IPOH GARDEN BERHAD (AUST) PTY LTD v AW EDWARDS PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY, PRIESTLY and MEAGHER JJA 24 August 1989, 19 October 1989 [1989] NSWCA 104 BUILDING CONTRACT — CONSTRUCTION OF CL405(h) OF AUSTRALIAN STANDARD METHOD OF MEASUREMENT OF BUILDING WORKS — "ALLOWANCE FOR WORKING SPACE" Mahoney JA This appeal concerns the payment to be made the respondent builder in respect of the construction of a pedestrian tunnel from the Queen Victoria Building to the Grace Bros Department Store. It concerns, in particular, the payment to be made for excavation of pits for footings. Under the contract the payment to be made in respect of each cubic metre of excavation was specified and, subject to adjustments permitted by the contract, the quantity of the excavation was also specified. In the present case, the cubic metres to be excavated in respect of the matters here in question were specified as 98 cubic metres and 83 cubic metres. However, it is agreed that payment is to be made in addition to this. The work to be done fell literally within the terms of CL405(h) of the Australian Standard Method of Measurement of Building Works, authorised by agreement between The Australian Institute of Quantity Surveyors and The Master Builders' Federation of Australia. (The court has been referred to the fourth edition of that Standard, January 1980). The appeal has proceeded upon the basis that the amount to be paid to the builder for such excavation is to be increased by adding to the quantity to be excavated as provided in the contract an amount, at the contract rate, for an additional space calculated in accordance with CL405(h) of the ASMM. It is agreed that CL405(h) applies because the work in question required formwork exceeding one metre high and because the work required workmen to operate from the outside, within the terms of that clause. The only question to be determined on this appeal is whether the extra quantity for which payment is to be made is to be calculated in accordance with par (ii) or par (iii) of CL4.05(h). The facts have been detailed in the judgment of Meagher JA which I have had the advantage of reading. I agree with his Honour's analysis of the relevant documents. In particular, I agree with his Honour's construction of CL405(h). That paragraph provides for "allowances for working space". The allowance is, as the clause indicates, hypothetical. But, being an allowance for working space, it would be expected that, as CL(ii) allows for working space of 0.60 metres and CL(iii) allows for one metre, the allowance for working space where both are satisfied is to be the greater of the two, viz, one metre. However, Mr Staff QC, for the proprietor, submitted that this construction should not be adopted. For this submission, he relied upon the meaning of "work" and the provisions of CL408(b). 2 UNREPORTED JUDGMENTS I do not think that CL408(b) requires a different construction of CL405(h). CL408(b) deals with the position where "basement or similar walls" are in question. The present work is not such. It may be that where basement or similar walls are in question, it will be necessary to consider the application of the general provisions for allowance of working space contained in CL405(h). That question does not arise in this appeal. Mr Staff suggested that the learned judge, in adopting the construction to which Meagher JA has referred, misconstrued the word "work". Upon the assumptions on which this appeal has proceeded, I do not think that that submission should be accepted. At least, there is no reason why the ordinary construction of CL405(h) should not be adopted in this case. I agree with the orders proposed by Meagher JA. Priestley JA For the reasons given by both Mahoney JA and Meagher JA I agree with the orders proposed by Meagher JA. Meagher JA This is an appeal by Ipoh Garden Berhad (Aust) Pty Ltd concerning the construction of a written agreement dated 14 June 1985 whereby it as proprietor engaged the respondent AW Edwards Pty Ltd to construct a pedestrian tunnel complete with shops from the Queen Victoria Building to the Grace Bros Department Store passing beneath the intersection of George and Market Streets Sydney. The excavations required by that agreement included those for ten pad footings on which were to be built reinforced concrete columns supporting the overlying roads. The case concerned the correct allowances to be made for working space in constructing those pad footings and columns. The specified Bill of Quantities (which fulfilled the function of both a Specification and a Bill of Quantities), which formed the basis for the respondent builder's pricing for the work for which he was to be paid, was drawn up pursuant to the General Conditions of Contract. CL1019 of those General Conditions required that where any "item of quantity" was omitted from the Specified Bill of Quantities which should have been included in it an amount designed to reflect the extra work involved should be added to the Contract Sum. That additional work was, it was agreed by both parties, to be quantified and valued by reference to the Australian Standard Method of Measurement of Building Works. Items c/36 and c/37 of the Specified Bill of Quantities provided: "C/36 Excavating pits exceeding 1m sq on plan down to existing railway tunnel roof for pad footings; exceeding 7m but not exceeding 8m total depth. (No 5) (SB) m3 98 C/37 Ditto; exceeding 8m but not exceeding 9m total depth. (No 5) (SB) m3 83" It was common ground that neither of those items made any allowance for working space and such an allowance should have been made. One had therefore to turn to the Standard to see what that allowance was. CL405(h) of the Standard provided: "Allowances for working space (which shall not be subject to adjustment if more or less space is actually required) shall be made in the measurements of excavations as follows: i. 0.15 metre from the face of any work which requires formwork not exceeding | metre high; ii. 0.60 metre from the face of any work which requires formwork exceeding 1 metre high; URSOH GARDEN BERHAD (AUST) PTY LTD v AW EDWARDS PTY LTD (Meagher JA) 3 iii. 1 metre from the face of any work to be covered externally with a damp-proof covering which is not described as executed overhand or from the external face of any work which requires workmen to operate from the outside." The appellant proprietor contended, both below and in this Court, that the allowance should be computed in accordance with sub-paragraph (ii) and the respondent builder contended that it should be computed in accordance with sub-paragraph (iii). In the former case the allowance should be $30,526.14; in the latter case it should be $138,700.96. On this issue Smart J found for the respondent builder, and it is this finding which was reagitated before this Court on appeal. However, the bulk of the hearing at first instance concerned another question, viz the purely factual issue whether the work defined in the contract required workmen to operate "from the outside" within the meaning of the second leg of sub-paragraph (iii). This issue was also decided by his Honour in favour of the respondent builder, the issue being decided in the affirmative. There was ample evidence for his Honour so to decide and the correctness of his Honour's finding in this regard was not challenged on appeal. Therefore, the sole question with which this appeal is concerned is the proper construction of 4.05(h) the Standard. Mr Staff QC, leading counsel for the appellant proprietor, in a powerful submission argued that the Court should hold that each of the sub-paragraphs (i) (ii) and (iii) were meant to be independent of the others, and further that sub-paragraphs (i) and (ii) between them constitute a code covering all situations in which formwork is required. In effect this means that the word "other" has to be used before the word "work" whenever it appears in sub-paragraph (iii). In my view these arguments should be rejected and Smart J's decision on the point is correct. The whole clause should be construed according to the ordinary meaning of the language used; and whilst it is clear from the terms of that language that sub-paragraph (i) and (ii) are mutually exclusive, there is no reason why either of those paragraphs may not overlap with sub-paragraph (iii). The fact that the appellant's argument necessitates the interpelation of extra words into sub-paragraph (iii) of itself demonstrates the inappropriateness of the argument. As Mr Walker, for the respondent builder, pointed out, if the situations involved in either sub-paragraph (i) or sub-paragraph (ii) also involve the application of sub-paragraph (iii), the result is that allowances of 0.15 metres (or 0.60 metres) should be allowed for working space as well as 1 metre. This would not involve cumulative allowances, because each allowance is measured from the same point, viz "the face of the work", the greater including the lesser. Thus, the ordinary canons of construction yield the result that sub-paragraph (iii) will always apply (inter alia) whenever there is a "work" which "requires workmen to operate from the outside". Moreover, the purpose of the clause yields the same result. His Honour found as a fact that, as a matter of ordinary engineering and quantity surveying expression in the industry, it would be unreasonable and inappropriate to restrict working space to less than 1 metre, and the Standard, whilst dealing with conventional and not actual situations, should not be construed as dictating a merely arbitrary conclusion. For these reasons I am of the opinion that the appeal should be dismissed with costs. Counsel for the Appellant: DA Staff QC and A Lakeman 4 UNREPORTED JUDGMENTS Solicitors for the Appellant: Clayton Utz Counsel for the Respondent: BW Walker and P Larkin Solicitors for the Respondent: Wesygarth Baldwick