White Constructions Pty Ltd v PBS Holdings Pty Ltd

1. [1]

   HIS HONOUR: This is a claim for damages alleged to have been suffered by the plaintiff (White), a developer, by the conduct of the second defendant (IWS), a sewer designer and the first defendant (SWC), a water servicing coordinator, in connection with the development of a 100 lot subdivision, known as Cedar Grove, at 59 Jamberoo Road, Kiama NSW.

2. [2]

   White is an experienced property developer. It has previously developed a number of subdivisions, including in the Illawarra region of NSW, into which Kiama falls.

3. [3]

   IWS and SWC are associated with Mr Joel Edwards (Edwards), an accredited water and sewer designer. IWS and SWC were represented by Edwards in their dealings with White.

4. [4]

   White retained Mr Trevor Unicomb (Unicomb) to be its project manager for the project. White and Unicomb had worked together before. In its dealings with IWS, White was, for the most part, represented by Unicomb. On White’s side Mr Graham Morcom (Morcom), a director of White, was in charge of the project.

5. [5]

   White contracted Cleary Bros (Bombo) Pty Ltd (Cleary Bros) to carry out the construction works.

6. [6]

   The project required design and installation of sewer infrastructure, in respect of which Sydney Water is the statutory authority. A precondition for the registration by the Land Titles Office of the subdivision was the issue by Sydney Water of what is commonly referred to as a s 73 Certificate. This is a reference to s 73 of the Sydney Water Act 1994 (NSW) (the Act), which makes provision for the issue of a certificate which certifies that the requirements of Sydney Water under the Act have been met.

7. [7]

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

8. [8]

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

9. [9]

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

10. [10]

    Both liability and damages are in issue.

11. [11]

    The premises of White’s case on liability are, first, that the project would have been completed by 15 July 2016 and, second, that IWS’s delay in lodging for approval an acceptable sewerage design with necessary backup documentary support caused the whole project to be delayed.

12. [12]

    White has the onus of establishing that by the delay so caused, it suffered loss.

13. [13]

    On the issues of when the project would have been completed and whether IWS’s default delayed the whole project, the parties each called an expert civil engineer programmer. White called Mr Jonathan Shahady (Shahady). IWS called Mr James Senogles (Senogles).

14. [14]

    Senogles prepared the first report, and thereafter two more. Shahady prepared two reports. They also prepared a joint report.

15. [15]

    Their disagreement commenced with what was the appropriate delay analysis method to be adopted. They then disagreed with how the other had applied the method which the other had selected. They reached profoundly differing conclusions. They did agree that nothing which occurred or did not occur up to and including 18 May 2016 had any delaying effect on the project. They also agreed what was the as-built programme.

16. [16]

    Shahady’s conclusion was that the project could have been completed by 15 July 2016 and that delay in approval of the underboring solution caused a critical delay of 240 calendar days to the project, of which 173 were due to the late provision of a complete sewer design (which prevented sewer works from being installed when required) and of which 67 were caused by changes to the sewer design, which caused additional work and took extra time to that planned by Cleary Bros.

17. [17]

    Senogles’ conclusion was that at best the works would have, in any event, not been finished before 10 February 2017, not least of all because of variations unrelated to the sewer works. On a series of assumptions (the correctness of which he did not embrace), he also expressed the opinion that at best the programme would have been completed only 19 days earlier than it in fact was.

18. [18]

    Plainly, both experts are adept at their art. But both cannot be right. It is not inevitable that one of them is right.

19. [19]

    Senogles used the so-called “collapsed as-built (or ‘but-for’) analysis”, which involves extracting delay events from the as-built programme to provide a hypothesis of what might have happened had the delay events not occurred. This method requires the selection of “logic links” which link various components of the works to assume relationships of dependency to determine a critical path.

20. [20]

    Shahady used the so-called “as-planned versus as-built windows analysis”, under which the duration of the works is broken down into windows which are framed by revised contemporaneous programmes, contemporaneously updated programmes, milestones or significant events. Key measuring points are identified on the path taken by the analyst to be critical. Changes to the critical path, critical path delays and the causes of those delays within and between each of the windows are examined to determine slippages and causes of delays.

21. [21]

    It is not inevitable that one of these methods is the appropriate one for use in this case.

22. [22]

    The expert reports are complex. To the unschooled, they are impenetrable. It was apparent to me that I would need significant assistance to be put in a position to critically evaluate their opinions and conclusions.

23. [23]

    Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 31.54(1) provides: [1]

24. [24]

    This is a useful rule, which is not used as often as it perhaps might (or should) be. It enables the Court to have the benefit of confidential, unbiased and competent scientific or other advice: see Adhesives Pty Ltd v Aktieselskabet Dansk Gaerings-Industri (1935) 55 CLR 523 at 580.

25. [25]

    Under UCPR r 31.54, the Court obtained the assistance of Mr Ian McIntyre (on whose appointment the parties agreed), a fellow of the Institution of Engineers Australia, who has many years of programming and delay analysis experience, including in major projects.

26. [26]

    I record that Mr McIntyre’s assistance was invaluable to the Court. His advice demonstrated that the complexity that has been introduced is a distraction.

27. [27]

    I have below revealed the advice I received from Mr McIntyre, upon which I have acted.

Sewerage installation

1. [28]

   The usual design goal of a new land development sewerage installation is to discharge sewerage from the development lots to a connection point with an existing sewer main, via “lead-in works”. Ideally an installation will be naturally gravity-fed to the connection point, but sometimes pumping installations are required. Consent of adjoining land owners may be needed. Complications arise when the connection point is far from the development site.

2. [29]

   Topography can create challenges. The site is not level. It has been described as “saddle shaped”, with the high point near the centre. The topography of the land does not permit waste to flow naturally by gravity from different catchment areas to a single point. Figure 1 is an aerial photograph of the development site. The site is in the centre of the picture, bounded by marked out roads.

3. [30]

   The Pacific Ocean (top right) is to the east of the site.

4. [31]

   The southeast (SE) and southwest (SW) catchments of the site did not have direct access to a Sydney Water main. The northern section of the site falls to the northeast (NE) and northwest (NW) and could be serviced by existing sewer mains within the abutting development. The SE catchment falls to the east. The eastern boundary of the site abuts an area of vegetation, which contains threatened species and endangered ecological communities. The SW catchment falls to the west and abuts a combination of farmland and a treed area containing endangered ecological communities.

5. [32]

   Pure gravity driven systems are preferred to systems which use pumps because they need less maintenance.

6. [33]

   Pumping installations can vary in complexity. Sometimes, pumps which can be bought off the shelf, referred to as “packaged pumps”, can be used. In other cases, pumping machinery may need to be specifically designed.

7. [34]

   One form of pump system is called “low pressure”. This is where a sewer collection well and pump is installed in every lot and a small diameter sewer pipe is installed in the footpath reserve along the roads. This is not a system generally favoured by Sydney Water because of the number of pumps potentially involving maintenance. White did not favour this system for this reason, and also because of perceived negative market reaction.

8. [35]

   Sewerage installations inevitably involve some form of excavation. Excavation can be by trenching or by boring. The pipes and mains are underground with inspection points via manholes. Excavating through rock is expensive. This site was rocky, and known to be so.

9. [36]

   According to Unicomb, a gravity sewer was not preferred because an initial option suggested by Edwards required a long lead-in sewer through hard rock and a section through native vegetation, which involved expense.

10. [37]

    As early as 7 May 2012, White obtained a Rock Survey from geotechnical engineers Douglas Partners which revealed that the subsurface conditions generally comprised topsoil overlying clay, gravelly clay, boulder overburden and latite bedrock.

Sydney Water’s idiosyncrasies

1. [38]

   No doubt wisely, Sydney Water does not favour dealing with proposed sewer installations on an informal basis. Before it will formally move in connection with a proposed sewerage installation, Sydney Water requires an application for a s 73 Certificate.

2. [39]

   Sydney Water will, however, provide a feasibility letter as a guide as to what its requirements could be if a developer applied for a s 73 Certificate.

3. [40]

   Once Sydney Water receives an application for a s 73 Certificate, it issues a Notice of Requirements (NOR) which the developer must satisfy. These requirements inevitably require the developer to engage an authorised Water Servicing Coordinator to be the contact point with Sydney Water. Sydney Water does not have direct contact with the developer. Edwards was designated as a Key Person with SWC, which gave him direct access to Sydney Water.

4. [41]

   Sydney Water requires the developer to engage appropriately capable Developer Infrastructure Providers (in this case IWS) and then to enter into a Developer Works Deed (incorporating Standard Terms) which sets out all parties’ roles and responsibilities.

Events until the s 73 application

1. [42]

   From as early as 2012, Unicomb was in discussions with Edwards about the development. In January 2012, Unicomb asked Edwards to prepare a sewer proposal. Unicomb had some communications with Sydney Water.

2. [43]

   Sydney Water issued a Feasibility Letter, addressed to Unicomb, on 2 April 2013.

3. [44]

   Edwards says that in about April or May 2014, he had a conversation with Unicomb to the following effect:

4. [45]

   Unicomb denies this conversation.

5. [46]

   Edwards says that on a number of occasions he told Unicomb that Sydney Water’s preferred option is a complete gravity feed system, unless it is persuaded otherwise.

6. [47]

   Edwards says he recalls having discussed the possibility of boring and the geological composition of rock with Unicomb in the period April to October 2014. He says that Unicomb repeatedly indicated words to the effect:

7. [48]

   Unicomb says that no such conversations took place and that they never discussed the possibility of boring until Sydney Water requested in March 2016 that it be considered in an options report.

8. [49]

   Edwards recalls such a conversation occurring when attending a meeting at Unicomb’s home-office in Blackbutt in or about May 2014. He says Unicomb had plans and diagrams showing possible routes and depths, and that Unicomb again emphasised the hardness of the rock.

9. [50]

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

10. [51]

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

11. [52]

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

12. [53]

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

13. [54]

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

14. [55]

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

15. [56]

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

16. [57]

    On 18 December 2014, IWS submitted to White (via Unicomb) a Fee Proposal for Design and Project Coordination Services (the Fee Proposal). The services offered included preparation of a sewer design package, preparing checklists, submission of the design to Sydney Water for approval, pursuing the design approval and liaising with the constructor. The services excluded “Protracted negotiations with Sydney Water”. IWS quoted $68,680 plus GST. White accepted the Fee Proposal.

17. [58]

    By 3 February 2015, IWS had prepared a sewer design, incorporating pumping stations, with a connection to a lead-in main.

18. [59]

    By 11 February 2015, Edwards had provided Unicomb with draft sewer plans.

19. [60]

    On 16 June 2015, White obtained conditional consent from Kiama Municipal Council for the development.

20. [61]

    White took transfer of the land on 26 June 2015, which it had contracted to purchase, from a Mr and Mrs Milne.

The Cleary Bros contract

1. [62]

   On 7 July 2015, White entered into a works contract with Cleary Bros for the construction of the works necessary to achieve the subdivision, which included drainage works, road works, water reticulation and sewer works (the Building Contract).

2. [63]

   The Building Contract incorporated the Australian Standard General conditions of contract (AS2124-1992). A Schedule to the Building Contract specified the Date for Practical Completion to be 30 weeks (presumably from date of contract). This period was later extended to 43 weeks.

3. [64]

   The Building Contract made provision for the appointment of a Superintendent to give directions and to issue certificates. Unicomb was appointed Superintendent.

4. [65]

   Clause 35 of the Building Contract is entitled “Times for Commencement and Practical Completion”. Clause 35.5 contains provisions for the granting of extensions of time for Practical Completion.

5. [66]

   Clause 36 of the Building Contract provides:

6. [67]

   The Building Contract includes the following Special Condition:

7. [68]

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

The Deed

1. [69]

   White applied to Sydney Water for a s 73 Certificate on 15 September 2015. Sydney Water issued a NOR on 4 November 2015.

2. [70]

   On 24 November 2015, Sydney Water, White as Developer, SWC as Water Servicing Coordinator and IWS as Designer entered into a Developer Works Deed (the Deed).

3. [71]

   Part B1 of the Deed records that the Deed comprises a number of instruments, including Sydney Water’s Provider Instructions.

4. [72]

   Part B2(a) of the Deed provides:

5. [73]

   The Deed incorporates, as Schedule 1, Standard Terms.

6. [74]

   Part A of the Standard Terms is headed “Carrying out the works”.

7. [75]

   Part A1 is entitled “General obligations”.

8. [76]

   Part A1.1(b) provides:

9. [77]

   Part A1.1(c) provides:

10. [78]

    Part A2 is headed “Design and preparation”.

11. [79]

    Part A2.1(a)(i) provides:

12. [80]

    Part B of the Standard Terms is headed “Meeting other conditions”.

13. [81]

    Part B6 is entitled “General warranties”. Part B6.1 is headed “Developer warranties”. It contains warranties by the developer including one that it has not been found guilty of corruption. Part B6.2 is headed “Listed Provider Party warranties” and contains warranties of the same general kind as Part B6.1. It provides:

14. [82]

    Part B7 is headed “Specific warranties, indemnities and release”. Parts B7.1 and B7.2 are pertinent. They provide:

15. [83]

    Part B8 is entitled “Laws and other legal conditions”.

16. [84]

    Part B8.1(c) provides:

17. [85]

    Part B8.2 provides:

18. [86]

    Part B8.4 provides:

19. [87]

    Part B8.5 provides:

20. [88]

    The Instructions to Designers – Major Works referred to in Part B7.1(a)(i) of the Standard Terms (the Instructions to Designers) is in evidence. Paragraph 3 of that instrument is headed “Role of the Designer”. The following paragraph is pertinent:

After the Deed

1. [89]

   On 21 December 2015, SWC submitted IWS’ water (as distinct from waste water) design to Sydney Water.

2. [90]

   Sydney Water approved the water design on 4 January 2016.

3. [91]

   On 23 December 2015, Unicomb emailed Edwards:

4. [92]

   On 24 December 2015, Edwards replied.

5. [93]

   On 4 January 2016, Unicomb emailed Edwards:

6. [94]

   Edwards replied:

7. [95]

   On 12 January 2016, Unicomb sent the following email to Edwards:

8. [96]

   Edwards replied:

9. [97]

   Edwards’ reply was misleading, and deliberately so, because he had not yet lodged the sewer plans with Sydney Water. This deception is not to be condoned in any way. My impression, nevertheless, was that he was a truthful witness. Edwards readily admitted to the falsity. He was no doubt being pressured by White at the time to deliver.

10. [98]

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

11. [99]

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

12. [100]

    This options report did not find favour with Sydney Water.

13. [101]

    On 19 February 2016, Ms Margaret McTainsh (McTainsh) of Sydney Water informed Edwards by email, relevantly:

14. [102]

    Edwards forwarded the email to Unicomb, writing:

15. [103]

    On 25 February 2016, Edwards wrote to Sydney Water saying, relevantly, that “gravity is impractical & impossibly expensive with up to 11.2m of excavation in bluestone”.

16. [104]

    Unicomb prepared a submission for inclusion in a new options report, and he sent it to Edwards on 2 March 2016. As recounted below, further options reports were prepared. They are all dated March 2016. Their precise dates have to be gauged from contemporaneous emails.

17. [105]

    On 4 March 2016, McTainsh sent Edwards some documents including a pro forma table of contents for the options report and a document to be used for costing in the report. Edwards forwarded the documents to Unicomb.

18. [106]

    On 6 March 2016, Unicomb sent Edwards further information for inclusion in the proposed draft options report.

19. [107]

    A further draft, apparently prepared on 7 March 2016, was more comprehensive. Unicomb prepared and included an options table in the report. The report contained a statement that:

20. [108]

    This passage was included, self-evidently, to induce Sydney Water to approve packaged pumps.

21. [109]

    The document considered various sewer options. It recorded that “the northern most 43 lots fall to the existing gravity sewer for Stage 1 of Cedar Grove Estate”. The report only dealt with 24 lots that have natural fall to the SW, and 33 that have natural fall to the SE. In the options table, gravity sewer options were discounted due to cost and environmental factors and not meeting standards. The only options identified as viable for the SW and SE catchments were packaged pump stations and a low pressure system.

22. [110]

    The next draft seems to have been prepared on 16 March 2016, and sent by Unicomb to Edwards. It left space for Edwards to insert some information, including about his discussions with Sydney Water.

23. [111]

    The options report was apparently sent to Sydney Water on or about 17 March 2016.

24. [112]

    There was some debate during evidence as to who of Unicomb and Edwards prepared what in the options reports. There is little doubt that Unicomb’s contribution was significant. I think it is fair to say that Unicomb was driving the process.

25. [113]

    On 29 March 2016 at 2.31pm, Mr Matthew Stark (Stark) of Sydney Water responded:

26. [114]

    This communication from Sydney Water was significant. For the first time Sydney Water raised a solution by way of underboring.

27. [115]

    Unicomb intervened, responding to Sydney Water directly. He also spoke to Stark.

28. [116]

    At 6.07pm on the same day, Unicomb emailed Stark, copied to Edwards:

29. [117]

    He then emailed Edwards at 6.15pm:

30. [118]

    The options report provided by Unicomb showed as viable options:

31. [119]

    On 30 March 2016 at 10.44am, Unicomb emailed Edwards:

32. [120]

    On the same day at 12.28pm, Stark emailed to Unicomb and Edwards:

33. [121]

    Stark also raised with Edwards, in a phone call whilst drafting this email, the need for the engagement of a specialist to prepare the report.

34. [122]

    Edwards says that Sydney Water’s indication that it would not permit the pump stations to be located in the footpaths or the road and that specific land would need to be dedicated to each station meant that at least two lots would be lost for sale regardless of whether they were pre-sold. Edwards recounts a conversation with Unicomb about this.

35. [123]

    Edwards says that after receipt of Stark’s email, he had a conversation with Unicomb, which included Unicomb saying words to the following effect:

36. [124]

    On 19 April 2016, 6 July 2016 and 1 August 2016, Sydney Water gave approvals for various components of the sewerage works, excluding the underbore component.

37. [125]

    On 16 May 2016, Edwards sent Sydney Water what appears to be the seventh and final options report. The options remained the same as they were in the previous report. Sydney Water favoured the boring solution, and despite considering that the report did not address its comments about requiring more information on the cost basis, indicated its confirmation that the matter could proceed “beyond options”.

38. [126]

    Sydney Water finally approved the underbore design on 11 August 2016.

39. [127]

    Figure 2 below depicts the various components of the sewer works. The legend indicates the date of the relevant approvals and the start/finish date of the various components of construction. Lines 8 and 9 (to the north) were constructed last and are not impacted by the underbore work.

40. [128]

    Trenching was required for each of the sewerage lines depicted. The bores are shown by the broken green line. Manholes needed to be excavated at the points where the bores joined the sewerage mains. A manhole was excavated at the confluence of roads one and four. This was the point from which the underbores were carried out. Save for at the point where the boring was carried out, the entirety of the boring work is underground and would have had no effect on any other work on the surface. There was some suggestion that lines 1 and 2 could not be constructed until the underbore was complete to the point where it was to intersect with those lines. This is wrong. This is because the point of intersection would have been known in advance and the pit with which the underbore was to intersect was constructed first.

41. [129]

    All the work, including the sewer works, was effectively complete on 24 February 2017. A Certificate of Practical Completion was issued on 1 March 2017.

Cleary Bros’ claims

1. [130]

   On 1 April 2016, Cleary Bros gave a Notice of Delay to the work reaching Practical Competition, allegedly because of delay in approval of the sewer works. On 18 May 2016, Cleary Bros made a claim for delay costs at $2500 per day, plus GST, purportedly under clause 36 Annexure B of the Building Contract.

2. [131]

   Separately, on 1 April 2016, Cleary Bros directed Progress Claim Number 18 to White. It included the following claim:

3. [132]

   $175,000 represents $2500 per day for 70 days.

4. [133]

   On 26 February 2018, Cleary Bros invoiced White for $166,637.92, being the remainder of the cash retention then being held by White under the Building Contract. The body of the invoice is as follows:

5. [134]

   Unicomb approved this invoice for payment over his signature on 27 March 2018.

6. [135]

   Somewhat peculiarly, and in circumstances which were not adequately explained by either Unicomb or Morcom, on the same day Cleary Bros issued another invoice, also certified by Unicomb over his signature, the body of which is as follows:

7. [136]

   On about 27 March 2018, Cleary Bros made Payment Claim Number 20 on White. The claim was for February 2018. The claim included $572,000 for “Delay Costs”. The claim appears to acknowledge that payment of $175,000 for Delay Costs had already been made by White to Cleary Bros. The final amount claimed was $151,489.04. Acting as Superintendent under the Building Contract, on 27 March 2018, Unicomb certified that amount to be payable by White to Cleary Bros.

The works

1. [137]

   The major components of the works were:

2. [138]

   The electrical and NBN installation was contracted to and carried out by an organisation called Transelect. Landscaping was contracted to RK Evans Landscaping Pty Ltd. The as-built program is not in dispute.

3. [139]

   I shall deal first with liability and then with damages.

4. [140]

   Initially White relied only on the Deed as constituting the contract between it, and IWS and SWC.

5. [141]

   White argued that, under B7.1 of the Standard Terms, IWS undertook and warranted to it:

6. [142]

   White argued that IWS breached these obligations by:

7. [143]

   White argued that under Part B7.2 of the Standard Terms, SWC undertook and warranted to it:

8. [144]

   In substance, it argued that SWC breached these obligations by failing to ensure that IWS did not breach its obligations to White.

9. [145]

   IWS and SWC took issue with White’s contention that under the Deed they gave any warranties to White. They argued that they gave warranties only to Sydney Water. There is substance in this contention, and I uphold it.

10. [146]

    Neither Part B7.1 nor Part B7.2 of the Standard Terms state expressly that the warranties are given in favour of White. If warranties in favour of White had been intended, the Deed could easily have said so. White’s contention requires words to be read in. The opposing contention does not require words to be read in, because both Parts B7.1 and B7.2 commence with the words “As well as the warranties under B6.2…”, and Part B6.2(a) commences with the words “Each listed provider warrants to Sydney Water…”. The warranties in Parts B7.1 and B7.2 are clearly given in favour of Sydney Water. It is not necessary to read in words such as “to the other parties to this Deed” to give these paragraphs effect.

11. [147]

    But this does not affect the outcome.

12. [148]

    IWS and SWC had not pleaded lack of privity with White in connection with the warranties. At the hearing, they sought leave to amend to take the point. I permitted them to do so in the following circumstances. First, White was granted leave to plead an equivalent breach by IWS of the Fee Proposal under which, in my opinion, IWS’s obligations to White were in substance no different to those pleaded by White as arising from the Deed, that is, to prepare, within a reasonable time and with due care, skill and diligence, a design fit for purpose, which means a design which meets Sydney Water’s (reasonable) requirements. Second, IWS agreed that it could not rely on circumstances which occurred between the Fee Proposal and 24 November 2015, that is the date of the Deed, as being adverse to White’s case.

13. [149]

    SWC is in a slightly different position.

14. [150]

    SWC put that it had no contract with White at all and that it merely performed a function for White’s benefit and received payment. I reject this submission. White, as it was obliged to do under part A1.1(b) of the Standard Terms, retained SWC as its Water Servicing Coordinator to manage the design and construction, and it paid for those services. It is in the nature of this appointment that SWC had obligations to do what it could to ensure that IWS performed. Because SWC had to supervise IWS it follows, I think, that SWC is to be taken as having an obligation to perform its duties within a reasonable time. It therefore does not matter that SWC did not give the warranties in Part B7.2 of the Standard Terms of the Deed to White.

15. [151]

    Save insofar as an obligation to perform within a reasonable time is concerned, Part A1.1(c) of the Standard Terms, which requires the WSC to ensure that Listed Providers design and construct the works in line with the Deed, Sydney Water’s policies, forms and specifications, and relevant legal requirements and standards, also would not assist White because the works were so designed and constructed. The same applies to Part A2.1(a)(i), which requires the WSC to arrange for a design package to be prepared and submitted to Sydney Water. It did this.

16. [152]

    It is not seriously in dispute that IWS’s initial design transpired to be unacceptable to Sydney Water. Its original submission, which entailed a sewage pumping station, should, if paragraph 3(f) of the Instructions to Designers had been complied with, have provided documentary evidence demonstrating that the feasibility and life cycle cost of all servicing options had been thoroughly assessed and that a gravity sewer was clearly uneconomic or inappropriate. The evidence does not extend to establishing that it would not have been possible to so demonstrate.

17. [153]

    The parties each called an expert water servicing coordinator. White called Mr Robert Dowey, and SWC and IWS called Mr David Filmer. They agreed that gravity sewerage options are generally preferred over pumping stations, although they did not say they are always preferred.

18. [154]

    They agreed that designs submitted were not of a standard that complied with the requirements of Sydney Water until on or about 17 May 2016, being the date that the final options report was submitted to Sydney Water. It is to be remembered that it is common cause that nothing that happened or did not happen before 18 May 2016 caused any delay to the sewerage installation.

19. [155]

    They agreed that a design should have been submitted by 24 November 2015 and, if prepared to the prescribed standard, would likely have been approved on or about 4 January 2016. They say there is no defined timeframe for Sydney Water to give design approval, although generally for gravity sewers approval could be expected within six to eight weeks of lodgement.

20. [156]

    White does not claim that it suffered any loss by IWS breaching its obligation to prepare an acceptable design (or submit a complying options report) per se. Clearly it suffered no loss from this. It did not implement the packaged pump design, and it does not claim that it wasted any money in propagating it. Also, IWS (supervised by SWC) ultimately complied with its obligation to prepare an acceptable design. The ultimate design was accepted and implemented.

21. [157]

    White’s essential complaint is about delay. Its loss was allegedly caused because the underbore design was not prepared and submitted earlier.

22. [158]

    IWS argued that:

23. [159]

    White disputes that Unicomb gave the instruction. It argues, however, that even if he did, it is irrelevant because:

24. [160]

    I have already found that White has no claim against IWS or SWC for breach of the Deed. It follows that exclusion provisions in the Deed (whatever might be their effect) have no role to play here.

25. [161]

    The Fee Proposal, however, contains no such exclusionary provisions.

26. [162]

    If White had instructed IWS not to propound the underbore solution, but to propound the pumping stations solution, it can hardly be suggested by White that IWS’s failure to propound the underbore solution was a breach of the Fee Proposal or that, if it is a breach, damages suffered by it (if it suffered them) were caused by that breach as opposed to its own conduct.

27. [163]

    It would not matter (in assessing whether IWS acted too slowly) whether Unicomb gave the instruction before or after acceptance of the Fee Proposal, the date the first design was submitted or at any time before Sydney Water first raised the underboring solution, because the instruction, if he gave it, was not withdrawn until the last of these events: see generally Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185 at [109].

28. [164]

    It is clear that both Edwards and Unicomb favoured a non-gravity solution. If Unicomb gave the instruction, the most White could say was that Edwards should have deflected it from doing what it wanted to. Having regard to the respective personalities of Unicomb (and Morcom) on the one hand and Edwards on the other, I am not persuaded that Edwards would have prevailed. Morcom and Unicomb are demonstrative and dominant. Edwards is restrained and less dominant. I am not satisfied in any event that the pumping station solution was hopeless.

29. [165]

    Did Unicomb give the instruction?

30. [166]

    I find that he did.

31. [167]

    I prefer Edwards’ evidence to that of Unicomb. The probabilities, supported by the objective contemporaneous circumstances, favour Edwards.

32. [168]

    There is no doubt that White would have wished to keep the cost of the project down. White had obtained two geological reports – which have been referred to earlier. His failure to disclose them is not without significance.

33. [169]

    I believe Edwards when he says he had never heard of an underboring solution being implemented in the area because of rocks.

34. [170]

    In evidence is a document created by Edwards on 6 February 2012, which includes his handwritten description of five available sewer options. Option number 5 is a horizontal bore. There is no record of the document being emailed to Unicomb. Edwards’ evidence is that this is unsurprising because it is very likely that he attended Unicomb’s office to deliver the document by hand. The existence of this document in itself supports Edwards. Figure 3 is a copy of this document.

35. [171]

    The first options report lodged with Sydney Water by IWS on 9 February 2016 makes reference to a gravity option, but makes no reference to an underbore. The gravity sewer is described as not only “uneconomical”, but “practically impossible”. This is consistent with the instruction having been given.

36. [172]

    During Edward’s cross-examination the following exchange occurred about the document, which is Figure 3, and Edwards’ assertion of the instruction:

37. [173]

    I consider Edwards’ response to be compelling.

38. [174]

    The underbore option was first included when Unicomb sent an amended options report to Stark on 29 March 2016. There then followed a series of options reports until the final one on 16 May 2016.

39. [175]

    The significant aspect of this is that Unicomb, in my view, took effective control of this process, starting with his direct communication with Stark.

40. [176]

    The options reports required financial analysis which plainly it was not Edwards’ function, nor within his capability, to provide. Edwards also made it clear at an early point that he did not have hydraulic expertise, yet White did not instruct hydraulic experts.

41. [177]

    Although no point was made of it, it is worthwhile to observe that the Fee Proposal excluded protracted negotiations with Sydney Water.

42. [178]

    White has not established that any of the delay between 29 March 2016 and 16 May 2016 was fairly caused by Edwards.

43. [179]

    The consequence is that White has failed to establish any breach of contract by IWS or SWC and its case must be dismissed.

44. [180]

    White’s final submissions did not include any argument based on breach of a non-contractual duty. Given my findings, no such breach would have been established in any event.

45. [181]

    Although it is not strictly necessary to do so, I will nevertheless consider the question of quantum, on the hypothesis that White had succeeded in establishing breach of contract.

46. [182]

    For the reasons which follow, White has not established that on that hypothesis it suffered any loss. The same conclusion would be reached if White had made out breach of a non-contractual duty.

47. [183]

    White abandoned a number of manifestly insupportable claims, including for a profit margin on alleged disruption costs of construction, a proportion of head office overheads unrelated to this dispute (which would have been incurred anyway) and consultants fees in relation to an application for funding from Sydney Water which application succeeded. As is dealt with below, it still persisted in a number of manifestly insupportable claims.

The law

1. [184]

   White bears the onus of establishing that it suffered loss and the quantum of it.

2. [185]

   White’s damages are based on delay to the whole project, said to be attributable to the late (underbore) sewer design. This is not the type of subject upon which precise evidence cannot be adduced. It is not a subject which involves the Court having to make an estimation or engage in some degree of guesswork. It is not the kind of case where it is necessary for the Court to do its best, in the absence of evidence which White was capable of adducing see: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768, 774 at [38]; State of New South Wales v Moss (2000) 54 NSWLR 536 at 554; Troulis v Vamvoukakis [1998] NSWCA 237; JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 at 243-246.

White’s claims

1. [186]

   White claims $1,935,199 (down from over $3 million originally claimed) as damages under the following heads:

Delay

1. [187]

   The first head of damages does not, as White correctly points out, require the Court to find a specified period of delay to the project caused by the sewer works. This head of damages is said to have been sustained because the delay (whatever its duration) interfered with the sequencing of works. It is nevertheless at this point appropriate to deal with whether White has established that the project was delayed as it says.

2. [188]

   The descriptions of the methods adopted by Shahady and Senogles respectively are evidently derived from the publication of the United Kingdom Society of Construction Law, the Delay and Disruption Protocol (the Protocol). [2]

3. [189]

   The Protocol enumerates six different methods of delay analysis, including those adopted by Shahady and Senogles.

4. [190]

   The Protocol methods have apparently been accepted into programming or delay analysis lore. In Alstom Ltd v Yokogawa Pty Ltd (no 7) [2012] SASC 49 at [1282], Bleby J described a method of delay analysis adopted by an expert as not being an accepted method of delay analysis for construction programming practitioners and observed that it was not mentioned in the Protocol as an accepted method of delay analysis.

5. [191]

   Mr McIntyre’s opinion, upon which I propose to act, is that for the purpose of any particular case, the fact that a method appears in the Protocol does not give it any standing, and the fact that a method, which is otherwise logical or rational, but does not appear in the Protocol, does not deny it standing.

6. [192]

   White, supported by Shahady, made a sustained attack on Senogles’ approach. White argued that:

7. [193]

   Shahady opined that detail sufficient to justify selection of appropriate logic links was absent from Senogles’ approach.

8. [194]

   Senogles, for his part, was critical of Shahady’s approach. Amongst others, he opined that Shahady did not properly consider the additional time that was required to complete additional non-sewer works or other delays unrelated to the sewer design, and the fact that the Building Contract did not include the whole scope of work required to complete the subdivision. He considered that Shahady assumed unjustifiable critical as-built logical relationships and that his method was flawed from both a factual and analytical point of view. In this regard, I think that one of the logical flaws in Shahady’s approach is that it assumes causation rather than identifies actual evidence of it.

9. [195]

   Mr McIntyre’s opinion, upon which I propose to act, is that neither method is appropriate to be adopted in this case. This view is consistent with me accepting Shahady’s view of Senogles and Senogles’ view of Shahady.

10. [196]

    Mr McIntyre’s opinion, upon which I propose to act, is that close consideration and examination of the actual evidence of what was happening on the ground will reveal if the delay in approving the sewerage design actually played a role in delaying the project and, if so, how and by how much. In effect, he advised that the Court should apply the common law common sense approach to causation referred to by the High Court in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506.

11. [197]

    The Court is concerned with common law notions of causation. The only appropriate method is to determine the matter by paying close attention to the facts, and assessing whether White has proved, on the probabilities, that delay in the underboring solution delayed the project as a whole and, if so, by how much.

12. [198]

    This requires it to establish that:

13. [199]

    For the reasons which follow, White has failed to discharge this burden.

14. [200]

    Shahady aptly commented that his report does not purport to prove facts. It does not.

15. [201]

    This case demonstrates the importance of paying close attention to the actual facts rather than opinions about what the evidence establishes.

16. [202]

    White sought to rely on the affidavit evidence of Mr Joel Carter, who worked as the site foreman and supervisor for Cleary Bros. He gave evidence about delays and disruptions to the works due to the delay in the sewer approval. He described the works as “delayed, piecemeal and disrupted”. The difficulty is that his evidence is couched in generalities such as:

17. [203]

    This evidence is incapable of founding any satisfactory specific findings of delay.

18. [204]

    The primary source of evidence as to what was happening on the ground is the Cleary Bros site diary (the diary).

19. [205]

    The diary is comprehensive, and appears to have been well kept. It is divided into headed sections which, amongst others, include:

20. [206]

    For present purposes the diary is more significant for what it does not say than for what it does.

21. [207]

    Despite the Court repeatedly emphasising the necessity to be directed to “raw data”, White took the Court to very little of the contents of this important contemporaneous record. The inference is open that the Court was not directed to much of it because of the paucity of relevant entries evidencing relevant delay. This did not relieve the Court of the burden of examining the site diary carefully.

22. [208]

    The sewerage installation involved, broadly, the following activities:

23. [209]

    It is agreed that up until 18 May 2016, the delay in approval of the boring solution had no delaying effect on the project.

24. [210]

    An examination of the diary and the agreed as-built programme reveals that as at 18 May 2016, the following was the state of the works:

25. [211]

    The diary reveals that Cleary Bros’ plumber and sewerage contractor, Mr Adam Christofides, was on site working on a sewer road crossing of Road 1 (at Ch 870). [3]

26. [212]

    There are repeated references in the diary, in the Delays Today section, to “Waiting for approved sewer design”, “Waiting for sewer and water subcontractor to start re-design work” and “Waiting for sewer design to be approved”. However, the diary does not identify the activities, if any, which were being adversely affected by the wait. The entries do not enable a finding of particular consequences. The diary reflects significant activities happening on site in any event.

27. [213]

    The diary reveals that a significant aspect of the sewerage installation was having to get through rock. It reveals that at any one time, there were up to four excavating machines there at the instance of the plumber and sewerage contractor. Rock was unquestionably a major delaying factor for the project as a whole.

28. [214]

    An organisation called UEA (frequently wrongly referred to in the evidence – including in the agreed as-built programme – as UAE) was retained as the boring contractor.

29. [215]

    The sewerage installation was carried out as follows:

30. [216]

    As can be seen from Figure 2, sewer lines 8 and 9 are distant from the other works and from the deep underbore, and could not physically have been impacted by construction of the other lines. They were installed last and are nonetheless said to be part of the delay caused by IWS. White has not established that this is the case.

31. [217]

    White contends that the particular areas of work which were disrupted by the late approval of the underbore are roadworks and kerbing (and guttering), Transelect and the landscaping. It is necessary to examine each of these activities.

32. [218]

    The following is the agreed as-built programme for roadworks and kerbing:

33. [219]

    The agreed as-built programme records that the roadworks and kerbing were done in four stages. Stages 1 and 2 were done from 3 March 2016 to 26 July 2016. There does not appear to be anything to suggest, and nor does the evidence establish, that the work in these stages was adversely affected by any delay in the sewer design approval or installation. The diary does, however, record that the kerb works were significantly affected by inclement weather between 31 May 2016 and 10 June 2016.

34. [220]

    Stage 3 appears to consist of four returns (corners) near lots 30, 86, 92 and 99. This work was done between 24 October 2016 and 2 November 2016. The diary entries for 24, 25, 26 and 27 October 2016 do not provide any meaningful support for the suggestion that “disrupted sewer” means disrupted by any relevant delay. The diary entry for 24 October 2016 says “We dug out & retrimmed for kerb returns on Rd 2, both ends”. The diary entries for 25, 26 and 27 October 2016 shed no additional light on the matter.

35. [221]

    Stage 4 appears to be work on the road base near a proposed kerb return on roads 1 and 4 to the south of lot 72, in the vicinity of the manhole excavation for the underbores. There is the possibility that work already done on the road base was damaged by the underbore work and had to be done in the vicinity of the manhole near lot 72. The evidence, however, does not establish when the initial work was done and, more particularly, whether this happened after 11 August 2016 when the underbore was approved. The evidence does not persuade me that if work had to be done, it was because of any relevant delay (that is, to the sewer design approval).

36. [222]

    The following is the agreed as-built programme for the Transelect works:

37. [223]

    Transelect mobilised to site on 4 July 2016. It had substantially completed its work by 16 November 2016. It returned sporadically thereafter, but the evidence does not establish either that it could not have completed all its work by 16 November 2016 or that any delay beyond that point had any relationship to the sewerage installation. The evidence does not establish that any of the Transelect works were delayed by sewer design approvals.

38. [224]

    Shahady prepared an analysis of electrical and NBN installation works to create what he opined should have been the verified as-built programme that Senogles, adopting his method, should have reached.

39. [225]

    The analysis included a histogram (which was referred to during the hearing as “the Manhattan”) which tracked the number of workmen from Transelect working on site from time to time. The significant feature of the Manhattan is that it reveals that, from mid-November, Transelect had minimal manpower resources on site. The sewerage works, bar lines 8 and 9, had been completed

40. [226]

    There is one matter worthy of observation. The Transelect work was undoubtedly affected by rock excavation. Yet Shahady opined, as it transpired mistakenly, that this was not a factor.

41. [227]

    The as-built programme shows that the landscaping was done from 10 January 2017 to 24 February 2017. The AC wearing course was completed by 29 November 2016.

42. [228]

    The diary entry for 4 November 2016 contains the following:

43. [229]

    The evidence did not establish that landscaping could not have been done earlier. The selected timing appears to have been that of Unicomb. This delay is not established to be connected with the sewerage works.

Claim for disruption costs of construction activities

1. [230]

   As mentioned earlier, these particular claims do not require White to establish any specific duration of delay to the project, but merely that the project was delayed because of the delay attributable to the sewer works. I have already found that White has not established such delay. White has also not established that these specific amounts are sufficiently causally linked to relevant delay in any event. It follows that White has not established an entitlement to these amounts.

2. [231]

   White relies on Unicomb as Superintendent under the Building Contract having certified these amounts. The existence of certifications by Unicomb, and the fact that White paid Cleary Bros according to those certifications, is not in dispute.

3. [232]

   However, Unicomb as Superintendent certifying that an amount is payable by White to Cleary Bros does not establish any entitlement in White (or the amount of any entitlement) to claim it from IWS and SWC. IWS and SWC are not bound by a certification process agreed between White and Cleary Bros. It is incumbent on White to establish an actual liability for an actual amount for it to be entitled to damages from IWS and SWC.

4. [233]

   There are other specific reasons why these claims have not been established in any event.

5. [234]

   $44,713 is claimed for removing rubbish and re-trimming base course ($12,621) and extra road base due to exposure ($32,092). Unicomb’s evidence was that he certified these costs because Cleary Bros could not lay the final layer of the road base pavement at the time it was originally scheduled to be laid because the locations needed to be excavated for the sewer works, which meant that the sub-base was exposed for an additional length of time during the delay and became contaminated by dirt and eroded. This required extra work.

6. [235]

   Morcom also gave evidence. His evidence was that the road base pavement was eroded by storm damage after exposure for many months during the delay, which required additional road base pavement material and work. He says that because of the delay to the sewer works, the final layer of the road base pavement could not be put down.

7. [236]

   Their evidence is conclusionary. It rises no higher than assertion, without particularising precisely how the programme was affected. As well, their evidence does not establish what level of erosion was suffered by the delay, as opposed to that which would have occurred in any event.

8. [237]

   Additionally, Special Condition 8 of the Building Contract provides:

9. [238]

   $7,611 is claimed for constructing temporary ramps over kerbs and reinstating them, comprising $2,840.23 to supply and install road base ramps, $1,728.72 to remove road base ramps and $3,041.69 to repair cracks in kerbs.

10. [239]

    Both Unicomb and Morcom gave affidavit evidence about these amounts, again in conclusionary form. The third component, according to Unicomb, was to repair kerbs damaged as a result of machinery crossing to access the sewer works. He asserts that had the sewer works been constructed prior to kerbing and guttering as programmed, the kerbs would not have been damaged by this work because they would have been installed after the sewer works. This does not establish that the damage was caused by any delay in any event. I am not satisfied that steps to avoid the damage were not available.

11. [240]

    $69,340 is claimed for Cleary Bros charging White to supervise Transelect. The basis for this claim is not clear. Unicomb’s affidavit evidence is that “due to site constraints caused by the delay in sewer approval, the management of the electrical reticulation works was added to Cleary Bros’ contract”. It is not clear what Unicomb means by “site constraints”, and it is not explained why Transelect did not do the work they had contracted to do.

12. [241]

    Cleary Bros added a 10% over cost for management of these works.

13. [242]

    Morcom’s affidavit evidence is that he had a conversation with Mr Tapp Lautasi (Lautasi), the Cleary Bros site manager, and Unicomb to the following effect:

14. [243]

    Neither Unicomb nor Morcom reveal whether Transelect were paid for management services which they did not perform. If White paid Transelect less, to take into account the reduction in services as one might expect, IWS and SWC would be entitled to the benefit of this reduction, if they were otherwise liable. It is to be inferred that White’s evidence on this issue would not have assisted it.

15. [244]

    $181,195 is claimed on the footing that by reason of the sewer delay, part of the rock excavation needed to be done at day work rates which were higher than the rates contracted for and with plant hire rates, rather than under the bill of quantities rate provided in the Building Contract.

16. [245]

    White has not established any contractual entitlement on the part of Cleary Bros to charge on this basis.

17. [246]

    According to Unicomb, he and Carter jointly calculated, to the best of their ability, the amount of rock in each sewer trench excavated under daily plant hire rates. Their calculation estimated the total volume of rock to be 498 m3. IWS and SWC point out that there is no evidence of the amount actually excavated.

18. [247]

    White claims $40,086 for modifications to drainage works and kerb and guttering. Unicomb says that this claim is for amounts claimed and recorded by Cleary Bros due to the disruption to the drainage works and kerb and guttering as a result of them being completed out of sequence due to the delay in sewer works as a result of the delay in sewer design approval. He says that he instructed Cleary Bros to construct the stormwater drainage and kerb and guttering before the sewer works, which resulted in additional costs.

19. [248]

    Leaving aside that this evidence does not establish that delay in sewer approval disrupted drainage works and kerb and guttering, it does not establish the necessity, or indeed any advantage, of having instructed Cleary Bros to construct the stormwater drainage and kerb and guttering before the sewer works.

20. [249]

    White submitted, in the alternative, that this was a reasonable step in mitigation. No foundation for this submission was provided.

Overhead, management and supervision costs from 15 July 2016 to 1 March 2017 (229 days)

1. [250]

   Clause 36 and Special Condition Clause 36 Annexure B of the Building Contract are set out above.

2. [251]

   White asserts that it is liable to Cleary Bros for delay costs of $547,000, being $2,500 a day for 219 days (229 days of delay, less the first 10 days excluded by Special Condition Clause 36 Annexure B). It claims this amount from IWS and SWC.

3. [252]

   This claim rests on White establishing a genuine liability to Cleary Bros.

4. [253]

   I am not persuaded that this claim is genuine. I consider it to be a contrivance to facilitate recovery from IWS and SWC.

5. [254]

   Even if it is real, White has not established its quantum.

6. [255]

   Morcom gave affidavit evidence that on or about 25 October 2016, he attended a meeting with Unicomb, Mr Matt Bennet (General Manager for Cleary Bros) and Lautasi. He says that at this meeting, he said words to the following effect:

7. [256]

   He says that at this meeting he also said words to the following effect:

8. [257]

   His affidavit does not record any assent by or on behalf of Cleary Bros, and there is no objective contemporaneous material to support it. Unicomb makes no mention of it.

9. [258]

   Under cross-examination, Morcom gave evidence that White will pay it to Cleary Bros even if they are not held by the Court to be entitled to it. He says that there is an agreement to delay payment and that White will pay win, lose or draw. I do not believe him.

10. [259]

    He gave the following evidence:

11. [260]

    There is an insurer involved, which it is thought will be the source for payment. In his own words, the agreement is that he does not need to pay the balance until he has settled with the insurance company. From Cleary Bros’ point of view, the alleged agreement is uncommercial. It has been out of its money for well over two years. No one from Cleary Bros gave evidence of it. According to Morcom, White made about $16 million profit on the job, yet it has not paid what it says is money genuinely owed. The alleged arrangement was made months before the project was finished.

12. [261]

    Added to this, as set out earlier, on 26 February 2018, Cleary Bros rendered two inconsistent invoices to White, both of which Unicomb certified. The first invoice recognised Cleary Bros’ delay damage costs by increasing the amount for variations and deducting damage delay costs. The second made no mention of damage delay costs. No obligation to pay them is thus reflected, but the economic effect of the invoice is the same. In my view, this change is to be explained by the fact that as between White and Cleary Bros, any obligation to pay these delay costs is contingent upon White recovering them in this case. Unicomb says he certified the second invoice on instructions. This is not the hallmark of independence.

13. [262]

    White has displayed no reluctance to make manifestly insupportable claims.

14. [263]

    The provisions of the Building Contract relied upon for the delay damages claim do not provide that $2500 per day is payable as liquidated damages. This figure is a cap. Morcom’s agreement to pay “$175,000 as the delay rate of $2,500 per day under the contract” is misconceived.

15. [264]

    Clause 36 entitles Cleary Bros to such extra costs as are necessarily incurred by it by reason of the delay, capped at $2500 per day under Clause 36 Annexure B. There is no admissible evidence to establish that Cleary Bros necessarily incurred extra costs exceeding $2500 per day.

16. [265]

    Perhaps surprisingly (or perhaps not, given the circumstances surrounding the alleged arrangement between White and Cleary Bros), rather than Cleary Bros asserting a claim for extra costs, Unicomb apparently asked Cleary Bros for an estimate of their daily costs.

17. [266]

    On 12 September 2018, Lautasi emailed Unicomb:

18. [267]

    This estimate does not prove that any costs were necessarily incurred or the amount of any such costs.

19. [268]

    White claims $202,300 consisting of:

20. [269]

    The claim for the Retention fee is untenable, and borders on the eccentric.

21. [270]

    Morcom gave affidavit evidence that on or about 2 August 2016 he met with Unicomb. He said he had previously held discussions with Unicomb regarding Unicomb’s desire to retire. He says he and Unicomb had a conversation in words to the following effect:

22. [271]

    Money paid by White to induce Unicomb not to retire cannot be characterised as a loss caused by IWS and SWC.

23. [272]

    Unicomb continued to charge, and was paid his normal hourly rate, for all his attendances.

24. [273]

    There is clear evidence that Unicomb continued to work for White on other projects during the asserted extension of his career.

25. [274]

    It seems that Unicomb has still not retired.

26. [275]

    The second component of this claim is said to be the subject of a series of invoices rendered by Unicomb to White over the period July 2016 to March 2017. The attendances described in the invoices cover the project and two other projects, indicating that Unicomb was engaged for White on other things.

27. [276]

    The amount claimed in respect of the project covers activities unrelated to the sewer works such as a meeting with Shellharbour Council for “land valuation” and a meeting at Kiama Council “re heritage matters”, to name a couple. It is difficult to see how these charges would not have been incurred anyway. It is not the obligation of the Court to sift through these invoices.

28. [277]

    It is not established that any of these charges is attributable to the delay in sewer approval.

Funding costs, loss of interest income of land sales revenue, bank fees and land taxes until land sale settlements end April 2017

1. [278]

   The figures are not in dispute.

2. [279]

   The proceedings are dismissed.

3. [280]

   I provisionally order that White is to pay the costs of IWS and SWC. This order will solidify after seven days unless any party notifies my Associate in writing that some other order is sought, stating brief reasons why, in which event the order will not made and directions will be made for the determination of costs.

4. [281]

   The Exhibits are to be returned.