Cook’s Constructions Pty v Stork Food Systems Aust Pty [2008] QSC 179

SUPREME COURT OF QUEENSLAND CITATION: Cook’s Constructions P/L v Stork Food Systems Aust P/L [2008] QSC 179 PARTIES: COOK’S CONSTRUCTIONS PTY LTD ACN 004 782 558 (plaintiff) v STORK FOOD SYSTEMS AUSTRALIA PTY LTD ACN 007 298 633 (defendant) FILE NO/S: S10993 of 2001 DIVISION: Trial Division PROCEEDING: Trial ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 22 August 2008 DELIVERED AT: Brisbane HEARING DATES: 4, 5,6,8, 11, 12,13, 15, 16,18,19 and 22 February 2008 JUDGE: Martin J ORDER: On the claim: Judgment for the plaintiff in the sum of $132,657.70 with interest. On the counterclaim; judgment for the defendant in the sum of $9,983,796.54 with interest. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – CONSTRUCTION OF PARTICULAR CONTRACTS AND IMPLIED CONDITIONS – OTHER MATTERS – interpretation of a clause for measuring quantities – whether quantity of work claimed had been measured in accordance with the contract. CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – where a clause of the contract required a party to give notice of a claim for breach of the sub-contract within 14 days – where no notice was given – whether the provision of progress claims satisfied that clause. CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – where Plaintiff did not hold a licence under the Queensland Building Services Authority Act 1991 – whether work -- 1 of 81 -- 2 completed by the plaintiff was ‘building work’ within the meaning of the Act – whether the ‘building work’ the defendant had paid for was paid by mistake. CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – where plaintiff is entitled to ‘reasonable remuneration’ under the Queensland Building Services Authority Act 1991 for work completed – appropriate methods for calculating reasonable remuneration – relevance of expert reports in determining reasonable remuneration. CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – whether the contract was a lump sum or schedule of rates contract. CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – AMOUNT – whether rates and quantities claimed for work were claimed in accordance with the subcontract. EVIDENCE – miscellaneous matters – rule in Browne v Dunn – where party did not cross examine on conflicting evidence in expert reports where such reports had been provided to the opponent in advance of the trial. EVIDENCE – miscellaneous matters – rule in Jones v Dunkel – whether adverse inferences could be drawn from a party not calling witnesses in relation to matters which only formed part of the background ‘factual matrix’ of the case. Queensland Building Services Authority Act 1991 Queensland Building Services Authority Amendment Bill 1999 Queensland Building Services Authority Regulation 1992, s 3A s 42(4) B P Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Bartier v Kounza Investments Pty Ltd [2003] QSC 390 Browne v Dunn (1893) 6 R 67 Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Cook’s Construction Pty Ltd v Stork ICM Australia Pty Ltd [2004] QSC 066 Cook’s Constructions Pty Ltd v Stork Food Systems Australia Pty Ltd [2008] QSC 186. Decor Ceilings Pty Ltd v Cox Constructions Pty Ltd (No 2) (2007) 23 BCL 347; [2005] SASC 483 Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383 Gino D’Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd R 40 -- 2 of 81 -- 3 Hansen v Mayfair Trading Co Pty Ltd [1962] WAR 148 Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd [1995] 2 Qd R 350 In the matter of Stork ICM Australia Pty Ltd; Stork ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd [2006] FCA 1849 Interline Hydrocarbon Inc v Prenzil Pty Ltd [2005] QSC 109 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Marshall v Marshall [1999] 1 Qd R. 173 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370 Price v John Holland (Constructions) Pty Ltd (1985) 59 ALJR 844 Re Allison, Johnson & Foster Ltd; ex parte Birkenshaw [1904] 2 KB 327 Smith v Commonwealth of Australia (2006) NSWSC 689 Trade Practices Commission v Arnotts Ltd (No. 5) (1990) 21 FCR 324 West v Mead [2003] NSWSC 161 Zullo Enterprises Pty Ltd v Sutton [2000] 2 Qd R. 196 COUNSEL: D J Digby QC, with S R Grahame and J D Wilson, for the plaintiff K E Downes, with S B Hooper, for the defendant SOLICITORS: Clarke & Kann, as town agents for McPherson & Kelley, for the plaintiff McCullough Robertson for the defendant -- 3 of 81 -- 4 TABLE OF CONTENTS Background ......................................................................................................................... 5 The Subcontract ................................................................................................................. 5 CCPL’s claim ...................................................................................................................... 6 Defence and Counterclaim ................................................................................................ 6 Construction of the Subcontract ....................................................................................... 7 The rule in Browne v Dunn .............................................................................................. 14 The Rule in Jones v Dunkel ............................................................................................. 17 The Defences ..................................................................................................................... 18 The Prescribed Notice Defence........................................................................................ 18 Defence relating to Alleged Errors in the Bill of Quantities......................................... 21 The Queensland Building Services Authority Act Defence............................................. 26 Quantities of footings ..................................................................................................... 28 Pedestal Claim ................................................................................................................ 29 Corrocem claim .............................................................................................................. 30 Suspended slabs.............................................................................................................. 30 Prill storage building ...................................................................................................... 31 The Claims ........................................................................................................................ 32 (i) The Bulk Earthworks Claim........................................................................... 32 (ii) The Road Reconstruction Claim .................................................................... 34 (iii) The Contour Drains Claim ............................................................................. 35 (iv) The Lime Stabilization of Site Roads Claim.................................................. 36 (v) The Boxing Out for Roadworks Claim .......................................................... 37 (vi) The Asphalt on Site Roads Claim................................................................... 38 (vii) The Quantities of Footings Claim................................................................... 38 Item 6.4.45 Steam Reformer Footings .................................................................. 39 Item 6.4.64 Turbine Generator Building ............................................................... 40 Item 6.4.65 Ammonia Storage Pipe Supports and Steam Reformer Pipe Supports 40 Item 6.7.8 Nitric Acid Plant Building Slabs ........................................................ 40 Duplication of Claim? ................................................................................................ 40 (viii) The Pedestal Claim .......................................................................................... 41 (ix) The Pedestal Reconciliation Claim................................................................. 47 (x) The Corrocem Claim ....................................................................................... 48 (xi) The Suspended Slabs Claim............................................................................ 52 (xii) The Prill Storage Building Structures Claim ................................................ 55 Formwork to base slab ............................................................................................... 56 Rate for formwork to nib walls................................................................................... 57 Rate for formwork to walls ......................................................................................... 57 Rate for concreting base slab ..................................................................................... 57 Rate for concreting walls ........................................................................................... 57 (xiii) The Crushed Rock to Substations 1 and 2 Claim ......................................... 57 (xiv) The Ammonia Spill Standby Claim ............................................................... 58 Recovery under s 42(4) QBSA Act.................................................................................. 60 The accountants’ evidence ............................................................................................ 64 The Counterclaim............................................................................................................. 67 What is the work in Appendix B? .................................................................................. 72 Is that work “building work”? ........................................................................................ 72 Was that work paid for by Stork?................................................................................... 79 If the work was paid for, was that payment made by mistake?...................................... 79 Conclusion ......................................................................................................................... 79 Schedule of Claims and Defences.................................................................................... 81 -- 4 of 81 -- 5 Background [1] In June 1998 Cook’s Constructions Pty Ltd (“CCPL”) and Stork ICM Australia Pty Ltd entered into an agreement (“the Subcontract”) whereby CCPL agreed to undertake the construction of earthworks and concrete works (“the works”) in relation to the construction of an ammonium nitrate plant at Moura in central Queensland. [2] On 14 December 2006 Lindgren J ordered1 , among other things, that: (a) the property of Stork ICM Australia Pty Ltd was to be transferred to and become the property of Stork Food Systems Australasia Pty Ltd (“Stork”); (b) all liabilities of Stork ICM were to be transferred to and become the liabilities of Stork; and (c) Stork ICM was to be deregistered without winding up pursuant to s 413(1)(c) of the Corporations Act 2001 (Cth); and (d) All legal proceedings pending by or against Stork ICM were to be continued by or against Stork. [3] The ammonium nitrate plant, the subject of this action, is a processing plant that manufactures ammonium nitrate in prill form. Prill is the pellet form which is the end product manufactured by the plant. The plant reforms natural gas to produce hydrogen which reacts with nitrogen extracted from the air and forms ammonia. The ammonia is then combined with nitric acid, which is also produced by the plant, to form the ammonium nitrate prill. That prill is then used in the manufacture of fertilisers and explosives. The Subcontract [4] The Subcontract as pleaded by CCPL is admitted by Stork. The Subcontract is constituted by the following documents: (a) Instrument of Agreement for Civil Subcontract Number QNP-001; (b) Exhibit C: Subcontract Schedules; (c) Exhibit D: General Conditions of Subcontract. (d) Exhibit E: Annexures to General Conditions of Subcontract including: (i) Annexures to the General Conditions of Subcontract Part A; (ii) Annexures to the General Conditions of Subcontract Part B, Quality system Requirements; (iii) Annexures to the General Conditions of Subcontract Part C, Safe System of Work Statement; (iv) Annexures to the General Conditions of Subcontract Part D Subcontractors Consent Deed; (e) Exhibit F: Scope of Work; (f) Exhibit G: Engineering Specifications; (g) Exhibit H: Drawings; (h) Exhibit I: Environmental Management Plan; (i) Exhibit J: Geotechnical Investigation; (j) Exhibit K: Contract Works Insurance; 1 In the matter of Stork ICM Australia Pty Ltd; Stork ICM Australia Pty Ltd v Stork Food Systems Australasia Pty Ltd [2006] FCA 1849. -- 5 of 81 -- 6 (k) Exhibit L: Health and Safety Risk Assessment; (l) Exhibit M Project Construction Agreement. CCPL’s claim [5] The plaintiff’s claim is made up of 14 separate items identifying aspects of the works undertaken by it, the plaintiff says, at the request of Stork. Those claims can, in turn, be categorised under four general headings. (a) Claims made pursuant to identified terms of the Subcontract: (i) the Bulk Earthworks claim, and (ii) the Ammonia Spill Standby claim, (b) Claims made pursuant to variations under the Subcontract: (iii) the Road Reconstruction claim, (iv) the Contour Drains claim, (v) the Lime Stabilization of Site Roads claim, (vi) the Boxing Out for Roadworks claim, and (vii) the Asphalt on Site Roads claim; (c) Claims made pursuant to clause 5.4 of Exhibit D of the Subcontract i.e. “Bill Error” claims: (viii) the Quantities of Footings claim, (ix) the Pedestal claim, (x) the Corrocem claim, (xi) the Suspended Slabs claim, (xii) the Prill Store claim, (xiii) the Crushed Rock to Substations claim; and (d) Claims made under separate, albeit related agreements: (xiv) the Pedestal Reconciliation Agreement. [6] CCPL brings further or alternative claims in respect of the Bulk Earthworks claim, the Road Reconstruction claim, the Quantity of Footings claim, the Pedestal claim, the Corrocem claim, the Suspended Slabs claim, the Prill Storage claim and the Crushed Rock to Sub Stations claim pursuant to clause 3.1 of Exhibit D of the Subcontract. Under that clause Stork was obliged to pay CCPL for the work undertaken an amount ascertained by: measurement and determination of actual quantities (determined in accordance with clause 3.2 of Exhibit D of the Subcontract), and multiplying the quantity so measured and determined by the rate accepted by Stork in accordance with clause 3.3(b) of Exhibit D of the Subcontract. Defence and Counterclaim [7] Stork raises a number of issues related to the terms of the subcontract which, it pleads, demonstrate: (a) That CCPL, not having given a prescribed notice under clause 51.1 of Exhibit D to the subcontract cannot recover any of the claims: paragraphs 6A-6D Fourth Further Amended Defence and Counterclaim (“FFADC”). (b) That CCPL cannot rely on errors in the bill of quantities and so Stork is not liable to pay certain claims: paragraph 6E-6I FFADC. (c) That CCPL did not lodge a final payment claim and, therefore, is barred from making a claim for work done prior to December 1999: paragraphs 7-13 FFADC. -- 6 of 81 -- 7 [8] Stork also pleads that: (a) that, as CCPL did not hold the relevant licence under the Queensland Building Services Authority Act 1991 (“QBSA Act”), it is not entitled to any monetary or other consideration for that part of the work said by Stork to be “building work” as that term is defined in the QBSA Act; (b) that CCPL did not measure the work performed in accordance with the subcontract and, as a result Stork has no obligation to make any payment where the claim relies upon measurement being performed in accordance with the subcontract; (c) particular defences to each of the heads of claim; and (d) that the proper construction of the subcontract has already been determined and that the plaintiff is estopped from arguing otherwise by the decision in Cook’s Construction Pty Ltd v Stork ICM Australia Pty Ltd. 2 [9] By way of counterclaim, Stork alleges: (a) that certain of the work performed by the plaintiff was “building work” within the meaning of the QBSA Act; and (b) that, as the plaintiff did not comply with the QBSA Act; then (c) CCPL was not lawfully entitled to claim or receive any payments in relation to the building work; and that (d) Stork, having mistakenly made payments to the plaintiff, is entitled to a refund of the amounts paid by it for the building work. [10] Before dealing with various claims I need to determine the proper construction of that part of the Subcontract upon which some of the claims rely and, also, some of the evidentiary issues raised by CCPL. Construction of the Subcontract [11] An issue which consumed a substantial part of the trial in both evidence and submissions was the proper construction of the Subcontract, in particular, clause 2 of Ex C. CCPL submitted3 that it was “of critical importance”. That may be an understatement. Interlocutory skirmishes between the parties prior to the trial frequently involved CCPL’s pleadings (especially on this point) and Stork consistently expressed the view that those pleadings did not accord with the subcontract as properly construed. [12] The final version of the statement of claim (the Fourth Further Amended Statement of Claim “FFASC”) was not reached until about the fifth day of the trial. It will assist to understand the argument if an example of the pleading is set out. [13] Under the heading “Bulk Earthworks, Raw Water/Evaporator Pond, Gravel Paved Areas and Site Roads” it is pleaded, in paragraph 7: “In accordance with the terms set out at paragraph 6 above, and clause 3.2 of Exhibit D of the construction agreement, Cook’s undertook the Bulk Earthworks, Raw Water/Evaporator Pond Gravel Paved Area and Site Roads works in the following quantities, as determined by reference to the method of measurement set out in 2 [2004] QSC 066. 3 Paragraph 9 of CCPL’s Final Submissions. -- 7 of 81 -- 8 clauses 2.0 and 2.1.3 of part A Subcontract Price Schedule and Bill of Quantities, Exhibit C to the construction agreement: (a) 12,635m3 of Engineered Fill for Plant Site Bulk Earthworks to the final surface as defined in AS 1181-1982 as shown on for-construction drawing SU-CS-00-D-0050 rev 5; SU-CS- 00-D-0051 rev 4 and SU-CS-00-D-0052 rev 0 from the commencing surface as defined in AS 1181-1982 as shown in electronic format on a Digital Terrain Model based Total Station data produced by Peter Robinson & Associates. PARTICULARS The profiles and dimensions of the final surface as defined in AS 1181-1982 relied on to calculate the quantity of 13,635 m3 of Engineered Fill for Plant Site Bulk Earthworks are shown on SU-CS-00-D-0050(5), SU-CS-00- D-0051(4) and SU-CS-00-D-0052(0) with the northerly marked in orange, the easterly marked in yellow, the batter slopes marked in pink, the reduced levels marked in blue and the dimensions marked in purple. The profiles and dimensions of the commencing surface as defined in AS 1181-1982 are as shown in electronic format on the Digital Terrain Model based Total Station data produced by Peter Robinson & Associates and provided to Stork in the course of the works.” [14] The clauses which are relevant to this discussion are: “2.0 MEASUREMENT FOR PAYMENT The Subcontractor shall execute the work under the Subcontract and fulfil all Subcontractors obligations thereunder and Stork shall pay the Subcontractor for the measured quantity of each item of the work performed under the Subcontract as certified by Stork at the appropriate rate in the Subcontract Schedule Part A - "Subcontract Price Schedule and Bill of Quantities". All items shall be measured nett in-situ to the profiles and dimensions shown on the Drawings or described in the Scope of Work and Specification and Subcontractor shall allow for wastage in the rates for the nett quantities given in the Subcontract Schedule Part A "Subcontract Price Schedule and Bill of Quantities". Upon issue by Stork of the 'Approved for Construction' Drawings for the work and prior to construction of work covered by the Drawings, Stork and Subcontractor shall jointly review the Drawings and agree on the rate items applicable to the work shown on the Drawings. Measurement of work shall be made in accordance with the conditions set out hereunder. 3.1 Performance and Payment The Subcontractor shall execute and complete the work under the Subcontract. -- 8 of 81 -- 9 Stork shall pay the Subcontractor; (a) for work for which Stork accepted a lump sum, the lump sum; (b) for work for which Stork accepted rates, the sum ascertained by measurement and determination of the quantities in accordance with Clause 3.2 and multiplying the quantity so measured and determined of each section or item of work carried out under the Subcontract by the rate accepted by Stork for the section or item, Adjusted by any additions or deductions made pursuant to the Subcontract. 3.2 Quantities Quantities in a Bill of Quantities or Schedule of Rates are estimated quantities only. A direction shall not be required to be given by Stork's Representative by reason of the actual quantity of an item required to perform the Subcontract being greater or less than the quantity shown in the Bill of Quantities or Schedule of Rates. Unless otherwise stated within the Contract, 'actual quantities' shall mean those quantities measured in accordance with Australian Standard 1181-1982, as amended from time to time, from the lines, dimensions and limits shown on the relevant Contract plans and drawings. Quantities over and above the actual quantities as a result of oversupply, over excavation or any other similar reason by the Subcontractor will not be included in the actual quantities and the Subcontractor agrees that Stork is not required to pay for these quantities over and above the actual quantities.” (emphasis added) [15] The argument put on behalf of CCPL was that the purpose of clause 2 was to ensure that Stork only paid for the work that it contracted for; so that, if CCPL inadvertently over-excavated a particular area, then Stork would not be required to pay for that over- excavation – it would only pay “to” the dimensions and profiles on the plans. It was submitted that that was made clear from the definition of “actual quantities” contained in clause 3.2 of Ex D of the Subcontract. [16] The basis of CCPL’s argument on the construction point was put during Mr Digby’s opening when he said:4 “Now, what we say about that clause is that read just on its language, even without the context which should assist our argument, it's simply saying that you have to - leave the word "nett in situ" out for the moment - you have to measure to the profiles and dimensions shown on the drawings. Now, that is an unexceptional stipulation. What it means is that when you're working out your measurements, the end point - and the word "to" is 4 T19-T20. -- 9 of 81 -- 10 used - the end point is what's shown on the construction drawings and that's perfectly workable and perfectly logical because defines the extent to which you are entitled to be paid. What it does not say, and we say would be impractical and unworkable - same thing, I suppose - and repugnant to the scheme of the contract to infer is that you only measure the profiles and dimensions shown on the drawings. That is, the for-construction drawings. In our submission this clause clearly gives scope for the operation of what one would expect to be the practical situation, that is that you draw upon a survey, or perhaps another drawing if there was a drawing setting out the precise details or sufficiently precise details of where you started or where you stripped to, and then the profiles on the for-construction drawings to work out the quantities that were relevant. It does not preclude that, and, indeed, there's no inference, we think, can reasonably - no implication can reasonably be read into clause 2 to say this somehow confines you to having reference only in terms of a measurement to the for-construction drawings. We concede, of course, that the for-construction drawings are a crucial element of the measurement because they define the extent - they define what you have got to do but they also define the extent to which you can expect to be paid for any quantities.” [17] The process of reasoning employed by CCPL then proceeds in this way: (a) As the Australian Standard 1181-1982 is referred to in clause 3.2 one needs to look at certain definitions. Those definitions are: (i) Original surface: the surface before any work has been carried out under the contract; (ii) Commencing surface: (in relation to an item in a Bill of Quantities) the surface before any work covered by the item has been carried out; (iii) Final surface: the surface indicated on the drawings to which the work described in any item of the Bill of Quantities is carried. (b) The reference to the “profiles and dimensions shown on the drawings” in clause 2 is a reference only to the “final surface”. (c) Clause 2 should be interpreted as meaning that the quantity is derived from measuring nett in-situ to the final surface. (d) As a volume cannot be calculated without knowing three dimensions then one needs to measure from the “commencing surface” to the “final surface”. [18] The reference to measuring from the “commencing surface” was supported by CCPL by reference to the evidence of Peter Robinson whose firm was contracted in June 1998 to supply the survey management for CCPL’s work on the project. That firm was also contracted by Stork to supply survey information (but not on these points5 ) for its relevant interest in the project. Mr Robinson gave evidence that, in his experience, earthworks are measured initially from the “original surface”, referred to as the “natural surface” when the area has not been disturbed, to the “commencing surface” 5 T552/20. -- 10 of 81 -- 11 or the “strip surface”. The earthworks quantities, he said, are then measured from the “commencing surface” to the “final surface”. [19] CCPL is, then, arguing that the act of measurement referred to in clause 2 is to be performed by reference not only to the profiles and dimensions shown on the drawings but also to a measurement obtained through the use of an accepted procedure or industry standard. In other words, CCPL argues that clause 2 operates by the drawings providing the end point of a measurement while the beginning is provided by a measurement obtained elsewhere. [20] The example of the pleading which is set out above shows that CCPL relies upon the profiles and dimensions of the “final surface” which is shown on identified plans, but the “commencing surface” is identified as being drawn from data produced by Mr Robinson pursuant to a method he described. [21] The method for measurement which he used can be summarised in the following way: (a) He measured the irregular original surface and the commencing or strip surface by using surveying devices that measured the bearing, distance and vertical angle to a reflective target using an infrared beam. Such measurements were given unique names and stored in a computer. (b) When all the measurements were completed they were downloaded into specialised surveying software which produced three- dimensional information for each point using the height and relative level of the total stations and combined that with the bearing, distance and vertical angle to each observed point. The software draws break lines between points with common names – break lines are lines that define changes of grade, eg, the top and bottom of a batter. Using that software the surveyor then creates a “digital terrain model” which is, apparently, better known as a “triangulated irregular network”. That digital terrain model provides the original or commencing surface for the calculation of quantities. (c) The surveyor then uses that digital terrain model which contains the representations of both the strip surface and the final earthworks surface to determine an accurate quantity. [22] Mr Robinson said that the final earthworks surface was created using the dimensions and profiles shown on the drawings. The result of the calculation made by Mr Robinson, and upon which CCPL relies, was reached by the creation of virtual surfaces using the software – the beginning virtual surface created by actual measurement of the “commencing surface” and the end or “final” virtual surface created by transposing measurements from the drawings. [23] CCPL argued that this method was not only available, but also the only method which complied with the sub-contract. This argument proceeded on the basis that the drawings did not contain enough information to allow the calculation to be made, viz., that the drawings did not contain the details of the levels from which the quantity should be measured. This was compared with what was said to be shown in the drawings – the final surface – which was the level to which the quantity could be measured. [24] I do not accept that CCPL’s argument demonstrates the correct construction of clause 2. -- 11 of 81 -- 12 [25] Great weight is placed by CCPL on the use of the word “to” in clause 2 which indicates, in the plaintiff’s construction, that the “profiles and dimensions shown on the drawings” are only those which can be identified as final surfaces. The plaintiff then draws from that an implication – an implication which was not pleaded – that one should then apply an industry practice as described by Mr Robinson in order to determine the measurement from which one would commence the calculation. [26] Stork, on the other hand, says that one cannot draw from the use of the word “to” an entitlement to measure quantities by reference to survey data. [27] Whenever construction of a clause in a contract has to be undertaken it is always sensible to construe such a clause in the light of the entire agreement. [28] The documents which make up the Subcontract commence with the usual recitals about the nature of the contract and that the Subcontract constitutes the entire agreement. It also provides a means by which discrepancies or inconsistencies within the entire document may be resolved. Clause 2 of the formal instrument of agreement provides: “The following Documents comprise the whole of the Subcontract between the Parties, and in the advent (sic) should there be a discrepancy or inconsistency between the Documents, the order of precedence in which they are listed may be relied upon to resolve the issue: Formal Instrument of Agreement Exhibit D – General Conditions of Subcontract Exhibit E – Annexures to General Conditions of Subcontract … Exhibit C – Subcontract Schedules …” [29] Should there be a discrepancy or inconsistency in the documentation, it is appropriate to consider other parts of the contract which have been agreed to have precedence over identified parts of the contract. [30] Exhibit D of the subcontract contains clause 3.2 (set out above) which provides, in part: “Unless otherwise stated within the Contract, 'actual quantities' shall mean those quantities measured in accordance with Australian Standard 1181-1982, as amended from time to time, from the lines, dimensions and limits shown on the relevant Contract plans and drawings.” [31] As is obvious, there is no reference to survey measurements taken or any other measurements which do not appear on any of the drawings or plans. There is reference only to “quantities measured … from the lines…” etc. As both clause 2 and clause 3.2 are referring to measurement of the same matters there is an inconsistency between the two clauses in that clause 2 does not refer to measurement “from the lines”. Clause 3.2 is in Exhibit D which has precedence over Exhibit C, which contains clause 2. [32] The quantities sought to be claimed by the plaintiff are actual quantities as determined by the contract. In the light of the provisions of clause 3.2, I consider it appropriate to read clause 2 of Ex C as meaning that one has reference to the drawings and the drawings only to determine the appropriate measurement. -- 12 of 81 -- 13 [33] The plaintiff, though, says that it is not possible to assess the quantity of work undertaken by reference only to the drawings. That submission is not supported by the evidence. [34] In cross-examination Mr Robinson agreed that it was possible to measure volume from contour lines on drawings. He said that it was an old method and not a very accurate method but that it could provide an answer depending upon the degree of accuracy required by the person seeking a calculation of volume.6 [35] Rodney Alsop gave evidence for the plaintiff. In cross-examination he agreed that there were methods for measuring quantities apart from those used by Mr Robinson. 7 Gordon Worrell, a witness called by the defendant, said that one method of calculating volume was by reference to contours which appear on a drawing. 8 [36] Gordon Leck, also called by the defendant, described the manner in which it was possible, by reference to the drawings in this case to arrive at a calculation of quantity by reference to the contour lines and other dimensions on the drawings.9 [37] It is likely that the method used by Mr Robinson would afford an accurate measure of the quantities which were to be removed and which were, in fact, removed. However, that is not a test which is applied anywhere in the subcontract. If it was impossible to arrive at an acceptable means of calculating quantity by reference only to the drawings, then the plaintiff might well have a case to argue for an implication of a particular term or terms relating to such a means of calculation. The fact that a calculation which is able to be performed may result in a less accurate conclusion is not, of itself, something which would cause me to arrive at a different construction of the relevant clauses. Parties are entitled to agree that a particular method shall be used to achieve a particular result. In doing so, they may have reasons which are not expressed in the contract for doing so. [38] There are other factors which support the view I have reached: (a) There is no reference in the subcontract or in the Australian Standard to any requirement for any of the surfaces the subject of a calculation to be measured by a surveyor apart from the measurements which appear on a drawing; (b) There is nothing in the subcontract which requires that Stork is to pay in accordance with survey measurements taken by a surveyor; (c) If it was the case that survey measurements were to be taken into account when calculating volume then one would expect to see in the contract a definition of the manner in which such survey measurements were to be taken. [39] The plaintiff did not plead that any industry standard or practice should be implied into the contract. Had it done so, I would not have been minded to find any such implication. Justice Mason’s observations in Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales10 are apposite in these circumstances: 6 T 558/29-T559/50. 7 T 598/35-T599/14. 8 T 686. 9 T 701/49-T703/19; T703/55-T705/10; T706/33-58; T707/25-37; T753/5-23; T756/17-21; and T758/57-T759/21. 10 (1982) 149 CLR 337 at 346. -- 13 of 81 -- 14 “For obvious reasons the courts are slow to imply a term. In many cases, what the parties have actually agreed upon represents the totality of their willingness to agree; each may be prepared to take his chance in relation to an eventuality for which no provision is made. The more detailed and comprehensive the contract the less ground there is for supposing that the parties have failed to address their minds to the question at issue. And then there is the difficulty of identifying with any degree of certainty the term which the parties would have settled upon had they considered the question.” [40] Further, the implication of such a term would not have satisfied the conditions expressed in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council11 and adopted in Codelfa.12 [41] Stork submitted that I was bound to follow the decision of Moynihan SJA 13 on this question. I have dealt with that argument in Cook’s Constructions Pty Ltd v Stork Food Systems Australia Pty Ltd [2008] QSC 178. [42] The proper construction of cl 2, then, is that it requires calculations to be done by reference to the profiles and dimensions on the relevant plan and does not allow reference to some other, unstated measure or means of measuring quantities. Thus, the evidence from Mr Robinson on this point is irrelevant. The rule in Browne v Dunn [43] There are a number of occasions in CCPL’s written submission where it notes that Stork did not cross-examine on matters contained in Mr Leck’s report. The effect of this, it was argued, was that the part of Stork’s case which was not put should not be accepted. The submission was based on the well known principle enunciated in Browne v Dunn. 14 The rule in Browne v Dunn is often expressed as being the requirement that a cross-examiner must put to a witness the nature of the case upon which it is proposed to rely in contradiction of the witness’ evidence. While that is a correct statement of the rule as it is often applied it is not a complete statement of the fundamental principle upon which the rule operates. [44] The basis for the rule has been expressed in the following way: “The underlying principles are that, in view of the rule against case splitting, which prohibits a party from calling fresh evidence after that party's case has closed, it is unfair to a witness to deny the opportunity of making any explanation open to the witness if a later invitation to disbelieve or criticise the witness is to be made; that it is unfair to the party calling the witness if the opportunity for the witness to proffer an available explanation is denied.”15 [45] I respectfully adopt the analysis of the principles (in a manner relevant to this case) which is provided by Campbell J in his reasons in West v Mead,16 where he says: 11 (1977) 180 CLR 266 at 282-283. 12 Codelfa at 347. 13 Cook’s Constructions Pty Ltd v Stork Food Systems Australia Pty Ltd [2004] QSC 066 14 (1893) 6 R 67. 15 Cross on Evidence, (Butterworths, Sydney, looseleaf) at [17435]. 16 [2003] NSWSC 161. -- 14 of 81 -- 15 “[95] In Browne v Dunn at 70-71 Lord Herschell LC stated an obligation of procedural fairness which counsel has when cross- examining a witness who counsel intends to submit should not be accepted: ‘If you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity to make any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.’ [96] However, Lord Herschell LC said that there was no obligation to raise such a matter in cross-examination where it is: ‘… perfectly clear that [the witness] has had full notice beforehand that there is an intention to impeach the credibility of the story which he is telling … All I am saying is that it will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation by reason of there having been no suggestion whatever in the course of the case that his story is not accepted.’ [97] In Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 Hunt J made a thorough review of later cases applying Browne v Dunn, and concluded (at 26): ‘I remain of the opinion that, unless notice has already clearly been given of the cross-examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings.’ In the present case, the serving of Ms West's affidavit in chief gave notice to Ms Mead and her advisers that Ms West proposed to rely upon the matters contained in para181. Ms Mead took the opportunity, in her own affidavit in response, specifically to reply to that allegation. Documents exchanged between the parties to litigation before the commencement of the trial are able to give notice that a witness's account of events will be challenged in particular ways, so that there is no breach of Browne v Dunn if the witness' account is not challenged in cross-examination. - Marelic v Comcare (1993) 121 ALR 114 at 120 (pre trial exchange of medical reports gives adequate notice), Flower & Hart v White Industries (QLD) Pty Ltd (1999) 163 ALR 744 at [52] (statement of issues, stated case and service of documentary evidence can give adequate notice), Stern v National Australia Bank Ltd (2000) 171 ALR 192 at [44] (adequate notice given by pleadings), Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 at 236 per Mahoney JA (adequate notice given by "the nature of the defendant's case and the particulars given, and otherwise the conduct of it"), In the Marriage of LC & TC (1998) 23 Fam LR 75 at [39] (affidavits give adequate notice). Cross On Evidence, 6th Australian edition, para [17460] footnote 12 says: -- 15 of 81 -- 16 ‘… the rule in Browne v Dunn did not apply where all parties were on notice of the evidentiary issues, eg by reason of affidavits having been exchanged …’ [98] The consequence of these decisions is that the circumstances in which Browne v Dunn will require matter to be put to a witness in cross-examination will depend upon the nature of the pre-trial preparation there has been, and whether that pre-trial preparation has been sufficient to give notice to a witness of the submission ultimately intended to be put to the court. An aspect of this is that Browne v Dunn will require more extensive cross- examination in a case where all the evidence is given orally, than is necessary in a case where the substance of the evidence proposed to be given by each side is notified in advance by affidavit or statement. [99] Even when there has been an exchange of affidavits or statements, the rule in Browne v Dunn will require a cross- examining counsel to put to a witness the implications which counsel proposes to submit can be drawn from the evidence, if those implications are not obvious from the evidence, or from other pre-trial procedures, or the course of the case. However, the submission which Ms Bateman seeks to put on the basis of paragraph 181 of Ms West's affidavit in chief involves no drawing together of strands of evidence to create some overall theory or inference of fact, but is a submission as to the legal consequence that should be drawn from the facts plainly asserted in para181. Nothing in the rule in Browne v Dunn prevents her from putting that submission.” (emphasis added) [46] Mr Leck’s report (in its final form) was in CCPL’s possession from August 2007. The opinions he expresses are clear and must have been well known to CCPL as two of its witnesses – Mr Robinson and Mr Alsop – were called to give evidence which commented upon Mr Leck’s conclusions. It follows from the analysis above, that where Mr Leck expressed a view which was inconsistent with the case advanced by CCPL then the rule in Browne v Dunn did not oblige counsel for Stork to put that to the CCPL witnesses. Where the opposing side has notice of the evidence to be given, it is only those implications which are not obvious from that evidence which need to be put to the opponent’s witnesses. [47] Other objections were made to statements made by Mr Leck in his oral evidence which were otherwise not contained in his report. It was submitted that those statements should be disregarded where they had not been put to the plaintiff’s witnesses. This is a brave submission from a party which was so ill prepared that it was still tendering reports, not having provided them before the trial, in the second week of the trial17 . There were a few occasions when oral evidence was given by Mr Leck which had not been put to the plaintiff’s witnesses. In most cases, it was responsive to earlier evidence which had been given without any notice or without the notice required by the Uniform Civil Procedure Rules. In any event, I have not found it necessary to base any findings on such evidence. [48] CCPL criticised Mr Leck’s evidence in many respects. In particular, it pointed to the numerous occasions in his written report where he expressed his opinion on the efficacy of the plaintiff’s pleadings and where he made statements which dealt with 17 Mr Alsop’s report, for example, was tendered on the ninth day of the trial. -- 16 of 81 -- 17 matters outside his areas of expertise. Those criticisms are not unfounded. Mr Leck often came perilously close to partisan statements and, on occasion, strayed into areas which would more properly be regarded as the province of submissions and arguments to be made by counsel. While I accept that his evidence was not pristine so far as total impartiality was concerned, I am confident that his technical observations were not coloured and I have ignored those parts of his report which represent opinion he was not qualified to give. The Rule in Jones v Dunkel [49] CCPL submits that adverse inferences should be drawn from the fact that Stork did not call Messrs Clissold, Lindner or Mazur and only called limited evidence from Mr Jewell. It places reliance on the so-called rule in Jones v Dunkel18 . I say “so-called” because the principle enunciated in that case is subject to many exceptions and variations. Nevertheless, the principle of general application is well-defined in Cross on Evidence as follows: “[the]unexplained failure by a party to give evidence, to call witnesses, or to tender documents or other evidence or produce particular material to an expert witness may, not must, in appropriate circumstances lead to an inference that the uncalled evidence or missing material would not have assisted that party's case. The rule can operate against parties not bearing the burden of proof and parties which do bear it as well. The appropriate circumstances exist where it was within the power of the party to tender the evidence which was not tendered …”19 [50] One of the exceptions to the general rule arises where there is a reasonable explanation for the omission to call a witness. It has been put this way: “The significance to be attributed to the fact that a witness did not give evidence will in the end depend upon whether, in the circumstances, it is to be inferred that the reason why the witness was not called was because the party expected to call him feared to do so. But there are circumstances in which it has been recognised that such an inference is not available or, if available, is of little significance. The party may not be in a position to call the witness. He may not be sufficiently aware of what the witness would say to warrant the inference that, in the relevant sense, he feared to call him. The reason why the witness is not called may have no relevant relationship with the fact in issue: it may be related to, for example, the fact that the party simply does not know what the witness will say. A party is not, under pain of a detrimental inference, required to call a witness “blind”.20 (emphasis added) [51] Most importantly, though, is that the rule only applies where there is an issue between the parties. The matters raised by CCPL as being subject to the rule are all matters which relate to evidence of oral directions, conversations, statements and so on. They relate to matters which were not pleaded in support of the plaintiff’s cause of action. There is no need to call a witness because, for example, he is referred to in correspondence unless that correspondence is relevant to the pleaded issues. Similarly, 18 (1959) 101 CLR 298 19 At [1215] 20 Fabre v Arenales (1992) 27 NSWLR 437 at 449-50 per Mahoney JA -- 17 of 81 -- 18 simply because a document becomes an exhibit, it does not follow that a person referred to in it should be called unless the reference to that person is relevant to the issues as pleaded. [52] CCPL called a reasonable amount of evidence from its witnesses about discussions held between those witnesses and employees of Stork or about documents not otherwise pleaded. That evidence was objected to on the basis that it did not relate to the pleadings. The general response was that the evidence was part of the “factual matrix” which allowed the court to understand the real issues. Parties are frequently allowed to give such evidence. It is often helpful. But it does not follow that, just because that evidence is given, the inference referred to in Jones v Dunkel can or should be drawn. [53] Evidence was received from Stork’s solicitor21 in which he explained why he had not taken statements from the witnesses the subject of CCPL’s submission on this point. He said, and it appears reasonable, that he had not thought that they could give relevant evidence because of the manner in which CCPL pleaded its case. That explanation is, in my view, strictly unnecessary as I consider that the inferences sought to be drawn cannot be so drawn as the evidence in question was not relevant to the pleaded issues. The Defences [54] Stork pleaded three defences of a general nature. Each of them applied to more than one of the claims. The findings with respect to these defences dictate the extent to which further findings and calculations need be made with respect to some of the claims. I will deal, then, with those defences first, before proceeding to consider each of the claims. The Prescribed Notice Defence [55] The bulk of CCPL’s claim is in two parts: it seeks damages for breach of the Subcontract constituted by the alleged failure to pay the amount claimed, and, in the alternative, it seeks an order “pursuant to the Subcontract” (presumably cl 3.1 of Exhibit D) that those sums be paid. [56] Clause 51.1 of Exhibit D relevantly provides: “Stork shall not be liable upon any claim by the Subcontractor in respect of or arising out of a breach of the Subcontract unless within 14 days after the first day upon which the Subcontractor could reasonably have been aware of the breach, the Subcontractor has given to Stork’s representative the prescribed notice. …. The prescribed notice is a notice in writing which includes particulars of all the following; (a) the breach, act, omission, direction, approval or circumstances on which the claim is or will be based; (b) the provision of the Subcontract or other basis for the claim or proposed claim; and (c) the quantum or likely quantum of the claim. This Clause 51.1 shall not have any application to; 21 Ex 61 -- 18 of 81 -- 19 (a) any claim for payment to the Subcontractor of any amount or amounts forming part of the Contract Sum; (b) any claim for payment for a variation directed by Stork’s Representative …” (Emphasis added) [57] It is admitted that no prescribed notice alleging a breach of the subcontract was served on Stork. [58] Stork argued that cl 51.1 was mandatory and that a failure to observe its terms prevented CCPL from making a claim after the relevant period elapsed. CCPL countered by submitting that the non-damages claim was not affected by this clause and the claims were otherwise excluded from the provisions of cl 51.1. [59] The word “claim: is defined in cl 2 of Schedule D as: “… including any claim, demand, action, proceeding or suit which subcontractor (sic) may make or bring against Stork … relating to the construction of the Subcontract or as to any fact, matter or thing arising out of or in connection with the Subcontract or the work under the Subcontract including (without limitation) any claim, demand, action, proceeding or suit seeking payment of money, or any costs, expenses, loss or damages on any ground whatsoever including (without limitation) pursuant to the Subcontract, on a quantum meruit, in quasi-contract, for unjust enrichment and insofar as is permitted by law pursuant to any other principle of law.” (emphasis added) [60] Clause 51.1 will apply when a claim is made which is in respect of, or arises out of, a breach of the Subcontract. To determine whether the clause applies requires the identification of the character of each of the claims. Each claim made by CCPL is premised on it having sought a progress payment and having only received a part payment from Stork. The FFASC categorises the money sought as damages for breach of contract or, alternatively, as payment in accordance with the Subcontract (or in the pedestal reconciliation claim – a separate agreement). [61] It follows, then, that CCPL’s claim for damages and its alternative claim for payment in accordance with the Subcontract come within that definition as the first (obviously) is a “claim … seeking … damages” and the second is a “claim … seeking payment of money”. Therefore, each claim will be barred unless the exemption applies. [62] It is submitted, though, by CCPL that the purpose of a provision (like cl 51.1) requiring a contractor to give notice within a reasonable time of the occurrence of events that he considers may entitle him to claim additional payment under the terms of the contract “is to enable the owner to consider the position and its financial consequences …” (Hudson’s Building and Engineering Contracts 11th ed, Sweet & Maxwell, 1995, para 4.132; see also Giles CJ, Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd & Ors (1996) 12 BCL 317 at 338)”. That is, no doubt, correct; but it is also intended to bring matters to an end should no notice be given by the appropriate date. [63] A similar clause was considered by Philip McMurdo J in Bartier v Kounza Investments Pty Ltd22 where his Honour concluded: 22 [2003] QSC 390. -- 19 of 81 -- 20 “I favour an interpretation which does require the builder to make a final payment claim as a condition precedent to payment. Clause 27.1 is in mandatory terms and there is a good commercial purpose in holding the parties to the timely performance of the steps set out in cl. 27 and 28, because it promotes an expeditious determination of their ultimate entitlements …”23 [64] I respectfully agree with that approach. That a notice of the type required in cl. 51.1 is a prerequisite to recovery is supported by other authorities, dealing mainly with clauses which require a notice before an extension of time can be given, which were considered, and helpfully summarised, by Besanko J in Decor Ceilings Pty Ltd v Cox Constructions Pty Ltd (No 2)24. He said: “[66] There is no doubt that parties can, if they wish, make compliance with a certain procedure a precondition to an extension of time by reason of delay or disruption or a claim for loss and damage resulting from delay or disruption. The question whether the parties have done that is to be determined as a matter of the construction of their contract. An intention to exclude the ordinary remedies arising on a breach of contract must be expressed in clear and unmistakable terms. (Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 per Lord Diplock at 717–718; Mancorp Pty Ltd v Baulderstone Pty Ltd (t/as Baulderstone Hornibrook) (No 2) (1992) 60 SASR 120).” [65] Does the exemption apply? Clearly, it cannot apply to the claims for damages as it only applies to a “claim for payment”. [66] Are any of the claims made by CCPL claims for payment to the Subcontractor of any amount or amounts forming part of the “Contract Sum”? The term “Contract Sum” is not defined in the Subcontract. CCPL submitted that “the only sensible meaning that can be given to the words “Contract Sum” is that it refers to the total sum due to the subcontractor for undertaking the subcontract including any additions or deletions thereto.”25 No further argument was advanced to support that contention. [67] Stork referred to the definition (in cl 2 of Exhibit D) of “Subcontract sum” which provides that that term relevantly means: “(a) where Stork accepted a lump sum, the lump sum; (b) where Stork 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 Stork 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 Subcontract.” 23 At [40]. 24 (2007) 23 BCL 347; [2005] SASC 483. See also Jennings Construction Ltd v Q H & M Birt Pty Ltd (1986) 8 NSWLR 18; Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd (1994) 11 BCL 360; Leighton Contractors Pty Ltd v South Australian Superannuation Fund Investment Trust (1995) 12 BCL 38; Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd (1996) 12 BCL 317. 25 CCPL’s Closing Submissions [235]. -- 20 of 81 -- 21 [68] The entire document governing the relationship between the plaintiff and the defendant is the “Subcontract”. While it bears that name it is, of course, in ordinary parlance the contract between them. The Formal Instrument of Agreement (which is the first part of the document) also provides that: “The Subcontract Sum is the lump sum of eight million seven hundred and fifty three thousand three hundred and eighty nine dollars and eighty three cents ($8,753,389.83) and excludes any additions or deductions which may be required to be made under the Subcontract.” [69] In the absence of a definition I think that the term “Contract sum” should be read as the sum arrived at by the calculations set out in the definition of “Subcontract sum” which is the figure referred to in the paragraph above and which is set out on page 13 of Part A of Exhibit C of the Subcontract. It follows, then, that the term excludes any additions or deductions contrary to the submission of CCPL. As CCPL is not suing for any amount contained within that sum (given that its claim is based on extra work) its claim (subject to what is said below) is not excluded from the effect of cl. 51.1. [70] CCPL argued that: “Clause 51 is a notice provision only. Its purpose is to ensure that Stork has proper notice of claims or potential claims in respect of or arising out of a breach of the Subcontract within a reasonable time of such claims arising. Provision of progress claims for work undertaken under the Subcontract by Cooks satisfies that purpose; and is the very reason for the exclusion contained in clause 51 relating to claims for breaches for non-payment of amounts forming part of the contract sum.” 26 [71] The provision of progress claims does not satisfy clause 51 because that clause is concerned with notifications of breach of contract, not of demands made in the ordinary course of the contract. [72] Are any of the claims for payment based on a variation directed by Stork’s Representative and, thus, excluded from cl 51.1? Yes, the claims made by the plaintiff which are for payment for a variation are: (a) Road Reconstruction; (b) Contour Drains; (c) Lime Stabilisation of Site Roads; (d) Boxing Out for Roadworks; and (e) Asphalt on Site Roads. [73] It follows, then, that the claims, other than those referred to immediately above, the pedestal reconciliation claim and the ammonia spill standby claim, are caught by clause 51. Defence relating to Alleged Errors in the Bill of Quantities [74] Of the various heads under which CCPL makes claims, there are six in which the entitlement to payment is alleged to arise because of an error in the “Priced Bill of Quantities”. They are the: (a) Footings, 26 [237] Plaintiff’s Written Submissions -- 21 of 81 -- 22 (b) Pedestals, (c) Corrocem, (d) Suspended Slabs, (e) Prill Storage Building Structures, and (f) Crushed Rock to Substations 1 and 2 claims [75] The “Priced Bill of Quantities” is defined in cl 2 of Exhibit D as: “… the Bill of Quantities priced and lodged by the Subcontractor with Stork’s Representative and corrected where necessary from time to time under Clause 5.3.” [76] The claims rely upon errors alleged to exist in the Priced Bill of Quantities within the meaning of cl. 5.4 of Exhibit D. Clause 5.4 relevantly provides: “If the Priced Bill of Quantities is in error in that it: (a) contains an incorrect quantity in relation to any item included therein; (b) contains an item which should not have been included therein; (c) omits an item which should have been included therein; then; (i) in the case of Clause 5.4(a) where the item is deficient in quantity or in the case of Clause 5.4(c) upon application in writing to Stork’s Representative by the Subcontractor; (ii) in the case of Clause 5.4(a) where the item is excessive in quantity or in the case of Clause 5.4(b) upon notification in writing to the Subcontractor by Stork’s Representative, the lump sum accepted by Stork for the execution of the whole of the work to which the Bill of Quantities relates shall except when the value of the error is less than $400, be adjusted by such amount as is required to correct the error, determined in the manner provided by Clause 45.6 for the valuation of variations as if the correction were a variation under the Clause. The Bill of Quantities shall be deemed to be in error as aforesaid to the extent that the items and quantities included in it differ from those required for the execution of the Works in accordance with the drawings and specification referred to in the Subcontract, measured in accordance with the method of measurement evidenced by the Subcontract.” [77] Stork submits that none of this is available to CCPL because there was not a Priced Bill of Quantities within the meaning of cl 5.4. Stork’s argument, in summary, was: “…that the plaintiff’s claims [, which are] premised upon an alleged error in the Priced Bill of Quantities such that the lump sum accepted by the defendant for the execution of the whole of the work [should be adjusted] pursuant to clause 5.4 of Exhibit D [,] suffer from the fatal flaw that no lump sum was accepted by the defendant for the execution of the whole of the work. This was a schedule of rates contract; this means that the defendant agreed to pay for quantities of work measured from the Subcontract drawings at agreed rates. The quantities in the Bill of Quantities were only ever estimates and so it -- 22 of 81 -- 23 is simply wrong to say that the defendant agreed to pay an identified lump sum for the work to be performed.” 27 [78] In support of its argument Stork refers to some of the definitions in the Australian Encyclopaedia of Forms and Precedents. [79] A schedule of rates contract is described in the following way: [1095] Schedule of prices or rates “In this form of agreement, the contractor agrees to execute the works for a price to be calculated according to the quantity of material actually used at an agreed rate. Rather than submitting a total price for the works, the contractor indicates rates per square metre, cubic metre or some other form of quantity and is paid for the actual amount performed. “This form of contract is commonly used in civil engineering works, particularly earth and road works where the precise volume or area is not known before the work commences. Tenders will usually be submitted on the basis of provisional quantities estimated by the principal’s quantity surveyor, giving some basis for determining the tender rates which will no doubt vary depending on the order of magnitude of the amount of work involved. The total of the provisional quantities multiplied by the tendered rates provides a figure to be used in comparing tenders. “The skill of tendering under such a contract relies on the contractor estimating more accurately than the principal the amount of quantities involved, so that the contractor’s rates can be “manipulated” to result in a similar provisional tender amount to the other contractors, but one which when the work is actually performed will provide a greater reward. “From the principal’s point of view, an accurate comparison of tenders relies on the provisional quantities being reasonably accurate. “This form of contract has the advantage that the principal is to pay for the amounts required (no more and no less) whereas under a lump sum contract both the principal and the contractor take the risk that their preliminary estimates were accurate.” (emphasis added) [80] A lump sum contract is described thus: “[1090] Lump sum contract In this form of agreement, the contractor commits himself or herself to execute specified work for a stated “lump sum” or fixed amount. The lump sum might in some circumstances be adjustable on account of a rise or fall in the cost of labour and/or materials, or on account of any variation to the works at the request of the principal, 27 Stork’s Closing Submissions at [12]. -- 23 of 81 -- 24 or might include provisional allowances. But generally the contractor is not entitled to claim further money over the stated amount.” [81] In order to determine into what category the Subcontract falls, an analysis of the relevant provisions must be undertaken. [82] One of the documents which makes up Exhibit C to the Subcontract is entitled “Subcontract Price Schedules and Bill of Quantities”. When CCPL refers in its pleading to the Priced Bill of Quantities it is referring to this document. It then alleges that, for example, the for-construction drawings require work beyond that contemplated by the tender process and, therefore, CCPL can have recourse to clause 5.4 for additional payment. [83] The problem that immediately arises is that cl 3.2 of Exhibit D of the Subcontract provides that: “Quantities in a Bill of Quantities or Schedule of Rates are estimated quantities only”. [84] That provision is consistent with the definition of a schedule of rates contract set out above. [85] In order for CCPL to be successful in its claims for adjustment of the lump sum pursuant to cl 5.4 it must, first, show that the Subcontract is a lump sum contract. That requires further analysis of the terms of the Subcontract. [86] Section 2 of Part A of Exhibit C, provides: “The Subcontractor shall execute the work under the Subcontract and fulfil all Subcontractor[‘]s obligations thereunder, and Stork shall pay the subcontractor of the measured quantity of each item of the work performed under the Subcontract as certified by Stork at the appropriate rate in the Subcontract Schedule part A — “subcontract Price Schedule and Bill of Quantities”. All items shall be measured net in-situ to the profiles and dimensions shown on the Drawings or described in the Scope of work and Specification and Subcontractor shall allow for wastage in the rates for the net quantities given in the Subcontract Schedule Part A — “Subcontract Price Schedule and Bill of Quantities”. Upon issue by Stork of the `Approved for Construction’ Drawings for the work and prior to construction of work covered by the Drawings, Stork and Subcontractor shall jointly review the Drawings and agree on the rate items applicable to the work shown on the Drawings. Measurement of work shall be made in accordance with the conditions set out hereunder.” (emphasis added) [87] The emphasis on measurement and the application of stated rates to the measured quantities is consistent with a schedule of rates contract. [88] Consistent with that emphasis on the application of stated rates to measured quantities is Clause 3.1 of Exhibit D which provides that the defendant must pay the plaintiff for work for which the defendant accepted rates: -- 24 of 81 -- 25 “… the sum ascertained by measurement and determination of the quantities in accordance with clause 3.2 and multiplying the quantity so measured and determined of each section or item of work carried out under the Subcontract by the rate accepted by Stork for the section of item, adjusted by any additions or deductions made pursuant to the Subcontract” (emphasis added) [89] Similarly, cl 3.2 of Exhibit D provides, among other things, that: “Quantities in a Bill of Quantities or Schedule of Rates are estimated quantities only. A direction shall not be required to be given by Stork’s Representative by reason of the actual item required to perform the Subcontract being greater or less than the quantity shown in the Bill of Quantities or Schedule of Rates. Unless otherwise stated within the contract, “actual quantities” shall mean those quantities measured in accordance with Australian Standard 1181–1982, as amended from time to time, from the lines, dimensions and limits shown on the relevant Contract plans and drawings. Quantities over and above the actual quantities as a result of oversupply, over excavation or any other similar reason by the Subcontractor will not be included in the actual quantities and the Subcontractor agrees that Stork is not required to pay for these quantities over and above the actual quantities.” (emphasis added) [90] Further, cl 3.3 of Exhibit D provides, among other things, that: “Where otherwise than by reason of a direction of Stork’s Representative to vary the work under the Subcontract, the actual quantity of an item required to perform the Subcontract is greater or less than the quantity shown in the Schedule of Rates; (a) where Stork accepted a lump sum for the item, the difference shall be valued under clause 45.5 as if it were varied work directed by Stork’s Representative as a variation; (b) where Stork accepted a rate for the item, the rate shall apply to 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 45.5 as if they were varied work directed by Stork’s Representative as a variation. ….” [91] During the course of construction there were, as might be expected, additions and changes made to the original plan for the construction. When this occurred, the evidence demonstrated that new bill items were introduced and agreed and allocated new bill numbers. No evidence was adduced which showed that any of the extra or new work was regarded as an error in Part A of Exhibit C of the Subcontract. On the contrary, the parties appear to have agreed to treat them as a new bill item in Part A of Exhibit C. In all the correspondence which was put before the court, I have been unable to find any clear reference to an alteration of a lump sum payable to CCPL. That clause 5.4 cannot be relied upon by the plaintiff is demonstrated by other parts of the Subcontract. -- 25 of 81 -- 26 [92] There are further references to a Bill of Quantities which must be considered. [93] Clause 2 of Exhibit D sets out the definitions of various terms. It provides that: “ ‘Priced Bill of Quantities’ means the Bill of Quantities priced and lodged by the Subcontractor with Stork’s Representative and corrected where necessary from time to time under Clause 5.3.” [94] Clause 5 of Exhibit D provides for three alternatives regarding the Bill of Quantities, namely: Alternative 1: A Bill of Quantities forms part of the Subcontract only to the extent provided in the Subcontract. Alternative 2: A Bill of Quantities shall not form part of the Subcontract. Alternative 3: A Bill of Quantities forms part of the Specification. [95] Exhibit E provides that Alternative 1 applies. Accordingly, a Bill of Quantities forms part of the Subcontract only to the extent provided in the Subcontract. [96] Clause 5.2 of Exhibit D provides that, “where there is a Bill of Quantities”, then among other things: “(a) CCPL shall lodge it with Stork’s Representative before the expiration of the time for lodgment stated in the Annexure or such further time as may be directed by Stork’s Representative from time to time; (b) notwithstanding any other provision of the Subcontract, the CCPL shall not be entitled to payment until CCPL has lodged the Bill of Quantities.” [97] Given the provisions of cl 5.2, the time for lodgment in a contract that had a Bill of Quantities would be essential. But, in Exhibit E (which contains the Annexure to the General Conditions of the Subcontract it is provided that; “The time for lodgment of the priced copy of the Bill of Quantities” is “Not Applicable”. [98] This designation of “Not applicable” in Exhibit E demonstrates that the Subcontract does not provide for a Priced Bill of Quantities at all. [99] Further, CCPL adduced no evidence to show that it did lodge a Bill of Quantities with Stork’s Representative; and it is only if a Bill of Quantities is priced and lodged in accordance with the Subcontract that the application of clause 5.4 can be justified. [100] It follows, then, that the Subcontract is not a lump sum contract. It is a schedule of rates contract. There is, then, no basis for the claims to which this defence applies. The Queensland Building Services Authority Act Defence [101] Stork raises the provisions of the Queensland Building Services Authority Act 1991 (“QBSA Act”) in two ways. First, as a complete defence to five of the claims made by CCPL on the basis that the work done was “building work” within the meaning of the QBSA Act and CCPL did not hold a relevant licence for that work. Secondly, Stork makes a counterclaim for a refund of the amounts paid by it to CCPL for that “building work”. [102] At the relevant times, s 42 of the QBSA Act prohibited a person from carrying out building work unless that person held a contractor’s licence of the appropriate class -- 26 of 81 -- 27 under the Act. If a person did carry out such work without the appropriate licence, the Act denied them any entitlement to “monetary or other consideration” for doing so. That denial was subject to a capacity to recover “reasonable remuneration” which, effectively, excluded any profit margin from such a sum. Section 42 relevantly provides: 28 “(1) A person must not carry out, or undertake to carry out, building work unless that person holds a contractor’s licence of the appropriate class under this Act. (2) For the purposes of this section – (a) a person carries out building work whether that person carries it out personally, or directly or indirectly causes it to be carried out; (b) a person is taken to carry out building work if that person provides advisory services, administration services, management services or supervisory services in relation to the building work; and (c) a person undertakes to carry out building work if that person enters into a contract to carry it out or submits a tender or makes an offer to carry it out. (3) Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so. (4) A person is not stopped under subsection (3) from claiming reasonable remuneration for carrying out building work, but only if the amount claimed – (a) is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and (b) does not include allowance for any of the following— (i) the supply of the person's own labour; (ii) the making of a profit by the person for carrying out the building work; (iii) materials and labour if, in the circumstances, the costs were not reasonably incurred; and (c) is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and (d) does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person's own direct or indirect benefit. … (10) Subsection (4) applies to building work carried out on or after 1 July 1992, unless the entitlement to payment for the carrying out of the building work was ….” 28 Section 42 was amended by section 21 of the Queensland Building Services Authority Amendment Act 1999 which inserted, among other things, subsections 4 and 10 into section 42. The effect of that was to give s 42 (4) a retrospective effect such that it applies to the events dealt with in this action. -- 27 of 81 -- 28 [103] The definition of “building work” was contained in Schedule 2 of the QBSA Act. It provided that “building work” means: “(a) the erection or construction of a building; or (b) the renovation, alteration, extension, improvement or repair of a building; or (c) the provision of lighting, heating, ventilation, air- conditioning, water supply, sewerage or drainage in connection with a building; or (d) the demolition of a building; or (e) any site work (including the construction of retaining structures) related to work of a kind referred to above; or (f) the preparation of plans or specifications for the performance of building work; or (g) any work of a prescribed kind; but does not include work of a kind excluded by regulation from the ambit of this definition.” [104] The QBSA Act defined “building” as including “any fixed structure”29 . During the times material to this action the Act did not define the meaning of the terms “drainage”, “site work”, or “retaining structures”. [105] It is contended by Stork that the following claims represent work which comes within the definition of “building work” and for which a licence was required: (a) Quantities of Footings; (b) Pedestal claim; (c) Corrocem claim; (d) Suspended slabs; and (e) Prill storage building structures. [106] CCPL admits that it did not hold any relevant licence at the material times but denies that any of its claims relate to the performance of “building work”. Quantities of footings [107] CCPL’s claim for quantities of footings only relates to certain footings which are set out in Attachment C to the statement of claim. The evidence which was given about those footings was to the effect that, in general, a footing is “generally considered to be a bigger arrangement, [a] more substantial arrangement” than a pedestal.30 In order to construct the footings, the plaintiff would need to excavate some earth, create formwork, place reinforcement, pour the necessary amount of concrete and, on occasions, backfill part of the excavation in order to bring the ground surface level with the footing. Mr Eames, who gave evidence for CCPL, frequently referred to footings as “concrete structures”.31 [108] A footing is a necessary and integral part of other items of construction. It is, by definition, something which is created so that something else may be built. For example, on this site, the footings which were built were to be used as the basis for other structures on the site such as buildings, pedestals and suspended slabs. As they formed the basis for other structures, the construction of the footings falls within the 29 Schedule 2, QBSA Act. 30 T 237. 31 T 230/20-31 and T231/51-58. -- 28 of 81 -- 29 definition of “the erection or construction of a building”, or “any site work (including the construction of retaining structures) related to work of a kind referred to above”, or both, as those terms are used in the definition of “building work”. I do not doubt that a footing is a “fixed structure”. [109] There is, in the definition of “building work”, an exclusion of certain work, namely, “work of a kind excluded by regulation from the ambit of this definition”. [110] Section 3A of the Queensland Building Services Authority Regulation 1992 provides that the following work, among others, is excluded from the ambit of the definition of “building work”: “… (t) the installation of manufacturing equipment or equipment for hoisting, conveying or transporting materials or products (including primary produce), but excluding the installation of fixed structures providing shelter for the equipment; … (x) work consisting of earthmoving and excavating; …” [111] The exclusion in s 3A(1)(t) has no application under this head. Section 3A(1)(x) does not, in my view, apply to the circumstances surrounding the claim for footings in this case. The exclusion in s 3A(1)(x) is for work “consisting” of earthmoving and excavating. The work in this case, though, consisted of more than just excavating. The word which needs to be analysed is “work”. If one was to ask what work was involved in the creation of footings, the answer would not simply be: “excavating”, but would include all the other activities referred to above. For “work” to consist of “excavating”, it means that a distinct and identifiable endeavour is made up solely of excavating. That is what the word “consisting” requires in these circumstances. If it was to be construed in any other way, then it would be inconsistent with the scope of work for which a concreting licence is required pursuant to Part 5 of the Regulation. Clause 2 of Part 5 of the Regulation provides that a concreting licence includes the scope of work dealing with “excavation of footings” and the “placing and fixing of reinforcement to footings”. It would be inconsistent with the provisions of the Act and the Regulation for a licence to be required for work which was excluded from the definition of “building work”. [112] The work which makes up the footings claim constituted “building work” within the meaning of the QBSA Act and, in the absence of the relevant licence, CCPL is not entitled to monetary or other consideration for doing that work. Pedestal Claim [113] CCPL’s claim in this area related to the construction of “columns, piers and plinths” being similar types of structures having a plan area of one square metre or less. These were distinguished from footings on the basis they were very small structures which actually became a part of the footings structures.32 [114] The construction of a pedestal required the erection of a steel cage (which is the reinforcement inside the pedestal), the connection of that cage to a footing or other supporting structure, the tying off of that reinforcement and then the building of timber 32 T 242/11-23 and T232/37-46. -- 29 of 81 -- 30 formwork into which the concrete would be poured. 33 Mr Eames said that plinths were “actually part of the footing structure”34 . He also explained that: “A “plinth” is a structure, dimensions of like of a pedestal, but placed upon an existing structure, existing concrete structure. Whereas a pedestal is generally considered to be a separate independent structure. The – both the idea of pedestals - the issue of pedestals and plinths are closely related because of the likeness in the type of construction and the quantity of work involved.”35 [115] The building of the pedestals involved the erection or construction of a fixed structure. Even though, relative to other parts of the work, they were small structures they, nevertheless, constituted “building work”. Those pedestals which were attached to footings would come within the scope of work of a concreting licence (“placing and fixing reinforcement to footings”) as well as coming within the general definition of “building work”. [116] The work which makes up the pedestals claim constituted “building work” within the meaning of the QBSA Act and, in the absence of the relevant licence, CCPL is not entitled to monetary or other consideration for doing that work. Corrocem claim [117] Corrocem was an additive used in the concrete placed in the ammonium nitrate building. It acted as a means of protecting the concrete floor from the various corrosive chemicals which were to be used in that building. There was considerable evidence as to the effect of Corrocem as an additive and to the manner in which it needed to be placed in a controlled temperature and not in the heat of the day. I can see no reason why it would not be regarded as being part of the scope of work for a concreting licence as it would certainly come within clause 2(7) of Part 5 of the Regulation as it involved: “Placing, vibrating, levelling and finishing of concrete including all special finishes”. [118] It is pointed out by Stork that as the ammonium nitrate building was a “building” within the meaning of the QBSA Act, the Corrocem claim would also be covered because it relates to work which can be described as the erection or construction of a “building”. [119] The work which makes up the Corrocem claim constituted “building work” within the meaning of the QBSA Act and, in the absence of the relevant licence, CCPL is not entitled to monetary or other consideration for doing that work. Suspended slabs [120] The suspended slabs were required for two buildings on the site. Originally the intention was that these slabs would be at ground level but, after the revision of for- construction drawings, the slabs were to be erected several metres in the air supported by columns. The manner in which they had to be built was described by Mr Eames in the following way: “There had to be scaffold towers built up to the height where the suspended slab was to be placed. There was – fairly strong steel 33 T 372. 34 T 232 35 T 245-6 -- 30 of 81 -- 31 bearers had to be put through. Formwork had to be placed across those to support the suspended slab and the weight of the concrete till it was set. … All the steel reinforcement had to be craned up into that area. And additional to a slab on ground the sides were much higher and had to be formed up.”36 [121] The suspended slabs and columns supporting them were obviously “fixed structures”. They could also be considered as being a part of other fixed structures of which they formed an integral component – the ammonia synthesis unit and the turbine generator building. [122] They also come within clause 2(6) of Part 5 of the Regulation: “Placing and fixing … suspended slabs …”. [123] The work which makes up the suspended slabs claim constituted “building work” within the meaning of the QBSA Act and, in the absence of the relevant licence, CCPL is not entitled to monetary or other consideration for doing that work. Prill storage building [124] As its name suggests, the prill storage building was a structure designed to store the prill manufactured at the site before it was removed to be processed elsewhere. The building was quite substantial. It was described as being “built like a fortress”.37 It was built in that way because it was designed to resist the effects of an explosion – a possibility given the nature of the prill. [125] The building had a concrete floor of varying thicknesses. Its internal walls were six metres in height, some 25 to 26.5 metres in length and 450 millimetres thick. The slab was thickened in various places and there was a footing established for silo storage together with a truck loading station. [126] This is the only structure about which CCPL says anything in its submissions on this point. It refers to the excavation of a substantial amount of earth as part of the construction of the footing for the building and submits that such work comes within the ambit of s 3A(1)(x) of the Regulation. However, for the reasons set out above, that subsection does not apply when the excavation is a necessary part of a larger building and is part of the construction of the building itself. CCPL also points to the “truck loading station” as coming within the ambit of s 3A(1)(t) of the Regulation on the basis that it is “installation of equipment for hoisting, conveying or transporting materials or products …”. CCPL’s submission is that the truck loading station is a piece of equipment into which prill is placed and from which it is removed and loaded into trucks for transport out of the plant. [127] As I understood the evidence, the truck loading station was an integral part of the prill storage building and consisted of a concrete area in which trucks could wait in order to be loaded. It did not include any equipment which would be used to hoist, convey or transport materials. When this matter was argued before Moynihan SJA he gave consideration to whether this work was “building work”. While, of course, a final judgment was not given in those circumstances, his remarks fortify my conclusion that the work done was not outside the definition of “building work”:38 36 T 279/10-30. 37 T 287. 38 Cook’s Construction Pty Ltd v Stork ICM Australia Pty Ltd [2004] QSC 066. -- 31 of 81 -- 32 “ [70] The prill store is essentially a building to store product of the process for which the project works were built. There is no occasion to doubt it is a building and that the plaintiff’s work included aspects of its erection or construction; see Multiplex Constructions Pty Ltd v Rapid Contracting Pty Ltd (In Liquidation) (Shepherdson J (unreported) [1998] QCA 10856/98). In that case, the erection of a prefabricated panel as part of the construction of a building was sufficient to satisfy s 42. [71] The fact that earthworks and excavation were carried out to prepare the building site, or that provision was made for equipment to hoist and convey the prill does not make what was otherwise building work become something else. That it was necessary to store the prill and so to provide a store building does not make it integral to the manufacture process so as to except it from the Act. Finally, that the plaintiff did not do all the building work for the prill store does not change the character of the building work the plaintiff carried out.” [128] The work which makes up the prill store claim constituted “building work” within the meaning of the QBSA Act and, in the absence of the relevant licence, CCPL is not entitled to monetary or other consideration for doing that work. The Claims (i) The Bulk Earthworks Claim [129] In paragraphs 6 to 15 of the FFASC the plaintiff sets out its claim with respect to bulk earthworks. It claims that it performed work under this heading and made progress claims in the sum of $851,017.21 but that Stork has only paid the sum of $708,119.76. The plaintiff, therefore, is claiming the sum of $141,367.45 plus interest. [130] The work performed under this heading involved the placement of fill, the excavation of earth for the creation of ponds, the laying of particular types of sub-base on site roads and the laying of a particular type of sub-base on gravel paved areas. [131] In paragraph 7A of the FFASC, CCPL claims that Stork was obliged to pay it pursuant to clause 3.1 of Ex D of the Subcontract. Clause 3.1 provides that for work for which Stork accepted rates (of which this is one type of work) Stork was to pay CCPL a sum ascertained by measurement and determination of the quantities in accordance with 3.2 and then by multiplying that amount by an identified rate. As is noted above, clause 3.2 requires that quantities are to be measured from the lines, dimensions and limits shown on the relevant contract plans and drawings. [132] The plaintiff’s claim in this area is based upon the calculations made by Mr Robinson which have already been considered. CCPL relies upon his measured quantities of: • 12,635 cubic metres for engineered fill • 126,947 cubic metres for bulk excavation of raw water evaporation ponds • 87,503 cubic metres for engineered fill on raw water evaporation ponds [133] Mr Alsop, in his evidence, relies upon those measurements for his calculation. While he says that the method used by Mr Robinson is an industry-acceptable method, there -- 32 of 81 -- 33 is, of course, no debate about whether it is an industry-acceptable method or not; the debate was whether or not the use of that method was consistent with the Subcontract. [134] One matter that is emphasised by Mr Alsop’s report is that he was unable to obtain any printout of the actual levels obtained to undertake a “logic check” of those items. One of the major problems with Mr Robinson’s report is that no one was able to check his calculations because vital data was contained on an old computer which, shortly before the trial, had ceased to function. Part of the difficulty here arises out of the very late change in pleading by CCPL and the failure to disclose documents relevant to that pleading at an earlier stage. As a result, neither Stork nor any of the experts were able to assess or comment upon the accuracy of any of the calculations made by Mr Robinson. [135] Apart from the fact that Mr Robinson’s calculations are not made in accordance with the requirements of the Subcontract, the weight which could be afforded to his calculations was substantially reduced by the absence of material which justified his conclusions and measurements. Ordinarily, in a case like this, one would expect evidence to be given which followed the process of measurement from beginning to end and in which the relevant records were proved so that an assessment of their accuracy could be made. [136] As the only computer which could operate the particular software used by Mr Robinson in arriving at his conclusions was no longer working, it was impossible for him to demonstrate the manner in which the program worked and, although he was able to display in court the 12D model upon which he relied, that model did not contain all of the data which he said had been entered into the program39 and, more to the point, without the original total station data no one could verify the information displayed by that 12 D model.40 [137] CCPL, in support of its claim that it has issued progress claims on this matter and generally, relies upon Exhibit 2. Exhibit 2 consists of two lever arch folders containing, in total, over 600 pages which appear to be progress claims and associated documents. I was taken to some pages of that exhibit during submissions but I was told, in final submissions, that I could “go through and see that they are all being paid for the amount that the plaintiff and its surveyor are surveying and measuring and acknowledged and formally paid by the defendant”. A submission which is, in essence, an invitation to a judge to accept a large number of documents and to examine them in order to determine whether or not a claim has been made out is an invitation I will not accept. I agree with the remarks of Adams J in Smith v Commonwealth of Australia41 where, at [67] he said: “The widespread habit of tendering vast quantities of paper and then making submissions that refer in generalities to the evidence or parts of it is quite inappropriate. It requires judges to trawl through the material to assess which parts actually support the submissions and, in effect, to construct the case that counsel has not done – or cannot do. This is not a proper role for a judge to undertake.” [138] As Mr Robinson’s evidence has not been accepted, and that was the only basis upon which this claim was made, the claim is unsupported and must be dismissed. 39 T 555/45-54. 40 T 556/16-19. 41 (2006) NSWSC 689. -- 33 of 81 -- 34 (ii) The Road Reconstruction Claim [139] This claim is pleaded in paragraphs 16 to 28 of the FFASC. It is a claim for $14,998.20, being the balance of the amount owing from a claim of $71,036 for the work performed between December 1999 and November 2000. [140] The work that was required was to carry out reinstatement of various internal plant roads. [141] Mr Eames’ unchallenged evidence was that road reconstruction was required for two reasons: first, because of a change in design and, secondly, because of the damage which was occurring to completed works from heavy machines being run over roads which were not intended to carry those heavy machines. Stork concedes that CCPL was required to carry out those works pursuant to a site instruction and thus the work amounted to a variation. [142] Clause 45.1 of the Subcontract provides that CCPL shall not “vary the work under the Subcontract except as directed by Stork’s Representative or approved in writing by Stork’s Representative under clause 45.” [143] The terms of the variation as set out in paragraph 17 of the FFASC are conceded to have been established by Stork and the appropriate rate for the work done of $28 per cubic metre is not in dispute. The dispute arises in three ways: (a) Has the plaintiff proved that it performed work in an amount of 2,537 cubic metres? (b) Did CCPL claim $71,036 for that work? (c) Has Stork only paid $56,037.08 leaving an outstanding balance of $14,998.20? [144] When the arrangements were made for the work to be done, it was agreed that: “Payment will be made at machine excavation rates as per Table B4. The surveyor will calculate quantities excavated and removed. Payment will be on the calculated quantities as presented on his certified sheets at the Table B4 rates.”42 [145] Mr Robinson’s calculations are contained in Ex 4443 and show an amount of 2,537 cubic metres as the relevant entry for this claim. The restrictions on the method of measurement referred to above do not apply in this part of the claim. The variation provided that the “surveyor will calculate quantities excavated and removed”. I accept that CCPL has established that it performed work in an amount 2,537 cubic metres. [146] Stork has paid CCPL $56,037.08.44 [147] What is not so clear is the amount which CCPL has claimed from Stork. In paragraph 21 of the FFASC, CCPL alleges that in or about the period November 1999 to April 2000 it claimed from Stork the sum of $71,036 or parts thereof in respect of the road reconstruction works. It particularises seven progress claims in support of that allegation. Those particulars are: 1. Item 3.7.1 of Progress Claim No. 18 dated 6 December 1999; 2. Item 3.7.1 of Progress Claim No. 19 dated December 1999; 42 Ex 44 – Letter CCPL to Stork 29.10.99, accepted by Stork by letter of 4.11.99. 43 Tab – Road Reconstruction, Certificate 30.3.00. 44 Admission by Stork in its final submissions at [302]. -- 34 of 81 -- 35 3. Item 3.7.1of Progress Claim No. 20 dated 4 February 2000; 4. Item 3.7.1 of Progress Claim No. 21 dated 28 February 2000. 5. Item 3.7.1 of Progress Claim No. 22 dated 28 February 2000. 6. Item 3.7.1 of Progress Claim No. 23 dated 28 February 2000. 7. Item 3.7.1 of Progress Claim dated 6 November 2000. [148] It is not easy to determine what is intended by those particulars. The references appear to be incorrect. For example, progress claim No 18 (contained in Exhibit 2) is dated 9 November 1999. It may be that the schedule attached to the letter of 9 November 1999 is the source of the date as it appears to have been created at 8.37am on 6 December 1999. Similarly, progress claim No 22, which is attached to a letter dated 8 April 2000, appears to have been created at 2.57 pm on 28 February 2000 or, perhaps, that is the date on which it was printed for some other purpose. Finally, there is a reference to item 3.7.1 of a progress claim dated 6 November 2000. I have been unable to find any such claim. It appears, from Exhibit 61, that what is described as “progress claim dated 6 November 2000” was, in fact, a letter from CCPL to Stork regarding claims made by CCPL that there were overdue amounts for payment outstanding from Stork. It contains a series of measurements by Mr Robinson with respect to the road works and associated activities and in appendix B to the letter it is asserted that the amount of $71,036 was the total cost of the project based on 2,537 cubic metres at $28 a cubic metre. Those figures are inconsistent with the claims made in progress claim No 22 in which it is claimed that 2,789 cubic metres were removed with a consequent cost (at $28 a cubic metre) of $78,092. [149] The figure of 2,789 cubic metres appears to be derived from a measurement contained in a letter from Mr Robinson to CCPL of 30 March 2000.45 The figure of 2,537 cubic metres appears to have been taken from another letter from Mr Robinson to CCPL of 31 October 2000.46 [150] It is not entirely clear but it is more likely than not that no progress claim was made with respect to this issue in the sum of $71,036. The higher figure which appears in the letter of 6 November 2000 does not correlate with the particulars provided with respect to this part of the claim. [151] The material which has been exhibited is unclear and does not support the assertion that the amount claimed was, in fact, claimed. Nevertheless, as cl 51.1does not apply to this claim, CCPL is not precluded from pursuing it. It has established its entitlement to the sum of $14,998.20. (iii) The Contour Drains Claim [152] This claim is pleaded in paragraphs 29 to 41 of the FFASC. It is a claim for $3,290.69 being the balance of the amount owing from a claim of $17,064.14 for the work performed constructing contour drains. [153] The claim arises out of a variation requested by Stork for CCPL to excavate and construct open earth contour drains in accordance with certain identified drawings. [154] The plaintiff relies on Mr Robinson’s report to support its claim. He says that his calculation – that the relevant volume was 4,331 cubic metres – was determined by 45 Exhibit 61, p 19. 46 Exhibit 61, p 18. -- 35 of 81 -- 36 surveying the original surface prior to excavation and then referencing that data to the plans identified in the particulars pleaded on this part of the claim. 47 That method, though, is not the method pleaded as the means of determining the relevant volume. [155] The plaintiff also relies on Mr Alsop’s report48 but he, relying solely on the plans, only confirms the length of the drains as being 2,779 metres and then calculates a minimum theoretical volume (1,729 cubic metres) and a maximum theoretical volume (3,335 cubic metres). Thus, his theoretical maximum volume is about 1,000 cubic metres less than that calculated by Mr Robinson. [156] The plaintiff has not established that it performed the work to the extent pleaded or as measured in the manner pleaded. This part of the claim fails. (iv) The Lime Stabilization of Site Roads Claim [157] This claim is pleaded in paragraphs 42 to 53 of the FFASC. It is a claim for $35,033.40 being the balance of the amount owing from a claim of $153,857.40 for the work performed under this head. [158] Pursuant to Variation 01849 dated 24 November 1998 Stork required CCPL to provide additional labour, materials, equipment and consumables and to spread lime on the sub base of the roads depicted on certain drawings. The mixing of lime into the sub base provides a harder base. [159] It was agreed that the price for the work was $10.60 a square metre for the supply, mixing and spreading of the lime plus $2,500 for mobilisation. [160] CCPL alleges that the amount for which it should be paid in accordance with the terms of the variation is 14,279 square metres. Stork denies that and, in paragraph 40 of the FFADC, pleads that “the quantity derived from the drawings as pleaded by the Plaintiff in its statement of claim, and as measured in accordance with the Subcontract, is 13,318m2.” [161] Thus, the area of debate (as with so much of this case) is about the particulars and the manner of measurement. CCPL sought to explain the difference in the amount by referring to Site Instruction 103 and to instructions given by Mr Clissold (Stork) to Mr Eames (CCPL). Neither the site instruction nor the oral instructions were pleaded and so CCPL cannot rely on them to justify its claim in excess of the amount of 13,318 square metres. That area appears, also, to have been agreed upon by Mr Robinson and Mr Leck in their joint report50 after the deletion of the 813 square metres which was the subject of the site instructions. [162] It follows, then, that CCPL is entitled to succeed on the admitted area of 13,318 square metres. The total owing, then, is $143,670.80 less the amount paid of $118,824, that is, $24,846.80 and that is the amount which CCPL may recover. 47 Ex 34, p 18. 48 Ex 39, p 5. 49 Ex 44, Lime Stabilisation Tab. 50 Ex 36. -- 36 of 81 -- 37 (v) The Boxing Out for Roadworks Claim [163] This claim is pleaded in paragraphs 54 to 65 of the FFASC. It is a claim for $3080 being the balance of the amount owing from a claim of $78,092 for the work performed under this head. [164] It is agreed on the pleadings that in late May or early June 1999 Stork requested CCPL to vary the terms of the construction agreement and CCPL agreed to do so in order to include work entailing the excavation of material between the bulk earthworks level and the road box level. This was pursuant to what is referred to as variation 145. It is also agreed that the rate for removal of earthworks arising from boxing out was $28 a cubic metre. The defendant admits that it has paid CCPL the amount of $75,012 for this work. [165] As with so many of these claims Stork denies the quantity alleged by CCPL on the basis that the claimed quantity “…cannot be measured from the drawings as pleaded and particularised by the plaintiff”. Both parties agreed that the issues for determination under this head are whether: (a) CCPL’s quantities as claimed have been measured in accordance with the method of measurement, and (b) Did CCPL in fact carry out the variation in the quantity of 2,789 cubic metres as shown on the for-construction drawings. [166] In its submissions Stork argues that a fact in issue is whether variation 145 required the plaintiff to carry out the works by reference to the for-construction drawings identified in paragraph 56 of the FFASC. That is not an issue that arises on the pleadings. Paragraph 56 pleads that the work was completed in the amount of 2,789 cubic metres and that that amount was determined by reference to the method of measurement set out in clauses 2.0 and 2.1.3 of part A of exhibit C to the Subcontract. Those clauses, in turn, require reference to for-construction drawings as they are the drawings from which measurements are to be taken under those clauses. It is not pleaded nor was it proved that variation 145 required the plaintiff to carry out the works by reference to those drawings. The document which was tendered with respect to variation 145 is a letter from CCPL to Stork to 11 July 199951 which refers to the volume of detailed excavation over and above the earthworks excavation removed when boxing out for the roads. That variation request, though, is only in the amount of 1,450 cubic metres and is supported by a certificate from Mr Robinson. In his report52 Mr Robinson says, using the for-construction drawings, that the quantity which can be calculated from the drawings is 2,789 cubic metres. [167] There was no explanation for the difference between the amount claimed in the letter of 11 July 1999 (variation request number 145) and the amount claimed in the statement of claim. In the evidence of Peter Young53 he says that the quantity referred to in that letter came “from Peter Robinson’s survey”. That is supported by the annexure to that letter being the certificate from Mr Robinson on that item. Mr Robinson did not explain how he came to that figure which is significantly less than the quantity he arrived at by reference to the for-construction drawings. In his report54 Mr Robinson refers to some calculations relating to road reconstruction and says that 51 Ex 33, tab 1. 52 Ex 34, p 19. 53 T 477 l 48. 54 Ex 34 p 16. -- 37 of 81 -- 38 the claim related to “boxing out and removal of damaged material from site roads”. In that part of his report he says that the quantity of material removed was 2,537 cubic metres. [168] Mr Leck, in his report,55 states that the claim involves the removal of material from below the gravel placement level, mixing it with lime and replacing it in a compacted form. He goes on to say that he cannot tell whether any duplication has occurred without actual levels. [169] In circumstances where a qualified surveyor has, at the time the work was undertaken, certified that the amount of material involved in the boxing out work was 1,450 cubic metres and then some eight years later arrives at a different figure, I think that it is appropriate to accept the figure which was calculated at the relevant time. That means that this claim must fail as the amount involved, according to the original estimation, is less than the amount claimed by CCPL in these proceedings. (vi) The Asphalt on Site Roads Claim [170] This claim is pleaded in paragraphs 66 to 77 of the FFASC. It is a claim for $52,787.70 being the balance of the amount owing from a claim of $230,657.70 for the work performed under this head. [171] Stork concedes this claim. (vii) The Quantities of Footings Claim [172] This claim is pleaded in paragraphs 96 to 113 and in attachment C of the FFASC. It is a claim for $7,991.50 being the balance of the amount owing from a claim of $77,090.36 for the work performed under this head. [173] It was a term of the agreement between the parties that CCPL would construct slab and pile footings for the nitric acid plant buildings at the following rates and in the following quantities: Works Rates Quantities Footing Excavation $32.16 109m3 Formwork $80.13 48m2 Concrete $490.57 108.5m3 [174] The plaintiff’s claim under this heading is expressed in the alternative. First, the claim is made pursuant to clause 5.4 of Ex D of the Subcontract on the basis that the bill of quantities is deemed to be in error for the purposes of that clause to the extent that the items and quantities included in it differ from those required for the execution of the footings work in accordance with the drawings and specifications referred to in the Subcontract and measured in accordance with the method of measurement required in the Subcontract. The error, according to CCPL, is that the bill of quantities contains an incorrect quantity in relation to item 6.7.8 of the footings bill of quantities and omits other items, being items 6.4.45, 6.4.49, 6.4.64, and 6.4.65. In consequence, CCPL pleads that, upon application in writing to Stork, the lump sum accepted by Stork for the execution of the whole of the work to which the bill of quantities relates should be 55 Ex 53. -- 38 of 81 -- 39 adjusted by such amount as required to correct the error determined in the manner provided for by clause 45.5. [175] In order to succeed on the claim relating to the bill error, CCPL must show that it complied with the requirements of clause 5.4(c)(i) or (ii). Those subclauses require, when a bill error is alleged, that an application in writing be made by CCPL to Stork’s representative. The document identified as proving compliance with that requirement is particularised in paragraph 103 of the FFASC. That document became Exhibit 15. It is not a document which has any bearing on this part of the plaintiff’s claim. It relates solely to the use of the additive Corrocem (which is dealt with elsewhere in these reasons). It follows, then, that the claim based upon a bill error cannot be maintained. [176] Secondly, the alternative form of the claim is that Stork had to pay CCPL (for work for which it accepted rates) the sum ascertained by measurement and determination of the quantities in accordance with clause 3.2 and by then multiplying the quantities so measured and determined of each section or item of work carried out under the Subcontract by the rate accepted by Stork for that section or item (see clause 3.1 of Exhibit D of the Subcontract). It is then said that the footings constructed by CCPL as measured in accordance with clause 2 of Part A of Exhibit C of the Subcontract resulted in the total value of the constructed new footing quantities being $77,090.36. CCPL then says that it applied to Stork for adjustment of the lump sum accepted by Stork for the whole of the work to which the bill of quantities relates. In the particulars of that part of the pleading Stork refers to a facsimile transmission dated 23 June 1999. The only document bearing that date which is a facsimile transmission from CCPL to Stork is Exhibit 15. It has no relevance to this claim. It relates solely to the claim concerning the use of the additive Corrocem. [177] There are five items described in Attachment C to the FFASC which are in issue. They are: Item 6.4.45 Steam Reformer Footings Item 6.4.49 KO Drum (Air Separation Unit) Item 6.4.64 Turbine Generator Building Item 6.4.65 Ammonia Storage Pipe Supports, Steam Reformer Pipe Supports Item 6.7.8 Nitric Acid Plant Building (Slabs) [178] On the plaintiff’s case, it was overpaid for Item 6.4.64 and so it need not be considered further on this point. [179] The parties differ as to the appropriate rates and the quantities involved for each of the other items in the following ways. Item 6.4.45 Steam Reformer Footings [180] CCPL says that the quantity was 3.24 cubic metres at $55 a cubic metre with a cost of $178.20. Stork says that the quantity was 3.46 cubic metres at $16.08 a cubic metre with a cost of $55.64. There is an amount of $122.56 said by CCPL to be owing. [181] With respect to the dispute about the quantity involved, I accept the evidence of Mr Robinson. His report56 demonstrates that he referred to the pleaded plans in arriving at his calculated volume. Mr Leck57 arrives at a different conclusion but differs by only 56 Ex 34, pp 21-22. 57 Ex 53, p 9 of Appendix B. -- 39 of 81 -- 40 .22 of a cubic metre. I accept Mr Robinson on the basis of his closer association with the project and knowledge of the relevant plans. [182] With respect to the appropriate rate, I accept Mr Leck who points out that there is a specific rate in the Subcontract Schedule of Rates identifying it as “Reformer – Footing Excavation”.58 That rate should apply in preference to the one promoted by Mr Alsop who based his opinion on the view he held as to the need for hand excavation. That was not a topic upon which there was sufficient evidence to justify his conclusion. [183] Therefore, on this claim, I find that the appropriate quantity is 3.24 cubic metres and the rate is $16.08 a cubic metre which means that CCPL was overpaid by Stork. Item 6.4.64 Turbine Generator Building [184] CCPL says that the quantity was 5.91 cubic metres at a rate of $55 per cubic metre. Stork says that the quantity was 2.63 cubic metres at a rate of $32.16 per cubic metre. The circumstances of this claim are very similar to those of the preceding claim. There is a specific rate in the Schedule of Rates for “Ammonia Plant Building – Footing Excavation”. I accept the volume calculated by Mr Robinson at 5.91 cubic metres and I apply to it the rate identified by Mr Leck of $32.16 per cubic metre. It follows that the plaintiff was overpaid for this item. Item 6.4.65 Ammonia Storage Pipe Supports and Steam Reformer Pipe Supports [185] With respect to this claim Stork contends that the relevant quantity is zero, because the claim under this heading is duplicated in the claim under the heading of “Pedestals”. Notwithstanding that, I find that the appropriate rate is $32.16 per cubic metre because that is the relevant figure in the Subcontract Schedule of Rates and if I am wrong with respect to the claim of duplication I find that Mr Robinson’s calculation is to be preferred in the sum of 2.43 cubic metres. That, once again, results in a finding of overpayment by the defendant. Item 6.7.8 Nitric Acid Plant Building Slabs [186] The issue under this claim relates only to quantities as there is an agreement on the appropriate rate. The point of dispute here is that Mr Robinson assumed a constant 200 millimetre width of the relevant slab, whereas that does not coincide with the width of the slab shown on the drawings. It was accepted by Mr Robinson that if the slab was not 200 millimetres thick then his calculation could be wrong. 59 On this matter I prefer the evidence of Mr Leck where he identifies a quantity of 121.06933 cubic metres. On that basis, the plaintiff has, once again, been overpaid. Duplication of Claim? [187] It is submitted by Stork that there is a duplication of claims in respect of footings and pedestals. That duplication is made out in Appendix D to Stork’s written submission provided to me. On the findings which I have made above the duplication is something which need not be pursued further. Likewise, on the findings I have made with respect to the applicability of the QBSA Act it is something which need not be further pursued. 58 Ex 53, p 35. 59 T 580/54 – 581. -- 40 of 81 -- 41 [188] The result of the findings above is that the plaintiff has no entitlement to the claims it makes for quantities of footings. (viii) The Pedestal Claim [189] This claim is pleaded in paragraphs 114 to 136 and attachments D, E and F of the FFASC. It is a claim for $308,912.33 being the balance of the amount owing from a claim of $515,406.59 for the work performed under this head. [190] Pedestals are typically small blocks of reinforced concrete which are constructed on slabs or pier foundations and which usually are the base for holding down bolts. At the time of the tender process there was no item in the drawings or the Scope of Works (Ex F to the Subcontract) which showed a pedestal (or pier, plinth or column) with a plan area of one square metre or less. [191] CCPL pleads60 that Stork issued it with for-construction drawings which included reference to the construction of pedestals having a plan area of one square metre or less. The particulars of those drawings are said to be contained in Attachment D to the FFASC. [192] CCPL then alleges that: (a) the for-construction drawings contained specifications different from the Bill of Quantities in that they required the construction of pedestals having an area on plan of one square metre or less61 , (b) the Subcontract deemed the Bill of Quantities to be in error, and the Bill of Quantities is in error, in that it contains incorrect quantities and omits items, being pedestals with an area on plan of one square metre or less, 62 (c) alternatively, clause 3.3 of the Subcontract permits valuation of an item of work under clause 45.5 if the Schedule of Rates omits an item,63 (d) between November 1998 and November 1999, the plaintiff constructed pedestals with an area on plan of one square metre or less in accordance with the Subcontract and the for-construction drawings.64 The plaintiff alleges that full particulars of the pedestal work, including quantities measured in accordance with the contract, are set out in Attachment D and that the profiles and dimensions relied upon to calculate those quantities are contained in specified for-construction drawings as well as Attachment D, (e) the plaintiff applied in writing for an adjustment of the lump sum accepted by the defendant for the whole of the work to which the Bill of Quantities relates,65 (f) the Subcontract required an adjustment to the Bill of Quantities to correct the error as if the correct were a variation,66 (g) the amount required to correct the error in the Bill of Quantities is to be determined in the manner provided by clause 45.5(b) of the 60 Para 115, FFASC. 61 Para 116, FFASC. 62 Para 117, FFASC. 63 Para 118, FFASC. 64 Para 119, FFASC. 65 Para 120, FFASC. 66 Para 121, FFASC. -- 41 of 81 -- 42 contract, and the relevant amount is $515,406 as particularised in Attachment D67 (para 122), (h) pursuant to the Subcontract the plaintiff claimed the sum of $515,406 in respect of the pedestal work, by progress claims 11-23,68 (i) the defendant has paid only $158,468 of the amount claimed by the plaintiff for the pedestal work, 69 (j) the Subcontract required the defendant to pay the plaintiff the amount of a progress certificate or progress claim within a prescribed time,70 (k) in breach of the Subcontract (and the “Pedestal Variation”), the defendant failed to pay the balance of the value of the pedestal work within the prescribed time, and the plaintiff is entitled to the said payment, 71 and (l) the plaintiff has suffered loss and damage in the sum of $308,912, being the difference between the amount it alleges to have claimed and the amount it alleges the defendant has paid72 (para 136). [193] Clause 5.4 of Attachment D provides: “Errors in Bills of Quantities If the Priced Bill of Quantities is in error in that it; (a) contains an incorrect quantity in relation to any item included therein; or (b) contains an item which should not have been included therein; or (c) omits an item which should have been included therein; then; (i) in a case of Clause 5.4(a) where the item is deficient in quantity or in the case of Clause 5.4(c) upon application in writing to Stork's Representative by the Subcontractor; and (ii) in a case of Clause 5.4(a) where the time is excessive in quantity or in the case of Clause 5.4(b) upon notification in writing to the Subcontractor by Stork's Representative, the lump sum accepted by Stork for the execution of the whole of the work to which the Bill of Quantities relates shall except when the value of the error is less than $400, be adjusted by such amount as is required to correct the error, determined in the manner provided by Clause 46.5 for the valuation of variations as if the correction where a variation under Clause 46. The Bill of Quantities shall be deemed to be in error as aforesaid to the extent that the items and quantities included in it differ from those required for the execution of the Works in accordance with the drawings and specification referred to in the Subcontract, measured in accordance with the method of measurement evidenced by the Subcontract.” 67 Para 122, FFASC. 68 Para 123, FFASC. 69 Para 124, FFASC. 70 Para 125, FFASC. 71 Para 126, FFASC 72 Para 136, FFASC -- 42 of 81 -- 43 [194] The reference to “Clause 46.5” is an error. There is no such clause. Mr Digby QC suggested that there was a transposition of numbers and that it should be read as “Clause 45.6”73 . I do not agree. Clause 45.6 deals with a variation omitting part of the work – it does not provide a means of measurement. On the other hand, clause 45.5 clearly does set out a mechanism for determining value. I intend to read “clause 46.5” as “clause 45.5”. [195] Clause 45.5 provides: “Valuation Where the Subcontract provides that a valuation shall be made under Clause 45.5, Stork shall pay or allow the Subcontractor, or the Subcontractor shall pay or allow Stork, as the case may require, an amount ascertained by Stork's Representative as follows; (a) lf the Subcontract prescribes specific rates or prices to be applied in determining the value, those rates or prices shall be used; (b) if Clause 45.5(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 45.5(a) or 45.5(b) apply, reasonable rates or prices shall be used in any valuation made by Stork's Representative; (d) in determining the deduction to be made for work which is taken out of the Subcontract, 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 16.2, 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 Subcontractor 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 12(b) applies, the percentage referred to in Clause 12(b) shall be used for valuing the Subcontractor's profit and attendance; and (h) daywork shall be valued in accordance with Clause 46. When under Clause 45.3 Stork's Representative directs the Subcontractor to support a variation with measurements and other evidence of cost, Stork's Representative shall allow the Subcontractor the reasonable cost of preparing the measurements or other evidence of cost that has been incurred over and above normal overhead cost.” [196] Paragraph 115 of the FFASC pleads that Stork issued CCPL with for-construction drawings which included reference to the pedestals and then particularised those drawings in Attachment D to the pleading. A review of Attachment D reveals the following: 73 T 786. -- 43 of 81 -- 44 (a) a number of the entries (for example: Steam Reformer Pedestal MF007) have, in the column “Stork For-Construction DRWG No.”, the notation “No plan”, (b) there are entries in a column “Survey DRWG No.” but no claim is made with respect to those drawings, (c) the cost of construction of the pedestals is set out and those costs appear to have been calculated from other entries which set out the types of labour engaged (for example: labourer, tradesman etc), the hours worked, the rate per hour and the cost of materials, (d) the total claim of $515,406.59 appears to have been arrived at by reference to the hours worked, the rates paid and the material used, and (e) that claim includes those pedestals for which no for-construction drawing is identified. The claim in paragraph 115 is inconsistent with the particulars attached to the paragraph to the extent referred to above. [197] As with most of the plaintiff’s claims, the argument is not about whether the work was done but the manner in which it should be remunerated and the pleaded claim for that remuneration and so I turn to the manner in which CCPL framed its claim. [198] Paragraph 122 of the FFASC pleads: “The amount required to correct the Bill Error, determined in the manner provided by clause 45.5(b) for the valuation of variations as if the correction were a variation under clause 45 of the construction agreement is $515,406.59. PARTICULARS “The calculation of the sum of $515,406.59 set out in the Pedestal Reconciliation attached hereto and marked ‘D’.” [199] In submissions, CCPL also sought to rely upon its pleading in paragraph 118: “Further, or in the alternative, there were terms of the construction agreement: (a) that Cooks’ would execute and complete the works under the construction agreement (clause 3.1 Exhibit D); (b) “works under the construction agreement” means the work which the Subcontractor is or may be required to execute under the construction agreement and includes variations, remedial works, Constructional Plant and Temporary Works (clause 2 Exhibit D); (c) that Stork would pay Cooks for work for which it accepted rates the sum ascertained by measurement and determination of the quantities in accordance with Clause 3.2 and multiplying the quantity so measured and determined of each section or item of work carried out under the Subcontract by the rate accepted by Stork for the section or item (clause 3.1 Exhibit D); (d) “actual quantities” shall mean those quantities measured in accordance with Australian Standard 1181-1982 as amended from time to time from the lines, dimensions and limits shown on the relevant Contract plans and drawings -- 44 of 81 -- 45 (clause 3.2 Exhibit D); (e) Where Stork accepted a rate for an item the rate shall apply to greater or lesser quantities (clause 3.3 Exhibit D); (f) If a schedule of rates omits an item which should have been included the item shall be valued under clause 45.5 as if it were extra work directed by Stork’s Representative (clause 3.3 Exhibit D).” [200] Stork argues that CCPL is confined by its pleading to a claim based upon cl 45.5(b), that is, a claim which must be calculated by reference (to the extent that it is reasonable to use them) to the rates or prices in a Priced Bill of Quantities or Schedule of Rates in circumstances where the Subcontract does not prescribe specific rates or prices to be applied. In other words, only the means of calculating compensation which have been pleaded may be relied upon. [201] CCPL, in response to that argument points to paragraph 118(f) of the FFASC which, so far as is relevant, pleads the term of the construction agreement that if a schedule of rates omits an item which should have been included the item shall be valued under cl 45.5 as if it were extra work directed by Stork’s Representative (cl 3.3 Exhibit D). It was submitted that “the pleading's broad enough to communicate to the reader that in this part, before we get to 45.5 (b), that the entitlement is said to be - to have the omission valued under clause 45.5 full stop. The pleading then goes on and in paragraph 122 pleads that the amount required to correct the bill error determined in a manner provided by 45.5 (b) is $515,000.”74 [202] In other words, CCPL argued that the allegation it pleaded in paragraph 118(f) meant that “the pleading's broad enough to carry a claim being advanced on the basis that clause 45.5 or some component of it is the proper foundation for a - for compensation for the omitted item.” 75 [203] I do not accept that submission. The allegation about the content of the agreement is made but there is no further pleading to the effect that, based upon clause 45.5, CCPL is entitled to payment of a particular amount. The only claim made is that contained in paragraph 122 which specifically refers to cl 45.5(b). It follows, then, that the only allegation to be met by Stork is that which makes the specific claim for an amount calculated in accordance with a particular part of cl 45. If it were otherwise, CCPL could have advanced a claim for any sum based on any of the parts of cl 45. To allow that would be to reduce the purpose of pleadings – to identify and confine the issues – to little more than talking points in an unregulated debate. [204] The breadth of the plaintiff’s argument on this point was exemplified by the following submission of Mr Digby QC: “In our submission, your Honour, the contract operates more broadly than to confine the plaintiff only to remuneration if there can be the identification of both a specific quantity and the identification of a specific rate, and in the operation of 5.4 as an example then through the conduit of clause 45.5 your Honour is able to remunerate the plaintiff on the basis what we have is a reasonable rate or reasonable price if the evidence is available.”76 74 T 789/38. 75 T 789/44. 76 T 787/20. -- 45 of 81 -- 46 [205] It might well be correct to say that the contract “operates more broadly”, but, in order for that to be a basis upon which a claim is made it would be necessary to plead that the Subcontract should be construed in that way. This part of the plaintiff’s argument betrayed, with respect, a conflation of the proper construction of the Subcontract and the manner in which a claim under the Subcontract could be pleaded. One example of that form of impermissible reasoning was the submission to the effect that one should look at the Subcontract as a commercial document and provide a sensible construction of the manner in which certain clauses should operate which was interwoven with a submission about the pleading being an appropriate vehicle for allowing an assessment of what was a fair or reasonable amount. 77 [206] In order that an opponent might be properly apprised of the case it has to meet it would be necessary, in a case such as this, to plead the construction of the Subcontract upon which a party intended to rely. It is not enough merely to advert to a clause in the Subcontract and then to submit later that a particular view of the operation of that clause should operate to allow a wider claim that that actually pleaded. That is what CCPL seeks to do when it argues that it should be able to rest its claim on any part of cl 45 even when it has identified (in para 122) a specific sub-clause as the one upon which it makes its claim. [207] I return to the pleaded case. As I have already pointed out, Attachment D to the FFASC contains references to pedestals other than those contained on for-construction drawings. In fact, Attachment D identifies 615 constructions said to be pedestals and not all of them are identified as appearing on for-construction drawings. I disregard those pedestals which are not on the for-construction drawings because they are not the subject of the claim. The next restriction in the pleading is the allegation that the pedestals in the attachment have a plan area of one square metre or less. Although there was evidence that CCPL did construct pedestals of that size I have not found any evidence to support the allegation that those listed in Attachment D fall within that description. There was considerable evidence about their construction78 , the cost of their construction79 , and the instructions and negotiations which took place about their construction80 . As to the last point, there was no pleaded reliance on any negotiations, conversations or correspondence. [208] Mr Robinson gave evidence that he prepared a document in relation to the pedestals that were constructed by CCPL during the course of the project.81 It was provided to CCPL as part of the work that he was requested to do to locate the footings. He was unable to say whether any of the items he identified formed part of the claim made by CCPL for pedestals. He was cross-examined82 as to whether pedestals identified by him and contained in the spreadsheet had plan areas in excess of one square metre. He agreed that there were some. The plans which he used for the purposes of that exercise were survey drawings as opposed to for-construction drawings. By way of example he found, with respect to survey drawing 124F013 that one of the pedestals shown on that drawing was in excess of one square metre in plan as were others identified by him in his spreadsheet. Survey drawing 124F013 is also referred to in Attachment D to the FFASC. 77 T 790/50 – 791/15. 78 T 243-245. 79 T 242, 271, 273, 341, 509; Ex 39. 80 T 248-273. 81 T 566. 82 T 567-569. -- 46 of 81 -- 47 [209] In Mr Alsop’s report83 he prepared a schedule which contained 611 pedestals. Of those, 230 were not contained in the claim made by CCPL and particularised in Attachment D to the FFASC. He also expressed the view that an assessment based on “day works” is an appropriate to fairly compensate a contractor for time spent on small items. That was the alternate claim made by CCPL and, indeed, a reference to Attachment D shows that the costs are calculated according to the number of hours expended in construction by various categories of person together with rates which they, according to CCPL, were paid. That raises another issue with respect to the pleading. In paragraph 119 of the FFASC the plaintiff says that Attachment D to the FFASC contains quantities measured in accordance with cl 2 of Part A of Exhibit C of the Construction Agreement. It does not. It does not identify any quantities and it only sets out, as referred to above, hours of labour and equipment and materials used. Although there is reference in the particulars to paragraph 119 to for-construction drawings, the particulars say that the profiles and dimensions are contained within both those drawings and Attachment D. Attachment D does not contain any reference to profiles and dimensions. [210] The evidence adduced by CCPL would be sufficient to establish that a large number of pedestals were built by it pursuant to directions given by Stork but there is insufficient evidence to establish the number of pedestals built, the size of the pedestals built (in particular, whether they were under one square metre in plan area), and the rates or prices to be used so far as is reasonable to assess the cost. [211] Further, Attachment D does not appear to apply the rates or prices as required by cl 45.5(b). The source of the rates used in Attachment D was not identified. It appears that they could not have come from tables B2 or B3 and the rate applied for survey work was nearly 50% more than the applicable subcontract rate under table B1. [212] Finally, the claim that is made by CCPL is a claim based solely on cl 45.5(b). Paragraph 122 of the FFASC refers only to that clause and there is no claim for a reasonable rate or price in the pleading. Even if there were, the details set out in Attachment D for hours spent and materials consumed were not supported by any other primary evidence. [213] The claim by CCPL under this heading is dismissed. (ix) The Pedestal Reconciliation Claim [214] In paragraph 130 of the FFASC it is pleaded that Stork requested CCPL, and CCPL agreed, to prepare day work sheets to detail evidence of the cost of construction of the pedestal work. It is pleaded that this is the “Pedestal Reconciliation Agreement”. The Pedestal Reconciliation is the document which makes up Attachment D to the FFASC. In its pleading CCPL says that the Pedestal Reconciliation Agreement “is in writing and is constituted by a letter from Stork to CCPL dated 9 January 2000”. That letter is contained in Exhibit 44 and, excluding formal parts, provides: “This is to confirm Stork’s verbal instruction for Cook’s to prepare and submit, to Stork, day sheets in support of Cook’s proposed average cost of $780 each, of pedestals construction. The day sheets must show total labour and materials involved in the construction of such pedestals.” 83 Ex 39. -- 47 of 81 -- 48 [215] The plaintiff then pleads84 that it was: “a term of the Pedestal Reconciliation Agreement that Stork would pay for the reasonable cost of preparation of the Pedestal Reconciliation”. That allegation is denied by Stork and understandably so. The document said to constitute the agreement is very brief and contains no reference to payment for anything. It contains no support for the allegation that Stork would pay the reasonable cost of preparation. [216] There is no other issue raised by the plaintiff, for example, such as an implied term, which might give rise to a cause of action on this point. [217] The plaintiff has failed to demonstrate an agreement either in the terms pleaded or otherwise which would justify its claim for $34,307 as the balance of the cost of preparation of the Pedestal Reconciliation. [218] Had the plaintiff sought to amend its statement of claim to include an allegation that there should be a term implied into the Agreement that Stork would pay the reasonable cost of preparation, it would still be unable to recover the amount it claims because it did not establish the necessary foundation for a finding that the amount claimed was in fact reasonable. The claim for $44,308 was based on the time alleged to have been taken to prepare the document. Attachment F to the FFASC contains what is called a preparation work record for the reconciliation and it purports to show the hours taken by each person involved together with what is said to be an appropriate rate. The persons named, the hours alleged to have been worked and the evidence in support are set out below: Peter Robinson – 200.5 hours – although Mr Robinson gave evidence about the manner in which he conducted a survey of the pedestals and other structures he did not give any evidence about the number of hours he spent doing that. Mr Sawyer – 34 hours – Mr Sawyer was not called. Mr Hooper – 99.5 hours – Mr Hooper was not called. Mr Wiseman – 178 hours – Mr Wiseman did give evidence of spending that amount of time and preparation.85 Mr Howard – 12 hours – Mr Howard did not give any evidence on this point. Mr Plail – 76 hours – Mr Plail was not called. Mr Glasgow – 40 hours – Mr Glasgow was not called. [219] At the most, then, the evidence supporting the time used to prepare the reconciliation relates only to Mr Wiseman and amount claimed for him is $10,680. [220] This claim is dismissed. (x) The Corrocem Claim [221] This claim is pleaded in paragraphs 137 to 153 and Attachment G of the FFASC. It is a claim for $68,209.69 being the balance of the amount owing from a claim of $161,148.69 for the work performed under this head. This claim arises out of the for- 84 Para 131 FFASC. 85 T 524. -- 48 of 81 -- 49 construction drawings which were issued for use in execution of the construction of the footing for the ammonia nitrate building. Those drawings required the addition of the additive Corrocem to the concrete in the footings the purpose of which was to enhance the strength and corrosion resistance capacity of the concrete being used. [222] It was agreed on the pleadings that the for-construction drawings required the use of the quantity of Corrocem alleged by the plaintiff; that the plaintiff claimed the sum of $161,148.69 in respect of these works; then, that Stork has only paid $92,939 in relation to this part of the plaintiff’s claim. [223] Stork accepts that the for-construction drawings relied upon by CCPL differ from the bill of quantities but maintains that there is no priced bill of quantities within the meaning of cl 5.4 of the Subcontract. I deal with the question of whether there is a “priced bill of quantities” within the meaning of the Subcontract elsewhere in these reasons. [224] If the Subcontract does contain a priced bill of quantities and there is an error in it then, in order that CCPL might be paid for additional work, CCPL must comply with cl 5.4(i) which requires an application in writing to Stork by CCPL. CCPL pleads that the adjustment of the lump sum accepted for the whole of the work to which the bill of quantities relates was made by a facsimile transmission of 23 June 1999. 86 [225] Stork argues that Exhibit 15 cannot be described as an application of the type alleged by the plaintiffs in that it does not refer to a lump sum or an adjustment to the bill of quantities, or an error in the bill of quantities. Mr Eddie gave evidence of the genesis of Exhibit 15:87 “Mr Eddie, did you have occasion to speak to Mr Jewell about the whole subject of rates in respect of Corrocem during the course of the calendar year 1999 and, if so, tell us as best you can recall in approximate terms when such a discussion took place and then we will deal with the substance of it?-- Well, behind Tab 11 is a copy of a facsimile that I sent to Peter Jewell on the 23rd of June, which followed a meeting I had with him to discuss the issue. At that time he had pointed out to me that we started out offering a rate of 643 and that went up to 703 and, you know, what was our position on it. I told him I would go back and review it, which I did. I went back and reviewed what the situation was and said that we had estimated before we started work that it would cost us $643 and that we were prepared to maintain that rate. When you speak of ‘we’ in that context-----?-- Cook's Construction. Right?-- On the second page of that letter is the detail of the break- up of that estimate that I had done previously.” [226] The letter, excluding formal parts, reads: “Peter Further to our meeting last week I make the following comments on events around the additional cost of the corrocem additive: 86 Ex 15. 87 T 133-134. -- 49 of 81 -- 50 • On 15 February I submitted a rate of $643 extra over for the incorporating the additive and placing the altered product. In the submission I highlighted the reasons for the additional cost but did not give a break-up of this cost. • We commenced placing corrocem concrete on 4 March and sometime after that we were apparently requested to substantiate our claim of $643. • Being after the event the records of actual performance were used in our letters of 4 May and 2 June. I would like to return to my original submission, which was our estimated cost, and I am prepared to stand by it. The break-up of the $643 is as follows: 1. Additional cost of incorporating additive Concrete 32Mpa in concrete truck at site $132/m3 Corrocem concrete in track at site $504/m3 Additional cost per track m3 $132/m3 Allowance for wastage (15%) $ 56/m3 Subtotal $428/m3 Mark-up on material (7%) $ 30/m3 Subtotal $458/m3 2. Additional cost of placing corrocem concrete Additional placing cost $ 70/m3 Additional finishing cost $ 25/m3 Aliphatic Alcohol $ 5/m3 Lights incl. fuel $ 15/m3 Subtotal $573/m3 On site overheads plus risk (say) $ 70/m3 TOTAL EXTRA OVER $643/m3 Peter if there is any aspect of this proposal that you would like to discuss further I would appreciate you contacting me direct.” [227] Exhibit 15 does not demonstrate the necessary compliance with cl 5.4. It does not refer to a priced Bill of Quantities or an error or omission in that Bill. It makes no application to Stork for an adjustment. [228] Should my finding that there was no application for an adjustment be incorrect, I should consider whether the amount claimed is reasonable. [229] CCPL claims that a reasonable rate for Corrocem is $703.32 a cubic metre.88 Although the estimate in Exhibit 15 is that the total extra over-cost would be $643 per cubic metre, when the records were reconsidered CCPL says that the actual cost of placing Corrocem is determined by the written records of those costs referred to in Attachment G. 89 [230] Stork points out a number of problems with the manner in which CCPL has calculated a “reasonable” rate for Corrocem. They are: (a) The number of hours pleaded as being required to place the Corrocem concrete is not supported. No documentary evidence was provided to establish the hours asserted. 88 Para 145 and Attachment G of the FFASC. 89 T 132. -- 50 of 81 -- 51 (b) There is an inconsistency between the calculation of the additional number of hours to place Corrocem above those required in relation to untreated concrete. It appears to be based upon the premise that untreated concrete would be placed at a rate of one cubic metre per half a man hour. That appears to be inconsistent with the rate in table B4 of Exhibit C to the Subcontract providing that the total cost of placing a cubic metre of untreated concrete is $141 whereas applying the “normal” rate relied upon by CCPL would result in a cost of placing one cubic metre of untreated concrete at $27.50. That may have an effect on the additional man hours said to have been required for the placement of Corrocem but it is difficult to form a concluded view on that in the absence of precise evidence dealing with it. (c) There was evidence about the “necessity” for the Corrocem to be placed at night in order to take advantage of cooler conditions. Attachment G refers to “four night pours” but there is other evidence which suggests there were five pours, or many pours.90 I could not find any evidence which supports the entry of four night pours. (d) CCPL claims the cost of placing concrete by pump. The concrete would have required the use of a pump for placement regardless of where Corrocem was an additive or not.91 (e) Attachment G asserts that the cost of Corrocem concrete was $504. There is no evidence to support that. There are no invoices or quotations or statement which support that figure. Mr Eddie gave evidence about the cost of Corrocem. In answer to one question he said that the purchase price of Corrocem per cubic metre was over $500. In answer to a question shortly after that he said the cost of buying the Corrocem was $400 a cubic metre.92 Other evidence was given by Mr Howard who said that the cost of Corrocem basically doubled the price of the concrete.93 If that was correct then, given that the contractual rate for the supply of concrete was $165 a cubic metre the extra cost would have been no more than that amount. (f) Further, in Attachment G there is a 25 % uplift on the cost. There is no basis for that. Mr Eames was not aware of any basis under the contract for CCPL to be able to be paid 25% more than they paid for something.94 Mr Young who created the claim with respect to Corrocem concrete could not say where he got the figure of 25%.95 [231] Mr Alsop was called to give evidence on this point. His evidence was based upon assumptions as to truck capacity and other performance issues which were not supported by any evidence. He also refers to additional costs incurred by the supplier in delivering the concrete to the site but no evidence was provided with respect to that. His rate of $268.80 a cubic metre included allowances for which there was no support. [232] Mr Leck gave evidence that a reasonable extra over-rate for Corrocem would be $30 a cubic metre on the basis that the cost of silica fume (of which Corrocem was a type) was $10 a cubic metre and some additional placing costs might be needed. His 90 Ex 14, T 275. 91 T 497. 92 T 145. 93 T 456. 94 T 361. 95 T 496. -- 51 of 81 -- 52 evidence was based upon a costing of silica fume. Corrocem was said to be a particular brand of silica fume technology but the extract from Rawlinson’s Construction Handbook 96 does not give sufficient particulars for me to be satisfied that that is an appropriate amount. [233] It follows that CCPL has not made out a reasonable rate for the placement of concrete treated with Corrocem. [234] In light of my finding that there was no application for an adjustment, this claim must be dismissed. (xi) The Suspended Slabs Claim [235] This claim is pleaded in paragraphs 154 to 170 and attachment H of FFASC. It is a claim for $171,809 being the balance of the amount owing from a claim of $520,465 for the work performed under this head. This claim arose out of a change from the sketch provided to CCPL for its tender for work. The original sketch provided97 showed slabs to be constructed at ground level. The for-construction drawings which were issued showed slabs which were to be constructed several metres in the air and, of course, supported by columns. To construct that type of a slab it is necessary to put scaffolding underneath a platform which acts as the form for the base of the concrete slab.98 The slabs to be constructed were for the ammonia synthesis unit and the turbine generator unit. [236] CCPL pleads that because of the change between the original sketch and the for-construction drawings the subcontract deemed the bill of quantities in error as it omitted an item being the suspended slabs and columns. In the alternative, CCPL pleaded that clause 3.3 of the Subcontract permitted valuation of an item of work under clause 45.5 if the schedule of rates omitted an item. [237] Stork denies that the bill of quantities is deemed to be in error or that CCPL is entitled to an adjustment of the lump sum to correct the error. [238] CCPL says that it applied in writing for an adjustment of the lump sum as required by the Subcontract but this is denied by Stork. [239] The other major area of disagreement is over the calculation of the amount claimed. That calculation is set out in Attachment H to the FFASC. [240] I turn first to the claim for an adjustment of the lump sum. It is one of the alternative bases for the claim by CCPL. It relies upon three letters: two dated 6 August 1999 99 and a letter dated 22 September 2000.100 [241] The letters of 6 August 1999 are virtually identical so far as the details of the figures are concerned. The first of the letters101 refers to the ammonia synthesis unit. The opening paragraph of the letter reads: “In an endeavour to simplify our claim and obtain consistency, we suggest that the ammonia synthesis unit (item 6.4.48) be regarded as 96 Ex 57. 97 Ex 8. 98 T 135. 99 QANP 271 and QANP 273 – see Ex 44, tab “suspended slabs”. 100 Ex 5. 101 QANP 271. -- 52 of 81 -- 53 a type 6 structure. Accordingly the following rates for formwork and concrete have been adjusted to reflect this type structure.” [242] The other letter of the same date102 refers in similar terms to the turbine generator. In neither letter is there a reference to the bill of quantities or the “lump sum”. There is a reference to rates being “adjusted” but not a reference to the “lump sum” being adjusted. In the written submissions from CCPL these letters are referred to as being in a group of letters said to “canvass (albeit unsuccessfully) bases for rates for the suspended slabs”. It is not argued in these submissions that they constitute an application in writing in the sense required by the Subcontract. [243] The other letter said to constitute an application for adjustment of the lump sum is the letter of 22 September 2000.103 This letter commences: “During the meeting on Friday 19 May 2000, you advised that Stork would revisit it’s (sic) position in relation to Cook’s claimed rates and a claimed soffit formwork areas for ammonia sysnthesis (sic) and turbine generator suspended slab structures. Cooks have had no response from Stork since the abovementioned meeting regarding Stork’s position. Cooks therefore assume Stork has accepted Cook’s rates as detailed in Cook’s letters QANP 271 dated 6/8/1999 and QANP 273 dated 6/8/1999 and require immediate payment for the outstanding value for the progress claim items 6.4.48 and 6.5.28, presented on the attached spreadsheet and summarised below.” [244] There is then a tabulation (the spreadsheet referred to was not tendered) and the tabulation shows a claimed value for the ammonia synthesis slab of $172,509.09 and for the turbine generator a value of $218,661.81. The letter claims that Stork has made total payments of $291,925.27 leaving a balance outstanding of $99,245.63. [245] No reference to this exhibit is made in the written submissions of the plaintiff or in the oral submissions made on the final day. When the letter was tendered104 its author, Mr Trende, was asked: “But that’s another letter for demand to Mr Jewell for payment this time in respect of suspended slabs? - - Correct.” That characterisation is correct. It is not, nor was it ever argued to be, a letter seeking an adjustment of the lump sum. [246] As has been noted with respect to other claims, in order for any adjustment of the lump sum to occur under clause 5.4 of the Subcontract there must be a request for an adjustment. None of the letters referred to above constitute a request as required by clause 5.4. It follows then that that clause has not been activated and the first ground for the claim fails. [247] In the alternative basis for the claim there a number of disputes. The next issue in dispute is the area of “edge formwork” involved with the construction of the turbine generator slab. This is a structure of approximately the same size as the ammonia synthesis slab save that it had an upstand surrounding the slab for which extra edge formwork was required. Mr Leck did not include the formwork for the upstands and so he arrived at an area of 107 sq metres for the formwork for the turbine generator slab 102 QAN p 273. 103 Ex 5. 104 T 90. -- 53 of 81 -- 54 whereas Mr Alsop agreed with the claim in the FFASC105 that the formwork was 150 sq metres. [248] The reason given by Mr Leck for not including the extra formwork was that, in his experience, the upstand is not actually part of the slab. That is something which was in his report which, as I have noted, was in the hands of the plaintiff for some months before the trial began yet there was no cross-examination on that point. Given that the relevant for-construction drawing shows that the upstand was a separate structure to the slab, I accept Mr Leck’s evidence on this point. [249] The next issue for consideration is the question of appropriate rates for the calculations of the amounts. CCPL has calculated the amounts by reference to cl 45.5(c) which means that they are relying upon “reasonable rates or prices”. [250] CCPL contends that the applicable rate for formwork for columns is $311.60 a square metre. Mr Leck says that $300 a square metre would be appropriate. Mr Leck agreed that two reasonable people might arrive at different reasonable prices and that there was nothing in the difference between him and Mr Alsop as it amounted to a difference of about 3%.106 I accept Mr Alsop’s assessment of $311.60 a square metre as the rate for formwork to the columns. [251] The plaintiff contends that the applicable rate for concrete for the columns is $787.21 a square metre. For the defendant, Mr Leck, says the applicable rate is $678.15 a square metre. The manner of calculation of this rate is set out in Attachment H to the FFASC. There are a number of internal difficulties with the manner in which that has been calculated. There is, for example, an amount for the base rate for concrete being “Schedule A + Cook’s margin”. This is not justified on the evidence. Mr Eddie could not explain it. He said that he did not know what “Schedule A + Cook’s margin” meant. 107 Mr Alsop said that it would be appropriate to claim a higher rate for concrete used in columns, walls and plinths as industry handbooks indicate that the rates for those items are not the same as the rate for slabs. [252] The difficulty with this part of the plaintiff’s claims is one which permeates the balance of the figures asserted by the plaintiff. In order to demonstrate that a rate is reasonable there must be some evidence, other than that of an expert who relies upon assertions for some of his evidence such as Mr Alsop does at page 13 of his report. It is contended by Stork that the plaintiff has been inconsistent in Attachment H when there is a reference to contractual rates as the basis for components of another rate. It is argued that such a calculation is invalid because the allegation that a rate is relied upon means that cl 45.5(c) cannot be the basis upon which the claim is made. I disagree. It is open to CCPL in these circumstances to point to a rate or part of a rate as being a reasonable component of another greater rate. [253] In the end, though, on this part of the claim, CCPL has simply failed to set out why the individual parts of the rate upon which it relies should be used to make up the greater rate to which it asserts it is entitled. [254] The next part of the claim is for soffit formwork for the suspended slab. CCPL seeks a rate of $708.07 a square metre. This is said by Stork to be overgenerous because it improperly incorporates the cost of formwork required for working space; the 105 Para 158. 106 T 722. 107 T 153. -- 54 of 81 -- 55 components of the claimed rate come from part B3 of Ex C to the contract (but there is no evidence of any invoiced costs) and, as above, by referring to contractual rates there is a contradiction with the claim for a reasonable rate. Mr Alsop says that a rate of $680 to $720 a square metre is appropriate108 but goes no further than that. There was a conflict between Mr Alsop’s assumptions and Mr Eames’ evidence as to the use of steel supports. Mr Alsop assumed the use of a substantial steel framework whereas Mr Eames’ evidence was that the structure was made up of steel columns and timber beams. 109 I accept Mr Leck’s evidence on this point, that is, that $200 a square metre is appropriate in light of his analysis.110 [255] With respect to the rate for the suspended slab-edge formwork, the difference is between the rate claimed by CCPL of $233 a square metre and Mr Leck who said that the applicable rate is $200 a square metre. There is a difference of approximately 15% between those two figures. I do not think that that is a sufficient difference in these circumstances to reject the plaintiff’s claim and I accept the amount it claims as reasonable. [256] The plaintiff contends that the applicable rate for the suspended slab is $678.15 a square metre. This was accepted by Mr Leck. [257] For the suspended slab concrete for the plinths, the plaintiff contends the applicable rate is $704.65 a cubic metre. Mr Leck says that the appropriate rate is $678.15 a cubic metre. Notwithstanding the arguments raised against the plaintiff’s claim on this point by the defendant, the difference between the two figures is less than 5% and given Mr Leck’s evidence about the applicable rate with a difference of less than 5% I accept that this part of the claim by the plaintiff is reasonable. [258] This claim would, but for the defences referred to earlier, succeed to the extent that the total owing based on the findings set out exceeded the amount paid by Stork. (xii) The Prill Storage Building Structures Claim [259] This claim is pleaded in paragraphs 171 to 187 and Attachment I of the FFASC. It is a claim for $420,466 being the balance of the amount owing from a claim of $1,784,123 for the work performed under this head. [260] The representation of the prill store in the tender documents was as just a slab on the ground. When the for-construction drawings were presented, there were, in addition to the slab, walls up to six metres high surrounding an area in which the prill was to be stockpiled.111 I accept that the for-construction drawings referred to in the reports of Mr Alsop and Mr Leck show a requirement for the construction of walls in addition to the slab. [261] CCPL pleads that because of the admission of the extra building work, the Bill of Quantities was deemed to be in error and the work was to be paid for in accordance with the Subcontract. It alternatively claims a valuation of that work under cl 3.3. In paragraph 177 of the FFASC, the plaintiff alleges that it applied to Stork for adjustment of the lump sum by such amount as was required to correct the bill error. No letter dated 13 December was put in evidence but there is a letter dated 12 108 Ex 39, p 17. 109 T 362. 110 T 722-723 111 T 137. -- 55 of 81 -- 56 December which carries the same reference, namely QANP 388. The copy of the letter contained in Ex 44 behind tab “Prill store” of 12 December 1999 is not signed. It was referred to in the evidence of Mr Eames as a draft and he says that he was “pretty well certain” that the final version of the letter was sent on the 12th or the next day, the 13th December. 112 That is likely, given that on 16 December 1999, Stork responded to a letter dated 13 December and bearing the same reference number and advising CCPL that its proposal was not acceptable to Stork. Further, in a letter of 13 December 1999, Mr Eames withdraws his letter of 13 December 1999 “in the interest of less confusion of the issue”. Whatever the circumstances of the sending of the letter, it did not constitute an application in writing for an adjustment of the lump sum. It was framed in terms of a variation and was in response to other correspondence relating to the prill store storage building. . [262] So far as the quantities claimed by the plaintiff are concerned, I address the issue of formwork first. CCPL contends that the appropriate quantity of formwork for the slab was 282.01 square metres. This is inconsistent, though, with Mr Robinson’s calculation which, after deleting the portion concerning construction joints113 was 154.3 square metres.114 That amount is also consistent with the calculation of Mr Alsop 115 where, after deleting an area relating to additional external slabs which were not claimed by the plaintiff, he arrives at a figure of 154.09 square metres. I accept that the appropriate figure to adopt here is 154 square metres being the amount closest to that found by Mr Alsop and Mr Robinson. The balance of the quantities claimed by the plaintiff is accepted by the defendant. [263] As with many of the other claims, a major disagreement exists with respect to the appropriate rates to be applied. [264] Mr Eames gave evidence about the construction of the prill store and the difficulties which were encountered.116 He also said that CCPL required another $100 a cubic metre on the rate it would ordinarily charge for placing the concrete because of the difficulties involved.117 [265] While there is agreement on the measurement of many of the quantities, there is complete disagreement as to the rates which should be applied to those quantities. I will consider each in turn. Formwork to base slab [266] CCPL seeks to apply a rate of $212.77 on the basis that that is the contractual rate applicable for formwork for “slab and walls”. This choice is supported by Mr Alsop.118 There is, though, no evidence as to why a rate applicable to “slab and walls” should be applied to a slab alone. In his report, Mr Leck says 119 that the rate for formwork to the base slab should be similar to the rate in 6.8.28 or the Table B4 rate, which are both rates set out in the Subcontract relating to formwork for slabs. Although Mr Alsop had 112 T 291. 113 These could not be included because clause 2.1.4(b) of part A of Ex C to the Subcontract provided that the rates for concrete should include such construction joints. 114 Ex 34, pp 31-32. 115 Ex 39. 116 T 285-289. 117 T 290. 118 Ex 39 p 14. 119 Ex 53 p 45. -- 56 of 81 -- 57 Mr Leck’s report and was asked to comment on it, he makes no reference to this difference of opinion. Although neither expert descends into any particularity, Mr Leck does provide some basis for accepting his assessment and I accept his rate of $80 a square metre. Rate for formwork to nib walls [267] Mr Alsop supports the plaintiff’s claim for a rate of $212.77 a square metre on the basis that it is an applicable for walls which are 200 millimetres thick and 500millimetres high. While there is evidence that some of the walls were 450 millimetres thick and about 6 metres high, there is no evidence about walls of the thickness and height relied upon by Mr Alsop. Mr Leck says that the rate for formwork to walls should be similar to the Table B4 rate for “form ply/metal sheeting” but gives no justification for that. Mr Alsop’s figure is more closely associated with the type of work and I accept it. Rate for formwork to walls [268] CCPL contends for a rate of $292.64 using a base rate of $212.77 a square metre together with various other rates which bring it up to the higher amount. Of the additional items claimed by the plaintiff some of them are incorrectly included as they should already have been regarded as forming part of the original formwork rate, for example, hire of solders, walkways, etc, a crane, formwork and so on. It seems to me that the plaintiff has not justified the addition of the extra amounts on top of the base rate. That base rate appears to be of more relevance than the rate asserted by Mr Leck and I prefer that amount, namely $212.77 a square metre for formwork for the walls. Rate for concreting base slab [269] CCPL claims a rate of $663.03 a cubic metre. I do not understand why the rate for the prill storage building itself ($490.57 in s 6.8.26 of Ex C) should not be the appropriate rate. No evidence was called to justify the higher amount. Mr Leck applied a rate of $529.85 a cubic metre and as this appears to be accepted by the defendant and is in excess of the rate which appears to be otherwise specified for the building I accept the higher rate. Rate for concreting walls [270] CCPL claims a rate of $733.45 a cubic metre. That is supported by Mr Alsop. Mr Leck chooses a different figure but provides no support for it. CCPL in attachment I to the FFASC pleads that the $733.45 figure is made up of items 6.5.25 from Schedule A and adds to it another item pursuant to variation 046 and an additional figure for which Table B3 is the reference. There is no evidence relating to variation 46 and I discard it. I do not understand the reference to Table B3 and no evidence was called upon it. I accept the rate set out in item 6.5.25, namely, $634.65 for this task. [271] This claim would, but for the defences referred to earlier, succeed to the extent that the total owing based on the findings set out exceeded the amount paid by Stork (xiii) The Crushed Rock to Substations 1 and 2 Claim [272] This claim is contained in paragraphs 204 to 228 of the FFASC. CCPL seeks the sum of $11,354.76 for work associated with placement of crushed rock at Substation 1. -- 57 of 81 -- 58 [273] The evidence called on this topic was not consistent with the FFASC. Mr Eames’ evidence was that the claim was for the replacement of crushed rock which had already been placed at the Substation and that this came about because the relevant electricity authority required it.120 The FFASC pleads a case, not supported by the evidence, in which there is no reference to replacement. [274] This claim is very much like the other claims in which it is alleged that the relevant item was omitted from the Bill of Quantities except that, in this case, CCPL contradicts its own claim by pleading that such an item was contained in the Bill of Quantities121. [275] The monetary part of the claim is constituted by allegations as to the hours engaged in the task together with the quantity of crushed rock used122 . The only support for that allegation is the letter written by Mr Eames of 18 February 2000123 to Stork which he refers to as Variation 203. Mr Digby QC disavowed any claim based on a variation124 . Nevertheless, CCPL referred to the refusal by Stork to agree to the variation in Stork’s memorandum of 23 May 2000125 . [276] There is no evidence to support the allegation that the for-construction drawings included laying 150mm thick 20 mm aggregate (no fines) crushed rock at substations 1 and 2. Mr Leck says that the drawings alleged to contain that particular did not do so126 . Mr Robinson agreed with that in the joint report127 and Mr Alsop made no comment on it. [277] The detail of the claim is supported to a limited extent by the evidence of Mr Eames who said that the letter of 18 February 2000 set out his summary of the facts relating to the crushed rock issue.128 [278] That letter, though, does not constitute an application for adjustment of a lump sum as pleaded or at all. [279] In the absence of evidence to support this part of the pleaded claim it must be dismissed. (xiv) The Ammonia Spill Standby Claim [280] This claim is contained in paragraphs 229 to 243 and attachment J of the FFASC. It relates to an ammonia spill which occurred on site on 18 January 2000. Stork directed CCPL to evacuate the site and to submit time sheets reflecting the loss of hours of staff and employee’s wages for payment by it. Pursuant to that direction, CCPL provided the information required and claimed the sum of $40,025. [281] CCPL’s claim is pleaded in two ways. First, it is pleaded as a claim made pursuant to cl 47.1 of Exhibit D of the Subcontract. That pleading is based upon the direction given by Stork being a direction under cl 39 of Exhibit D which gives rise to a capacity to make the claim and, in the absence of payment, to make a claim for interest. Secondly, 120 T297. 121 Para 204 FFASC. 122 Para 211 FFASC. 123 Ex 44, Tab “Crushed Rock”. 124 T 296/45. 125 Ex 44, Tab “Crushed Rock”. 126 Ex 53. 127 Ex 36. 128 T 296 -- 58 of 81 -- 59 and in the alternative, CCPL pleads that the request by Stork and the agreement by CCPL to halt works as a result of the spill and to submit timesheets reflecting the loss staff and employee’s wages and plant constituted an agreement. [282] Stork submits that the claim as first pleaded has not been established because there was insufficient or no evidence to demonstrate that CCPL incurred more cost than it otherwise would have but for the suspension. It further is submitted that the evidence is insufficient to demonstrate that the costs which are particularised in the pleading were incurred as a result of the ammonia spill. That latter submission is correct. There was no evidence led which could establish the assertion that CCPL incurred more cost than it otherwise would have but for the suspension. [283] On the alternative ground for the claim the evidence, though, is that Mr Jewell, on behalf of Stork, issued a memorandum to CCPL and others to this effect: With the recent disruptions on site re the Ammonia incident I require all companies to submit timesheets reflecting the loss of hours as listed below, these timesheets are to reflect staff, wages, employees and plant. Tuesday 18 th January = 2 hrs Wednesday 19th January = 8 hrs Thursday 20th January = 8 hrs Friday 21 st January = 8 hrs [284] In response to that Mr Eames, for CCPL, provided a letter referring to the shutdown and attaching a schedule setting out expenses relating to both labour and plant. [285] Mr Howard, for CCPL, gave evidence that after the spill Stork required everyone to evacuate to a nearby depot outside the fenced area. During that time there was a mass meeting at which safety on site was discussed and which was attended by representatives from Stork and other contractors on site. He said that Stork representatives – either Mr Jewell or Mr Mazur – said that “no one would be out of pocket and that we would be reimbursed”. [286] Mr Howard gave evidence that the timesheets sought by Stork were provided and that they contained the details sought129 . There is no reason not to accept that those figures were accurate. [287] I find that there was an agreement between the parties with respect to the evacuation of the site as a result of the ammonia spill. Stork required CCPL to remove all persons from the site which had the inevitable consequence that none of the plant could be used. In fact, CCPL could not use staff, subcontractors or plant as a result of Stork’s directive. It would, though, have incurred some cost in having to pay for labour or plant which could not be gainfully engaged. The evidence is sufficient to establish, on the balance of probabilities, that the document purporting to set out the expenses incurred by CCPL was accurate and did, in fact, represent the costs incurred both for staff and plant. There is one entry in the schedule relating to lost wages which was not explored in evidence. The last entry on the schedule is the name “Paul Robinson* 4”. The only reference to “Paul Robinson” in the trial is in evidence by Mr Howard to the effect that Paul Robinson was a concreting subcontractor who did work on footpaths and similar types of structures. Given that the entry against his name is four times 129 T 463. -- 59 of 81 -- 60 greater than all the other entries, it is reasonable to conclude that it refers to four employees of that subcontractor. [288] I find that CCPL has proved its claim under this heading for the amount of $40,025. Recovery under s 42(4) QBSA Act [289] Section 42(4) provides that a person is not prevented under s 42(3) from claiming reasonable remuneration but any such amount is subject to the following conditions: (a) It cannot be more than the amount actually charged, (b) It cannot include an allowance for: (i) The supply of the person’s own labour, (ii) The making of a profit by the person for carrying out the building work, (iii)Costs incurred by the person in supplying materials and labour if the costs were not reasonably incurred. (c) It cannot be more than an amount which was agreed to as the price for carrying out the building work, and (d) It cannot include any amount paid by the person that can be fairly characterised as being, in substance an amount paid for the person’s own direct or indirect benefit. [290] In [209] of its written submission, Stork argues that while CCPL pleads that s 42(3) of the QBSA Act operates subject to s 42(4) it does not claim any entitlement to reasonable remuneration pursuant to that subsection. That is not quite correct. In paragraph 39 of CCPL’s second amended reply and answer, it pleads, in [39], as follows: “Further to paragraph 37 hereof if it did undertake building work as defined by the QBSA Act, which is not admitted but for the reasons set out in paragraphs 26 to 36 hereof specifically denied, pursuant to s 42(4) of the QBSA Act it is entitled to reasonable remuneration for carrying out the building work.” [291] That is not, of course, a pleading of a claim. It is only the pleading of an entitlement which is a prerequisite to the making of a claim. It does not descend to any particularity; it does not identify any amount that might be claimed. Also, any such claim should be in the Statement of Claim. [292] The plaintiff came closest to making a formal claim in the final oral submissions made on the last day of the trial. Mr Digby QC, for CCPL, said: “Your Honour will be aware that in paragraph 39 of the reply the - can I call it a defence for the moment, your Honour? -- the defence under clause 42(4) of the QBSA is raised by the plaintiff. Your Honour is also aware, having presided over the trial, that the case [has proceeded] on the basis of evidence being put forward by both parties and tested in relation to what would be an appropriate reasonable remuneration: Mr Same's report on the part of the plaintiff and Miss Janine Smith's report on the part of the defendant. Now, we're not sure precisely how this point in the opening is put and whether it [is] said that notwithstanding that - the question of reasonable remuneration is raised in the reply the plaintiff puts forward and has been addressed in the evidence and in submissions, including opening submissions -- the defendant is saying at the end -- 60 of 81 -- 61 of the day [that] your Honour is precluded from applying the provisions of clause 42(4) because of the matter arising not as a positive claim, but as a reply to the counterclaim which is put forward in our learned friend's [pleadings]. If that were how the matter was put, then we would seek leave to draft that same paragraph in the reply into the statement of claim [if there needs] to be a positive allegation to enable your Honour to deal with 42(4) of the QBSA and the particulars of the reasonable remuneration that is advanced would be by reference to the report of Mr Same from […] KNP.” 130 [293] That was a curious submission given the requirements of the Uniform Civil Procedure Rules and the remarks and reasons of Moynihan SJA in his decision given on 16 March 2004 (almost four years to the day before Mr Digby QC made his submission) where, in respect of the same point, he said: “[55] The claims do not seem to me to be pleaded in terms of a claim under s 42(4) of the Act. The point needs to be clarified. Any claim under s 42(4) should be properly pleaded in the statement of claim. In an earlier round of pleadings the plaintiff pleaded (in an amended reply of 2 November 2001), a claim under s 42(4). There is, however, correspondence suggesting that such a claim is not being pursued.”131 [294] Notwithstanding the unsatisfactory nature of the pleading on this point, the plaintiff called evidence, without objection, ostensibly on the topic of reasonable remuneration. [295] It is an essential first step in any assessment under s 42(4) to determine the “reasonable remuneration” for the particular item of “building work”. I was not addressed on what the term “reasonable remuneration” means in that section. Although the terms are not coincident in meaning, limited assistance can be obtained from consideration of some of the many cases which deal with a claim for quantum meruit.132 An authority frequently referred to in this area is Flett v Deniliquin Publishing Co Ltd 133 in which Herron CJ said: “In a case of quantum meruit the value of the services rendered is, as the Latin expression implies, a claim for what the services reasonably were worth. It is therefore properly assessed at the normal market rate or price prevailing when the benefit was received. In seeking a measure of reasonable reward, the parties’ ineffective contract may be looked at for this purpose and in some cases the degree of benefit conferred on the defendant may be taken into account: Way v Latilla [1937] 3 All ER 739. But there must be some evidence of a market or prevailing price. … [His Honour described the inadequacy of the evidence.] … Put in another way, there was no external standard to which the trial judge could refer to define the quantum of the claim.”134 (emphasis added) 130 T 792-793. 131 Cook’s Construction Pty Ltd v Stork ICM Australia Pty Ltd [2004] QSC 066. 132 “the amount deserved”. 133 [1964-5] NSWR 383. 134 At 385-386. Ferguson J agreed. See also Horton v Jones [No. 1] (1934) 34 SR (NSW) 359 at 368. -- 61 of 81 -- 62 The use of a price stated in a contract as evidence, but as evidence only, on the question of amount, was also confirmed in Pavey & Matthews Pty Ltd v Paul ,135 Gino D’Alessandro Constructions Pty Ltd v Powis, 136 and Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd.137 [296] Three witnesses were called on this topic. For the plaintiff, there was Mr Norman Same, a forensic accountant from knp Solutions, and Mr Rodney Alsop, a quantity surveyor. For the defendant, there was Ms Janine Smith, a forensic accountant from Vincents. [297] Before I consider the evidence on this issue, I should, briefly, revisit some of the basic principles applicable to expert evidence because they appear to have been overlooked with some of the reports which were tendered. [298] It is trite law that for an expert opinion to be of any value the facts upon which it is based must be proved by admissible evidence.138 In Trade Practices Commission v Arnotts Ltd (No. 5), 139 Beaumont J reviewed a number of common law authorities and concluded: “In my opinion, these authorities establish that there is a rule of evidence at common law that, except in a straight-forward uncomplicated case, where the facts are admitted and readily identified, the opinion of an expert is admissible only where the premises, that is to say, the facts upon which his or her opinion is based, are expressly stated.”140 [299] More recently, Heydon JA, in Makita (Australia) Pty Ltd v Sprowles, 141 undertook a detailed examination of the law in this area and, notwithstanding that he was concerned with the Evidence Act 1995 (NSW), the following principles are also applicable at common law: 142 “[85] In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of “specialised knowledge”; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be “wholly or substantially based on the witness’ expert knowledge”; so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of “specialised knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is “wholly or substantially based”, applies to the facts assumed or observed so as to produce the 135 (1987) 162 CLR 221 at 252, 257. 136 [1987] 2 Qd R 40 at 58-59. 137 [1995] 2 Qd R 350 at 355. 138 Price v John Holland (Constructions) Pty Ltd (1985) 59 ALJR 844 at 846. 139 (1990) 21 FCR 324. 140 At 330. 141 (2001) 52 NSWLR 705. 142 See Interline Hydrocarbon Inc v Prenzil Pty Ltd [2005] QSC 109 at [14]. -- 62 of 81 -- 63 opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v The Queen (at 428, [41]), on ‘a combination of speculation, inference, personal and second-hand views, as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise’.” (emphasis added) [300] In this case, some of the experts (from both sides) made rather bald statements that some rate or other matter was, in their opinion, reasonable. That is insufficient. It was put by Anderson J in this way: “Mr Adam gave oral testimony and attempts were made to lead from him evidence that would show that he had personally verified the data relied on for his estimates or had direct knowledge of the matters relied on. In my opinion, his evidence did not go that far. If anything it underlined the fact that he truly had relied on a range of material reported to him or provided by others. No doubt he treated the data he was given with appropriate circumspection and accorded to it more or less reliability according to his own views about the quality of it and of its provenance and no doubt in doing so, he called upon his own personal experience. Whilst in one sense this constitutes bringing his own judgment to bear on the task of valuation, I do not think it overcomes the fundamental difficulty. Expert opinion is to be judged like any other evidence. It must be comprehensible and reach conclusions that are rationally based. The process of inference that leads to the conclusions must be stated or revealed in a way that enables the conclusions to be tested and a judgment made about the reliability of them. This requirement is not satisfied by evidence from an expert which says, in effect: “I have examined the costings and estimates made by others and on the strength of my own expertise and experience in the field I believe them to be reasonable.” “Such a forensic device overlooks the most important rule that it is for the court to judge the reliability of evidence given in support of the case. If an opinion relies on facts that must be proved or assumptions that must be verified, it is to the court that they must be proved and verified, not to the expert witness.”143 [301] In an article144 on the reform of law relating to expert evidence, Dr Freckelton SC examined the reasoning in Makita and other cases and, in a conclusion with which I respectfully agree, said: “Under the common law, it is tolerably apparent that a failure to prove the bases of an expert’s opinion would render the opinions themselves inadmissible. (See R v Abadom [1983] 1 WLR 126 at 143 Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370 at 389-90 144 Expert Evidence Law Reform (2005) 12 JLM 393. -- 63 of 81 -- 64 131, interpreting R v Turner [1975] 1 QB 834; Jeffrey v The Queen (1991) 60 A Crim R 384 at 389; Bevan Investments Ltd v Blackhall and Struthers (No 2) [1978] 2 NZLR 97 at 122; Forrester v HM Advocate [1952] JC 28) There is much to be said for the straightforwardness of such an approach as it precludes the expert from functioning as the undisclosed conduit for others' views and for facts that are incapable of effective evaluation.” The accountants’ evidence [302] The evidence from Mr Norman Same was contained in a written report. It is of no assistance, for two reasons. First, notwithstanding the importance of this issue, the plaintiff did not instruct Mr Same until mid-December 2007 – some two months before the trial and some eight years after the events in question. It is not surprising, given the delay by the plaintiff in dealing with this issue, that important documents upon which Mr Same might have been able to rely in his report were unavailable. Mr Same noted in [5] of the summary of his opinion: “5.1 My ability to accurately calculate the expenditure that qualifies as reasonable remuneration for carrying out building works as defined at 1.2 is limited as Cook’s could not locate: (a) project costing work papers or estimates relating to the ANP project. (b) third party invoices or statements detailing costs of various items purchased for the ANP project. (c) any other supporting documentation or work papers that would assist in confirming the expenses incurred. 5.2 Allocated overheads are apportioned by project revenue as a percentage of company revenue. This allocation has not yet been tested.”145 Further, his conclusion on the profit and loss statements provided to him by CCPL was based on that company’s general ledger and no verification was possible which distinguished the project the subject of this action and any other project undertaken by CCPL at that time.146 Thus, there was no way of identifying costs and expenses which were solely related to the project, let alone any individual part of the project. [303] Secondly, although Mr Same says that he had been “instructed to calculate the amount, in accordance with section 42(4) of the Act, that Cook’s is entitled to claim as reasonable remuneration for carrying out building works assuming all the work alleged to be “building work” as defined by the act was “building work” for the project conducted on behalf of Stork …”,147 he did not undertake that exercise. In his calculation of reasonable remuneration he recreated a profit and loss statement for the project rather than for any of the parts of the undertaking alleged to be building work. This conclusion, accurate or not, does not allow any opinion to be formed as to the reasonable remuneration of each of the items of “building work”. It did not refer to any “external standard” to define the quantum. 145 Ex 42. 146 Ex 42, [6.4]. 147 Ex 42, [2.2]. -- 64 of 81 -- 65 [304] It is unfortunate that no attention was given by two of the witnesses148 called on this topic, to the fact that, in a case such as this, it will be necessary to identify the work the subject of contention and, then, to assess the reasonable remuneration in respect of each item.149 Each claim should have been the subject of an individual assessment by those witnesses, if they were otherwise qualified. [305] The area of expertise which is relevant is that possessed by quantity surveyors. CCPL called Mr Alsop. While Stork called Mr Leck, he did not give any evidence on this point. [306] Mr Alsop’s report,150 like others tendered by the plaintiff, was only made available during the trial. He was first engaged in mid December 2007 and he says he was retained to “present an indication of the fair value of the works, based on the Contractual Documentation and Other matters made available to me.”151 Why he was asked to consider “fair value” rather than “reasonable remuneration” was not explained. It was not a concept which was pleaded. It is not a term found in the QBSA Act. [307] In re-examination, Mr Alsop said that, in his opinion, there is no difference between a reasonable rate and the concept of a fair value.152 That may well be correct, but it does not deal directly with the concept of “reasonable remuneration”, of which a rate may only be one part of the assessment. [308] His report is called in aid for other claims which are considered elsewhere, but on the issue of “reasonable remuneration” it is of no assistance for the following reasons: (a) Some of the documents upon which he relied were not in evidence, namely: (i) Report of Simon Tormey & Associates, Chartered Quantity Surveyors, 16 August 2005; (ii) Claim for Differences following Stork April Assessment, undated; (iii) file marked Miscellaneous Documents including ‘Notes on Major differences between Cook’s April Progress Claim and Stork’s Assessment’ and two affidavits of Warren Eddie; (iv) the drawings (listed in Appendix B) which were supplied to Mr Alsop. (b) Mr Alsop relied upon measurements obtained using a digitiser but it was not established that the plans he used were those which were pleaded or in evidence. (c) It cannot be determined from his report whether he used the profiles or dimensions marked up on the pleaded drawings. (d) When he expressed a view with respect to the “building work” claims he referred to the “value” of each item and not the “reasonable remuneration” for each item. [309] If the “reasonable amount” can be determined, then the next steps are to assess it against the criteria in s 42(4)(a)-(d): 148 Mr Same and Ms Smith. 149 Hansen v Mayfair Trading Co Pty Ltd [1962] WAR 148; Re Allison, Johnson & Foster Ltd; ex parte Birkenshaw [1904] 2 KB 327. 150 Ex 39. 151 Ex 39 at p 1. 152 T 612/1-4. -- 65 of 81 -- 66 (a) Is the “reasonable amount” more than actually charged? If so, it must, subject to any other reductions, be reduced to the amount charged. (b) Does the “reasonable amount” include any allowance for: supply of the “person’s” labour; the making of a profit; or costs not reasonable incurred in supplying labour and material? If so, it must be reduced by such amounts. CCPL raised the question of how the “supply of the person’s labour” can be applied to the case where the builder is a corporation. The Acts Interpretation Act 1954 provides 153 that “a reference to a person generally includes a reference to a corporation as well as an individual”. In this context, I think that “person” should be read as a reference to an individual. It is, I think, intended to deny to an unlicensed person any return for his or her own labour. To read “person” as a corporation would be to deny the costs associated with employment of workers. Section 42(4)(b)(i) should be read as not having any effect so far as employees’ costs are concerned. Unreasonable labour costs are dealt with in s 42(4)(b)(iii). It is unnecessary to deal with s 42(4)(b)(ii) or (iii) except to note that: without a definition of “profit” it would be difficult to assess that exclusion; and the notion that costs unreasonably incurred should be excluded from “reasonable remuneration” seems unnecessary as the assessment of reasonable remuneration should have already excluded any unreasonably incurred expense. (c) Is the “reasonable remuneration” more than an agreed price? If so, it must, subject to any other reductions, be reduced to the agreed price. (d) Does the “reasonable remuneration” include any amount paid for the person’s direct or indirect benefit? If so, it must be reduced by that amount. This is, in essence, an “anti-avoidance” provision designed to preclude the use of a scheme to avoid the effect of s 42(4). In the Explanatory Note accompanying the amending Bill154 the following was said with respect to this sub-section: “it is designed to attack any scheme entered into by the unlicensed contractor, for example employing the contractor’s child or the charging of a management fee by a company of which the contractor is a beneficial shareholder, to use this new provision to gain personal profit from unlicensed contracting.” [310] Mr Same’s report did not attempt to take the first step because, as he admitted, he was not an expert in determining reasonable costs associated with building work.155 Further, no effort was made in that report to identify the reasonable remuneration for any one of the individual claims made by CCPL alleged by Stork’s to be “building 153 Section 32D. 154 Queensland Building Services Authority Amendment Bill 1999. 155 T 633/36-37. -- 66 of 81 -- 67 work”. Instead, Mr Same provides four alternative amounts which, he says, could be reasonable remuneration for carrying out all of the building work under the Subcontract. [311] At [6.25] of his report, Mr Same says: “In order to calculate the reasonable remuneration that Cook’s is entitled to, I have recreated a profit and loss statement for the project based on the ANP profit and loss statements concluded on above in 6.4.” [312] He then sets out profit and loss statement in which he arrives at a conclusion relating to the “reasonable cost of project”. At the foot of the table there is a note: “The reasonable cost of project also equals the sum of total expenses per general ledger plus total other expenses.” [313] The conclusion is irresistible that the figure referred to by Mr Same in his report as being the “reasonable cost of project” is, indeed, his assessment of the cost of the entire undertaking engaged in by CCPL. There is nothing to suggest that he has in any way attempted to provide any amount which is able to be related to either any single one of the “building work” claims or all of them. That conclusion is supported by the response by counsel for CCPL during final submissions where he agreed that Mr Same based his report on the entire project.156 [314] I was invited by the plaintiff to engage in an exercise whereby I would compare the reasonable remuneration assessed by Mr Same ($16.153 million) with the amount paid to the plaintiff ($16.425 million) and that I could then order a reimbursement of the defendant by the plaintiff in an amount equal to the difference between those two figures. Other means of arriving at the “reasonable remuneration” for the total of the items included in the “building work” were also suggested in submissions, but none of them could overcome the principal problem – no attempt had been made to assess “reasonable remuneration”. [315] Another argument was advanced that CCPL, having made a loss on the entire operation, should be able to claim anything that was expended by CCPL as “reasonable remuneration”. Apart from the doubtful integrity of that as an accounting exercise, it does not necessarily follow that the making of a loss means that the amount charged was reasonable. History is replete with instances of businesses making losses even when their prices were unreasonably high. [316] It follows, then, that there is no evidence upon which the provisions of s 42(4) can act. [317] Ms Smith did not advance any evidence by which the reasonable remuneration for any of the items under consideration could be assessed. Ms Smith’s report was infected by the same vices as Mr Same’s. She did not have the expertise to deal with the costs of construction and her approach was on a whole of project basis. The Counterclaim [318] In paragraphs 106 to 112 of the FFADC Stork pleads a claim for the payment by CCPL to Stork of the money received by CCPL from Stork for the “building work”. 156 T 793. -- 67 of 81 -- 68 [319] The claim is based on the allegations that CCPL was not licensed within the meaning of the QBSA Act, that it impermissibly performed work for which it was not licensed, and that Stork paid it for that work. [320] Section 42(3) of the QBSA Act provides: “Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.” [321] The effect of s 42(3), together with the balance of s 42, was considered in Marshall v Marshall .157 In that case, McPherson JA said: “In my opinion, the effect of s. 42(3) is to prevent an unlicensed builder, in proceedings of any kind, from recovering the price or any part of it payable under a contract for building work carried out in contravention of the section. Taken by itself, that might perhaps not prevent a builder from receiving money voluntarily paid by the other party. The terms of s. 42(3) are, however, very wide. A person who carries out work in contravention of s. 42 is “not entitled” to any “monetary consideration” for doing so. According to the ordinary meaning of those words, a person receives a “monetary consideration” for carrying out work if he is paid for doing it. The sum of $51,000 paid by the plaintiff to the defendant satisfies that description. Counsel were unable to refer the Court to authority bearing in any relevant way on the meaning of “entitled” in a context like this. But s. 42(3) expressly declares it to be money to which the recipient is “not entitled”, which can only mean that it is money to which he has in law no right or title. If that is so, there is no identifiable basis on which he can, as against the person who paid it, claim to keep or retain it or its equivalent.”158 (emphasis added) [322] Whether the plaintiff could recover the amount she paid to the builder was considered next. His Honour said: “If she was not legally obliged to make the payment, but did so under the mistaken belief that she was, then the money is recoverable in restitutionary proceedings even though the mistake was one of law. See David Securities Pty Ltd v. Commonwealth Bank of Australia (1992) 175 CLR 353. The plaintiff here has a finding to that effect in her favour. The mistake must, of course, be one without which the payment would not have been made: Kelly v. Solari (1841) 9 M. & W. 54, 58; 152 E.R. 24, 26. What Parke B. said there was directed to a mistake of fact; but, given that, since the decision in David Securities money paid under a mistake of law is now recoverable, the same general principle must also apply to recovering a payment made under a mistake of that kind. In determining whether or not the mistake of law has that character here, it is, in my respectful opinion, first of all necessary to determine whether the effect s. 42, and in particular of s. 42(3), is to relieve the plaintiff of any legal obligation to pay the price or any part of it. It is only if there was no such legal obligation that the plaintiff can claim to recover her payment as 157 [1999] 1 Qd R 173. 158 At 176. -- 68 of 81 -- 69 money paid under a mistake of law. Once that is shown, it may not be necessary to make the further inquiry whether s. 42(3) also has the effect of denying the defendant the right to retain the money so paid. The plaintiff may, on the authority of David Securities Pty Ltd v. Commonwealth Bank (1992) 175 C.L.R. 353 be entitled without more to recover the money paid. But if the payment was made in pursuance not merely of a mistake of law but under an agreement or transaction that was prohibited and made an offence by statute, then the plaintiff needs to go the further length of establishing that the statutory prohibition does not preclude her from recovering what she has paid. Far from preventing the plaintiff from recovering the sum paid to the defendant for the building work carried out in contravention of the statutory prohibition, s. 42(3) of the Act does, for the reasons already given, enable her to recover that payment. If the defendant was not entitled to any monetary consideration for carrying out building work in contravention of s. 42, then, as I would interpret s. 42(3), he is not entitled to retain the payment made to him for doing it. Because the prohibition in s. 42 was enacted for the benefit of a class of persons of whom the plaintiff is one, she is entitled to recover the payment she made to the defendant. On that footing, it may be that she would have been entitled to recover the whole of the sum paid by her; but at trial and on appeal, she was prepared to allow to the defendant the value of the work, which in effect involves reducing the amount of $51,000 by the cost of rectifying the defects or deficiencies in the work done by him.” 159 (emphasis added) [323] Pincus JA and de Jersey J (as he then was) approached the matter in a more direct way but, essentially, agreed with that statement of principle and said: “The learned judge found that in making the payments totalling $51,000, the respondent mistakenly believed that the first appellant — the actual builder — “was entitled to payment by law and that she was obliged to pay him”. On any reasonable construction of s. 42(3), because the first appellant was not appropriately licensed, the respondent was not obliged to pay him in accordance with her apparent contractual obligation. Consistently with David Securities Pty Ltd v. Commonwealth Bank of Australia (1992) 175 C.L.R. 353, the judge would therefore have ordered the reimbursement of the $51,000, but he deducted $16,672.50, being the true value of the work done, which left the respondent with a judgment for $34,327.50.” 160 [324] Further, their Honours said: “The respondent was not however merely seeking the recovery of moneys paid under an illegal contract. The judge accepted her other, and primary, claim, which was that the moneys were repayable because paid under a mistake. In light of David Securities and the judge's finding of fact - which is unassailable - his conclusion necessarily followed, and renders unnecessary any further consideration of the precise scope of s.42(3). That is so because the 159 At 178-179. 160 At 180. -- 69 of 81 -- 70 respondent's mistake, as to her obligation to pay, was relevant on any reasonable interpretation of sub-s(3), which plainly excused her from any obligation to pay under the contract in these circumstances.”161 (emphasis added) [325] It follows, then, that Stork, if it can otherwise prove its claim, can recover the money it paid to CCPL for work covered by the QBSA Act and for which CCPL was unlicensed. [326] In order to succeed Stork must establish that: (a) the work which is the subject of the Counterclaim was “building work” within the meaning of the QBSA Act; and (b) the payments made by the defendant to the plaintiff included payment for such “building work”; (c) the payments for such “building work” comprised “monetary or other consideration” within the meaning of section 42(3) of the QBSA Act; and (d) the defendant made the payments in the mistaken belief that: (i) it was obliged to do so; (ii) the plaintiff was lawfully entitled to receive them; and (iii) the plaintiff had complied with clause 16.1 of Exhibit D to the Subcontract (being the admitted express term of the Subcontract requiring the plaintiff to comply with Queensland legislation).162 [327] CCPL makes particular reference to the identification in paragraph 107 of the FFADC of the “building work”. That paragraph pleads: “[107] Certain of the work performed by the Plaintiff under the Subcontract was ‘building work’ within the meaning of the QBSA Act as in force during the relevant period (‘the building work’). Particulars Further particulars of the building work are contained in document 133 filed on 2 June 2006.” [328] It says, correctly, that document 133 has no greater status than that of a pleading and then argues that: (a) there is no evidence of the work involved in the “building work”; (b) there is no evidence of the time at which the work was done; (c) there is no evidence as to the applicable rate or rates; (d) there is no evidence as to the extent of the work performed; (e) there is no evidence to support the inclusion of some of the work as part of the “building work” ; and (f) there is no evidence of payment by Stork for the “building work”. [329] The first step must be to determine whether Stork has proved that the work identified in Document 133 was, in fact, done, and then, whether it was work for which CCPL was unlicensed. [330] I have determined in other parts of these reasons that the claims by CCPL with respect to: (a) quantities of footings; 161 At 180 162 Stork’s Written Submissions, para 650. -- 70 of 81 -- 71 (b) pedestals; (c) Corrocem; (d) suspended slabs; and (e) the prill storage building structures are claims for “building work” within the meaning of the QBSA Act. [331] It will assist if I identify the provenance of Document 133. In various paragraphs of the FFASC the plaintiff identifies a document entitled “Assessment of Approved Payments” in the particulars of an allegation that Stork has paid a certain amount to CCPL for work performed by CCPL 163 . In particular, CCPL refers to that document in support of its allegations concerning the following claims: (a) quantities of footings – paragraph 107; (b) pedestals – paragraph 124; (c) Corrocem – paragraph 147; (d) suspended slabs – paragraph 164; and (e) the prill storage building structures – paragraph 181. [332] In January 2008, Stork’s solicitors sought a copy of that document from CCPL’s solicitors. The document they provided is part of WGM-4 in Exhibit 61. That document became Exhibit 24 in this trial. [333] Exhibit 24 was identified by Mr Eames as the last progress claim made by CCPL 164 . It records the payments alleged by CCPL to have been made by Stork for each item of work undertaken by CCPL 165 . The document lists the work which was performed under each particular type of work. For example, under the heading “Bulk Earthworks” and the subheading “Plant Site Bulk Earthworks” it lists things such as: “Top Soil Removal to 300mm depth”, “Bulk Excavation”, “Engineered Fill” and so on. [334] Stork used a document similar to Document 133 as the basis for the particulars it provided of paragraph 112(b) of its counterclaim in June 2006. It contains the same information regarding quantity, unit rate and amount as Document 133/Exhibit 24. It also contains columns headed “‘Building Work’ Direct” and “‘Building Work’ Allocation”. Those columns appear in the document which constitutes Appendix B to Stork’s written submissions. But Stork only claims for the amounts under the heading “‘Building Work’ Direct”. [335] In its submissions on the counterclaim CCPL refers to Document 133 for its references to various items in the counterclaim. Stork refers to the document in Appendix B. Both of those documents are directly related to Exhibit 24. All those documents contain the same references to items of work or material. As this a claim by Stork, I will refer to the document that constitutes Appendix B. Appendix B only refers to work under the heading “Footings”. Stork abandoned any claim to the variations noted on pages 45-50 of Appendix B and it makes no claim for other work found to come within the QBSA Act such as pedestals, Corrocem and so on. [336] The amount claimed by Stork for the whole of what it says is “building work” is substantial – $9,983,796.54 – and a great deal more than the amount alleged by CCPL to have been paid by Stork for the claims I have found to be “building work”. The 163 It is referred to in the particulars of paragraphs 10, 22, 35, 47, 59, 71, 107, 124, 135, 147, 164, and 181 FFASC. 164 T 368-369. 165 T 465. -- 71 of 81 -- 72 difference arises because the claims by CCPL are only for additional work it said was required (usually) by changes made by the for-construction drawings. Thus, for example, CCPL’s claim for the additional work under the heading of “Quantities of Footings” was $77,090.36 (including the amount alleged to have been paid) whereas, Stork’s counterclaim is for all of the payments made for “building work” entailed in the footings. [337] The issues which arise are these: (a) What is the work in Appendix B? (b) Is that work “building work”? (c) Was that work paid for by Stork? (d) If the work was paid for, was that payment made by mistake? What is the work in Appendix B? [338] CCPL argues that there is no proof that, whatever the work is in Appendix B, it was work which was performed under the Subcontract. That is a submission which must fail, given that Appendix B is drawn directly from Exhibit 24 which is the final progress claim from CCPL for the work which it had performed166 . There was no other contractual relationship between CCPL and Stork and Exhibit 24 is in the form used by CCPL for other claims under the Subcontract. Although Stork pleaded that the work was done under the Subcontract167 , that is not a necessary element of its cause of action for repayment of the sum in question. Section 42 of the QBSA Act takes effect when the work is done – the general, contractual basis for the work is irrelevant. [339] The only work to which the counterclaim attaches is work which appears under the heading “Footings”. It is work for which, according to CCPL, it has been paid by Stork. Whether any of the items appear in the various schedules of the Subcontract168 is irrelevant to the relief available to Stork. Similar irrelevant issues raised by the Plaintiff include: when the work was done169 , what the appropriate rates were170 , and the extent of the work performed. Is that work “building work”? [340] I have considered the meaning of the term “building work” as used in the QBSA Act above. The plaintiff attacks this part of the counterclaim on the basis that Stork has not demonstrated that each of the items under the heading “Footings” has been proved to constitute “building work”. The objection goes on to say that there is no evidence as to what work was involved in the Subcontract Footing items. That, as I have pointed out above, is not to the point. Exhibit 24 demonstrates that CCPL did the work set out in that document and Stork paid the amounts recorded in it. The point made by CCPL which Stork must answer is whether the work recorded was “building work”. It is not enough simply to assume that each item under the heading “Footings” is “building work” because of the finding that the footings work the subject of the plaintiff’s claim was “building work”. A closer analysis is needed. 166 T 368-369 167 Para 107, FFADC 168 Para 162-164, Plaintiff’s Written Submissions 169 In any case, it can only have been done during the period of the contract and before Exhibit 24 was issued by CCPL. 170 It is the amount paid by Stork which is relevant. -- 72 of 81 -- 73 [341] Most of the items which are set out under “Footings” were the subject of evidence and were extracted in Appendix E of Stork’s Written Submissions. For example: Footings, Pedestals and Plinths generally Mr Eames gave the following evidence describing footings, pedestals and plinths, and the nature of the work involved in their construction. “The first difference which immediately comes to mind is the numerous small pedestals and plinths that are shown on the drawing----- Are they part of what you refer to as "footings"?-- Yes. And where are they?-- Because they are actually part of the footing structure.” (T232) … Can I ask you to say to his Honour, if you can, what it is that is the distinguishing feature of a footing compared with a pedestal and vice versa, how does his Honour distinguish between a pedestal and a footing?-- Your Honour, a pedestal is in general terms a small square or rectangular concrete arrangement which sits above a surface to support the foot - or the leg of a structure. Whereas a footing is generally considered to be a bigger arrangement, more substantial arrangement upon which, you know, a large object would sit rather than just a single or some type of leg arrangement.” (T237) … MR DIGBY: ….. can you describe to his Honour what work is involved in constructing that pedestal as well as supplying the concrete?-- The work that's involved is the steel cage, the reinforcing cage inside the pedestal, even though it's only small, still has to be tied. The formwork - the formwork has to be placed - formed up and placed around the outside of the steel work. The holding down bolts which go into these pedestals had to be set up and located very accurately. There was still a requirement for the surveyor to come and survey them to make sure that everything was in exactly the correct position. And then the concrete had to be brought in and poured and vibrated into place.” (T243) … And what's - with the term "raised plinths", is that the same as or related to or different from the pedestals that we've been talking about?- - A "plinth" is a structure, dimensions of like of a pedestal, but placed upon an existing structure, existing concrete structure. Whereas a pedestal is generally considered to be a separate independent structure. The – both the idea of pedestals - the issue of pedestals and plinths are closely related because of the likeness in the type of construction and the quantity of work involved.” (T245-6) …. And can you tell his Honour whether what we're looking at in those two photographs [Exhibit 25] is a footing or a pedestal?-- Your Honour, -- 73 of 81 -- 74 that's a pedestal. And if you can----- HIS HONOUR: Isn't that below ground?-- Some of it is below ground, your Honour, yes. The top of that structure, however, will be above ground. Ground level in this case will be the underside of the long timber supports which run across the - from left to right across the photograph. And if you notice, the holding down bolts in the centre are above that and the piece of white material - that white line which goes around inside the box, that's actually called a plastic fillet, and that would be above ground level too. MR DIGBY: Mr Eames-----?-- This pedestal will be very close to ground level at - on completion. Mr Eames, looking at the components in the photographs, the framing timbers and the plastic caps on the reinforcement one can see in the lighter of the photographs, the more distant photograph, can you tell his Honour what approximately the dimensions of this pedestal are?-- Your Honour, this pedestal appears to be somewhere in the order of 400 millimetres by 400 millimetres. Perhaps 450. And can you take the two photographs separately? Taking, first of all, if you would, Mr Eames, the photograph which is taken from the further distance from the work involved?— Yes. And can you describe to his Honour - I don't want you to take long on it, you've given general descriptions already, but can you describe for his Honour generally the work involved in forming up the pedestal that we can see in the photograph [Exhibit 25], for the transcript?-- Your Honour, the work which would be involved in doing this particular pedestal, the steel cage, which is the reinforcement which goes inside, would be tied. The timber formwork would then be built. The white corners, which are evident in the photograph, and the white line around just below the piece of crossbracing template that supports the holding down bolts are called the plastic fillets. They're a 45 degree angle. They would have been placed intact into the formwork. The whole lot would have then been surveyed and located properly, and when the survey – during the survey location the whole unit would have been moved around inside that excavation until it was in the correct position. When it was in the correct position these small pieces of reinforcing that are seen holding the bracing on the timber and the supports' material for the timber are pinned down and then the whole thing is rechecked. The piece of timber with the holding down bolts in it are drilled at the right separation and then that's then placed in - into the box with the holding down bolts in it. You can see a nut above it. There will be another nut below that as well. That's then located and the surveyor will then pinpoint the two that those two - position of those two bolts. That's then nailed in, and then the formwork is then inspected ready for the concrete to be placed. And taking the photograph which is taken closer to the feature we're looking at?-- Yes. And looking into the void into which the concrete is to be placed, can -- 74 of 81 -- 75 you describe to his Honour what features we see there, for the transcript? And what's involved in putting that together from the contractor's point of view?-- From the contractor's point of view, your Honour, the things to note here are the steel reinforcement, which are the bars running left to right and up and down on the page. The white plastic fillet that I referred to can be seen fairly clearly running top to bottom on the left-hand side of the page. This piece of timber across - which runs left to right across the page is the template which contains the holding down bolts. And the reinforcement is held away from the sides of the formwork by a plastic bar chair, which is - a bar chair is that strange-shaped grey object that you can see on the left-hand side of the photograph. …. And, finally, can you describe to his Honour what is involved in placing concrete in a small location like that?-- Your Honour, it's basically impossible to - it's very difficult, it's not impossible, but it's very difficult to get the concrete into a small area like that without spilling it everywhere unless you put it in by shovel and so it has to be generally placed by shovel and use a very small concrete vibrating tool to vibrate the concrete to compact it and get rid of the air bubbles and the voids in it. And was the work you've just described, including the work relating to the placement of concrete, typical of what was done in relation to the pedestals that are the subject of the plaintiff's claim?-- That's correct.” (T371-373). Photographs 3 and 7 of Exhibit 23 shows pedestals (T364/25). The photographs which are Exhibit 25 also show pedestals and formwork (T371/2) Ableflex Ableflex is a joint filler which is similar to silicon, the purpose of which is to waterproof joints (Mr Howard at T469/52-55) Additional reinforcing to Piers over 100kg / m3 Mr Eames gave evidence describing the work required for the construction of a “Footing” and the use of reinforcing in the construction of footings and pedestals. Mr Eames also gave the following evidence: “… Probably the most significant - one of the significant differences, other than what I have covered already, is that there - I cannot remember the exact clause, but there is a requirement in the contract document for the concrete footings to contain not more than 100 kilos per cubic metre of concrete. Most of the footings that we did - not all, sir, but most of them - contained significantly more than 100 kilos per cubic metre, which required additional effort to tie and place the steel reinforcing prior to placing the concrete. …. And is the sort of reinforcement you refer to as being called up a normal or exceptional form of reinforcement?-- It's - 100 kilos per cubic metre is, industry-wise, generally accepted as a rule of thumb quantity. Some concrete structures, depending on their purpose, will contain sometimes less than 100 kilos, sometimes more and sometimes significantly more depending on their intended purpose and the loadings you would expect to have in place on them. What I'm seeking to have you explain, Mr Eames, is that you have said -- 75 of 81 -- 76 to his Honour in essence that some of the footings that we had to build when the design was developed were more complicated because they had a large amount of reinforcement in them; is that what you're saying?-- A large amount of reinforcement and with odd shapes in them. There was a lot more steel tying in them. The example I gave you with the voids in it had to have steel work tied around the voids. It's not just tying straight bars, there's a lot of formwork which goes around it which has all got to be tied into place.” (T235-6) Backfill One of the uses for backfill was to fill a void or excavation made for the purpose of positioning the formwork required for an underground structure.(Mr Howard at T467/468) Bearing Plates A form of Embedded Metalwork, as described below. Blinding Concrete Blinding is “a mixture of sand and just straight sand and cement which is placed on the bottom of the excavation. Its purpose is to stop the steel work from being pushed through into the soil and mud underneath the excavation. It provides a stable base upon which to construct the formwork - sorry, my apologies, on which to construct the reinforcing, the reinforcing steel.” (Mr Eames at T353) Blockouts Blockouts can refer to formwork which is required to create a hole in the concrete at the top of a pedestal, for example, to allow drainage (Mr Howard at T466/47-53) Cast in Ferrules Mr Howard gave the following evidence: “MR HOOPER … A ferrule is a piece of metal tubing that gets cast into concrete through which something such as an electrical cable can later be passed?-- Yes, but unlikely, because most of the time the ferrules were used to support the concrete formwork that was cast. On that particular project no ferrules were used to pass an electrical conduit through. (T470/14-22) Compressible Void Former Mr Howard gave evidence that a compressible void former is used where a slab is subject to differential loads, that is where the pressure applied to the slab is not uniform, in order to distribute the load to specific support points rather than directly to the ground at each load point. It can be placed directly under a concrete floor slab (T466/12-16) Concrete This refers to the concrete itself used to create the footings in question. Mr Eames’ evidence regarding Footings describes the placement of concrete in the footing structure. Concrete screed Mr Howard explained that screeding refers to the standard finishing of a concrete structure; “you screed the concrete with a screeding tool which is just a standard finish.” (T469/47-49) Embedded metalwork Mr Howard gave evidence that, in some cases, embedded metal work involved a metal plate being positioned at the top of a pedestal, the purpose of which was to prevent the wearing of the concrete at the top of the pedestal by the structure positioned above it. (T466/32-40) Footing Excavation The reference to “footing excavation” refers to excavation necessary to construct the footing in question. Photograph 6 of Exhibit 23 shows footing excavation (T364/36). Mr Eames gave the following evidence: -- 76 of 81 -- 77 “The difference between that footing and this one here is basically the type excavation that you need to do to get that footing in and the backfilling. This - because it has been excavated on an angle, to pour that concrete footing would require you - would require the whole thing to be placed in formwork, whereas with this type of footing arrangement here, it will be dug into the ground and poured against the surface of the ground” (T234-5) … “When - your Honour, when we actually constructed a footing, the excavations were dug or the formwork - and/or the formwork placed, the steel work was tied and placed into the footing formwork arrangement, the surveyor would then come and check the whole construction before it was filled with concrete … (T238/16-22) … “Can I ask you to go to the last of the documents you haven't addressed in that part of the folder. It's a letter dated the 27th of October 1999 in which you write to Mr Jewell about excavation of concrete footings; do you have that document?— ... … My question was what was the purpose of writing the letter?-- The letter details the method that will be used for excavation for major concrete footings to ensure that we - that Cook's are excavating to a layer or to a depth where the in situ material provides for varying capacities called for in the specification.” (T240-241) Formwork In Mr Eames’ evidence regarding the work required for the construction of a Footing, he described the use of formwork in the construction of footings and pedestals. Mr Eames also gave the following evidence regarding the nature of the formwork required in relation to footings: “What other differences in the footings had to be built once in fact the detailed design came down compared with the footings on drawing 001 in the contract, can you describe to his Honour?-- None of these footing types on 001 have what's called blockouts or voids in the actual concrete. They all appear to be a mass concrete footing. Now, several of the footing types we did - for arguments, the ammonia synthesis unit had octagonal shaped raised arrangements on top of the slab with an octagonal void in the centre of it. And how do you achieve that void?-- Well, it basically all has to be formed up and poured in place. And by reference to the drawing we were looking at, 0105, am I right in assuming there's no detail of a void being put into the form?-- No, there's no voids in that one, Mr Digby, but if you can bear with me for a moment I will find the drawing that has the voids in it. The first drawing relating to that is page 77 in the book of drawings. It's drawing number SU-CS-10D-0057 and if you look at the plan view on that drawing, you will see the eight octagonal raised sections with the octagonal void actually formed up and taken out of the footing area. And those features on that drawing 0057 that you've referred to that need to have boxed formwork placed inside them to achieve the void when you're pouring the concrete, they're footings, are they?-- Correct. I believe they are footings.” (T235) HD Bolts “HD” refers to “hold down”. Mr Eames’ evidence described the use of holding down bolts. Mr Eames also gave the following evidence: -- 77 of 81 -- 78 “When you formed these footings up, is it in the nature of a footing that they would never have a bolt or a fixture cast into them, that was a job for pedestals and things of that nature, was it?-- No, many of those footings had bolts and fixtures cast into them. Some of the footings that had a plinth arrangement on them where the height of the plinth was insufficient to provide a proper embedment for the holding down bolts on top of it, those holding down bolts would actually have to be cast into the footing arrangement at the time of the initial pour. (T238/40-52) Hydrostatic water relief valve Mr Howard gave evidence that a hydrostatic water relief valve “was for the relief of water underneath a structure. … It was for the protection of the concrete.” (T470/1-10) Piers The piers referred to in section 6.1 of the particulars to the counterclaim related to the construction of footings for the various structures referred to in the remainder of section 6. The piers are listed separately in section 6.1 rather than by reference to the particular structure to which each related. Piers are concrete columns which were placed into the ground for the purpose of supporting the load of structures positioned above them (see Howard’s evidence at T465/56 – 466/2). The piers differed in length and diameter depending on the size and nature of the load they were required to support. Poly Moisture Barrier Mr Howard gave the following evidence: “Mr Howard, would you describe poly moisture barrier as being a polythene sheeting which is laid down before concrete is poured in order to stop ground water rising into the concrete?-- Not necessarily. The plastic can be used to stop the moisture being leached out of the ground and not sucking the moisture out of the concrete, and it can also be used for water, but not always. Most of the time it is used to stop the concrete from drying on the edge.” (T468/9-16) Rebate formwork This is a particular type of formwork used to create an inlet in a concrete structure for the purpose of joining that concrete structure with another section of concrete (see Howard’s evidence at T469/28-31). Supply & Place Low Heat Concrete Mr Howard described low heat concrete as being concrete that has been changed so that it generates less heat (T467/1-9) Templates A template is a typically a temporary measure used to hold something in place, such as a hold-down bolt, whilst concrete is being poured (see T470/25-30). Mr Eames’ evidence made reference to templates that supported holding down bolts (T372/27). Waterstop A waterstop is a means of preventing water transferring through joints, in a water bound structure. (T468/24-26) [342] The various items set out above are all consistent with the work described by Mr Eames with respect to the construction of footings, pedestals, plinths and the like. It is work consisting of the erection or construction of a building, or any site work (including the construction of retaining structures) related to work of that kind. It includes work for which particular licences are prescribed under the Queensland -- 78 of 81 -- 79 Building Services Authority Regulation 1992, such as concreting. It is all work which is closely connected to, and necessary for, the construction of fixed structures and so is “building work” within the meaning of the QBSA Act. Was that work paid for by Stork? [343] Exhibit 24 (a document created by CCPL) establishes that the work set out in Appendix B was paid for by Stork in the amount of $9,983,796.54. If the work was paid for, was that payment made by mistake? [344] Stork called Mr Peter Jewell on this issue. He was “Stork’s representative” for the purposes of the Subcontract but he was not an employee of Stork. He was also the person who was responsible for certifying the payments by Stork to CCPL. His evidence171 was that: (a) when he certified those payments, he expected the plaintiff to hold all licences it was required to hold do the contract works within Queensland172 ; (b) if he had discovered that the plaintiff did not hold the licences it was required to hold, he would have taken legal advice and acted in accordance with that advice: “I would have adjusted their payment accordingly in relation to the legal advice I was given”173 ; and (c) during the course of the Subcontract he did not discover that the plaintiff did not hold any licence that it was supposed to hold174 . [345] Mr Jewell was cross-examined 175 on this area: “Among the many things you might have done is it correct to say that had you discovered that one of your subcontractors was not appropriately licensed under that Act, you nevertheless would have insisted on the subcontractor continuing to perform its work under the subcontract?-- No. Well, let's look at it from a different angle. Had you discovered that the subcontractor was unlicensed is it your evidence that you would have stopped it then and there from continuing to work under its subcontract?-- Until they were licensed, yes.” [346] Stork was, through its representative, mistaken as to its obligation to pay CCPL. It is clear from his evidence that had he discovered that CCPL was unlicensed he would have stopped it from working and taken legal advice. [347] The defendant has made out its counterclaim. Conclusion [348] The schedule attached to these reasons sets out the results of the various findings I have made. 171 T 649-651. 172 T 650. 173 T 650. 174 T 650. 175 T 655-656. -- 79 of 81 -- 80 [349] I give judgment on the claim for the plaintiff in the sum of $132,657.70 with interest. On some of the claims on which the plaintiff has succeeded interest will accrue in accordance with the method admitted on the pleadings. The details are: (a) Road reconstruction $ 14,998.20 (b) Lime stabilization of site roads $ 24,846.80 (c) Asphalt on site roads $ 52,787.70 (d) Ammonia spill standby $ 40,025.00 $132,657.70 [350] I give judgment on the counterclaim for the defendant in the sum of $9,983,796.54 with interest. [351] I will hear the parties on the calculation of interest and on costs. -- 80 of 81 -- 81 Schedule of Claims and Defences Does the Prescribed Notice Defence apply? Does the Lump Sum Contract Defence apply? Does the QBSA Act Defence apply? Claim Allowed/ dismissed Yes No Yes No Yes No Bulk earth works claim Dismissed X X X Road reconstruction claim Allowed $14,998.20 X X X Contour Drains claim Dismissed X X X Lime Stabilization of Site Roads claim Allowed $24,846.80 X X X Boxing Out for Road works claim Dismissed X X X Asphalt on Site Roads claim Allowed $52,787.70 X X X Quantities of Footings Claim Dismissed X X X Pedestal Claim Dismissed X X X Pedestal Reconciliation Claim Dismissed X X X Corrocem claim Dismissed X X X Suspended Slabs claim Allowed X X X Prill Store claim Allowed X X X Crushed Rock to Substations claim Dismissed X X X Ammonia spill standby claim Allowed $40,025 X X X -- 81 of 81 --