New South Wales Supreme Court CITATION : Lily Homes v Aslan & Anor [2006] NSWSC 824 HEARING DATE(S) : 9 August 2006 JUDGMENT DATE : 22 August 2006 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Harrison DECISION : (1) The appeal is dismissed; (2) The judgment and orders of His Honour Magistrate W G Pierce dated 6 December 2005 are affirmed; (3) The summons filed 23 December 2005 is dismissed; (4) The plaintiff is to pay the defendants' costs as agreed or assessed. CATCHWORDS : Appeal decision of Local Court Magistrate - cracks in concrete driveway LEGISLATION CITED : Local Courts Act 1982 (NSW) - s 73 Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Bellgrove v Eldridge (1954) 90 CLR 613 Carr v Neill [1999] NSWSC 1263 CASES CITED : Devries v Australian National Railways Commission (1993) 177 CLR 472 James Edward Bromely & Ors v Forestry Commission of NSW [2003] NSWCA 252 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 165 R L & D Investments Pty Ltd v Bisby [2002] 37 MVR 479; [2002] NSWSC 1082 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588 Swain v Waverley Municipal Council [2005] HCA 4 Lily Homes Pty Limited - Plaintiff PARTIES : Karim Aslan - First Defendant Mona Aslan - Second Defendant FILE NUMBER(S) : SC 16065/2005 COUNSEL : Mr B Pluznyk - Plaintiff Mr C P Locke - Defendants SOLICITORS : D'Agostino Solicitors - Plaintiff Oliveri Attorneys - Defendants LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 1068/2004 LOWER COURT JUDICIAL OFFICER : His Honour W G Pierce LCM LOWER COURT DATE OF DECISION : 6 December 2005 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON TUESDAY, 22 AUGUST 2006 16065/2005 - LILY HOMES PTY LIMITED v KARIM ASLAN & ANOR JUDGMENT (Appeal decision of Local Court Magistrate - cracks in concrete driveway) 1 HER HONOUR: By summons filed 23 December 2005 the plaintiff seeks to appeal part of the decision of His Honour Magistrate W G Pierce dated 6 December 2005 and seeks orders, firstly, that the judgment against the plaintiff be set aside; secondly, entry of judgment for the plaintiff against the defendants with costs; and thirdly, in the alternative, that the judgment be set aside and remitted to the Local Court for determination. 2 The plaintiff in these proceedings is Lily Homes Pty Limited (Lily Homes) who was the second defendant in the Local Court. Filip Pavicin was the first defendant in the Local Court. The defendants in these proceedings are Karim Aslan and Mona Aslan who were the plaintiffs in the Local Court. The plaintiff relied on the affidavit of Su Ts'en Lin affirmed 26 April 2006. For convenience in this judgment I shall refer to the parties by name. 3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 73 of the Local Courts Act 1982 (NSW) (the Act) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby [2002] 37 MVR 479; [2002] NSWSC 1082. It cannot be said that the judicial officer acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. 4 In Swain v Waverley Municipal Council [2005] HCA 4, the Chief Justice at [2] reiterated that in the common law system of civil justice, the issues between the parties are determined by the trial process. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal. 5 Section 75 of the Act provides that the Court may determine an appeal either by (a) varying the terms of the judgment or order, (b) setting the judgment or order aside, (c) setting the judgment or order aside and remitting the matter for determination in accordance with the Court's directions or, (d) by dismissing the appeal. Grounds of appeal 6 The grounds of appeal are firstly, that the Magistrate erred in law in admitting into evidence the reports of Norman Tonkin dated 19 July 2005 and 13 October 1995; secondly, the Magistrate erred in law in admitting into evidence paragraphs 5, 6, 12, 13, 14, 15 and 16 of the report dated 19 July 2005 and paragraphs 3, 4, 5, 6 and 7 of the report dated 13 October 2005; thirdly, the Magistrate erred in law in rejecting the evidence of Norman Tonkin that the concrete cracking could have been caused by thermal expansion and contraction; fourthly, the Magistrate erred in law in finding the reasonable costs of rectification was $24,937 and by allowing interest from 31 December 2004; fifthly, that the Magistrate failed to give reason; and sixthly, the Magistrate erred in law in entering judgment against the plaintiff where the defendant sued in negligence Filip Pavicin as principal and the plaintiff as agent, and His Honour found that the principal was not negligent (see supplementary grounds of appeal filed 17/03/2006). 7 The Magistrate entered judgment for the plaintiff as against the second defendant (Lily Homes) in the amount of $24,937 and interest with costs from 31 December 2005. There was verdict for the first defendant (Filip Pavicin). The third party claim failed. Local Court proceedings 8 The Aslans sued Mr Pavicin and Lily Homes seeking $6,700 for damage to their driveway and backyard, caused between August and November 2003. At the hearing, the amount claimed was increased to $24,937. [ASC] 9 In about November 2002 Lily Homes (the builder) entered into an agreement with Filip Pavicin to build a residential duplex at 16 Augusta Street, Punchbowl. Mr Pavicin's existing dwelling had been demolished to enable the construction of the duplex. Karim and Mona Aslan own the adjoining premises at 14 Augusta Street. They have a concrete driveway and concrete backyard. In order to obtain access to the Pavicin property the builder had to go through the Aslans' property. That much is common ground. 10 Paragraph [7] of the ASC pleads the Aslans had given Lily Homes permission to go through their property on the condition that care would be exercised by Lily Homes to avoid damage to the property. Lily Homes admitted that Aslans gave it permission to go through their property but Lily Homes denied that it agreed to take reasonable care. (para [3] defence). Mr Vince Camera, the sole director of Lily Homes, also deposed that he said to Mr Aslan "Can I go through your property?" and Mr Aslan answered "Yes." (Aff 24/08/2005 – para [4]). It was open to the Magistrate to find that the builder breached its agreement with the Aslans. 11 There was a factual dispute between the Aslans and Mr Camera. Mr Camera deposed that the only vehicle he had under his control since entering the building agreement apart from a motor car and a tipping truck was a bobcat. (Aff 25/10/21005 – para [3]). Lily Homes denied that it had owned or had under its control any yellow machinery or machinery in which the driver was enclosed by glass. Both Mr Camera and Mr Pavicin deposed that they had noticed cracks in the concrete prior to the work being carried out. 12 Mr Aslan gave evidence that he saw two vehicles, big and small (t 36.55). The big vehicle was yellowish in colour (t 42.30) but the size could not be described (t 43.5). He stated that they came on two different occasions (t 58.15), but later said that they came on the same day (t 59.30). Mr Aslan did not see the big vehicle traverse his property (t 74.25). Mrs Aslan gave evidence that she saw a vehicle traversing her property. It had tank like tracks and was red or yellow in colour and that it was big (t 111.35-45). She also saw a smaller vehicle (t 114.35, 115.5). Other members of the Aslan family also gave evidence. In any event, in the statement of issues, a matter not in dispute was that the builder drove his heavy machinery over the concrete on the Aslans' land (3)(g). 13 On 5 June 2003 the Aslans sent a letter to Mr Pavicin demanding that he repair the concrete that had been damaged within 14 days. In 2003 Mr Filip Pavicin admitted that an employee of Lily Homes, Frank Camera, drove a bobcat up the Aslans' driveway, across the backyard and onto Mr Pavicin's property for the purpose of landscaping and that Mr Camera returned the same way. But the sighting of the bobcat can be disregarded as the Magistrate made a finding that the damage was not caused by the bobcat. The Magistrate's decision 14 The hearing in the Local Court took a number of days. The Magistrate made findings throughout the hearing which appear in the transcript. 15 The Magistrate in his reasons stated: "I propose to give a judgment for the plaintiff against the second defendant, not against the first defendant. There's nothing that could sheet home responsibility to the first defendant in the circumstances. But the second defendant, for the reasons that we've just been discussing, I won't recap them in full, for fear of boring your, if nothing else. But can I just simply say this, that the plaintiffs, and their son's and what not, all collectively gave evidence. Gave believable evidence as to their manner – their demeanour. They gave believable evidence, they spoke of this yellow track machine next door. They spoke of tracks leading up their driveway. The damage was done, in fact, we have expert evidence to the effect that it was done, that the damage appeared in the backyard as well as down the driveway which negates the accident of some errant vehicle in the street being a possible cause. And we therefore find ourselves in the position that it would be wholly implausible to imagine any other cause, at least on the balance of probabilities, and especially with the damage in the backyard, other than the actions of the second defendant on their way in or out to next door. As I said before, the measure of damage in a matter like this ought to be a matter of practical commonsense. I am trying to be practical about it because there are no hard and fast rules in the authorities about these things they vary wildly from one end of the spectrum to the other depending on what sort of damage and what sort of factual circumstances you're looking at. And once you've got a case such as some concrete which is damaged there seems to be a reasonable and fair way to look at damage is ripping it up, taking it out, and putting in new concrete. I accept that the damage is the larger amount in the latest quote …" The report of Norman Tonkin dated 19 July 2005 16 Lily Homes submitted that the report of Mr Norman Tonkin should not have been admitted into evidence as it falls short of the requirements of Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 165. 17 Mr Tonkin is a consulting engineer and according to his CV (which was annexed to his affidavit) has practiced as such since 1972. In evidence Mr Tonkin said that he had been looking at concrete for some 30 to 40 years (t 71.9). He made a visual inspection of the concrete in the Aslans' driveway and backyard. He took photographs to show what went wrong. From the photographs Mr Tonkin referred to some places where the concrete did not crack but the slab went down (t 76.5). Mr Tonkin expresses his view (Aff 19/07/2005 – para [10]): From my observation it was clear that heavy vehicles or vehicles bearing heavy load had been driven over the concrete driveway and the backyard. The weight of the load exceeded the bearing value of the soil underneath the concrete. As a result the concrete subsided and cracked under the load." 18 The plaintiff's Counsel referred to purported deficiencies in Mr Tonkin's report. They included where Mr Tonkin had referred to the driveway only and had not referred to the backyard, he could not give an opinion about the vehicles that traversed the Aslans' property being of sufficient weight to cause the cracking of the concrete; did not take samples of the concrete; did not test the soil (but he would not have been qualified to do so as that would be the province of a geotechnical expert); conceded that thermal expansion can cause concrete cracking but that he did not consider the formula for thermal expansion. 19 The plaintiff's Council referred to Makita at [7] where it is stated that: "… the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of "specialised knowledge" in which the witness is expert by reason of "training, study or experience", and on which the opinion is "wholly or substantially based", applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible …" 20 During legal argument as to the report's admissibility, the Magistrate contrasted a case involving the nuclear reactor at Lucas Heights to a backyard driveway where it might be expected that battery of physicists would give evidence, and it may well have required all sorts of tests to be carried out to establish what caused the problems with the nuclear reactor. It may be that in a backyard driveway case an expert can observe that concrete is not reinforced. An expert can observe the depth the unreinforced concrete and say "Well its not good enough for anything other than an ordinary motor car." (t 55, 5/10/2005). Mr Khandhar of Counsel (for the Mr Pavicin at the Local Court hearing) submitted that the costs of cutting a portion of concrete away and having it tested would be prohibitive. I would add, so would the costs of having the soil sample tested by a geotechnical expert. I agreed with the Magistrate's comments. To consider what caused unreinforced concrete to crack is not an onerous task for an experienced engineer. An experienced engineer can form an opinion without resorting to testing of the soil and a small block of concrete which has been extracted. In a field of expertise the knowledge as to how a certain state of affairs is brought about may be uncontroversial. Sometimes a visual inspection may be enough. Sometimes tests are required. This is a case where the expert was not required to carry out tests. It is my view that the Magistrate's decision to allow the expert's report to be admitted was correct. 21 However, the plaintiff's Counsel drew the Court's attention to Mr Tonkin's evidence as to when the cracks occurred. Mr Tonkin inspected the concrete on 19 February 2005 and 9 May 2005. On the first inspection Mr Tonkin described the driveway cracks as being "fresh" (t 213). When asked how fresh, Mr Tonkin answered "You can tell when concrete has a fresh crack the concrete is quite clean where it breaks really." When further questioned he estimated that the cracks were created about two or three months earlier ie, in November 2004. The plaintiff's evidence is that the cracks occurred somewhere between August 2003 and November 2003. Thus Mr Tonkin's evidence puts the cracks as occurring one year later. On this issue the Magistrate stated (t 27.22-28): "And the only really safe basis, one might think, upon which you can pin down that they may be fibbing is that your expert Mr Tonkin, who I certainly believe in terms of his credibility and belief that I believe, says 'These crack are – the big cracks – are recent' – up to three months shall we say. And if they are around a year he must be wrong." 22 The Magistrate accepted Mr Tonkin's evidence on the cause of the cracking and damage, but not his view as to when the cracks occurred. He accepted the plaintiff's evidence as to when the cracks occurred. It was open to the Magistrate to adopt this approach. There is no error of law. Damages 23 Lily Homes submitted that if Mr Tonkin had the expertise of quoting for costs of demolition and laying of concrete, he ought to have prepared one himself, instead of leaving it to other (HASSARATI & Co Pty Ltd and S Terzopoulos). According to the plaintiff, neither was called to give evidence and that by using Cordell's building guide does not cloak the user as an expert. 24 Lily Homes also submitted that the assessment of damages was not reasonable. Counsel referred to a passage from James Edward Bromley & Ors v Forestry Commission of NSW [2003] NSWCA 252 at [4] where Mason P (with whom Meagher and Sheller JJA agreed) stated: "The cases relied upon by the appellants (Evans and Parramatta City Council) do not establish that a plaintiff can automatically elect between diminution of value or restoration costs in a tortious claim against a defendant who damages land or goods. Restoration and repair costs may be a way of valuing loss, but only if it is reasonable to do so. The touchstone remains loss. In some cases reinstatement would provide an unjust enrichment rather than a negation of loss. Reinstatement must be a reasonable and proportionate response to the damage before the cost of reinstatement can be the measure of damages (see Evans at 40, Parramatta at 335E, Trindade & Cane, The Law of Torts in Australia 3rd ed, 2000 pp 554-5, Fleming, The Law of Torts 9th ed, 1998 pp 282-3, McGregor on Damages 16th ed, 1997 pp965ff)." 25 Similarly in Bellgrove v Eldridge (1954) 90 CLR 613, Dixon CJ, Webb J and Taylor J turned their minds to the question of the measure of damages in respect of a deficient building project. They held [at 617] that: "In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she sustained by the failure of the appellant to perform his obligations to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract." 26 They continued at 618: "Indeed – and such was held to be the position in the present case – there may well be cases where the only practicable method of producing conformity with plans and specifications is by demolishing the whole of the building and erecting another in its place. In none of these cases is anything more done than that work which is required to achieve conformity … The qualification, however, to which this rule is subject is that, not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt." 27 The onus is on the plaintiff to establish that the damages claimed are reasonable. Mr Tonkin, the engineer, saw three quotes and was of the view that he would be surprised if the companies who furnished the quotes of $7,370 and $8,500 were still in business (t 83 – 84). One of the quoter's licence had expired. There was a quote for $5,291 which Mr Tonkin thought was reasonable but it only covered the breaking up and removal of the concrete. The quote from S Terzopoulos dated 11 May 2005 covered the preparation of the site and to lay 20 mpa of concrete in the sum of $19,646. Mr Tonkin was of the opinion that the work and the cost set out in that quote was appropriate [15]. When asked, Mr Tonkin gave evidence that the costs for demolition and fixing the concrete could be found in Cordell Building Cost Guide and that he was familiar "with what is cost in there because he is using Cordells all the time" (t 96). It is a standard reference book within the building industry. Cordells (which is updated yearly) gives the cost of concrete per cubic metre. Mr Tonkin was with the Greek builder when he wrote down the measurements and "sketched it up." 28 The plaintiff's quotes to rectify the damage meant that the Aslans were getting a better concrete driveway and backyard than had previously been the case. The Council required the nextdoor neighbours' driveway (Pavicin) to be constructed with reinforced concrete. Once the Magistrate made a finding that the cracks were caused by Lily Homes' vehicles there needed to be work of some kind undertaken to repair the concrete. Lily Homes did not produce any evidence to show that there were more modest ways to repair the concrete. In my view it was open to the Magistrate to find that it was reasonable and fair damages for the costs of ripping up the concrete, taking it out and putting in new concrete and accepted that the damage was the larger amount of the latest quote - $24,937. It was open to the Magistrate to accept that the type of concrete used to be in accordance with Council's specifications. 29 Interest is discretionary and it was open to the Magistrate to award interest. 30 The appeal is dismissed. The judgment and orders of His Honour Magistrate W G Pierce dated 6 December 2005 are affirmed. The summons filed 23 December 2005 is dismissed. 31 Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed. The Court orders: (1) The appeal is dismissed. (2) The judgment and orders of His Honour Magistrate W G Pierce dated 6 December 2005 are affirmed. (3) The summons filed 23 December 2005 is dismissed. (4) The plaintiff is to pay the defendants' costs as agreed or assessed. ********** 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.