New South Wales Supreme Court CITATION : Bovis Lend Lease Pty Limited v EMB Fire SystemsPty Limited [2000] NSWSC 683 FILE NUMBER(S) : SC 55006/00 HEARING DATE(S) : 3/3/2000 JUDGMENT DATE : 3 March 2000 PARTIES : Bovis Lend Lease Pty Limited (Plaintiff) EMB Fire Systems Pty Limited (Defendant) JUDGMENT OF : Einstein J COUNSEL : F Corsaro (Plaintiff) G Sirtes (Defendant) SOLICITORS : Freehill Hollingdale & Page (Plaintiff) Cutler Hughes Harris (Defendant) CATCHWORDS : Application for interlocutory relief DECISION : I make order 2 in the notice of motion filed by Bovis Lend Lease Pty Limited and I initial and date that notice of motion. THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - CONSTRUCTION LIST EINSTEIN J Friday 3 March 2000 Revised 13 July 2000 55006/00 BOVIS LEND LEASE PTY LIMITED v EMB FIRE SYSTEMS PTY LIMITED JUDGMENT 1 HIS HONOUR: Bovis Lend Lease Pty Limited has obtained leave to file in court a summons and a notice of motion which have been made returnable this afternoon. In each case the defendant is EMB Fire Systems Pty Limited. At the same time EMB Fire Systems Pty Limited has been granted leave to file in court a summons joining Lend Lease Property Services Pty Limited as defendant. That summons has been made returnable instanter. 2 A full transcript has been taken of the submissions addressed by counsel, each asking for urgent interlocutory relief. The lateness of the hour makes it impossible for the Court to give very extensive reasons for judgment. I am satisfied, however, from the materials which have been read on affidavit, from hearing the evidence and cross-examination of Mr Radley who is a director of EMB Fire Systems Pty Limited and from the arguments, that the clear balance of convenience in this case requires that upon the plaintiff by its solicitor giving the usual undertaking as to damages, the order sought in para 2 of the notice of motion pursued by Bovis Lend Lease Pty Limited should be made and the orders sought on an urgent interim interlocutory basis in the summons propounded by EMB Fire Systems Pty Limited should not be made. 3 The short position is that Bovis Lend Lease Pty Limited is bound by what is referred to as a commitment phase deed and other contractual arrangements with the Sydney Airport Corporation Limited. The contract obliges Bovis Lend Lease to carry out the Sydney International Terminal expansion project for Sydney Airport Corporation Limited. 4 EMB Fire Systems were employed by Bovis to carry out fire sprinkler services works on the SA 2000 project. EMB's works included the design of the fire sprinkler services. Bovis' contractual obligations to Sydney Airport Corporation Limited appear, at least at a prima facie level, to include providing to Sydney Airport Corporation Limited final As-Built' drawings and documents and all manuals required by Sydney Airport Corporation Limited, including training manuals, in relation to maintenance, within three months of the date of practical completion of the separable parts of the works. There are three separable parts or stages of the works, the first stage having reached practical completion on 17 December 1999. 5 In his affidavit of 3 March 2000, Mr Walker said inter alia: "8. All documents must be supplied to SACL both in hard copy and in digital format (clause 15 of the Deed). The digital format documentation must comply with SACL's requirements, which includes supplying documentation in SACL's Intergraph Microstation UNIX based CADD (computer aided drafting) system and SACL's CAD manual (clause 15 of the Deed). The same digital requirements are included in BLL's subcontract with EMB (clause 5.5 of the Subcontract). 9. BLL has in its possession 87 hard copy drawings which are marked "preliminary As-Builts" from EMB. Those drawings are approximately 70 per cent complete. BLL does not possess those drawings in digital format. BLL does not possess any manuals from EMB for the operation of the fire sprinkler services. 10. Part of my job on site is to co-ordinate work on site and to understand what is happening in various areas of the works. I gather this information from my own observations and from people reporting back to me. In my opinion, 75% of the works EMB was contracted to carry out are complete. I have based this opinion on the amount of incomplete and defective works. Exhibited to me at the time of swearing this affidavit and marked "PGW4" are a true copy of Schedules which list Areas of Outstanding works and Areas requiring rectification for the works EMB were contracted to carry out. 11. In my opinion, a considerable amount of work has been carried by EMB beyond those 87 drawings and EMB must have considerable amount of drawings to have done this work. 12. SACL issued a Certificate of Practical Completion for the first stage of the SA2000 Project on 20 December 1999. Exhibited to me at the time of swearing this affidavit and marked "PGW5" is a true copy of the Certificate. 13. Consequently for that part of the Works included in the first stage, final As-Builts and Manuals must be provided to SACL on or by 17 March 2000. 14. The date for practical completion for the second stage of the SA2000 Project is 31 March 2000. 15. The date for practical completion for the third stage of the SA2000 Project is 29 April 2000. 16. Consequently, there are eight weeks remaining for the SA2000 Project to be completed. This means that final As-Builts and Manuals for the third stage must be provided to SACL by 29 July 2000. 17. On 2 March 2000, I asked Mr Charles Ottens of BLL to approach Metropolitan Fire Systems Pty Ltd (MFS) on my behalf to request a quotation to produce all hard-copy and digital drawings which EMB were required to produce under their subcontract with BLL for the fire sprinkler protection works. Exhibited to me at the time of swearing this Affidavit and marked with the letters "PGW6" is a true copy of a letter from MFS dated 2 March 2000 which contains their quotation. 18. I am informed by Mr Ottens and verily believe that it will take MFS a period of 20 weeks to produce the drawings in both hard copy and digital format (including SACL's Intergraph Microstation UNIX based CADD system format). MFS believe 50 of the drawings BLL holds can be downloaded into digital format. 19. This means that a considerable amount of work has to be done to convert the 50 drawings into digital format. The further 100 drawings that MFS refer to in its quotation are further drawings that will have to be commenced from scratch, that is produced in both hard and digital format by MFS. 20. At this stage of the Works, it is reasonable to expect that EMB would have completed approximately 75% of the drawings required for the subcontract works. Stage One drawings represent 60% of the works to be carried out by EMB. Consequently, final "As-Builts" in hard copy and digital format for 60% of EMB's works must be supplied to SACL in 15 days time. These drawings are required to produce the final manuals as well. 21. MFS has been employed to take over the remaining Works that were to be carried out by EMB. Without EMB's drawings and documentation (As-Builts and design drawings for the rest of the works), MFS will be unable to materially start construction for nearly two weeks. MFS will require this time to create a design in conjunction with Connel Wagner (services consultant to the entire project) for the works and to allow for ordering of materials additional to those on site to carry out the works. In my opinion this is likely to result in a delay to completion of the Project of approximately five weeks. This will most likely result in Stages 2 and 3 not being completed on time. 22. Under the deed (clause 45.1 and Schedule 1 of the Deed), BLL is liable for Liquidated Damages for not completing the works by the date for practical completion. The rate for liquidated damages for Stages 2 and 3 is $37,500 per day to a maximum of $5,000,000. There is also a bonus of $2,000,000 for BLL if the date for practical completion for Stage 3 is met (clause 48.1 and Schedule 1 of the Deed). 23. The drawings are also required so MFS can ascertain defects in the works. 24. The airport extensions cannot be certified without the drawings. The extensions cannot be used without certification. 25. The SA 2000 project is project being carried out in preparation for the Olympic Games. Its completion is necessary to cope with the increased arrivals expected from the middle of the year. 26. The drawings are site specific and they cannot be used by EMB on any other project. The copyright of the drawings vests in SACL on creation (clause 6.3 of the Subcontract) and therefore the drawings cannot be used on any other job without SACL's consent. 27. MFS' drawing quotation is consistent with prices quoted at tender time for design documentation. 28. EMB's drawings are also required for further checking by the surveyor for As-Builts according to grid reference. A surveyor is employed to identify all services in relation to the main grid set-out of the building for easy identification of services within the building. In order for the surveyor to carry out this work, EMB's drawings are required. The Surveyor's marked-up drawings are part of the documents required under clause 44.7 of the Deed. 29. Exhibited to me at the time of swearing this affidavit marked "PGW7" to "PGW8" respectively are true copies of the following correspondence between BLL and EMB: (a) BLL to EMB dated 23 February 2000; and (b) EMB to BLL dated 29 February 2000. 30. Exhibited to me at the time of swearing this affidavit and marked "PGW9" is a true copy of a notice to EMB site staff dated 25 February 2000 which was passed on to BLL. 31. Exhibited to me at the time of swearing this affidavit and marked "PGW10" are true copies of the following correspondence between BLL and EMB: (a) BLL to EMB dated 25 February 2000; (b) EMB to BLL dated 25 February 2000; (c) EMB to BLL dated 28 February 2000; and (d) BLL to EMB dated 29 February 2000. I am informed by David Woodcock (the Project Director of SA2000) and verily believe that based on the contents of this correspondence and the correspondence contained in Exhibit PGW9, he believed EMB had not rectified the defaults under subclauses 12.1.1(2) and (3) and had failed to satisfy him the defaults under subclause 12.1.1(5) would be rectified without further delay to the progress of the Works Further he believed that EMB had repudiated the subcontract. Exhibited to me at the time of swearing this affidavit and marked "PGW11" is a true copy of the Notice pursuant to clauses 12.1.2 and 12.2 of the subcontract in which BLL notified EMB that its employment under the Subcontract was terminated. 32. Exhibited to me at the time of swearing this affidavit and marked "PGW12" is a true copy of a letter from BLL to EMB dated 1 March 2000 in which BLL gave notice to EMB to produce to BLL all drawings and documents relating to the Works pursuant to clause 6.16 of the Subcontract" 6 The application now pursued by Bovis is for the purpose of it obtaining urgent access to final drawings and manuals required to be produced by 17 March 2000 pursuant to the contractual arrangements with Sydney Airport Corporation Limited. 7 The position as it has been elicited from counsel and on the evidence is that EMB Fire Systems Pty Limited has had its employment, at least it appears at a prima facie level, terminated by Bovis, and further that the difficulties which Bovis will face in the absence of the subject order being made, involve extremely large liquidated damages and an inability to re-document the work within anything like the timetable presently required by the contractual arrangements which Bovis has with Sydney Airport Corporation Limited. 8 Close attention has been given during the cross-examination and in submissions to the relationship and association between two companies, namely EMB Fire Systems Pty Limited of the one part and EMB Fire Technology Pty Limited of the other part. Initially Mr Sirtes of counsel, who appears for EMB Fire Systems Pty Limited, indicated that there was, as I heard him, no relevant nexus or association between the fire technology company and the fire systems company. He further put that there was an impossibility defence in terms of the orders sought on the summons propounded by Bovis being made. 9 I am satisfied from the cross-examination that Mr Radley, who is a director of both the fire system company and the fire technology company, in fact has an indirect interest as to one half of the shareholding in EMB Fire Technology. It is inappropriate in a short judgment late on a Friday afternoon to set out excerpts from Mr Radley's cross-examination. Suffice it to say that he, inter alia, accepted that he had in his possession certain of the drawings which are presently being sought. 10 To my mind there is no substance in the submissions by Mr Sirtes that the balance of convenience favours the refusal of the relief sought by Bovis and the granting of the relief sought by EMB Fire Systems. The position with respect to EMB Fire Systems and its positive application is that the application was supported by Mr Radley's affidavit of 3 March 2000. That affidavit in a number of places suggested that the facts were quite different to those which in the course of his cross-examination Mr Radley accepted were indeed the present facts. This is more particularly so by reference to the particular requirements of the plaintiff to access the subject materials. 11 An important parameter in my view as to the balance of convenience here is that both counsel seem to have accepted that there should not be any particular difficulty with a very urgent reference of the matters in dispute being heard and finally adjudicated upon in coming weeks. Naturally the precise directions which may be able to be achieved in terms of a streamlining of such an attempt to have a final determination of the dispute remains to be closely monitored by the Court. To my clear observation and belief both parties need to know their respective legal rights inter se at the earliest possible time. It is very important, as I understand and accept, that EMB Fire Systems Pty Limited ascertain whether, and if so to what extend, Lend Lease is indebted to it and whether, and if so to what extent, the claims which it seeks to propound in its summons at a factual and legal level are to be upheld. It is equally important for the Lend Lease Group to know the answer to that question. 12 To my mind the balance of convenience dictates that early next week counsel propound, having discussed the matter with one another, a set of short minutes of order seeking to set up as early a reference as possible. In the event that there are disputes about that matter I propose for the whole of these proceedings to be before the Court on 10 March on which occasion both parties should assume that I will endeavour to streamline the directions for the parties and to cause a reference to be set up at as early an opportunity as is practicably possible within the constrains of the administration of justice and the rights of each party to prepare and properly present such a case. 13 In those circumstances, and upon the plaintiff by its solicitor giving the usual undertaking as to damages, I make order 2 in the notice of motion filed by Bovis Lend Lease Pty Limited and I initial and date that notice of motion. Costs of today are reserved and I stand the summons in both matters and the notice of motion over until 10 March 2000 and require counsel to, having consulted with one another, inform my associate, preferably by facsimile, as to the net result of that consultation by Tuesday at 5pm. CORSARO: Your Honour, there was a typographical error in the notice of motion describing the project. We have had a short minute of order prepared which I can hand up to your Honour. I have provided my friend with a copy. That reflects the orders that we seek. HIS HONOUR: I revoke the earlier order. Upon the plaintiff by its solicitor giving the usual undertaking as to damages I make order 1 in terms of the document called "order" which I date 3 March 2000 and place with the papers and initial. I certify that paragraphs 1 - 13 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 3 March 2000 and revised on 13 July 2000 ___________________ Susan Piggott Associate 13 July 2000 Last Modified: 09/27/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.