El-Bayeh v Bayeh t/as JARS Engineering & Contracting Services

1. [1]

   The plaintiff, Mr Yousseff El-Bayeh, is the registered proprietor of a property in Huntingwood.

2. [2]

   On 5 July 2001, Mr El-Bayeh obtained development consent from Blacktown City Council for the construction of a factory/warehouse with ancillary office accommodation.

3. [3]

   It was a term of the development consent that a construction certificate be obtained pursuant to s 109C of the Environmental Planning and Assessment Act 1979 (NSW) (“the Act”).

4. [4]

   Such a construction certificate was issued by an accredited certifier, Mr Barry Johnson, on 4 August 2006. By the construction certificate, Mr Johnson certified that work completed in accordance with the architectural plans and other documents referred to in it (which I will call “the Approved Plans”) would satisfy the requirements of the Act.

5. [5]

   The defendant, Mr Samir Bayeh, is Mr El-Bayeh’s cousin, and a qualified engineer. Mr Bayeh trades under the name JARS Engineering & Contracting Services.

6. [6]

   No doubt because of the similarity between the surnames of the plaintiff and the defendant, counsel referred to them as Yousseff and Samir. For convenience, and without intending any disrespect, I will do the same.

7. [7]

   On 13 October 2006, Yousseff and Samir entered into a “Contract Agreement”, which described its subject as being the “contract for supervision and management works” in respect of the Huntingwood property.

8. [8]

   The agreement was brief, and was in the following terms:

9. [9]

   Work commenced in May 2007. Practical completion occurred in April 2008. The warehouse was first leased in May 2010.

10. [10]

    Yousseff claims that Samir has acted in breach of the contract (or a concomitant duty). Although Yousseff’s pleaded case was wider, Mr Finnane, who appeared for Yousseff, developed his case as follows:

    1. (1)

       it was an implied term of the contract that the works to be done in accordance with the 2001 development consent would be completed within a reasonable time;

    2. (2)

       Samir acted in breach of that term because he “failed to complete” those works within a reasonable time;

    3. (3)

       Samir owed Yousseff a duty to exercise reasonable care and skill in the supervision and management of the works;

    4. (4)

       Samir acted in breach of that duty because he “failed to ensure” that the works were completed within a reasonable time;

    5. (5)

       had Samir complied with that term or duty, the works would have been completed and the warehouse available to be leased out a year earlier than actually occurred; and

    6. (6)

       Yousseff has thereby suffered damage.

11. [11]

    Yousseff’s case focussed on two periods of delay:

    1. (1)

       between April 2008 (when the application was first made to the Council for approval under s 96 of the Act to vary the terms on which the 2001 development consent was granted) and September 2008 (when such approval was given); and

    2. (2)

       between March 2009 (when the certifier, Mr Johnson, first specified the steps to be taken before he issued an occupation certificate) and September 2009 (when he issued that occupation certificate).

The contract

1. [12]

   The express terms of the contract were that:

   1. (1)

      Samir would “supervise and manage” the construction of the warehouse complex; and

   2. (2)

      Samir’s “duties and responsibilities” were the “project management & supervision of all works related to the construction of [the] warehouse”.

2. [13]

   Mr Condon SC, who appeared for Samir, accepted that, in the circumstances, it was an implied term of the contract, and also Samir’s duty, to exercise reasonable care and skill in the supervision and management of the construction of the warehouse.

3. [14]

   What divided the parties was whether it was an implied term of the contract or Samir’s duty to ensure that construction was completed within a reasonable time.

4. [15]

   The contract recited that the “estimated construction period” for the warehouse was “8-10 months” (excluding any delay caused by weather or site conditions). Mr Finnane accepted that the contract could not be construed so as to impose on Samir an obligation to “meet that time frame come what may”, but submitted that it recorded an estimate by the parties for how long construction would take and that Samir’s duty was to supervise and mange construction having regard to that estimated time frame.

5. [16]

   So much may be accepted.

6. [17]

   However, as Mr Condon pointed out, as Samir’s obligations were confined to supervising and managing the construction, it is clear that the parties did not anticipate that Samir would himself be involved in the actual construction. The parties must have contemplated that the actual construction would be carried out by a builder or (as in fact happened) a variety of contractors.

7. [18]

   In those circumstances, I see no reason to imply a term or find a duty on the part of Samir to ensure that the construction be completed within a reasonable time.

8. [19]

   Samir’s obligation, whether as an implied term of the contract, or a duty, was simply to exercise reasonable care and skill to supervise and manage the construction of the warehouse in the context of an estimate by the parties that it would take between 8-10 months to construct the warehouse.

What happened

1. [20]

   Work commenced in May 2007.

2. [21]

   At around that time, Samir noticed that the ground levels on the neighbouring property to the east were approximately 500mm higher than the level of the proposed warehouse ground floor slab. He decided that the level of the slab should, accordingly, be raised by 500mm.

3. [22]

   Samir gave uncontested evidence that he then had this conversation with Yousseff:

4. [23]

   Accordingly, Samir made a request to the Council on 7 May 2007 to “raise the internal final reduced level of the proposed warehouse” by 500mm.

5. [24]

   On 22 May 2007 the Council replied as follows:

6. [25]

   The Council’s letter thus made clear that it had no objection in principle to the slab being raised (subject to the caveats about fill) but that a formal application under s 96 of the Act was necessary to vary the terms of the development consent.

7. [26]

   Samir said that he showed Yousseff the Council’s letter and that they had a conversation about it. There is a dispute about that conversation, and I will return to it below.

8. [27]

   What is common ground is that no s 96 application was made at that stage to modify the 2001 development consent to take account of the increased height of the floor slab; such an application was not made until April 2008 (see below).

9. [28]

   The slab was laid at the increased height. That work was completed by August 2007.

10. [29]

    Between October and November 2007, various other modifications were made to the design of the building.

11. [30]

    Work recommenced in November 2007 in accordance with that amended design. Again, no application was made to the Council at that time for s 96 approval to modify the 2001 development consent to take account of these changes.

12. [31]

    By March 2008, the parties had evidently turned their minds to the preparation of revised drawings (to take account of the increased height in the slab, and the changes in design made in October and November 2007) for the purpose of making an application to the Council under s 96 of the Act for consent to modify the 2001 development consent.

13. [32]

    Thus, in mid-March 2008, Yousseff and Samir met on site with the architect engaged (evidently by Yousseff) for the project.

14. [33]

    Samir gave unchallenged evidence that:

15. [34]

    Practical completion was achieved in early April 2008. Construction thus took around 11 months; slightly more than the “8-10 months” estimate in the contract. However, Yousseff makes no complaint about this.

16. [35]

    Nor does Yousseff make any complaint about the quality of the building work.

17. [36]

    In his affidavit, Yousseff said that “at some point after 30 June 2008” an application under s 96 of the Act “was apparently made on my behalf”. He said that “if I had any involvement in that process at all, it was limited to signing any documents that Samir asked me to sign”.

18. [37]

    The fact is that on 29 April 2008, Yousseff signed an application to the Council under s 96 of the Act for approval of modifications to the design of the project, including the increased slab height, as well as the modifications made in October and November 2007.

19. [38]

    Several weeks later, on 9 May 2008, Mr Johnson visited the site to determine whether construction had been carried out in accordance with the approved plans. The evidence did not reveal whether Mr Johnson’s visit was prompted by the s 96 application made on 29 April 2008.

20. [39]

    During that visit, Mr Johnson told Samir that the works were not being carried out in accordance with the Approved Plans, that he proposed to refer the matter to the Council, that he could not issue an occupation certificate until all matters were resolved, and that work should cease unless it was in accordance with the Council’s consent and the construction certificate.

21. [40]

    Mr Johnson served a formal notice on Yousseff to this effect on 30 June 2008 (pursuant to s 121B of the Act).

22. [41]

    On 29 August 2008, Yousseff applied for the issue of a building certificate pursuant to s 149A of the Act.

23. [42]

    On 11 September 2008, the Council gave the s 96 consent sought in the 29 April 2008 application.

24. [43]

    On the same day, the Council imposed a new condition requiring that a retaining wall facing a drainage reserve to the west of the site “be finished in a smooth even surface and painted to match that of the industrial building”.

25. [44]

    On 20 October 2008, the Council wrote a further letter to Yousseff, referring to the 29 August 2008 application for a building certificate and stated that the Council was not able to “properly consider your application” until various requirements were satisfied.

26. [45]

    Evidently, those requirements were satisfied by 17 February 2009, on which date the Council issued a building certificate pursuant to s 149A of the Act.

27. [46]

    Two days later, on 19 February 2009, Mr Johnson issued a construction certificate under s 109C of the Act.

28. [47]

    There is no evidence before me as to the manner in which the Council’s requirements of 20 October 2008 were satisfied or of Samir’s role in that process. No complaint is made in these proceedings about those matters.

29. [48]

    By February 2009, Yousseff and Samir had fallen out.

30. [49]

    On 20 February 2009, Yousseff’s solicitor wrote to Samir asserting “poor workmanship, mismanagement and negligence on your behalf which have resulted in our client sustaining considerable damage” and demanding a copy of Samir’s public liability and professional indemnity insurance policies.

31. [50]

    Samir replied on 20 February 2009, denying the allegations of poor workmanship, mismanagement and negligence, concluding that:

32. [51]

    On 12 March 2009, Samir sent an email to Yousseff’s son Andrew (then a student at the University of Technology, part way through a Bachelor of Construction Project Management course). In the email, Samir asked Andrew to check through a list of “unpaid expenses” and to indicate which should be paid. One of the invoices was from Mr Johnson. Another was Samir’s invoice for $135,000, being the amount he had demanded in his letter of 20 February 2009. Samir concluded by saying that “a meeting should be arranged with your dad to discuss those outstanding invoices”.

33. [52]

    Although Yousseff said in cross-examination that he could not remember this email, it is obvious from this email, and later communications to which I refer below, that he had asked Andrew to assist him in relation to the final stages of the project. I would infer that this was because of his falling out with Samir.

34. [53]

    At this point, the final step to be taken before the premises could be leased out was the issue of an occupation certificate pursuant to s 109C of the Act.

35. [54]

    On 20 March 2009, Mr Johnson sent an email to Samir listing 18 matters which would require attention before an occupation certificate could be issued.

36. [55]

    By now, the retaining wall referred to at [43] above had been covered with a “smooth even surface” (as required by the Council’s letter of 11 September 2008) but remained unpainted.

37. [56]

    On 21 May 2009, Andrew wrote to the Council about the retaining wall. He said that he wished to emphasise “my position” concerning the wall and set out his “reasons for not requiring the wall to be painted”.

38. [57]

    Several days later, on 29 May 2009, Andrew wrote to the Council asking for a “copy of the building certificate and related documents” for the project.

39. [58]

    The Council accepted Andrew’s argument concerning the painting of the wall and, on 2 June 2009, wrote to Yousseff (“Attention: Andrew El-Bayeh”) withdrawing the condition that the wall be painted.

40. [59]

    Yousseff claimed to have had no knowledge of this process. In his affidavit, he said that on 2 June 2009, he received a letter from the Council “confirming that a further application to amend” pursuant to s 96 of the Act but said “I had not been involved in the process of submitting the further application for amendment to the Council other than perhaps by signing some document that [Samir] asked me to sign”.

41. [60]

    Several weeks later, on 15 June 2009, Yousseff’s solicitor wrote to Samir demanding that he “forward to our office all invoices, files, documents, consents, approvals and certificates” concerning the project.

42. [61]

    Samir replied on 25 June 2009 stating that:

43. [62]

    On 17 September 2009, Mr Johnson issued an occupation certificate pursuant to s 109C of the Act.

44. [63]

    Yousseff said that shortly after the issue of the occupation certificate, he “contacted a number of real estate agents for the purpose of identifying a potential lessee” for the warehouse.

45. [64]

    On 1 May 2010, the premises were leased to a third party for a three year term at an annual rent of $357,120.

46. [65]

    There is no evidence before me (apart from Yousseff’s statement at [63]) as to what steps Yousseff (or his agents) took during the seven-month period from September 2009 and May 2010.

The witnesses

1. [66]

   As I have mentioned at [26], there is a dispute between Yousseff and Samir about a conversation that Samir claims he had with Yousseff following receipt by Samir of the Council’s letter of 22 May 2007.

2. [67]

   Resolution of that dispute requires consideration of the reliability of the evidence given by Yousseff and Samir.

3. [68]

   Mr Finnane submitted that Yousseff is a “simple, unsophisticated man” and pointed out that his native tongue is Arabic. Yousseff gave his evidence through interpreters, although he was often able to respond in English to questions without waiting for them to be translated into Arabic.

4. [69]

   On the first day he gave evidence, Yousseff was assisted by an interpreter who, although conversant with Arabic, spoke that language with an Iraqi dialect. Yousseff speaks Arabic with a Lebanese dialect. I was informed that some English words are translated differently into Arabic, depending on which of those dialects is in question. That did cause some difficulties with the evidence given by Yousseff on the first day. On the second day, an interpreter who spoke Arabic with a Lebanese dialect was used and no difficulties were encountered thereafter.

5. [70]

   Further, as Mr Finnane pointed out, the events in question occurred between 8 and 10 years ago.

6. [71]

   Taking those matters into consideration, there were, nonetheless, difficulties with Yousseff’s evidence.

7. [72]

   For example, a matter he emphasised in his affidavit was the need to have a project manager on site at all times. Thus, he recounted a conversation between Samir and a builder, Mr George Petra, in which Samir (in Yousseff’s presence) emphasised how important it was for the builder to be present on site “all the time”.

8. [73]

   Later in the affidavit, Yousseff said he was present on the site on most days when building work was carried out and that although Samir was present every day for the first three months, thereafter he only attended “on average one day in every two weeks until completion of the Building Works”.

9. [74]

   However, in cross-examination he readily accepted the proposition that Samir attended the site either daily or every second day.

10. [75]

    Similarly, in his affidavit Yousseff said that, although he was present most days, he did not know the details of what needed to be done and did not know from whom subcontractors took their instructions. But in cross-examination, he readily agreed that “Samir and I” gave instructions to subcontractors on the site.

11. [76]

    Further, as I have set out above at [59], Yousseff claimed to have had no knowledge of the process whereby the Council agreed that the retaining wall would not be painted and, in his affidavit, speculated that this had come about as a result of Samir asking him to sign documents. The truth, as Yousseff must have known, was that his son, Andrew, had negotiated the matter with the Council. Indeed, as the evidence set out above reveals, Andrew played an active role in the project from March 2009 onwards. I found Yousseff’s evidence that he could not recall this to be disingenuous.

12. [77]

    On the other hand, I found Samir to be a calm, collected and credible witness.

13. [78]

    It is true that, at times, he gave evidence defensively and was anxious at times to add to his answers an unresponsive assertion of Yousseff’s involvement in the matter the subject of the question.

14. [79]

    However, overall, I found him to be a reliable witness.

15. [80]

    To the extent that there is conflict between the recollections between Yousseff and Samir, I prefer that of Samir.

Samir’s alleged failure to lodge a s 96 application

1. [81]

   Yousseff alleges that, in breach of his obligation under the contract to exercise reasonable care and skill to supervise and manage the construction of the warehouse, Samir failed to cause a s 96 application to be lodged with the Council (both in respect of the increased height of the floor slab and the changes in design made in October and November 2007) in a timely manner, that an application was only made under s 96 of the Act in respect of all these matters on 29 April 2008 and that this caused a delay to the project.

2. [82]

   Only Yousseff, as the owner of the property, could make an application under s 96. Thus, Yousseff’s case was, in effect, that Samir failed to cause him to make such an application.

3. [83]

   In his affidavit, Yousseff referred to Mr Johnson’s notice of 30 June 2008 (referred to at [40] above) and said:

4. [84]

   On the other hand, Samir said in his affidavit in reply that upon receipt of the Council’s letter of 22 May 2007 (referred to at [24] above) he showed the letter to Yousseff and that Yousseff said:

5. [85]

   When pressed in cross-examination about this by Mr Finnane, the following exchange occurred:

6. [86]

   Although Mr Finnane criticised this evidence on the basis that it did not appear in Samir’s affidavit, it was responsive to Mr Finnane’s questions and, to my mind, had a ring of truth about it.

7. [87]

   Yousseff did not serve an affidavit disputing that conversation and did not give any evidence-in-chief before me disputing that conversation.

8. [88]

   In cross-examination, Mr Condon put to Yousseff that he had “asked for the section 96 application to be postponed”. Yousseff denied this.

9. [89]

   Despite Yousseff’s evidence, I have concluded that it is more likely than not that it did occur.

10. [90]

    I have come to this conclusion for a number of reasons.

11. [91]

    First, for the reasons I set out above, I did not find Yousseff to be a reliable informant.

12. [92]

    Second, as I have said, I found Samir’s evidence on this subject in cross-examination to be convincing.

13. [93]

    Third, Samir gave unchallenged evidence (set out at [22]) that he mentioned the slab height problem to Yousseff, saying, “these changes need to be approved by the council”, and then obtained Yousseff’s instructions to “check it with the council”. It is inherently probable that, in those circumstances, Samir would have informed Yousseff of the result of that enquiry and shown Yousseff the Council’s letter of 22 May 2007.

14. [94]

    Fourth, it is clear from Yousseff’s evidence that he was aware of the need to obtain s 96 approval for variations to the terms upon which development consent had been given.

15. [95]

    Thus, he gave this evidence in response to questions from me:

16. [96]

    Fifth, Yousseff agreed that he had been involved in discussions with Samir in late 2007 concerning the need to make changes to the building’s design and knew that s 96 approval would be needed for these changes.

17. [97]

    Thus, he gave this evidence:

18. [98]

    Sixth, as I have set out at [33] above, in March 2008, Yousseff participated, without demur, in discussions with the architect who was preparing the drawings required to reflect the increased height of the floor slab and the changes in design made in October and November 2007.

19. [99]

    Yousseff must have seen that the work was then complete, or near complete, and have known that the drawings that the architect was preparing were to be used to make a s 96 application (which he would have to sign) to the Council in order to obtain approval, in effect retrospectively, for a variation of the Approved Plans.

20. [100]

    All these matters point to the conclusion that Yousseff knew the design of the building had been changed from that in the Approved Plans and that s 96 approval was needed for those changes. They also point to the probability that, as Samir said, Yousseff instructed him in May 2007 to proceed with the project without (then) obtaining s 96 approval.

21. [101]

    I find that Yousseff and Samir did, in May 2007, have an exchange as set out in Samir’s affidavit and in the passages I have set out from Samir’s cross-examination.

22. [102]

    I also find that Yousseff knew full well that a s 96 application was called for in May 2007 and again after the variations in October and November 2007, but elected not to make that application until the work was complete.

23. [103]

    In my opinion, Samir was entitled (indeed obliged) to act as Yousseff instructed.

24. [104]

    Accordingly, I reject Yousseff’s contention that Samir acted in breach of his obligations under the contract by failing to lodge the s 96 application in a timely manner.

25. [105]

    The application was made in April 2008, and not earlier, because that was the decision Yousseff made.

26. [106]

    These findings have the effect that the balance of Yousseff’s case also falls away.

Samir’s alleged failure to apply for a building certificate

1. [107]

   Practical completion took place in early April 2008.

2. [108]

   The s 96 application was made on 29 April 2008. Yousseff, as owner, actually signed it. Yousseff said that it was his practice simply to sign, without question, documents proffered for his signature by Yousseff. But he must have seen from the form of the 29 April 2008 document that it was a formal application, on a Blacktown City Council template, to which was attached a large number of plans.

3. [109]

   And, for the reasons I have set out, I find that he well knew why it was only being made at this time.

4. [110]

   An application for a building certificate was made to the Council on 29 August 2008. Samir said he did not make that application earlier because he had not been asked to do so by Mr Johnson. Nonetheless, he agreed the application could have been made earlier.

5. [111]

   But, as Mr Finnane accepted, the Council would not, and could not, determine an application for a building certificate until it had determined the s 96 application.

6. [112]

   Once the Council granted s 96 approval (on 11 September 2008) it evidently proceeded to consider the building application and made the requisitions in its letter of 20 October 2008 (see [44] above).

7. [113]

   I see no reason to conclude that the Council would have acted more promptly in relation to the building certificate application had it been lodged earlier.

8. [114]

   In these circumstances, my finding is that there was no action or inaction of Samir in relation to the building certificate application that made any difference to the progress of the project.

The delay in satisfying Mr Johnson’s occupation certification conditions of 20 March 2009

1. [115]

   I cannot see that Samir had any responsibility for such delay as occurred in responding to Mr Johnson’s email of 20 March 2009, setting out the matters to be attended to before an occupation certificate was granted.

2. [116]

   Indeed, this aspect of the matter was only faintly pressed by Mr Finnane who accepted that I may see “some difficulty” with this part of Yousseff’s case.

3. [117]

   The fact is, by March 2009, Yousseff and Samir had fallen out.

4. [118]

   Yousseff had instructed his solicitors to write the letter referred to at [49] above to Samir and had, I find, asked his son Andrew to take over the role hitherto played by Samir (see [51], [52], [56], [57] and [76] above).

5. [119]

   In any event, Samir’s obligations under the contract came to end on 15 June 2009, when Yousseff’s solicitors demanded that he hand over all files, documents, approvals and consents (see [60] above).

The result

1. [120]

   In my opinion, Yousseff has failed to establish a breach by Samir of either his contractual obligations or any duty.

2. [121]

   For those reasons, the proceedings should be dismissed.

3. [122]

   In those circumstances, it is not necessary for me to deal with two other aspects of the case, namely, whether Yousseff’s case was statute barred and whether Yousseff had established damage.

4. [123]

   However, in deference to the arguments advanced by Mr Finnane and Mr Condon, I will deal with each of the matters, albeit briefly.

Limitations

1. [124]

   Mr Condon submitted that, in any event, Yousseff’s claim arising out of Samir’s alleged failure to make a s 96 application in a timely manner was statute barred.

2. [125]

   I agree.

3. [126]

   If, contrary to my findings, Samir was bound by contract or duty to make a s 96 application, it was Yousseff’s case that (to adopt the words in Mr Finnane’s submissions) he was bound to take that step “as a matter of urgency”; that is, as soon as it was known that there was to be a departure from the Approved Plans.

4. [127]

   Thus, on Yousseff’s case, Samir was bound to cause Yousseff to make a s 96 application in around May 2007, in respect of the increased height of the slab, and November 2007, for the other departures agreed to be made from the Approved Plans.

5. [128]

   Thus, Yousseff complained of a breach by Samir of an obligation “to perform a single act, by date capable of determination” (to adopt the words of Ipp J (as his Honour then was) in Hammond v Minister for Works (1992) 8 WAR 505 at 516, see below). That “single act” was to procure that he, Yousseff, make a s 96 application “as a matter of urgency”, on or about those dates.

6. [129]

   In my opinion, any such cause of action arose in around May or November 2007.

7. [130]

   The proceedings were commenced more than six years later, on 3 December 2013.

8. [131]

   Mr Finnane submitted that Samir was subject to a continuing duty which he breached repeatedly, each day he delayed in causing a s 96 application be made.

9. [132]

   I do not agree.

10. [133]

    As Ipp J said in Hammond at 516 (cited with authority by Mason P in Winnote Pty Ltd v Page (2006) 68 NSWLR 531; NSWCA 287 at [80]):

Damages – rejection of Mr Briggs’s report

1. [134]

   Yousseff relied on a valuation report dated 17 September 2015 prepared by Mr Russell Briggs.

2. [135]

   On the first day of the hearing, I rejected the tender of that report and gave brief reasons for my decision. I said that I would give more extensive reasons in my final judgment. These are those reasons.

3. [136]

   Mr Briggs is a director of Colliers International and a certified practising valuer.

4. [137]

   Mr Briggs purported to express an opinion as to the annual rent that a lessee would have paid for the warehouse, once constructed, on various dates between 1 July 2007 and 17 September 2009, the minimum and maximum terms for which a lessee would seek to lease the warehouse and the length of time that the warehouse would need to be marketed in order to find a lessee.

5. [138]

   Mr Briggs has substantial experience in valuing property and in conducting rental reviews. Although Mr Condon made a submission to the contrary, I was satisfied that Mr Briggs had the requisite training, study or experience to express an opinion about these matters for the purpose of s 79 of the Evidence Act 1995 (NSW).

6. [139]

   At cl 1.2 of his report, Mr Briggs stated that his information sources were, “although…not limited to”, amongst other things, “Colliers International Industrial Market Research” and “other relevant information”.

7. [140]

   The nature of that “research” and “information” was not revealed in the report.

8. [141]

   Under the heading “Valuation Considerations,” Mr Briggs set out what he described as being a “Rental Market Commentary” which asserted, in a number of tables, “Average Net Face Rentals for Prime and Secondary Stock” at various dates for various areas in Sydney, including “west” Sydney.

9. [142]

   However, Mr Briggs’s commentary was in general terms and did not identify the source for this statement as to those average rentals or identify by what process of reasoning he reached the conclusions stated.

10. [143]

    Mr Briggs’s report then, under the heading “Rental Evidence”, stated that in assessing the market rental for the subject property he had:

11. [144]

    He set out a “selection” of 12 properties. In relation to those properties, he set out various details including the lessee, term, and rental rate.

12. [145]

    However, Mr Briggs made no analysis of those 12 properties. He did not assert that they were in any way comparable to the subject property. For example, he did not assert whether any of them is superior to or inferior from the subject property.

13. [146]

    Then, under the heading “Valuation Methodology”, Mr Briggs went on simply to assert, without explanation:

    1. (1)

       what in his opinion would have been “the annual rent that a lessee would have paid to lease the warehouse and the property if the warehouse was available for occupation” on various dates and which he described as his “adopted rate” per square metre;

    2. (2)

       the minimum and maximum terms tenants were likely to seek; and

    3. (3)

       the period during which the subject property would have to be marketed to achieve those rentals.

14. [147]

    Mr Briggs gave no reasons for coming to these conclusions.

15. [148]

    The conclusions as to Mr Briggs’s “adopted rate” for market rent correspond, to some degree, to the “Average Net Face Rentals” (referred to at [141] above) and the rent of the 12 properties referred to at [144].

16. [149]

    But, as I have said, the report does not reveal the provenance of those “Average Net Face Rentals” nor anything which would enable the reader to understand whether the 12 properties are comparable to the one in question.

17. [150]

    I see no explanation at all in the report for Mr Briggs’s conclusions about likely lease terms or marketing periods.

18. [151]

    The report suffers from the same difficulties as McDougall J identified in Rolleston v Insurance Australia Ltd [2016] NSWSC 1561 in relation to the report that his Honour was considering in that case.

19. [152]

    As his Honour pointed out in Rolleston, and in his Honour’s earlier decision of Bone v Wallalong Investments Pty Ltd [2012] NSWSC 137 (at [21] to [26]):

20. [153]

    In this case, just as in Rolleston:

21. [154]

    For these reasons, I found the report to be a clear example of one where it has not been shown that the opinions expressed are “wholly or substantially based” on Mr Briggs’s “specialised knowledge based on [his] training, study or experience”.

22. [155]

    In any event, if I were wrong about that conclusion, I would have excluded the report in the exercise of my discretion under s 135 of the Evidence Act, essentially for the reason that McDougall J gave in Bone at [37]:

23. [156]

    For those reasons, I rejected the tender of Mr Briggs’s report.

Damages – loss of a chance?

1. [157]

   Once Mr Briggs’s report was rejected, the only evidence relevant to damage was that set out at [63] and [64] above: namely, Yousseff’s statement that, shortly after issue of the occupation certificate on 17 September 2009, he contacted a number of agents for the purpose of identifying a potential lessee, and the fact that, on 1 May 2010, the premises were leased to a third party for a three year term at an annual rent of $357,120.

2. [158]

   Mr Finnane submitted that I should infer that, had the occupation certificate been issued a year earlier, in September 2008, it is more probable than not that Yousseff would have procured that the premises be leased at the same rent after a corresponding delay (some seven months) and that I should, accordingly, conclude that Yousseff’s loss is in the order of $350,000.

3. [159]

   Had it been necessary for me to decide this issue, I would not have felt able to come to this conclusion.

4. [160]

   As I have said, apart from the matters to which I have just referred, there is no evidence before me as to the process undertaken by or on behalf of Yousseff to procure that the premises be leased.

5. [161]

   Further, Mr Finnane’s submission invites me to assume that market conditions and demand were in all respects the same between September 2008 and May 2009 and September 2009 and May 2010.

6. [162]

   Absent evidence on the subject, I see no basis upon which I could come to that conclusion.

7. [163]

   In effect, I was being asked to assess the value of the chance that, assuming he had otherwise made out his case, Yousseff had suffered loss by reason of an occupation certificate being issued in September 2009 rather than September 2008. In my opinion, the evidence before me was not sufficient to reach any conclusion about that matter. As Gleeson CJ said in Troulis v Vamvoukakis [1998] NSWCA 237 at [239]:

Conclusion

1. [164]

   Yousseff’s claim fails.

2. [165]

   The proceedings should be dismissed with costs.