MDA Law
Whites constructions (Pty) Ltd v PBS Holdings (Pty) Ltd 2019 NSWSC 1166
Introduction
This case relates to a claim for damages by a property developer White Constructions (Pty) Ltd against PBS Holdings (Pty) Ltd (first defendant) (hereinafter referred to as “SWC”) and Illawarra Water and Sewer Design (Pty) Ltd (second defendant) (hereinafter referred to as “IWS”), a water servicing coordinator and sewer designer respectively, in connection with a 100 lot subdivision, known as Cedar Grove, located in Kiama, New South Wales. The damages claim is based on a breach of contract where White contends that IWS failed to prepare a satisfactory sewer design within a reasonable time and SWC failed to ensure that IWS timeously discharged its obligations to do so.
Factual Background
The plaintiff is an experienced property developer in New South Wales. The first and second defendants were engaged by the plaintiff to attend to the design and installation of sewer infrastructure, in compliance with Sydney Water’s requirements, before a Section 73 certificate would be issued by Sydney Water. The issue of the Section 73 Certificate is a precondition to the registration by the Lands Title Office (Deeds Office) of the subdivision.
The plaintiff contends that IWS proposed to Sydney Water an installation system which involved pumping stations, rather than a gravity-based solution which involved deep underbore. It was a gravity-based system which was eventually accepted by Sydney Water. This, the plaintiff alleges, delayed the completion of the project from 15 July 2016 to 1 March 2017, and on this basis, it founds its claim for damages.
Issues for determination
The plaintiff who bore the onus of proving that the delay was caused by the actions of the first and second defendants utilised the services of an expert civil engineer programmer to conduct an appropriate delay analysis. The second defendant IWS, likewise engaged an expert civil engineer programmer for the same purpose. Each expert utilised a different delay analysis method and arrived at profoundly different conclusions.
Plaintiff’s expert used the “as planned v as built window analysis” which is an observational analysis which entails the works being broken down into separate windows against revised contemporaneous programmes, contemporaneously updated programmes, milestones and significant events. The analyst identifies key critical points on the path. Changes to the critical path, delays and causes of delays between the windows are examined to determine the causes of the delays.
The second defendant’s expert relied on the “collapsed as-built (but-for) analysis” which involves extracting delay events from the as-built programme to provide a hypothesis of what might have happened if the delay events had not occurred. This method requires a selection of ‘logic links’ which link various components of the works to establish dependencies to determine a critical path.
Law and application
Each expert’s evidence contradicted the others and was found to be complex and difficult to understand by a novice in the field. His honour Mr Justice Hammerschlag relied on Rule 31.54 – Assistance to other parties, of the Uniform Civil Procedure Rules 2005 (NSW), which provides at 31.54(1):
“In any proceedings, the Court may obtain the assistance of any person specially qualified to advise on any matter arising in the proceedings and may act on the advisor’s opinion”.
A Mr McIntyre of the Institute of Engineers Australia, who has a wealth of planning and delay analysis experience in major projects, assisted the Court in understanding the methods of delay analysis adopted by both parties’ experts. It is to be noted that both methods adopted are derived from the United Kingdom Society of Construction Law, the Delay and Disruption Protocol (the Protocol). The Protocol includes six different methods of delay analysis which includes the two referred to above.
Mr McIntyre however held and upon which the learned Judge acted, that merely because a method is part of the Protocol does not give it standing and likewise a logical, methodical and rational method, which does not appear in the Protocol, does not deny its standing.
Plaintiff’s expert Shahady attacked the defendant’s expert approach stating, inter alia, this method did not accord with common sense, logic links were not sustainable, and it obscured the inefficient performance of the defendant.
Defendant’s expert Senogles, likewise attacked Shahady’s report stating, inter alia, no consideration was given to additional time to complete additional non-sewer works and further that the method contained unjustifiable critical as-built logical relationships – hence this method was flawed both factually and analytically.
His honour Mr Justice Hammerschlag relied on McIntyre’s finding that neither method was appropriate and instead turned to actual evidence of what was happening on site to properly consider and ascertain the impact of the delays in obtaining approval of the sewer design. The Court, using McIntyre’s guidance, applied the common sense approach to causation referred to in March v E and M H Stramare (Pty) Ltd (1991) 171 CLR 506.
Whilst the Court had repeatedly emphasized the necessity of ‘raw data’, the plaintiff failed to show any concrete records attributing the delays to the defendants. The Court held that only by referring to the facts a determination could be made as to whether the approval of the under-boring solution delayed the project as a whole, and if so, to what extent.
The primary source of evidence to show what was actually happening on site was the contractor’s daily diaries.
The Court thus turned to a thorough examination of the daily diaries and found that whilst there was repeated reference to “awaiting sewer design, sewer re-design; sewer design approval” it was found that the diaries did not identify any specific activities which were affected by these “waits”.
The diaries also revealed extensive excavation through rock as a significant aspect of the sewerage installation, which work continued pending the approvals. The daily diaries were found to be comprehensive and well-kept which contributed to its evidentiary value.
The Court went into extensive detail in examining the various ‘as-built’ dates which revealed that delays were attributable to other factors such as inclement weather and in certain instances, for other reasons, the work was in any event incapable of earlier completion.
Conclusion
Accordingly, the Court discarded the complex delay analysis reports advanced by both parties and instead relied on the true position as evidenced from the daily diaries and found that the plaintiff had not proven breach of contract by the defendants. The Court’s position was that a common-sense approach be applied in determining the true cause of the delay.
The above judgement reinforces that opinion evidence can be subverted by reliance on the actual facts on hand – here accurate record keeping on the project served to dispose of an otherwise complex matter in a simple and straightforward manner.
