17-33. 740 Exhibit 2, WIC.207.056.1242, WIC.207.056.1243; T16-6, lines 35-42. 741 Exhibit 2, CMC.001.003.0051; T16-6, line 44 to T16-7, line 6. 742 CMC’s Written Closing Submissions, [1208]. 743 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 per Mason J at 346. -- 159 of 304 -- 160 (c) Practically, WICET was the only party that was in a position to obtain the relevant consent from the Financier as it was the party with the finance contract relationship with the Financier.744 [633] WICET further submits that CMC was not directed to suspend the work as the adjudication submission was not a direction to suspend the work. WICET however in its adjudication response dated 11 January 2013 made it clear to CMC that the operation of clause 4.3(c) of the Tripartite Deed required CMC to not undertake the relevant “variation work” unless it had prior consent.745 Whilst it was CMC that suspended the work I do not accept that the suspension was not caused by WICET. WICET through the adjudication response had effectively informed CMC that it would not be entitled to any payment for work performed at the Bebo Arch. Without WICET obtaining the Financier’s consent, CMC was placed in a commercially difficult situation of carrying out works for which it may ultimately not be paid. CMC’s pleaded case is not based on its notice to suspend the works at Bebo Arch but rather WICET’s failure to obtain the consent of its Financier earlier than 11 February 2013. WICET, as it acknowledges, had the obligation to obtain the relevant consent.746 As a result of WICET’s failure to obtain that consent CMC’s obligation to carry out and right to payment for the relevant variation works was compromised. [634] WICET’s failure in this respect constitutes a qualifying cause of delay. (ii) Delay Event 11 – Flood damage delay [635] A rain event caused flooding at the Bebo Arch site during the period 24 January 2013 to 27 January 2013. The wingwalls suffered heavy scouring and a transfer of large silt deposits occurred that required removal. As a result of the damage caused by the flooding, CMC was required to carry out reinstatement and rectification works at the Bebo Arch which resulted in the delayed completion of the Bebo Arch by eight calendar days from 13 February 2013 to 20 February 2013. [636] The key finding of fact sought by CMC is that the suspension associated with Delay Event 10 impacted the progress of the works at the Bebo Arch such that the impacts of inclement weather would have been avoided. CMC’s pleaded case relies on the late provision of the final Bebo Arch redesign drawings.747 CMC pleads that it was not issued with construction drawings for the Bebo Arch by WICET until 25 July 2012 constituting a 26 day delay (Delay Event 8). WICET submits that CMC has not led evidence that the Bebo Arch would have been finished by the date of the rain event. Mr Pancholi’s evidence was limited to the effect of the suspension arising from the failure of WICET to obtain its Financier’s consent on the progress of the work at the Bebo Arch. His evidence was that if there had been no suspension of the works because of the Financier consent issue, the wet weather event would have had a “different effect” on the Bebo Arch.748 [637] His evidence was as follows: 744 CMC’s Written Closing Submissions, [1211]. 745 Exhibit 2, CMC.007.005.0200 at .0207. 746 WICET’s Written Closing Submissions, [104]. 747 Eighth Further Amended Statement of Claim, [218]. 748 T16-9, lines 10-27. -- 160 of 304 -- 161 “And doing the best you can, what difference did the fact of the financier consent suspension have? What effect did that have on the subsequent effect of the wet weather? --- As I mentioned before, we were very close to the finishing and the process – when you are backfilling in the layers you seal the layers, as you go and when you’re on the final layer it’s sealed for permanent completion of the work. If we were to continue this on 22nd, 3rd before the rain we would have managed to seal the area, seal the road and would have mitigated the impact. Wouldn’t have completely eliminated but definitely would have helped if we’d have continued the work to mitigate the potential subsequent impact.” [638] WICET submits that on the evidence, Delay Event 10 must be decided in CMC’s favour for it to have an entitlement pursuant to Delay Event 11. This is not correct. For reasons stated below I have concluded that CMC is entitled to an extension of time of 26 days in respect of Delay Event 8. This is the Bebo Arch redesign delay. It is also the pleaded delay relied on by CMC in relation to Delay Event 11. CMC is entitled to the extension of time for Delay Event 8 because I have determined that the Bebo Arch was on the critical path. The main damage caused by the rain event from 24 January 2013 to 27 January 2013 was heavy scouring to the wingwalls and a transfer of large silt deposits. Mr Pancholi’s evidence (which was not challenged) was to the effect that had CMC conducted works at the Bebo Arch on 22 and 23 January 2013 it would have managed to seal the area and the road prior to the rain event and would have mitigated the impact. Had the works on the Bebo Arch not been further delayed by Delay Event 8, it may be accepted that the works described by Mr Pancholi would have been completed well before the rain event. It is not to the point whether the Bebo Arch would have been completed by the time of the rain event but rather whether the works which would have wholly mitigated the flood damage would have been completed. [639] I accept that Delay Event 8 and the suspension associated with Delay Event 10 did impact the progress of the works at the Bebo Arch such that the impacts of inclement weather between 24 to 27 January 2012 would have been avoided. Delay Even 11 therefore constitutes a qualifying cause. Expert evidence [640] Before dealing with Issue 2 concerning methodology and programs it is convenient to summarise the approach of the two experts. The two experts who gave evidence in relation to delay were Mr King and Mr Abbott. The differences in their approach, including their methodology and the programs they used were stark. [641] Whilst it is for the Court to determine whether CMC has demonstrated those matters required by clause 35.5(B)(1) to (5), there are aspects of the evidence of both experts which have assisted me in determining whether CMC is entitled to an extension of time. For reasons which are made evident below I generally gained more assistance from the evidence of Mr King and preferred his evidence. [642] In his report of 17 August 2015749 Mr King sought to provide an analysis of CMC’s entitlement to extensions of time. Mr King identified the Baseline Program. He also 749 Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, p 11 at [16]. -- 161 of 304 -- 162 identified that updated programs were furnished by CMC on various dates from 17 December 2011 to 29 March 2013. According to Mr King the updated programs effectively provided a “status update” of the progress of the works on the project. He referred to these programs as “statused programmes”.750 Mr King relied upon the statused programs in carrying out his analysis as he was of the opinion that they comprised reliable evidence of the dates upon which activities actually started and finished and were forecast to start and finish. As I have previously observed there was only ever one Baseline Program and no revised Baseline Programs were approved by the Principal’s Representative. [643] Mr King’s methodology involved him undertaking the following steps: (a) he considered the statused program that was issued prior to the commencement of the alleged delay; (b) he determined the criticality (or otherwise) of the relevant activity prior to the delay occurring; (c) he reached an opinion as to the impact to the delay on the date for practical completion by introducing a delay activity into the program to model the claimed delay; and (d) he considered any programs that were produced during the period that the delay was occurring to determine whether the criticality of the relevant activity was maintained. [644] This methodology is referred to as the Time Impact Method. This method constitutes a prospective approach. [645] Mr King’s methodology was however different in the case of the Bebo Arch delay. In relation to Delay Event 9 for example, Mr King: (a) determined that the Bebo Arch was on the critical path during the period of the claimed delay; (b) determined which work activities within the Bebo Arch construction were on the actual critical path; (c) compared the planned and actual duration for the Bebo Arch activities which were on the actual critical path; (d) determined whether CMC had claimed for an increase in scope for these activities; and (e) reached an opinion as to the delay duration for those activities where an increase in scope had occurred. [646] This methodology adopts the “as-planned” v “as-built” approach. The approach is a retrospective one in which Mr King compared the Baseline Program with an as-built program. 750 Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, p 26 at [40]. -- 162 of 304 -- 163 [647] Mr Abbott’s delay analysis initially involved certain adjustments to the Baseline Program to create the “SJA Adjusted Baseline Program”. The primary adjustment to the Baseline Program made by Mr Abbott was done on instructions. He adjusted the Baseline Program to include a revised duration of the settlement surcharge period from 90 calendar days to 182 calendar days.751 Mr Abbot was instructed to assume that: (i) surcharge monitoring was within CMC’s Scope of Work; (ii) the surcharge settlement period for the Beales Creek work was for a nominal period of six months and ought to therefore have been reflected in CMC’s program accordingly. [648] Mr Abbott then prepared a “Programme of the Day” by statusing the SJA Adjusted Baseline Program using the works progress data contained in the most contemporaneous CMC “working program” so as to create a separate program which reflected the state of the works at a point in time as close as possible prior to the commencement of the alleged Delay Event. Mr Abbott752 stated that it is essential that the Program of the Day: (a) accurately reflects the as-built portion of the project up to and including an accurate status of the works as at the status date of the program; (b) accurately reflects the forward looking, planned portion of the project. This section of the project should be in line with the previous approved sequence and timing of the works, free from manipulation that may artificially influence the program. [649] In order to assess the effect of each Delay Event Mr Abbott inserted the Delay Event into the Program of the Day. He then observed any impact on the Completion Date. Mr Abbott adopted a time impact analysis being a prospective approach in relation to all Delay Events including Delay Events 5, 9, 10 and 11. [650] Whilst there are obvious differences in the methodology adopted by the respective experts one common feature is that they both sought, either by Mr King using CMC’s statused programs or in Mr Abbott’s case the Programs of the Day, to gain an accurate reflection of CMC’s intentions going forward. As stated by Mr King in the Joint Expert Report on Delay,753 “it is essential that the Contractor in developing the updated version of the Baseline Programme, that it modify the programme in order to reflect its intentions going forward.” [651] WICET submits that Mr Abbott’s methodology accords more with the Contract and accepted delay analysis methodology and should be preferred by the Court. If however the Court is not persuaded by the evidence of Mr Abbott it should not accept the evidence of Mr King given “his unashamed departure from the Contract”. WICET further submits that it is open to the Court to reject all of the expert evidence if it finds that none of it is sufficiently compelling and cogent. In those circumstances WICET urges the Court not to embark upon any speculative analysis but rather find that CMC has not discharged its 751 Exhibit 2A, Court Book Vol 8, Expert Report on Delay by Stephen Abbott dated 2 November 2015, p 8 at (g)(iii). 752 Exhibit 2A, Court Book Vol 8, Expert Report on Delay by Stephen Abbott dated 2 November 2015, p 22 at [26]. 753 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, p 1. -- 163 of 304 -- 164 onus to prove an entitlement to any extensions of time under the Contract.754 The necessity to reject outright the evidence of Mr King or Mr Abbott does not, in my view, arise. [652] CMC submits that in the course of the concurrent evidence, Mr Abbott demonstrated: (a) an argumentative, overbearing and uncivil personality (as acknowledge by WICET); (b) a lack of independence; (c) a tendency towards mechanical application of his own method without demonstrating sufficient reasoning or common sense; and (d) a willingness to provide evidence outside his own expertise for the benefit of WICET.755 [653] Comparatively, according to CMC, Mr King is a recognised industry expert with a wealth of experience in delay analysis in litigious matters. He has also applied a common sense approach consistent with the Delay Protocol and the lay evidence that was led at trial.756 [654] CMC’s suggestion that Mr Abbott lacked independence relies on my request to Mr Abbott in the course of the concurrent evidence that civility be maintained. I did not appreciate Mr Abbott shaking his head vigorously in disagreement to an answer given by Mr King. That episode does not however reflect on Mr Abbott’s independence as an expert. I accept WICET’s submission that the Court’s observations of Mr Abbott’s demeanour in the course of the concurrent evidence should not be determinative of whether his analysis is accepted or not accepted.757 [655] As to CMC’s submission that Mr Abbott demonstrated a willingness to provide evidence outside his own expertise for the benefit of WICET, CMC refers to paragraphs 44, 45, 145, 146, 154 of Mr Abbott’s expert report on delay dated 2 November 2015. These paragraphs to which objection was taken, do evidence Mr Abbott expressing concluded views as to matters of contractual construction and factual findings which are matters for the Court not for Mr Abbott. His opinions in these respects are inadmissible. In each instance however Mr Abbott’s inadmissible opinions were, almost invariably supportive of WICET’s position. This became evident in an exchange I had with Mr Abbott in relation to Delay Event 9.758 The exchange concerned Mr Abbott’s unwillingness to acknowledge that some CMC programs he relied on for his Program of the Day already had inbuilt delay which he should have taken into account. Mr Abbott sought to justify his failure to take this inbuilt delay into account by suggesting that the Bebo Arch could have been constructed in a much shorter period. I deal with this issue in more detail below. [656] WICET’s primary criticism of Mr King is that his approach did not comply with the Contract and that he did not explain in his report why he adopted a different methodology for Delay Events 9, 10 and 11. 754 WICET’s Written Closing Submissions, [90]. 755 CMC’s Written Closing Submissions, [1164]. 756 CMC’s Written Closing Submissions, [1165]. 757 WICET’s Written Submissions, [89]. 758 T26-92, line 5 – T26-93, line 40. -- 164 of 304 -- 165 Issue 2: Methodology and programs Methodology [657] The issue is whether the Contract permits both a prospective and retrospective delay analysis. WICET submits that Mr King’s retrospective delay analysis in respect of Delay Event 9 using an “as planned” v “as built” analysis is not permitted by clause 35.5 of the Contract. [658] In my opinion the better view is that the Contract permits both a prospective and retrospective delay analysis. [659] Paragraph 3 of clause 35.5 provides that: “If the Contractor is or will be delayed in reaching Practical Completion … and within 28 days after the delay occurs the Contractor gives the Principal’s Representative a written claim … the Contractor shall be entitled to an extension of time for Practical Completion.” Clause 35.5 further provides: “The Contractor will only be entitled to an extension of time for Practical Completion pursuant to this Clause if – (B) the Contractor – (5) demonstrates to the satisfaction of the Principal that the Contractor has been or will be actually delayed in achieving Practical Completion.” [660] The use of the disjunctive “or” gives the Contractor a choice to demonstrate that either it has been actually delayed or it will be actually delayed in achieving Practical Completion. The past tense “has been” as CMC submits, contemplates looking backwards, after the delay event has expired, to demonstrate that (with knowledge of hindsight) the Contractor has actually been delayed in achieving Practical Completion. CMC further submits that the retrospective approach is particularly appropriate if the activity delayed occurs towards the end of the project, such that the time at which the claim for the extension comes to be assessed is after Practical Completion has been achieved.759 [661] WICET makes the following submission: “Whilst the word ‘has’ (much like the word ‘is’) might, viewed in isolation, suggest a retrospective analysis, the word is immediately followed the critical words by ‘or will be’. The phrase ‘has or will be actually delayed’ should have the same meaning as ‘is or will be delayed’. Further the insertion of the word ‘actually’ does not require a retrospective analysis. If that were intended, the word ‘actually’ would not have been proceeded by ‘will be’. On a proper construction, the word ‘actually’ simply emphasises that CMC is only entitled to a EOT if Practical Completion is affected.”760 759 CMC’s Written Closing Submissions, [1229]. 760 WICET’s Written Closing Submissions, [122]. -- 165 of 304 -- 166 [662] I do not accept this construction. The use of the words “has been … actually delayed” addresses past delay permitting or indeed inviting retrospective analysis. A Contractor would be entitled to an extension of time for Practical Completion if it demonstrates either a past or future delay. Further as CMC correctly submits, WICET’s construction does not give the word “actually” any work to do. [663] My interpretation of clause 35.5 as permitting both a prospective and retrospective delay analysis rest on the ordinary meaning of the term “has been or will be actually delayed”. Both parties referred to the Society of Construction Law Delay and Disruption Protocol which is an industry publication concerning delay analysis.761 This Protocol has been updated by a Rider prepared in July 2015 (Rider 1). The Protocol recognises the primacy of the Contract in undertaking any delay analysis. It states that a Contract will take precedence over the Protocol, and that the method of delay analysis will be dictated by the relevant Contract.762 Rider 1 provides in paragraphs 11 and 14: “… there was a strong argument put forward that contemporaneously submitting and assessing an EOT application and awarding an EOT on a prospective basis (specifically, through the use of time impact analysis) can sometimes lead to unrealistic results … Another key difference introduced by Rider 1 to the Protocol (and the 2nd edition) is the removal of the preference for a particular delay analysis methodology where that analysis is carried out time distant from the delay event or its effect. This is because the Contract terms, the circumstances of the project, the claim or the dispute and the available project records (amongst other matters) are all crucial factors in determining the most appropriate methodology and these matters will vary between projects. Despite this change, irrespective of the methodology, fundamentally the conclusions of the delay analysis must be sound from a common sense prospective in light of the facts that actually transpired on the project. This is because a theoretical delay analysis which is divorced from the facts and common sense is unhelpful in ascertaining whether in fact the relevant delay event caused critical delay to the completion date and the amount of that delay.” [664] The Protocol and Rider 1 recognise the primacy of the Contract. The parties referred me to a number of authorities on this issue. As these cases did not consider the actual words of Clause 35.5(B)(5) they are of limited assistance in determining whether clause 35.5 permits both a prospective and retrospective delay analysis.763 Programs [665] Pursuant to clause 35.5 (B)(1) the Contractor will only be entitled to an extension of time for Practical Completion if among other matters it has demonstrated the activities delayed 761 Exhibit 414, CMC.514.002.0579. 762 Exhibit 414, CMC.514.002.0579, Protocol, s 4.2, Rider 1, s 4.3. 763 CMC referred to Alstom Limited v Yogokawa Australia Pty Ltd & Anor (No 7) [2012] SASC 49 where Bleby J accepted Mr King’s retrospective delay analysis. WICET referred to CMA Assets Pty Ltd v John Holland Pty Ltd (No 6) [2015] WASC 217 at [323]-[325] where Allanson J considered that the words “is or will be delayed” required that delay impact be determined prospectively. -- 166 of 304 -- 167 are on the critical path in the construction program referred to in clause 33.2. Clause 35.5 does not expressly prescribe how the Contractor may demonstrate this requirement. [666] Clause 33.2 is set out in Annexure A to these Reasons. The first paragraph of clause 33.2 defines, for the purpose of clause 33, a “construction program” as being a statement in writing showing the dates by which, or the times within which, the various stages or parts of the work under the Contract are to be executed or completed. The third paragraph of clause 33.2 states that the Contractor shall furnish to the Principal’s Representative a construction program within the time and in the form specified in the Special Conditions of the Contract at Appendix F2 and will revise the construction program as specified in the Special Conditions of the Contract at Appendix F2. [667] Schedule F2 is also set out in Annexure A to these Reasons. Clause 2.5 of Schedule F2 is headed “Baseline Construction Program”. It provides that the Contractor shall submit a detailed breakdown of the program contained in Schedule C6 in accordance with clause 33.2 of the General Conditions of Contract. Once the Principal’s Representative has reviewed the construction program and gives a direction that it is suitable as a Construction Program, it shall become the Baseline Program against which actual time performance will be measured. No changes shall be made to the Baseline Program without the prior agreement, in writing, of the Principal’s Representative. [668] Clause 2.6 of Schedule F2 deals with revisions to the Baseline Program. The Contractor is required to review the Baseline Program when any one of the following events occurs:  progress of the Works falls significantly behind or otherwise departs significantly from that shown in the Baseline Program;  a contract variation is issued and the Principal’s Representative agrees the variation affects the Contract Date for Practical Completion;  there is a change in method of working adopted by the Contractor that the Principal’s Representative determines should be reflected in the Baseline Program; or  the Principal’s Representative directs that the Baseline Program be revised because in the opinion of the Principal’s Representative the Baseline Program does not reflect the actual work patterns of the Contractor. [669] There was only one Baseline Program approved in relation to the Project. The experts agreed that the Baseline Program is the appropriate starting program for their delay assessment. The experts further agree that there was no revised Baseline Program(s) as defined by Appendix F2 of the Special Conditions of the Contract submitted by CMC and/or approved by the Principal’s Representative. [670] WICET submits that the Contract requires that the critical path be determined by a reference to the Baseline Program (as amended by Mr Abbott), and not by reference to construction programs issued from time to time by CMC. Mr King assessed the effect of delay based on what he described as the “statused versions” of the Baseline Program. Mr King described the contemporaneous CMC programs as: “contemporaneous records of progress (tracking progress rather than interpretation of progress at some later time) and forecasts a bona fide planned works to completion as perceived by the Contractor at that time using the resources available, -- 167 of 304 -- 168 providing a unique view of the conditions at the time and similarly what was thought to be the critical path to completion at that time.” 764 [671] WICET submits that the working programs relied on by Mr King have no contractual status in that they were neither an approved Baseline Program or a Revised Baseline Program. WICET submits that the use of the word “the” in clause 33.2 indicates there is only one program from which criticality is assessed.765 WICET further submits that whilst the first paragraph of clause 33.2 broadly defines what constitutes a “construction program” the third and fourth paragraphs then narrow what “the” construction program will be. Those paragraphs require the furnishing and revision of a program in accordance with Appendix F2. According to WICET the best interpretation of clauses 35.5(B)(1) and 33.2 is that the program furnished and revised is the program used for the delay analysis. It is the Baseline Program as approved by the Principal’s Representative which is the program against which actual time performance is measured.766 [672] CMC submits that clause 33.2 does not refer to critical paths in the Baseline Program. Rather, it refers to critical paths “… in the construction program referred to in clause 33.2”. Under clause 33.2 the construction program is one issued by the Contractor. The term “construction program” is defined broadly in the opening words of clause 33.2 of the General Conditions. Each of the programs issued by CMC upon which Mr King assessed critical path fall within the description of a “construction program” under clause 33.2 and therefore clause 35.5(B)(1) of the General Conditions. CMC further submits that there is no requirement for the approval of the Principal’s Representative before the program becomes a “construction program” within the meaning of clause 33.2 of the General Conditions (as there is for the “Baseline Program”).767 [673] In oral submissions WICET suggested that CMC’s construction would permit a Contractor to demonstrate the activities delayed were on the critical path by reference to a “manipulated program”.768 CMC submits that its construction of clause 35.5(B)(1) makes commercial sense: “If critical path was only to be tested by reference to what was in the baseline program at day one, there would be no certainty that the principal would ever approve any revised baseline program, you would have a situation where, in a long job such as this – this was to go for more than a year – you would be testing the critical path back on a document which might have been right when the job began but is now completely out of date.”769 [674] I accept CMC’s construction. Clause 33.2 makes specific reference to the Special Conditions of the Contract at Appendix F2. Clauses 2.5 and 2.6 of Appendix F2 expressly identify the Baseline Program and the revised Baseline Program. Clause 35.5(B)(1) does not refer either to a Baseline Program or a revised Baseline Program. The reference is rather to “the construction program referred to in clause 33.2”. By clause 2 of the General Conditions words in the singular include the plural and words in the plural include the 764 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 1.2 at [4]. 765 WICET’s Reply Submissions, [253]. 766 Contract, Appendix F2, clause 2.5. 767 CMC’s Written Closing Submissions, [1246]. 768 T33-18, lines 36-47. 769 T33-73, lines 10-16. -- 168 of 304 -- 169 singular, according to the requirements of the context. The reference in clause 35.5(B)(1) to “the” construction program may be read as a reference to the construction programs referred to in clause 33.2. Clause 33.2 itself contemplates various construction programs. It commences by defining a “construction program” in wide terms. This definition contains no requirement for the approval of the Principal’s Representative before the program becomes a “construction program” within the meaning of clause 33.2. Before a construction program can become a Baseline Program however clause 2.5 of Appendix F2 requires the Principal’s Representative to give a direction that “the construction program” is suitable as a “Construction Program”. It is only then that it becomes the Baseline Program. That is, clause 35.5(B)(1) when read with clause 33.2 and Appendix F2 contemplates a construction program as defined, a construction program included in the Contract, a construction program which is furnished to the Principal’s Representative and a construction program furnished to the Principal’s Representative which is approved. Clause 33.2 in this respect provides that the furnishing of a construction program or of a further construction program shall not relieve the Contractor of any obligations under the Contract including the obligation to not, without reasonable cause, depart from an earlier construction program. [675] This interpretation of clause 35.5(B)(1) does not result in a Contractor being permitted to use a “manipulated program”. First, under the second paragraph of clause 33.2 a construction program shall not affect rights or obligations in clause 33.1. Clause 33.1 identifies one of those obligations as being that the Contractor shall proceed with the work under the Contract with expedition and without delay. Secondly, clause 35.5(B)(1) requires the Contractor to demonstrate the activities delayed are on the critical path in the construction program referred to in clause 33.2. The Contractor must also under clause 35.5(B)(5) demonstrate “to the satisfaction of the Principal that the Contractor has been or will be actually delayed in achieving Practical Completion.” As I have already observed clause 35.5(B)(1) does not prescribe how the Contractor may demonstrate that the activities delayed are on the critical path. Clause 1 of Appendix F2 provides: “The Approved Construction Program, progress reports, subsequent updates, revisions and supplementary programs as detailed in this Appendix are an essential part of the project control system used by the Principal’s Representative and the Principal in managing the Project, managing this Contract and in monitoring the progress of the Works. The information and data provided by the Contractor pursuant to this Appendix must therefore be reliable, accurate and timely in presentation. Programs, reports and data requirements contained within this Appendix F2 are considered the minimum requirements under the Contract.” [676] The Contractor is therefore obligated to provide programs that are both reliable and accurate. Further the methodology of Time Impact Analysis, as described in the Protocol is as follows: “Time Impact Analysis is based on the effect of Delay Events on the Contractor’s intentions for the future conduct of the work in the light of progress actually achieved at the time of the Delay Event…” [677] As CMC submits, in order to properly carry out Time Impact Analysis in accordance with the Protocol, consideration is required to be given to CMC’s intentions for the future conduct of the work at the time of the Delay Event. This is also consistent with common -- 169 of 304 -- 170 sense as the intent of Time Impact Analysis is to analyse the impact of a Delay Event on the Works as they would have been carried out had the Delay Event not occurred.770 Any construction programs used by a Contractor for the purposes of satisfying the requirement of clause 35.5(B)(1) would need to be of such a quality as to permit a Time Impact Analysis to be conducted. [678] CMC submits that the Contract does not permit assessment of critical path by reference to Mr Abbott’s “Program of the Day”. Mr Abbott has created a Baseline Program which is different to the approved Baseline Program. Mr Abbott made a change in the duration of the surcharge settlement from 90 days to 182 days. This duration is not reflected in the approved Baseline Program nor in any CMC construction programs. WICET submits that the creation by Mr Abbott of the SJA Adjusted Baseline Program must be the correct approach. This adjustment was simply made by Mr Abbott on instructions. In the joint expert report on delay Mr Abbott refers to a letter from Worley Parsons dated 23 March 2013 rejecting an extension of time application by CMC.771 Worley Parsons in that letter states: “According to the PR Representative’s records, placement of surcharge material for the areas adjacent to Beales Creek Bridge was completed on 12 January 2013. In accordance with the drawings and specifications the Contractor is to allow a 6 month settlement period in order to achieve the required bearing pressure prior to removal of surcharge material and final grading. This results in a forecast Date for Practical Completion in July 2013. This program error has been pointed out to the Contractor numerous times at progress meetings and finally through correspondence, however the Contractor decided to ignore this advice and persist with displaying the incorrect critical path to Practical Completion in its Program updates.” [679] Nothing in this correspondence alters the fact that the approved Baseline Program contemplated a period of 90 days rather than six months as the duration for the surcharge settlement. WICET has not identified any contractual basis that would permit Mr Abbott to make such an important change to the approved Baseline Program. CMC submits and I accept that as Mr Abbott’s “Programs of the Day” are derived from the SJA Adjusted Baseline Program it follows that none of his Programs of the Day ever satisfied the description of a “construction program referred to in clause 33.2”.772 [680] WICET seeks to impugn the reliability of the programs relied on by Mr King. Unlike Mr Abbott’s Programs of the Day, Mr King’s programs were at least contemporaneous CMC programs. Mr Abbott criticised Mr King’s reliance on these contemporaneous programs as follows: “It is not clear to me how Mr King can suggest using CMC’s Working Program which in my view suffer from many defects is appropriate just because they were formulated at a particular point in time by the contractor. Just because a program is contemporaneous does not mean that it is compliant or correct. Mr King’s methodology for assessing delays does not consider the possibility of a contractor’s intentions being misguided, ill-informed, 770 CMC’s Written Closing Submissions, [1251]. 771 CMC.011.003.0506; Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 1.2 at [1]. 772 CMC’s Written Closing Submissions, [1258]. -- 170 of 304 -- 171 incorrect or disingenuous. Mr King simply assumes (without verification) that the contractor’s programs comply with the Contract and are correct.”773 [681] WICET identifies the following matters as reflecting poorly on the contemporaneous CMC programs utilised by Mr King in his delay analysis: (a) many of the working programs showed dates for Practical Completion which differed from the contractual Date for Practical Completion; (b) the dates in the programs “fluctuated wildly” such that it is difficult to have any confidence in the veracity or reliability of the planning;774 (c) the programs were not the programs communicated by CMC to Worley Parsons on a weekly basis; (d) Mr King has not sought to verify the programs (either by their historical component or the plan for the remaining works), as required by the Protocol; (e) the programs selected by Mr King are not statused on a date close in time to the Delay Event. (f) Mr King impacts his host programs with activities representing his delays that are based on a five day calendar instead of a seven day calendar, resulting in a longer assessment of delay in some cases; and (g) Mr King should have appreciated that the CMC contemporaneous programs were inherently unreliable because of the circumstances in which they were prepared including the circumstance that they were not provided to Worley Parsons. [682] WICET submits that certain contemporaneous documents “strongly hinted at manipulation of the programs, and identified, expressly and implicitly, an ongoing intent to make the Bebo Arch the critical activity irrespective of the true position on site.”775 [683] None of these matters alter my preference for Mr King’s delay analysis. As a preliminary observation the reliability of the CMC contemporaneous Work Programs should not be viewed in vacuo. From the factual findings I have made above it is apparent that CMC was significantly delayed on the Project. WICET, through Worley Parsons and Aurecon Hatch, was largely responsible for these delays. The delays included the redesign and construction of the Bebo Arch. As I have already observed CMC did not receive the final design drawings for the Bebo Arch wingwalls until 19 September 2012 being approximately 19 days after the contractual Date for Practical Completion. The effect of the various Delay Events on CMC’s progress was the subject of lengthy and detailed evidence from Mr Vance, Mr Grey, Mr Henderson and Ms Haber. CMC has summarised in its written submissions the extensive involvement of CMC personnel in changing and updating programs.776 WICET submits that it is difficult to understand how this evidence advances CMC’s submission.777 According to WICET it does not follow from that 773 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 1.2 at [4]. 774 WICET’s Written Closing Submissions, [192(e) and (f)]. 775 WICET’s Written Closing Submissions, [204]. 776 CMC’s Written Closing Submission, [1261]. 777 WICET’s Reply Submissions, [258(b)]. -- 171 of 304 -- 172 evidence that the programs were endorsed or approved by WICET. The evidence does not however go to this issue. It is directly relevant, in my view, to the reliability of contemporaneous CMC programs. The input into these programs by Mr Vance, Mr Henderson and Mr Grey for example, constitutes input from engineers who were on the ground with detailed knowledge of the actual progress of the works and what was required to complete the works. [684] Given their extensive input it was not necessary for CMC to call Mr Storrier, who was a CMC programmer. I do not accept than an inference should be drawn against CMC for not calling Mr Storrier to the effect that his evidence would not have supported Mr King’s delay analysis.778 CMC’s summary of the relevant evidence which I accept as accurate is as follows: (a) Mr Vance gave evidence that CMC, and he personally, had involvement in changing and updating programs. (b) Mr Henderson gave evidence that he was involved in programming on a day to day basis. (c) Mr Grey gave evidence that he would help status the program in the monthly reports. Mr Grey further stated that he played an active role in formulating and reviewing the GC 09 Progress View 29 March 2013 As-Built Program. He also participated in the preparation of the construction program for the Bebo Arch. Mr Grey gave detailed evidence as to how this program was formulated. (d) Mr Grey stated that it was his practice to sit down with a programmer and provide all the information required to produce the program including the activities, the commencement and completion dates, successors, durations and predecessors. Notably, he stated this was the case for any activity he was responsible for, not just the Bebo Arch. (e) Mr Vance gave evidence that he was involved in correspondence regarding the updating of programs to reflect actual issues on-Site and affecting the progress of works. (f) Mr Vance gave evidence that the anticipated start date and the date for access to Site, came out of discussions with Worley Parsons. Specifically, Mr Knowles was aware of the dates when he approved the programs. (g) Mr Vance gave evidence that updated versions of the construction program were provided to WICET each week in a weekly report and that these programs would occasionally be discussed at weekly meetings and WICET, from time to time, would provide feedback on the updated programs. (h) Mr Vance gave evidence that the programmers for CMC and WICET liaised on a number of times in relation to preparing the programs. (i) Mr Vance gave evidence that programs were sent electronically by Vanessa Ocampo to Worley Parsons on a weekly basis. 778 WICET’s Written Closing Submissions, [73] – [79]. -- 172 of 304 -- 173 (j) Mr Henderson gave evidence that a version of the program to completion passed between CMC and WICET and there could have been internal programs to completion where different attributes are challenged to see the effect that they would have on progress. (k) Mr Grey gave evidence, in relation to the Bebo Arch works, that resources were assessed during two week look ahead meetings. These discussions would centre on the program and how resources would be distributed accordingly. (l) Mr Pancholi gave evidence that there were open discussions between Worley Parsons and CMC about the different versions of the target program (in relation to the Bebo Arch) where Worley Parsons would provide a response and feedback. These discussions involved CMC personnel taking Worley Parsons personnel, including a programmer, through the logic and sequence of the program and updating them in regards to location and duration of work over the upcoming four to six weeks. (m) Mr Henderson gave evidence that Mr Storrier was involved in preparing programs for weekly reports which were given to Worley Parsons. (n) Mr Vance gave evidence that Peter D’Costa, CMC’s planning engineer, would status programs electronically. (o) Mr Grey gave evidence that Mr Scott Harrison was a programmer from Critical Control who Mr Pancholi and Mr Grey worked with to generate programs. [685] As to WICET’s first point raised concerning the reliability of the CMC programs utilised by Mr King, it is unsurprising that the working programs show a different Date of Practical Completion to the Date for Practical Completion contained in the Contract. The Date for Practical Completion is the contractual date by which CMC agreed to have achieved Practical Completion. The Date of Practical Completion is the date on which Practical Completion was expected to be achieved. As CMC correctly submits, the reason the Date of Practical Completion should differ from the date in the Baseline Program is because the work did not go according to plan.779 [686] As to WICET’s allegation that the dates in the programs “fluctuated widely” I accept CMC’s submission that this is explicable by the fact that contemporaneous programs seek to reflect delay and therefore provide for different dates on which the Contractor expects to reach Practical Completion. A reliable program may also seek to forecast known or foreshadowed delay into its program so that it could ensure the programs were reliable indicators of the future progress of the works.780 [687] WICET’s allegation that the programs relied on by Mr King were not communicated by CMC to Worley Parsons on a weekly basis and are different in certain respects to those that were communicated, was the subject of extensive submissions by CMC781 and WICET.782 It is unnecessary to deal with these submission because, in my view, the differences between the work programs relied on by Mr King and the programs provided 779 CMC’s Written Closing Submissions, [1268]. 780 CMC’s Written Closing Submissions, [1269]. 781 CMC’s Written Closing Submissions, [1270] – [1282]. 782 WICET’s Reply Submissions, [259] – [269]. -- 173 of 304 -- 174 in the weekly reports to Worley Parsons are not significant. In three instances the Date for Practical Completion varies by as little as one day. The greatest variation is approximately 24 days. Further, the programs referred to paragraph 192(g) of WICET’s closing submissions were solely used by Mr King to check whether the delayed activities were on the critical path. I accept CMC’s submission that any minor differences in the forecast date of Practical Completion or completion of the Bebo Arch is irrelevant, as Mr King has not relied upon those dates to calculate the appropriate extension of time.783 [688] As to WICET’s submission that Mr King did not seek to verify the information within CMC’s programs, WICET in particular criticises Mr King’s opinion that the programs comprise reliable evidence of the dates on which activities actually started and finished and were forecast to start and finish. WICET submits: “There is no justification for, or substance behind, that opinion. It is simply a bald assertion that the programs are reliable. This is particularly the case when one considers the matters to which Mr King did not have regard (the weekly programs) the matters about which he was unaware (that CMC was maintaining target programs) and the fact that the programs he did use were not provided to Worley Parsons in circumstances where he conceded that he would attach more importance to programs which were provided to Worley Parsons.”784 [689] In the joint expert report Mr King agreed that he did not verify the as-built/historical information in the CMC programs including the status of the activities. With respect to the verification of the future sequences and durations in each of the CMC programs used by Mr King, other than a change to the relationship between Beales Creek and Rail Receival (with which Mr Abbott agrees), Mr King has made no other changes to the future sequence and durations to the CMC programs. Mr King relied on the forecast CMC work and did not rely on the historical component of the works except in the case of the Bebo Arch. All claimed delays excluding the Bebo Arch, did not rely on the historical component of the program for their impacting.785 Mr Abbott accepted, as detailed in the joint report, that Mr King did not rely on the historical component of the CMC working programs. In such circumstances one may readily understand why Mr King did not seek to verify the historical information. As to Mr King not verifying the as-built information, for reasons discussed below I accept the reliability of this program. The reliability of the CMC work programs and the as-built program does not simply rest on whether Mr King verified the programs. Mr Vance, Mr Grey and Mr Henderson who contributed to the insertion of the relevant dates into CMC’s programs, had the care and control of the works on a day to day basis. Their hands-on involvement in both the Project and the programming permits the CMC work programs to be used in a delay analysis. [690] WICET further questions the reliability of the programs used by Mr King on the basis that they are not statused on a date close in time to the Delay Event. Mr Abbott in the joint report states that the programs which he impacted were statused at a point in time immediately prior to the Delay Event. In his opinion Mr King does not appropriately impact the host programs used in Mr King’s delay assessment. In almost all of his assessments Mr King impacts programs with statuses that are far too old for the purposes 783 CMC’s Written Closing Submissions, [1280] – [1282]. 784 WICET’s Written Submissions, [195]. 785 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 2.7. -- 174 of 304 -- 175 of Time Impact Analysis. This, according to Mr Abbott, results in the placement of some of Mr King’s Delay Events at the wrong points in time. [691] Section 4.8 of Rider 1 provides: “The time impact analysis method involves introducing delay event sub- networks into a logic-linked baseline programme (being the ‘host’ programme) that is most contemporaneous with the delay event being considered (preferably an Updated Programme) and recalculation of this updated programme using CPM programming software in order to determine the prospective impact the delay event would have on the then predicted completion dates. The host programme for each analysis can be either a contemporaneous programme or a contemporaneously updated baseline programme (ie an Updated Programme) (the difference being the contemporaneous programme may have logic changes/activity/resource changes from the baseline programme). In either case, the analyst needs to verify that the host programmes historical components reflect the actual progress of the works and its future sequences and durations for the works are reasonable, realistic and achievable and properly logically linked with the software.” [692] Rider 1 does contemplate that the Time Impact Method involves introducing delays into the program most contemporaneous with the commencement of the delay. Mr King however, explained why he chose programs which in some instances were four weeks out from the relevant Delay Event. Mr King in his expert report on delay dated 17 August 2015786 outlined why he adopted this approach. In relation to Delay Event 1, for example, Mr King assessed the impact of this delay by reference to a CMC program of 2 December 2011. This was in circumstances where the delay is alleged to have commenced on 12 January 2012. In paragraph 109 of his report Mr King states: “I have used the 2 December 2011 programme because it most closely reflects the planned completion date for the mobilisation of the piling (i.e. 23 January 2012 versus 8 March 2012 in the 7 January 2012 programme).” [693] Mr King’s opinion is that the CMC program of 7 January 2012 was trying to second guess when the permits might be approved and issued to CMC and as such the program forecast the approval to be received by 6 February 2012 whereas the status of 2 December 2011 forecast an approval date of 16 December 2011. That is, Mr King sought to identify programs which already made allowances for the relevant Delay Event. Mr King further explained his approach in evidence: “So as at 7 January 2012, CMC had tried to second guess when they might get the permits and they’ve put in a completion date there of 6 February 2012. The effect of that is it pushes all of the piling activities into March. So the program was already building delay into it, a delay that had already been running from, effectively, November 2011. So I needed a program that, essentially, didn’t have delay in it, or much delay. The 2 December program had about eight days of delay in it, and that’s the one that I used. This one had weeks and weeks and weeks of delay built into it.”787 786 Exhibit 2A, Court Book Vol 7. 787 T24-94, lines 30-38. -- 175 of 304 -- 176 [694] WICET submits that Mr King’s reasoning in this respect does not withstand scrutiny.788 WICET further submits that Mr King’s opinion that the program represented CMC’s estimation of the anticipated delay is nothing more than speculation. CMC did not call the actual programmer responsible for reflecting the Contractor’s intentions to explain and establish what was intended by the 7 January program.789 I do not accept WICET’s submissions. I found Mr King’s explanation for his choice of programs (ie ones that did not have in-built delay) to be not only logical and a common sense approach but also correct. Mr King is a very experienced programmer. The addition to the 7 January program of weeks and weeks of delay is, in my view, readily explicable by CMC seeking to incorporate into the program allowances for the anticipated delay. Mr King’s approach cannot be described as speculative. [695] To the opposite effect Mr Abbott was unable to provide to the Court any rational explanation why he used programs, although more contemporaneous, which had in-built delay. This is demonstrated by the following exchange I had with Mr Abbott in the course of the concurrent evidence: “HIS HONOUR: Can I actually ask you, Mr Abbott, that’s simply not making sense to me … MR ABBOTT: Okay. HIS HONOUR: … because I know from the lay evidence that there was a considerably delay in obtaining the necessary waterway barrier permit. I know that as a fact. MR ABBOTT: Yep. HIS HONOUR: There’s a lot of evidence on that. It is for me, and given that we’re reporting on delay event 1, it is for me presently the most obvious reason why there’s a delay. Mr O’Donnell’s question is really quite simple. Given that the program that we’re looking at has inbuilt in it an anticipation or appreciation of that very delay in relation to permits, why isn’t that an inbuilt delay in this program and then – then, following on from there, why wouldn’t it be a mistake to actually use this program with an inbuilt delay for the purpose of assessing delay? MR ABBOTT: Yeah. I understand what you say. I understand – I understand the confusion or complication. First and foremost, time impact method is time impact method. That tells us what we are supposed to do. What this program is doing is forecasting all sorts of activities to occur at all sorts of times. I don’t know, your Honour, the reasons why they were forecasting this. It may well have been for this permit issue. It may be that they decided that it was more efficient to do something else before they did this work. I don’t know. All I know is this program doesn’t tell me, and I’ve seen nothing that tells me that this program was structured to build in a delay. It’s just simply a program. It shows a sequence of work.” [696] CMC submits and I accept that the effect of Mr Abbott’s evidence was that he was essentially powerless in the face of the required use of the Time Impact Method to 788 WICET’s Written Closing Submissions, [201]. 789 WICET’s Reply Submissions, [274]. -- 176 of 304 -- 177 consider the issue of in-built delay. A use of a more contemporaneous program that has in-built delay will infect the result of a delay analysis. I therefore prefer and accept Mr King’s choice of less contemporaneous programs that do not reflect in-built delay. [697] WICET further seeks to challenge the reliability of Mr King’s host programs because he impacts the programs with activities representing his delays that are based on a five day calendar instead of a seven day calendar, resulting in longer assessments of delays in some cases.790 Mr King did however, at the commencement of his evidence, in respect of Delay Event 1 alter the delay period by two days on the basis that an activity was of five days duration which was placed on a five day working calendar rather than a seven day working calendar. Apart from this one alteration to Delay Event 1 there was no cross-examination of Mr King on this issue. [698] WICET submits the CMC programs were “inherently unreliable because of the circumstances in which they were prepared and the circumstance that they were not provided to Worley Parsons”.791 WICET’s submission is most relevant to Delay Event 9. Mr King conducted a delay analysis in respect of Delay Event 9 by comparing CMC’s planned sequence of work and the duration for that work as scheduled in the Baseline Program. This is “as-planned” versus “as-built” methodology which Mr King considered appropriate for analysing the delay associated with the redesigned Bebo Arch. In adopting this methodology Mr King was of the opinion that there was no need to impact the delay as the as-built record is already embedded into the contemporaneous programs. WICET sought to challenge Mr King’s retrospective approach by seeking to mount a case that CMC deliberately delayed the construction of the redesigned Bebo Arch so as to ensure it remained on the critical path. Accordingly, Mr King has utilised programs for his delay analysis that were manipulated by CMC. WICET’s case in this respect fails. [699] The starting point is the sworn evidence of Mr Grey, Mr Pancholi and Mr Henderson which I accept. Mr Grey in cross-examination expressly rejected any suggestion that he prepared the Bebo Arch program and included activities into the program which were not included in the Baseline Program for the purpose of lengthening the duration of the Bebo Arch to make it the longest activity.792 Mr Pancholi also rejected the same suggestion made to him in cross-examination: “And around the end of 2012 CMC was formulating a delay claim to be made against WICET? … Yes, as a result of the various delays in the design and the other aspects, yes. And CMC pursued a strategy of diverting resources away from the Bebo Arch to other works such as the Beales Creek Bridge? … No And I suggest to you it pursued the strategy so as to make the Bebo Arch works the longest activity and to ensure it had a delay claim it could make against WICET? … No.”793 [700] I have already set out my factual findings in relation to the redesign and construction of the Bebo Arch. The increase in duration is readily explicable by reference to the delays 790 WICET’s Reply Submissions, [203]. 791 WICET’s Reply Submissions, [204]. 792 T12-48, lines 34-36; T12-50, lines 42-46. 793 T16-24, lines 45 – T16-25, line 6. -- 177 of 304 -- 178 caused in the provision of the necessary design drawings. Based on the information Mr Grey had to hand he assisted in the preparation of a revised construction program for the remainder construction of the Bebo Arch.794 Mr Grey gave the relevant CMC programmer the activities, durations, successors, predecessors and the information required to produce the program. [701] Mr Abbott in his expert report dated 2 November 2015 at [83] suggests that a direct consequence of CMC adding 305 working days to the net activities of the Bebo Arch and reducing the Beales Creek Bridge program by 73 working days was to achieve the net cumulative effect of sending the Bebo Arch section of works critical on Mr King’s assessment of the working programs which is the subject of Delay Event 9. Mr Abbott considered that this created an artificial critical path running through the Bebo Arch. Mr King’s analysis of Delay Event 9 results in 111 working days where as Mr Abbott’s analysis results in 37 working days. As to the reduction in relation to the construction of the Beales Creek Bridge Mr King assessed each reduction in time against the actual duration the activity ended up taking and found that the reductions in time were appropriate.795 As to the increases in duration of the program for the Bebo Arch as I have already observed these were due to the varied nature of the work. Given Mr Grey’s hands-on involvement in the construction of the Bebo Arch and his input into the construction program I accept the reliability of Mr King’s use of CMC’s programs in relation to the construction of the Bebo Arch. [702] WICET’s submission that the programs prepared by CMC were inherently unreliable also relies on a number of contemporaneous emails. [703] On 8 June 2012 Mr Henderson sent an email to Mr Storrier and Mr Vance which requested a change in logic in a program. Mr Henderson requested that a particular activity commence after another activity with a lag of 14 days. He further stated in this email:796 “Will need some assessment regarding the reduction of the 14 days dependent upon any effects upon the PC date given we are trying to maintain the Bebo on the critical path.” [704] Mr Henderson was cross-examined in relation to this email. WICET submits that Mr Henderson was evasive in his responses and could not explain the plain meaning of the words he used it is necessary to set out his evidence: “Now, as at the time of this email, Mr Henderson, you were aware to your knowledge, weren’t you, that CMC was trying to maintain the Bebo Arch on the critical path? … Possibly so, yes. Yep. And you were saying to Mr Storrier that some assessment would need to be made regarding what you call the reduction of the 14 days, depending upon how that affected maintaining the Bebo on the critical path? … 794 T11-30, lines 10-13; Exhibit 87, CMC.502.028.9067. 795 T24-98, lines 36-47; T24-99; T24-100; T 24-101, lines 1-22; CMC’s Written Closing Submissions, [1296]. 796 Exhibit 249, CMC.505.006.4904. -- 178 of 304 -- 179 The understanding I have was that the 14 days we were actively trying to reduce curing times, and so any reduction in the 14 days would have been in relation to the curing time that we’re talking about between the two slabs. All right. Now, am I right in reading this email, I put it to you squarely, the way I interpret this email that you’re saying to Mr Storrier that if your request for a logic change had the effect of taking of the Bebo Arch off the critical path, you would need to reconsider your request?… No, I understand that the 14 days, as I say, and historically on projects we try and reduce curing times where we can. It’s fairly commonplace. I’ll give you an opportunity to look at your words: ‘Will need some assessment regarding the reduction of the 14 days dependent upon any effects upon the PC date given we are trying to maintain the Bebo on the critical path.’ Can you explain what you meant by that?… Not really, no. I can’t recall the … All right? … The exact reason, but the reduction in curing time, as I say, is fairly commonplace. It something we would – we would ask for and use to reduce durations.”797 [705] A little further in Mr Henderson’s cross-examination this exchange occurred:798 “And I want to suggest to you that the reason at the end of June the Bebo Arch remained critical in the 29 June programme, and the 29 June programme showed no lag between the two concrete deck slab activities, was that CMC was trying to maintain the Bebo on the critical path? … I can’t recall the email and why the wording is in there, just that there was a lag potentially as a result of curing times and it was common for us to try and reduce these lags and their effects. And I want to suggest to you that to your knowledge, in terms of the preparation of programmes for the weekly reports in June 2012, the realities of what was happening on site were always subservient to the need to maintain the Bebo Arch on the critical path? … No, I wouldn’t agree with that.” [706] Simply because Mr Henderson could not recall why he used particular words in the email of 8 June 2012 does not mean he was being evasive. Further he expressly rejected any suggestion of the programs being manipulated. [707] The other relevant email is 27 September 2012. Between 26 and 27 September 2012 senior CMC commercial representatives including Mr Pancholi exchanged emails about amendments to the program to account for the Bebo Arch design. In the 27 September 2012 email sent at 9.07pm, Mr Pancholi indicated that there might be scope to change the construction sequence to save time. However the emails which followed cautioned against that. Mr Baines for example wrote: 797 T13-52, line 26 – T13-53, line 9. 798 T13-53, line 45 – T13-54, line 9. -- 179 of 304 -- 180 “Be careful of acceleration to the Bebo Arch as it will affect our 146 EOT claim, You need to filter the remaining works and look at any impact if we finish the arch early.” [708] Mr Pancholi: “Correct, I am aware of this. As discussed yesterday I have prepared two version of the target program to complete remaining works. Depending on the possibility of the approval of EOT claim, we will have to decide which program to follow.” [709] Mr Baines then wrote: “No matter what Beals [sic] Creek bridge must finish before the Bebo arch. We need to be prepared for an instruction from WP to accelerate the arch”. [710] WICET submits that the only reasonable interpretation of these emails, and the finding sought, is that CMC intended to and did tailor its programs such that the Bebo Arch remained the critical activity. In cross-examination Mr Pancholi identified that he had prepared two versions of the target program to deal with two different scenarios. One scenario was an accelerated program and one was based on the current scenario.799 Mr Pancholi gave further evidence in relation to these two programs in re-examination.800 The accelerated program was compiled in anticipation of a direction from Worley Parsons to accelerate the works at Bebo Arch. This direction was never given. Mr Pancholi did however meet with representatives of Worley Parsons where the proposed accelerated program was presented and received a favourable response. Ultimately however Worley Parsons did not give any acceleration direction in accordance with the proposed accelerated version of the program. I accept CMC’s submission that the thrust of Mr Pancholi’s sworn evidence was that rather than going slow on the Bebo Arch Mr Pancholi was seeking to accelerate the works at the Bebo Arch.801 Mr Pancholi was directly asked in re-examination whether in making decisions including about resourcing and programming for the Bebo Arch he took into account the effect of those decisions on CMC’s delay claims. Mr Pancholi’s response was as follows: “No, and I also like to point out that the Beales Creek end and the Bebo Arch are two distinct structures and they require different crew and different skillsets. So there’s no interchange of swapping resources to the other areas to delay. They are specifically allocated skill crews for Bebo Arch.”802 [711] Under clause 33.3 of the General Conditions WICET, where CMC was entitled to an extension of time for Practical Completion under clause 35.5, had the discretion to direct CMC in writing to accelerate the performance of the works at the Bebo Arch. If however compliance with an acceleration direction caused CMC to incur more cost, the difference would be valued under clause 40.5. The presentation of a program accelerating works at the Bebo Arch given by Mr Pancholi to representatives of Worley Parsons does not support WICET’s suggestion of an internal CMC agreement or understanding to manipulate programs in order to keep the Bebo Arch on the critical path. Further at the time of this alleged manipulation of programs CMC had not been granted any extension 799 T16-24, lines 5-16. 800 T16-27, line 30 – T16-29 line 3. 801 T34-10, lines 30-36. 802 T16-28, line 45 – T16-29, line 3. -- 180 of 304 -- 181 of time for the construction of the varied Bebo Arch. As such CMC was at risk of liquidated damages under the Contract of $64,108.40 per day. Mr Abbott’s “Programs of the Day” [712] In the joint expert report Mr King criticises Mr Abbott’s use of his Programs of the Day: “1. It is my opinion that Mr Abbott has not selected a contemporaneous programme as he has created a Baseline Program which is different to the Approved Baseline Programme. 2. He has then imported progress information from the CMC contemporaneous programmes and amended both percent complete and remaining duration. 3. He has also changed the percent complete from physical percent complete to durational percent complete. 4. He has then re-scheduled using a different scheduling criteria than what was contained in the Approved Baseline Programme (this occurs in some but not all of the delay events). 5. In all cases Mr Abbott is using a programme which he has created.”803 [713] I accept that Mr Abbott’s methodology relies on a program which he has created from contemporaneous CMC programs. He has, however, in creating his Program of the Day made numerous changes to the information imported from the CMC programs. Spreadsheets prepared by Mr King (Exhibit 415) show hundreds of discrepancies between the “as-built” part of Mr Abbott’s Programs of the Day and the CMC working program. Whilst some of these discrepancies may not ultimately be material to Mr Abbott’s delay assessment, there are in my view difficulties with Mr Abbott’s Programs of the Day. First, they rely on the SJA Adjusted Baseline Program in which Mr Abbott, on instructions, has increased the duration of the settlement surcharge to 182 days. Secondly, in creating his Programs of the Day Mr Abbott has chosen to use the most contemporaneous CMC working program irrespective of whether that program reflects inbuilt delay. Thirdly, Mr Abbott’s created programs do not accurately reflect the “as-built” portion of the project up to and including an accurate status of the works as at the status date of the program. This was admitted by Mr Abbott.804 Fourthly, Mr Abbott disregarded the extent to which CMC had added or removed activities in their working programs and also disregarded any sequencing changes by CMC in their working programs. The fact that Mr Abbott was selective in what information he imported into the CMC’s working programs to create his Programs of the Day is not surprising given that Mr Abbott’s programs are derived from the contract approved logic and durations in the SJA Adjusted Baseline Program. As a result, Mr Abbott’s Programs of the Day simply do not reflect additional activities, changed durations or changed sequencing which CMC had decided upon at the time the delay event occurred. This, in my view, constitutes a serious deficiency in Mr Abbott’s Programs of the Day. As observed by Mr King in the joint expert report: 803 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 2.6. 804 T31-112, lines 12-22. -- 181 of 304 -- 182 “I do not understand how Mr Abbott can state that he has relied on CMC’s intentions at the time when he is not using the CMC contemporaneous programme at the time. Neither Mr Abbott nor I were there at the time, to understand the Contractor’s thinking with regard to resources, sequence, productivities and working hours, access and materials handling. I note Mr Abbott’s reference to verification of logic, durations, status, resourcing, and productivities yet there are no specific details of what activities have been checked, changed and on what basis or assumptions made.”805 Issue 3: Critical Path Analysis [714] The Protocol defines “Critical Path” as follows: “The sequence of activities through a project network from start to finish, the sum of whose durations determines the overall project duration. There may be more than one critical path depending on workflow logic. A delay to progress of any activity on the critical path will, without acceleration or re- sequencing, cause the overall project duration to be extended, and is therefore referred to as a ‘critical delay’.” [715] Mr King considers that all of CMC’s alleged delays are critical. Mr Abbott has only identified four days of critical delay being delay associated with Delay Event 4 which is the Site-wide suspension. As I have determined that WICET was not responsible for Delay Event 4 this would result, on Mr Abbott’s analysis, to there being no days of critical delay. Surcharge settlement [716] The primary difference between the experts’ critical path analysis is the duration for settlement surcharge. Surcharge is the placement of fill to temporarily load the existing soft ground to a level greater than anticipated in the design, to effectively increase the rate of consolidation and consequently decrease the magnitude of long term post- construction settlement.806 The approved Baseline Program and every subsequent CMC program provided for a duration of 90 days. On instructions, Mr Abbott in creating his SJA Adjusted Baseline Program has used a duration of 182 days. [717] Mr Abbott has only analysed critical path based on his instruction to change the duration of the surcharge settlement to 182 days. CMC correctly submits that if the assumption is not accepted by the Court, then all Mr Abbott’s various analyses of critical path must be rejected. [718] WICET submits that the planned duration of the surcharge monitoring ought to have been six months.807 WICET accepts that the settlement had the potential to reach the necessary 805 Exhibit 2A, Court Book Vol 9, Joint Expert Report on Delay by Stephen Abbott and Gerard King dated 28 April 2016, Item 2.10 at [4]-[5]. 806 Exhibit 2, CMC.502.036.7923 (On-Site Civil Works – Supplementary Technical Specification, Section 8.19.5). 807 WICET’s Written Closing Submissions, [225]. -- 182 of 304 -- 183 level of consolidation before the expiry of six months. WICET submits, however, that the objectively appropriate planned duration should have been six months because the contract “demanded it”.808 In particular, WICET refers to clause 6.4 of the Scope of Work which deals with the OLC platform. Clause 6.4 stated: “Completion of bulk earthworks along the Overland Conveyor Platform sought of the Hanson Road corridor is required to allow the GC21 contractor to commence work on the overland conveyor construction. This area of earthworks includes fill embankment over soft ground, and construction will include approximately 6 months of surcharging. Works include: … - Placement of surcharge material - Monitoring of embankment settlement - Removal of surcharge material - Pavement works.” [719] Whether the Baseline Program should have shown a duration of six months as opposed to three months is, in my view, irrelevant. Pursuant to clause 35.5(B)(1) the Contractor is required to demonstrate that the activities delayed are on the critical path “in the construction program referred to in clause 33.2”. The critical path must therefore be analysed by reference to one of the construction programs issued by CMC pursuant to clause 33.2 of the General Conditions. Neither the approved Baseline Program nor any construction program issued by CMC ever contemplated a 182 day duration for the surcharge. Pursuant to Appendix F2 of the Special Conditions at clause 2.6, the Principal’s Representative never directed preparation of a revised construction program providing for a six month duration for the surcharge. Further, as I construe clause 6.4 of the Scope of Work, a six month monitoring period for the settlement of surcharge was not mandated. The reference to “approximately six months of surcharging” is “a nominal or approximate period in which it was expected that criteria could be achieved”.809 [720] As Mr Abbott has acted on this instruction and incorporated it into the SJA Adjusted Baseline Program upon which his Programs of the Day rely he has failed to analyse the critical path in a way that conforms to clause 35.5(B)(1) of the General Conditions of the Contract. [721] Even if I am wrong in this conclusion, CMC alternatively submits that if it is accepted that the Baseline Program should properly have provided for a six month duration for settlement of surcharge, the evidence demonstrates (and Mr Abbott conceded) that the surcharge could not be placed (and commence settling) until the piling works at Beales Creek had been completed.810 Had it been necessary I would have found, based on Mr Vance’s evidence summarised in [1325] of CMC’s Closing Submissions, that if a six month duration for surcharge was applied in assessing critical path, then it would also follow that: 808 WICET’s Written Closing Submissions, [228]. 809 CMC’s Written Closing Submissions, [1317(a)]. 810 CMC’s Written Closing Submissions, [1317], [1325]-[1329]. -- 183 of 304 -- 184 (a) insofar as the critical path ran through the settlement surcharge, it also ran through the construction of the Beales Creek Bridge, including the piling of that Bridge, in that the piling had to be completed before the surcharge could be placed; and (b) in the months February to May 2012, the critical path ran through the Rail Receival Bridge, in that the piling on that Bridge had to be completed before the piling could be undertaken on the Beales Creek Bridge. [722] It follows as CMC submits that a consequence of the shift in critical path occasioned by the adoption of a six month duration is that it also causes the critical path to run through Delay Events 1 to 7 in the report of Mr King. [723] In making these precautionary findings I have had regard to WICET’s submission that the absence of surcharging at the approaches to the Beales Creek Bridge location was driven by the fact that CMC had utilised the areas “as crane pads and laydown areas for the Beales Creek Bridge construction since March 2012”.811 Mr Vance’s evidence, which I accept, was that the surcharge on the approaches to the bridge could not be placed until construction of the bridge had reached an advanced stage, and in particular, until the deck slab and the relieving slab had been completed. This was the reason why surcharge could not be placed at the approaches to the Beales Creek Bridge. I accept Mr King’s evidence as to why it is appropriate to insert a logic link in the relevant programs between Beales Creek and the Rail Receival works if a surcharge period of six months is applied. Whilst CMC has not pleaded a case to the effect that if the surcharging is critical, the Rail Receival and Beales Creek works must also be critical, such a case did not in my view, require to be pleaded. This is because CMC’s alternative submission responds to Mr Abbott’s expert delay analysis based on the instruction to use a six month period. [724] Two further issues remain to be considered in relation to surcharge. First, was surcharge monitoring required before Practical Completion and was the monitoring of surcharge removed from CMC’s Scope of Works? CMC accepts that placement of the surcharge had to occur before Practical Completion. It also accepts that surcharge monitoring was within CMC’s Scope of Works. CMC submits that the Contract did not require monitoring of the surcharge to be finished before Practical Completion. Clause 6.5, Part 5, Section D of the Scope of Work refers to “monitoring of embankment settlement for surcharged areas including areas that have been handed over”. CMC submits that this contemplates that monitoring can occur after handover. Further, the Contract milestone dates at Schedule C-5 to the Contract provided a milestone date for placement of the surcharge material on the OLC in the area encompassing the Beales Creek Bridge by 13 June 2012, and provide for a date for Practical Completion of 30 August 2012. That leaves only 78 calendar days between placement of the surcharge and practical completion. CMC submits that this supports the notion that monitoring of the material could continue after Practical Completion. Further, there was nothing inherent in the nature of the monitoring activity that would require it to be done before Practical Completion. CMC further submits that as the removal of the surcharge was deleted from CMC’s Scope of Work any further obligation to monitor can be done after handover. WICET submits, however, that CMC had a contractual obligation to reach the design consolidation of 90%. This requirement is found in Note 7 to a contractual drawing.812 Note 7 reads: 811 WICET’s Written Closing Submissions, [245]-[248]; WICET’s Reply Submissions, [286] –[291]. 812 CMC.013.017.0374. -- 184 of 304 -- 185 “Surcharge period nominally six (6) months. Surcharge may only be removed after the contractors geotechnical engineer has assessed the settlement monitoring results and confirmed that a minimum of 90% of primary consolidation settlement expected under the permanent design load has been achieved, subject to review and approval by the principal.” [725] WICET submits that CMC had a contractual obligation to achieve 90% consolidation. CMC submits, and I accept, that properly construed Note 7 to the contractual drawing does not create a contractual obligation, rather it describes an event. The design consolidation is an event in the sense that gravity causes consolidation but removal of the surcharge may only take place once a geotechnical engineer has assessed a minimum of 90% of primary consolidation settlement. CMC’s obligation was to monitor until that event occurred but was under no obligation to achieve the event. [726] As to the second question, a site instruction sent by email on 15 January 2013 instructed that Xcel (being WICET’s audit surveyor engaged by Worley Parsons) was to survey the settlement plates every second day at the Beales Creek Bridge after filling was complete, with the data to be provided to Aurecon Hatch on a weekly basis for review. Further, that Aurecon Hatch would determine when 90% consolidation had been achieved in accordance with the contractual drawing. Thereafter Xcel undertook the readings on-Site, provided those readings to Aurecon Hatch and Aurecon Hatch determined when design consolidation had been achieved. WICET submits that by simply communicating to CMC that Xcel would undertake the monitoring of surcharge on the approaches to Beales Creek Bridge, WICET did not dispense with CMC’s obligation to achieve 90% consolidation of the embankment.813 In the final payment WICET did deduct $9,300 from the amount being paid to CMC as representing the amount WICET paid to Xcel to do the monitoring on the approaches to Beales Creek Bridge. [727] CMC submits that it should be found that these events amounted to a variation of the Contract, unilaterally issued by WICET under clause 40.1 of the General Conditions, which had the effect of omitting part of the work from CMC’s Scope of Work, namely monitoring the surcharge settlement. The site instruction does not, however, in my view constitute a direction under clause 40.1 by the Principal’s Representative to “omit any part of the work under the Contract”. As I have previously observed, there is no contractual basis for identifying the “effect” of an instruction in determining whether a variation under clause 40 has been directed. The site instruction did not in terms say that the monitoring of the settlement was removed from CMC’s Scope of Work. The fact that the amount WICET paid to Xcel was deducted from CMC’s final payment does not convert the site instruction into a direction to the Contractor to omit any part of the work under the Contract. Delay Event 1 – Beales Creek Permit Delay [728] For the reasons stated above, I prefer the approach of Mr King in determining whether the activities delayed are on the critical path. Whilst Mr King was cross-examined extensively as to his methodology, he was not challenged as to his conclusions, in applying that methodology, that each of the relevant Delay Events were on the critical path. 813 WICET’s Written Closing Submissions, [237]. -- 185 of 304 -- 186 [729] With respect to Delay Event 1, Mr King on his review of the relevant programs concluded that the Beales Creek piling work was critical and had been critical from 17 November 2011. [730] The real issue in relation to Delay Event 1 is determining the appropriate extension of time. WICET submits that there is no apparent connection between the pleaded delay period and the events which are alleged by Mr King to have caused the delay. WICET submits that the event which allegedly caused the delay occurred on 26 January 2012 when Mr Knowles gave his oral direction to mobilise to Mr Vance. Whilst the dates of impacted delay are 12 January 2012 to 17 February 2012, what Mr King has actually assessed is the extension of time duration. Mr King in cross-examination explained that the date of instruction to mobilise is not the start of the Delay Event but rather a step along the road in terms of the effect of that Delay Event on the completion of the Works. According to Mr King, what triggers the starting time for the Delay Event is the date on which the mobilisation of the piling rig became critical.814 The extension of time duration was calculated by reference to two periods. The critical delay associated with delay to the Beales Creek permit approval was 16 calendar days – that is, 30 August 2012 (and being the original Date for Practical Completion) versus 15 September 2012 (being the impacted Date for Practical Completion).815 The second period of delay associated with the down time at Beales Creek Bridge after Avopiling had mobilised was as amended a delay of 18 calendar days, that is from 15 September 2012 prior to impacting the delay to 3 October 2012 after impacting the delay.816 [731] WICET submits that the proper start date for the delay is in fact 3 February 2012 when CMC started incurring cost in respect of its piling subcontractor, Avopiling. Mr King’s analysis in assessing critical delay concerns a prolongation of the Project as a whole due to the lack of a waterway barrier permit causing critical delay. His analysis is not affected by when CMC actually commenced to incur costs in respect of Avopiling. [732] WICET further submits that Mr King has overstated the delay by approximately seven days because he has impacted the 2 December 2011 CMC program but compared the impacted Date for Practical Completion in the impacted program against the Baseline Program (rather than the unimpacted 2 December program) for the purpose of calculating the delay.817 [733] I have considered Mr Abbott and Mr King’s evidence in relation to this alleged overstatement of the delay by approximately seven days.818 When this evidence is considered in the light of Mr King’s reply report819 I do not accept that Mr King is mistaken. CMC was already anticipating delay in its 2 December program and had provided an eight day float. The 2 December 2011 program had forecast a completion date of 6 September 2012 rather than 30 August 2012. The delay in the forecast project completion date in the program was as a consequence of delays in the receipt of various permits (shown under the heading of “Delays”) necessary for the commencement of 814 T25-72, lines 21-35. 815 Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, [108] and [113]. 816 Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, [122]. 817 WICET’s Written Closing Submissions, [267(c)]. 818 T25-64, lines 20-39; T25-68, line 38 – T25-69, line 4. 819 Exhibit 2A, Court Book Vol 9, Expert Report in Reply on Delay by Gerard King dated 2 March 2016, [134] – [135]. -- 186 of 304 -- 187 piling at Beales Creek Bridge.820 As observed by Mr King in his reply report at [135], the piling mobilisation activity was in critical delay from 17 November 2011 when the late start date of the piling activity was exceeded “noting that once the late start date is exceeded all float has been consumed and the activity is in critical delay”. There is no overstatement because the program used by Mr King already contained a float of approximately eight days specifically for delay in obtaining the relevant permit. [734] I therefore accept Mr King’s extension of time duration of 34 days. Delay Event 2 – Rail Receival Permit [735] I accept Mr King’s analysis that the activities delayed were on the critical path as at the time of Delay Event 2. The appropriate extension of time is two days. Delay Event 3 – NCR 01 [736] I accept Mr King’s evidence that the activities delayed were on the critical path as at the time of Delay Event 3. Mr King inserted a new activity into the impacted 2 December 2011 program which represented the NCR 01 delay. This produced a delay to completion of 13 calendar days as a result of an actual delay of 10 calendar days and six hours. CMC’s pleaded case however is for an extension of time equal to 10 days. I will therefore allow an extension of time of 10 days. Delay Events 4 and 5 [737] In light of my findings above CMC is not entitled to any extension of time in relation to Delay Events 4 and 5. Delay Event 6 - Stop Work Direction [738] I accept that the activities delayed were on the critical path and that the appropriate extension of time is one day and seven hours. Delay Event 7 – Hammer Direction [739] I accept Mr King’s evidence that the piling at the Beales Creek Bridge was critical up until the issue of the 29 June 2012 Working Program. The appropriate extension of time is 13 calendar days. Delay Event 8 – Pyealy Creek Bebo Arch redesign delay [740] Mr King concluded that there was a delay to a critical activity of 26 calendar days in relation Delay Event 8. Mr Abbott however disagreed with Mr King’s assessment of delay not only because of the critical path. The first criticism is that the 29 June 2012 CMC program used by Mr King already incorporated adjustments to construction 820 Exhibit 2A, Court Book Vol 7, Expert Report on Delay by Gerard King dated 17 August 2015, [89]. -- 187 of 304 -- 188 activities to account for the additional work required to the Bebo Arch. WICET submits that the extended duration of these activities “may have influenced Mr King’s determination that, upon late delivery of the design, the Bebo Arch was on the critical path”.821 The CMC program had however been adjusted in circumstances where CMC was aware that additional work was going to be required to construct the Bebo Arch. The CMC program therefore used by Mr King reflected CMC’s current intention in relation to the construction of the Bebo Arch.822 [741] Secondly, Mr King is criticised for identifying 29 June 2012 as the start of the delay. Mr Abbott uses 25 July 2012 as the start date for the delay being the date the late design was provided. WICET submits that based on the lay evidence the Bebo Arch works could have started in April 2012 (if accurate design information was available) thus, the Bebo Arch activity was in delay from around that date. If the delay had been impacted in April 2012, there would have been no entitlement because the Bebo Arch works were non- critical at that time.823 CMC accepts that while it knew in April that there was a potential issue with the Bebo Arch, on Mr King’s analysis, it was not until 29 June 2012 that the Bebo Arch became critical. Mr King has therefore properly utilised a contemporaneous CMC program from the time the Bebo Arch came on the critical path to perform his analysis.824 WICET’s submission is not supported by the opinion of either Mr King or Mr Abbott. [742] I accept Mr King’s evidence that the activities delayed were on the critical path. The appropriate extension of time is 26 days. Delay Event 9 – Bebo Arch additional work delay [743] This constitutes the longest extension of time sought namely 111 working days. The dates of the impacted delay are referrable to specific works at the Bebo Arch: (a) footings – 14 August 2012 to 18 September 2012 – 35 working days; (b) rockfilled mattress – 19 September 2012 to 26 September 2012 – 8 working days; (c) backfilled footings – 17 September 2012 – 1 working day; (d) wingwalls – 13 October 2012 to 2 December 2012 – 46 working days; (e) additional backfill – 14 December 2012 to 12 February 2013 – 21 working days. [744] Mr King considered five separate and contemporaneous CMC programs in forming his opinion that the delayed activities were on the critical path. Each of the programs considered by him identified that the critical path to completion was through the Bebo Arch. To confirm that his analysis was accurate, Mr King considered CMC’s “as-built program” dated 29 March 2013. This program contains the actual start and finish dates of the various activities. He then analysed the actual critical path for the various Bebo Arch construction activities. 821 WICET’s Written Closing Submissions, [306]. 822 CMC’s Written Closing Submissions, [1392]. 823 WICET’s Written Closing Submissions, [309]. 824 CMC’s Written Closing Submissions, [1392(b)]. -- 188 of 304 -- 189 Mr King’s methodology [745] In assessing criticality in respect of Delay Event 9 Mr King adopted a retrospective approach. I have already determined that as a matter of contractual construction clause 35.5 permits both a prospective and retrospective analysis. [746] While the Contract permitted Mr King to adopt a retrospective approach WICET criticises Mr King’s use of a retrospective approach: “… Mr King’s methodology is global in nature in that it attributes all of the additional duration to the revised design. It is opportunistic for CMC to assert that the whole of the additional construction durations are due to the revised design. There are a multitude of factors which influence the activity duration: eg, labour rosters, rain days (in whole or part), decisions to move resources to other works, subcontractor availability. Mr King’s analysis accounts for none of those things.”825 [747] Mr King was cross-examined as to why he adopted a retrospective approach in respect of Delay Event 9: “Well, I thought the most accurate approach was to consider what was scheduled in the baseline program because there needed to be a starting point for analysis of what CMC allowed for the execution of that work absent the variation works, and then I considered the as constructed record contained in the CMC 29 March ‘13 program as a reasonable reflection of what actually occurred as a contemporaneous record, so that I could compare what was planned to have happened versus what actually happened. … Mr Kelly: Did you have anything more than a thought? Did you do any preparatory work to see if you could apply a time impact methodology to the Bebo Arch.? Mr King: All I did was I looked at the period of construction of the Bebo Arch which ran over – well, it started in July 2012, it ran till March 2013. That was an eighth month period. To do a time impact analysis over such a long period of time would be entirely theoretical. It wouldn’t even reflect what actually occurred.”826 [748] Mr King described his approach as “a more robust approach” because one can get variances even within a window of a month.827 I accept that Mr King, as an experienced expert in programming, adopted a retrospective approach for appropriate reasons. [749] To the contrary Mr Abbott in seeking to apply the Time Impact Method to Delay Event 9, impacted a CMC program created in September 2012 by applying “first principles” to the revised design and calculating his expected increased in duration for the relevant activities. Mr Abbott in assessing Delay Event 9 prepared a Program of the Day. He took the impacted program of the delay from Delay Event 8 and statused it with progress 825 WICET’s Written Closing Submissions, [327]. 826 T24-49, lines 3-9 and lines 36-44. 827 T24-50, lines 15-18. -- 189 of 304 -- 190 information from CMC’s working program of 15 September 2015. He then impacted the program (prospectively) to identify the impact of the delay. He: (a) considered CMC’s program at the time and after the change in design to review the work sequence adopted by CMC to execute the work; (b) assessed the change in quantities associated with the redesign based on quantities instructed to him; (c) studied the differences and the drawings to assess the proper sequence and estimated durations for each activity (and where necessary) made allowances for temporary situations such as concrete curing; (d) reviewed the Site records to gain an understanding of the activities that took place; (e) having regard to (a) – (d): (i) if the activity was not the subject of a redesign, he did not change it in his program; (ii) if the activity did not change in scope but did change in quantity, he made adjustments to the program by adding new activities to represent increased durations necessary to accommodate the changed volume of work; (iii) if the scope changed so significantly as to render an activity unnecessary, he reduced the duration to zero in the program; (iv) if the scope added work such as to require a new activity, Mr Abbott created new activities to represent the new work or an allowance of time; and (f) then determined the impact on the program having regard to the amended activities set out in (e). [750] This led to Mr Abbott’s conclusion that the Bebo Arch works were not critical and had a float of 66 working days. [751] WICET suggests that Mr Abbott’s approach reflects a degree of rigour to the delay assessment not applied by Mr King.828 I cannot accept this submission. Mr Abbott’s approach was entirely theoretical. Mr Vance’s evidence was that Mr Abbott’s program at Appendix 12.4 of his report is missing significant activities and is unrealistic in its durations of backfill and major activities including the wingwalls.829 Mr Abbott’s program does not allow for the effect on the efficiency and the construction of the Bebo Arch caused by the lack of a clearing permit. [752] In carrying out his assessment Mr Abbott referred to Rawlinson’s Construction Handbook (2015 edition). Mr King in his Reply Report notes that Mr Abbott has: (a) arbitrarily adjusted the rates contained in Rawlinson’s Construction Handbook to reflect “difficult working conditions in a rural area” but has provided no explanation 828 WICET’s Written Closing Submissions, [334]. 829 T6-63, lines 35-41. -- 190 of 304 -- 191 or justification as to the adjustments that he has made given that the adjustments made are of varying percentages for each construction element; (b) assumed a manning level for the work activities under consideration.830 [753] Mr King identified that productivity rates which prevail on a site are a function of a number of matters including location, geology, typography and the quality and skill of the resources undertaking the work. Mr King notes that neither of them were on-Site at the time that the work was performed to be able to validate any of these Site conditions. [754] Mr Abbott’s analysis presumed that the footings for the Bebo Arch could have been constructed in 22 working days. There are numerous errors in Mr Abbott’s analysis. Not only did he not account for the permit delay affecting one-third of the footings until 18 August 2012 he failed to account for the following: (a) he did not account for the footings being poured in two separate concrete pours; (b) he did not account for the higher upstand for the footings requiring more formwork, including a walk way for its construction; (c) he assumed that CMC was using two crews, which did not occur due to the late receipt of the clearing permit.831 [755] CMC in its closing submissions at [1420] to [1429] identifies a number of errors in Mr Abbott’s analysis concerning his estimate of how long the wingwall footings, wingwalls and backfilling should have taken. I find that Mr Abbott’s analysis cannot be relied on to support WICET’s submission that the duration of the construction of the footings, wingwall footings, wingwalls and backfilling of the Bebo Arch were inflated. I prefer and accept the evidence of Mr Grey as to the actual time it took to construct the Bebo Arch as redesigned. [756] I accept Mr King’s analysis that the delay activities for Delay Event 9 were on the critical path and that the appropriate extension of time is 111 days. Delay Event 10 – Financier Consent [757] At the time of Delay Event 10 the Bebo Arch work was on the critical path. The appropriate extension of time for this Delay Event is 21 calendar days. Delay Event 11 – Flood Damage Delay [758] I accept Mr King’s evidence that this Delay Event was on the critical path and the appropriate extension of time is 8 calendar days. 830 Exhibit 2A, Court Book Vol 9, Expert Report in Reply on Delay by Gerard King dated 2 March 2016, [270]. 831 CMC’s Written Closing Submissions, [1417]. -- 191 of 304 -- 192 Issue 4: Concurrent Delays [759] Mr Abbott identified concurrent delays in relation to three Delay Events. In respect of Delay Event 1 “Beales Creek Permit Delay” the concurrent delays are identified as CMC’s failure to submit a Work Method Statement 30 days prior to its works commencing and the fact that the Beales Creek pile liners were not delivered to site until 9-10 February 2012. It follows from my reasons in relation to Direction 1 for the Piling Claim that neither event identified by Mr Abbott constitutes a concurrent delay. [760] The second concurrent delay is identified in respect of Delay Event 5. As Delay Event 5 does not constitute a qualifying cause it is unnecessary to consider any alleged concurrent delay. [761] In relation to Delay Event 10 – Financier’s Consent, Mr Abbott refers to contemporaneous records which indicate that works were put on hold between 24 and 27 January 2013 because of wet weather (and two of those days were inclement Weather Events). Because wet weather is at CMC’s risk, Mr Abbott considered that those days were a Delay Event for which CMC was responsible. I have considered this rain event above in the context of Delay Event 11 – Flood Damage Delay. [762] Clause 35.5 of the General Conditions of the Contract provides (by the fifth paragraph): “Where more than one event causes concurrent delays and the cause of at least one of those events, but not all of them, is not a cause referred to in the preceding paragraph, then to the extent that the delays are concurrent, the Contractor shall not be entitled to an extension of time for Practical Completion.” [763] WICET submits that this provision, on a proper construction, must disentitle CMC to an extension of time to the extent a neutral delay is found to be concurrent with a claimed delay.832 [764] CMC submits that the concept of “delays” in clause 35.5 is referring to delays to Practical Completion (as it is only delays to Practical Completion) that entitle CMC to an extension of time and can therefore attract the operation of clause 35.5. CMC suggests that an expanded form of clause 35.5 (fifth paragraph) reflecting that interpretation would read as follows (emphasis added): “Where more than one event causes concurrent delays in achieving Practical Completion and the cause of at least one of those events, but not all of them, is not a cause referred to in the preceding paragraph, then to the extent that the delays in achieving Practical Completion are concurrent, the Contractor shall not be entitled to an extension of time for Practical Completion.”833 CMC’s construction is in my view the correct construction. [765] Mr King’s approach is that if a non-qualifying concurrent delay occurs after the alleged WICET delay, on a prospective analysis, the non-qualifying cause of delay had no effect because CMC was delayed prior to, or continued to be delayed after, the non-qualifying 832 WICET’s Written Closing Submissions, [385]. 833 CMC’s Written Closing Submissions, [1447]. -- 192 of 304 -- 193 cause.834 Mr Abbott, however, has not considered whether, in the context of rain events, the activities impacted by that rain would have been finished but for the Delay Event prior to the rain occurring. Taking Delay Event 10 as an example, Mr Abbott’s approach is that if the rain event occurs within the period of Delay Event 10 then it constitutes a concurrent delay. I accept CMC’s submission that Mr Abbott’s approach does not consider what actually occurred and does not accord with common sense or the contractual requirements.835 [766] I have already considered the effect of the rain event on Delay Event 11 above. [767] It follows that the extensions of time in respect of Delay Events 1 and 10 should not be adjusted because of the alleged concurrent delays identified by Mr Abbott. Issue 5: Other non-compliances with clause 35.5 [768] In respect of Delay Events 1, 2, 3, 6, 7 and 9 WICET submits that CMC is not entitled to an extension of time for Practical Completion because CMC has failed to comply with clause 35.5(B)(2) which provides that a Contractor will only be entitled to an extension of time if it: “(2) has complied strictly with this Clause 35.5 and in particular has given the claims and notices required by this Clause (except for the notice required by the first paragraph) strictly in the manner and within the times stipulated.” [769] WICET alleges that CMC has failed to comply with the notice requirements in clause 35.5 and in particular those required by the third paragraph of clause 35.5 (3P Notice): “If the Contractor is or will be delayed in reaching Practical Completion by a cause described in the next paragraph and within 28 days after the delay occurs the Contractor gives the Principal’s Representative a written claim (with all the necessary supporting documentation to enable the Principal’s Representative to properly assess the claim) for an extension of time for Practical Completion setting out and evidencing the facts on which the claim is based (including the extent of the delay), the Contractor shall be entitled to an extension of time for Practical Completion.” [770] Whilst WICET admits that notices were issued with respect to Delay Events 1, 2, 3 and 6 it nonetheless disputes CMC’s entitlement to an extension of time on the basis that CMC did not strictly comply with notice requirements of the third paragraph of clause 35.5. [771] CMC submits that the requirement for a 3P Notice was either discharged by CMC or has no application on the facts as: (a) WICET, by its conduct over the course of the Project, waived the requirement for strict compliance with clause 35.5(B)(2); 834 T25-103, lines 30-35. 835 CMC’s Written Closing Submissions, [1442]. -- 193 of 304 -- 194 (b) in the alternative, WICET should be estopped from insisting upon strict compliance with the requirement to submit such a notice as it represented that such compliance was unnecessary to CMC, which relied upon those representations and would now be occasioned detriment should WICET be allowed to resile from its prior position; and (c) in the further alternative, CMC complied with its obligation by providing notice to WICET that it was delayed and intended to claim time and costs as a result, which notice satisfied the requirements of clause 35.5. Findings of fact for Issue 5 [772] I make the following factual findings. [773] On 20 October 2011 CMC submitted a Notice of Delay – NOD1 relating to, inter alia, the lack of clearing permits, issues with access over railway, and the lack of a water way barrier permit at Beales Creek (that is Delay Event 1). [774] On 12 December 2011 CMC then submitted a letter referenced VAR17 claiming a 23 days extension of time and resultant delay cost pursuant to clause 36 of the General Conditions. This letter was issued outside the 28 day time frame provided in clause 35.5 for issuing a 3P Notice. [775] The Principal’s Representative did not respond to VAR17 within 28 days by either granting an extension of time or providing its reasons for not doing so. A response within 28 days by the Principal’s Representative is contemplated by the seventh paragraph of clause 35.5 which provides: “If the Contractor is entitled to an extension of time for Practical Completion the Principal’s Representative shall, within 28 days after receipt of the notice of the number of days extension claimed, grant a reasonable extension of time. If within the 28 days the Principal’s Representative does not grant the full extension of time claimed, the Principal’s Representative shall before the expiration of the 28 days give the Contractor notice in writing of the reason.” [776] On 18 January 2012, Mr Vance, Mr Henderson Mr Knowles and Mr Enright met on-Site. During that meeting, Worley Parsons sought further information relating to VAR17. [777] On 20 January 2012 CMC submitted a letter with reference VAR17-02 providing further information and an Updated Claim for an extension of time of 52 days. The Principal’s Representative did not respond to VAR17-02 within 28 days. [778] On 14 March 2012, Worley Parsons issued a letter to CMC with reference 218-0012. That letter quoted clause 35.5(B)(2) (requiring strict compliance with the notice requirements) but, despite CMC not having strictly complied with that clause, granted a three day extension of time for the Clearing Permit Delays. The letter did not raise any time bar or failure to comply with clause 35.5(B)(2) as a reason for refusing any extension of time. [779] On 18 April 2012 CMC submitted a letter to Worley Parsons proposing that a meeting be held on 26 April 2012 to discuss CMC’s claimed extensions of time. -- 194 of 304 -- 195 [780] Mr Vance and Mr Enright gave evidence in relation to the 26 April meeting. Mr Vance gave evidence that: (a) it was agreed at the 26 April meeting that CMC would resubmit the whole delay claim covering all events that had occurred up to the time of the 26 April meeting; (b) the whole delay claim was submitted on 21 August 2012 and included Delay Events that had occurred between the 26 April meeting and 3 August 2012; and (c) a conversation occurred between Mr Vance and Mr Lester King in July or August 2012 that concerned the resubmission of the delay claim including the Bebo Arch and all delay claims up to the time of resubmission, during which Mr King suggested that it would be easier to submit a simple critical path delay to resolve the delay issues, including the Bebo Arch and other claims up to the time of resubmission.836 [781] Mr Enright’s version of the 26 April meeting corroborates Mr Vance’s evidence: “Do you have any recollection of the agreement being referred to in that paragraph? … Yes. And what is your recollection of the discussion at the meeting which is being referred to in that third paragraph? … There had been a delay claim submitted at the start of the Project. Glen Mosch had sent a letter about a week previous to this trying to agree 20 days’ extension of time, but only up to a certain period, so not the full delay period. Our discussion was we need to see the entire delay to actually properly assess the claim and that was the agreement, that they would submit the entire claim as one rather than in, I guess, piecemeal fashion.”837 [782] The agreement reached at the 26 April meeting was confirmed in writing by Mr Vance in a letter dated 27 April 2012: “As agreed at a the meeting Glen Mosch, Paul McGilvray and Ben Vance from CMC and David Enright from Worley Parsons held at your Hanson Road office on the 26 April 2012, CMC will resubmit its claim to encompass the entire period for which it has suffered delays associated with clearing permits and access to the site.”838 [783] On 21 August 2012, as a direct result of the 26 April meeting, CMC submitted a claim for an extension of time pursuant to clause 35.5 of the Contract (August 2012 Claim). The August 2012 Claim: (a) sought an extension of time of 144 days for delays that occurred between 7 September 2011 and 3 August 2012; and (b) expressly referred to and relied upon a significant number of notices of delay (NOD) submitted by CMC including: 836 T7-20, line 28 – T7-21, line 44; CMC’s Written Closing Submissions, [1487]. 837 T16-58, line 46 – T16-59, line 7. 838 Exhibit 422, CMC.002.004.0284. -- 195 of 304 -- 196 (i) CMC’s NOD dated 16 May 2012 with respect to Delay Event 6;839 (ii) CMC’s NOD dated 18 June 2012 with respect to Delay Event 7;840 (iii) CMC’s NODs dated 1 March 2012,841 23 April 2012,842 2 June 2012,843 2 July 2012,844 and 11 July 2012,845 with respect to Delay Event 8. [784] On 20 September 2012, Worley Parson responded to the August 2012 Claim846 requesting that CMC submit additional supporting information in order for Worley Parsons to assess the delay issues. That letter again did not refer to or seek to rely upon the requirement to submit 3P Notices within 28 days, consistently with the agreement reached on 26 April 2012 and Worley Parsons’ prior conduct. [785] On 7 December 2012, CMC submitted a further extension of time claim pursuant to clause 35.5 (December 2012 Claim).847 In summary, CMC’s letter: (a) referred to CMC’s August 2012 Claim and numerous subsequent notices advising of ongoing critical delays including: (i) CMC’s NOD dated 4 September 2012 with respect to Delay Events 8 and 9;848 (ii) CMC’s NOD dated 10 September 2012 with respect to Delay Events 8 and 9;849 (iii) CMC’s NOD dated 14 September 2012 with respect to Delay Events 8 and 9;850 (iv) CMC’s NOD dated 21 September 2012 with respect to Delay Event 8;851 (v) CMC’s NOD dated 27 September 2012 with respect to Delay Event 8;852 (b) stated that CMC was entitled to an extension of time of 188 days for delays that occurred between 7 September 2011 and 19 September 2012; (c) stated that from 29 June 2012, the Bebo Arch was on the critical path to Practical Completion and that, based upon the revised design, the Bebo Arch would have formed the critical path from 18 March 2012; 839 Exhibit 2, WIC.502.092.3170. 840 Exhibit 2, WIC.502.104.0150. 841 Exhibit 2, CMC.503.021.9762. 842 Exhibit 2, WIC.220.014.6243. 843 Exhibit 2, CMC.505.070.4808. 844 Exhibit 2, CMC.503.020.3838. 845 Exhibit 2, CMC.503.019.9539. 846 Exhibit 2, CMC.505.085.4690. 847 Exhibit 2, CMC.505.085.2621; CMC.505.085.2623 and CMC.001.006.0160. 848 Exhibit 2, WIC.503.022.7371. 849 Exhibit 2, WIC.503.026.7266. 850 Exhibit 2, WIC.503.026.7263. 851 Exhibit 2, CMC.018.007.0242. 852 Exhibit 2, CMC.006.003.0244. -- 196 of 304 -- 197 (d) stated that the date for Practical Completion taking account of the extension of time is 6 March 2013; and (e) attached an independent expert report setting out a detailed analysis of the delay for the period. [786] Contemporaneously, on 7 December 2012, CMC submitted a claim for delay and disruption costs.853 The claim referred to CMC’s claims for extensions of time on 12 December 2011, 20 January 2012, 21 August 2012 and 7 December 2012. This claim attached three independent expert reports including, inter alia: (a) the expert delay analysis report attached to the December 2012 Claim;854 and (b) an expert report detailing the delay and disruption to piling works at Beales Creek and Rail Receival for the period 4 February 2012 to 24 May 2012.855 [787] On 21 December 2012, Worley Parsons responded to CMC’s December 2012 Claim.856 That letter did not reject the claims for non-compliance with the requirement to submit 3P Notices within 28 days. Rather the letter stated that “the PR Representative has undertaken an assessment of the Contractor’s above referenced extension of time Claim”. The PRR proceeded to uphold CMC’s entitlement to an extension of time in respect of three events: (a) Event 1 – Permit Approvals for Beales Creek; (b) Event 2 – Piling Resources Limitations (which notably purported to include various delays associated with the Rail Receival piling works); and (c) Event 3 – Revised Design for Pyealy Creek Bridge. [788] In respect of Event 1, CMC was awarded a 15 day extension of time notwithstanding that the delay for which that extension of time was awarded occurred between 10 April 2012 and 24 April 2012, and the claim was not made until some nine months later (on 7 December 2012). Worley Parsons raised no objection to the timeliness of the claim and, in fact, said nothing at all about the requirements for a 3P Notice. Even though Worley Parsons awarded CMC zero days in respect of Event 2 and Event 3, the reasons were stated to be because the delay was caused by CMC or that the works were not on the critical path, rather than non-compliance with the notice requirements.857 Waiver [789] In Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd858 Hammerschlag J considered waiver in the context of a construction contract. His Honour was considering the findings of a referee which were as follows: 853 Exhibit 2, CMC.505.085.2625. 854 Exhibit 2, CMC.001.006.0160. 855 Exhibit 422, CMC.001.003.0140. 856 Exhibit 2, CMC.504.002.6686. 857 City Inn v Shepherd Construction Limited (2008) 24 Const LJ 590; Donnison v The Employers’ Accident and Live Stock Insurance Co Ltd (1897) 24 R 681. 858 [2008] NSWSC 1163, [108]. -- 197 of 304 -- 198 “As I have noted above, the weight of evidence indicates that both parties dispensed with the need to conform with the procedural and notice provisions of the Contract. I am satisfied that Corbett (and thus CorCourt and CorCon) did not consider himself under any obligation to observe the procedural provisions nor did he require Quasar to comply with those provisions. In these circumstances, CorCourt’s denial of Quasar’s claims, based on the notice provisions in Sections H, J, L of the Contract, has no merit and must fail.” [790] In upholding the referee’s decision, Hammerschlag J stated: “A party may expressly or impliedly give up its right to insist on a contractual condition: see the Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406-7 per Mason CJ. On the evidence the referee found that that is what the plaintiff had done. By its conduct throughout it had waived a right to insist on strict performance of the conditions of the Contract with respect to the making of claims generally which included waiving its right to insist on performance of the particular formal requirements in respect of the delay claim.”859 [791] In Commonwealth of Australia v Verwayen Mason CJ observed: “According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right by acting in a manner inconsistent with that right. However, the better view is that, apart from estoppel and new agreement, abandonment of a right occurs only where the person waiving the right is entitled to alternative rights inconsistent with one another, such as the right to insist on performance of a contract and the right to rescind for essential breach.” (citations omitted)860 [792] CMC submits that WICET (and its duly authorised representatives): (a) granted extensions of time to CMC where CMC had submitted its 3P Notices for those extensions of time well outside the timeframe contemplated by clause 35.5, in circumstances where WICET was plainly aware of that requirement – this is evident from the 14 March 2012 letter in which Worley Parsons quoted the requirement to submit the 3P Notice but granted CMC a three day extension of time despite non-compliance with that requirement; (b) specifically requested that CMC withdraw its various delay claims and resubmit those claims as one global claim so that WICET could “see the entire delay to actually properly assess the claim” – this occurred during the 26 April 2012 meeting; (c) granted extensions of time to CMC for delay events where CMC had not strictly complied with the notice requirement in clause 35.5. [793] CMC therefore alleges that WICET waived the requirement for strict compliance with the notice requirement in clause 35.5. WICET now seeks to resile from that position by 859 Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1163, [110]. 860 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406-407. -- 198 of 304 -- 199 denying CMC’s entitlement for those same delay events on the basis of non-compliance with clause 35.5. CMC submits that WICET has lost the right to do so. [794] WICET submits that waiver requires the election of an inconsistent right. WICET alleges that the 26 April 2012 meeting constitutes nothing more than a decision, communicated to CMC, to continue to receive the claims (including guidance as to the form the claims would come in). This is not, according to WICET, an election between inconsistent rights sufficient to amount to waiver of the requirement to strictly comply with clause 35.5. It was permissible for WICET to continue to receive claims and reserve its position in relation to compliance with clause 35.5. The terms of the letter recording the “agreement” refer to CMC resubmitting its claim. WICET therefore submits that it must still be relevant whether CMC, in the first submission of the claim, complied with the requirements of clause 35.5.861 [795] WICET further submits that the evidence does not support the proposition advanced by CMC that there was agreement to resubmit all delays up to August 2012. The August 2012 claim related to Delay Events 6 to 8 none of which are related to access and Clearing Permits. WICET made no representations at the April 2012 meeting, about how future claims were to be submitted and which claims remained to be submitted in accordance with clause 35.5 of the Contract.862 [796] There are a number of difficulties with WICET’s submissions. First, irrespective of whether there was an agreement at the 26 April 2012 meeting for CMC to resubmit all delays up to August 2012 CMC did in fact submit a claim for an extension of time on 21 August 2012 seeking 144 days for delays that occurred between 7 September 2011 and 3 August 2012. It was this claim that Worley Parsons responded to requesting additional supporting information. Similarly in relation to the 7 December 2012 claim submitted by CMC this was also responded to by Worley Parsons. In none of Worley Parsons conduct in dealing with the extension of time claims did it reserve WICET’s right to insist on strict compliance with the notice provisions under clause 35.5. Worley Parsons accepted and decided CMC’s extension of time claims without reference to the notification requirements. [797] Worley Parsons was aware of those requirements having referred to and quoted clause 35.5(B)(2) in its letter of 14 March 2012. WICET’s conduct (through Worley Parsons) was consistent with the agreement made on 26 April 2012 that CMC would resubmit its various delay claims as one global claim rather than in a “piecemeal fashion”. Worley Parsons responded to both the 21 August 2012 claim and the 7 December 2012 claim. This conduct does not support WICET’s submission that the agreed procedure was limited to particular delay events. Worley Parson in administering the Contract in respect of CMC’s claims for extensions of time did not either require strict compliance with the notification provisions of clause 35.5 and did not decide any of these claims by reference to those provisions. By dealing with CMC’s claims for extensions of time in this way in accordance with the 26 April Agreement, WICET elected to abandon its right to rely on strict compliance with the notice provisions for all extension of time claims. [798] WICET refers to clause 48 of the General Conditions of the Contract. Clause 48 deals with waiver of conditions and provides: 861 WICET’s Written Closing Submissions, [416]. 862 WICET’s Reply Submissions, [317]-[318]. -- 199 of 304 -- 200 “Except as provided at law or in equity or elsewhere in the Contract, none of the terms of the Contract shall be varied, waived, discharged or released, except with the prior consent in writing of the Principal in each instance.” [799] The requirement for a waiver to be in writing is subject to the exception that a waiver may arise at law or in equity. Clause 48 can itself be waived by the conduct of the parties as occurred in this case. Further clause 48 cannot operate to preclude a waiver in this case. A requirement for “the prior consent in writing of the Principal” is not applicable where the contractual requirement has been waived by the conduct of the Principal’s own agent, Worley Parsons. [800] WICET also refers to the power of the Principal’s Representative under clause 35.5 to unilaterally “extend time”. The unilateral power of the Principal’s Representative however is not to extend time but rather to extend the Date for Practical Completion: “Whether or not the Contractor has made, or is entitled to make, a claim for an extension of time under this Clause 35.5, the Principal’s Representative may, in its absolute discretion, at any time and from time to time by written notice to the Contractor and the Principal, unilaterally extend the Date for Practical Completion. The power to extend any such date under the previous paragraph: (i) may only be exercised by the Principal’s Representative and the Principal’s Representative is not required to exercise its discretion under the previous paragraph for the benefit of a Contractor; and (ii) is not a direction which can be the subject of a dispute pursuant to Clause 47 or in any other way opened up or reviewed by any other person (including any arbitrator or court).” [801] WICET submits that the exercise of that power by the Principal’s Representative is not inconsistent with WICET requiring strict compliance with the notice requirements in clause 35.5. The result of this power is that, according to WICET, if an extension of time is granted without strict compliance with the timing provisions, a clear statement of waiver is required. Otherwise, CMC could not simply assume that WICET did not insist on compliance with the notice provisions.863 The unilateral power of the Principal’s Representative is simply one to extend the Date for Practical Completion. It is a power that is not required to be exercised for the benefit of the Contractor. It is a distinct and different power which the Principal’s Representative has in determining a Contractor’s claim for an extension of time. It is in the context of that exercise of power that WICET, by its conduct through Worley Parsons, waived any requirement for strict compliance with the notification provisions of clause 35.5. I therefore find that WICET has waived the right to strict compliance with clause 35.5. In light of this finding, it is unnecessary to consider CMC’s alternative submissions. [802] It follows from my findings in respect of Issues 1 to 5 that taking into consideration that CMC fails in relation to Delay Events 4 and 5, it is entitled, pursuant to clause 35.5 of the General Conditions of the Contract, to an extension of time for Practical Completion of 216 days 7 hours capped at 208 days. It further follows that WICET’s Counterclaim for liquidated damages under clause 35.6(a) of the Contract fails. 863 WICET’s Reply Submissions, [321(d)]. -- 200 of 304 -- 201 Quantum – Delay Claim [803] Clause 36 of the General Conditions of the Contract which deals with delay or disruption costs relevantly provides: “Where the Contractor has been granted an extension of time under Clause 35.5 for any delay caused by an event listed in clause 35.5(b)(i), the Principal shall pay to the Contractor such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay and for on-Site overheads attributable to the delay valued by the Principal’s Representative under Clause 40.5. The Principal’s Representative’s valuation shall exclude any off-Site overheads or profit.” Clause 36 differs from the standard AS2124 provision. The standard clause 36 simply refers to “such extra costs as are necessarily incurred by the Contractor by reason of the delay”. [804] The first construction issue concerns what is the “delay” to which clause 36 refers. For example, in relation to Delay Event 1 – Beales Creek Piling Permit – is the relevant delay the period of the impacted delay (12 January 2012 to 17 February 2012) or the delay in CMC achieving Practical Completion (34 days)? CMC’s primary submission is that the relevant delay for which Direct Costs and on-Site overheads may be awarded is the Contractor’s delay in achieving Practical Completion. CMC’s alternative submission864 is that the assessment of costs must be at the time of the relevant delay. Both quantum experts, Mr Roberts and Mr Tsipis have assessed costs for the period of the delay itself rather than CMC’s delay in achieving Practical Completion. WICET submits that the assessment ought to be carried out at the time the costs are incurred, as the assessment under clause 36 is of costs caused by delay.865 [805] CMC’s primary submission is to be preferred as the proper construction of clause 36. It is the introductory words to clause 36 that identifies the relevant delay: “Where the Contractor has been granted an extension of time under Clause 35.5 for any delay caused by an event listed in Clause 35.5(b)(i).” Any entitlement for a Contractor to have costs valued under clause 40.5 for the purposes of clause 36 only arises where it has been granted an extension of time. As is apparent from clause 35.5, an extension of time is only granted where the Contractor is or will be delayed in reaching Practical Completion by a cause described in clause 35.5(b). The written claim (required by the third paragraph of clause 35.5) is given where the Contractor is or will be delayed in reaching Practical Completion. Pursuant to clause 35.5(B)(5), in order for a Contractor to be entitled to an extension of time for Practical Completion it must demonstrate to the satisfaction of the Principal that the Contractor has been or will be actually delayed in achieving Practical Completion. [806] Clause 36 therefore, by its introductory words, identifies the relevant delay as a delay in the Contractor reaching or achieving Practical Completion. 864 CMC’s Written Closing Submissions, [1647] – [1656]. 865 WICET’s Reply Submissions, [359]. -- 201 of 304 -- 202 [807] In support of its alternative submission CMC refers to Thiess Watkins White Construction Ltd v Commonwealth.866 In that case Giles J (as his Honour then was) was considering an appeal from a referee’s decision. The relevant clause in that case was clause 35.4 which referred to “extra costs incurred … by reason of or as a result of or arising from the exercise of the Superintendent of the power to grant or allow any extension of time …”. CMC relies on the following passage from the judgment of Giles J: “When a contractor incurs extra cost as a result of delay is a question of causation, and thus a question of fact. It is not correct to tack the owner caused delays on the end of the contract and take the extra costs as the costs then incurred. The extra costs incurred by reason of the delay must be assessed by regard to the impact in fact upon the contractor’s progress … there was no error in principle in the referee assessing the extra costs as if they had been incurred at the time of the relevant delay: that must have been, in the referee’s view, the most appropriate reflection of when the delays caused the extra costs.”867 [808] In considering this passage it is important to identify the actual items of cost with which his Honour was dealing. Thiess put before the referee evidence of time-based costs per potential working day, and the referee accepted those costs save as so far as they included an allocation to the works of a proportion of Thiess’ off-site overheads. The referee, with the exception of the cost of insurance, considered that off-site overheads were “not strictly allowable since they are costs which basically are not affected by delays”. In relation to the passage relied on by CMC, Giles J was considering time-based costs per potential working day. His Honour observed that these costs varied according to the resources on- site from time to time. The referee had assessed the extra costs as if they had been incurred at the time of the relevant delays. His Honour concluded that there was no error in principle in the referee assessing the extra costs as if they had been incurred at the time of the relevant delay. His Honour observed that that must have been, in the referee’s view, the most appropriate reflection of when the delays caused the extra costs. [809] Giles J was therefore simply identifying that the question of when a Contractor incurs extra costs as the result of delay is a question of causation. This is evident with how his Honour dealt with the referee’s decision in relation to off-site overheads: “But cl 35.4 does not address loss suffered as a result of delay: it refers to ‘extra costs incurred … by reason of or as a result of or arising from the exercise by the Superintendent of the power to grant or allow any extension of time’. Equating the latter part of this phrase with delay, loss suffered by reason of delay is not the same as extra costs incurred by reason of delay. Loss may be suffered where costs are incurred which would not have been incurred at all but for the delay, or it may be suffered where the same costs are incurred as would have been incurred had there not been delay but the effect of the delay is that other work can not be undertaken and the contractor’s income is less. Only in the former case are extra costs incurred by reason of delay. I take the referee to have made this distinction, because he described the off-site overheads as costs not affected by delays: that is, he thought the same costs would have been incurred had there not been delay.”868 866 (1992) 14 BCL 61. 867 Thiess Watkins White Construction Ltd v Commonwealth (1992) 14 BCL 61, 67. 868 Thiess Watkins White Construction Ltd v Commonwealth (1992) 14 BCL 61, 77-78. -- 202 of 304 -- 203 [810] Much of this is academic because CMC as its primary submission only seeks the extra on-Site overheads attributable to the delay in it achieving Practical Completion. CMC’s claim is therefore quite simple. As CMC took an additional 208 days to achieve Practical Completion, it incurred an additional 208 days of on-Site overheads. There can be no question that the additional on-Site overheads are attributable to the delay. These on-Site overheads are to be valued under clause 40.5. [811] The second construction issue concerns what costs are recoverable under clause 36. Clause 36 identifies two costs which are recoverable: (a) such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay; and (b) on-Site overheads attributable to the delay. “Direct Costs” are defined to mean costs that are reasonably and necessarily incurred by the Contractor and which do not include any profit, loss of profit or off-Site overheads. In terms of a valuation under clause 40.5, clause 40.5(f) provides that if the valuation relates to extra costs incurred by the Contractor for delay or disruption, the valuation shall include a reasonable amount for overheads but shall not include profit or loss of profit. [812] Whilst the parties made extensive submissions in relation to this issue, they at least agree that any assessment of on-Site overheads attributable to the delay valued by the Principal’s Representative under clause 40.5 shall exclude any off-Site overheads or profit. CMC claims on-Site overheads attributable to the period for which the extension of time is granted. This is on the basis that CMC’s Contract Price only covered CMC incurring on-Site overheads up to the contractual date for Practical Completion. As CMC is faced with an extra cost for 208 days of on-Site overheads it ought to be compensated.869 For the purposes of clause 36, I accept that CMC’s claim for on-Site overheads are “attributable to the delay” because such extra on-Site overheads are incurred by the fact that CMC remained on-Site for an additional 208 days. [813] The real point of contention between the parties is how the on-Site overheads are to be valued in accordance with clause 40.5. As I have already observed, clause 40.5 prescribes a cascading regime. CMC’s primary submission is that the Contract, pursuant to clause 40.5(a), prescribes a specific rate or price to be applied in determining the value of its on-Site overheads. The alleged specified rate is found in Schedule C-4.2 dealing with Daywork Rates. Item 21 of the “Schedule of Daywork Indirect Personnel and Facilities Rates” states “Overall Composite Daily Rate (includes Staff and facilities) - $38,000”. CMC submits that the Court does not need to have regard to the detailed evidence of the quantum experts in relation to the valuation of delay costs. Rather, the appropriate amount of delay costs is simply the 208 days for the extension of time multiplied by $38,000 per day, resulting in a valuation of $7,904,000.870 [814] The first difficulty with this submission is that the Overall Composite Daily Rate is not a specific rate prescribed by the Contract to be applied in valuing on-Site overheads attributable to a delay in achieving Practical Completion. Schedule C-4, as previously discussed, relates to rates for pricing variations. A delay or disruption claim pursuant to 869 CMC’s Written Closing Submissions, [1615]. 870 CMC’s Written Closing Submissions, [1607]. -- 203 of 304 -- 204 clause 36 is not a variation. Schedule C-4.2 deals with Daywork Rates. Schedule C-4 provides variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s Representative. Schedule C-4.2 contains a schedule of Daywork Labour Rates. Schedule C-4.3 is a schedule of Daywork Constructional Plant Rates. The schedule of Daywork Indirect Personnel and Facilities Rates, which contains the Overall Composite Daily Rate of $38,000 sits between Schedule C-4.2 and Schedule C-4.3 in the Contract. Whilst this is its location in the Contract, it is not headed as a Schedule C-4 schedule. The Overall Composite Daily Rate does, however, constitute an item for a schedule which itemises “Daywork Indirect Personnel and Facilities Rates”. Further, clause 36 when read with the definition of “Direct Costs” and clause 40.5(f) only permits CMC to claim on-Site overheads excluding profit. Daywork Rates are typically inclusive of profit and off-Site overheads. As set out in “Hudsons Building and Engineering Contracts” in relation to Daywork Rates: “This expression is sometimes carefully defined in a separate schedule, but if not will usually be taken to mean a valuation on a ‘prime cost’ basis covering all the contractor’s reasonable expenditure – e.g. on the basis of the labour or any supervisory hours claimed, any relevant materials or plant items, and usually with a reasonable percentage for profit and overheads. This method of valuation is likely to be used where pricing the work is not practical and an extended completion date is not involved –e.g. work or services where there is no recognisable end product capable of being separately priced.”871 [815] The $38,000 rate should not be considered as a contractually prescribed rate under clause 40.5(a) for the purposes of clause 36 because, as a matter of construction, it is not at all clear that the rate excludes CMC’s profit and off-Site overheads. Clause 36 (read with clause 40.5(f)) excludes a Contractor’s profit and off-Site overheads. Schedule C-4.2 (page 12) deems that the specified rates for Labour, Construction, Plant and Subcontractor Services all include profit. Schedule C-4.2 is silent as to whether the rates in the Schedule of Daywork Indirect Personnel and Facilities Rates exclude profit and off-Site overheads. The pre-contractual negotiations, to which I refer below, do not reveal how the $38,000 rate was calculated and whether it excludes profit and off-Site overheads. Further CMC alleges that Schedule C-4 is a “Schedule of Rates” as defined. I have determined that it is not. If it was however, clause 49 of the General Conditions provides that the Contract Sum and any rates to be applied in calculating the Contract Sum and rates in any approved Schedule of Rates includes the Contractor’s profit and off-Site overheads. It follows that if Schedule C-4 is a “Schedule of Rates” the $38,000 rate would include CMC’s profit and off-Site overheads, neither of which may be included under clause 36. The rate cannot therefore constitute a contractually prescribed specific rate for valuing a delay claim under clause 36 as it includes profit and off-Site overheads. Whilst I do not accept CMC’s contention that Schedule C-4 is a “Schedule of Rates”, clause 49 does highlight that the $38,000 rate cannot be treated as a contractually prescribed rate in valuing a delay claim for the purposes of clause 40.5(a). [816] CMC alleges, however, that at the time of making the Contract, the parties agreed a rate for CMC’s on-Site overheads to be used should CMC be granted any extensions of time for Practical Completion. CMC alleges that this is the $38,000 rate. CMC submits that the description “Overall Composite Daily Rate (includes Staff and facilities)” on its face 871 Ian Duncan Wallace, Hudson’s Building and Engineering Contracts (Sweet & Maxwell, 11th ed, First Supplement) 163 at [7.111]. -- 204 of 304 -- 205 is not self-explanatory, as it does not clearly identify in what situation the $38,000 rate is to be applied. The ambiguity and the description, according to CMC, allows account to be taken of the surrounding circumstances in which this item was incorporated into the Contract.872 CMC refers to Codelfa Construction Pty Ltd v State Rail Authority (NSW)873 and Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd874. In Mount Bruce, Kiefel J (as the Chief Justice then was) and Keane J observed: “[108] That regard may be had to mutual knowledge of the parties to an agreement in the process of construing it is evident from Codelfa Construction Pty Ltd v State Rail Authority (NSW)875. Mason J, with whom Stephen and Wilson JJ agreed, accepted that there may be a need to have regard to the circumstances surrounding a commercial contract in order to construe its terms or to imply a further term. In the passages preceding what his Honour described as the ‘true rule’ of construction876, his Honour identified ‘mutually known facts’ which may assist in understanding the meaning of a descriptive term or the ‘genesis’ or ‘aim’ of the transaction. His Honour had earlier referred877 to the judgment of Lord Wilberforce in Prenn v Simmonds878, where it was said that ‘[t]he time has long passed when agreements … were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations’. [109] In a passage from DTR Nominees Pty Ltd v Mona Homes Pty Ltd879, to which Mason J referred880, it was said that the object of the exercise was to show that ‘the attribution of a strict legal meaning would “make the transaction futile”’. In Electricity Generation Corporation v Woodside Energy Ltd881, French CJ, Hayne, Crennan and Kiefel JJ explained that a commercial contract should be construed by reference to the surrounding circumstances known to the parties and the commercial purpose or objects to be secured by the contract in order to avoid a result that could not have been intended. [110] The ‘ambiguity’ which Mason J said may need to be resolved arises when the words are ‘susceptible of more than one meaning’882. His Honour did not say how such an ambiguity might be identified. His Honour’s reasons in Codelfa are directed to how an ambiguity might be resolved. 872 CMC’s Written Closing Submissions, [1619]. 873 (1982) 149 CLR 337 at 352. 874 (2015) 256 CLR 104 at 108-113. 875 (1982) 149 CLR 337. 876 (1982) 149 CLR 337 at 351-352. 877 (1982) 149 CLR 337 at 348-349. 878 [1971] 1 WLR 1381 at 1383-1384; [1971] 3 All ER 237 at 239. 879 (1978) 138 CLR 423 at 429, referring to Prenn v Simmonds [1971] 1 WLR 1381 at 1384; [1971] 3 All ER 237 at 240. 880 (1982) 149 CLR 337 at 351. 881 (2014) 251 CLR 640 at 656-657 [35]. 882 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 352. -- 205 of 304 -- 206 [111] In reasons for the refusal of special leave to appeal given in Western Export Services Inc v Jireh International Pty Ltd883, reference was made to a requirement that it is essential to identify ambiguity in the language of the contract before the court may have regard to the surrounding circumstances and the object of the transaction. There may be differences of views about whether this requirement arises from what was said in Codelfa. This is not the occasion to resolve that question. [112] It should, however, be observed that statements made in the course of reasons for refusing an application for special leave create no precedent and are binding on no one. An application for special leave is merely an application to commence proceedings in the Court884. Until the grant of special leave there are no proceedings inter partes before the Court885. [113] The question whether an ambiguity in the meaning of terms in a commercial contract may be identified by reference to matters external to the contract does not arise in this case and the issue identified in Jireh has not been the subject of submissions before this Court. To the extent that there is any possible ambiguity as to the meaning of the words ‘deriving title though or under’, it arises from the terms of cl 24(iii) itself.” [817] CMC also refers to the judgment of McPherson JA (with whom Pincus JA agreed) in Nosic v Zurich Australian Life Insurance Ltd886 where his Honour, after referring to Codelfa stated: “In applying these principles the first question to be considered here is whether the language of the contract is ambiguous or susceptible of more than one meaning. As to that, there can be little doubt. Few words or phrases are susceptible of only one meaning.” [818] His Honour continued: “But where, as here, the relevant expression is ambiguous, it is permissible to arrive at the objectively ascertained presumed intention of the parties by reference to matters which they knew, and to arrive at their knowledge by examining what they said at the relevant time.”887 [819] The surrounding circumstances identified by CMC concern pre-contractual negotiations. Mr Semmler was CMC’s estimator who was involved in the tender process and in pricing the project. In the course of his involvement during the tender and post-tender phase, he received a request from WICET to provide a composite rate for delay claims.888 On 21 March 2011 WICET emailed CMC attaching Addendum 0005 and a spreadsheet entitled “WICET PROJECT – BID CLARIFICATIONS No. 1”.889 At item 10 on page 2 of that 883 (2011) 282 ALR 604 at 605. 884 North Ganalanja Aboriginal Corporation v Queensland (1996) 185 CLR 595 at 643 per McHugh J. 885 Collins v The Queen (1975) 133 CLR 120 at 122. 886 [1997] 1 Qd R 67 at 78. 887 [1997] 1 Qd R 67 at 80. 888 T15-16 lines 33-35. 889 Exhibit 277, CMC.501.011.6338. -- 206 of 304 -- 207 spreadsheet Worley Parsons requested that CMC: “… submit an overall composite daily rate for indirect personnel and facilities to be applied for extensions of time to the date for practical completion.” [820] On 24 March 2011 CMC sent a letter890 to Worley Parsons enclosing (amongst other things): (a) a copy of the Bid Clarification spreadsheet which had been completed by CMC, including by the inclusion of the following in response to item 10 on page 2: “Refer attached New Schedule C-4.2.2 list of CMC indirect personnel and facilities including overall composite daily rates …”; and (b) Attachment 17, being a revised copy of Schedule C-4.2.1 including the Overall Daily Composite Rate of $38,000. [821] The schedule provided by CMC to Worley Parsons on 24 March 2011 is materially the same as the schedule in C-4.2 of the Contract. It contained the reference to “Dayworks”. CMC submits that this cements the fact that it was intended to be used for the purposes of assessing delay costs – practically speaking there is no other reason for its inclusion.891 [822] Mr Semmler explained how the $38,000 rate was arrived at: “That was a rate that we calculated at that particular point in time from the software that we use, Expert Estimation, which allows us to go and have a look at our recurring cost for indirects and also other reoccurring costs that are happening at that particular time of the project, namely environmental maintenance type things that need to be allowed for when you’re delayed.”892 [823] CMC submits that the attribution of “Dayworks” to the schedule provided containing the $38,000 rate was a misnomer that is “just a mistake”.893 As a matter of construction of the Contract, CMC submits that the Court may simply ignore the attribution “Dayworks” by discerning the parties’ intention. CMC further submits that the $38,000 rate can have no sensible application for a “Dayworks” situation. The difficulty I have with these submissions is that the Court would also have to ignore where the $38,000 rate appears in the Contract, namely in Schedule C-4, being a schedule for valuing variations or additional work directed by the Principal’s Representative to be carried out on a Unit Rates basis or a Dayworks Rates basis. CMC has not sought rectification of the Contract. Further, it was CMC which provided the $38,000 rate as part of a Dayworks Schedule. I cannot discern any proper basis for finding that the attribution “Dayworks” was simply a misnomer or just a mistake. [824] There is no dispute between the parties that ambiguity is a necessary precondition in order to have regard to extrinsic evidence. CMC submits that the ambiguity arises as to what is meant by the description “Overall Composite Daily Rate (includes Staff and facilities)”. WICET submits, however, that the question of ambiguity should not be considered in the isolated context of construing the Overall Composite Daily Rate but rather seeking to interpret that rate in the context of the Contract as a whole. WICET submits that Nosic v 890 Exhibit 278, CMC.510.001.0057 at .0060. 891 CMC’s Written Closing Submissions, [1626]. 892 T15-19, lines 35-40. 893 T34-35, lines 29-31. -- 207 of 304 -- 208 Zurich Australian Life Insurance Ltd is not authority for the proposition that, in a written contract, ambiguity can be identified by looking at one particular phrase. Nosic was a case which was concerned with a particular exception to the parole evidence rule that applies when extrinsic material is admitted to identify the subject matter of the contract. WICET refers to McPherson JA’s statement in Nosic at [79]: “The objective background facts thus identify the income of the trust as the subject matter which the insurance was designed to protect against reduction or loss arising from future disability on the part of the plaintiff. In that respect, the question here does not differ in substance or principle from that in Macdonald v Longbottom (1860) El. & El. 977; 120 E.R. 1177, where evidence of a pre-contract conversation was admitted to identify ‘your wool’ that was sold as including both wool on the plaintiff’s farm and wool which he had bought on other properties.”894 [825] I accept that the identification of ambiguity is a product of the ordinary principles of contractual interpretation. One does not look at a particular phrase in isolation and conclude that it is ambiguous, rather one looks at the contract as a whole, interprets it in accordance with orthodox principles of construction and then, at that stage, identifies whether there is an ambiguity that permits recourse to the extrinsic material.895 [826] For the purposes of a valuation under clause 40.5, the issue is not whether there is ambiguity in the meaning of the Overall Composite Daily Rate, but rather whether there is any ambiguity that this rate is a prescribed specific rate under the Contract to be applied in determining delay or disruption costs under clause 36. There is in my view no ambiguity which would permit resort to extrinsic evidence. [827] I do not accept CMC’s submission that the $38,000 rate has been mistakenly located in the contractual schedules.896 The $38,000 rate is an item in a schedule that refers to “Dayworks”. Further, there is no evidence that the pre-contractual communications culminated in any agreement that the $38,000 rate would be used to value extensions of time. The schedule supplied by Mr Semmler in response to Worley Parsons’ request expressly applied to Dayworks and did not in terms provide an Overall Composite Daily Rate “to be applied for extensions of time”. As submitted by WICET, it is unsurprising that WICET, having been presented with a Dayworks figure for a delay cost calculation, formed the Contract by putting the provided rate into a Variation and Daywork schedule and not another part of the Contract identified for housing any agreed delay cost calculation.897 [828] In arriving at my conclusion that the $38,000 rate does not constitute a prescribed specific rate under the Contract for the purposes of clause 40.5(a), I have had no regard to CMC’s post-contractual conduct.898 [829] In light of my conclusion it is unnecessary for me to consider whether the $38,000 rate constitutes a penalty as submitted by WICET. 894 WICET’s Reply Submissions, [344] – [345]. 895 WICET’s Reply Submissions, [346] citing Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 325 ALR 188, per French CJ, Nettle and Gordon JJ at 47 – 48. 896 CMC’s Written Closing Submissions, [1631] – [1637]. 897 WICET’s Written Closing Submissions, [562]. 898 CMC’s Written Closing Submissions, [1632]; WICET’s Written Closing Submissions, [563] – [574]. -- 208 of 304 -- 209 [830] As clause 40.5(a) does not apply then pursuant to clause 40.5(b) an amount is ascertained by reference to the rates or prices in a Priced Bill of Quantities or Schedule of Rates where it is reasonable to use them. Mr Roberts for his valuation, applied the rates in Schedule C-4.2 “Schedule of Daywork Indirect Personnel and Facilities Rates”. He initially did so with a reduction of 5% for profit, but a later amendment to his report had the effect that Mr Roberts simply applied the rates as they appear in the Schedule.899 I have already determined that Schedule C-4 does not constitute a “Schedule of Rates” for the purposes of clause 40.5(b). CMC in its closing submissions at [1657] identifies eight reasons why the rates in Schedule C-4.2 should be applied for the purposes of clause 36. I have addressed the thrust of these submissions in dealing with the application of Schedule C- 4 rates to the Earthworks Claim. [831] CMC’s claim should, in my view, be valued by the application of reasonable rates pursuant to clause 40.5(c). The parties raise a preliminary issue as to what is recoverable as on-Site overheads. In quantifying the on-Site overheads in respect of each Delay Event by the application of reasonable rates, there is little difference in the result arrived at by Mr Roberts and Mr Tsipis. The difficulty with the experts’ analysis is that they proceeded on a wrong interpretation of clause 36 by looking at on-Site overheads attributable to the delay to a particular activity rather than the overheads attributable to the period of the extension of time. [832] The experts differed as to what is recoverable as on-Site overheads. Mr Tsipis proceeded on the following basis: (a) He identified the overhead resources used during the execution of the Contract; (b) He allocated CMC’s resources on the job into three categories being “General”, “Civil” and “Structural”; (c) He then allocated each Delay Event a resource category (that is either General, Structural or Civil); and (d) He then proceeded to allocate those resources to the delays in accordance with the category to which the delay relates. [833] CMC submits that there is no basis for allocating CMC’s overhead resources in categories to which specific delays relate because an extension of time applies to the date for Practical Completion of the whole of the Project (and not to individual activities on the program). That is, the entirety of CMC’s overhead resources were indirectly impacted because the entirety of CMC’s overhead resources are time-related resources which, but for the delays, were detained on-Site for longer than they otherwise would have been.900 But for the delays, CMC’s resources would have demobilised from the Site on the original date for Practical Completion. [834] WICET in its Reply Submissions at [363] to [367] submits that clause 36 does not contemplate that all overheads are recoverable merely by reason of the fact of delay; indeed it requires that the delay has caused the additional overhead, or that the overhead claimed otherwise be attributable to the delay. WICET further submits that in order for the overheads to be recoverable, it must not only be time-related, but the delay must have 899 T35-63, lines 28-30. 900 CMC’s Written Closing Submissions, [1694]. -- 209 of 304 -- 210 caused the overhead to be prolonged. I accept CMC’s submissions. The causal inquiry raised by clause 36 is whether the on-Site overheads are “attributable” to the delay. The relevant delay is CMC achieving Practical Completion. CMC is under clause 36, entitled to the on-Site overheads for each of the 208 days of the awarded extension of time. [835] The difficulty I have in ascertaining the amount for on-Site overheads is that neither of the quantum experts identified an appropriate daily rate reflecting CMC’s on-Site overheads for the relevant period of 208 days. As conceded by CMC, there is no direct expert assessment which may assist the Court.901 A number of the Delay Events which were valued by both Mr Roberts and Mr Tsipis, however, occurred near or after 30 August 2012. Mr Roberts’ report contains information permitting an assessment of CMC’s on- Site overheads post 30 August 2012. Exhibit 427 identifies the relevant Delay Events occurring near or after 30 August 2012, their duration and Mr Roberts’ valuation conducted by reference to Schedule C-4.2 rates. Exhibit 427 arrives at a daily average for on-Site overheads of $24,587.09. This daily average multiplied by 208 days delay comes to $5,114,114.72. [836] There are two difficulties with Exhibit 427. The first is that it uses C-4.2 rates rather than reasonable rates pursuant to clause 40.5(c). Mr Roberts, as an alternative valuation, has used reasonable rates to all resources to arrive at a valuation of $4,474,484. Mr Tsipis has also applied reasonable rates but only to those resources he considered necessarily incurred additional costs by reason of the delays assessed by Mr King. Mr Tsipis’ valuation in this respect is $3,633,042. I have examined the Schedules to Mr Roberts’ report which evidence that he carried out the same exercise in relation to Delay Events occurring near or after 30 August 2012 using reasonable rates as well as C-4.2 rates. I will require further submissions and assistance in having Exhibit 427 re-calculated so as to reflect the use of Mr Roberts’ reasonable rates. [837] The second difficulty with the calculations in Exhibit 427 was raised by WICET in oral submissions.902 The difficulty is that Exhibit 427 does not constitute a weighted average. The total duration of the relevant Delay Events referred to in Exhibit 427 is 180 days. The total of Mr Roberts’ C-4 valuation is approximately $3,683,287. By dividing that figure by 180 days the average daily rate is reduced from $24,587.09 to approximately $20,463. The adoption of a weighted average to arrive at an average daily rate is in my view correct. This weighted average should therefore be applied in calculating the average daily rate once the relevant valuation is calculated by reference to Mr Roberts’ reasonable rates rather than the C-4.2 rates. [838] In seeking further assistance in this respect, I am not suggesting that there is not already evidence before the Court that would permit an assessment of the quantum of CMC’s Delay Claim. [839] WICET counterclaims in relation to the Delay Claim (Variation 17).903 WICET has already paid CMC $4,087,233.21 in respect of Variation 17. WICET’s counterclaim cannot be determined until CMC’s Delay Claim is quantified. 901 T35-39, line 37. 902 T36-30, line 34 – T36-31, line 22. 903 Sixth Further Amended Defence and Counterclaim, [285] – [290]. -- 210 of 304 -- 211 Environmental Management Claim (Variation 90) [840] It is common ground that WICET varied CMC’s work under the Contract to increase the size of the area in respect of which CMC had environmental obligations. It is also common ground that the variation is to be valued by the application of reasonable rates under clause 40.5(c). [841] WICET has already paid CMC the amount of $154,617.67 in respect of this variation. CMC however, claims that the value of the additional work performed calculated at reasonable rates is $224,363.72. The details of this calculation are contained in [109] of the eighth further amended statement of claim. The original area to be managed in terms of CMC’s environmental obligations was 490,665m2. The final area to be managed, as evidenced in an email from Mr Miroshnikoff to CMC dated 17 April 2013, was 600,905m2.904 This constitutes a percentage increase in area of 22.47%. The Contract in item 7 of Schedule C-3 “Environmental management and systems” provided for a lump sum of $998,616. The additional cost of environmental management of $224,363.72 claimed by CMC is calculated by applying a proportional 22.47% increase to the lump sum amount of $998,616. The amount of $154,617.67 was paid by WICET to CMC by compulsion as a result of a statutory adjudication. WICET counterclaims for the amount of $154,617.54 or such other sum as the Court finds to be the amount of the over-payment, pursuant to section 100(3) of the BCIP Act. [842] Clause 56 of the Contract deals with CMC’s environmental obligations. It provides: “The Contractor shall: (a) take all action necessary to protect and preserve the environment from harm or damage arising from or in connection with the carrying out of the work under the Contract; (b) comply with all of the requirements referred to in Clause 14.1(a) to (d) relating to the protection or preservation of the environment; (c) without limiting Clause 56(b); (i) comply with and ensure that all subcontractors and all agents and employees of the Contractor and the subcontractors comply with, any environmental authority issued under the provisions of the Environmental Protection Act 1994 (Qld) concerning the Works or the Site; and (ii) comply with any requirements relating to the protection and preservation of the environment set out in the Special Conditions of Contract Appendix F7; (d) obtain all approvals or licenses required by any of the requirements referred to in Clause 14.1(a) to (d) applicable to the work under the Contract, except those listed in Annexure Part A, and pay and indemnify the Principal against all fees, fines or other amounts payable under all environmental protection or preservation requirements in connection with any such applicable approvals or licenses; and 904 Exhibit 97, WIC.004.002.0362. -- 211 of 304 -- 212 (e) to the maximum extent permitted by law, indemnify and keep indemnified the Principal and its employees and agents against all claims, demands, actions, costs (including legal costs), charges, expenses, damages, loss, penalty, fine or other liability (including without limitation in tort, under any law), arising from or in connection with actual or threatened environmental damage, destruction or harm (including in respect of making good environmental damage or in defending claims) arising from or contributed to by: (i) acts or omissions of the Contractor, its employees, its subcontractors or their employees (whether wilful, negligent or otherwise); (ii) breach by the Contractor of its obligations under this Clause 56; or (iii) the carrying out of the work under the Contract. [843] The Special Conditions of the Contract at Appendix F7 set out numerous environmental management obligations of CMC. They include obligations relating to waste management, noise and vibration control, air pollution management, erosion and sediment control, identifying exclusion zones, cultural heritage management, chemical discharge controls and environmental analysis obligations. There are no breakdowns of the specific costs associated with different components of work comprising CMC’s environmental management works. The lump sum amount in Item 7 of Schedule C-3 represents CMC’s entitlement to the performance of all environmental management works set out in the relevant schedule. The Contract does not provide specific rates or prices to be applied in determining the value of specific components of environmental management works. The parties agree that, by way of four site directions, WICET directed a variation of the Contract to increase the size of the area in respect of which CMC had obligations relating to environmental management.905 There is a factual dispute about how much Variation 90 enlarged the size of the area in which CMC was required to discharge its environmental obligations. WICET’s primary contention is that CMC did not perform all of the work associated with its environmental obligations in the additional areas.906 According to WICET, each of CMC’s environmental obligations informed the quantum of the lump sum amount. Therefore, on WICET’s case, CMC would only be entitled to a proportional increase in the lump sum amount if CMC performed each of the individual tasks that informed the original lump sum amount. [844] Mr Vance gave evidence of the extra work required in relation to installing and maintaining environmental controls because of the increased area CMC had to clear and its relationship with cost:907 (a) CMC was required to install additional environmental controls including sediment fences, sediment basis and channels, rock checks, mulch berms, particularly in the area at the rear of the GPN Borrow Pit, and near an additional haul road.908 905 Eighth Further Amended Statement of Claim, [101]; Sixth Further Amended Defence and Counterclaim, [82]. 906 WICET’s Written Closing Submissions, [1659] – [1660]. 907 T7-42, line 47 – T7-50, line 24. 908 T7-45, lines 26-43. -- 212 of 304 -- 213 (b) There is a relationship between the area of open ground and the extent of environmental controls,909 because the amount of water run off you need to control is directly proportional to the area that is cleared.910 Mr Miroshnikoff accepted that additional clearing of the kind which occurred on the Project would typically lead to some form of additional environment controls which would be required to control sediment and run off.911 (c) The cost of environmental controls comprised the vast majority of the figure of $998,616 at item 7 of Schedule C-3. In particular: (i) although item 7 included the cost of compiling environmental management plans, if further areas were cleared then additional work on management plans would have to be undertaken by updating or incorporating new annexures912 so that only “some small part” of the figure at item 7 is “not related to area”;913 (ii) other things that might be included in the figure (such as environmental training and handling waste or dangerous goods) were “all minor in scope compared to the main works”914, that is, “the control of sediment and erosion on the site, the basins, the silt fences, the mulch berms …”.915 (d) During the project CMC in fact spent substantially more time (10,423 hours)916 – on environmental management than contemplated by Schedule C-3 (6,867 hours)917 – an increase of a little over 50%. [845] Mr Vance conceded that CMC did not undertake all of its environmental obligations in the additional area. The relevant exchange during Mr Vance’s cross-examination was as follows:918 “Now, I wanted to suggest to you that CMC’s environmental management activities extended beyond clearing to matters which were unaffected by an increase in the cleared areas?--- So in terms of putting together plans for erosion and sediment control, etcetera, you do another area, you need to do more. In terms of monitoring, you need to do more but it still might be the same number of people. So I’d agree that some small part of this in terms of cost is not related to area.” [846] Mr Vance went on to confirm examples of CMC’s environmental obligations which were not proportionally related to clearing, including: (a) preparation of management plans;919 909 T7-45, lines 1-4; T7-45, lines 12-21. 910 T7-45, lines 1-10. 911 T19-24, lines 6-36. 912 T10-29, lines 30-31; T10-29, lines 37-39. 913 T10-29, lines 32-33. 914 T10-29, line 45. 915 T10-60, lines 26-28. 916 T7-46, line 34 – T7-46, line 4. 917 CMC.508.001.1564, Schedule C-3, Item 7, “Direct Man Hours”). 918 T10-29, lines 28-33. 919 T10-29, lines 35-39. -- 213 of 304 -- 214 (b) undertaking environmental training;920 and (c) handling of waste or dangerous goods management during the course of the project.921 [847] Mr Tsipis also opined on the issue:922 “I accept that an increase in the terrestrial area that requires environmental management would cause the cost of environmental management to increase. However, I do not accept that the increase in environmental management area would affect all of the environment management tasks included in the Contract and specifically in Schedule C-3 Pay Items 7 and 19 to 33. It is apparent from the plain reading of Schedule C-3 that Pay Item 7 ‘Environmental Management and Systems’ encompasses more scope than simply activities associated with Site related tasks that would possible be affected by the increase in environmental management area. In this respect, I note that Pay Item 7 also includes the following Pay Items, which in turn refer to MRS Standard Work Items in MRS51 Environmental Management …” [848] The issue for the Court in carrying out a valuation pursuant to clause 40.5(c) is to determine whether CMC’s approach constitutes the application of reasonable rates or prices. For the following reasons I am satisfied that it does. [849] First, WICET criticises CMC’s methodology in seeking a proportional increase to the entire lump sum item. It relies on the concessions of Mr Vance and the opinion of Mr Tsipis as set out above. There is however, a sufficient proportional relationship between an increase in area and CMC’s environmental obligations under the Contract. I accept Mr Vance’s evidence of the extra work that was required in relation to installing and maintaining environmental controls because of the increased area. It is not to the point that an increase in area would necessarily affect all of the environmental management tasks included in the Contract. Whilst the lump sum amount in respect of CMC’s environmental obligations is informed by the actual works required to be performed, the nature of the environmental obligations set out in clause 56 of the Contract and Appendix F7 is such that in some areas of the Site, no works may be required, and in other areas more work may be required. The lump sum amount therefore accounts for the uneven distribution of the works required across the Site. In this sense, the lump sum amount in Item 7, Schedule C-3 represents the risk and responsibility undertaken by CMC. Whilst CMC also made an allowance for other activities these other activities were minor in comparison to the primary works undertaken, that is “the control of sediment and erosion on the site, the basins, the silt fences, the mulch beams”.923 There is no perfect way of conducting the valuation. I accept CMC’s approach is reasonable. [850] Secondly, WICET, through Mr Miroshnikoff, had previously agreed with CMC’s methodology. His email of 17 April 2013 states: 920 T10-29, lines 41-42. 921 T10-29, lines 44-45. 922 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, [346] – [347]. 923 T10-60, lines 26-28; CMC’s Written Closing Submissions, [1721]. -- 214 of 304 -- 215 “Gents, Further to our meeting last Thursday 11 April 2013, please refer below to our response to VAR 090 regarding environmental management. In general, we agreed the following:  An alternate cost assessment method is difficult. It was agreed that current method is acceptable.  Areas that were cleared and handed over to other Contractors are to be excluded from the claim.  The PRR to review clearing plan and assess areas that do not apply. The PRR has assessed the additional areas as per attached plan. Based on the plan attached, the following areas are assessed as being excluded from the claim; 1. GC07 laydown area – Area 46,349m2. GC07 laydown area was handed-over to GC07 Contractor immediately after clearing complete. Therefore additional environmental management does not apply. 2. Contractor haulroads – Area – 49,173m2. In accordance with Part 5 Section D – Scope of Work, Clause 4.6 the Contractor is responsible to use existing, upgrade or construct haulroads as necessary to haul material from the borrow area to the works areas. Therefore it is deemed that any allowance for environmental management for these areas are already included in the relevant lumpsum item. With respect to the above, the revised variation amount is calculated as: Original Area: 490,665m2 Final Area: 696,427m2 Less: GC07 laydown (46,349m2) Haulroads (49,173m2) Revised TOTAL: 600,905m2 Percentage increase 22.5% Original Value of Item 7 $918,616.00 Additional cost $206,389.60 [based on additional 22.5% area] We trust you agree to the revised calculation above. -- 215 of 304 -- 216 Please do not hesitate to contact the undersigned should you have any further queries.”924 (emphasis added) WICET submits that this email should not be interpreted as a concession that CMC’s methodology for valuing Variation 90 was or is considered appropriate, or was approved by WICET. As explained by Mr Miroshnikoff during his cross-examination:925 (a) the purpose of his proposing a proportional methodology was simply to resolve the dispute in respect of Variation 90; (b) it was a solution devised by him in the absence of CMC being able to provide the evidence he had requested; (c) he disagreed with the claim and that he was looking to try and move forward on some claims and WICET was happy to look at how he could do that.926 Mr Miroshnikoff’s evidence was as follows: “And can you recall during the meeting whether you expressed any view about that method in terms of its appropriateness or otherwise?--- Yeah, look, I did express a view right at the start of the conversation that, no, we did not agree to that method. We didn’t think it was appropriate.”927 [851] Mr Miroshnikoff’s evidence is difficult to reconcile with the views he expressed in his email. The email expressly stated that it was agreed that the current method was acceptable. The email also set out a revised calculation to which CMC’s agreement was sought. In those circumstances I do not accept Mr Miroshnikoff’s recollection that he expressly stated that he did not agree with this method. [852] WICET submits that Mr Miroshnikoff’s acceptance of CMC’s methodology was made in a without prejudice meeting and in without prejudice correspondence, for the purpose of resolving a dispute. I do not accept this submission. The email was tendered at trial and provided to WICET’s quantum expert, Mr Tsipis. I construe Mr Miroshnikoff’s email as constituting an agreement that CMC’s methodology would be applied in valuing Variation 90. I therefore accept CMC’s submission that the email contains admissions against interest made by WICET that the original area CMC had to manage was 490,665m2 and that the total area CMC ultimately had to clear was 600,905m2.928 [853] Thirdly, I do not accept WICET’s submission that CMC has miscalculated the additional area. The area was admitted by WICET as set out in Mr Miroshnikoff’s email. Mr Tsipis calculated the original area requiring environmental management to be 527,849m2. He compared that with the area certified against the relevant Schedule C-3 items in the Final Certificate and determined that the percentage increase in the area over the original Scope of Works to be 14.91%. I accept CMC’s submission that Mr Tsipis’ calculation is theoretical and was not put to Mr Vance. It is reasonable in my view to proceed on the percentage increase to be applied to the lump sum as recorded in Mr Miroshnikoff’s email. 924 Exhibit 97, WIC.004.002.0362. 925 T19-25, line 40 – T19-26, line 18. 926 WICET’s Written Closing Submissions, [1682] – [1683]. 927 T17-52, lines 43-46. 928 CMC’s Written Closing Submissions, [1726]. -- 216 of 304 -- 217 [854] I therefore accept CMC’s claim for a further $69,746.05 in respect of Variation 90. It follows that WICET’s counterclaim concerning Variation 90 fails. Geolon 600 Claim (Variation 63) [855] This claim concerns the proper valuation of Variation 63. This variation required CMC to install Geolon 600 on the Reclamation C Bunds where previously Geolon 400 was specified. [856] The variation was directed by drawing number 1530-C-DR-0291 Revision 2, which specified the use of Geolon 600 in areas that had previously specified Geolon 400. It is an admitted variation between the parties. CMC has been paid $1,429,602.96 to date in respect of the work related to Variation 63.929 CMC claims an additional amount of $240,192.61.930 [857] WICET submits that the amount it owes CMC is $158,069.65. WICET pleads however, that it owes CMC $171,688.42 in respect of Variation 63.931 The difference between the parties’ figures according to Mr Roberts and Mr Tsipis is $60,288.40.932 Both experts value this variation under clause 40.5(c) of the Contract. The issue is what is a reasonable rate or price for the admitted variation. [858] There are two matters in dispute between the parties. The first concerns whether there should be an additional allowance for profit and overheads arising from the extra cost of installing Geolon 600 above the cost of installing Geolon 400. The second is whether there should be an additional allowance for the plant and labour to cover the extra area over which Geolon 600 had to be installed. Profit and Overheads [859] CMC claims it is entitled to be paid an additional $51,880.40 by WICET as a reasonable mark-up for profit and overheads as a result of the variation. It may be accepted that a valuation of a variation should include a reasonable amount for profit and overheads. Mr Roberts allowed 12.5%, Mr Tsipis did not. [860] Mr Roberts applied a 12.5% mark-up for profit and overheads only to additional material required as a result of the variation. Mr Roberts’ approach, in my view, is to be preferred as reflecting the application of reasonable rates and prices for the purpose of clause 40.5(c) of the Contract. [861] Whilst item 61 of Schedule C-3 already includes profit and overheads associated with the Geolon activity, Mr Roberts’ mark-up is only referable to the additional material required. [862] Mr Tsipis accepted that unless a mark-up for profit is allowed on the extra cost of Geolon 600, CMC’s profit margin or profit recovery would be reduced compared to if no variation was ordered.933 Mr Tsipis also accepted that there was a range of additional overheads 929 Eighth Further Amended Statement of Claim, [93]. 930 Eighth Further Amended Statement of Claim, [94]. 931 Sixth Further Amended Defence and Counterclaim, [75(d)]. 932 Exhibit 2A, Court Book Vol 17, Schedule to Experts’ Joint Report on Quantum dated 16 July 2016, [6]. 933 T31-103, line 25 – T31-104, line 5. -- 217 of 304 -- 218 likely incurred as a result of the variation.934 Despite these acknowledgments, Mr Tsipis did not make any allowance for profit and overheads. [863] Mr Roberts explained why his approach did not involve double counting:935 “MR ROBERTS: On the additional – on the additional cost of material between the cost of material for 600 and 400 only. So my additional overheads and profit only applies to the extra cost of material between purchasing 400 and 600 but actually I adopted Mr Tsipis’ – this is Mr Tsipis’ – basically this format is Mr Tsipis’ format so I just adopted his format. So the only difference really is the fact I have added 12 and a-half per cent profit. MR KELLY: That’s correct. MR ROBERTS: Yes. MR KELLY: And my suggestion to you is your methodology really involved CMC receiving two lots of profit and overhead. MR ROBERTS: That’s not correct. MR KELLY: Well, it receives profit and overhead in terms to the extent that that was included in the pay item in respect of 70 per cent approximately of the work which it never performed. MR ROBERTS: Correct. MR KELLY: And then it receives another lot of profit and overhead as you’ve imposed it for 12 and a-half per cent. MR ROBERTS: Only on the extra cost of the material. That’s just isolated only the extra cost of the material between the Geolon 400 and 600. So there’s an extra over cost in buying the material. That’s the only extra overheads and profit.” I accept Mr Roberts’ evidence. [864] In cross-examination, Mr Tsipis accepted that Mr Robert’s allowance was a reasonable rate to apply under the Contract to take account of extra overheads and profits.936 [865] The allowance of $51,880.40 for additional overheads and profit should be allowed. Extra plant and labour [866] The second issue is whether the costs of plant and labour to install Geolon 600 should be pro-rated. [867] CMC claims $8,408.00 to account for the area variation and additional labour required. [868] CMC was required to install Geolon 600 over an increased area, being 108,579m², compared to the original 102,060m². Accordingly, CMC seeks an allowance for the additional labour required. 934 T31-104, lines 7-14. 935 T31-100, line 26 – T31-101, line 6. 936 T31-105, lines 7-15. -- 218 of 304 -- 219 [869] The original amount payable for installation of the Geolon 400 was $838,933.20. That amount is specified in Schedule C-3 of the General Conditions at item 61. [870] CMC submits that as it was required to install the Geolon 600 over an increased area, it is reasonable to allow some additional time for labour. Mr Roberts allows for this by a pro-rata increase in the man-hours contained in Schedule C-3 from 26.5 days to 28.2 days. Mr Tsipis makes no allowance. [871] WICET submits that Mr Roberts oversimplifies the relationship between the duration shown in a program for installation of material and the quantity of material. [872] Mr Tsipis and Mr Roberts however agree that an additional two persons were required for the installation, but disagree on the amount of time the two labourers were required. Mr Roberts’ approach, even if considered simplistic, at least attempts to apply a reasonable rate for the purposes of clause 40.5(c) of the Contract. [873] Mr Roberts applied a proportional allowance to adjust the 26.5 days of labour by the difference between the agreed final quantity of Geolon 600 (108,579m²) and the original contract quantity of Geolon 400 (102,060m²). The difference between these figures is 6.39%. Mr Roberts applied an allowance of 6.39% to the 26.5 days of labour, which represents the 28.2 day adjustment included in his report. [874] In cross-examination, Mr Roberts accepted that the time period in the Baseline Program (being the 26.5 days) included installation activities such as establishment and planning which bore no proportional relationship to the quantity or type or material to be installed. Mr Roberts also acknowledged that his calculations did not consider whether there would be no increase in the installation activity. [875] Even with these acknowledged shortcomings in his approach, I accept that a proportional percentage increase results in a reasonable rate. I therefore value CMC’s claim in relation to Variation 63 as follows: Agreed Value: $1,588,333.00 (as between the experts) Profit and Overheads: $51,880.40 Plant and Labour: $8,408.00 $1,648,621.40 Less amount already paid by WICET $1,429,602.96 $219,018.44 I note that WICET submits that the Agreed Value does not reflect what the experts actually agreed. On WICET’s calculation the Agreed Value should be $1,533,612.21.937 The evidence before the Court however of the Agreed Value is that as shown in the experts’ joint report. 937 WICET’s Written Closing Submissions, [1689] – [1691]. -- 219 of 304 -- 220 Bank Guarantee [876] The parties agree that:938 (a) On 11 October 2011, pursuant to clauses 5.2, 5.3 and 5.4 and Annexure Part A of the General Conditions, CMC provided WICET with two unconditional Bank Guarantees being: (i) ANZ Bank Guarantee DG79263115 for $1,923,251.94 dated 7 October 2011; and (ii) ANZ Bank Guarantee DG79323115 for $1,923,251.94 dated 7 October 2011. (b) WICET issued a Certificate of Practical Completion to CMC on 27 March 2013.939 (c) On or about 2 May 2013, WICET returned ANZ Bank Guarantee DG79263115 to CMC. (d) WICET issued the Final Certificate pursuant to clause 42.8 of the General Conditions on 7 May 2014.940 [877] The Final Certificate showed a net balance of $12,269.507.88 owing from CMC to WICET.941 This balance was calculated in accordance with WICET’s right under clause 42.10 of the General Conditions to set off any amount owing to it by way of debt or claim. [878] CMC contends that under clause 42.8, WICET was required to return Bank Guarantee DG79323115 within 14 days of the issue of the Final Certificate.942 [879] The final paragraph of clause 42.8 provides (emphasis added): “Within 14 days after the issue of a Final Certificate which certifies a balance owing by the Principal to the Contractor, the Principal shall release to the Contractor any retention moneys or security then held by the Principal.” [880] WICET alleges that upon issuance of the Final Certificate, it provided that an amount was owing to WICET by CMC such that WICET was not obliged to return the Bank Guarantee pursuant to clause 42.8 of the General Conditions. WICET has not, to the date of these proceedings, called on the Bank Guarantee which it still holds. [881] CMC submits that whether WICET has any entitlement to retain or draw upon the Bank Guarantee will depend upon the Court’s finding in relation to the various claims. If the Court finds for CMC such that, at the time of issuance of the Final Certificate, an amount was properly owed by WICET to CMC, then the Bank Guarantee should properly be returned to CMC. 938 Eighth Further Amended Statement of Claim, [225A]-[225E]; Sixth Further Amended Defence and Counterclaim, [246A] – [246D]. 939 Exhibit 2, CMC.505.017.8451. 940 Exhibit 2, CMC.508.002.0414. 941 Exhibit 2, CMC.508.002.0414. 942 Eighth Further Amended Statement of Claim, [225D]. -- 220 of 304 -- 221 [882] CMC has reserved the right to make further submissions in relation to the return of the Bank Guarantee upon receipt and consideration of this judgment. Interest [883] CMC claims interest is payable on two bases: under the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act) and pursuant to clause 42.9 of the Contract. Interest under the Contract [884] Clause 42.9 of the Contract provides, relevantly: “42.9 Interest on Overdue Payments If any moneys due to either party remain unpaid after the date upon which or the expiration of the period within which they should have been paid then interest shall be payable thereon from but excluding the date upon which or the expiration of the period within which they should have been paid to and including the date upon which the moneys are paid. The rate of interest shall be the rate stated in the Annexure and if no rate is stated the rate shall be 18 percent per annum. Interest shall be compounded at six monthly intervals.” [885] WICET admits that CMC is entitled to the payment of interest on any moneys held to be due and payable to CMC:943 (a) calculated at the rate of 8% per annum and compounded at six monthly intervals; (b) from the date on which those moneys were required to have been paid to CMC under the Contract; (c) until those moneys are actually paid to CMC. [886] WICET contends that there is a real question as to whether the claims made in the proceeding were in fact made under the Contract (and thus, WICET suggests, payable under the Contract). WICET also foreshadows a submission that interest would not be payable from a date under the Contract.944 It is not necessary at this stage to consider these submissions as both WICET and CMC reserve the right to make further submissions in relation to interest payable under the Contract in the case of an award favourable to CMC.945 943 Eighth Further Amended Statement of Claim, [226]; Sixth Further Amended Defence and Counterclaim, [244A]; WICET’s Written Closing Submissions, [1725]. 944 WICET’s Written Closing Submissions, [1726]. 945 CMC’s Written Closing Submissions, [1758]; WICET’s Written Closing Submissions, [1728]. -- 221 of 304 -- 222 Interest under the QBCC Act [887] Section 67P of the QBCC Act provides for the payment of interest at a “penalty rate”946 where an amount is required to be paid under a “building contract”, and the time for payment has passed without payment being made. [888] The regime in section 67P of the QBCC Act is only enlivened if the Contract the subject of this proceeding is a “building contract”. A building contract under the QBCC Act is a contract for “building work”.947 [889] “Building work” is defined to include the construction, renovation or repair of a building (which is defined as any fixed structure948) or the renovation, alteration, extension, improvement or repair of the building. Building work also includes ancillary work such as site work, preparation of plans and contract administration relating to the building. However, building work does not include work of a kind excluded by the Queensland Building and Construction Commission Regulation 2003 (Qld) (QBCC Regulation).949 [890] WICET submits that the work under the Contract was not building work. It accepts that there is authority for the proposition that only a small amount of building work is required under a contract for it to be considered a building contract. As observed by McMurdo J (as his Honour then was) in Monadelphous Engineering Pty Ltd & Muhibbah Construction Pty Ltd trading as Monadelphous Muhibbah Marine v Wiggins Island Coal Export Terminal Pty Ltd950 a “building contract” may be one in which only some of the work required is “building work”. [891] Contrary to WICET’s submissions, CMC submits that the Contract is a “building contract” within the meaning of that term in the QBCC Act, and section 67P of that Act is thereby engaged. A contract will be a “building contract” not only if a small amount of building work is contemplated but any building work whatsoever, no matter how insignificant in the context of the Contract as a whole.951 [892] CMC by reference to the front page of the Instrument of Agreement in the Contract, which contains the approved warning under section 67V of the Queensland Building Services Authority Act 1991 (Qld), submits that whilst not determinative, the parties specifically treated the Contract as a building contract under the QBCC Act. All that may be inferred is that the warning was placed on the Instrument of Agreement for the avoidance of doubt. As correctly submitted by WICET, some of the other drafting in the Contract indicates that the parties were unsure about the applicability of the QBCC Act.952 [893] CMC has identified four categories of work which it submits are “building work” under the QBCC Act: three types of pavement works and a rope bridge. 946 Which means – 10% a year plus the rate comprising the annual rate, as published from time to time by the Reserve Bank of Australia, for 90 day bills. 947 Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), s 67AAA. 948 QBCC Act, Schedule 2. 949 QBCC Act, Schedule 2. 950 [2015] QSC 160 at [15]. 951 CMC’s Written Closing Submissions, [1761]. 952 See for example, clause 42.2 of the General Conditions of the Contract; WICET’s Reply Submissions, [374]. -- 222 of 304 -- 223 (a) Pavement works for the Rail Receival Bulk Earthworks Package [894] Under the Sequence of Works heading in the Scope of Work document,953 section 6.2 provides: “6.2 Rail Receival Bulk Earthworks Completion of the rail receival bulk earthworks is required to allow the GC07 contractor to commence work on the dump station civil works construction. Works include: … ● Pavement works” [895] In section 7.5 of the Scope of Work document,954 pavement works are stated to mean, relevantly: “Hardstand pavements for the Rail Receival area, including the arrival and departure bridge abutments rail formation, form part of the scope of work and include: ● Subgrade preparation, including excavation (box-out), filling and compaction ● Supply, place and compact unbound materials (pavement base and submission-base) ● Finishing and trimming to grade and level.” [896] CMC submits that the work described in relation to the Rail Receival pavement is the construction of a road (otherwise known as pavement). CMC asserts that a road, or in this case, the pavement, is a fixed structure. Roadworks are excluded from the definition of the building work in the QBCC Act only if the road is constructed for public use.955 CMC submits that the road is not excluded as “building work” because it was not developed for the public use of driving or riding of motor vehicles. Here the express contractual purpose of the pavement at the Rail Receival work front was “… to allow the GC07 contractor to commence work on the dump station civil works construction”. CMC submits that this is important for two reasons: (a) first, the pavement is not intended for public use (and the roadworks exclusion in the QBCC Regulation does not apply). The intent of the pavement is expressly for a subsequent contractor to commence an unrelated contract package in the Rail Receival area; and (b) secondly, the fact that the purpose of the pavement is for use by a subsequent contractor means that the construction of the pavement is permanent works and not temporary works (in the context of what is required under the Contract).956 953 CMC.508.001.1990 at .2022. 954 CMC.508.001.1990 at .2032. 955 QBCC Regulation, Schedule 1AA, Item 14. 956 CMC’s Written Closing Submissions, [1772]. -- 223 of 304 -- 224 WICET submits however, that the pavement works should not be considered “building work” because: (a) the pavements, as described in the scope identified by CMC, comprise three layers of rock and fill: subgrade, base and subbase; (b) accordingly, the pavements were works within the exclusion for “Excavating” and “Earthmoving” set out in item 32 of the QBCC Regulation. That the pavements can fit this description is apparent from the Baseline Program. For example, on page 2 of 16, there is an activity under the heading “general earthworks” for “excavation, all materials – box out for pavements – rail receival” (excavation). There are then further activities for unbound (that is unsealed) pavements (see page 3 of 16) (earthmoving). Item 32 of Schedule 1AA of the QBCC Regulation excludes “work consisting of earthmoving and excavating”. If the pavement constitutes earthmoving and excavation it will not be “building work”. The full text of section 6.2 under the Sequence of Works heading in the Scope of Work document957 reads: “6.2 Rail Receival Bulk Earthworks Completion of the rail receival bulk earthworks is required to allow the GC07 contractor to commence work on the dump station civil works construction. Works include: ● Clearing, grubbing, stripping as defined ● Drainage and civil works ● Cut and embankment earthworks ● Rail loop bridge abutment earthworks, ● Pavement works.” [897] Whilst the pavement works fall under the title Rail Receive Bulk Earthworks and the construction of the pavement involved excavation, the pavement work was more than simply earthmoving and excavating. I have already identified section 7.5 of the Scope of Work document.958 Section 7.5 is headed “Roadworks and Pavements”. The hardstand pavements for the Rail Receival area include not only excavation (box-out) but also the supply place and compact unbound materials (pavement base and subbase) and finishing and trimming to grade and level. Such works appropriately fall under the heading of section 7.5 “Roadworks and Pavements”. The pavement works, in my view, constitute roadworks rather than earthmoving and excavation works. [898] WICET’s alternative submission is that the pavement works were temporary.959 In Monadelphous, McMurdo J observed that something which was built only to facilitate the construction of a structure, rather than as something to have a use after the performance of the Contract, is different. His Honour did not accept that such a 957 CMC.508.001.1990 at .2022. 958 CMC.508.001.1990 at .2032. 959 WICET’s Reply Submissions, [376(c)]. -- 224 of 304 -- 225 “temporary” structure could be a “building” in the relevant respect. His Honour further stated: “According to my reasoning in para [31], this road did not make the Contract a building contract because it is not proved that it was constructed for the purpose of remaining on the land as a fixed structure after the performance of the Contract. Another contractor is now constructing a permanent road in the place of this temporary road. It is far from demonstrated that the contractual intention was to produce a structure, in the form of the dirt road, which was to remain intact after the performance of the Contract.”960 [899] By reference to Monadelphous and section 2.2.3 and clause 5.5 of the Scope of Works, WICET submits that the pavement works were temporary. The pavement works for the Rail Receival Bulk Earthworks package were, however, intended for use by a subsequent contractor. That is, the pavement works were to remain after the performance of the Contract. They were not, in that sense, temporary. (b) Pavement Works for the Rail Receival Access Road [900] Under the Sequence of Works heading in the Scope of Work document,961 section 6.3 provides: “6.3 Rail Receival Access Road Completion of the Rail Receival Access Road works and construct the railway overpass bridge is required to allow safe access from Reid Road to the WICT dump station site in particular for the GC07 construction package. Works include: … ● Pavement works” [901] The same observations I have made apply to these pavement works. The express contractual purpose of the pavement works of the Rail Receival work front was to allow the GC07 Contractor to commence work on the dump station civil works construction. (c) Pavement Works for the Overland Conveyor Platform package [902] Under the Sequence of Works heading in the Scope of Work document,962 section 6.4 provides: “6.4 Overland Conveyor Platform Completion of bulk earthworks along the Overland Conveyor Platform south of the Hanson Road corridor is required to allow the GC21 contractor to commence work on the overland conveyor construction. This area of 960 Monadelphous Engineering Pty Ltd & Muhibbah Construction Pty Ltd trading as Monadelphous Muhibbah Marine v Wiggins Island Coal Export Terminal Pty Ltd [2015] QSC 160, [54]. 961 CMC.508.001.1990 at .2022. 962 CMC.508.001.1990 at .2022. -- 225 of 304 -- 226 earthworks includes fill embankment over soft ground, and construction will include approximately 6 months of surcharging. Works include: … ● Pavement works” The express contractual purpose of the pavement works of the OLC platform work front was to allow the GC21 Contractor to commence work on the OLC construction. As submitted by CMC, at least two paved roads were specifically constructed to facilitate the work of future contractors. There was no requirement in the Contract for CMC to deconstruct those paved roads. Nor was there any evidence to suggest that these roads were public roads. [903] As I have found that the pavement works constitute “building works” for the purposes of the QBCC Act, it follows that the associated electrical works in relation to the pavement works for the OLC platform package also constitute “building work”. (d) Fauna Bridges [904] Under the Scope of Works heading in the Scope of Work document,963 section 7.9 provides: “7.9 Fauna Rope Bridges The GC09 construction package includes the supply and installation of two fauna rope bridges over the overland conveyor in accordance with drawings WIG-1000-C-DR-0100, 0101 and 0102.” [905] The fauna rope bridges, were fixed to the ground and passed over the OLC “… in accordance with drawings WIG-1000-C-DR-0100, 0101 and 0102.” CMC submits that the fauna bridges are fixed structures (or a building as that term is defined in the QBCC Act).964 I accept WICET’s submission that there is insufficient evidence to determine whether the rope bridges are fixed structures for the purposes of the definition of “building work”. It is not clear on the evidence whether the rope bridges would be permanent or removed once the OLC was constructed.965 [906] In light of my findings that the pavement works constitute “building work” I conclude that CMC is entitled to interest payable pursuant to section 67P of the QBCC Act. WICET’s Counterclaim [907] WICET does not press its counterclaim in relation to Variation 103 (Pyealy Creek Bebo Arch). I have already dealt with WICET’s counterclaims in respect of Environmental Management (Variation 90), the Delay Claim (Variation 17) and its counterclaim for liquidated damages. There are three further matters to consider in relation to the counterclaim: 963 CMC.508.001.1990 at .2034. 964 CMC’s Written Closing Submissions, [1788]. 965 WICET’s Reply Submissions, [377] – [381]. -- 226 of 304 -- 227 (a) WICET’s counterclaim in relation to adjudication fees and interest. This concerns WICET’s entitlement to claw back amounts awarded under the BCIP Act. (b) OLC Claim (Variation 30). WICET seeks to claw back an amount of $476,364.83 in relation to the OLC Claim awarded to CMC in the first BCIP Act adjudication. (c) The Final Certificate and Scott Schedule. WICET claims two sums in the alternative from CMC in relation to overpayments made in the course of the Contract being: (i) $3,704,788.38; (ii) in the alternative, $3,819,893.79. (a) Adjudication Fees and Interest [908] WICET seeks to recover adjudication fees of $90,878.63. This constitutes half of the adjudication fees being $45,320 for the first adjudication and adjudication fees of $50,114.49 for the second adjudication. On 16 February 2013 an adjudicator awarded CMC the sum of $9,308,081.53. On 5 June 2013 an adjudicator awarded CMC the sum of $2,845,972.39. On each occasion WICET was required to pay interest on the adjudicated amount at the rate of 10%. WICET seeks to recover these interest payments in the amount of $52,356.86. [909] WICET relies on section 100(3) of the BCIP Act, which in effect provides that in any proceedings before a court in relation to any matter arising under a construction contract: (a) the court must allow for any amount paid to a party to the contract in any order it makes in those proceedings; and (b) may make orders it considers appropriate for the restitution of any amount so paid, and any other orders it considers appropriate, having regard to its decision in the proceedings. WICET submits that if and to the extent the Court concludes that CMC had no legal right (apart from the interim right established by the adjudication decisions) to the payment of all or part of the sums paid pursuant to the adjudication decisions, the Court should make an order requiring CMC to repay the sums paid.966 These claims are identified as items in the Final Certificate.967 [910] By WICET’s closing submissions, it has revised its claims in respect of adjudication fees and interest downwards.968 It now seeks to recover amounts in respect of adjudication fees and interest on a basis proportionate to the amounts it alleges should not have been payable in the adjudications as follows:969 (a) in respect of the first adjudication, the payment from CMC to WICET of $35,503.41 in interest and $37,939.23 in fees; and 966 WICET’s Written Closing Submissions, [1749]. 967 Final Certificate, CMC.508.002.0414 at .0430, Scott Schedule Cells 30, 31, 33 and 48. 968 WICET’s Written Closing Submissions, [2152] and Annexure C. 969 WICET’s Written Closing Submissions, [2154] and Annexure C. -- 227 of 304 -- 228 (b) in respect of the second adjudication, the payment from CMC to WICET of $4,462.39 in interest and $21,308.18 in fees. [911] WICET’s counterclaim for adjudication fees and interest fails. WICET has not been substantially successful in clawing back amounts paid pursuant to the BCIP Act adjudications. It would therefore be inappropriate for the Court to make an order for CMC to pay to WICET the costs and interest it paid as a result of being subject to adverse adjudication decisions. [912] There are further difficulties identified by CMC with WICET’s counterclaim. First, clause 42.8 of the Contract does not permit WICET to include in the Final Certificate amounts for adjudication fees and interest. Clause 42.8 provides that the Final Certificate may certify the amount which “… is finally due from the Principal to the Contractor or from the Contractor to the Principal under or arising out of the Contract or any alleged breach therefore.” WICET does not plead that its entitlement to the recovery of the adjudication fees and interest arises as a result of a breach of the Contract by CMC. The amounts paid by WICET in the first and second adjudications arise not out of a contractual obligation, but rather out of a statutory obligation. The obligation to pay the adjudicator’s fees arose pursuant to section 35(3) of the BCIP Act. The obligation to pay interest on the adjudicated amounts arose pursuant to section 15(2) of the BCIP Act.970 (b) OLC Claim (Variation 30) [913] Part of CMC’s claim for Variation 30 in the first BCIP Act adjudication was for the cost of being unable to haul from the OLC Cut to the Reclamation C Bunds over the Beales Creek Bridge. CMC was awarded $476,364.83 in relation to the OLC Claim. WICET contends that CMC has no valid legal entitlement to the payment of any amount for the OLC Claim. [914] CMC submits, and I accept, that WICET bears the onus of proving that it has overpaid CMC.971 CMC contends that WICET has failed to discharge this onus.972 [915] The nature of the OLC Claim is that because of WICET’s failure to obtain appropriate permits CMC could not utilise an intended haul road across Beales Creek to haul material. The claim as articulated in CMC’s Adjudication Application was as follows: “In reliance on this scope of works, in its tender, CMC provided and planned for a haul route down an existing site road form the OLC Cut down the Overland Conveyor Corridor across the Beales Creek bridge to the Reclamation Bunds (see the proposed Traffic Management Plan (OLC Cut Haul). In order to construct the OLC Cut Haul across the Beales Creek bridge, CMC was required to perform works on the bridge. The Contract anticipated that WICET would obtain the permits to allow works to proceed on the Beales Creek Bridge as the permits for works on the 970 CMC’s Written Closing Submissions, [1808]. 971 Industrial Installations & Relocations Pty Ltd v Leiner Davis Gelatin International Ltd (Unreported, Supreme Court of Victoria, Rolfe J, 5 May 1998); Currie v Dempsey (1967) 69 SR (NSW) 116 at 125. 972 CMC’s Written Closing Submissions, [1749]. -- 228 of 304 -- 229 Beales Creek Bridge and the Pyealy Creek Bridge are identified as WICET’s responsibility in Appendix 1 of Special Condition F7 – Table 1.2 of the WICET Construction Environmental Management Plan... Further, the minutes of the Site Readiness Meeting held on 16 September 2011 record the PRR’s advice that ‘Worley expect all Project and Tenure permits to be supplied by WICET in readiness for site mobilisation.’ … The failure of WICET to obtain the necessary environmental permits for temporary works, including but not limited creek crossing at Beales and Pyealy creek and haul roads to access the site meant that the haul roads followed a convoluted route… The effect of no crossing at Beales Creek meant that:  access to the northern side of Beales Creek was dependent upon construction advancing sufficient of the reclamation bunds from the West to support construction traffic; and  the round trip haul distance from the OLC cut to the reclamation bund increased from 4km to 8km. CMC submits that the lack of provision of a permit for works on the Beales Creek bridge and resulting change to the OLD Cut Haul constitutes a variation to the scope of work…” [916] CMC has admitted in its reply that its tender Traffic Management Plan did not anticipate that it would haul over Beales Creek. WICET submits that that admission destroys the basis of the claim and the claim must fail as a result. I do not accept this submission. First, the purpose of the traffic plans was not to detail a construction methodology, but to identify the proposed flow of traffic at points in time. Mr Vance explained this in cross-examination: “… there are a number of these plans. Jay did them. I’m not sure that I actually reviewed them before they went in. What he’s showing here is not actually my recollection of our plans at the time, but there’s quite a few of these that were submitted and, as I tried to explain earlier, a traffic management plan is the whole body of the document. At times we might have been running trucks here one day and running trucks in a different loop the next day. It’s not intended to be a – they’re not intended to be a detailed plan of exactly how you’re going to build the job. They’re intended to be a snapshot of what you’re doing at a certain time.”973 [917] Quite apart from the Traffic Management Plan there was evidence that, but for WICET’s failure to obtain appropriate permits, CMC was intending to and could have utilised a haul road across Beales Creek to haul material. This evidence includes that of Mr Semmler who, during the February 2011 site visit, was informed by Mr Webb that the Contractor would need to construct an access across Beales Creek to gain access to the Reclamation C area. Both Mr Semmler and Mr Ahern gave evidence concerning pre-contractual discussions during which WICET representatives again suggested a 973 T8-16, lines 19-25. -- 229 of 304 -- 230 temporary access (a culvert) across Beales Creek. Mr Semmler and Mr Ahern’s recollections of these discussions is corroborated by RFI 0020 dated 11 October 2011.974 [918] The intended construction of a temporary culvert over Beales Creek was also specifically mentioned by Mr Vance in a letter dated 20 October 2011:975 “It does not appear to us from the documents we have received to date that the water way barrier approvals for either Beales Creek or Pyealy Creek with [sic] allow the construction of temporary access culvert to facilitate construction and in particular bulk earthworks.” Item 1 of the RFI identified the work type/area as being lack of access between “Borrow Pit and Bund Area – lack of temporary construction access in general”. The specific component/items is identified as “permit conditions and temporary works”. The description is as follows: “Temporary works discussed during the tender period include, … 2. Temporary access across Beales Ck. Via use of a temporary culvert (Corrugated Metal Pipe) pipe to allow temporary crossing 1 x 1200 mm dia. allowed for.” The response from Mr Knowles to this RFI was to refer CMC to the Minutes of Meeting of 7 October 2011, specifically items 3.1, 3.2 and 3.3. Item 3.4 of the Minutes of 7 October 2011976 records: “As contingency to above, CMC to scope and budget mobilisation and installation of temporary pre-fabricated bridge structures to enable alternative construction access across the Creek locations.” [919] WICET suggests, incorrectly in my view, that CMC was not entitled to make the OLC Claim based on an inability to cross Beales Creek as the crossing was only proposed as an alternative post-contract and was not required in any event.977 WICET, in making this submission, relies not only on item 3.4 of the Minutes of Meeting of 7 October 2011 referred to above, but also the fact that on 12 October 2011 CMC was asked to prepare a temporary access across Beales Creek as “a contingency”.978 The nature of the intended access across Beales Creek was a “culvert” and not a pre-fabricated temporary bridge structure. It is apparent from the evidence of Mr Semmler and Mr Ahern and RFI 0020 that access across Beales Creek was always contemplated by use of a culvert. The suggestion of a pre-fabricated temporary bridge was something WICET raised post- contract, CMC priced and then WICET abandoned.979 WICET’s suggestion in its closing submissions at [1758(c)(ii)], that CMC first scoped or budgeted for access over Beales Creek on 7 October 2011 is not correct. The contention is said to be supported by Mr Vance’s evidence.980 His evidence, however, concerned a pre-fabricated bridge not a culvert. 974 CMC.505.089.8286. 975 CMC.003.006.0387. 976 CMC.505.089.8286 at .8289. 977 WICET’s Written Closing Submissions, [1758]. 978 Exhibit 2, CMC.503.023.2317. 979 CMC’s Written Closing Submissions, [1746(c)]. 980 T8-12, lines 28-30. -- 230 of 304 -- 231 [920] WICET has led no direct evidence from its own witnesses in relation to the OLC Claim. The claim fails. Final Certificate and Scott Schedule [921] WICET claims two sums in the alternative from CMC in relation to overpayments made in the course of the Contract being: (a) $3,704,788.38; (b) in the alternative, $3,819,893.79.981 [922] The first sum is the amount certified under the Final Certificate less the amounts in respect of items otherwise the subject of these proceedings. That sum is claimed as a debt due and owing under the Contract or, in the alternative, as damages for breach of CMC’s obligation to pay under the Contract. WICET refers to this as its primary claim in respect of the Final Certificate. [923] The second sum represents a fresh valuation of the items in the Final Certificate which are not otherwise the subject of these proceedings. The parties’ positions in respect of each of these items have been set out in a Scott Schedule. WICET claims that sum by way of overpayment. WICET’s Primary Claim [924] WICET’s primary claim is determined upon a proper construction of the Contract, in particular clauses 42.8, 42.1 (fifth paragraph) and 47.7. Clauses 42.1 and 42.8 are set out in Annexure A to these Reasons. Clause 42.8 specifies the time in which the Principal’s Representative shall issue to the Contractor and to the Principal a final payment certificate endorsed “Final Certificate”. In the certificate the Principal’s Representative is required to certify the amount which, in the Principal’s Representative’s opinion, is finally due from the Principal to the Contractor or from the Contractor to the Principal under or arising out of the Contract. The second paragraph of clause 42.8 relevantly provides: “Unless either party, either before the Final Certificate has been issued or not later than 15 days after the issue thereof, serves a notice of dispute under clause 47, the Final Certificate shall be evidence in any proceedings of whatsoever nature and whether under the Contract or otherwise between the parties arising out of the Contract, that the Works have been completed in accordance with the terms of the Contract and that any necessary effect has been given to all terms of the Contract which require additions or deductions to be made to the Contract Sum.” Certain exceptions are identified which include fraud and accidental or erroneous inclusion or exclusion of any work. [925] The fifth paragraph of clause 42.1 provides: 981 WICET’s Written Closing Submissions, [1791]. -- 231 of 304 -- 232 “Subject to the provisions of the Contract, including clause 42.10, within 30 days after the end of the month following receipt by the Principal’s Representative of a claim for payment (or within 60 days after the end of the month where the Contractor issues the claim for payment later than the date specified in Annexure Part A), the Principal shall pay to the Contractor, or the Contractor shall pay to the Principal, as the case may be, an amount not less than the amount shown in the payment certificate as due to the Contractor or to the Principal as the case may be.” [926] Clause 47 concerns dispute resolution. Clause 47.7, entitled “Performance of obligations”, provides: “Despite the existence of a Dispute, the parties must continue to perform their respective obligations under this Contract except where this Contract has been terminated.” [927] The Final Certificate was issued on 7 May 2014.982 The Final Certificate states: “In accordance with clause 42.8 of the General Conditions of Contract the PR certifies the amount payable by the Contractor to the Principal as follows (and as detailed in the attached certificate): … [C] Amount to be paid by the Contractor to the Principal (=[B] - [A]) = $12,269,507.88.” [928] WICET’s primary claim is not for the amount shown in the Final Certificate of $12,269,507.88. The amount sought by WICET is $3,704,788.38. As I have observed, this figure is arrived at by subtracting from the figure in the Final Certificate the amounts in respect of items otherwise the subject of these proceedings. [929] On 13 May 2014 and pursuant to clause 47.2 of the Contract, CMC issued a notice to WICET disputing the contents of the Final Certificate.983 The notice stated, inter alia, that: “… the total value due and payable under the Contract is incorrect and that the Certified Amount is therefore disputed and subject to the operation of clause 47 of the GC.” [930] WICET submits as a matter of construction that: (a) the amounts certified under the Final Certificate were due and owing to WICET within the prescribed time from the date of the certificate; (b) the giving of a Notice of Dispute did not relieve CMC of that obligation to pay.984 In support of this submission WICET refers to clause 47.7, which was a bespoke addition, not present in the standard AS2124 Contract. Clause 47.7 however, in my view, does nothing more than require the parties to continue to perform their respective obligations 982 CMC.508.002.0414. 983 Exhibit 2, CMC.509.005.0001. 984 WICET’s Written Final Submissions, [1807]. -- 232 of 304 -- 233 under the Contract, irrespective of the existence of a Dispute. Clause 47.7 requires the relevant obligation to be properly identified. On WICET’s construction, the obligation of the Contractor is to pay the amount certified in the Final Certificate even where the Contractor disputes that amount. The obligation to pay the amount shown in a payment certificate as due to the Principal in clause 42.1 (fifth paragraph) is made subject to the provisions of the Contract. The obligation is therefore subject to clause 42.8. The effect of the second paragraph of clause 42.8 is that where a Notice of Dispute is served under clause 47, the Final Certificate does not constitute evidence in any proceeding of either: (a) that the Works have been completed in accordance with the terms of the Contract; or (b) that any necessary effect has been given to all the terms of the Contract which require additions or deductions to be made to the Contract Sum. [931] CMC submits that if WICET’s construction is accepted, it leads to a very odd result, namely that the Final Certificate is not evidence of a debt but gives rise to a debt.985 WICET submits however, that the effect of the Contract is that although the Final Certificate loses its special evidentiary status upon the service of a Notice of Dispute, the obligations to pay in accordance with it are not affected.986 [932] In support of its interpretation, WICET refers to Skilled Group Ltd v CSR Viridian Pty Ltd & Anor.987 In that case Vickery J, after reciting the relevant provisions of AS2124, rejected the contractor’s submission that it was not required to make the payments due under the Final Certificates because it issued Notices of Dispute under clause 42.8 of the General Conditions of AS2124-1992 as amended. The second paragraph of clause 42.8 considered by Vickery J is in the same terms as clause 42.8 (second paragraph) of the present Contract. In rejecting the contractor’s submission, his Honour noted that while the subcontract did not define the terms “payment certificate” or “final certificate” the superintendent had the power to issue payment certificates including final payment certificates. His Honour referred to clause 42.1 which dealt with payment certificates and relevantly provided: “Within 28 days after the receipt by the Superintendent of a claim for payment [or] within 14 days of issue by the Superintendent of the Superintendent’s payment certificate, whichever is the earlier, the Principal shall pay to the Contractor the amount due to the Contractor and shall with the payment provide written particulars of how the payment was calculated.” The similar provision in the present Contract is, as I have observed, made “subject to the provisions of the Contract”. [933] Vickery J also referred to the first paragraph of clause 42.8 of the subcontract, which is in similar terms to the first paragraph of clause 42.8 of the present Contract. His Honour observed: “In my opinion, in this contractual context, delivery of a valid Notice of Dispute under clause 42.8 has only limited effect. It deprives a Final 985 T35-74, lines 34-36. 986 WICET’s Reply Submissions, [398]. 987 [2012] VSC 290. -- 233 of 304 -- 234 Certificate of the evidentiary effect contemplated by the clause. It does not relieve the disputing party from the contractual obligation to make the payment due under the Final Certificate. This construction is supported by cl 47.1 of the Sub-contract terms which provides: ‘Notwithstanding the existence of a dispute, the Principal and the Contractor shall continue to perform the Contract and the Contractor shall continue with the work under the Contract.’”988 [934] Vickery J’s conclusion that there remains a contractual obligation to pay the moneys certified as payable in a final certificate in circumstances where a notice of dispute has been given is difficult to reconcile with the reasoning of Keane JA (as his Honour then was) in Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd989 (de Jersey CJ and Holmes JA (as the Chief Justice then was) agreeing). Keane JA was considering clause 37.4 and 42.1 of AS4000/1997. Clause 37.4 was the relevant final certificate clause and provided as follows: “Final payment claim and certificate Within 28 days after the expiry of the last defects liability period, the Contractor, shall give the Superintendent a written final payment claim endorsed “Final Payment Claim” being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract. Within 42 days after the expiry of the last defects liability period, the Superintendent shall issue to both the Contractor and the Principal a final certificate evidencing the moneys finally due and payable between the Contractor and the Principal on any account whatsoever in connection with the subject matter of the Contract. Those moneys certified as due and payable shall be paid by the Principal or the Contractor, as the case may be, within 7 days after the debtor receives the final certificate. The final certificate shall be conclusive evidence of accord and satisfaction, and in discharge of each party’s obligations in connection with the subject matter of the Contract except for: a) fraud or dishonesty relating to WUC or any part thereof or to any matter dealt with in the final certificate; b) any defect or omission in the Works or any part thereof which was not apparent at the end of the last defects liability period, or which would not have been disclosed upon reasonable inspection at the time of the issue of the final certificate; c) any accidental or erroneous inclusion or exclusion of any work or figures in any computation or an arithmetical error in any computation; and d) unresolved issues the subject of any notice of dispute pursuant to clause 42, served before the 7th day after the issue of the final certificate.” 988 Skilled Group Ltd v CSR Viridian Pty Ltd & Anor [2012] VSC 290, [205]. 989 [2009] QCA 329. -- 234 of 304 -- 235 Clause 42.1 of AS4000-1997 provided: “42.1 Notice of Dispute If a difference or dispute (together called a ‘dispute’) between the parties arises in connection with the subject matter of the Contract, including a dispute concerning: (a) a Superintendent’s direction; or (b) a claim: (i) in tort; (ii) under statute; (iii) for restitution based on unjust enrichment or other quantum meruit; or (iv) for rectification or frustration, or like claim available under the law governing the Contract, then either party shall, by hand or by certified mail, give the other and the Superintendent a written notice of dispute adequately identifying and providing details of the dispute. Notwithstanding the existence of a dispute, the parties shall, subject to clauses 39 and 40 and subclause 42.4, continue to perform the Contract.” [935] Keane JA had to consider the effect of a notice of dispute in relation to the Superintendent’s final certificate. His Honour stated: “[14] In my respectful opinion, the learned primary judge’s decision was correct. Reed’s notice of dispute of 30 September 2009 engaged the terms of cl 37.4(d) to deny to the superintendent’s certificate the effect for which Martinek’s argument contends. [15] It may be accepted that the final settling of accounts between contractor and principal established under the terms of the contract may supersede the interim adjudications effected under the Payments Act, but in this case, the terms of cl 37.4(d) of the contract reflect an intention that the ‘accord and satisfaction’ and the ‘discharge of obligations’ between the parties not be effected by the superintendent's certificate while the issues the subject of Reed's notice of dispute remain ‘unresolved’. … [17] On Martinek's behalf it is argued that the second and third paragraphs of cl 37.4 are to be read separately from the fourth paragraph. That argument is unpersuasive for two reasons. First, one must attempt to give all the paragraphs of cl 37.4 an operation by which each paragraph works in harmony with the others: the fourth paragraph should not be read as an operative stand alone provision; rather, its natural reading is as an explanation and qualification of the effect of the second and third paragraphs. Secondly, both the second and the fourth paragraphs of cl 37.4 speak in terms of the -- 235 of 304 -- 236 evidentiary effect of the superintendent's certificate: that is an express invitation to treat the fourth paragraph as an explanation and qualification of the effect of the superintendent's certificate as ‘evidencing the moneys finally due and payable between the Contractor and Principal on any account ... in connection with the subject matter of the contract.’ … [20] In my respectful opinion, on the proper construction of cl 37.4, it is only the moneys certified as due and payable by a certificate unqualified in its effect by the fourth paragraph of cl 37.4 that give rise to a right to payment in accordance with the third paragraph of cl 37.4. Because the effect of the superintendent's certificate is qualified in this way, it can give rise to no right in Martinek under the contract which is apt to trump the effect of the adjudication decision.” [936] WICET seeks to distinguish Martinek on the following basis: “(a) in Martinek, the contract expressly qualified the effect of the release of the mutual debt of relationship (being evidence of ‘accord and satisfaction’) by reference to whether a notice of dispute had issued prior to the issue of the Final Certificate; and (b) in the present case, however, the Contract has the opposite effect: it expressly provides, by clause 47.7, that the issue of a notice of dispute does not affect the performance of obligations under the Contract (which would include, relevantly, the obligation to pay).”990 [937] Martinek cannot be distinguished as submitted by WICET. The difference in language as to the evidentiary effect of a final certificate between clause 37.4 (considered by Keane JA) and the second paragraph of clause 42.8 of the present Contract, does not, in my view, alter the force of his Honour’s observations. Both clauses identify the effect of a notice of dispute on the evidentiary status of a final certificate. There is no relevant distinction between a final certificate being conclusive evidence “of accord and satisfaction, and in discharge of each party’s obligations in connection with the subject matter of the Contract” and a final certificate evidencing “that the Works have been completed in accordance with the terms of the Contract and that any necessary effect has been given to all the terms of the Contract which require additions or deductions to be made to the Contract Sum”. [938] In both instances the final certificate certifies the amount which, in the opinion of the relevant representative, is finally due from the Principal to the Contractor or from the Contractor to the Principal. The consequence of serving a notice of dispute on the evidentiary effect of the final certificate is, according to Keane JA: “…an express invitation to treat the fourth paragraph as an explanation and qualification of the effect of the superintendent’s certificate as ‘evidencing the moneys finally due and payable between the Contractor and Principal on any account … in connection with the subject matter of the Contract.’”991 990 WICET’s Reply Submissions, [397]. 991 Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QCA 329 per Keane JA at [10]. -- 236 of 304 -- 237 [939] Nor does clause 47.7 of the present Contract permit Martinek to be distinguished. Clause 42.1 of the contract considered by Keane JA contained a provision similar in effect to clause 47.7: “Notwithstanding the existence of a dispute, the parties shall, subject to clauses 39 and 40 and subclause 42.4, continue to perform the Contract.” [940] There is however, in my view, a proper basis to distinguish Skilled Group Ltd. The wording of clause 42.1 of the contract which Vickery J considered is not in the same terms as clause 42.1 in this case. The payment obligation under clause 42.1 of the present Contract is expressly stated to be “subject to the provisions of the Contract”. Those words suggest that the obligation to pay is recognised by the parties as not being unqualified. Clause 42.1 is subject to clause 42.8 which specifically deals with the final certificate and the effect on the evidentiary status of such a certificate where a notice of dispute has been served. [941] I accept the correctness of the construction adopted by Keane JA in Martinek. It follows that I do not accept WICET’s submission that CMC is in breach of clause 42.1 of the Contract by not paying the sum specified in the Final Certificate.992 The Alternative Claim to Re-valuation [942] WICET’s alternative claim is that if CMC is not obliged to pay the sum (as varied) in the Final Certificate, then the amounts in the Final Certificate fall to be re-valued. The amount claimed by WICET in relation to overpayments pursuant to its alternative claim is $3,819,893.79. The re-valued items from the Final Certificate are contained within the Scott Schedule (based largely on Mr Tsipis’ re-valuations).993 WICET’s alternative claim is for a sum higher than that certified by the Principal’s Representative in the Final Certificate. [943] CMC identifies a number of preliminary difficulties with WICET’s alternative claim based on Mr Tsipis’ re-valuations, which depart significantly from the Final Certificate: (a) The re-valuations in the Scott Schedule do not give rise to any cause of action. Under the General Conditions the obligation to pay a debt arises from the Final Certificate itself, not from some later re-valuation of items referred to in it. No breach of contract by CMC is alleged in connection with the re-valuation case. (b) Further, clause 42.2 of the General Conditions makes plain that the Principal is not permitted to vary a Final Certificate (except in limited circumstances, none of which apply). Because WICET’s alternative case is based on an impermissible de facto correction of the Final Certificate, it is not a claim permitted under the Contract. (c) The effect is that while WICET could have led valuation evidence seeking to support the amounts set out in the Final Certificate, it cannot lead evidence seeking to improve its position and recover more than set out in the Final Certificate. The Final Certificate is a document created by the Principal, based on its (presumably 992 WICET’s Written Closing Submissions, [1807] and [1809]; CMC’s Written Closing Submissions, [1839]. 993 Court Book Vol 14, Expert Report on Quantum (Costs and Final Certificate) by George Tsipis dated 16 November 2015. -- 237 of 304 -- 238 carefully considered and bona fide) valuations. The Contractor has no control over those valuations – they are entirely matters for the Principal. Given this, and the terms of clause 42.2 of the General Conditions, there is nothing inconsistent about the Principal being held to the valuations under the Final Certificate, but the Contractor, if it puts the certificate in dispute (as CMC has done), being permitted to demonstrate that valuations made under it are erroneous and should be disregarded or reduced.994 [944] WICET submits however that CMC cannot, on the one hand, contend that its assessment as set out in the Scott Schedule is a defence to its liability under the Final Certificate (based on WICET’s primary submission) while, on the other, contend that it is not open to WICET to carry out its own assessment.995 CMC asserts that there is nothing inconsistent about the Principal being held to the valuations under the Final Certificate, but the Contractor, if it puts the Final Certificate in dispute (as CMC has done), being permitted to demonstrate the valuations made under it are erroneous and should be disregarded or reduced. [945] I note that in its closing submissions, CMC asserts that by reason of errors in the Final Certificate, it is entitled to additional payments in respect of Variations 143, 149 and Pay Items 324, 325, 326 and 452.996 Both parties therefore, seek to advance a case that the Final Certificate is in error and that each party is entitled to money back. In the course of oral submissions, however, certain concessions were made by both parties. [946] First, WICET accepts that Mr Tsipis’ re-valuation of any item in the Final Certificate should be capped at the amount shown in the Final Certificate. Mr Tsipis’ opinion as to value, may however, be utilised as supporting the amount for an item shown in the Final Certificate.997 Secondly, CMC accepts that it would not be appropriate to advance a case for additional payments in relation to Variations 143, 149 and Pay Items 324, 325, 326 and 452, if they have not been incorporated in the Scott Schedule. On my examination of the Scott Schedule none of these items have been incorporated into the Scott Schedule.998 Thirdly, CMC accepts that where Mr Roberts did not value a particular item, the Court could proceed on Mr Tsipis’ valuation subject to there being some evidential basis for his opinion.999 [947] The parties have utilised a Scott Schedule to summarise the items in dispute in relation to the Final Certificate. The Scott Schedule is Annexure B to WICET’s closing submissions. The Scott Schedule identifies 97 items. A total of 53 items have been agreed between the parties. They are shaded in green in the Scott Schedule. CMC accepts that $1,193,481.91 is repayable to WICET.1000 [948] As to the balance of the 44 items that remain in dispute, the parties, in accordance with Exhibit 428, only require full reasons in respect of Scott Schedule Cells 1, 12, 13, 14, 15, 17, 18, (21 and 24), 25, (30, 31, 33 and 48), and 32. Cells 30, 31, 33 and 48 relate to WICET seeking to recover adjudication fees and interest. I have already dealt with this 994 CMC’s Written Closing Submissions, [1818(c)], [1842] – [1844]. 995 WICET’s Written Closing Submissions, [1815]. 996 CMC’s Written Closing Submissions, [1859] – [1883]. 997 T33-31, line 20 – T33-32, line 8; T35-70, lines 24-32. 998 T35-69, line 30 – T35-70, line 3. 999 T35-70, line 27 – T35-71, line 28. 1000 CMC’s Written Closing Submissions, [1891(a)]. -- 238 of 304 -- 239 claim. The parties only require brief reasons in relation to the balance of the remaining items in dispute. Cell 1 – Variation 65: 104 Raise the Bunds [949] CMC submits, and I accept, that as claimant WICET bears the overall onus of proof in relation to establishing an overpayment to CMC.1001 [950] This item concerns the proper value of a claim by CMC for Dayworks associated with works to raise the height of the Reclamation C Bunds by one metre. [951] On 15 June 2012 CMC sent an email to the Principal’s Representative, confirming that its subcontractor (AE Group) was preparing to demobilise its equipment at the Reclamation C Bunds and, if no further work was needed, demobilisation would be done within seven days. On 25 June 2012, WICET by Worley Parsons, issued CMC with Site Instruction 68 (SI68). The instruction required CMC to raise the height of the bunds by one metre, but only up to a cost of $500,000. [952] On 3 July 2012, CMC issued a Notice of Variation to the Principal’s Representative stating that the time, and the cost constraints outlined in SI68 were unrealistic. CMC further informed the Principal’s Representative that it was currently pricing the work, but in the meantime CMC would be undertaking the works on a Dayworks basis. The parties agree SI68 is a variation to be quantified at Dayworks Rates. Both experts approached the valuation on that basis. [953] On 17 July 2012, CMC issued correspondence to WICET providing a priced Schedule of Rates estimate of $8,928,599 for the Scope of Works required by SI68. [954] On 20 July 2012, the Principal’s Representative responded by issuing SI76, instructing CMC to immediately stop work and to perform an orderly shutdown of the labour and equipment related to the raising of the Reclamation C Bunds. [955] WICET has paid CMC $1,091,560.97 in relation to this variation. WICET now asserts that CMC’s entitlement should be valued at $236,172.15. The alleged overpayment to CMC is $855,388.82. According to the Scott Schedule, CMC’s position is that it is entitled to $729,255.82 in relation to the variation and the amount of the repayment to WICET is $362,305.15. In the quantum experts’ joint report, Mr Roberts and Mr Tsipis identify the disagreed amount as being $480,927.67. [956] The primary difference identified in the joint expert report is that Mr Tsipis has excluded from his valuation the claimed plant standby hours due to inclement weather. Mr Roberts’ opinion is that as SI68 required CMC to keep all required and adequate plant on-Site to carry out the works, the claimed plant standby hours are reasonable. The appropriate rates to be applied, according to Mr Roberts are those found in Schedule C-4.3 which incorporates a Schedule of Plant and Equipment Stand Down Rates. [957] The key issue is a question of construction: Does the third paragraph of Schedule C-4 preclude remuneration for plant on standby for wet weather? Schedule C-4 is entitled “Rates for Pricing Variations”. The third paragraph provides: 1001 CMC’s Written Closing Submissions, [1827]. -- 239 of 304 -- 240 “The Contractor shall only be remunerated for work actually performed and approved by the Principal’s Representative. The Contractor shall not be entitled to remuneration for plant stand-by time.” [958] Neither of the terms “stand-by” or “stand down” are defined in the Contract. The Contract does, however, identify that the Contractor would be entitled to payment for plant that has been stood down but not for plant that is on a stand-by. Both terms in my view, contemplate a unilateral act or decision by either the Contractor in respect of having plant and equipment on stand-by, or by the Principal in directing or requiring plant and equipment to be stood down. If the Contractor for example, in carrying out a directed variation, unilaterally chooses a construction methodology which, for its own convenience, requires plant and equipment to be on stand-by, it would not be entitled to remuneration for plant stand-by time. Similarly, if the Principal, for its own purposes, directs the Contractor to stand down plant and equipment, then the Contractor would be entitled to payment. A weather event is neutral. It does not arise because of any unilateral action on either the part of the Contractor or the Principal. The third paragraph of Schedule C-4 makes no mention of a weather event. I construe the clause as disentitling the Contractor to remuneration for plant stand-by time brought about by some decision or action on the part of the Contractor. CMC was instructed by Worley Parsons (by SI68) to keep all required and adequate plant on-Site to carry out the works. I accept Mr Vance’s evidence, that the original works to the Reclamation C Bunds were completed by 4 July 2012. I do not accept WICET’s submission, that the original Scope Work for the Reclamation C Bund was not finished until August 2012.1002 The “as-built” programs referred to by WICET do not distinguish between the original works, and the works the subject of SI68. [959] It follows that I accept Mr Roberts’ valuation for Variation 65. In accordance with the Scott Schedule, CMC accepts that it is liable to repay WICET $362,305.15.1003 [960] I note that WICET in its closing submissions at [1934] and [1935] suggest that the use of Stand Down Rates for the inclement weather does not wholly explain the difference between the experts of $480,927.67. I accept the accuracy of the difference in the valuation for Variation 65 as explained by Mr Tsipis and Mr Roberts in the joint report. In those circumstances I find that CMC is liable to repay $362,305.15 to WICET in respect of Variation 65. Cell 12 – Variation 56 – Additional Topsoil Quantities [961] This item concerns the proper value of the work associated with topsoil stripped from various areas around the Site. The parties agree that CMC has been paid $250,799.89 in respect of this item. WICET asserts that the proper value of the claim is $40,965. CMC asserts that the proper value is $279,837.95. [962] There are two issues between the parties: (a) the volume of the topsoil stripped; and (b) the rate to be applied to the topsoil stripped. 1002 WICET’s Reply Submissions, [439(c)]. 1003 CMC’s Written Closing Submissions, [2067]-[2068]. -- 240 of 304 -- 241 [963] Schedule C-3 of the Contract provides for the stripping of topsoil to a certain quantity at a rate of $3.97 per m3. In carrying out this work CMC followed the Department of Main Road Standard Specification MRS11.04 – December 07.1004 According to CMC, the relevance of the specification for Variation 56 is that it contains the relevant work items, and defines how those work items are used to measure work performed. In this case, it is in reference to the stripping of topsoil beyond the depth provided for in Schedule C-3 of the Contract. Mr Vance’s evidence was that CMC had to remove additional topsoil and subsequently backfill and compact at those areas. This is ordinarily done to obtain a proper foundation.1005 [964] On 21 May 2012, CMC wrote to the Principal’s Representative advising that the quantities of topsoil required for removal for a number of items had increased. CMC’s letter also stated the surveyed quantity of stripped material. [965] Section 9 of the Main Roads Specification deals with stripping of topsoil. Work Item 3103P includes not only stripping existing topsoil from the Site, but also use of or disposal of surplus material and material unsuitable for use as planting medium. Clause 9.4 of the specification deals with material considered suitable for use as planting media: “Topsoil stripped from the Site which is considered suitable for use as planting media shall be the upper, organically rich layer of soil. It shall include only the O and A soil horizons. Where a P soil horizon is present, topsoil shall not be used for planting media unless specifically approved otherwise by the Superintendent. The material shall be free from matter toxic to plant growth, rubbish or other deleterious material. It may contain all natural vegetation except for trees, shrubs, crops and weeds, …” [966] Clause 9.5.2 provides: “Surplus material and material considered to be not suitable for use as planting media in accordance with clause 9.4 shall be assessed for use as fill or deemed to be Unsuitable Material and disposed of in accordance with Clause 12.” Clause 12.2 permits disposal of surplus material and/or unsuitable material on-Site at locations specified in clause 8 of Annexure MRS11.04.1. [967] As to the first issue of quantity, Mr Roberts used the quantity of topsoil referred to by CMC in its letter of 21 May 2012 to the Principal’s Representative.1006 This letter referred to the surveyed quantity of stripped material. This resulted in Mr Roberts applying a rate to the additional topsoil quantity of 11,456.64m3. This is also the quantity identified in the Final Certificate.1007 Mr Tsipis, however, has applied a rate to 10,318.64m3 as shown in the as-built survey of the topsoil by Xcel Surveying. The relevant report is annexed to the affidavit of Stephen Armstrong, who was employed by Xcel Surveying and worked on the project.1008 Mr Armstrong compiled a number of volume reports in 2013. They 1004 CMC.502.093.9091. 1005 T7-49, lines 15-21. 1006 Exhibit 2, CMC.006.005.0379. 1007 Final Certificate, CMC.508.002.0414 at .0434. 1008 Exhibit 424, Affidavit of Stephen Armstrong sworn 5 August 2016, Exhibit SJA-10. -- 241 of 304 -- 242 were compiled for Worley Parsons. He had not seen any data from CMC so as to know whether CMC’s volumes were consistent with those which he calculated. Other volume reports were prepared in 2015 at the request of Mr Miroshnikoff. Xcel’s quantity surveys were not contemporaneous. Xcel was an audit surveyor. Most of Mr Armstrong’s survey work for Xcel was completed after CMC had left the project Site. Xcel was never provided a complete as-built dataset by CMC. Xcel’s volume reports are the result of a comparison of base level surface data and design as-built data. Xcel never did a complete as-built and it had to use design as-built data to calculate completed volumes. Mr Armstrong states in his affidavit1009 that he was “comfortable” using design data for the volume calculations because the as-built surveys Xcel had performed identified that the as-built was within an acceptable tolerance of design. He does not specify however what constitutes “an acceptable tolerance”. The difference in total volumes used by Mr Roberts and Mr Tsipis (21,925m3 compared to 20,787m3) is not significant. On the evidence WICET has in my view, failed to demonstrate any good reason to depart from the quantity of topsoil identified in the Final Certificate. Whilst the evidence of Mr Armstrong was not challenged the Xcel surveys are qualified and retrospective. [968] The second issue concerns the rate applied to the additional stripped topsoil. Mr Tsipis applies the rate of $3.97 per m3 under Schedule C-3. Mr Roberts applies the $3.97 rate (within the limit of accuracy) to the quantities of topsoil found in Schedule C-3 and a rate of $29 per m3 to the additional stripped topsoil. This rate for the additional topsoil is found in Schedule C-3 item 82, which refers to the excavation and disposal of “Unsuitable Material”. [969] Mr Tsipis applies the lower rate on the basis that the additional topsoil stripped was not unsuitable and was in fact used as planting media. Mr Roberts however, considers that as the additional excavation and resulting backfill was required due to the presence of material which was not suitable as founding material, the work operations involved in this additional excavation and backfill are as described in the Main Roads Specification and the Schedule C-3 item 82 description. The relevant Pay Item in the specification for unsuitable material includes the compaction of base excavation. WICET submits that whilst Mr Vance gave evidence to the effect that CMC carried out some compaction, it was only in areas which had been backfilled. The compaction was therefore not of the “base excavation” but rather of the backfill that had been placed over the base excavation. I reject this submission. The mere placement of backfill over the base excavation does not mean that CMC did not compact the base excavation. [970] Further, none of CMC’s witnesses were given the opportunity to comment on this distinction. Whilst the distinction was not raised with Mr Roberts, he did give evidence that if a Contractor takes out unsuitable material it has to be replaced with something and then compacted.1010 [971] The additional topsoil was, in accordance with the Main Roads Specification, “Unsuitable Material”. The additional topsoil had to be stripped because, according to Mr Vance, it was not appropriate as a foundation. Nor was it suitable as plant media because, in accordance with clause 9.4, it had not been stripped from the upper organically rich layer of soil. 1009 Exhibit 424, Affidavit of Stephen Armstrong sworn 5 August 2016, Exhibit SJA-10. 1010 T31-59, lines 19-21. -- 242 of 304 -- 243 [972] I therefore value Variation 56 in the amount already paid to CMC by WICET of $250,799.89. This is also the amount shown in the Final Certificate. No amount is repayable to either party. Cell 13 – V32 PVMi5 GC08 Scope Transfer OLC works – Variation 32 [973] This item concerns the proper valuation of work done by CMC for additional earthworks to extend the length of OLC. These additional works were instructed by SI65 on 21 June 2012. The parties agree that the additional work constitute a variation. WICET has paid to CMC an amount of $595,707.79. This was the amount certified. [974] The certification of $595,707.79 was based on the valuation of 14 items. Three of those items concern the application of a rate to a quantity. These are items 11, 12 and 13. WICET now seeks to depart from the certification in relation to items 11, 12 and 13 in reliance on expert evidence. [975] WICET submits that there is considerable agreement between the experts that CMC has been paid for volumes far and above its actual entitlement in respect of items 11, 12 and 13.1011 CMC submits that based on WICET’s inability to provide the as-built survey data in support of its expert assessment of the volumes, it has failed to discharge its onus of proving its entitlement to repayment.1012 [976] To understand these submissions it is necessary to consider the separate and joint expert reports of the surveyors called by WICET and CMC. WICET tendered a report of Mr Byrom of Goodwin Midson.1013 He was instructed to investigate a number of volume calculations previously completed by the project audit surveyor, Xcel. Mr Byrom was of the opinion that he has not been provided all necessary information to independently review some of Xcel’s figures. WICET accepts that the data prepared by Xcel was inadequate.1014 As the information supplied from Xcel was incomplete, Mr Byrom utilised information contained in CMC’s expert surveyor’s report. CMC’s expert was Mr Sippel of Geo-metric Surveying Pty Ltd. Mr Sippel also identified that the Xcel data as supplied was incomplete in respect to Variation 32, including volume reports. As a result Mr Sippel was unable to comment on whether the Xcel surveyed quantity reflects the actual works carried out by CMC. Mr Sippel was, however, able to analyse certain CMC survey data entitled “08 Bund Asbuilt”. He assumed that this survey data was relevant to Variation 32. Using this information, Mr Sippel caused volume calculations for items 11, 12 and 13 to be carried out. These calculations, in his opinion, indicated significant differences from CMC’s claimed amounts detailed in the Worley Parsons’ letter. This is a reference to the Worley Parsons’ letter dated 19 December 2012.1015 This letter incorrectly refers to Variation 32 as Variation 098. The volumes calculated by Mr Sippel for items 11 and 12 were similar to the results provided by Xcel. Mr Byrom used the same information supplied to Mr Sippel for the purposes of making his volume calculations. The only difference in his approach was that he noted that there was no bounding polygons in relation to Variation 32. He was able to locate a polygon called “PSHT” within the Geo-metric digital file which appeared to encompass the correct area. 1011 WICET’s Written Closing Submissions, [2004]. 1012 CMC’s Written Closing Submissions, [2140]. 1013 Addendum to Court Book, Vol 17, Expert Survey Report by Alistair Byrom dated 26 May 2016. 1014 WICET’s Written Closing Submissions, [2005(a)]. 1015 CMC.505.024.9919. -- 243 of 304 -- 244 There is little difference between Mr Sippel’s and Mr Byrom’s volume calculations. In the joint report, the experts identify that their total calculations are similar: Item Description CMC assessment Sippel (CMC) Byrom (Xcel) Byrom (CMC data) Comment 11 Load & cart from GPN Borrow, all materials including general fill 20,925.39m3 9,263m3 9,075m3 (based on item 13) 9,238m3 Item 11 = Item 12 x 1.13 The quantity of this item is the volume of item 12 with a bulking factor of 113% applied. 12 Place & compact all materials in bunds 18,505.39m3 8,197m3 8,031m3 (based on item 13) 8,175m3 Item 12 = Total - item 13 This volume is a function of the total volume identified by the experts, less identified granular fill. That is, it compensates for placing all material except the granular fill, which is compensated in item 13. 13 Supply & Place granular fill (drainage blanket) 4,250m3 2,178m3 Not identified, assume 2,179m3 2,179m3 Quantity is surveyed. 13A New Item Supply only granular fill 2,072m3 2,071m3 (based on item 13) 2,071m3 Item 13A = 4250- item 13 This volume assumes that CMC treated 4,250m3 of granular fill (per the CMC assessment of item 13). A portion is used as granular fill and compensated under item 13. The remainder is compensated under this item 13A as “supply only”. Total quantity of material on CH3083 to CH3205 (Total) 10,356m3 10,210m3 10,354m3 Quantity is surveyed. [977] I do not accept CMC’s submission that WICET has failed to discharge its onus of proving its entitlement to repayment. The reports of both experts demonstrate that the volumes -- 244 of 304 -- 245 claimed by CMC as certified were excessive. Both experts ultimately relied on data that appears to have originated from CMC. The only difference is that Mr Byrom took the additional step of incorporating into his calculations an appropriate bounding polygon. In the result, even though there is very little difference between the volumes calculated by the experts, it is appropriate to use those calculated by Mr Byrom. [978] As to the rate, Mr Roberts did not value this item. Mr Tsipis found that there were no specific items within Schedule C-4 which were suitable for the valuation of items 11, 12 or 13. He utilised Schedule C-3 items applicable to the work. Applying those rates, the valuation in accordance with Mr Byrom’s volumes is as follows: Item Description Byrom (Xcel) Rate Amount 11 Load & cart from GPN Borrow, all materials including general fill 9,075m3 $8.71/m3 $79,043.25 12 Place & compact all materials in bunds 8,031m3 $4.84/m3; $38,870 13 Supply & Place granular fill (drainage blanket) 2,179m3 $42.46/m3 $92,520.34 13A New Item Supply only granular fill 2,071m3 $42.46/m3 $87,934.66 TOTAL $298,368.29 PLUS AMOUNT NOT IN DISPUTE IN RELATION TO THE OTHER ITEMS $137,179.07 TOTAL CLAIM $435,547.36 Amount paid to date $595,707.79 Amount WICET should be paid $160,160.43 [979] I find that in relation to Cell 13 CMC should repay WICET the amount of $160,160.43. Cell 14 – 075 PVN 578 Rail Receival Basins on Hold – Variation 51 [980] Variation 51 relates to the loading, hauling and placement of 12,188m3 of general fill material that was required for the construction of MC22 road embankment. [981] The experts agree that the quantity of material the subject of the claim is 12,188m3. The parties agree that CMC has been paid $273,011.20 in respect of this item. It is an agreed variation. [982] Mr Tsipis has used the rate of $6.79/m3 from C-3 schedule, plus an amount for traffic control of $26,813.47. His total valuation is $109,569.99. This valuation, according to WICET results in a repayment to WICET of $163,441.21. The rate utilised by Mr Tsipis -- 245 of 304 -- 246 from Schedule C-3 is Pay Item 88 which relates to “Excavation, All Materials – Rail Receival platform, drains and ponds.” WICET submits that the rate used by Mr Tsipis is substantially higher than the rate for simple placement of material at the MC22 embankment of $2.26m3 which is the rate identified in Schedule C-3 Pay Item 309. The rate used by Mr Tsipis was applied pursuant to clause 40.5(b). [983] Mr Roberts in valuing this variation sought to value the actual resources expended (by going through all of the relevant CMC daily costing sheets) and then value those resources by reference to the rates in Schedule C-4.3, which is a schedule of Daywork Constructional Plant Rates. If there were no appropriate rates in Schedule C-4.3, Mr Roberts has used reasonable rates. Mr Roberts methodology is described in paragraphs [365] – [370] of his report.1016 Mr Roberts has applied a rate of $23.31m3. [984] The issue in relation to this claim is the proper valuation of CMC’s work in circumstances in which it is accepted that there was a variation and that CMC’s work was disrupted. It is also common ground that the variation was not directed by the Principal’s Representative as Dayworks. [985] The variation arose because on 14 March 2012 CMC received a notification from Worley Parsons that the drawings for the Rail Receival Sediment and Storage Basins were placed on hold. [986] On 19 October 2012, CMC wrote to the Principal’s Representative and noted that the drawings still remained on hold (and as a result so did the works) and further confirmed that: (a) CMC had exhausted all general fill stockpiles created from the rail receival platform excavation; (b) the platform had been excavated to allow the GC07 Contractor to commence works; (c) the remaining fill required to complete the MC22 embankment was in the sediment pond, storage pond and the excavation for the roads, which was on hold during this time; (d) the hauling general fill from the stockpile to MC22 embankment caused CMC to incur additional costs; and (e) CMC has valued those additional costs under clause 40.5(c), as being a reasonable price.1017 [987] The rate identified in the letter of 19 October 2012 was an extra over rate of $22.40m3. In the Scott Schedule for Cell 14 CMC, as an alternative, submits that if Schedule C-4 does not prescribe a rate for this variation (which is denied), then CMC’s position is that a reasonable extra over rate per clause 40.5(c) of the Contract is $22.40m3 and the value of this claim is $273,011.20. [988] I am not satisfied, by reference to the valuation of this variation by either Mr Tsipis or Mr Roberts, that any amount is repayable to WICET. The valuation should, in my view, 1016 Exhibit 2A, Court Book Vol 11, Expert Report on Quantum by Paul Roberts dated 6 April 2016. 1017 Exhibit 2, CMC.002.004.0153. -- 246 of 304 -- 247 be conducted pursuant to clause 40.5(c) by reference to reasonable rates. Mr Tsipis has used a Schedule C-3 rate to value this variation. I accept Mr Roberts’ evidence that use of a Schedule C-3 rate would be inappropriate, because that is a rate made “under competitive tendering conditions”, and one which did not make provision for the issues actually experienced by CMC on-Site.1018 The only adjustment Mr Tsipis made for the disrupted productivity was to amend his rate from $2.26 to $6.79. This amendment did not give sufficient weight to the disruption experienced by CMC. The impact of the variation included the following: (a) the disruption to CMC in loading trucks due to the GC07 contractor’s plant movements and construction activities in the immediate area around the stockpile; (b) the access issues to the stockpile area due to the GC07 contractor’s plant movements and construction activities; (c) the delays to trucks using haul roads due to the presence of GC07 contractor vehicles and plant; and (d) the increased safety precautions required when working in close proximity to a third party.1019 I do not accept WICET’s submission that Mr Tsipis’ increase in rate from $2.26 to $6.79 is consistent with Mr Tsipis’ making allowance for “very significant disruption”.1020 [989] The difficulties with Mr Roberts’ valuation is that he uses Daywork Rates from Schedule C-4.3 in his valuation of the impacted resources. The variation was not directed to be performed on a Daywork basis. I accept WICET’s submission that the Daywork Rates are not a reliable basis from which to form a reasonable rate pursuant to clause 40.5(c) because they include items such as supervision and management that are unlikely to be appropriate to the cost incurred by CMC in carrying out the work under the variation given that the work was carried out by a subcontractor and performed concurrently with the work in other areas.1021 Both WICET and CMC submit that each valuer has relied on assumptions which were not substantiated. [990] It remains the fact that WICET has paid CMC the amount of $273,011.20 on the basis of the reasonable rate identified by CMC in its letter of 19 October 2012. Given the deficiencies in both the valuation of Mr Tsipis and Mr Roberts, there should be no interference with the amount WICET has already paid CMC. Cell 15 – Filling Reclamation Bunds Area C – Item 89 [991] This item concerns the appropriate quantity calculation for fill that was placed in the area of the Reclamation C Bunds. The parties agree that CMC has been paid $1,579,039.80 in respect of this item. WICET alleges that CMC is only entitled to $1,421,276.81 for this item. CMC should therefore repay WICET $157,762.99. WICET assesses the 1018 T31-37, lines 19-23. 1019 CMC’s Closing Submissions, [2169]. 1020 WICET’s Reply Submissions, [454]. 1021 WICET’s Written Closing Submissions, [1991]. -- 247 of 304 -- 248 alleged overpayment by reference to the quantity of fill identified by Xcel. The total filling volume identified by Xcel is 289,465.746m3. [992] CMC asserts that the volume identified by Xcel is incorrect because it does not allow for settlement of the bunds which took place. Aurecon Hatch’s design for the bunds1022 included an allowance of 10% of fill volume for settlement of the bunds. Once that 10% fill volume allowance is applied to Xcel’s figure, the resultant volume calculation is 318,412.321m3, which is less than a 1% difference with CMC’s claimed volume. [993] CMC’s expert surveyor, Mr Sippel, in his report at [4.10] accepted that the intent of the Aurecon Hatch document was that an allowance of 10 % for settlement was made.1023 Mr Sippel opined that it would follow that a similar allowance should be reasonably applied to the Xcel calculation of general fill. This allowance for settlement of 10% was agreed to by both surveying experts in the joint expert report. [994] WICET submits, however, that an allowance for settlement of 10% ought not be made. WICET relies on a contractual document entitled “On-Site Civil Works – Supplementary Technical Specification”1024 which states as follows: “8.19.8 Allowance for settlement It is expected that all filled earthworks areas will settle with time during the construction period. In particular, fill earthworks within Tidal Areas will be subject to significant settlement due to consolidation of the underlying soft soils. … Within Tidal Areas it is expected that the level of the existing ground surface prior to filling will settle with time during construction, and will be somewhat lower at the time final finished earthworks levels are achieved (including after surcharge fill is removed where applicable). As such, the calculation of quantities for fill within Tidal Areas shall include an adjustment to the level of the surveyed ‘prepared existing ground surface’. The magnitude of the quantity adjustment shall be based on the results of relevant settlement plate monitoring records. Beneath fill batter areas, the magnitude of the quantity adjustment shall be calculated as half the magnitude of the estimated settlement at full batter height. The magnitude of the quantity adjustment shall be reasonably agreed with the Principal / Superintendent prior to claim. The Contractor shall make necessary allowance for settlement within the Standard Work Item 3301, which is for all general filling works. No separate or additional payment shall be made for allowance for settlement.” [995] By reference to the last paragraph of this specification, WICET submits that CMC was obliged to make allowance for settlement in its rate, and is not entitled to additional payment for settlement. I do not accept this submission. The second paragraph of the specification contains the following words: 1022 CMC.503.015.1947. 1023 Exhibit 2A, Court Book Vol 14, Expert Surveying Report by Peter Sippel dated 9 May 2016. 1024 Exhibit 2, CMC.502.075.9087. -- 248 of 304 -- 249 “As such, the calculation of quantities for fill within Tidal Areas shall include an adjustment to the level of the surveyed ‘prepared existing ground surface’.” [996] I accept CMC’s submission that when paragraphs 2 and 3 of the specification are read together the specification contemplates a calculation of quantities making an adjustment for settlement. There is, however, no specific allowance, apart from the calculation of quantities pursuant to paragraph 2, for settlement.1025 [997] It follows that no adjustment should be made to the amount already paid by WICET to CMC. Even though Mr Sippel’s calculation would suggest that CMC should repay WICET an amount of $15,635.30, there is only a 1% difference in CMC’s claimed volume and Mr Sippel’s calculation. In those circumstances, I accept that CMC’s claim as originally made was reasonable. Cell 17 – Granular Material OC South – Ch 0 to Ch 3803 – Item 94 [998] This item concerns the proper value of work for placement of granular material on the OLC. The parties agree that CMC has been paid $497,805.29 in respect of this item. The rate of the item is not in dispute. The issue between the parties is the proper volume for the item. WICET asserts that CMC’s entitlement in relation to item 94 is $347,556.16. This is based on a surveyed quantity of 8,185.496m3 identified by Xcel. WICET therefore seeks the repayment of $150,249.13. CMC asserts that no moneys are repayable. CMC submits that the quantity claimed by it and paid by WICET was and remains reasonable. [999] The issue is resolved by a consideration of the relevant surveying evidence. [1000] CMC claimed, and was paid, in relation to item 94 for 11,107m3 of granular fill, on the basis of a volume report.1026 [1001] WICET relies on Xcel’s volume calculation for the granular fill, which is 8,185m3. The Xcel volume has been calculated by comparing the granular fill surface against the strip surface. CMC submits that WICET is now seeking to retrospectively re-certify and re-value the cut and fill operations previously performed by CMC on-Site and previously certified by Worley Parsons. CMC criticises the Xcel volume calculation on the basis that it was not contemporaneous being carried out on 5 June 2015, approximately three years after the works were carried out. CMC therefore asserts that the Xcel volume calculation is unreliable. WICET submits, however, that the contemporaneous survey showing a quantity of 11,107m3 was not proven during the hearing. It is not, therefore, a survey which either expert performed and should be ignored. CMC’s contemporaneous volume calculation should not be ignored. It was this calculation which Worley Parsons previously acted on for the purposes of certifying item 94. [1002] CMC’s expert surveyor, Mr Sippel, was provided with survey data from CMC that showed a greater extent of the granular layer than that depicted in Xcel’s survey data. Based upon that, Mr Sippel assumed that the survey data with which he had been supplied constituted a more up-to-date survey of the granular filled surface. From his analysis of 1025 T35-88, lines 12-34. 1026 CMC.503.020.7640; Exhibit 2A, Court Book Vol 14, Expert Surveying Report by Peter Sippel dated 9 May 2016, [5.2]. -- 249 of 304 -- 250 that survey data supplied by CMC, it was his opinion that the quantity claimed by CMC appears to be reasonable. The basis of Mr Sippel’s opinion is detailed in paragraphs 5.1 to 5.17 of his report. He, as well as Mr Byrom, audited survey data which WICET had provided to Xcel and agreed with Xcel’s volumes. Mr Sippel, however, was provided with a further three files from CMC “08 Bund Asbuilt”, “working existing and strip surfaces” and “13 Asbuilt OLC”. Mr Sippel interrogated the surface from the “13 Asbuilt OLC” file and assumed that it depicted the most recent granular filled surface (because it was larger in area than the Xcel volume). This is shown in Diagram 5.1 of Mr Sippel’s report, where the Xcel granular surface is depicted by the white triangles and the CMC granular surface is depicted by the green, yellow and white triangles. [1003] In order to calculate the volume using that surface, Mr Sippel adopted what he described as “a conservative approach” by omitting the green section where the interval for the survey data was larger than in the other area. He then caused a calculation of the volume including the green section, which resulted in a volume calculation of 12,570m3. Mr Sippel also identified two surfaces depicting excavation of unsuitable material, one from the as-built Project and one from the Unsuitable Project. From his review of those surfaces he formed the opinion that there were two identifiable unsuitable surfaces surveyed by CMC. The second of these unsuitable surfaces was surveyed by CMC between CH 1806 and CH 1830 on 26 June 2012. Mr Sippel identified that whilst the 26 June surface is outside of the design OLC area but within the polygon defined by Xcel, it should have been accounted for when calculating the volume of granular fill but was not. Mr Sippel then caused a final volume calculation to be carried out including the green section in Diagram 5.1 and the unsuitable areas, which resulted in a volume of granular fill of 13,271m3. Mr Sippel’s volume calculation is 2,000m3 greater than CMC’s contemporaneous volume calculation. [1004] Mr Byrom in his report arrives at the same volumes as Xcel, namely 8,185m3. He observed however, that he has been unable to locate any other surface information that would reflect the top surface of “CMC Rock Asbuilt”, as a result he cannot complete a totally independent check on Xcel’s calculations.1027 Mr Byrom has not been supplied with the documents used by Mr Sippel for his calculation. He notes however, that the volume calculation of 8,185m3 is defined by a polygon that excludes both the yellow and green triangles shown in Diagram 5.1 of Mr Sippel’s report. By use of an overlay Mr Byrom suggests that it would not be appropriate to include all the yellow TIN within the “standard” OLC Platform calculations.1028 Mr Byrom does accept that the green TIN appears to be located within the “standard” OLC Platform and should be included within the calculations. He is unable to provide any opinion as to Mr Sippel’s identification of “Unsuitable surfaces”.1029 [1005] Neither Mr Sippel nor Mr Byrom were cross-examined by the parties. In the absence of cross-examination I am not able to accept WICET’s submission that the as-built data relied on by Mr Sippel is “demonstrably unreliable”.1030 Nor has it been established, in my view, that the as-built data relied on by Mr Sippel is “demonstrably inaccurate”. Even if such inaccuracy had been demonstrated by WICET, Mr Sippel’s volume calculation is, in any event, 2,000m3 greater than CMC’s contemporaneous volume calculation. There 1027 Addendum to Court Book, Vol 17, Expert Survey Report by Alistair Byrom dated 26 May 2016, [51]-[52]. 1028 Addendum to Court Book, Vol 17, Expert Survey Report by Alistair Byrom dated 26 May 2016, [92]. 1029 Addendum to Court Book, Vol 17, Expert Survey Report by Alistair Byrom dated 26 May 2016, [94]-[95]. 1030 WICET’s Written Closing Submissions, [2035]. -- 250 of 304 -- 251 is, therefore, significant room for error before it could be concluded that the volume claimed by CMC of 11,103m3 was not reasonable. [1006] I find that no amount is repayable to WICET for this item. Cell 18 – 124 Quantity Increase in Piling – Variation 75 [1007] This item relates to CMC’s claim for the cost of excavation, concreting and reinforcement of Piles A5-A8 as a result of the pile sockets collapsing. CMC has been paid $247,213.82 in respect of this item. WICET asserts that it is entitled to be repaid $101,249.77 because CMC is not entitled to payment for any increased excavation, concrete and reinforcement used by it in the installation of Abutment A Piles A5-A8 because it caused the circumstances, the subject of NCR-16, and therefore was the cause of any additional excavation, concreting and reinforcement. CMC asserts to the contrary, namely that NCR-16 arose as a result of WICET’s conduct. [1008] CMC does not take issue with the amount of repayment sought. It follows from my reasons in relation to Direction 5 concerning specification uncertainty in relation to the Piling Claim that CMC, not WICET, caused the additional work. [1009] Accordingly, I find that WICET is entitled to a repayment of $101,249.77 in relation to this item. Cells 21 and 24 – Bridge Abutment Protection – Type 4 Abutment B – Item 66 and Abutment A – Item 65 [1010] WICET asserts that in respect of item 66 it paid CMC $77,822 and in respect of item 65 $72,638. WICET alleges that CMC did not carry out the works the subject of these items and should repay both amounts. There is no dispute that CMC did not carry out the work in respect of the items. The only issue is whether WICET has established that CMC was in fact paid the two amounts. [1011] WICET relies on the Final Certificate as recording both payments. By reference to the Final Certificate1031 it is evident that whilst the two amounts are recorded in the “commitment” column, the columns dealing with the previous certification and final certified amount for both items uniformly records zero. As correctly submitted by CMC, the “commitment” column in the Final Certificate was a cost control function adopted by WICET and the Principal’s Representative, and the amounts contained within that column were approved by WICET as the budget for those works at the time of entering into the Contract.1032 The commitment column does not represent the amount WICET necessarily paid to CMC, but rather it is an amount that came from the pre-existing document, agreement or instruction that WICET used to build up the original Contract price.1033 The mere fact that the two amounts appear in the commitment column of the Final Certificate, does not, in my view, evidence that WICET paid those amounts to CMC. 1031 CMC.508.002.0414 at .0417. 1032 T19-15, lines 18-23. 1033 CMC’s Written Closing Submissions, [1848]. -- 251 of 304 -- 252 [1012] WICET asserts that payment claims, certificates and records also demonstrate the payment of both amounts. WICET submits that the amounts were claimed by Payment Claim 14 and included in payment certificate 14. The difficulty with this submission is that the relevant letter from Worley Parsons1034 attaches a payment schedule which identifies the specific item for which payment is certified. Items 65 and 66 are not mentioned in the payment schedule.1035 [1013] CMC further submits that by reference to the Final Certificate and Exhibit 425, which is entitled “Admissions on Payment”, it is common ground that CMC has been paid a total amount exclusive of GST of $58,127,785.04. This amount does not include the amounts for items 65 and 66. I accept CMC’s submission that WICET has not established that CMC was paid any money for these items. In any event, as the Final Certificate showed an amount of zero as being paid for both items, WICET’s entitlement to any payment pursuant to the Final Certificate should be capped at zero. Cell 25 – 079 Additional Pavement Testing – Variation 54 [1014] This item concerns additional pavement testing by CMC. CMC has been paid an amount of $196,157.50. WICET accepts that a change in specification “undoubtedly required more testing”.1036 For the purposes of the Final Certificate WICET audited CMC’s claim and could not find evidence of the CBR (soaked) test and reduced CMC’s entitlement to $139,187.50. This is the amount stated in the Final Certificate.1037 CMC accepts that there is an amount of $56,970 to be repaid to WICET in respect of Variation 54. [1015] WICET however asserts that the amount that should be repaid is the full amount of $196,157.50 primarily on the basis that CMC has presented no evidence to demonstrate that it undertook any testing whatsoever. The fact remains that WICET performed a detailed audit of CMC’s claim to arrive at the figure of $139,187.50. It is WICET that seeks a repayment beyond the amount certified in the Final Certificate. WICET has, in my view, failed to establish any basis to now allege that the additional testing was not undertaken by CMC. Mr Tsipis carried out his valuation of Variation 54 on the basis of an instruction from WICET to assume that CMC had not demonstrated that it carried out the additional testing required. Mr Tsipis’ valuation, on the basis of this instruction, was of course $nil. [1016] WICET alternatively seeks a repayment of $120,046.36 in respect of Variation 54. At [2118] of its closing submissions, WICET identifies three reasons why CMC should repay $120,046.36 rather than the amount shown in the Scott Schedule of $56,970. None of the matters identified by WICET are the subject of expert evidence and are raised for the first time in final submissions as a further alternative basis for valuing this item. I accept CMC’s submission that in those circumstances the Court is not in a position to determine whether the repayment sought in the alternative is either accurate or reasonable.1038 1034 Exhibit 425; CMC.504.003.9298. 1035 T35-85, lines 33-41. 1036 WICET’s Written Closing Submissions, [2115]. 1037 CMC.508.002.0414 at .0434. 1038 T35-87, lines 25-28. -- 252 of 304 -- 253 [1017] I find that in relation to this item WICET is entitled to a repayment of the difference between the amount paid to CMC of $196,157.50 and the amount certified in the Final Certificate of $139,187.50, being an amount of $56,970. Cell 32 – 028 Ground Surface Treatment Omitted Item – Variation 45 [1018] There are a number of omitted items in dispute. It is necessary to set out the relevant clauses which deal with omitted items. [1019] The last paragraph of clause 3.3 of the General Conditions (as amended) provides as follows: “3.3 Adjustment for Actual Quantities – Schedule of Rates If the Schedule of Rates omits an item which should have been included, the Item shall be valued under Clause 40.5 as if it was extra work directed by the Superintendent Principal’s Representative as a variation.” [1020] Clauses 3.1.2, 3.3.1 and 3.3.4 of Schedule C-3, provide as follows: “3.1.2. The Contract Sum includes the price of the whole of the work under the Contract which includes but is not limited to services and other incidentals associated with or necessary for the execution of the work described and the performance of the obligations of the Contractor under the Contract, whether specifically mentioned or not within the Schedule C-3 – ‘Section C3 Contract Price Schedule’. … 3.3.1. The rates inserted in the Schedule C-3 – ‘Section C3 Contract Price Schedules’ shall be the full inclusive cost of the work described and shall be deemed to include but are not limited to, the cost of wages, profit, overheads, all supervision (including foreman and above), insurance, consumables, timekeeping, charges, transportation to and from the Site, transportation around the Site, all clerical and office work, performance of the obligations of the Contractor under the Contract and all incidental costs incurred in performing the work. … 3.3.4. The descriptions of rate activity items, equipment and parts are intended only as brief descriptions sufficient for identification and are not exhaustive.” [1021] Clauses 3.2.4 and 3.3.5 of Schedule C-3.3 and clause 3.4 of the General Conditions, provides as follows: “3.4 Minor Items Notwithstanding any other provision in the Contract, minor items not expressly mentioned in the Contract but which are necessary for the -- 253 of 304 -- 254 satisfactory completion and performance of the work under the Contract shall be supplied and executed by the Contractor. The cost of such minor items shall be deemed to be included in the Contract Sum.” “3.2.4. Minor activity items, equipment or parts not expressly mentioned in the Contract or the Schedule C-3 – ‘Section C3 Contract Price Schedules’, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the Contract Sum.” “3.3.5. Minor activity items, equipment, parts and other costs not expressly mentioned in the Contract or the Schedule C-3 – ‘Section C3 Contract Price Schedules’, including related travel and accommodation, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the rates.” [1022] On a proper construction of these provisions, an item of work is not an “omitted item” for which CMC is entitled to payment where: (a) it is part of the Scope of Work under the Contract and it is reasonably contemplated by an existing Schedule C-3 item; or (b) the item is “minor”, but necessary for the satisfactory completion and performance of the work under the Contract.1039 [1023] Omitted items are to be valued pursuant to clause 40.5. [1024] The parties agree that CMC has been paid $94,723.20 in respect of this item. WICET seeks the repayment of the whole of this amount on the basis that it does not constitute an omitted item under the Contract. CMC asserts that it is an omitted item. Mr Roberts valued CMC’s claim for the omitted item at $72,106.97, resulting in a repayment to WICET of $22,616.23. [1025] On 4 January 2012, CMC wrote to the Principal’s Representative and explained that this item had been omitted by WICET.1040 [1026] On 22 February 2013, CMC again wrote to the Principal’s Representative stating that further work, in accordance with work item 3104 of the specification (being the ground surface treatment under the embankment), was performed by CMC in the area beneath the OLC embankment between CH430 to CH1550 and CH1980 to CH2700.1041 [1027] Work item 3104 of the specification included: (a) work operations listed in clause 2.2.5 of MRS 11.01 Introduction to Standard Specifications; and (b) supplying, placing and compacting fill material in holes and localised depressions; 1039 WICET’s Written Closing Submissions, [1825] – [1828]; CMC’s Written Closing Submissions, [1907]. 1040 Exhibit 421, CMC.502.063.5126. 1041 Exhibit 2, CMC.504.006.3379. -- 254 of 304 -- 255 (c) adjusting the moisture content of in situ material below the existing ground surface; and (d) compacting material below the prepared ground surface. [1028] Mr Tsipis’ opinion is that CMC’s claim for this item has no merit on the following grounds: (a) the Scope of Works specifically includes ground surface treatment and the work under the Contract. (b) Schedule C-3 Payment Item 91 “filling, general fill – Overland Conveyor Platform (south – Ch 0 to Ch 3083)” is associated with MRS Standard Item 3301 Road Embankment, which includes ground surface treatment and specifically MRS work item 3104 Ground Surface Treatment. Mr Tsipis concludes: “Therefore, I do not consider the ground surface treatment related to the construction of the embankment fill on the overland conveyor from Ch 430 to 1550 and Ch 1980 to 2700 has been omitted from Schedule C-3, and therefore, it follows that the Contract Sum is not required to be adjusted pursuant to Clause 40.5.”1042 [1029] Mr Roberts disagrees with Mr Tsipis’ conclusion: “With the exception of point (a) above, which is standard across all MRS items, none of the work operations included the ground surface treatment under embankments are included in the MRS item 3301, as applicable to Schedule C-3 item 9.1. In my opinion, CMC could not have reasonably contemplated this scope when submitting its tender and rate for item 91. As such, the works associated with this variation are an omitted item and do not meet the requirement stated in paragraph 1129 of Mr Tsipis’ report.” [1030] Paragraph [1129] of Mr Tsipis’ report records his instruction as to the proper construction of clauses 3.3 and 3.4 of the General Conditions of Contract and clauses 3.3.1, 3.3.4 and 3.3.5 of C-3.3 Schedule of Rates. I accept Mr Roberts’ opinion that none of the work operations included in ground surface treatment under embankments are included in MRS Item 3301. The amount repayable to WICET by CMC is therefore $22,616.23. Other omitted items Cells 3 to 11 [1031] There are nine items which make up this claim. The parties agree that CMC has been paid $305,954.17 in respect of these items. CMC asserts that its entitlement is $211,138.34 with the result that $94,815.83 is repayable to WICET. In the Final Certificate the amount said to be payable to CMC is $11,500.29. In the Scott Schedule this position has changed again and WICET asserts that CMC is only entitled to 1042 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, [1149] – [1150]. -- 255 of 304 -- 256 $5,764.80. In his report Mr Roberts only deals with Cells 7 and 8. Mr Tsipis deals with Cells 3 to 11. I accept Mr Tsipis’ evidence that for Cells 3, 4, 5, 6, 9, 10 and 11 the relevant items were part of the Work under the Contract and included in the Contract Sum. The work items are therefore not omitted. I also accept Mr Tsipis’ further or alternative opinion in respect of Cells 3, 4, 5, 6, 9 and 10, that the relevant works were minor activity items which, by their nature, were necessary for the satisfactory completion and performance of the work under the Contract. As to Cells 7 and 8, whilst Mr Roberts agrees that these were not omitted items, he disagrees with Mr Tsipis regarding any requirement to adjust the Contract Sum as a result of these works. By reference to a drawing concerning Beales Creek Bridge, Mr Roberts found the quantities included in Schedule C-3 for items 176 to 180 are incorrect. For the reasons identified in [1929] – [1937] of CMC’s closing submissions, I accept Mr Roberts’ approach in valuing Cells 7 and 8 (items 7411 and 7425). Mr Tsipis agrees to the valuation made by Mr Roberts in the amount of $45,287.89. Mr Roberts however amended his original valuation found at [554] of his report from $45,287.89 to $42,542.89. This is the only amount to which CMC is entitled. CMC should therefore repay WICET $263,411.28 in respect of Cells 3 to 11. Cell 20 – 004 Dynamic Testing of Piles [1032] CMC has been paid $79,750 in respect of this item. It accepts that it is entitled to $64,687.50 and must repay WICET the amount of $15,062.50. The issue is whether in circumstances in which the relevant Main Road specification provides for a separate Pay Item for dynamic testing and there is no corresponding Pay Item in Schedule C-3, should dynamic testing be held reasonably to have been included in the general piling work items. Mr Tsipis considers the testing to fall within the existing Scope of Work and within MRS Item 7603 in Schedule C-3 Pay Item 143 “driving steel piles”. Mr Roberts however considers the works are an omitted item as dynamic testing is separately and specifically detailed under MRS Items 7801P – establishment of equipment on-Site for dynamic testing of piles (provisional quantity) and 7802P – dynamic testing of pile to determine load capacity (provisional quantity). [1033] WICET submits that Mr Roberts misunderstands the contractual test. The only relevant threshold is whether the work was reasonably contemplated by a Schedule C-3 item. If so, it will not have been “omitted”. In this case the Pay Item relied on by Mr Tsipis provides generally for testing. CMC ought to have assumed that any testing within its scope (including dynamic testing) was included in that item.1043 I do not accept this submission. [1034] CMC’s position was stated in a letter to WICET dated 20 January 2012. CMC maintained that Schedule C-3 to the Contract failed to include the following items: ● MRS Item 781P – establishment of equipment on-Site for dynamic testing of piles (provisional quantity); and ● MRS Item 782P – dynamic testing of pile to determine load capacity (provisional quantity). 1043 WICET’s Written Closing Submissions, [1894]. -- 256 of 304 -- 257 [1035] Whilst Mr Roberts agrees with Mr Tsipis that the requirements regarding the dynamic testing of piles were specified in the Contract, he disagrees with Mr Tsipis’ position regarding the inclusion of the cost for dynamic testing of piles within the Contract Sum. Mr Tsipis referred to MRS01, clause 2.1.5, which states: “The following Work Operations are common to all Work Items and are deemed to be included in the Work Items shown in the Schedule of Rates - … (h) all testing, except to the extent that testing is the subject of a separate specific Work Item in the Schedule of Rates.” [1036] According to Mr Roberts, the work operations required to conduct dynamic testing are succinctly and specifically detailed in MRS Work Items 7801 and 7802. These items are also deemed to include the Work Operations listed in clause 2.1.5. Therefore, the testing referred to in clause 2.1.5 cannot be related to the dynamic testing of piles, otherwise these two work items would be superfluous. Mr Roberts is therefore of the opinion that the dynamic testing scope forming the basis of this item is not a “test” necessary for the completion of the works in the context described in clause 31.7 of the Contract, but a discrete element of the works that is specified, measured and claimed as a standard work item. His opinion is that attempting to categorise the discrete elements of work associated with these items as part of CMC’s general testing responsibilities under the Contract is a failure to reasonably consider the MRS Work Items 7801 and 7802.1044 I accept Mr Roberts’ opinion. [1037] The amount of repayment to WICET is $15,062.50. Cell 27 – 029 Supply and Install Expansion Joint [1038] WICET seeks repayment of $53,826.50 for a claimed omitted item, namely a granor XJS expansion joint. The claim relates to the item being omitted from Schedule C-3. The Contract expressly provides for the addition of items omitted from Schedule C-3 and their valuation pursuant to clause 40.5 of the Contract. Clauses 3.2 and 3.3 of the General Conditions were amended as set out in Annexure B of the General Conditions to the Contract. The General Conditions to the Contract take precedent to the Contract Schedules and therefore to the extent that clauses 3.1.2, 3.3.1 and 3.3.4 of Schedule C-3 are inconsistent with amended clauses 3.2 and 3.3 of the General Conditions, they should be read down. [1039] Both Mr Tsipis and Mr Roberts deal with this omitted item. I accept Mr Roberts’ opinion as expressed in [466] – [470] of his report. From the Scott Schedule in relation to Cell 27 CMC accepts and I find that an amount of $6,338.24 is repayable to WICET. Cell 52 – 072 Bearing Pedestals [1040] WICET seeks the repayment of $5,821 for this item. Only Mr Tsipis gave an opinion in relation to this item. I accept his opinion that the relevant works are not an omitted item 1044 Exhibit 2A, Court Book Vol 11, Expert Report on Quantum by Paul Roberts dated 6 April 2016, [498]-[502]. -- 257 of 304 -- 258 and further or alternatively, that the works were minor.1045 The amount that should be repaid to WICET in relation to this item is $5,821. Cell 54 – 131 Omitted Item – Evaporation Compound [1041] WICET seeks the repayment of $3,536.75. I find that this item is not an omitted item or alternatively, the relevant works are minor activity items which, by their nature, were necessary for the satisfactory completion and performance of the work under the Contract. WICET is entitled to a repayment of $3,536.75. Lack of Evidence – Cells 39, 41, 47, 50, 60, 61 and 62 [1042] The parties are agreed in relation to Cell 62. WICET concedes that CMC is entitled to an amount of $1,943.60.1046 [1043] In respect of Cells 39, 41, 47, 50, 60 and 61 CMC submits that no moneys are repayable to WICET primarily because WICET has failed to lead any evidence in support of the repayment of these amounts.1047 Whether WICET is entitled to any repayment in respect of these Cells, cannot be determined on the basis of CMC’s “no evidence” submission. WICET’s closing submissions deal with each item and the basis upon which the item is said to be payable. Further, as submitted by WICET, whether there is an entitlement to repayment is in some instances a question of law. Further, as to Cells 39 and 41, for example, there is evidence from Mr Miroshnikoff concerning the relevant items. Mr Miroshnikoff swore that paragraphs 372 to 408 of his witness summary were true and correct.1048 Cells 39 and 41 – OC Access Roads – Items 114 and 119 [1044] I accept, based on Mr Miroshnikoff’s evidence at [388] – [397] of his witness summary that, as a result of NCR24 and NCR25, CMC should repay WICET $17,519.47 in respect of Cell 39 and $15,949.06 in respect of Cell 41. Cell 47 – 002 Bridge Work Design [1045] WICET has failed to establish any basis for a repayment of $11,812.50 in respect of Cell 47. The works were carried out pursuant to an instruction from Mr Knowles to CMC on 17 October 2011. These works were the design for a temporary crossing of Pyealy Creek and access at Beales Creek. The works were not the design of temporary works required under the Contract, as alleged by WICET, but resulted from access issues and delays caused by WICET. I have determined that WICET was responsible for the delay associated with the waterway barrier permit. 1045 WICET’s Written Closing Submissions, [1916] – [1922]; CMC’s Closing Submissions, [2016] – [2024]. 1046 WICET’s Written Closing Submissions, [2060]. 1047 CMC’s Closing Submissions, [1896]. 1048 T19-3, lines 22-25. -- 258 of 304 -- 259 Cell 50 – Item 91 – Clay Liner [1046] WICET seeks the repayment of $7,896.33 in respect of an amount for this item paid to CMC of $344,486.88. As Mr Byrom was unable to independently verify the surfaces used by Xcel, his assessment as to the quantity of 67,860m3 cannot be viewed as sufficiently accurate or precise to warrant a repayment of $7,896.33. Cell 60 – Variation 77 [1047] The amount of repayment sought by WICET is $646.30. The correspondence of 19 April 20131049 does not establish WICET’s entitlement to be repaid this amount. Cell 61 – Variation 43 [1048] The letter of 19 April 2013 does not establish a basis for WICET to be repaid $500.25. Other Items Cell 16 – Variation 62 – 099 Piling Specification Change [1049] WICET has paid CMC $168,144.34 for this item. The quantum experts have agreed a value of $14,439.62 in respect of the requirement for inspection by camera. CMC is entitled to this amount. It constitutes part of the amount that WICET has already paid. The experts also agree that the breaking back of the piles to the Rail Receival Access Bridge Abutment A and B and Pier 1 was always a requirement of the Contract for CMC to complete and is therefore not an omitted item.1050 [1050] This results in a repayment to WICET of $123,213. The experts disagree as to whether geotechnical certification was always part of the scope. In light of my findings in relation to Direction 5, “specification uncertainty” in respect of the Piling Claim, this dispute is resolved in WICET’s favour. Accordingly WICET is entitled to a total repayment for this item of $153,704.72. Cell 22 – 101 Reclamation C Drop Board Structure – Variation 63 [1051] WICET has paid CMC an amount of $255,557.81 for these works. WICET now seeks a repayment of $44,222.29 on the basis that one of the 11 items, namely item 1.9, should be valued at a rate of $2,081.11/m3 based on the average of Schedule C-3 Pay Item 175 and item 2.1.4 of Schedule C-4.1. CMC seeks to have the same item valued using Schedule C-4 item 2.1.4, which is an applicable rate of $2,600/m3. CMC by adopting this rate accepts that there is an amount of $10,842.81 repayable to WICET. [1052] The only issue is the applicable rate. 1049 CMC.505.015.3826. 1050 WICET’s Written Closing Submissions, [1883]; Addendum to Courtbook, Vol 17, Experts’ Joint Report on Quantum by George Tsipis and Paul Roberts dated 18 July 2016, Item 10.5.10. -- 259 of 304 -- 260 [1053] Mr Roberts has not valued this variation. Mr Tsipis has valued this claim. He disagrees that the Schedule C-4.1 rate applies. Mr Tsipis accepts that the revised drawings show that the design of the Concrete Drop Structure was significantly changed.1051 He also accepts that these changes constitute a variation requiring the varied design to be valued under clause 40.5. What is being valued is a variation. Item 2.1.4 of Schedule C-4.1 is a rate applicable for slabs on ground with less than 200mm thickness. It is not a specified rate for the purposes of clause 40.5(a). Clause 40.5(b) is not applicable as I have determined that Schedule C-4 is not a “Schedule of Rates” as defined. The question is whether the rate in Schedule C-4.1, which deals with unit rates for pricing variations, may be applied as a reasonable rate for the purposes of clause 40.5(c). [1054] The primary reason Mr Tsipis does not apply this rate is because of clause 4.1.3 of Schedule C-4. Mr Tsipis is of the opinion that changes in quantities in Schedule C-3 within the limits of accuracy will not be valued using Schedule C-4.1 unit rates. I have already rejected this construction in respect of the Bebo Arch Claim.1052 It follows that I do not accept Mr Tsipis’ opinion that it is inappropriate for this variation to be valued by reference to item 2.1.4 of Schedule C-4.1. [1055] Accordingly the amount of repayment to WICET is $10,842.81. Cells 23, 26 and 35 – 074 Fencing Drawing Amendment Cost – Variation 50 – Items 122 and 123 [1056] These items concern the valuation of fence works. For Cell 23 WICET seeks the repayment of $54,641.86. CMC accepts that $40,096.86 is repayable. For Cell 26 WICET seeks the repayment of $54,426. CMC asserts that WICET is not entitled to any repayment for this item. As to Cell 35, WICET seeks a repayment of $34,560.50. CMC accepts that $31,567.08 is repayable for this item. WICET’s submissions are at [2039] – [2053] of its closing submissions and in [469] – [472] of its reply submissions. CMC’s submissions are found at [2243] – [2274] of its closing submissions. Having considered these submissions, I accept that in determining the total length of the fence it is appropriate to accept the Xcel survey which was verified by Mr Byrom. The Xcel survey identified the High Astronomical Tide (HAT) line and one can measure the length of the tidal fence by reference to it. Mr Byrom in his report considered this data as well as aerial imagery rotated and scaled to fit a number of clearly identified known points along the corridor. Using this data, he measured the as-built length of the fence, but had to use vegetation/soil changes to delineate the tidal zone. CMC submits that WICET has not provided it with “as-built survey data” relied upon by Mr Byrom. The Xcel data was tendered at trial. Further, the aerial imagery utilised by Mr Byrom is data which ought to be available publicly or which CMC could have (but did not) ask for.1053 In any event, the experts agreed on the total length of the fence in their joint report at [15]. It is however unclear what length was actually agreed because they each identify three total lengths and the agreements in the joint report are difficult to reconcile. 1051 Exhibit 2A, Court Book Vol 14, Expert Report on Quantum by George Tsipis dated 16 November 2015, [1531]. 1052 See [580] – [583] above. 1053 WICET’s Reply Submissions, [471(c)]. -- 260 of 304 -- 261 [1057] As Mr Byrom’s as-built “aerial image” calculation is comparable to the surveys provided by Xcel, I accept WICET’s submission that it is appropriate to use the Xcel survey.1054 This results in a repayment to WICET of $54,641.86 in respect of Cell 23. The amount of repayment in respect of Cells 26 and 35 is $88,986.51. [1058] Accordingly the total repayment to WICET is $143,628.37. Cell 28 – Item 87 Exc-box-out for pavements [1059] CMC assert that a review of payment certificate 19 sent to the Principal’s Representative on 19 April 20131055 shows that CMC claimed and was paid $50,621.76 for this work. The Final Certificate shows $0 payable to CMC for this item. Mr Miroshnikoff’s unchallenged evidence, which I accept, is that the work was de-scoped from CMC and performed by the GC07 Contractor. CMC did not perform this work.1056 [1060] WICET is entitled to a repayment of $50,621.76 for this item. Cell 34 – 083 Drainage Blanket on OLC and Rec C [1061] WICET has paid CMC $36,754.86 in respect of this item. WICET seeks the repayment of the full amount. The claim is for the additional accommodation and flights incurred by CMC. The figure of $36,754.86 was calculated and claimed by CMC in a letter dated 12 May 2012.1057 WICET refers to clauses 3.3.1 and 3.3.5 of Schedule C-3 to submit that the relevant Schedule C-3 Pay Items are inclusive of accommodation and flight costs. This ignores that the additional accommodation and flight costs were incurred by CMC as a result of a site instruction issued by the Principal’s Representative. This instruction was to increase the thickness of the drainage blanket to 500mm and 750mm at the creek on the primary bund location. [1062] I accept CMC’s submission that, in circumstances where these were variation works under clause 40.1, they affected the following Pay Items: (a) 3301.76/3301.78 which covered drainage material placement on Reclamation C and the OLC; and (b) Item 12 accommodation. [1063] I accept that the claim for the additional accommodation and flight costs was as a result of the operation and works being extended for an additional six months as a result of WICET’s site instruction.1058 [1064] Accordingly no amount is repayable to WICET in respect of this item. 1054 WICET’s Written Closing Submissions, [2043]. 1055 Exhibit 2, CMC.502.060.7888 at .7893. 1056 Mr Miroshnikoff, Witness Statement, [382] – [384]; T19-3, lines 22-25. 1057 CMC.505.082.8392. 1058 CMC’s Written Closing Submissions, [2302] – [2304]. -- 261 of 304 -- 262 Cell 94 – Granular Material [1065] WICET seeks the repayment of $9,056.04 from a total amount of $2,988,886.78 paid to CMC for this item. Mr Byrom at [51] of his report dated 26 May 2016 states that he has been unable to locate any other surface information that would reflect this surface, as a result he could not complete a totally independent check on Xcel’s calculations. Given the small amount involved and the reservations expressed by Mr Byrom, WICET has not established a proper basis for any repayment. I find that no amount is repayable in relation to this item. Cell 97 – Item 81 [1066] CMC has been paid $955,561.86 in respect of this item. Mr Byrom assessed the fill quantities for this item and found that Xcel’s survey was reliable. The cut volume from the Xcel survey was 112,398.13m3. WICET acknowledges that this results in a payment from WICET to CMC of $45,905.48.1059 The Final Certificate confirmed the certification of $1,038,906. This valuation was based on a contemporaneous assessment and certification performed by the Principal’s Representative at the time of issuing the Final Certificate on 7 May 2014. The quantities certified by the Principal’s Representative were 116,600m3.1060 CMC submits that WICET has not provided any evidence as to why the assessment and certified quantities of the Principal’s Representative at the time of issuing the Final Certificate were incorrect. WICET relies however on Mr Byrom’s calculation of quantity. Mr Byrom at [44] – [47] of his report was qualified in his acceptance of Xcel’s volume and his own calculations. Mr Byrom arrived at his quantity by first conducting a visual review of the comparison between the as-built survey surface and design. He noted that there was “general agreement”. He calculated the volume to be 133,568m3. Mr Byrom observed however that this was within 8.6% of Xcel’s calculation. [1067] In light of these qualifications, WICET has not established that in determining any repayment to CMC Mr Byrom’s calculation should be preferred over the contemporaneous quantities certified by the Principal’s Representative which were never disputed by CMC. [1068] Accordingly, the amount payable to CMC in relation to this item is $83,344.14. Conclusion – Final Certificate and Scott Schedule [1069] The parties are to calculate the amount payable by CMC to WICET in respect of the Final Certificate Scott Schedule in accordance with these Reasons. Disposition 1. I value CMC’s Earthworks Claim at $1,549,509. 2. I value CMC’s alternative GPN Borrow Pit Claim at $580,194.90. 1059 WICET’s Written Closing Submissions, [2067]. 1060 CMC’s Written Closing Submissions, [2375]. -- 262 of 304 -- 263 3. I value CMC’s Piling Claim (Variation 142) at $884,330. 4. In respect of the Pyealy Creek Bebo Arch Claim (Variation 103) CMC is entitled to an additional payment of $822,516. 5. As to the Delay Claim (Variation 17) CMC is entitled to an extension of time of 208 days. The parties are required to provide further submissions in having Exhibit 427 recalculated so as to reflect the use of Mr Roberts’ reasonable rates and incorporating a weighted average. 6. For the Environmental Management Claim (Variation 90), CMC is entitled to a further payment of $69,746.05. 7. In relation to the Geolon 600 Claim (Variation 63) CMC is entitled to a further payment of $219,018. 8. I will hear the parties further as to the Bank Guarantee. 9. As to interest, I have determined that section 67P of the QBCC Act applies. I will hear the parties further as to the calculation of interest. 10. WICET’s counterclaim for liquidated damages fails. I will hear the parties further as to WICET’s counterclaim in respect of the Delay Claim (Variation 17). 11. WICET’s counterclaim in respect of adjudication fees and interest under the BCIP Act fails. 12. WICET’s counterclaim in respect of the OLC Claim (Variation 30) fails. 13. WICET’s counterclaim in respect of the Environmental Management Claim (Variation 90) fails. 14. The parties are to calculate the amount to which WICET is entitled for its counterclaim in respect of the Final Certificate/Scott Schedule in accordance with these Reasons. [1070] I will hear the parties further as to final orders, further directions and costs. -- 263 of 304 -- 264 Annexure “A” SC No 6050/2013 Relevant General Conditions and Schedules 33 PROGRESS AND PROGRAMMING OF THE WORKS 33.1 Rate of Progress The Contractor shall proceed with the work under the Contract with due expedition and without delay. The Contractor shall not suspend the progress of the whole or any part of the work under the Contract except where the suspension is under Clause 44.9 or is directed or approved by the Principal’s Representative under Clause 34. The Contractor shall give the Principal's Representative reasonable advance notice of when the Contractor requires any information, materials, documents or instructions from the Principal’s Representative or the Principal. The Principal and the Principal’s Representative shall not be obliged to furnish any information, materials, documents or instructions earlier than the Principal or the Principal’s Representative, as the case may be, should reasonably have anticipated at the Date of Acceptance of Tender. The Principal’s Representative may direct in what order and at what time the various stages or parts of the work under the Contract shall be performed. If the Contractor can reasonably comply with the direction, the Contractor shall do so. If the Contractor cannot reasonably comply, the Contractor shall notify the Principal’s Representative in writing, giving reasons. If compliance with the direction causes the Contractor to incur more or less cost than otherwise would have been incurred had the Contractor not been given the direction, the difference shall be valued under Clause 40.5. 33.2 Construction Program For the purposes of Clause 33, a ‘construction program’ is a statement in writing showing the dates by which, or the times within which, the various stages or parts of the work under the Contract are to be executed or completed. A construction program shall not affect rights or obligations in Clause 33.1. The Contractor shall furnish to the Principal’s Representative a construction program within the time and in the form specified in the Special Conditions of Contract at Appendix F2 and will revise the construction program as specified in the Special Conditions of Contract at Appendix F2. The Contractor shall not, without reasonable cause, depart from- (a) a construction program included in the Contract; or -- 264 of 304 -- 265 (b) a construction program furnished to the Principal’s Representative. The furnishing of a construction program or of a further construction program shall not relieve the Contractor of any obligations under the Contract including the obligation to not, without reasonable cause, depart from an earlier construction program. 34 SUSPENSION OF THE WORKS 34.1 Suspension by Principal’s Representative If the Principal’s Representative considers that the suspension of the whole or part of the work under the Contract is necessary- (a) because of an act or omission of- (i) the Principal, the Principal’s Representative or an employee, consultant or agent of the Principal; or (ii) the Contractor, a subcontractor or an employee or agent of either; (b) for the protection or safety of any person or property; or (c) to comply with an order of a court, the Principal’s Representative shall direct the Contractor to suspend the progress of the whole or part of the work under the Contract for such time as the Principal’s Representative thinks fit. 34.2 Suspension by Contractor If the Contractor wishes to suspend the whole or part of the work under the Contract, otherwise than under Clause 44.9, the Contractor shall obtain the prior written approval of the Principal's Representative. The Principal’s Representative may approve of the suspension and may impose conditions of approval. 34.3 Recommencement of Work As soon as the Principal’s Representative becomes aware that the reason for any suspension no longer exists, the Principal’s Representative shall direct the Contractor to recommence work on the whole or on the relevant part of the work under the Contract. If work is suspended pursuant to Clause 34.2 or 44.9, the Contractor may recommence work at any time after reasonable advance notice to the Principal's Representative. 34.4 Cost of Suspension -- 265 of 304 -- 266 Any cost incurred by the Contractor by reason of a suspension under Clause 34.1 or Clause 34.2 shall be borne by the Contractor but if the suspension is due to an act or omission of the Principal, the Principal’s Representative or an employee, consultant or agent of the Principal and the suspension causes the Contractor to incur more or less cost than otherwise would have been incurred but for the suspension, the difference shall be valued under Clause 40.5. 34.5 Effect of Suspension Suspension shall not affect the Date for Practical Completion but the cause of suspension may be a ground for extension of time under Clause 35.5. 35 TIMES FOR COMMENCEMENT AND PRACTICAL COMPLETION 35.1 Time for Commencement of Work on the Site The Contractor shall give the Principal’s Representative 7 days’ notice of the date upon which the Contractor proposes to commence work on the Site. The Principal’s Representative may reduce the period of notice required. The Contractor shall commence work on the Site within 14 days after the Principal has given the Contractor possession of sufficient of the Site to enable the Contractor to commence work. The Principal’s Representative may extend the time for commencement of work on the Site. 35.2 Time for Practical Completion The Contractor shall execute the work under the Contract to Practical Completion by the Date for Practical Completion. Upon the Date of Practical Completion the Contractor shall give possession of the Site and the Works to the Principal. 35.3 Separable Portions The interpretations of- (a) Date for Practical Completion; (b) Date of Practical Completion; (c) Practical Completion, -- 266 of 304 -- 267 and Clauses 5.7, 16, 35, 37, 38, 42.3 and 42.5 shall apply separately to each Separable Portion and references therein to the Works and to work under the Contract shall mean so much of the Works and the work under the Contract as is comprised in the relevant Separable Portion. If the Contract does not make provision for the amount of security, retention moneys, liquidated damages or bonus applicable to a Separable Portion, the respective amounts applicable shall be such proportion of the security, retention moneys, liquidated damages or bonus applicable to the whole of the work under the Contract as the value of the Separable Portion bears to the value of the whole of the work under the Contract. 35.4 Use of Partly Completed Works If a part of the Works has reached a stage equivalent to that of Practical Completion but another part of the Works has not reached such a stage and the parties cannot agree upon the creation of Separable Portions, the Principal’s Representative may determine that the respective parts shall be Separable Portions. In using the Separable Portion that has reached Practical Completion, the Principal shall not hinder the Contractor in the performance of the work under the Contract. 35.5 Extension of Time for Practical Completion When it becomes evident to the Contractor that anything, including an act or omission of the Principal, the Principal’s Representative or the Principal’s employees, consultants, other contractors or agents, may delay the work under the Contract, the Contractor shall promptly notify the Principal’s Representative in writing with details of the possible delay (including the extent of the delay) and the cause. When it becomes evident to the Principal that anything which the Principal is obliged to do or provide under the Contract may be delayed, the Principal shall give notice to the Principal’s Representative who shall notify the Contractor in writing of the extent of the likely delay. If the Contractor is or will be delayed in reaching Practical Completion by a cause described in the next paragraph and within 28 days after the delay occurs the Contractor gives the Principal’s Representative a written claim (with all the necessary supporting documentation to enable the Principal's Representative to properly assess the claim) for an extension of time for Practical Completion setting out and evidencing the facts on which the claim is based (including the extent of the delay), the Contractor shall be entitled to an extension of time for Practical Completion. The causes are- (a) an industrial condition that was beyond the reasonable control of the Contractor occurring on or before the Date for Practical Completion: and (b) any of the following events whether occurring before, on or after the Date for Practical Completion- -- 267 of 304 -- 268 (i) delays caused by- – the Principal; – the Principal’s Representative; – the Principal’s employees, consultants, other contractors or agents; (ii) actual quantities of work being greater than the quantities determined by reference to the upper limit of accuracy stated in the Annexure (otherwise than by reason of a variation directed under Clause 40); (iii) latent conditions; (iv) variations directed under Clause 40; (v) repudiation or abandonment by a Nominated Subcontractor; (vi) not used; (vii) not used; (viii) delays by municipal, public or statutory authorities not caused by the Contractor; (ix) claims referred to in Clause 17.1 (v); (x) any breach of the Contract by the Principal; (xi) a Force Majeure Event, to the extent the Force Majeure Event or its effects could not have been prevented, avoided, remedied, reduced, lessened or overcome in whole or in part by the Contractor taking those steps which a prudent, experienced and competent contractor would have taken; or (xii) any other cause which is expressly stated in the Contract to be a cause for extension of time for Practical Completion. Where more than one event causes concurrent delays and the cause of at least one of those events, but not all of them, is not a cause referred to in the preceding paragraph, then to the extent that the delays are concurrent, the Contractor shall not be entitled to an extension of time for Practical Completion. With any claim for an extension of time for Practical Completion, or as soon as practicable thereafter, the Contractor shall give the Principal’s Representative written notice of the number of days extension claimed. If the Contractor is entitled to an extension of time for Practical Completion the Principal's Representative shall, within 28 days after receipt of the notice of the number of days extension claimed, grant a reasonable extension of time. If within the 28 days the Principal’s Representative does not grant the full extension of time claimed, the Principal’s Representative shall before the expiration of the 28 days give the Contractor notice in writing of the reason. -- 268 of 304 -- 269 In determining a reasonable extension of time for an event causing delay, the Principal’s Representative shall have regard to whether the Contractor has taken all reasonable steps to preclude the occurrence of the cause and minimise the consequences of the delay. Whether or not the Contractor has made, or is entitled to make, a claim for an extension of time under this Clause 35.5, the Principal’s Representative may, in its absolute discretion, at any time and from time to time by written notice to the Contractor and the Principal, unilaterally extend the Date for Practical Completion. The power to extend any such date under the previous paragraph: (i) may only be exercised by the Principal’s Representative and the Principal’s Representative is not required to exercise its discretion under the previous paragraph for the benefit of the Contractor; and (ii) is not a direction which can be the subject of a dispute pursuant to Clause 47 or in any other way opened up or reviewed by any other person (including any arbitrator or court). A delay by the Principal or the failure of the Principal’s Representative to grant a reasonable extension of time or to grant an extension of time within 28 days shall not cause the Date for Practical Completion to be set at large but nothing in this paragraph shall prejudice any right of the Contractor to damages. The Contractor will only be entitled to an extension of time for Practical Completion pursuant to this Clause if- (A) the cause of the delay is a cause listed in the fourth paragraph of this Clause; and (B) the Contractor- (1) has demonstrated the activities delayed are on the critical path in the construction program referred to in Clause 33.2; (2) has complied strictly with this Clause 35.5 and in particular has given the claims and notices required by this Clause (except for the notice required by the first paragraph) strictly in the manner and within the times stipulated; (3) has complied with any reasonable instruction of the Principal with respect to the cause of the delay; (4) has taken all proper and reasonable steps necessary and within its control both to preclude the occurrence of the cause of the delay and to avoid or minimise the consequences of the cause of delay and has demonstrated this to the satisfaction of the Principal; and (5) demonstrates to the satisfaction of the Principal that the Contractor has been or will be actually delayed in achieving Practical Completion. -- 269 of 304 -- 270 35.6 Delay Liquidated Damages (a) Liability (i) If the Contractor fails to reach Practical Completion by the Date for Practical Completion the Contractor must pay the Principal Delay Liquidated Damages at the rate stated in Annexure Part A for each day after the Date for Practical Completion up to and including the Date of Practical Completion or the date on which this Contract is terminated, whichever occurs first. (ii) Delay Liquidated Damages may be deducted from any sum otherwise payable by the Principal to the Contractor or will be payable without deduction on demand being made by the Principal, and if such sums are insufficient, the Principal may have recourse to any security provided by the Contractor pursuant to Clause 5.2. (b) Fair estimate The parties agree that the Delay Liquidated Damages are a fair and reasonable pre-estimate of the damages likely to be sustained by the Principal if the work under the Contract is not completed by the Date for Practical Completion. 35.7 Limit on Liquidated Damages The Contractor's liability under Clause 35.6 is limited to the amount stated in the Annexure. * 35.8 Bonus for Early Practical Completion If the Date of Practical Completion is earlier than the Date for Practical Completion the Principal shall pay the Contractor the bonus stated in the Annexure for every day after the Date of Practical Completion to and including the Date for Practical Completion. The total of the bonus shall not exceed the limit stated in the Annexure. 35.9 Not Used 36 DELAY OR DISRUPTION COSTS Where the Contractor has been granted an extension of time under Clause 35.5 for any delay caused by an event listed in Clause 35.5(b)(i), the Principal shall pay to the Contractor such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay and for on-Site overheads attributable to the delay valued by the Principal's Representative under Clause 40.5. The Principal's Representative's valuation shall exclude any off-Site overheads or profit. -- 270 of 304 -- 271 Where the Contractor has been granted an extension of time under Clause 35.5 for a delay caused by any other event for which payment of extra costs for delay or disruption is provided for in Annexure Part A or elsewhere in the Contract, the Principal shall pay to the Contractor such extra Direct Costs as are necessarily incurred by the Contractor by reason of the delay and for on-Site overheads attributable to the delay valued by the Principal's Representative under Clause 40.5. The Principal's Representative's valuation shall exclude any off-Site overheads or profits. The Contractor shall not be entitled to make any Claim for delay costs which could have been reasonably avoided by the Contractor. Further, such costs shall not be included in any valuations of delay costs pursuant to Clause 40.5. Nothing in Clause 36 shall oblige the Principal to pay extra costs for delay or disruption which have already been included in the value of a variation or any other payment under the Contract. Except to the extent expressly set out in Clause 36, the Contractor shall not be entitled to make a Claim for any costs, expenses, damages or other amounts resulting from any delay or disruption arising from any cause (including without limitation breach by the Principal). 40 VARIATIONS 40.1 Variations to the Work The Principal’s Representative may direct the Contractor to- (a) increase, decrease or omit any part of the work under the Contract; (b) change the character or quality of any material or work; (c) change the levels, lines, positions or dimensions of any part of the work under the Contract; (d) execute additional work; and/or (e) demolish or remove material or work no longer required by the Principal. The Contractor shall not vary the work under the Contract except as directed by the Principal's Representative or approved in writing by the Principal's Representative under Clause 40. The Contractor is bound only to execute a variation which is within the general scope of the Contract. The Contractor shall not be bound to execute a variation directed after Practical Completion unless the variation is in respect of rectification work referred to in Clause 37. 40.2 Proposed Variations Upon receipt of a notice in writing from the Principal’s Representative advising the Contractor of a proposed variation under Clause 40, the Contractor shall advise the Principal’s -- 271 of 304 -- 272 Representative whether the proposed variation can be effected. If the variation can be effected, the Contractor shall- (a) advise the Principal's Representative of the effect which the Contractor anticipates that the variation will have on the construction program and time for Practical Completion; and (b) provide an estimate of the cost (including delay costs, if any) of the proposed variation. The Principal shall reimburse the Contractor for the reasonable costs of complying with the requirements of Clause 40.2. 40.3 Pricing the Variation Unless the Principal's Representative and the Contractor agree upon the price for a variation, the variation directed or approved by the Principal's Representative under Clause 40.1 shall be valued under Clause 40.5. The Principal's Representative may direct the Contractor to provide a detailed quotation for the work of a variation supported by measurements or other evidence of cost. 40.4 Variations for the Convenience of the Contractor If the Contractor requests the Principal's Representative to approve a variation for the convenience of the Contractor, the Principal's Representative may do so in writing. The approval may be conditional. Unless the Principal’s Representative otherwise directs in the notice approving the variation, the Contractor shall not be entitled to- (a) an extension of time for Practical Completion; or (b) extra payment, in respect of the variation or anything arising out of the variation which would not have arisen had the variation not been approved. The Principal's Representative shall not be obliged to approve a variation for the convenience of the Contractor. 40.5 Valuation Where the Contract provides that a valuation shall be made under Clause 40.5, the Principal shall pay or allow the Contractor or the Contractor shall pay or allow the Principal as the case may require, an amount ascertained by the Principal’s Representative as follows- -- 272 of 304 -- 273 (a) if the Contract prescribes specific rates or prices to be applied in determining the value, those rates or prices shall be used; (b) if Clause 40.5(a) does not apply, the rates or prices in a Priced Bill of Quantities or Schedule of Rates shall be used to the extent that it is reasonable to use them; (c) to the extent that neither Clause 40.5(a) or 40.5(b) apply, reasonable rates or prices shall be used in any valuation made by the Principal's Representative; (d) in determining the deduction to be made for work which is taken out of the Contract, the deduction shall include a reasonable amount for profit and overheads; (e) if the valuation is of an increase or decrease in a fee or charge or is a new fee or charge under Clause 14.3, the value shall be the actual increase or decrease or the actual amount of the new fee or charge without regard to overheads or profit; (f) if the valuation relates to extra costs incurred by the Contractor for delay or disruption, the valuation shall include a reasonable amount for overheads but shall not include profit or loss of profit; (g) if Clause 11 (b) applies, the percentage referred to in Clause II (b) shall be used for valuing the Contractor's profit and attendance; and (h) daywork shall be valued in accordance with Clause 41. 41 DAYWORK The Principal's Representative may direct that quantities greater than those determined by reference to the upper limit of accuracy referred to in Clause 3.3 or variations directed by the Principal's Representative under Clause 40.1 shall be carried out as Daywork. The Contractor shall thereafter each day record particulars of all resources used by the Contractor for the execution of the Daywork and each day furnish to the Principal's Representative the particulars and copies of time sheets, wages sheets, invoices, receipts and other documents evidencing the cost of the Daywork. The Principal's Representative may direct the manner in which matters are to be recorded. In determining the value of Daywork regard s hall be had to- (a) the amount of wages and allowances paid or payable by the Contractor at the rates obtaining on the Site at the time as established by the Contractor to the satisfaction of the Principal's Representative or at such other rates as may be approved by the Principal’s Representative; (b) the amount paid or payable by the Contractor in accordance with any statute or award applicable to day labour additional to the wages paid or payable under Clause 41 (a); (c) the amount of hire charges in respect of Constructional Plant approved by the Principal's Representative for use on the work in accordance with such hiring rates and conditions as may be agreed between the Principal's Representative and the Contractor or, in the -- 273 of 304 -- 274 absence of agreement, in accordance with such rates and conditions as may be determined by the Principal's Representative; (d) the amounts paid for services, subcontracts and professional fees; (e) the actual cost to the Contractor at the Site of all materials supplied and required for the work; and (f) the charge stated in the Annexure or, if no charge is stated, a charge agreed between the Principal's Representative and the Contractor to cover overheads, administrative costs, site supervision, establishment costs, attendance and profit, or, in the absence of agreement, a reasonable charge determined by the Principal's Representative. Amounts payable for Daywork shall not be subject to adjustment for rise and fall in costs notwithstanding that the Contract may provide for adjustment for rise and fall in costs. Amounts payable for Daywork shall not be subject to adjustment for rise and fall in costs notwithstanding that the Contract may provide for adjustment for rise and fall in costs. 42 CERTIFICATES AND PAYMENTS 42.1 Payment Claims, Certificates, Calculations and Time for Payment At the times for payment claims stated in the Annexure and upon issue of a Certificate of Practical Completion and within the time prescribed by Clause 42.7 and in accordance with Special Conditions of Contract at Appendix Fl, the Contractor shall deliver to the Principal's Representative claims for payment supported by evidence of the amount due to the Contractor and such information as the Principal's Representative may reasonably require. Claims for payment shall include the value of work carried out by the Contractor calculated in accordance with Section C3 Contract Price Schedules, together with all other amounts then due to the Contractor arising out of or in connection with the Contract or for any alleged breach thereof. The Contractor shall not be entitled to payment for any Adjustment under the Contract until the work the subject of the Adjustment has been completed by the Contractor and the Principal's Representative has approved both the basis and quantum of the Adjustment and provided written notification of this approval to the Contractor. For the purposes of this paragraph, ‘Adjustment’ shall mean any Claim for payment in addition to the Contract Sum for costs, losses, expenses or damages, including variations, arising under, out of, or in connection with, the Contract, the work under the Contract or the Project. Within 10 Business Days after receipt of a claim for payment, the Principal's Representative shall issue to the Principal and to the Contractor a payment certificate stating the amount of the payment which, in the opinion of the Principal's Representative, is to be made by the Principal to the Contractor or by the Contractor to the Principal. The Principal's Representative s hall set out in the certificate the calculations employed to arrive at the amount and, if the amount is more or less than the amount claimed by the Contractor, the reasons for the difference. The Principal's Representative shall allow in any payment certificate issued pursuant to this Clause 42. I or any Final Certificate issued pursuant to Clause 42.8 or a Certificate issued pursuant to Clause 44.6, amounts paid under the Contract and amounts otherwise due from the Principal to the Contractor and/or due from the Contractor to the Principal arising out of or in connection with the Contract including but not limited to any amount due or to be credited under any -- 274 of 304 -- 275 provision of the Contract. If the Contractor fails to make a claim for payment under Clause 42.1, the Principal's Representative may nevertheless issue a payment certificate. Where the contract is not for building work pursuant to the Queensland Building Services Authority Act 1991, the following paragraph will apply: Subject to the provisions of the Contract, including clause 42.1 0, within 30 days after the end of the month following receipt by the Principal's Representative of a claim for payment (or within 60 days after the end of the month where the Contractor issues the claim for payment later than the date specified in Annexure Part A), the Principal shall pay to the Contractor, or the Contractor shall pay to the Principal, as the case may be, an amount not less than the amount shown in the payment certificate as due to the Contractor or to the Principal as the case may be. Where the contract is for building work pursuant to the Queensland Building Services Authority Act 1991, the following paragraph will apply: Subject to the provisions of the Contract, including clause 42.1 0, within 5 Business Days of when the Principal's Representative issues a payment certificate, the Principal shall pay to the Contractor or the Contractor shall pay to the Principal, as the case may be, an amount not less than the amount shown in the certificate as due to the Contractor or to the Principal as the case may be. A payment made pursuant to this Clause shall not prejudice the right of either party to dispute under Clause 47 whether the amount so paid is the amount properly due and payable and on determination (whether under Clause 47 or as otherwise agreed) of the amount so properly due and payable, the Principal or Contractor, as the case may be, shall be liable to pay the difference between the amount of such payment and the amount so properly due and payable. Payment of moneys shall not be evidence of the value of work or an admission of liability or evidence that work has been executed satisfactorily but shall be a payment on account only, except as provided by Clause 42.8. Notwithstanding Clause 42.4, the Principal shall be obliged to pay for any item of unfixed plant and materials where that item is- (a) to be imported into Australia, provided the Contractor has given the Principal a clean on board bill of lading or its equivalent, drawn or endorsed to the order of the Principal and, where appropriate, a custom's invoice for the item; or (b) listed in the Annexure and which is not an item to be imported into Australia, provided the Contractor establishes to the satisfaction of the Principal's Representative that the Contractor has paid for the item, and the item is properly stored, labelled the property of the Principal and adequately protected. Upon payment to the Contractor of the amount which includes the value of the item, the item shall be the property of the Principal free of any lien or charge. Except as provided in the Contract, the Principal shall not be obliged to pay for any item of unfixed plant and materials which is not incorporated in the Works. -- 275 of 304 -- 276 42.2 Correction of Payment Certificates At any time and from time to time, the Principal's Representative may by a further certificate correct any error which has been discovered in any previous certificate, other than a Certificate of Practical Completion or Final Certificate. 42.3 Retention Moneys The Principal may deduct from moneys otherwise due to the Contractor amounts up to the limit of the percentages, if any, stated in the Annexure of so much of the value of the respective items stated in the Annexure as is included in the calculation of a payment. 42.4 Unfixed Plant and Materials Alternative 1 If the Contractor claims payment for plant or materials intended for incorporation in the Works but not incorporated, the Principal shall not be obliged to make payment for the plant or materials unless the Contractor provides additional security in one of the forms provided by Clause 5.3 in an amount equal to the payment claimed for the plant or materials. Alternative 2 If the Contractor claims payment for plant or materials intended for incorporation in the Works but not incorporated the Principal shall not be obliged to make payment for such plant or materials but the Principal may make payment, if the Contractor establishes to the satisfaction of the Principal' s Representative that- (a) such plant or materials have reasonably but not prematurely been delivered to or adjacent to the Site; (b) ownership of such plant and materials will pass to the Principal upon the making of the payment claimed; and (c) such plant or materials are properly stored, labelled the property of the Principal and adequately protected. Upon payment to the Contractor of the amount claimed, the plant or materials the subject of the claim shall be the property of the Principal free of any lien or charge. Alternative 3 The Contractor shall not be entitled to payment for plant or materials not incorporated in the Works. -- 276 of 304 -- 277 42.5 Certificate of Practical Completion The Contractor shall give the Principal’s Representative at least 14 days notice of the date upon which the Contractor anticipates that Practical Completion will be reached. When the Contractor is of the opinion that Practical Completion has been reached, the Contractor shall in writing request the Principal's Representative to issue a Certificate of Practical Completion. Within 14 days of the receipt of the request, the Principal's Representative shall give to the Contractor and to the Principal a Certificate of Practical Completion certifying the Date of Practical Completion or give the Contractor in writing the reasons for not issuing the Certificate. When the Principal’s Representative is of the opinion that Practical Completion has been reached, the Principal's Representative may issue a Certificate of Practical Completion whether or not the Contractor has made a request for its issue. 42.6 Effect of Certificates The issue of a payment certificate or a Certificate of Practical Completion shall not constitute approval of any work or other matter nor shall it prejudice any claim by the Principal or the Contractor. Notwithstanding the provisions of Clause 42.8, neither the issue of the Final Certificate nor payment by the Principal of the final amount due to the Contractor shall prejudice the rights of the Principal to recover from the Contractor damages arising out of the supply by the Contractor of faulty materials and/or the performance by the Contractor of defective work when the existence of such faulty materials or defective work was not known to the Principal at the date of issue of the Final Certificate. 42.7 Final Payment Claim Within 28 days after the expiration of the Defects Liability Period, or where there is more than one, the last to expire, the Contractor shall lodge with the Principal’s Representative a final payment claim and endorse it 'Final Payment Claim'. The Contractor shall include in that claim all moneys which the Contractor considers to be due from the Principal arising out of or in connection with the Contract, the Project or the work under the Contract. After the expiration of the period for lodging a Final Payment Claim, any Claim which the Contractor could have made against the Principal and has not been made shall be barred. 42.8 Final Certificate Within 14 days after receipt of the Contractor's Final Payment Claim or, where the Contractor fails to lodge such claim, the expiration of the period specified in Clause 42.7 for the lodgement -- 277 of 304 -- 278 of the Final Payment Claim by the Contractor, the Principal’s Representative shall issue to the Contractor and to the Principal a final payment certificate endorsed ‘Final Certificate’. In the certificate the Principal's Representative shall certify the amount which in the Principal's Representative’s opinion is finally due from the Principal to the Contractor or from the Contractor to the Principal under or arising out of the Contract or any alleged breach thereof. Unless either party, either before the Final Certificate has been issued or not later than 15 days after the issue thereof, serves a notice of dispute under Clause 47, the Final Certificate shall be evidence in any proceedings of whatsoever nature and whether under the Contract or otherwise between the parties arising out of the Contract, that the Works have been completed in accordance with the terms of the Contract and that any necessary effect has been given to all the terms of the Contract which require additions or deductions to be made to the Contract Sum, except in the case of- (a) fraud, dishonesty or fraudulent concealment relating to the Works or any part thereof or to any matter dealt with in the said Certificate; (b) any defect (including omission) in the Works or any part thereof which was not apparent at the end of the Defects Liability Period, or which would not have been disclosed upon reasonable inspection at the time of the issue of the Final Certificate; or (c) any accidental or erroneous inclusion or exclusion of any work, plant, materials or figures in any computation or any arithmetical error in any computation. Within 14 days after the issue of a Final Certificate which certifies a balance owing by the Principal to the Contractor, the Principal shall release to the Contractor any retention moneys or security then held by the Principal. 42.9 Interest on Overdue Payments If any moneys due to either party remain unpaid after the date upon which or the expiration of the period within which they should have been paid then interest shall be payable thereon from but excluding the date upon which or the expiration of the period within which they should have been paid to and including the date upon which the moneys are paid. The rate of interest shall be the rate stated in the Annexure and if no rate is stated the rate shall be 18 percent per annum. Interest shall be compounded at six monthly intervals. 42.10 Set Offs by the Principal Without limiting the Principal's rights under any other provision of the Contract and notwithstanding the provision of or the issue of certificates by the Principal's Representative under Clause 42.1, the Principal may deduct from any moneys due to the Contractor, including amounts payable under a payment certificate, any debt due from the Contractor to the Principal or any claim which the Principal may have against the Contractor whether or not the debt or claim arises by way of damages, debt, restitution, under the Contract or otherwise. If the moneys payable to the Contractor are insufficient to discharge the debt or claim the Principal may have recourse to- -- 278 of 304 -- 279 (a) retention moneys; and (b) if retention moneys are insufficient, security provided under Clause 5.2. Nothing in this Clause shall affect the right of the Principal to recover from the Contractor the whole of the debt or any claim or any balance that remains owing. 42.11 Recourse for Unpaid Moneys Where, within the time provided by the Contract, a party fails to pay the other party an amount due and payable under the Contract, the other party may, subject to Clause 5.5, have recourse to retention moneys, if any, and, if those moneys are insufficient, then to security under the Contract and any deficiency remaining may be recovered by the other party as a debt due and payable. -- 279 of 304 -- 280 C-3 Contract Price Schedules C-3.1 Summary of Contract Sum 3.1.1 The Contract Sum is comprised of fixed lump sum, schedule of rates prices and provisional sums within the Schedule C-3 – “Section C3 Contract Price Schedules”. 3.1.2 The Contract Sum includes the price of the whole of the work under the Contract which includes but is not limited to services and other incidentals associated with or necessary for the execution of the work described and the performance of the obligations of the Contractor under the Contract, whether specifically mentioned or not within the Schedule C-3 – “Section C3 Contract Price Schedules”. 3.1.3 The Contract Sum is fixed and is not subject to adjustment for rise or fall in costs unless otherwise stated in the Contract. 3.1.4 All rates and prices in the Schedule C-3 – “Section C3 Contract Price Schedules” are fixed and are not subject to adjustment for rise and fall in costs unless otherwise stated in the Contract. 3.1.5 All rates and prices in the Schedule C-3 – “Section C3 Contract Price Schedules” are in Australian dollars and are exclusive of GST. 3.1.6 The Contract Sum breakdown reflects the broad break-up of the Works into recognisable and manageable areas of work for progress monitoring and progress payment purposes. Prior to executing a Contract the Principal and the Contractor shall agree on a final breakdown that may be different in detail from, but will be generally consistent with, the Contract Sum breakdown herein. 3.1.7 The methods of measurement for payment are set out in C-3.5. C-3.2 Lump Sum Prices The Contract Sum includes lump sum items, payment for such items shall be for the amounts shown in the Schedule C-3 – “Section C3 Contract Price Schedules” which comply with and include for the following: 3.2.1 The lump sum prices inserted in the Schedule C-3 – “Section C3 Contract Price Schedules” shall be the full inclusive cost of the work described and shall include but are not limited to, the cost of labour, facilities, materials, plant, equipment, tools, transportation, provision of inspection and test reports evidencing the Principal’s Representative’s acceptance of the work, taxes, charges, fees, overhead, profit and all other things necessary to perform the work in accordance with the obligations set forth in the Contract. 3.2.2 The breakdown of the work under the Contract in the Schedule C-3 – “Section C3 Contract Price Schedules” consists of work activity items, equipment and parts that form recognisable and manageable portions for assessment purposes. -- 280 of 304 -- 281 3.2.3 The descriptions of activity items, equipment and parts are intended only as brief descriptions sufficient for identification and are not exhaustive. 3.2.4 Minor activity items, equipment or parts not expressly mentioned in the Contract or the Schedule C-3 – “Section C3 Contract Price Schedules”, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the Contract Sum. 3.2.5 Each activity item, equipment item, major part or group of related parts shall be individually priced. The costs of individual items against which no prices are stated shall be deemed to be distributed throughout the prices entered for related items of work. Where no activity item is provided, the cost is deemed to be distributed throughout the prices entered for related items of work. 3.2.6 The lump sum prices in the Schedule C-3 – “Section C3 Contract Price Schedules” include planning, performing and expediting the works, preparation of all specified programs, charts, schedules and reports of other documents required under the Contract, coordination with others, management of personnel and any other management activity required. 3.2.7 Supply and installation of the Contractor’s temporary services shall include electric power, water supply, sewage, ablution, communication and telephone service. 3.2.8 Supply and erection of the Contractor’s site facilities shall include, but not limited to, offices, meal rooms, workshops, storage areas, ablution and toilet facilities. 3.2.9 Supply, installation and maintenance of construction office facilities for sole use of the Principal or his representatives where specified. 3.2.10 Establishment on Site of the Contractor’s personnel, plant and equipment. 3.2.11 Maintenance and cleaning of the Site establishment until disestablishment. 3.2.12 The fixed lump sum price for Survey in this Schedule C-3 – “Section C3 Contract Price Schedules” includes all labour, materials and equipment required to survey the Works and the Site to complete the Works, including set out of the Works and the documentation of survey. 3.2.13 To include for all costs associated with accommodation, R&R and travel for contractor personnel including their subcontractors. C-3.3 Schedule of Rates The Contract Sum includes schedule of rates items, payment for such items shall be at the rates shown in the Schedule C-3 – “Section C3 Contract Price Schedules” – which comply with and include for the following: 3.3.1 The rates inserted in the Schedule C-3 – “Section C3 Contract Price Schedules” shall be the full inclusive cost of the work described and shall be deemed to include but are -- 281 of 304 -- 282 not limited to, the cost of wages, profit, overheads, all supervision (including foreman and above), insurance, consumables, timekeeping, charges, transportation to and from the Site, transportation around the Site, all clerical and office work, performance of the obligations of the Contractor under the Contract and all incidental costs incurred in performing the work. 3.3.2 The rates are fixed and not subject to adjustment for rise or fall in costs, including difficulty of the work or any difference between estimated and actual quantities, unless otherwise stated in the Contract. 3.3.3 The quantities in the Schedule C-3 – “Section C3 Contract Price Schedules” are estimated and, for the purpose of payments under the Contract, the quantities shall be measured in accordance with the method of measurement for payment (refer to C-3.5). 3.3.4 The descriptions of rate activity items, equipment and parts are intended only as brief descriptions sufficient for identification and are not exhaustive. 3.3.5 Minor activity items, equipment, parts and other costs not expressly mentioned in the Contract or the Schedule C-3 – “Section C3 Contract Price Schedules”, including related travel and accommodation, which by their nature are necessary for the satisfactory completion and performance of the work under the Contract, shall be supplied by the Contractor and their cost shall be deemed to be included in the rates. C-3.4 Provisional Sum 3.4.1 The cost of the amounts marked in the Schedule C-3 – “Section C3 Contract Price Schedules” “Provisional Item, if ordered” are provisional as described below. 3.4.2 Where a Work Item Number contains a suffix “P” and the words “Provisional Item, if ordered” appear in the description of the item, the Contractor shall only be entitled to be paid for that work if the Principal’s Representative directed the Contractor in writing to undertake that work. It shall be understood that the work represented by that Work Item may not be required under the Contract. Limits of accuracy do not apply to these Work Items. 3.4.3 The Principal may elect to award the work the subject of a “Provisional Item, if ordered” to another contractor. C-3.5 Method of Measurement for Payment 3.5.1 For works where the schedule item includes a reference to an item covered by a Main Roads Specification, the method of measurement for the purpose of payment for the work under the Contract shall be in accordance with the prescribed method applicable to that standard item reference. 3.5.2 Where works are not covered by a referenced MRS item, the method of measurement for the purpose of payment for the work under the Contract shall be in accordance with -- 282 of 304 -- 283 Australian Standard AS1181 – 1982 as amended. Departures from AS1181 are listed in Schedule 3.5 – Schedule of Departures from Method of Measurement below. Schedule 3.5 – Schedule of Departures from Method of Measurement Item Specified Departures 1 1.3.9 Table 1.1 – Rounding up of measurements for billing Amend interval of rounding for lengths less than 10 metres from 1.0 to 0.1 metres -- 283 of 304 -- 284 Schedule C-3 Section C-3 Contract Price Schedules -- 284 of 304 -- 285 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C- 3 Contract Price Schedules -- 285 of 304 -- 286 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules" -- 286 of 304 -- 287 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules" -- 287 of 304 -- 288 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules" -- 288 of 304 -- 289 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules" -- 289 of 304 -- 290 Contract GC09 - Bulk Earthworks (South Hanson Road) Schedule C-3 - "Section C-3 Contract Price Schedules" -- 290 of 304 -- 291 C-4 Rates for Pricing Variations Where the relevant Specification provides for more than one class or type of the product listed, the Unit Rates table below; Schedule 4.1: Unit Rates shall include rates and descriptions for each class or type. Variations shall be performed on a Unit Rates or a Daywork Rates basis at the sole discretion of the Principal’s representative. The Contractor shall only be remunerated for work actually performed and approved by the Principal’s Representative. The Contractor shall not be entitled to remuneration for plant stand- by time. The Contractor shall provide time sheets, payroll records and such other information as the Principal’s Representative may require for verifying the work actually performed by the Contractor. C-4.1 Unit Rates The cost of approved variations under the Contract shall be calculated in accordance with Schedule 4.1 – Unit Rates for Variations herein, with particular reference to: 4.1.1 The unit rates in this Schedule are the full inclusive cost of the work described including all Contractor’s obligations set forth in the Contract. 4.1.2 The unit rates herein are fixed and are not subject to adjustment for rise and fall in costs unless otherwise stated in the Contract. 4.1.3 Unless specifically stated otherwise in this Schedule the unit rates shall apply to work that is additional or with increased quantities (outside the upper limits of accuracy stated in the Annexure Part A) and to work that is deleted or with reduced quantities (outside the lower limits of accuracy stated in the Annexure Part A) under the Contract. Schedule 4.1 Unit Rates for Variations ITEM DESCRIPTION UNIT RATE $AUD 1 Civil Works 1.1 Excavation/Trenching Excavation for drains, or trenching for piping or electrical conduit, to depth shown including all permits, excavation, spoil management, barricading and signage 1.1.1 For trench 800 deep m3 30.00 1.1.2 For trench 1000 deep m3 25.00 1.1.3 For trench 1200 deep m3 20.00 -- 291 of 304 -- 292 ITEM DESCRIPTION UNIT RATE $AUD 1.1.4 For trench greater that 1200 deep m3 18.00 1.1.5 For drains m3 16.00 1.2 Backfill Backfill to excavations including supply and placement of service warning tape, back fill and compaction 1.2.1 General Backfill – from spoiled materials m3 60.00 1.2.2 Supply and install bedding sand m3 200.00 2 Concrete Works 2.1 Concrete Supply, place, finish, strip, cure, dress, inclusive of excavation & backfill, reinforcement and formwork. 2.1.1 0.5 to 1.5 Mpa Flowable Fill m3 800.00 2.1.2 10 MPa in blinding layer -509 mm min nominal thickness m3 1,000.00 2.1.3 40 MPa Structural – Foundations m3 2,800.00 2.1.4 40 MPa Structural – Slab on ground (<200 mm thick) m3 2,600.00 2.1.5 40 MPa Structural – Suspended slabs m3 N/A 2.1.6 40 MPa Structural – plints and pedestals m3 N/A 2.1.7 40 MPa Structural – formed open drains m3 2,200.00 2.1.8 50 MPa Structural – formed open drains m3 3,200.00 2.1.9 Spraycrete m3 1,800.00 2.1.10 50 MPa Non-shrink Cementitious Structural grout m3 12,000.00 2.1.11 70 MPa High strength grout m3 12,200.00 3 Steelwork 3.1 Supply and install painted light steelwork (sections 0-30kg/m) tonne N/A 3.2 Supply and install painted heavy steelwork (sections 60-90kg/m) tonne N/A 3.3 Supply and install painted steelwork (sections 60-90kg/m) tonne N/A 3.4 Supply and install painted extra heavy steelwork (sections 90- 125kg/m) tonne N/A -- 292 of 304 -- 293 ITEM DESCRIPTION UNIT RATE $AUD 3.5 Supply and install painted extra heavy steelwork (sections >125kg/m) tonne N/A 3.6 Supply and install heavy duty galvanised steelwork tonne N/A 3.7 Supply and install painted steel stairs c/w handrails and treads lineal metre N/A 3.8 Supply and install handrail system lineal metre N/A 3.9 Supply and install heavy duty galvanised gridmesh tonne N/A 4 Piling 4.1 Supply sheet piles m N/A 4.2 Pitch and drive sheet piles m N/A 5 Electrical 5.1 Supply and install – 150mm dia. PVC U/G Conduit, including pullwire m 70.00 5.2 Supply and install – 100mm dia. PVC U/G Conduit, including pullwire m 60.00 5.3 Supply and install – 80mm dia. PVC U/G Conduit, including pullwire m 57.00 5.4 Supply and install – precast electrical/data/communications pulling pit c/w cover each 2,200.00 -- 293 of 304 -- 294 C-4.2 Daywork Rates Daywork sheets for Variations shall be verified and signed on a daily basis by the Principal’s Representative and the responsibility for obtaining the signature rests with the Contractor. Daywork sheets shall reflect both labour and plant resources, together with any materials and hired resources used by the Contractor. No additional entries or additional claims will be made on the Daywork sheets after signature thereof. 4.2.1 Labour ● The labour rates specified in Schedule C-4.2 shall be deemed to include (but are not limited to) the cost of wages, Contractor’s profit, overheads, all supervision and management (including foreman and above), use of small tools under AUD 5,000 in value, insurance, consumables, accommodation, construction facilities, timekeeping, charges, transportation to and from the Site, transportation around the Site, all clerical and office work and all incidental costs incurred in performing the work. ● Normal time and overtime shall be as defined in the relevant Site industrial agreement. 4.2.2 Constructional Plant ● The rates for Constructional Plant specified in Schedule C-4.3 are inclusive of driver and operators’ wages, water, oil, fuel, consumable stores, maintenance, spare parts, services, repairs, insurance, overheads, profit and all other things of whatever nature required for the efficient and safe operation of the plant. ● The plant rates set out in Schedule C-4.3 are fixed and are not subject to change for any reason whatsoever including difficulty of the work or any difference between estimated and actual quantities. ● Service books for all equipment may be requested by the Principal’s Representative to verify the state of the equipment. 4.2.1 Materials and Subcontracts ● In calculating the payment due to the Contractor for materials used for Daywork (except for materials for which the cost is included in the Daywork labour rates), only the net quantity actually used for the Daywork shall be measured. ● The Contractor shall be entitled to payment in respect of materials and subcontracts used in Daywork at the actual invoiced cost to the Contractor, including freight to the Site, but excluding any cash or trade discounts, plus a percentage mark-up as shown in Annexure Part A which shall be deemed to cover all costs including, but not limited to the following: ● all off-Site and on-Site administration; ● delivery, handling and storage; -- 294 of 304 -- 295 ● insurances; ● overheads, profit and margins; ● mark-up of whatsoever nature. ● Unless otherwise agreed, materials required in the performance of the Daywork and which are not otherwise covered by a rate in the Schedule C-4.2 and C-4.3 (whether plant or labour) shall be paid for only in the quantities authorised by the Principal’s Representative. -- 295 of 304 -- 296 Schedule C-4.2 – Schedule of Daywork Labour Rates Working Rate per Hour (A$) Item Award Classification NT (Normal Time) NT x 1.5 NT x 2 1 Leading Hand 106.00 147.00 189.00 2 Tradesman 106.00 147.00 189.00 3 Tradesman’s Assistant 102.00 141.00 180.00 4 Labourer 102.00 141.00 180.00 5 Plant Operator 106.00 147.00 189.00 6 Truck Driver 104.00 145.00 186.00 7 Crane Driver 106.00 147.00 189.00 8 Surveyor 197.00 284.00 371.00 9 Surveyor’s Chainman 102.00 141.00 180.00 -- 296 of 304 -- 297 Schedule of Daywork Indirect Personnel and Facilities Rates Working Rate per Hour (A$) Item Award Classification Day 1 Construction Manager 2,900.00 2 Project Manager 2,800.00 3 QA/QC Manager 2,250.00 4 Safety/Environmental Manager 1,950.00 5 Senior Project Engineer 2,400.00 6 General Superintendent 2,500.00 7 Site Engineer 1,950.00 8 Foreman 2,250.00 9 Contract Administrator 1,500.00 10 12m x 9m Office Complex 180.00 11 12m x 3m Office 60.00 12 12m x 3m Crib 70.00 13 6m x 3m Ablution Block 110.00 14 Portable Chemical Toilet 28.00 15 Pump Outs 100.00 16 6m x 3m Office Furniture 25.00 17 6m x 3m Crib Furniture 35.00 18 Server 200.00 19 Communications 55.00 20 Office Running Costs 50.00 21 Overall Composite Daily Rate (Includes Staff and facilities) 38,000.00 -- 297 of 304 -- 298 Schedule C-4.3 – Schedule of Daywork Constructional Plant Rates Rate per Hour (A$) (Including Operators) Item Plant Description Working 1. Scraper (Cat 631) or equivalent 480.00 2. Bulldozer (Cat D9R) or equivalent 440.00 3. Bulldozer (Cat D6R) or equivalent 320.00 4. Excavator (Cat 330) or equivalent 290.00 5. Excavator (Cat 320) or equivalent 250.00 6. Road grader (Cat 140) or equivalent 280.00 7. Front end loader Cat 980 330.00 8. Front end loader Cat 950 290.00 9. Dump truck 10 m3 300.00 10. Articulated dump truck (Moxy 30,000 litre) 300.00 11. 16t vibratory roller or equivalent 200.00 12. 10t vibratory roller or equivalent 180.00 13. Multi-tyred roller 180.00 14. Backhoe 190.00 15. Semi-Trailer 18t 200.00 16. 12t Rigid tipper 180.00 17. Water cart (16KL) 180.00 18. Utility (No Driver) 150.00/Day 19. 4x4 Vehicle (No Driver) 190.00/Day 20. Minibus (No Driver) (12 Seater) 280.00/Day 21. Crane 16t articulated (or similar) 240.00 22. Mobile Crane 25T 290.00 23. Mobile Crane 50T 400.00 -- 298 of 304 -- 299 Rate per Hour (A$) (Including Operators) Item Plant Description Working 24. Elevating Work Platform 250.00/Day 25. Cherry Picker 330.00/Day 26. 50mm diesel driven concrete pump with hoses 200.00 27. Concrete pump truck 270.00 28. Dewatering Pump 50mm including hoses 130.00/Day 29. Dewatering Pump 75mm including hoses 200.00/Day 30. Dewatering pump 150mm including hoses 330.00/Day 31. Mobile Generator 20 KVA 250.00/Day 32. 7.5 KVA Generator 130.00/Day 33. 5 KVA Generator 130.00/Day 34. 400CFM Compressor 500.00/Day 35. Diesel Welder 400A/AS N/A 36. Jackhammer (30 kg) 100.00/Day 37. Piling rig # 1 () 1,500.00 38. Piling rig # 2 () 1,500.00 -- 299 of 304 -- 300 Schedule of Plant and Equipment Stand Down Rates Rate per Hour (A$) (Including Operators) Item Plant Description Working 1. Scraper (Cat 631) or equivalent 390.00 2. Bulldozer (Cat D9R) or equivalent 360.00 3. Bulldozer (Cat D6R) or equivalent 260.00 4. Excavator (Cat D4) or equivalent N/A 5. Excavator (Cat 330) or equivalent 230.00 6. Excavator (Cat 320) or equivalent 200.00 7. Road grader (Cat 140) or equivalent 220.00 8. Grader (Cat 16) or equivalent N/A 9. Front end loader Cat 980 260.00 10. Front end loader Cat 950 230.00 11. Dump truck 10 m3 240.00 12. Articulated dump truck (Moxy 30,000 ltre) 240.00 13. 16t vibratory roller or equivalent 160.00 14. 10t vibratory roller or equivalent 150.00 15. Multi-tyred roller 150.00 16. Backhoe 160.00 17. Semi-Trailer 18t 100.00 18. 12t Rigid tipper 150.00 19. Water cart (16KL) 150.00 20. Utility (No Driver) 75.00/Day 21. 4x4 Vehicle (No Driver) 160.00/Day 22. Minibus (No Driver) (12 Seater) 220.00/Day 23. Crane 16t articulated (or similar) 190.00 -- 300 of 304 -- 301 Rate per Hour (A$) (Including Operators) Item Plant Description Working 24. Mobile Crane 25T 230.00 25. Mobile Crane 50T 320.00 26. Elevating Work Platform 200.00/Day 27. Cherry Picker 260.00/Day 28. 50mm diesel driven concrete pump with hoses 160.00 29. Concrete pump truck 210.00 30. Dewatering Pump 50mm including hoses 100.00/Day 31. Dewatering Pump 75mm including hoses 160.00/Day 32. Dewatering Pump 105mm including hoses 260.00/Day 33. Mobile Generator 20 KVA 200.00/Day 34. 7.5 KVA Generator 100.00/Day 35. 5 KVA Generator 100.00/Day 36. 400CFM Compressor 400.00/Day 37. Diesel Welder 400A/AS N/A 38. Jackhammer (30 kg) 80.00/Day 39. Piling rig # 1 () 1,200.00 40. Piling rig # 2 () 1,200.00 -- 301 of 304 -- 302 Appendix F2 2 PLANNING AND PROGRESS REPORTING 2.1 General Pursuant to General Conditions of Contract Clause 33 the Contractor shall comply with this procedure for planning and progress reporting. The Contractor shall consider specific JSA work plans when developing the Contractor’s Program such that a correlation can be seen between the two documents. These plans as depicted in the program shall be in accordance with the Contractor’s Safety Management Plan. 2.2 Program Submission Within 28 days of the Date of Acceptance of the Tender, the Contractor shall prepare and submit its construction program to the Principal’s Representative for direction as to its suitability in accordance with clause 33 of the General Conditions of Contract. Until such time as the Principal’s Representative gives direction that a construction program is suitable the Principal’s Representative may have regard, as necessary, to the program submitted with the Contractor’s Tender. The Contractor’s program shall be developed using Critical Path Method (CPM) and presented on a time scaled bar chart fully continuous in logic that clearly highlights the critical path(s) throughout the network. The Contractor’s program shall be submitted in both hard and electronic (native file) copy forms using a computer software package approved by the Principal’s Representative. The only software package accepted is: ● Primavera P6 … 2.5 Baseline Construction Program The Contractor shall submit a detailed breakdown of the program contained in Schedule C6 in accordance with clause 33.2 of the General Conditions of Contract. Once the Principal’s Representative has reviewed the construction program and gives a direction that it is suitable as a Construction Program, it shall become the Baseline Program against which actual time performance will be measured. No changes shall be made to the Baseline Program without the prior agreement, in writing, of the Principal’s Representative. No direction as to use or any other comment or direction by the Principal’s Representative as to suitability of or any change to any construction program, revised construction program or short term rolling program submitted by the contractor shall: ● Relieve, limit or exclude any of the Contractor’s liabilities or obligations under the Contract, including, without limitation, its obligation to execute work under the Contract to Practical Completion by the Date for Practical Completion and its responsibility for all -- 302 of 304 -- 303 planning, scheduling, sequences, methods and techniques necessary for the due performance of its obligations under the Contract; ● Constitute a direction to accelerate, disrupt, prolong or vary any or all or the Contractor’s work under the Contract; ● Constitute the granting of an extension of time for Practical Completion or a determination in relation to any application for an extension of time for Practical Completion; or ● Affect the time for performance by the Principal or Principal’s Representative of any of their obligations or oblige either of them to do anything earlier than is necessary to enable the Contractor to bring the work under the Contract to Practical Completion by the Date for Practical Completion. The Baseline Program shall show a ‘Key Milestones’ grouping at the top of the Master Contract Report (described below) that shall show key milestones and activities as directed by the Principal’s Representative. These shall generally include, but not limited to: ● Contract Award; ● Mobilisation to Site; ● Delivery to site of key equipment; ● Start of Construction for key trades; ● Completion of construction in major areas; ● Start of pre-commissioning; ● Start of no-load commissioning; ● Start of load commissioning; ● Completion of load commissioning; ● Forecast date for Practical Completion; and ● Contract Date for Practical Completion 2.6 Revisions to the Baseline Program The Contractor shall review the Baseline Program when any one of the following events occurs: ● progress of the Works falls significantly behind or otherwise departs significantly from that shown in the Baseline Program; ● a contract variation is issued and the Principal’s Representative agrees the variation affects the Contract Date for Practical Completion; -- 303 of 304 -- 304 ● there is a change in method of working adopted by the Contractor that the Principal’s Representative determines should be reflected in the Baseline Program; or ● the Principal’s Representative directs that the Baseline Program be revised because in the opinion of the Principal’s Representative the Baseline Program does not reflect the actual work patterns of the Contractor. If any of the events listed above occur, and where agreed with the Principal’s Representative, the Contractor shall submit a revised construction program to the Principal’s Representative for a direction that the revised program is suitable. The Contractor must submit both hard and electronic (native file) copies of the schedule. Once the Principal’s Representative gives a direction that the revised program is suitable, that program shall be the Revised Baseline Program. The Revised Baseline Program shall clearly indicate the following: i) the reason for the revision; ii) the difference between the Revised Baseline Program and the previous Baseline Program; and iii) the revision number of the Revised Baseline Program. The Revised Baseline Program will require a revised manning histogram with an additional data line called ‘reforecast planned progresses added to the progress ‘S curve’. The Principal’s Representative’s written approval of any revised Baseline Program shall be given prior to the Revised Baseline Program being adopted as the target program for comparative reporting purposes. Additional detail may be inserted into the Revised Baseline program at the request of either the Contractor or Principal’s Representative. In such cases, the overall start and finish dates of the detail activities shall not vary from the original summary activity(s) which were replaced. -- 304 of 304 --