New South Wales Supreme Court CITATION : Dante De Grazia trading as All Sydney Building Services v Nicholas Solomon & Ors [2010] NSWSC 322 HEARING DATE(S) : 15/02/10, 18/02/10, 19/02/10, 22/02/10 - 26/02/10, 1/03/10 - 5/03/10, 8/03/10, 10/03/10 - 12/03/10 JUDGMENT DATE : 28 April 2010 JURISDICTION : Equity Division Technology and Construction List JUDGMENT OF : Einstein J DECISION : The parties are to submit short minutes of order. CATCHWORDS : CONTRACTS - Building, engineering and related contracts - The Contract - Claim by builder for variations and delay costs - Whether Court can adjust date for practical completion under contract - Whether architect/proprietors estopped from pleading that that builder's claims were not made in compliance with the relevant contractual procedures and therefore must fail - The principle in Liebe v Molloy - Whether the plaintiff builder's claims for variations and delays made out on the evidence - Relevant principles where the architects are simultaneously the proprietors - Whether architect had duty to act impartially - Whether this duty breached - Performance of work - Whether it is possible to assess delay where construction programming has not occurred - Whether the expert evidence relied upon by the parties should be accepted - Cross-claim by defendants against builder for defective work - PROCEDURE - Courts and judges generally - Courts - Relevant principles for making a finding of fraudulent conduct - Whether allegation of fraudulent conduct made out - TRADE AND COMMERCE - Trade Practices Act 1974 (Cth) and related legislation - Consumer protection - Misleading or deceptive conduct or false representations - Whether brochure produced by cross-defendants was misleading or deceptive - Whether cross-claimants proved reliance on particular representations - Whether causation shown in cross-claim - Whether relevant limitation period had expired - Whether evidence showed that cross-defendants' product was not fit for purpose. Evidence Act 1995 LEGISLATION CITED : Home Building Act 1989 Sale of Goods Act 1923 Trade Practices Act 1974 (Cth) CATEGORY : Principal judgment Aleyn v Belchier (1758) 28 ER 634 Arenson v Casson Beckman Rutley & Co [1977] AC 405 Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1999] 1 AC 266 Briginshaw v Briginshaw (1938) 60 CLR 336 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Canterbury Pipe Lines Ltd v Christchurch Drainage Board (1979) 16 BLR 86 Dixon v South Australian Railways Commissioner (1923) 34 CLR 71 Fink v Fink (1946) 74 CLR 127 Gould v Vaggelas (1984) 56 ALR 31 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 79 ALR 83 Hickman & Co v Roberts [1913] AC 229 John Holland Construction & Engineering Pty Ltd v Majorca Projects Pty Ltd (1996) 13 BCL 235 Jones v Dunkel (1959) 101 CLR 298 London Borough of Merton v Stanley Hugh Leach Ltd (1985) 32 BLR 51 Liebe v Molloy (1906) 4 CLR 347 CASES CITED : Lubenham v South Pembrokeshire DC (1986) 33 BLR 39 Lubhman Fidelities and Investments v South Pembrook Shire District Council (1986) 33 BLR 39 Makita (Australia) v Sprowles (2001) 52 NSWLR 705 Medtel Pty Ltd v Courtney [2003] FCAFC 151 Minster Trust Ltd v Traps Tractors Ltd (1954) 3 All ER 136 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 Ngurli & Ors v McCann (1953) 90 CLR 425 Pacific Associates Ltd v Baxter Co [1990] 1 QB 993 Pedler v Richardson (Supreme Court of NSW, Young J, 16 October 1997, unreported) BC 9705263 Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd (2002) 18 BCL 322 Perini Corporation v Commonwealth [1969] 2 NSWR 530 Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd (1993) 113 ALR 30 Sutcliffe v Thackrah [1974] AC 727 Turner Corp Ltd v Coordinated Industries Pty Ltd (1995) 11 BCL 202 Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 Watson v Foxman (1995) 49 NSWLR 315 Brookings on Building Contracts, 4th Edition, 2004 LexisNexis Butterworths Keating on Building Contracts, 6th Edition, 1995, Sweet & Maxwell TEXTS CITED : Keating on Construction Contracts, 8th Edition, 2006, Sweet & Maxwell Tobin, Concurrent and Sequential causes of Delay, (2008) 24 Building and Construction Law Journal 10 Hon Mr Justice Byrne, Total Costs and Global Claims, (1995) 11 Building and Construction Law Journal 397 Dante De Grazia trading as All Sydney Building Services (Plaintiff) PARTIES : Nicholas Solomon (First Defendant and First Cross Claimant) Caroline Larcombe (Second Defendant and Second Cross Claimant) Timbeck Pty Limited formerly trading as Timbeck Cedar Products (Cross Defendant) FILE NUMBER(S) : SC 2006/0268636 Ms E Olsson SC (Plaintiff) COUNSEL : Mr I Roberts, Mr M Auld (First and Second Defendants/Cross Claimants) Mr G Sirtes SC, Mr J Tobin (Cross Defendant) John Carmody & Co (Plaintiff) SOLICITORS : Sachs Gerace Lawyers (First and Second Defendants/Cross Claimants) Thurlow Fisher Lawyers (Cross Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST Einstein J Wednesday 28 April 2010 2006/0268636 Dante De Grazia t/as All Sydney Building Services v Nicholas Solomon & Anor ` JUDGMENT The proceedings 1 The proceedings before the Court concern the contractual arrangements entered into between the principal parties in October 2001. There is also a cross-claim pursued by the defendants by cross summons against a supplier of weatherboards. 2 On 17 October 2001 the plaintiff, Dante De Grazia trading as All Sydney Building Services, a licensed Builder, entered into a contract with the defendants, both of whom were registered Architects, to build two houses for the defendants on land situated at 26 and 26A Brown St, Bronte. The contract was in the standard form SBW-2. It included a specification and the drawings as well as other documents. 3 The contract sum was $1,319,935.00 inclusive of GST. 4 The defendants, Nicolas Solomon and Carolyn Larcombe, carried on a practice called Larcombe & Solomon Architects. 5 In 2001 the defendants sought Builders to develop their property. They wanted to build a duplex, in one of which they would live and the other, they would rent. 6 The contract provided that it was to be administered by an Architect. The owners were the Architects nominated to administer the contract. Mr Solomon carried out the day-to-day contract administration. However it is common ground that in the event that any of the causes of action pursued by the plaintiff against the defendants succeed, both of the Architects will be jointly and severally liable. 7 The original date for possession of the site was 1 November 2001 and Practical Completion was to be achieved by 11 September 2002. 8 During the course of the works, the plaintiff suffered various delays and for various reasons, the Architect extended the contract time for completion from 1 November 2002 (the original date) to 17 February 2003 [Memorandum L and S to DDG 28 January 2004 (Court Book 5: 1730)]. 9 On 24 December, the plaintiff achieved actual Practical Completion [Notice of Practical Completion (Court Book 5: 1643)]. In working days [defined by the contract Clause 9.3 as days excluding Saturdays, Sundays, statutory or public holidays and RDO's (rostered days off). The evidence of Mr Solomon was that RDOs are one day a month. T:795.5], the difference between the adjusted date and the actual date of Practical Completion is 206 days [calculated from calendars attached to report of George Zakos 13 August 2008, volume 4 of pale blue Court Book, page 1419 ]. There is a dispute between the parties as to the adjusted date for Practical Completion: the plaintiff contends for March 2003, the defendants contend for February 2003. 10 It is also to be kept in mind that, somewhat unusually, the contract remains on foot. There is still a final certificate to be issued. But for the contract remaining on foot the plaintiff's case may have been pleaded differently as to damages. The principle issues as between the major parties 11 There are a number of disputes litigated as between the major parties. 12 Ms Olsson SC, the Builder's counsel, endeavoured to focus throughout the trial on three items so called 'big-ticket items': these being the issues which had arisen concerning windows, cladding and joinery. This was not to be regarded as an abandonment of other variation and delay claims but it was said that because of the relatively small monetary claims involved, the small items could be dealt with fairly swiftly. 13 Without being exhaustive the real issues would least include the following: i. Whether the Builder complied with the contract provisions in making the claims that are the subject of the proceedings. ii. Whether the defendants are estopped from raising arguments regarding non-compliance with contractual procedures because neither party performed its works under the contract in strict compliance with the contractual terms or required the other party to so act. iii. Whether the Builder is entitled to recover any of the amounts claimed. iv. Whether each or any of the variations claimed are in fact variations entitling the Builder to recover cost. v. Whether the Builder has demonstrated any delay to the works caused by any of the matters alleged. vi. Whether the owners in their capacity as the Architect performed their role as Architect administering the contract. vii. If negative to v, whether the defendants are entitled to any claim liquidated damages and if so, the quantum. viii. Whether the defendants failed to address requests for details or instructions made by the plaintiff in a timely manner or at all. ix. Whether the defendants' conduct contributed to or caused a delay to the plaintiff's ability to complete the works in accordance with the scheduled program. x. If affirmative to viii, whether the plaintiff is entitled to damages or compensation for that conduct and those delays and if so, the quantum. xi. Whether the defendants issued instructions which affected the plaintiff's critical path programming and caused him to suffer increased costs, and if so, the quantum of those costs, both in terms of delay occasioned and the appropriate daily rates for the delay. xii. Whether the Builder is bound by the agreements alleged by the defendants to have been reached in the meeting on 20 June 2003. xiii. Whether the Builder is required to pay to the owners liquidated damages for the period when the works are said to have been delayed beyond the adjusted date for practical completion. xiv. Whether the amount of liquidated damages recoverable by the owners is $162,750.00 or some other amount. If so what is that other amount? xv. Whether the works are defective as alleged by the owners. xvi. If so, whether the owners are entitled to recover the cost of rectifying those defects as assessed by the owners' expert Mr Abbott or some other amount. xvii. Whether Timbeck made the representations alleged. xviii. Whether the representations by Timbeck were false. xix. Whether Timbeck has engaged in misleading and deceptive conduct. xx. Whether the owners are entitled to damages and other orders under s.82 and s.87 of the Trade Practices Act 1974. The limited reference out 14 During the hearing the parties agreed to refer a particular matter out for enquiry to a referee. The matters which were thereafter so referred were identified as follows: As to the matters contained in paragraphs C18 to 21 (inclusive) of the amended cross-claim filed on 29 March 2007 : (a) Whether the items listed in the joint report of the experts filed on 4 February 2010 are defects under the contract; (b) If so, how those defects should be rectified; (c) What is the cost of that rectification work? The plaintiff's "Road Map" of results Road map guide 15 The Court sought the assistance of counsel in drawing a roadmap in order to identify the sundry permutations depending as one or other of the parties may succeed on certain issues and all hail on other issues. 16 It is for obvious reasons, convenient to set this roadmap out in detail: The plaintiff abandoned paragraphs 17 to 23 of the Further Amended List Statement (FALS) at the outset of the hearing. Paragraph 24 was amended so that only the following sub- paragraphs were pressed: (i)– (vi) inclusive (viii) – (ix) (xi) (xiii) (xvii) (xx) (xxiii) (xxvi) Items (iii) (windows and doors), (xvii) (cladding) and (xx) (joinery) were pressed as the 'big ticket' items. If any or all of the 'small' items are found to have been established by the evidence, the value claimed should be allowed, there being no contradictory evidence as to quantum. Some, but not all, of the 'small' items also attract a delay claim and a delay cost. If the item is accepted by the Court and a delay to the works is also found, then the number of days delay ought to be identified and flagged. If and only if none of the 'big ticket' items are found, then these delays claims and associated costs will be relevant. As to the 'big ticket' items: (i) the evidence with respect to the windows and doors was that the works were delayed by approximately 31 days (a figure Mr Zakos calculated and accepted). Although the period of delay occurred in 2002, the length of the delay should be added to the date for Practical Completion. (ii) If the cladding claim is accepted, the delay to the works should be measured from the date on which the work was discovered to be leaking water (23 February 2003) to the date upon which the remedial work was completed which was 3 July 2003 [DG 2: 422 Letter from L and S to ASBS re 'Draft statement – in confidence' ] (which is 88 working days). (iii) If the joinery claim is accepted, the works were delayed from early December 2002 (when the Builder started to send correspondence regarding delays) for 195 days (Zakos evidence and evidence from site minutes and Mr De Grazia) Since these days overlap each other (to the extent delay is allowed at all) the delay is as follows: If the windows only are allowed, the adjusted date for PC should be 4 April 2003 (ie 31 days); If the cladding only is allowed, the adjusted date for PC should be no earlier than 5 July 2003 (90 days allowing for a few days to finish associated works) If the joinery only is allowed, the adjusted date for PC should be no earlier than 17 December 2003 (or more than 190 days) which the Builder contended was the date on which the project was completed. If the windows and joinery only are allowed, the adjusted date would be 5 July 2003. If the windows and cladding and joinery are all found, the adjusted date should be 17 December 2003. The daily rate for delay costs should be either $1,000.00 (per Zakos calculation) or $858.00 which is calculated in accordance with the industry accepted method of dividing the figure for preliminaries by the number of days in the job. Preliminaries $180,000.00 [ Builder's tender CB 2/80 Divided by 42 weeks (number of weeks in job per original completion date) Subtotal $4,285.70 pw or $857.14 per working day (say $858.00). Working days are Monday to Friday excluding public holidays and Rostered Days Off (RDOs) of 1 per month. The plaintiff's cases 17 The plaintiff contends as follows: i. The works reached Practical Completion on 24 December 2003. ii. The works were varied during the course of construction. iii. The plaintiff incurred time and cost in carrying out the additional work which resulted from such variations and contends that the defendant Mr Solomon was in breach of his duty as Architect under the contract in his assessment of the plaintiff's applications for variation claims and extension of time claims. iv. The parties fell into dispute over some of the variations and delay claims submitted by the plaintiff and can be categorized as follows: a) variation claims by the Builder for work that has altered from that shown in the original contract documents, and b) the costs of delay associated with such variations. v. The plaintiff commenced proceedings in the Supreme Court to recover monies for the variations and delays alleged by him to have occurred throughout the progress of the job. vi. The defendants defends those proceedings and cross-claimed for delay being the difference between the adjusted date for Practical Completion of 17 February 2003 (granted by Solomon) and 24 December 2003 when Practical Completion was actually granted. The claim for liquidated damages was 217 days at $750.00 per day being a total of $162,750.00. vii. The plaintiff disputes the adjusted date for Practical Completion but agrees that Practical Completion was actually granted on 24 December 2003. viii. In addition, the defendants allege that the plaintiff carried out work otherwise than in a proper and workmanlike manner and in breach of the warranties implied into the contract by virtue of s.18B of the Home Building Act 1989 . It is alleged that the cost of rectification is in the order of $475,000.00. The plaintiff denies both the defective work and the cost of rectification. ix. The plaintiff's defence is based on three propositions: a) the work is not defective as alleged. Both properties have been inspected by Mr Peter Finnane and he has provided expert reports in respect of each property which reveal that the defective work is not capable of ready detection or is minor and easily capable of rectification and the kind of work which would normally be finished in a defects liability period b) the plaintiff should have been given the opportunity to rectify the items which required attention. He requested access for the purpose of rectification and it was denied. As a result, even if work is found to have been defective, the appropriate measure of damages should be the cost to the plaintiff of rectifying the work rather than the cost of a third party Builder c) any defective work would, in terms of quantum, be comfortably set off against the plaintiff's claim x. The plaintiff's claim opened with three main items, being the claim for $41,771.00 for changes to the window schedule; the rectification of the timber cladding of the houses being a claim for $204,082.45; a claim for 195 days of delay in respect of the Woodfast Joinery subcontract, being a claim for $338,500.00. The reasons treat with the ultimate manner in which these claims were put. xi. The parties have engaged experts who have met in conclave in an attempt to quantify the alleged variation works and the delay claim as well as the defendants' claim for defective work and their reports have been filed and served. The defendants' cases 18 The defendants contend as follows: i. The Builder failed to complete the works in the time required by the contract. The original date for practical completion was 11 September 2002. The Builder did not reach practical completion until 24 December 2003. Even allowing for entitlements to extensions of time the Builder should have completed the works by 17 February 2003. ii. The owners have filed a cross summons in which they claim liquidated damages for the 217 days that the Builder was late in completing the works. iii. Following the date of practical completion the Builder was required to rectify defects notified to him during the defects liability period. He failed or refused to carry out that rectification work and those defects remain. The owners have also claimed the cost of that rectification work. iv. More than two years after leaving the site, the Builder sent a series of letters dated 16 May 2005 that raised a number of variation claims as well as claims for delay costs. The owners did not receive the letters until 20 June 2005. v. The contract includes provisions for the submission, assessment and payment of variations. It also includes provisions dealing with claims for extensions of time and delay costs. None of those provisions were complied with when the claims that are the subject of the proceedings were made. The claims are out of time pursuant to the contract by more the two years. vi. During the course of the works the owners (through Mr Solomon) and the Builder met to resolve all outstanding variation claims. That meeting took place on 20 June 2003. vii. During that meeting all positive variations (ie, additions to the works) were agreed by the owners and the Builder. Mr Solomon wrote to the Builder to confirm the agreements. The Builder did not respond to the letter confirming the agreements reached at the meeting. viii. The only variations not agreed were some negative variations, that is, variations involving a deletion of part of the contract work. There were only very few of those. ix. During the course of the works the Builder made claims for extensions of time. The owners in their capacity as the Architect assessed all claims that were made. All of the claims relating to delay that are made in these proceedings were first made in mid 2005 about two and a half years after the works reached practical completion. The Builder's delay claims relate to the variations claim. x. Despite the agreement on 20 June 2003 and the terms of the contract relating to the entitlement to recover for variations and delay, the Builder's current claim is for variations and delays not previously notified and never before made pursuant to the contract. xi. The owners, in their capacity as the Architect, assessed the claims and rejected them. They rejected them both on the basis that they had not been made in accordance with the contract as well as on the respective merits of each of the claims. xii. The Builder asserts both a contractual entitlement to the amounts for variations and delays as well as damages for breach of the Architect's obligation to act fairly and reasonably in administering the contract. xiii. The owners' submission is as follows : a) The Builder has no entitlement to claim other than pursuant to the contract. The contract provides a regime for the claim and payment of variations and other costs such as for delay. The Builder has not complied with the requirements of the contract entitling him to recover any amount for the items claimed. b) Even if the Builder had complied with the contract entitling him to make a claim, each of the claims made has no merit and the Architect was correct to reject them. c) Having correctly rejected the claims the Architect did not fail to administer the contract fairly and reasonably. The defendants' claim against Timbeck Pty Ltd 19 The owners also move on a cross summons against Timbeck Pty Limited. 20 Their contentions in this regard are as follows i. The Architectural Specification called up weatherboard external cladding available from a particular supplier; Australian Architectural Hardwoods . During the works the Builder asked the owners to allow him to source the weatherboards from a different supplier; Timbeck . ii. The owners allege that they agreed to that change in reliance on certain representations made by Timbeck in its brochure. After the weatherboards were fixed to the frame there was considerable leaking through the external walls. iii. The owners contended that the leaking occurred because the Timbeck weatherboards were not suitable as external cladding, contrary to its representations. iv. Due to their unsuitability the Timbeck weatherboards had to be removed and replaced with weatherboards from another supplier. Those weatherboards have not leaked. v. The owners claim their loss suffered in reliance on the representations. That loss includes the cost of the supply and installation of the original Timbeck weatherboards and any liability the owners may have to the Builder for any delay or additional work. 21 The defendants contend that the Builder is responsible but in the alternative bring Trade Practices claims against Timbeck, with respect to their alleged reliance on the suppliers representations in a brochure as to suitability of the weatherboards 22 At this stage in these reasons it is appropriate to identify one or two in limini issues which include certain questions of principle. Can the Court alter the adjusted date for practical completion? 23 The first question for determination is whether further adjustment can be made to the adjusted date given by the defendant. 24 The difficulties when analysing entitlement to extensions of time (EOTs) (and damages said to flow from delays) where there are overlapping causes are conceptually challenging but this cannot deter the Court from addressing concurrent or sequential causes of delay: Tobin, 'Concurrent and Sequential causes of Delay' (2008) 24 Building and Construction Law Journal 10. 25 Rolfe J considered the legal and evidentiary burdens of delay in Turner Corp Ltd v Coordinated Industries Pty Ltd (1995) 11 BCL 202. His Honour concluded a number of propositions at page 221: i. where the contract provides an extension of time clause, which can accommodate delay caused by the principal and provides a contractual regime or mechanism whereby the delay is to be calculated, the fact the principal may have caused delay has the effect that an allowance should be made in accordance with the contract. It does not have the effect that the contractual provisions are thereby overlooked or put aside or that time is put "at large". ii. In any event the principal's actions must cause "actual" as opposed to potential delay in the sense that the completion of the work is delayed by the actions of the principal. It is not to the point to say that there could have been a delay. It is necessary to establish that delay was caused. iii. In any event one must determine, as a matter of fact, what the overall effect of the action of the principal was……[The] delay must be judged in all the circumstances of the case. Certainly it may allow some relief to the contractor, but to suggest that it eradicates all delay caused by the contractor prior thereto, or even subsequent thereto if not causally related to the activities of the principal, would be to set up a legal principle far exceeding the one that a party cannot rely upon its own default. 26 The plaintiff contends and I accept that the Court may and should adjust the completion date of this contract. Contract clause 9.2.2 provides that 'Should progress of the Works be delayed due to causes beyond the control of the Builder, then the Builder shall be entitled to a reasonable extension of time for Practical Completion'. Contract clause 9.2.3 governs the Architect's role regarding extensions of time: The Architect shall determine whether an extension of time for Practical Completion shall be granted and the extent thereof and shall so notify the Builder in writing within 10 days of recept of the Builder's notice under subclause 9.2.1 or where applicable subclause 9.2.1.2 … 27 In assessing a request for extension of time, it is implicit that the Architect must act impartially and fairly. The weight of authority dictates that it must be so: Perini Corporation v Commonwealth [1969] 2 NSWR 530; Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd (2002) 18 BCL 322; Sutcliffe v Thackrah [1974] AC 727; Keating on Building Contracts (6th ed) at 330. 28 The proper interpretation of the above provisions is that the Court must first determine whether the progress of the works was delayed due to causes beyond the control of the Builder. If it was, the Builder was entitled to a reasonable extension of time (Contract clause 9.2.2). The Court must determine whether the Architect granted a reasonable extension of time. If the Architect did not, the Court may retrospectively grant a reasonable extension of time under the contract. Examining the principles where the Architects are simultaneously the proprietors 29 The principles would appear to include the following: i. Architects have an obligation to act honestly and impartially notwithstanding their relationship with the principal. There are numerous authorities to this effect : [cf Brookings on Building Contracts 4 th (2004) LexisNexis Butterworths at [9.12] (hereinafter ' Brookings' ). ii. In truth this is only one application of the general doctrine expressed in Aleyn v Belchier (1758) 28 ER 634 at 637 by Lord Northington : " No point is better established than that, a person having a power, must execute it bona fide for the end designed otherwise it is corrupt and void'. [Cited with approval by Williams ACJ, Fullagar J and Kitto J in Ngurli & Ors v McCann (1953) 90 CLR 425 at 440] iii. In Minster Trust Ltd v Traps Tractors Ltd, (1954) 3 All ER 136 at p 973, Devlin J observed as follows: "There is no general rule of law prohibiting the influencing of certifiers. Apart from fraud, a duty not to influence can only be imposed by an implication arising from the contract. Such an implication must, in accordance with settled principles, be both reasonable and necessary, and the contract must be examined to see what it yields in this respect." At (1954) 3 All ER at p 145 his Lordship observed: "If two parties agree to appoint an arbitrator between them, it would be, I think, implied in the contract in order to give it business efficacy that neither side would seek to interfere with his independence. If a party to a contract is permitted to appoint his agent to act as arbitrator in respect of certain matters under the contract, a similar term must be implied. iv. Keating on Construction Contracts , eighth edition [Sweet & Maxwell 2006] at 13-012 observes as follows : "The Architect is engaged by the employer to act as his agent for the purpose of securing the completion of the works in an economical and efficient manner… But in performing them he most act fairly and professionally in applying the terms of the construction contract. An Architect acting under the ordinary construction contract is the employer's agent throughout notwithstanding that in the administration of the contract he has to act in a fair and professional manner . The Architect is required to act independently and honestly. The duty sometimes described as a duty to act 'impartially' does not overlay independence and honesty so as to encompass natural justice. The duty is one to act 'fairly', so long as what is regarded as fair is flexible and tempered to the particular facts and occasion. These obligations extend to such of the Architects duties as require him to use his professional skill and judgment in forming an opinion or making a decision where he is holding the balance between his client and the contractor. Typical of such duties are those requiring him to issue certificates or to grant extensions of time. An Architect is not however, ordinarily obliged to exercise a power to order a variation where it is fair to do so. [cf Keating on Construction Contracts at page 415, footnote 53: Sutcliffe v Thackrah [1974] AC 727, HL; cf Arenson v Arenson [1977] AC 405, HL; LBC Merton v Leach (1985) 32 BLR 51 at 77 and following; Pacific Associates v Baxter [1990] 1 QB 993, CA; cf Canterbury Pipe Lines Ltd v Christchurch Drainage Board (1979) 16 BLR 86 (New Zealand CA). See also, Lubenham v South Pembrokeshire DC (1986) 33 BLR 39 at 52, CA reciting submissions by counsel with apparent approval. See also "Professional independence" at paragraph(s) 5-040 and the observations of Lord Hoffmann in Beaufort Developments (NI) Ltd v Gilbert-Ash (NI) Ltd [1999] 1 AC 266 at 276, HL] v. An extreme example of an Architect failing to understand the obligation of independence is to be found in Hickman & Co v Roberts [1913] AC 229 where the Architect wrote to the Builder :' 'Had you not better call and see my clients, because in the face of their instructions to me I cannot issue a certificate, whatever my own private opinion in the matter'. The House of Lords had no difficulty in concluding that the adjudication of the Architect was not binding upon the contract, the Architect having failed altogether to preserve that attitude of independence which was required of him in the discharge of his duties as certifier. vi. In the absence of an express term, a similar obligation may be implied. [cf Perini Corporation v Cth [1969] 2 NSWR 530, but see Lubhman Fidelities and Investments v South Pembrook Shire District Council (1986) 33 BLR 39 at 58. Non-observation of this obligation: 'may in certain circumstances relieve the Builder from the contractual pre-condition that there is an Architect's certificate before an entitlement to payment arises': John Holland Construction and Engineering Pty Ltd v Majorca Projects Pty Ltd (1996) 13 BCL 235 at 245 citing with approval Dixon v South Australian Railways Commissioner (1923) 34 CLR 71.] vii. Approximately 40 years ago MacFarlan J in examining cases which concerned an engineer employed by a Public Works body, observed as follows [in Perini v Commonwealth [1969] 2 NSWR 530 at 536] : [such a person is an employee of public works body but in addition] 'becomes vested with duties which oblige him to act fairly and justly and with skill to both parties to the [construction] contract. The essence of such a relationship in my opinion is that the parties by the contract have agreed that this officer shall hold these dual functions and they have agreed to accept his opinion or certificate on the matters which he is required to decide'. The contract in Perini contained a clause as to delays and extensions of time. The clause was in substance similar to the contract in question in Mr De Grazia's case. Under the clause the Contractor could apply within a specified time for an extension of time due to delays. A sub-clause provided: "The Director of Works shall, if he thinks the cause sufficient, but not otherwise, by writing extend the time for completion of the works for such period as he shall think adequate …' At 238 MacFarlan J held that Director had a discretion about whether or not to grant extensions of time if an event had caused delay, and '[t]he kind of interest which must govern the exercise of the Director's discretion is the interest of each party [ie both parties] as it appears from all the provisions of the agreement'. Returning to the instant proceedings 30 The Architect's self-interest by reason of their bifurcated position has been strongly urged upon the Court by the plaintiff as an important consideration to be closely kept in mind. The plaintiff's contention is that a close examination of the Architect's conduct through the whole of the building project makes clear that the requisite independence which was required of him was very often absent. 31 Certainly in the present proceedings the Court is justified in the closest analysis of whether or not this claim by the plaintiff is made good by the evidence. The simple fact is that obligation of the Architect to act impartially must be very carefully monitored. The question for the Court is as to whether or not the obligation to act impartially was in fact breached or whether, notwithstanding their bifurcated position, the Architects have not been shown to have breached their duty of impartiality. The matter inheres in the detailed evidence and in the assessment of the credit of the principal witnesses. 32 For the reasons exposed below, the essential finding is that on a number of occasions Mr Solomon indeed breached the relevant contractual duties as to his role, whether it be conscious or unconscious. Examining the contract in focus in the present proceedings as regards the Architect's role 33 The contract does not include an express provision prescribing how the Architect is to act. However, it is clearly consistent with the contract as a whole to imply such a term: cf Brookings at p 135, footnote 69. 34 The following terms are all consistent with the Architect having a duty to act in an impartial manner: i. Under Contract clause 5.2.1 the Architect is authorised to issue instructions to the Builder where this Agreement so requires or provides; ii. Under Contract clause 5.1 the proprietor [in this case effectively the Architect] is excluded from giving instructions to the Builder or acting contrary to any Architect's instruction; iii. Under Contract clause 5.2.3 the Architect is authorised to act as the assessor, valuer or certifier where this Agreement so requires or provides; iv. Under Contract clause 6.8 the Architect may notify defects etc to the Builder after the date of Practical completion, and the Builder is to make good such defects at the Builder's own cost, unless the Architect instructs otherwise; v. Under Contract clause 9.1 the Architect is to judge when the stage of practical completion is met; vi. Under Specification clause 1.23 the Architect is to take notes at site meetings; vii. Under Contract clause 9.2.3 the Architect is to determine whether an extension of time for Practical Completion shall be granted and the extent thereof; viii. Under Contract clause 10.9 where the time for Practical completion has been extended on grounds of delay caused by one or more of specified reasons, the Architect, upon receipt of a notification of loss or expense incurred by the Builder as a result of such delay, is to make an addition to the Contract Sum as the Architect considers reasonable; ix. Under Contract clause 10.6 the Architect is to value any variation on a on a fair and reasonable basis having regard to specified matters; xi. Under Contract clauses 11.2, and 11.3, the Architect has the role of assessing the Builder's final claim and issuing a Final Certificate. Under Contract clause 11.5 the amount included in the Final Certificate becomes a debt due and payable by the relevant party to the other within 15 days. Relevant provisions of the contract documents 35 Without being exhaustive the following represents an analysis of a number of the provisions of the contractual documents required to be closely kept in mind: a) In what follows it is to be noted that t he documents listed in Appendix Item B4 constitute 'The entire, final and concluded agreement between the Proprietor and the Builder relating to the execution of the works …': Lump Sum Contract clause 1.2.4. These documents are: the Lump Sum Contract ('the Contract)', the Specification document ('the Specification') and several other specified drawings and documents. Under Contract clause 2.3, in the event of any ambiguity, discrepancy or inconsistency between the contract documents, the order of precedence set out in Item D of the Appendix to the Contract applies: the Contract is given the highest precedence, followed by the Specification and then the drawings. b) The following summary lists of provisions of the Contract and the Specification of especial relevance to the present litigation: Provisions concerning the parties' roles Contract clause 5.2 Architect's Authority The Proprietor and the Builder expressly agree that the Architect is hereby authorised: 5.2.1 to issue instructions to the Builder where this Agreement so requires or provides; … 5.2.3 to act as the assessor, valuer or certifier where this Agreement so requires or provides. Contract clause 5.3 Architect's Instructions Any instruction which may be given by the Architect shall be in writing, and signed by the Architect, and shall be within the general scope of the Works as contemplated by this Agreement… Except where this Agreement otherwise provides, the Architect may give an instruction orally but shall promptly confirm it in writing. If the Builder in writing requests the Architect to confirm an oral instruction, the Builder shall not be bound to comply with the instruction until the Architect does so. Contract clause 5.4 Compliance with instructions The Builder shall comply promptly with all Architect's instructions. Should any written instruction require the Builder to notify the Architect in writing before executing the instruction, if compliance with that instruction will adjust either the Date for Practical Completion or the Contract Sum, the Builder shall promptly comply with this requirement. Contract clause 6.1 Construction Methods The Builder is and shall remain responsible for all construction means, methods, techniques, sequences and procedures employed and to be employed by him in and about the execution of the Works and for co-ordinating all portions of and the execution of all portions of the Works and the Architect shall not be entitled to issue any instructions as to these matters. Contract clause 6.6 Materials and Workmanship All materials and standards of workmanship shall be in conformity with this Agreement provided that: 6.6.1 In circumstances where material or workmanship so described or shown is not reasonably procurable the Builder shall seek the Architect's instructions… Specification 1.23 Site meetings Throughout the course of the Contract, site meetings shall generally occur on a once per week basis. At all times the Builder shall attend. Additional meetings may be called by the Architect or Builder should the situation warrant. The Architect shall take notes at all these meetings and distribute to Builder and Proprietor within 3 working days after each meeting… Provisions governing variations Under Contract clause 1.2.12 "Variations" is defined as any of the following: Increases or decreases in or omissions form the Works. Changes in the character of quality of any material or work. Changes in the levels, lines, positions or dimensions of any part of the Works. Execution of additional work. New fees or charges, increases or decreases in fees or charges referred to in clause 6.3 which occur two weeks prior to the closing date for tenders. Contract clause 6.7 Variations Subject to any other provisions of this Agreement, the Architect may instruct the Builder to carry out variations. Notwithstanding any other provisions of this Agreement, the Builder shall not be obliged to execute any Variation (except a variation arising from the provisions of clauses 3.2 or 6.3) if within 5 days of receiving the Architect's Instruction to do so the Builder shall make to the Architect written objection provided always that such objection is not made unreasonably or vexatiously. Contract clause 10.6 Valuation of Variations Unless otherwise agreed, any Variation (including a Variation to the work of a sub-contractor or supplier identified under clause 4.2) shall be valued by the Architect on a fair and reasonable basis having regard to the rates and prices (if any) shown in Items M1 and M2 of the Appendix but varied so far as reasonably necessary in respect of relevant alterations of award rates and conditions since the date of this Agreement. 10.6.1 Where the Variation results in an addition to the Contract Sum, the cost therefore, together with the percentage stated in Item N of the Appendix shall be added to the Contract Sum …. 10.6.3 Any delay costs and expenses arising from the Variation shall be added to the Contract Sum. Specification clause 1.25 Contract Variations … Should the Builder consider that a variation warrants an adjustment to the Contract Sum or an extension of time then this shall be put in writing prior to commencement of such work. Written approval from the Architect must be received prior to the execution of variation work. Refer also Clause 1.27 & 1.29. Counting of days under the Contract Contract clause 9.3 provides: Where under the provisions of this Contract any notice is to be given or any other matter or things is to be done in a stated period of days, the following days shall not be counted, namely: Saturdays, Sundays, Statutory or Public Holidays and Rostered Days Off, and except for the purposes of Sections 9, 10 and 11 of this Agreement those days state in Item H of the Appendix. ' Provisions relevant to the issue of delay Contract clause 1.3 Builder's Obligations The Builder shall: … 1.3.3 bring the Works to Practical Completion by the Date for Practical Completion. Under Contract clause 1.2.9 Practical completion is defined as 'The stage of being substantially complete and fit for use and/or occupation by the Proprietor'. Specification 1.19 further provides: 'Practical Completion shall mean that state in the execution of the work under the Contract when such documents and other information required under the Contract which, in the opinion of the Architect, are essential for the use, operation and maintenance of the Works have been supplied, and the Works are substantially compete except for minor items' … Contract clause 9.1 Practical Completion The Architect shall decide the date when in the Architect's opinion the Works have reached a stage of Practical Completion and shall thereupon notify in writing the Proprietor and the Builder accordingly … Specification clause 1.22 Construction Program Within the first two weeks of the Contract, the Builder shall provide a construction program showing the dates by which or the times within which the various states or parts of the work under the Contract are to be executed, and shall adhere to that program unless a deviation is approved by the Architect. The program shall be updated monthly. Specification clause 1.26 Extension of time Requests for extension of time to the contract period must be submitted in writing to the Architect for consideration . The Architect must respond in writing within 5 working days to an extension of time request. Delay in activities which are not critical to the construction program shall not justify extension of the time for Practical Completion of the Works. Contract clause 9.2 Delays 9.2.1 Delay shall be notified by the Builder as follows: 1. Upon it becoming evident to the Builder that progress of the Works is likely to be delayed, the Builder shall notify the Architect stating the nature, cause and if known the extent of the delay; 2. if the Builder's notice given under 9.2.1.1 does not state the extent of the delay then the Builder, as soon as practicable after becoming aware of the extent of the delay, shall notify the Architect of the extent. 9.2.2 Should progress of the Works be delayed due to causes beyond the control of the Builder, then the Builder shall be entitled to a reasonable extension of time for Practical Completion. 9.2.3 The Architect shall determine whether an extension of time for Practical Completion shall be granted and the extent thereof and shall so notify the Builder in writing within 10 days of recept of the Builder's notice under subclause 9.2.1 or where applicable subclause 9.2.1.2 … 9.2.5 Notwithstanding the provisions of this clause the Architect may at any time, by notice in writing to the Builder during the currency of this Agreement, extend the time for Practical Completion if in the Architect's opinion the Builder is entitled to such an extension Contract clause 10.9 Costs of delays Where the time for Practical Completion has been extended on the grounds of delay caused by one or more of the following reasons: 10.9.1 by reason of Architect's Instructions, other than under clause 6.6 with respect to standard of materials or workmanship; 10.9.2 delay by the Architect in giving necessary instructions requested by the Builder in writing;… then the Builder within a reasonable time of such delay may notify the Architect of any loss or expense incurred or borne by the Builder as a result of such delay and the Architect thereupon shall make such addition to the Contract Sum as the Architect considers reasonable . Contract Clause 10.10 Liquidated and ascertained damages If the Builder shall fail to bring the Works to Practical Completion by the Date for Practical Completion then: 10.10.1 The Architect may give notice in writing to the Builder and the Proprietor not late than 20 days after the date of Practical Completion that in the Architect's opinion the Works ought reasonably to have been brought to Practical Completion on some earlier date stated in that notice not being earlier that the Date for Practical Completion. 10.10.2 If such notice is given the Architect using the rate stated in Item P of the Appendix shall calculate and advise the Builder and the Proprietor of the total value of the Liquidated and Ascertained Damages. The Proprietor shall then determine and advise the Builder if damages will apply, and the Builder, if so required, shall pay or allow the Proprietor the sum calculated by the Architect. The Proprietor shall have no right to damages for delay apart from that expressed in this clause. Provisions concerning sub-contracts Contract Clause 4.1 Sub-contacting The Builder may sub-contract any part or parts, but not the whole, of the Works. The Builder, by sub-contracting, shall not be relieved or any of the Builder's responsibilities under this Agreement. Under Contract clause 4.2.1 the Architect is given the opportunity to instruct the Builder to use a particular subcontractor, however the Builder is not bound to accept the instruction. Contract clause 4.2 Identification of Supply and Sub-contract Work 4.2.1 The Architect shall issue instructions in respect of any materials or goods or work which are the subject of a Provisional Sum referred to in clause 10.7 and the Builder shall make arrangements for supply or enter into sub-contracts in accordance therewith and consistent with the Builder's obligations under this Agreement, provided that should the Builder have reasonable objection to any instruction, then the Builder shall not be bound to accept the instruction but shall as soon as practicable notify the Architect of this objection and seek the Architect's further instructions. 4.2.2 The Architect shall not invite tenders pursuant to sub-clause 4.2.1 in such a way as to prevent the Builder from obtaining discount for prompt payment where this is customarily allowed. Contract clause 4.5 Bankruptcy/Default or identified suppliers or sub-contractors In the event that any supplier of materials or goods or sub-contractor carrying out works identified pursuant to clause 4.2: 4.5.1 Commits or becomes the subject of any one of the insolvency events included in clause 12.4 or; 4.5.2 defaults in such a way as would entitle the Builder to determine the supplier's or sub-contractor's employment under the supply or sub-contractor agreement; then the Builder shall notify the Architect in writing which notice shall be left at or forwarded by certified mail addressed to the address of the Architect. The Architect shall thereupon issue instructions to the Builder and all costs and expenses necessarily incurred by the Builder in complying with such instructions shall be deemed to be part of the total amount expended in respect of the Provisional Sum concerned and shall be dealt with accordingly under the provisions of clause 10.8. Provisions concerning the performance of the building work Contract clause 1.3 Builder's Obligations The Builder shall: … 1.3.2 regularly and diligently execute and complete the Works in accordance with this Agreement to the reasonable satisfaction of the Architect; and Contract clause 5.5 Employment of others on Builder's default If within a reasonable time after receipt of a written notice form the Architect requiring compliance with any Architect's Instructions the Builder does not comply therewith then: 5.5.1 The Architect may issue a second notice to the Builder requirement compliance within a reasonable time to be stated in the notice; 5.5.2 if the Builder does not comply with the second notice for the Proprietor may employ and pay others to execute any work whatsoever which may be necessary to give effect to such instructions of the Architect; and 5.5.3 except in the case of an instruction to which the Builder has made valid objection under the provisions of clause 6.7 all reasonable costs incurred in connection with the execution of such work and which the Proprietor would not have incurred but for the Builder's failure to comply with the instructions, shall be recoverable from the Builder by the Proprietor as a debt. Such costs may be deducted by the Proprietor from any moneys due or to become due to the Builder under this Agreement. Contract clause 6.8 Making good defects Any defects, excessive shrinkages and other faults due to materials or workmanship not in accordance with this Agreement, which are apparent and notified in writing by the Architect to the Builder after the Date of Practical Completion and before the end of the Defects Liability Period stated in Item E of the Appendix, shall be made good by the Builder at the Builder's own cost unless the Architect shall otherwise instruct. Should the Builder fail to comply the provisions of clause 5.5 shall apply. Provisions governing progress claims Contract clause 10.1 Progress claims At intervals as nominated in Item J of the Appendix (or less at the discretion of the Architect) the Builder may submit to the Architect claims for progress payments, including a statement of the Builder's valuation of work done. Contract clause 10.2 Progress Certificates Within 5 days of receiving a progress claim, the Architect shall issue to the Builder a Progress Certificate showing: 10.2.1 The contract value of work done as assessed by the Architect; 10.2.2 the amount of Retention (if any); 10.2.3 the total amount previously certified; 10.2.4 the amount due to the Builder, and 10.2.5 any amount which the Proprietor is entitled to deduct pursuant to clause 10.14. Contract clause 10.3 Differences between Claims and Certificates Should the amount of any Progress Certificate issued by the Architect pursuant to clause 10.2 differ from the amount claimed by the Builder under clause 10.2 the Architect shall at the time of issue of such Certificate provide to the Builder in writing particulars of that difference. Contract clause 10.4 Progress payments Within the time stated in Item K of the Appendix of receiving any Progress Certificate, the Proprietor shall pay to the Builder the amount stated on the Certificate. 10.5 Failure to Issue or Pay Progress Certificates Should the Architect fail to issue the Builder any Certificate as provided for in clause 10.2 or 10.15 or should the Proprietor fail to pay the Builder in accordance with the provisions of clause 10.4 then the Builder shall be entitled to interest at the rate stated in Item L of the Appendix compounding monthly upon all payments which should have been certified or overdue payments from the date on which such payments were or should have been due until the date of payment. Provisions concerning provisional Sums Contract clause 10.7 Provisional Sums A Provisional Sum (whether described as a Provisional Sum or Prime Cost Sum) means a sum included in the Contract Sum for: 10.7.1 Work materials or goods expressed to be executed or supplied by the Builder; or 10.7.2 the supply and fixing of materials or goods or the execution of work or the fabrication or manufacture and supply or materials or goods particular to and exclusively for Works by persons to be identified by the Architect under clause 4.2.1. 10.7.3 Fees payable under sub-clause 6.3. 10.8 Adjustment of Provisional Sums In the event of the total amount expended in respect of all Provisional Sums: 10.8.1 Exceeding the total amount therefore included in the Contract Sum the amount of the excess together with a percentage thereof as stated in Item N of the Appendix shall be added to the Contract Sum. 10.8.2 Being less than the total amount therefore included in the Contract Sum the amount of difference shall be deducted from the Contract Sum. In respect of work, materials or goods which are the subject of a Provisional Sum, the Builder shall be entitled to retain any discount for prompt payment which may be allowed. Provisions concerning dispute resolution 13.1 Notice of Dispute If any dispute or difference (a dispute) concerning this Agreement shall arise between the Proprietor or the Architect on the Proprietor's behalf and the Builder, then either party may give to the other written notice of the dispute delivered by hand, sent by certified mail or sent by facsimile transmission. 13.2 Conference Within 5 days after serving a notice of dispute, the parties shall confer to resolve the dispute or to agree on methods of doing so. At every such conference each party shall be represented by a person having the authority and power to agree to settle the dispute and, as appropriate, to agree on a method of resolving the dispute. All aspects of every such conference except for the fact of occurrence shall be privileged and without prejudice. The parties' final submissions regarding compliance with the contractual procedures 36 Following the Court having reserved its judgment the plaintiff sought to plead that the defendants were estopped from raising arguments regarding non-compliance with the relevant contractual procedures, or that it would be unconscionable to raise such arguments, against Mr De Grazia's claims. This estoppel or unconscionable conduct was said to exist because neither party performed its works under the contract in strict compliance with the contractual terms nor required the other party to so act. 37 Ms Olsson made two further arguments that are dealt with below. 38 There is an initial question of whether Ms Olsson's amendment to add the estoppel/unconscionability point should be allowed. 39 In this regard, Ms Olsson submitted that the defendants' pleadings did not specifically raise the provisions of the contract and plead a time bar to the plaintiff's claims for variations, extensions of time or delay costs: rather, the claims were denied. Therefore the plaintiff, not being on notice that a time bar only might be argued, did not put on a reply pleading estoppel. Ms Olsson further submitted that the defendants did not conduct their case as if the time bar provisions were fatal to the plaintiff's case: rather they argued the merits of the claims for variations, extensions of times and delay costs. Thirdly, Ms Olsson submitted that since the matter was argued in that way and evidence led both as to the manner in which the contract was performed and as to the correspondence and other documents relating to the various claims of the plaintiff, it was difficult to see where the prejudice to the defendants occurred. Finally, Ms Olsson contended that plaintiff did not, by virtue of the proposed amendments, seek to re-open or re-agitate any of its contentions. 40 The defendants opposed the plaintiff's proposed amendment to its pleadings. The defendants' counsel, Mr Roberts, addressed Ms Olsson's contentions in turn. Firstly, as to the time bar issue, his essential submission was that the plaintiff must have known from the outset that the defendants would rely on failure to comply with the contractual provisions with regard to instructions, variations and delays. This was said to be because the Architect had on 30 June 2005 rejected the Builder's claims on that basis. Secondly, as to the defendants conduct of the case, Mr Roberts submitted that the defendants had made it abundantly clear that the relevant contractual provisions would be relied upon, and the fact that they addressed the merits of Mr De Grazia's claims did not disentitle them from so relying. Thirdly, as to the question of prejudice, Mr Roberts submitted the defendants would be prejudiced by having to ask the Court for leave to reopen their case. It was said the defendants would need to rely on additional documentary evidence to meet the new case on estoppel, and in particular to show that they conducted themselves in a belief that they were bound by the contract's administrative provisions. Finally, Mr Roberts submitted that the fact the plaintiff did not seek to reopen his case or re-agitate any of his contentions did not avoid or reduce the need for the defendants to reopen their case, since the absence of any new evidence did not necessarily mean the defendants would not be adversely affected by the amendment. Decision as to amendment 41 In my view the defendant has not identified with the necessary precision, the sorts of prejudice which would persuade the Court not to grant the leave to amend now sought. There are cases [and this is such a case] where the manner in which the proceedings have been conducted means that a party is entitled to rely upon matters such as now put forward by the plaintiff: specifically that the defendants pleadings did not specifically raise the provisions of the contract and plead a time bar to the plaintiff's claims for variations, extensions of times or delay costs: rather, the claims were denied. Hence the plaintiff, not being on notice that a time bar only might be argued, did not put on a reply pleading estoppel. 42 There is also substance in the plaintiff's contention that the defendants did not conduct their case as if the time bar provisions were fatal to the plaintiff's case: rather they argued the merits of the claims for variations, extensions of times and delay costs. 43 I accept that since the matter was argued in that way and evidence led both as to the manner in which the contract was performed and as to the correspondence and other documents relating to the various claims of the plaintiff, it is difficult to see where the prejudice to the defendants occurs. 44 For those reasons the application for leave was allowed. The substance of the estoppel/unconscionable conduct argument 45 Ms Olsson's arguments as to the substantive aspect of the estoppel/unconscionable conduct argument have been outlined above. 46 In addition to his submission against allowing the amendment, outlined above, Mr Roberts made various submissions during final argument relevant to this issue. 47 Mr Roberts in final submissions outlined in detail the contractual provisions governing variations and extensions of time. He submitted that the contractual requirements existed for the beneficial purpose of ensuring certainty for both parties in their dealings. Mr Roberts submitted that it was necessary to examine the contractual requirements because the plaintiff's claim was pleaded as the Architect having breached his duties in administering the contract. 48 The final version of the plaintiff's pleading makes clear that the claim is framed as a breach of the Architect's contract administration duties, for which the proprietors are said to be liable. Specifically, it alleges the plaintiff carried out variation work at the direction of the Architect, and the Architect failed to properly value this work as required by Contract clause 10.6. Furthermore, the plaintiff claims delay costs which were said to result from these variations. It was alleged that the plaintiff claimed extensions of time under Contract clause 9.2 but the Architect failed to properly assess these claims in breach of Contract clause 9.2.3. 49 Mr Roberts also submitted that Mr De Grazia's allegation that Mr Solomon verbally agreed to a range of variations and extensions of time was unlikely to be true, given both Mr Solomon's tendency to document things and the contractual requirement that these matters be in writing. 50 In reopening their case, the defendants sought to make out the proposition that the parties did regard themselves as bound by the contract terms. The defendants said this was apparent from a group of documents –which they adduced- that evidenced the parties' conduct in relation to various contractual procedures, including extensions of time and variations. Decision as to the substance of the estoppel/unconscionable conduct argument 51 Ultimately, Ms Olsson's submission is accepted for the following reasons: i. The defendants' contention that Mr De Grazia must lose the case for the simple reason that he uniformly failed to give the contractual notices requisite where complaints were in order whilst from time to time having substance, in the main failed to fairly describe and pay justice to the actual positions adopted at the time by Mr De Grazia and by Mr Solomon. ii. It is true that the additional documentary evidence adduced by the defendants demonstrates that in a substantial number of instances the parties appear to have regarded themselves as bound by the contractual procedures. However, in significant other instances – outlined below in these reasons – the parties did not act in compliance with the relevant contractual procedures. Some of the parties' contractual breaches concerned key areas of their relationship and some were of an ongoing nature. Such breaches support the alternative argument, that the parties did not regard themselves as strictly bound by the relevant contractual terms. iii. A prime example of the parties' disregard for the contractual procedures was that although at trial the defendants drew on the Builder's failure to ever produce an adequate construction schedule, the documentary evidence supported Ms Olsson's contention that for most of 2002 Mr Solomon had not taken issue with this failure. In this regard, although Mr Roberts was able to point to a request for a construction schedule dated 11 December 2001 - at the outset of the project- the next request for an updated construction schedule was dated 28 November 2002. iv. Furthermore, Ms Olsson was able to point to two areas of real importance –outlined in these reasons- where Mr Solomon had breached his contractual obligations. The present is an example of a full-blown building case where the Builder and the Architect for a myriad of reasons, some small and some large, breached their contractual obligations. v. Essentially, the many volumes of evidence require the Court to stand back and reach overall decisions on the substance of the plaintiff's claims, based squarely on the evidence. The principle in Liebe v Molloy 52 In addition to the estoppel argument, Ms Olsson submitted that the plaintiff's variations ought to be considered because the principle in Liebe v Molloy (1906) 4 CLR 347 had been complied with. 53 The Liebe decision was usefully summarised by Priestley JA, Samuels JA agreeing, in Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 at 271-272: The facts in Liebe were that a Builder contracted to erect buildings for over $30,000. The contract provided that no works beyond those included in the contract should be allowed or paid for without an order in writing signed by both the Architect and the proprietor. The Builder claimed payment for certain works said by him to be extras. There had been no order in writing for these works as required by the contract. They had been ordered by the Architect, either in writing signed by him alone, or orally. The owner had known that they were being done. The High Court (Griffith CJ, Barton and Higgins JJ) in reasons delivered by Griffith CJ said (at 354), that if the proper inferences from the facts were (i) that the employer had actual knowledge of the extra works as they were being done, (ii) knew that they were outside the contract and (iii) knew that the Builder expected to be paid for them as extras then a contract to pay for them could properly be implied. If however the fact was that the owner did not know the particular works were extras or did not know or believe that the Builder expected to be paid for them, then it would be proper to conclude that no contract to pay for them should be implied … In Liebe , because the arbitrator had made no finding of fact beyond the owner's knowledge of the works as they were done, the matter was remitted to him to make the further findings of fact necessary before the question of liability could be determined. 54 In Update, Liebe was distinguished on the basis that the extra work in question in Update was not 'outside the contract' in the Liebe sense of being done solely because of a request by the proprietor's Architect and being clearly additional to what was required in order to complete the contract work for the contract price: (1990) 20 NSWLR 251 at 274G, 277D. 55 The principle is further discussed in Brookings at [10.8]. In the present case, the principle in Liebe, as interpreted in Update, also plays a part in supporting Mr De Grazia's claims for purported variations. 56 Ms Olsson's third submission in this area of the case was that the variations pressed by Mr De Grazia, excluding the cladding, were notified while the contract was still on foot. The way forward 57 It seems appropriate to commence with an examination of the credit of the witnesses called. Mr De Grazia 58 Generally I was impressed with the evidence given by Mr De Grazia. By reason of the consensual decision of the parties to have the evidence in chief of the major witnesses dealt with viva voce, it was necessary for him to slowly and carefully travel through the principal events. He accomplished that exercise well and where he was unable to recall a particular event or was unsure of himself, he made that clear. His recollections were close enough to the very extensive site meeting notes and to the correspondence which had passed between the parties as to be impressive. He was in the witness box for a very considerable time and the cross-examination was careful and pointed. As one may expect, the cross examiner from time to time was able to establish that a recollection of Mr De Grazia did not accord with a particular document or was inconsistent with some other testimony. But given the number of areas over which Mr De Grazia was cross-examined and making allowances for the odd occasion when by reason of his accent he found difficult to make himself understood, I would provide him as a witness of credit. 59 Later in these reasons the Court deals with the substantial attack on his credit concerning a particular letter said by Mr Solomon to have been fabricated after the event. Mr Solomon 60 Likewise I was impressed with the evidence given by Mr Solomon. He too had to give his evidence in chief viva voce and also in that regard gave clear evidence exhibiting a huge command of detail assisted by his copious site minute notes and correspondence. There were however a number of areas where it seemed to me that his protestations of having been impartial in his role as administering the contract could not be accepted. It is obviously very difficult for an Architect at one and the same time to give impartial evidence of the events which happened when he himself is under cross-examination endeavouring to justify his conduct. 61 One of the very curious circumstances with which the Court has to deal concerns the extremely untidy way in which Mr Solomon purported to put before the Court an album containing huge slabs of photographs of the site, said to have been contemporaneous. It was only in the course of his cross examination that what emerged was that certain categories of those photographs could not be relied upon at all for the simple reason that it was very difficult to be certain as to the date upon which the photographs had been taken. These were not photographs which, as I understood it, had been discovered by the defendants. I regard the whole debacle concerning the photographs [which were often shown to Mr De Grazia during his cross-examination on the basis that he was asked to assume that the photographs were taken on the dates identified in the photographs] as indicative of a sloppy approach to a major Court case where photographic evidence would play such a commanding role. The attempts by Mr Solomon to explain how some segments of the photographs could be relied upon whereas other segments of the photographs could not be relied upon, simply suggested to me that Mr Solomon, notwithstanding his apparent huge command of the detail, had in truth had himself a number of doubts about certain events and times. That he had not until his cross examination said a word about the inability of the Court to rely upon certain categories of the extensive photographs itself does not speak well in terms of his credit, particularly in a situation where he occupied the position as carrying out the day to day contract administration and was purporting to put forward photographs to prove the state of the site and of the building works as captured on camera on particular occasions. 62 His explanation as to the different categories of photographs may be shortly summarised as follows: i. Firstly, there was a category of digital photos taken from the commencement of the project until about January 2003 which had a date on the JPEG file of the photo. Accordingly, it was possible to know the exact time and date that these photos were taken. ii. Secondly, there was a category of digital photos taken after January 2003 when the date function on the camera had been turned off. In attributing a date to these photographs, Mr Solomon had accepted that the relevant date was the date on which they had been uploaded onto his computer (this information was available) T:835.10. However, Mr Solomon accepted under cross-examination that the dates attributed to the photographs in this category could not be relied upon as accurate and in some cases could be wrong by approximately one month T:836.23-44. This was related to Mr Solomon's concession that he had uploaded some photographs twice, which had the result that the same photograph was given two dates T:835.3-8. iii. Thirdly, there was a category of film photographs where Mr Solomon had approximated the date on which the photographs were taken. He testified that he had used various methods to accurately approximate the relevant dates, although there could be a window of one week either side of the dates attributed. However, under cross-examination Mr Solomon accepted in relation to some particular film photographs highlighted by Ms Olsson that the same photographs had been given two dates, approximately one month apart. 63 As the reasons which follow make clear two particular examples, neither of which reflect well on him, may be cited. 64 Mr Solomon of course had a vested interest in the adjusted date being as early as possible because he had a liquidated damages clause accruing at $750 per working day. 65 Firstly, having extended the date for Practical Completion to 17 February 2003, Mr Solomon continued to process the Builder's progress claims but purported to deduct from the sum owing to the Builder an amount for liquidated damages (said to be accruing at $750 per working day from the adjusted date for completion). The only contractual provision dealing with the entitlement to claim liquidated damages is clause 10.10 and it permits the assessment and claim of liquidated damages only after Practical Completion [for obvious reasons]. 66 When the Builder (quite rightly) challenged Mr Solomon's right to make a deduction from a progress certificate for liquidated damages, Mr Solomon agreed not to deduct it in order to "assist the Builder's cash flow" but continued to include a running calculation of the amount owed in later progress certificates. Not only was he not entitled to make the deduction prior to Practical Completion but his conduct supports the inference which is drawn, that he was including the running total in order to intimidate the Builder. 67 The second example of Mr Solomon's conduct can be seen from his blatant interference in the Builder's contractual right to perform his own sequencing of the works and negotiate the terms on which subcontractors were engaged. Mr Solomon was not entitled to dictate to the Builder when and at what stage he installed the windows and doors. Clause 6.1 provides that: The Builder is and shall remain responsible for all construction means, methods, techniques, sequences and procedures employed and to be employed by him in and about the execution of the Works and for co-ordinating all portions of and the execution of all portions of the Works and the Architect shall not be entitled to issue any instructions as to these matters. 68 However, the Architect issued instructions as to when the windows should be installed and this constituted a breach of Contract clause 6.1. This follows from the conclusion reached in these reasons that the Architect's specification as to the window construction method was inconsistent with the Builder's contractual power to decide construction methods. Furthermore, although the Architect was contractually entitled to nominate subcontractors for provisional sum items, the Architect was not entitled to dictate the terms on which such subcontractors were engaged. Nevertheless, this is what occurred with regard to the subcontractors engaged for the supply and installation of the fireplace stone and joinery. The point is further explained in relation to joinery and the fireplace stone in these reasons. The meeting of 20 June 2003 69 It was common ground between Mr De Grazia and Mr Solomon that a meeting took place between them on 20 June 2003 in Mr Solomon's offices in Surrey Hills. The evidence given by Mr Solomon 70 Mr Solomon's evidence was that he said to Mr De Grazia that the reason for the meeting was to thrash out the unresolved variation claims made up to the date of that meeting if this was possible to agree upon. His evidence was that Mr De Grazia said that he fully understood that that was the reason why they were together and that he had wanted to sort out these matters and did not wish to wait until the end of the project to have an argument over variations. 71 Mr Solomon's notes taken at the meeting were in evidence. His evidence was that they did not reach agreement on any contract variation deductions during the meeting. His evidence was that they had reached agreement on every contract variation addition except for one item –item 6D in Contract adjustment 2, which related to the change to Western Red Cedar weatherboards - which Solomon regarded as a deduction and Mr De Grazia regarded as an addition [T:659-660]. 72 Mr Solomon's evidence was that at the end of the meeting he had made the following statement to Mr De Grazia: "Danny this has been a very long meeting but from my point of view it's been productive. We have agreed on all your variation claims up to the date of this meeting except for one item, every single one you've submitted. I take it there are no more claims that will be arising out of any events from the commencement of the project up until this date. They are all done, they are all settled. Is that your understanding?" 73 Mr Solomon's evidence [ T:664] was that Mr De Grazia had said: "Yes that's my understanding, I am perfectly clear about this. We have settled all my variation claims after the date of this meeting." 74 In the result Mr Solomon's evidence, if accepted, was that two major issues concerning cladding-the initial change from Jarrah to WRC timber and the rectification of the faulty cladding-were specifically exempted from being concluded at the June 2003 meeting [T:819.42-820.25] 75 Mr Solomon's further evidence was that after the meeting he began to compose a letter to confirm the agreement which they had just made at the meeting and that at about the same time he also received a progress claim [a few days later] namely progress claim 7. The letter which he composed was in the following terms: Further two-hour meeting in our office on 20/6/03 week confirm your advice that no more cost variation claims will be forthcoming from you. The above advice covers all work to date and is obviously conditional upon us not instructing you to vary the works at a future date. We also confirmed that all cost variation claims (except change from Jarrah to WRC timber) have been resolved and we confirm that the various costs deductions are still to be resolved [cf NS/3 at page 136] 76 Additionally the Architects' then solicitors had written to the plaintiff's solicitors on 1 July 2003 stating inter alia as follows: Variations - We are instructed by our client that all variations have now been settled between the parties except in regard to the change from Jarrah to WRC timber. This is reflected in certificate of payment number seven dated 27 June 2003. (copy attached for your information) 77 The letter which he composed confirmed exactly with what had happened in the meeting of 20 June but says "This letter confirms what has happened and it covers all variations, every single one from the commencement of the project to date, and all those items bar 1 are of course settled. The letter also said that this was obviously conditional upon Mr Solomon not issuing any further variation instructions from that day until completion of the project" The covering letter is in evidence [NS/3 page 136]. The evidence given by Mr De Grazia 78 Mr De Grazia, in his evidence in chief, rejected the suggestion that the June 2003 meeting finally concluded his claims for variations, meaning he would not make any further variation claims T:292.30. 79 Mr De Grazia gave evidence that he sent a response to Mr Solomon's letter of 27 June 2003 on 10 July 2003 T:292. 40-293.3. 80 In cross-examination, Mr Roberts suggested that Mr De Grazia only sent his response in 2005, and backdated it to July 2003, because he was worried that Mr Solomon's 2003 letter had resolved all variation claims. Mr De Grazia rejected this suggestion T:476.37-37. 81 Mr Solomon testified that as far as he was aware there had never been a response to the letter from his solicitor to Mr De Grazia's solicitors, dated 1 July 2003, concerning the outcome of the meeting T:673.10-674.3. 82 In cross-examination by Ms Olsson, Mr Solomon maintained that he had not seen Mr De Grazia's letter until the first day of the hearing. Ms Olsson highlighted the fact that the letter had been part of the plaintiff's list of discovered documents, and that Mr Solomon had been given access to these documents T:821.25-821.49. There was evidence that Mr Solomon personally attended at the plaintiff's solicitor's offices in order to examine the plaintiff's documents produced on discovery. His evidence was that he had not seen Mr De Grazia's letter on the occasions when he had so attended those offices. 83 Mr Solomon also rejected Mr Olsson's suggestion that Mr De Grazia had in effect said to Mr Solomon, at the time of the June 2003 meeting, that Mr De Grazia did not expect the meeting to resolve variations except for those that were discussed at the meeting. Mr Solomon was adamant in his recollection that there was a clear understanding that all variations up to the meeting date – bar those excepted- would be concluded – and no more variations would be forthcoming which predated the meeting T:822.10-822.19. 84 Mr Roberts, counsel appearing for the defendants, pressed upon the Court the proposition that the letters written by the plaintiff during the period 4 June 2003 up to 10 October 2003 all have a consistent form or appearance that is different to exhibit P 10 [which is the letter from Mr De Grazia of 10 July]. 85 The further contention is that the letters comprising exhibit D8 all have a centre justified bold subject line. The contention is that the format of exhibit P 10 has a striking similarity to the letters prepared in May 2005 and is quite distinct from those that were apparently written between June and October 2003 when exhibit P 10 was meant to have been prepared. 86 Having closely looked at the several pro forma documents being used by Mr De Grazia I remain skeptical that any of these inconsistencies may be relied upon when so serious an allegation as the present is put forward. Ms Olsson submitted and I accept that a review of the documents Mr De Grazia was using in 2003 showed that there was very little consistency in the way he set out either the letterhead or the addressee. As Ms Olsson highlighted, in the letterhead of the letter of 10 July 2003, the telephone and fax line appeared under the E in the word Services and the mobile number began under the D in the word Developments. This was the same as the letterhead on several other letters of around the same date identified by Ms Olsson. In contrast, in a fax from around the relevant time, identified by Ms Olsson, the telephone number appeared under the S in Services and the mobile number under the & before Developments. Ms Olsson was also able to identify a difference between the use of capitals for the addressee and subject matter of two letters written by Mr De Grazia in November 2003. Moreover, a brief review of the documents created by Mr De Grazia from around the relevant time shows that there were inconsistencies in the styles used other than those specifically identified by Ms Olsson. However, Ms Olsson was not able to point to an instance where Mr De Grazia had formatted the subject line in the centred style of the letter of 10 July 2003 (which was said to bear the striking similarity to the 2005 letters). 87 Ms Olsson further submitted that the content of the letter of 10 July 2003 – and in particular the grammar used – suggested that it was the same as Mr De Grazia's earlier documents and smacked of being written by him alone, without the input of anyone else (such as the claims consultant he later used). 88 Importantly it seems to me that there can be no real excuse for Mr Solomon and his team not to have immediately engaged a forensic expert to examine exhibit P10 even as the proceedings commenced. In the circumstances the Court would clearly have permitted those investigations. The defendants clearly simply eschewed such a course and having done so must live with the result. The principles: fraudulent conduct 89 There is a plethora of authority in support of the proposition that the Court is bound to see that a case of fraud is clearly proved. An allegation of fraudulent intent is one of the most serious allegations capable of being made. Actual dishonesty is said to be "the hallmark of fraud". The gravity of the allegation has been said to be such that whereas section 140(1) of the Evidence Act 1995 (NSW) stipulates a single standard of proof for all civil cases, namely the balance of probabilities, Section 140(2) preserves the doctrine in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362; Pedler v Richardson (Supreme Court of New South Wales, Young J, 16 October 1997, unreported) at 10-11. See also McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315, 319. More recently in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 the High Court has put the matter in the following terms: "The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary "where so serious a matter as fraud is to be found". Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a Court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct." 90 This leaves the Court in the position where Mr Solomon's claim that the Builder forged/concocted exhibit P 10 to further his case is rejected. The cladding issue 91 The original contract documents had specified in relation to the cladding of the building, a redgum cladding with a particular nominate size. [T:135]. The cladding was to be on the upstairs part of the house [the back stairs having originally shown as cladding and had been later deleted]. 92 An overview of the relevant facts relied upon by the Builder in asserting his claims for, amongst other claims, the cladding costs, is as follows: (a) During the course of the contract Solomon issued instructions for variations to the works; (b) Solomon was very indecisive about choosing the external timber cladding. The Builder and Solomon were in a dialogue about this issue, with no resolution, for many months between February 2002 until August 2002; (c) Solomon provided the specification for the jarrah cladding directly to the supplier on around 9 August 2002; (d) The Builder placed an order for the jarrah cladding on or about 13 August 2002 at the request of Solomon: see De Grazia's site diary entry for 13 August 2002; (e) On 1 September 2002 the Builder sought a three week extension of time caused by the delay, selection and ordering of the jarrah weatherboard; (f) The jarrah cladding arrived on the site at around 3.00pm on 13 September 2002. On 17 September 2002, the Builder formed the view that the profile of the weatherboard was not to Solomon's specification. He called "Andrew" from Australian Architectural Hardwood and was advised that Solomon had changed the specification. This was confirmed by Solomon who told De Grazia "I've authorized changes to the profile without telling you"; (g) On 18 September 2002 the Builder commenced the installations of the jarrah weatherboards and found that it was not possible to fix the weatherboards properly because: i. they varied too much in size; ii. the 4mm channel/spacing could not be maintained because of the variation in the size of the weatherboards; iii. the butt joint flashings could not be installed because the profile of the weatherboards was too complex for the flashings to fold around the shape of the weatherboard. (h) On 18 September 2002 Solomon directed the Builder to use a bronze coated nail and drill a hole in every board to insert the nail. The boards were to be painted; one coat prior to installation and one coat after. 93 The defendants were not happy with the Jarrah weatherboards. The Builder raised the possibility of using Western Red Cedar as an alternative for Jarrah. On 6 August 2002 the Builder gave the defendants (approx) 600mm long boards and a Timbeck brochure promoting various Timbeck products. Turning to the detail 94 Mr De Grazia gave evidence that at a particular point in time he had a conversation with Mr Solomon about the specifications, in particular discussing parameters of what nominal size meant. Mr Solomon insisted that nominal size was the finished size. Mr De Grazia disagreed and made enquiries of Australian Architectural Hardwoods only to learn that forest red gum was unavailable [T:139-140] 95 In a subsequent conversation between the Builder and Mr Solomon, the Builder passed on the information that red gum was not available in any size so that it was out of the question. At a site meeting Mr Solomon had asked him to consider a cost saving if the weatherboards were changed from red gum to western red cedar [T:142]. These discussions took place in approximately February or March 2002. 96 In the further discussions Mr Solomon advised Mr De Grazia that he was looking at other profiles, one of the profiles being a Tilling western red cedar. Following that discussion Mr De Grazia made enquiries of Tilling and passed on to Mr Solomon what he had learned, namely that the western red cedar was more expensive to start off with and that the profile would not have been available from Tillings. Tillings was not prepared to manufacture the profile [T:143]. 97 In any event Mr Solomon informed Mr De Grazia that he had spoken to Australian Architectural Hardwood and that they had Jarrah available which also was a similar timber [T:151]. After further discussions Mr Solomon directed him to advise on a potential cost saving if there was a change and the Builder made some enquiries about costs. The discussions dragged on and by about the end of March 2002, the Builder considered that it was critical that the cladding be decided. 98 On his evidence this was because the building was almost ready for cladding and they did not have a specific profile or timber to work with [T:153]. The Builder's evidence was that by the end of March the stage which the work had reached was the brick work, the ground floor was up, the formwork was done on the first floor and the Builder was ready for concrete pours for the first floor in about late May. 99 Mr De Grazia made clear that by the end of March, or towards the end of March, there had been no decision on the type of boards to use and hence the Builder had not been able to order them. There were then discussions between the Builder and Mr Solomon about the finish of the cladding, that is the paint or stain. The Builder's further evidence was that as at 3 April, there still had not been a decision about which boards to use. There was evidence before the Court about a number of site meetings in relation to these matters. In particular at a site meeting on 5 April 2002 Mr De Grazia testified that particular discussion took place relating to the cladding being required as urgent. The urgency about the cladding on the Builder's case, was that the cladding would take six to 10 weeks after it would be ordered before it would arrive on site and then it would have to be painted before it could go one. The Builder's evidence was that it had to be made and it had to be ordered and had to arrive on the site. 100 These items concerning the need for Mr Solomon to make up his mind about the cladding he wanted are to be found in a number of the site minutes at the time. At a particular point in time Mr Solomon advised the Builder that he had a price from Tillings for $78 per square metre as opposed to a figure of $84 on the site minute. The Builder's evidence was that he told Mr Solomon that he had a price from Architectural Hardwood to tender for around $65 per square metre for the red gum. Mr De Grazia understood that the cedar was more expensive than the red gum and Mr Solomon was contending for the opposite [T:159]. 101 The Builder continued to pursue the proposition that it was urgent that the cladding be selected and even by a site meeting of 17 July, the same entry with respect to the weatherboard continued to appear in the site minutes. The continued vacillation from Mr Solomon in relation to the cladding continued through the site meeting of 25 July with the Builder now making clear that he needed the cladding and that the job was ready to go on but he could not continue without the cladding. 102 On his evidence Mr Solomon agreed with him and said that he would do the best he could to get the matter attended to. Mr Solomon had identified the problem that he was having was that of selecting the profile and the species of timber that he wanted. 103 The Builder thought that it was at the same meeting that he was advised that Ms Laracombe, Mr Solomon's co-proprietor, did not like the western red cedar and was looking for alternative species. The site minutes of 6 August at page 169 also dealt with cladding. In due course the Builder actually gave a Timbeck sample to Mr Solomon which he thought might appeal to him. 104 By that stage approximately 6 August, the Builder's evidence was that the building was ready for the weatherboards and that the Builder could do nothing else other than installing weatherboards and trying to seal the project for the next set of trades to come in. His evidence which is accepted was that very little was happening on the site at the time outside of a bit of roofing sheeting and the like [T:163]. 105 The Builder gave evidence that he said to Mr Solomon that he was holding the work up and that the Builder could not go any further and that the Mr Solomon was costing the Builder a lot of money. Mr Solomon had replied that he would do the best he could to select the weatherboards as soon as he could and was generally fed up with the weatherboard issue. 106 Mr Solomon also asked the Builder what would be the advantage of air-dried timber. Mr De Grazia said that he thought for an external installation, air-dried timber would be better, but that the Architect should make his own enquiries with the representatives and decide for himself which way he wanted to go [T:163]. The reason the Builder had given Mr Solomon the Timbeck brochure was because he had used Timbeck several times before and never had a problem with the Timbeck ship lap profile. Mr Solomon had said that he would telephone a particular representative of Timbeck. 107 There was then a meeting on about 9 August in which Mr Solomon had made clear that he did not want the cladding on the stair walls between the two houses and wished to delete it. He wanted cement rendered walls instead. That is what occurred. 108 At about the same period of time there was an entry in the site minutes stating "proceed with ordinary and recycled Jarrah from Australian Architectural Hardwoods [T:165]. The Builder asked Mr Solomon what this was about. Mr Solomon said that he had spoken with 'Andrew' from Australian Architectural Hardwoods who had said that he had Jarrah available which was the same as the red gum in price-in other words cheaper than western red cedar. Mr De Grazia then said: That's fine but we still need the profile and we still need to sort out whether you want the 150 by 25 nominaliser as a finished size or the actual finished size which will be around 140 by 20 mm and did you ask Andrew whether the nominal size that you require is available." 109 Mr Solomon had answered to the effect that this was what had been specified and what he wanted. Mr Solomon also said it's a matter for you to source the 150 by 25 nominal. 110 On the Builder's evidence Mr Solomon actually sketched the profile at the site meeting and once the Architect had finished doing that by hand, the Builder asked him whether that was the profile he wanted and he said he thought so. At about the same time Mr Solomon asked what the Builder thought of the profile and the Builder and said that it would be okay but that he would look at cutting an extra groove into the profile for the purpose of water capillarying up along the board. The Architect said that was a very good idea and that he would do that and would finalise it and would send the sketch to the Builder. 111 On about 13 August the Builder recalled calling or talking to Andrew from Architectural Hardwoods and the Builder in fact made a note of that conversation [T:166]. On the Builder's evidence, Andrew told the Builder that he required a new cutter to make the far the profile that Nicholas had requested. At this time the Builder made clear to Andrew that he had not seen the actual profile as yet, because Mr Solomon had taken it away from the site shed to redraw it properly. At that point in the conversation Andrew said that he had the profile himself right there. 112 Mr De Grazia then telephoned Mr Solomon informing him that Andrew from Architectural Hardwood had passed on to the Builder the fact that Mr Solomon had sent a profile to provide the weatherboards directly to Architectural Hardwood. The Builder said: That is not on. You should have sent it to us first. You should have let us negotiate with Architectural Hardwood. This creates problems in the sense we don't know what you want or what you will be ordering by you dealing direct with contractors. It complicates the issue of running the job" 113 Mr Solomon had said that he only acted in that way in order to speed the order for the weatherboards as they were so far behind. The only conversation that the Builder could recall about price was whether the timber that Mr Solomon was requesting was the normal size of the cover or a standard profile that they had discussed with the 140 by 90 mm finish. In due course the Builder ordered the cladding as per Mr Solomon's profile. 114 The Builder's further evidence was that he did have a conversation with Mr Solomon about the method of fixing the boards as there are different methods of fixing cladding. The Builder's evidence was that Mr Solomon wanted the weatherboard fixed with two bronze coated nails on each board and that the Builder had said that that was fine as it was what was specified. At that stage the size of nail had been specified and at that stage, around about 23 August, when he finally got to the point of being able to place an order for the cladding, very little was happening on the site. 115 Mr De Grazia's evidence was that all that was happening was a small bit of electrical work in the roughing stage, a bit of plumbing in the roughing stage and possibly a bit of roofing in the top part of the building. There were only limited areas which the Builder could roof. Due to the weatherboard not being up they could not finish anything anyway. Mr De Grazia's evidence was that he had a conversation with Mr Solomon about the state of the work and advised Mr Solomon that the project was on standstill and Mr Solomon said that he was aware of it and that he would give the Builder some extensions of time to take care of the work where it was delayed. In fact an extension of time had been granted. 116 The Builder's evidence in relation to the site meeting of 4 September at concerned a notation about the cladding where there is an entry which says, "check whether 50 mm nails are adequate in lieu of 65 mm. The Builder's evidence was that Mr Solomon asked him to check that and that the Builder had said to Mr Solomon: "It's not my role to decide that. You decide. You the Architect. You specify" [T:170] 117 In due course the instruction from Mr Solomon was to use the 65 mm bronze coated nails with flat heads. The Builder's evidence was that at this stage virtually nothing was happening at the site as the project was on a standstill mainly. He was waiting at that stage for the cladding. The cladding arrives 118 Within one or two weeks the cladding arrived on a Friday afternoon. On the following Monday the cladding was carried into the living areas and the painters arrived and began painting. However when the plastic came off the cladding the Builder observed that the boards were not as per the specified sketch that he had received from Mr Solomon, in between the ordering and the arriving of the weatherboards. What was different as between the sketch and the boards as delivered was that they had been reduced. The overlap of the board had been reduced. And that was the only difference on the sketch, but the actual boards themselves were very badly machined and rough and one couldn't do anything with it. 119 The Builder then rang Andrew at Architectural Hardware and asked why the boards did not meet the sketch which had been ordered. The Builder then telephoned Mr Solomon and asked him why he had altered the sketch without telling the Builder. Mr Solomon said that he was only trying to speed up the process of the weatherboards. The Builder then asked Mr Solomon to come and look at the boards and explained to him what the problem was. The Builder said that the boards could not be fitted, this being because the groove was not at the right spot. It varied from one end of the board to the other. 120 At the time the Builder had selected about 30 or 40% of the boards and put them aside, that is to say, actually rejected them. 121 In due course Mr Solomon arrived and took photos of the boards and said that the Builder should continue to paint them as they would be alright. In this discussion Mr Solomon had been referring to all of the boards, that is to say even the ones which the Builder had rejected. 122 Complying with that instruction Mr De Grazia was instructed to install some of the weatherboards so that Mr Solomon could have a look at the finished product. The Builder complied with that instruction to install some of the weatherboards so that Mr Solomon could look at the finished product. A wall was chosen for the purpose of doing that. 123 Notably by letter dated 17 September 2002 addressed to Mr Solomon, the Builder made the following points: Confirming this morning meeting and advice you that the weatherboard by Australian Architectural Hardboard are not as per your specification : further confirming that you have changed the spacing from 6 mm these boards have not been machined to a constant width. We will do the best as possible to accommodate the 4 millimetre spacing but this will require extra time and some re-dressing of boards: we cannot guarantee even spacing. To be fair to us and yourself extra time for installation should be discussed now and agreed on. 124 On the same day, Mr Solomon sent a memorandum to Australian Hardwoods [exhibit DG1 page 184] commenting on the Jarrah that had just been received making the observations: i. There is a variation in height of the upper tongue; ii. The location of the weather groove (too low) means that the visible Shade line must be reduced from specified 6 millimetres to 4 millimetres; iii. The junction where the vertical time meets the shoulder is rough; iv. On some boards the weather groove runs out to zero. 125 The same document was faxed to the site office. 126 At about the same time the Builder himself made some notes which are somewhat difficult to interpret. The relevant transcript is generally as follows: Q. So you'll need to do this very clearly, please. Take your time. A. " Start to fix weatherboard on the south wall, rear 26." Q. That's number 26? A. It is number 26. Q. Yes. A. "This is impossible due to the" - "due to the" - "to do a good job. The boards vary too much in size and four millimetre channel is"-- Q. Just pause there. The reference to the four millimetre channel, what, that's in the profile? A. That's in the profile, the gap between one board and the other, and which was originally specified six millimetres, but due to the quality of the board, it was agreed with Nicholas to reduce it to four millimetres… Q. So it says, "vary in size and four millimetre channel". Then what comes after that?… Q. That's the line we're up to. A. "The channel is too small to accommodate the variation of the board. Butt joint flashing could not be installed successfully due to the profile. Nicholas suggested that we gave the best that we could and he would look at the board in a couple of days." Q. Is there anything else? A. I installed one metre of the board - one metre of board were installed. Q. Okay. Now, there's a reference there to flashing? A. Yes. Q. Could you just tell his Honour, on the site you had the timber frame for the rooms? A. Yes. Timber studs, you mean. Q. Timber studs; studwork? A. Yes. Q. Then was anything fixed to that? A. There was foil fixed to that, yes... Q. What sort of foil? Describe it for his Honour? A. It's a perforated foil, it's designed as a water barrier between the boards and the actual - between the weatherboards and the frame. This particular one was perforated for the purpose of breathing, so-- Q. Perforated for the purpose of-- A. Air. Air travelling between the walls and the boards. That's all it is. Q. Yes. And how was that fixed? A. It's nailed to the studwork. Q. And what happens at the top and the bottom? A. Nothing happen. Nothing was designed or scheduled, so for nothing to happen. It just overlapped over the concrete slab, or I think there's a beam in most cases in that particular job. Q. A beam? A. A beam, a steel beam, yeah. And on the top was just pushed over, over the stud and nailed on top of the timber plate, which would have been eventually covered with the roof flashing. Q. Was that drawn anywhere? Was that in a drawing, or a sketch? A. Just on the specification. Q. What, to just install it? A. Yes. [T:166 - 177] 127 The evidence adduced from the Builder then travelled through an explanation concerning the manner in which the weatherboards were to be fixed, the fact that there was only to be flashing on the butt joint and similar. The Builder was shown two pieces of timber cladding in the witness box and in due course they became exhibit P 5 and are appropriately described as two pieces of timber cladding or two sections of timber cladding. In explaining the witnesses description of how they fitted together the transcript records the following: The witness is holding two pieces of cladding, and holding them with the unpainted, thin edges together, to describe a butt joint, that is how the boards fit together in a horizontal section. What he described with his hands was that a piece of flashing, that is, Alcoil material, is folded over the top of the board, or down one face of the board, one painted face of the board, and turned underneath at the bottom so that any water that's behind that board can go out underneath it. [T:179] 128 In due course the Architects rejected the Jarrah and the Builder offered again some western red cedar cladding that he had in the site shed in larger pieces. The Jarrah was returned. Mr Solomon said that he was going to use Timbeck weatherboards and the Builder had said that he had used those boards before, that the shiplap was very good and that he had had no problems with it. 129 Item 23.2 of the site minutes of 20 September 2002 records that the Builder was to proceed with supply and fix of Timbeck external weatherboards. The details include the use of secret nailing Exhibit DG1 page 188. Decision in relation to initial part of cladding claim 130 In relation to the cladding, Mr De Grazia made two claims that related to events occurring before the Timbeck weatherboards were installed and the water penetration issue arose. 131 By a letter of 16 May 2005, the Builder informed Mr Solomon as follows: Re: 26-26A Brown Street Waverley Changes Timber from Australian Redgum to WRC Dear Nicholas During the course of the contract the Architect directed that the timber cladding be changed from Redgum to Jarrah due to the unavailability of Redgum cladding. As required when a variation is directed ASBS complied with this direction. ASBS submitted a claim for this change in materials for $3,933.00. the Architect assessed the claim as $1,081.00 being a difference of $2,852.00. ASBS rejects the Architect's assessment of the claim. The Architect has not provided detail of his assessment. We believe that the original claim by ASBS is the correct rate based on the following: 1. Unit rate redgum 2. Unit rate jarrah 3. Area of cladding 4. Difference in costs for the erection of the different type of cladding. We wish to claim the difference in the original claim and the amount paid being $2,852.00 (exclusive of GST). 132 Furthermore, the Builder had made an assessment of the delay to his work that was occasioned by, first of all the delay in the selection of the cladding and secondly the change from Jarrah to the western red cedar. He had calculated that estimate based on the days that they were on site and that the Builder could not install or do anything else otherwise than waiting for the cladding. The Builder's estimate could not give the exact amount of days but gave a percentage of three or four weeks including Saturday. The cladding probably on the Builder's evidence, took to 2 to 3 weeks. The Builder's evidence was that in the normal course of events the following steps should have followed: A. Well the plasterboard be ready to be installed, some tiling can start to happen and electrical work be completed, we're talking rough end here, not just light and fittings, just rough end work can be completed, the plumbing can be completed in rough end. Q. Was this upstairs or throughout the house? A. Mainly upstairs, but it could have been achieved throughout the house. Q. Then what happened? A. Then joinery goes in, then painter comes in. Q. Beg your pardon? A. Then the painters are coming in, in order to complete the project. Q. Now I just want to stay with the cladding for a moment, did the cladding raise itself as an issue after you'd completed its installation? A. After I complete the installation? [T:187] 133 Mr De Grazia's claim for the balance of his variation claim in relation to the change from Redgum to Jarrah is allowed. The delay claim outlined in the preceding paragraph is also allowed, subject to any extensions of time which have already been granted and which would be caught up in the claim (the builder conceded in evidence in chief that some extensions of time in relation to this issue had been granted: T169.39). As regards performing this calculation, the parties are directed at the end of these reasons as to the way forward. 134 To the extent that Mr De Grazia's claims in this area did not comply with the relevant contractual procedures, the decision, for reasons outlined above, is that in all the circumstances Mr De Grazia's claims are not defeated by failure to comply with the relevant contractual procedures. Some important issues in relation to the Timbeck weatherboards 135 In relation to the Timbeck weatherboards that were installed and then re-installed after water penetration, the following matters are of particular note. 136 Although the Builder had used Timbeck before he had never installed the V-Joint profile. At T211.15ff the Builder gave the following evidence during his examination-in-chief: Q. Were you concerned in any way about using the V-joint profile? A. No, I wasn't. Again, Timbeck has been around a long time, and provided these profiles for a long time. I did say to Nicholas that I never installed V-joints profile externally before. Q. Sorry, you did say that or didn't say that? A. I did say that, that I never installed V-joints profile externally before. Q. I'm sorry, I don't know whether his Honour heard that, but I didn't actually hear the answer. A. I did not - I said to Nicholas that I did not install weatherboard with a 606 profile before on an external face. 137 Where the Builder had installed the Timbeck product externally he had always done so with flashing [T479.30]. The situation at the commencement of the Builder's installation of the Product was as follows: i) the Product had never been previously used by the Builder; ii) the Architect's specification did not address the use of the Product but Redgum (a hardwood); iii) the Builder had always installed Timbeck products externally with a flashing; iv) this was the first external installation undertaken by the Builder without a flashing as directed by the defendants as project Architects. 138 Mr Forbes, the foreman, made the observation at one of the inspections undertaken after the leaks in the following terms at T:532.06ff: Q. Right. Were you able to work out then or another time how the water had got into the house? I mean, it obviously had come in front the rain but how precisely it was tracking in or blowing in or trickling in? A. Well, various inspections were done by various people. Upon inspecting the outside of the boards we'd noticed some of the boards had shrunk and we were also concerned the whether it might be leaking some nails in but mainly the shrinkage of the boards seemed to be the main problem. His explanation for this shrinkage was given at T533.10ff during his examination-in-chief: Q. How did you come to create test panels? A. Well it was discussed with Nicholas that the, before we put the weatherboards on, the painting method and all through my life in the trade doing weatherboards I've also used oil based primer on weatherboards to seal the boards to prevent any moisture gain or loss through weather and I've always found if you seal the broads properly they don't leak. And we recommended to Nicholas that they should be painting the boards with an oil based primer. And he didn't want to do that, he said Cabots said that their product would be just as good. Q. Cabots? A. That's the supplier of the stain that he specified us to use. 139 The defendants, as Architects, also directed the Builder to only apply two coats of paint on the weatherboards contrary to the paint manufacturer's specification. Mr Forbes testified in the following terms at T:534.09ff: A. Yes, well we then stressed the fact that we think more coats of paint are required than two coats to Nicholas and he said he didn't want to put more than two coats. I rang Cabots up and asked them for their recommendation for exterior cedar weatherboards-- Q. Now don't say what they said. Did you speak to Nicholas after that? A. I spoke to Nicholas and informed him of my conversation. Q. What did you say? A. And I said that I was informed by Cabots that they'd recommend three coats minimum on cedar for external use. Q. What did he say? A. He said that he didn't want to use three coats, that to put two coats on and see how we go and he would put a third coat if he thought it was necessary. 140 On 26 February 2003, at the direction of Mr Solomon and Ms Larcombe, the Builder carried out more water testing. None of this testing (or any other testing in this entire matter) was undertaken by experts in accordance with any transparent methodology. In fact, none of the experts in this case ever saw the Timbeck Product or tested it. The testing by non-experts involved pointing a stream of water from an ordinary garden hose in 'wide spray mode' at a mock-up set of cladding in the backyard of the premises. The water was squirted at the cladding from about 1 and a half metres away from the cladding T626.36ff. 141 On 3 March 2003, Mr Solomon attended a site meeting and 2 test panels were constructed: i. Timbeck W.R.C using 606 V-joint, 1.8mm nails; and ii. Timbeck W.R.C using shiplap 606, 1.8mm nails. 142 The shiplap panel did not allow water to penetrate whilst the 606 V-joint panel did. 143 On 5 March 2003 Charlie Herbert of State Forests of NSW attended and forwarded a report on 11 March 2003. 144 At no time did the defendant as Architect instruct the Builder to undertake a flashing of the building. This was confirmed by the Builder at T480.37ff. Q. The problems with the leakage was discovered in 2003, about February. At that stage the evidence is that there was basically some to-ing and fro-ing between you and Mr Solomon as to methods of rectification? A. Yes. Q. One thing I suppose that could have occurred at that stage was that you could have installed a flashing? A. Yes. Q. Had you been directed to do so, you would have done so? A. Yes. Q. Flashing is a commonly used device in cavity walls and a lot of other forms of construction to direct water that has entered into a wall or an external face or a façade outside the building rather than inside the building, correct? A. Yes, that's the idea of flashing. 145 On 23 May 2003, the Builder advised Mr Solomon that Mr Solomon, as Architect, was responsible for selecting the profile, the painting systems and the fixing methods of the weatherboards, being a proposition which Mr Solomon accepted. 146 The Builder then ordered the Timbeck weatherboards which arrived at the site, the position being that no other work was happening at the site at the time. The Builder's evidence was that the next section of work which would require to be done after the weatherboards, involved installation of plasterboard, tiling, waterproofing, painting, and joinery and that none of those trades could be begun because the building was not waterproof. 147 When the cladding had arrived the Builder informed Ms Laracombe that he was unable to use the timber. However at the instruction of Mr Solomon, the Builder was required to proceed installing the current weatherboards 606 view joins. He did so and installation took approximately two to three weeks. The water penetration 148 At this stage in the narration of the Builder's evidence he recounted that in early 2003 cladding had to be pulled off the wall and redone because of water penetration. 149 Without going into all of the detail presently it suffices to say that Mr Solomon claimed that it was the Builder's fault that the cladding leaked. The proposition which came forward from Mr Solomon was that the Builder had certain responsibilities under the Home Building Act 1989 to provide a watertight building. The Builder was however adamant that the problems could not be laid at his door because the Architect had specified the materials and had asked the Builder to install them in a particular way. There were a number of letters which were exchanged between these parties. At the same time pleasantries were being exchanged between Mr Solomon and Timbeck. The contemporaneous correspondence 150 The contemporaneous correspondence includes the following: Memo Mr Solomon to Mr De Grazia – 21/2/03 Dear Dante Re: Timbeck Western Red Cedar External Wall Cladding Note of site visit on 21/2/03 Present: Dante de Grazia Builder, ASBS Randall Jones Structural Engineer Nicholas Solomon Architect Weather: Steady rain from the north and north east, very light breeze from north and north east. Observations: 1) Significant water penetration through all external cladding on north wall of No. 26a onto concrete floors of Bed 1a, Bed 2a, Bed 3a. 2) Water penetration through east wall of Bed 2a. 3) No evidence of water penetration through south wall of No. 26. it was noted that external face of the south wall was dry (due to rain coming from the north). 4. Some plasterboard and thermofoil paper was removed in Bed 2a and revealed water around the studs and water tracking along the bottom of the channel of the back face of the boards. 5) Water penetration along north wall/ceiling junction of Bed 1a. Water tracking across ceiling to plasterboard joints 1200mm in from north wall. Weatherboard fixing method: 1) Fixing method observed was nail of approx 50 degrees down through top tongue of each board. Refer attached diagram. 2) On 21/2/03 ASBS advised that this was the fixing method used for all the external timber cladding. 3) Nail type used as advised by ASBS on 21/2/03: 50mm long x 2.5mm galvanised with 3.5mm flat head. 4) Horizontal splitting of the tongue of the board was observed (using mirror & torch). This splitting occurred around the nail penetration into the stud. 5) Water penetration was observed around the nail fixing points (using mirror & torch). Timbeck printed literature A copy of Timbeck's installation specification is attached. Once Timbeck have inspected the work and provided comment, we will issue instructions regarding the water penetration issue. (Page 320 of Exhibit DG1 Volume 2) Timbeck (Mr Henderson) to ASBS (Mr De Grazia) (not dated) Dear Danny, Re: 606V at 26 Brown Ave, Bronte Further to site meeting attended by Mr Mark Hewitt and me and after our discussions we offer the following comments: 1. The material supplied by us appears to be fit for purpose. 2. The method of installation adopted by you appears to meed industry standards. It is in accordance with the recommendations given to you by representatives of Timbeck with the exception that the nail you have used is 2.5mm (by your admission) whereas we recommend a 1.8mm nail. Beyond the advisory comments made on site as to the likely source of water penetration on this installation we can not offer any further advice. (Page 322 of Exhibit DG1 Volume 2) Memo Mr Solomon to Mr De Grazia – 27/2/03 Dear Dante, Re: Timbeck 606V Western Red Cedar External Wall Cladding Following three site inspections by us on 21/2/03, 24/2/03 and 26/2/03 we are satisfied that the installation of the Timbeck western red cedar external wall cladding is admitting water into the building. We request that you propose your method of rectification for the entire weatherboard installation in order to comply with the Building Code of Australia and the Timber Development Association guidelines for external weatherboards. Kind regards Nicholas Solomon (Page 323 Exhibit DG1 Volume 2) Letter ASBS to Larcombe & Solomon Architects dated 1/3/2003 Project: Pair of House Location: 26 & 26A Brown St, Waverley Re: Timbeck 606V W/Red Cedar External Wall Cladding Attention Nicholas Solomon Dear Nicholas Please provide proof of how the installation admitting water into the building. A letter has been issued by Timberbeck confirming that the installation meets industry standard and the recommended method of installation is accordingly to manufacturers instruction. The 2.5 nail were requested by you a statement can be provided by Robert Forbes site foreman and Arturo De Grazia that I was sent to exchange 1.8 nails to 2.5 at your request. Discussed on site office before installation commence. This is a specified product by you please provide evidence that this product is suitable for external cladding and that the recommended method of installation is suitable. This should carry some testing certificate proving it. That should been requested by you prior to specifying the product. We have relied on your professionalism and your specifications to supply and install specified product. We confirm that all reasonable care has been take to install the product as per specification and we fill it's not our responsibility to prove the product or the reasons why water admitting occurs. We further put you on notice that this holding up the project and your decisions is need A.S.A.P. We further request that a method of ratification is provide by you to comply with the building code of Australia. This is usually the Architect roll not the Builder. Regards Danny de Grazia [Page 324 of Exhibit DG1 Volume 2] Letter ASBS to Larcombe & Solomon Architects dated 1/3/03 (should be 3/3/03) Re: External Cladding Attention: Mr Nicholas Solomon Dear Nicholas, Confirming our nailing and water test of this morning at 10.00am 3/3/03 and prove that the cladding has allowed considerately, water penetrates to the internal side of the cladding. As you know we have used 3 methods of fix and appear that make no difference between on or the other. We have taken a further test by revising the boards and provide shiplap profile no water penetration as occur. We must come to conclusion by this morning test that the cladding is faulty not your previous suggestion (the installation). As per our inspection discussed this morning we note that some considerable shrinking has appear again. This is beyond our control as you no the timber has been arriving on site at different stage and wrapped in plastic un wrapped and paint all around before installation. We put you on notice that the above is holding the project and A. resolution is required A.S.A.P. Please advise if you would consider re install plasterboard were was removed for the purpose of inspection. The water admission this morning test. It is a concern to us. Please provide your instruction. Regards Danny De Grazia [Page 325 of Exhibit DG1 Volume 2] Memo: Larcombe & Solomon to ASBS dated 4 March 2003 Dear Dante, Re: Timbeck 606V Western Red Cedar External Wall Cladding This instruction is issued in accordance with sub-clause 5.2.1 of the contract. We repeat our request dated 27/2/03 for you to propose methods of rectification to ensure that the Timbeck wrc external wall cladding is weather tight. As previously indicated, the responsibility still rests with you to comply with the Building Cost of Australia and provide a weatherproof building. Kind regards Nicholas Solomon [Page 326 of Exhibit DG1 Volume 2] Memo: Larcombe & Solomon to ASBS date 4 March 2003 Dear Dante, Re: Timbeck 505V Western Red Cedar External Wall Cladding Further to your letters dated 1/3/03 and received 4/3/03 we advise the following: 1) Please date the letters correctly. 1 st March 2003 is obviously the wrong as the water test was conducted on 3 March 2003. 2) We have noted the results of the water tests conducted on 3 March 2003. 3) Despite what Timbeck have written regarding the material and the installation their verbal comments suggest it is an installation issue. 4) Your conclusion that the cladding is faulty means that the responsibility rests with you to pursue the issue with your timber supplier. 5) Should excessive shrinkage have occurred on the boards then that is an issue between you and your timber supplier. Evidence of the correct moisture content of the boards is what you should demand of your supplier. 6) We are arranging for an independent timber expert to inspect the work and provide a written opinion. It would be helpful for the Bed 2a plasterboard lining to remain off until the completion of the inspection. 7) You have not proposed any methods of rectification as requested on 27 February 2003. The responsibility still rests with you to comply with the Building Code of Australia and provide a weatherproof building. 8) The Timbeck wrc cladding product was proposed and recommended by you following your refusal to warranty the weatherproofing of the previous cladding material (Jarrah). You assure us that you had used the Timbeck product previously without any problems, including the secret nail fixing method. The Timbeck external cladding brochure was given to us by you. You also assured us that the Timbeck product was superior to the alternate Tillings wrc product (due to the air drying of Timbeck as opposed to kiln drying of Tillings). The Timbeck product was not in the contract specification but we agreed to its use after your endorsement of the product. To suggest that we specified the product therefore its our problem is unreasonable and demonstrates a reluctance to rectify the problem. 9) At no stage did we verbally request that you change the nails from 1.8mm nails and that should have been adhered to. 10) There is no doubt that the cladding problems are delaying the project. We still await your proposals to rectify. Kind regards Nicholas Solomon [Page 327 of Exhibit DG1 Volume 2] Treating with the real question for determination concerning the water penetration issue 151 The real question for determination is this: i. if it is accepted that the WRC cladding from Timbeck which was installed by the Builder in late 2002 leaked because of an inherent fault in the timber or because of a defect in workmanship, the Builder is at fault and his claim for a variation and delay fails. ii. if the finding on the balance of probabilities, is that the cladding leaked because of the design provided for its installation by Mr Solomon , then the Builder should be entitled to a variation for its cost and for the time it took him to create test panels, receive instructions as to the new product and fixing method and replace the cladding. 152 As the reasons which follow make plain, the findings based on the evidence which is accepted as reliable, favour scenario ii. 153 The Architect helpfully offered evidence as to an appropriate period to allow for that delay – 90 days [Memorandum L and S to DDG dated 5 January 2004 "Draft Statement of Fact- In Confidence" – Court Book 5:1644]. 154 The evidence satisfies the Court that the most probable factual matrix is this: the proprietor had originally selected Redgum for the cladding. As Architect, he had drafted a specification for its installation. Redgum proved to be unavailable in the quantities required and he was required to make an alternative selection. Although Western Red Cedar (WRC) was suggested by the Builder as an alternative soft wood [emphasis added], it was considerably more expensive than Redgum and accordingly, the proprietor or Architect selected Jarrah. 155 The Architects then took some time to select a profile but when they did, Mr De Grazia moved fairly quickly and the first delivery of boards occurred on 17 September 2002. He was concerned about their quality and communicated this to the Architect who attended on site and asked for a sample panel to be installed. 156 The evidence then diverges: according to the Builder, the Architect agreed that the boards were not of good quality and he rejected them. The Architect seemed to say that it was the Builder who rejected the boards and who refused to warrant their ability to be weatherproof. 157 There is no need to decide which version is correct on this point because one thing was clear – many of the boards had been milled so that the tongue in the tongue and groove was uneven and the groove in the boards tapered, in some of them, to nil. 158 The boards were returned to Australian Architectural Hardwoods who apparently did not charge either party for them, a fact that tends to confirm that they were defective. 159 Mr Solomon then turned his attention to WRC as an alternative product. He sought to imply if not assert that the Builder had made certain representations about their quality and abilities but this evidence is rejected. At best, Mr De Grazia testified that Mr Solomon had provided him with a sample which he said he had used before successfully. 160 Mr Solomon selected the product. He selected the profile. The evidence was that he and his partner had a sample of the V joint profile made up, that his partner asked for a sample of the shiplap profile to be made up and that Mr Solomon then (by phone) selected the V joint profile. The evidence was that Mr Solomon directed the installation of the boards by virtue of his specification and by specific instruction as to butt flashing and as to nailing. The only aspects upon which there was any controversy in this part of the evidence was the size of the nails and the type of vapour barrier in the walls [notably neither are suggested as a cause for the water entry]. 161 The Builder installed the boards to Mr Solomon's satisfaction and to his specification. Mr Solomon inspected the works and assessed the conformity to the contract and specification and certified and paid the Builder for the works. 162 Each of the following contentions put by counsel for Mr De Grazia is of substance: i. The Architects cannot point to any evidence, other than an unexplained and vague suggestion by Mr Abbott which is rejected, that there was any inherent defect in the cladding product. ii. The Architect cannot point to any failure in workmanship by Mr De Grazia in the supply or installation of the cladding product. iii. The appropriate inference is that the specification and design was the most probable cause of the water entry problem but it was one which Mr Solomon was quick to reject and his inherent conflict of interest revealed itself once again. He blamed the Builder. iv. Mr Solomon could not direct the Builder as to either the fault in his workmanship nor a method of rectification even though the Builder asked for instruction. Instead, the Architect pointed to the contract and the Builder's statutory warranty and told him it was his obligation to provide a weather tight building. However, the statutory warranty under the Home Building Act 1989 is no more or less than a contractual warranty and does not attract any notion of strict liability. v. The Builder was obliged to comply with the terms of the contract. A specific term of the contract was to build in accordance with the plans and specifications and this he did. It was not his role to question the design of the Architect; it was not his role to install the cladding in a manner that differed from the specification. At its highest, a Builder's duty could only be to draw the Architect's attention to a patent flaw in his design but even that position is unavailable to the defendants in the present case because a number of experts examined the cladding and drew no consensus as to the cause of the water penetration. If other experts could not do so, it cannot seriously be contended that the Builder should do so. vi. It must also not be forgotten that the Architect changed the product, the profile and the installation of the detail when he instructed the Builder to carry out rectification. vii. And as the Builder's counsel also observed, lest it be suggested that the Builder acknowledged liability by carrying out the works, two things should be borne in mind: (a) the Builder submitted a quotation for carrying out the work which, although rejected by the Architect, was nevertheless tantalizingly left open by him for 'discussion' until after the work was carried out; (b) the Builder was also faced with the threat by the Architect that he would invoke Clause 5.5.2 against the Builder. In other words, Mr De Grazia was between a rock and a hard place, and he performed the work. 163 I accept as correct the proposition that this work was necessitated by the Architect's flawed design for the original works and his unwillingness to accept responsibility for it. 164 It ought also to be borne in mind that the proprietor had a direct pecuniary interest in just such a result. 165 For the reasons outlined above, Mr De Grazia's variation and delay claim in relation to the rectification of the cladding is allowed. 166 To the extent that Mr De Grazia's claim in this area did not comply with the relevant contractual procedures, the decision, for reasons outlined above, is that in all the circumstances Mr De Grazia's claim is not defeated by failure to comply with the relevant contractual procedures. Dealing with the pleaded cross-claim 167 Each of the following submissions put to the Court by the cross defendant is of substance and is adopted in what follows. 168 Paragraph 18 of the cross-claimants' amended list statement pleads that Timbeck made representations to the Builder and the cross-claimant: (a) that the Product was a suitable timber cladding for external use (EXPRESS) (b) that if any insulation was to be installed, it should be fixed with the use of a perforated insulation film to allow the timber to breathe (EXPRESS); and (c) there was no need for the installation of additional sarking or other form of weatherproof film (IMPLIED). 169 The Timbeck brochure is located at Exhibit NS4 at 512 (Court Book 2568-9). The following submissions were put forward by Timbeck and are accepted in relation to each of the pleaded representations: (a) the Product was a "suitable" timber cladding for external use: (i) No such representation is made in the brochure (for good reason – the word "suitable" is parasitic and gains meaning only from context. Its use is question-begging – suitable for what , suitable depending on what , suitable if properly installed , suitable if it has not shrunk ); (ii) The usage of the Product in the Brochure was not unqualified whereas the pleaded representation is wholly unqualified. The pleaded representation, as a matter of imputation, must mean that the use of the Product irrespective of the method of installation or affixation, that is, the Product was, to descend into the jocular, 'idiot proof'. Its use in any fashion would cause a structure to be weatherproof. This is contradicted by the qualifications in the Brochure itself: a. "Contained here is the general information relating to installation….for specific recommendations…please contact the Western Red Cedar Information Centre". b. "Some installations of Timbeck Panelling require additional attention…" c. "For a customised specification please contact Timbeck". (iii) By its response to particulars dated 25.11.00, the cross-claimants asserted that "the product was not suitable for the purpose of external cladding in that it was not weatherproof when installed in accordance with the cross-defendant's requirements. (emphasis added); (iv) This statement is significant as it confirms that the Brochure did not represent that the Product was intrinsically weatherproof. Its weatherproof qualities were dependent upon its installation. The next part of the cross-claimants equation is establishing what "the cross-defendants requirements" actually were. It is here that the cross-claimants' case is confused and misguided because: a. there are no "requirements" in the Brochure; b. the Brochure does not guarantee weatherproof quality – cladding is only part of an external protection system that, like any other façade system, works in tandem with other building elements to expel water to the outside of a building. c. The corresponding and necessary constituent parts of the external cladding system were: (a) never specified by the Architects; (b) not the subject of enquiry with Timbeck; and (c) not a matter upon which the Builder received any guidance from the Architects. (v) The Cross-Claim does not set forth what is intended to be meant by the expression "suitable". The cross-defendants divine (from paragraph 21(a)) that it is intended to mean water resistant or weatherproof. If so, the Brochure does not allege that the Product is waterproof or water resistant. Solomon himself admits the Brochure doesn't say this at T:939.46: Q. Because there was nothing in the Timbeck brochure that said anything about the product being weather tight, did it? A. Not that I'm aware of, no. (vi) The efficacy of the Product is interconnected with its installation. It does not inherently possess any particular water resistant qualities. It is wood. It is porous. Its overall performance is a combination of the Product and its mode of fixing and its mode of installation. (These two expressions are quite different: "fixing" means the process of physically fixing the cladding to the timber frames of the building (or battens upon the frame). "Installation" is a broader term that encompasses the installation of the external façade system – one element of which is the cladding – with other elements which may include sarking, flashing, sealing, painting, creation of cavities etc). (vii) The Brochure, particularised in paragraph 18 of the Cross-Claim, makes plain the significance of fixing . It does not deal with the installation of the façade system – this is a matter of design. Different features of a building will impact upon the method of design installation. The brochure itself does not pretend to provide anything more than 'general' information regarding fixing . Specific recommendations in relation to installation required advice from Timbeck and/or a mode of installation to be specified by the Architect; (viii) The Brochure specifically recommended that a project Architect insert, when preparing a specification for the use of [a] Timbeck product, the statement "Installation shall be strictly as per Manufacturers' recommendation" (emphasis added). This is hardly surprising – the Architects set forth a very detailed specification in Clause 7.11 of the Specifications (Exhibit D3) governing the installation of "Recycled Forest Redgum" from Australian Architectural Hardwoods". No similar such specification was ever provided to the Builder by the Architect in relation to the use of the Timbeck Product; (ix) There is no evidence that the alleged representation contained in the Brochure was ever made to the Builder (as opposed to the Architect) as pleaded; (x) The evidence that the cladding was not suitable for external use is minimal if not non-existent. First , there is no evidence of any testing being undertaken of the cladding in question by any expert. Secondly , the failure of one batch of any timber cladding product would not constitute any deception about the Product generally. Put another way, a representation that a product was suitable for a particular usage would not constitute a guarantee that the product would not fail. The representation pleaded against Timbeck as to the 'suitability' of the Timbeck Product for external use, if made at all (which is denied), was made about Timbeck Western Red Cedar cladding generally. If, for example, VW represents that a vehicle is suitable for rough terrain the fact that one vehicle breaks an axle when traversing such terrain does not constitute misleading and deceptive conduct about that marque of vehicle. This highlights the difference between a claim under the Trade Practices Act and one under the Sale of Goods Act ; (b) If any insulation is to be installed it should be fixed with the use of perforated insulation film: (pleaded as an express representation) (emphasis added): (i) The brochure says nothing about fixing insulation. It says: 'If insulation is to be installed, Timbeck recommends the use of perforated insulation film to allow the timber to breathe.' It gives no recommendation as to the type of fixing or the method of fixing of such insulation (noting the distinction above between 'fixing' and 'installation'). Of greatest significance is the qualification 'if' insulation is to be installed. It is obvious that there may be situations where a waterproof membrane is not required by the person specifying the Product, and as such, the brochure is not supposed to be a universal template to cover every situation. (c) No need for installation of additional sarking or other form of weatherproof film. (i) This representation is characterised as an implied representation but can only properly be characterised as a representation by silence. No implication of the kind pleaded can be made. The Brochure was silent about any need for "additional sarking or other form of weatherproof film". It is perverse for the cross-claimants to allege that by not mentioning something in the Brochure this constitutes an implied representation it was not necessary. This is ex post facto reasoning. (ii) Such an argument would give rise to bizarre implications; if a twenty-four bottle carton of beer does not contain a warning that consumption of all 24 bottles in rapid succession by one person will endanger life this does not implicitly represent the contrary. Cigarette packets, before the mandatory warning regimes, did not implicitly represent that cigarettes were not carcinogenic but this omission did not suggest they were not, or that they were healthy. (iii) In truth, the representation could only constitute a representation by silence which is not pleaded. Even if it is interpreted as a 'silence' claim it must fail because: a. There is no basis to assert that the representation pleaded in paragraph 18(c) of the Cross-Claim was one that was of such materiality that there was an obligation upon Timbeck to disclose it; b. A representation by silence requires evidence that the silence was intentional, i.e. not inadvertent see s.4(a) of the Trade Practices Act . No such evidence exists. It is a matter upon which the onus rests upon the cross-claimants. No evidence on advertence was called and the claim must therefore fail. Whether the Timbeck Brochure was misleading or deceptive 170 The cross-claimants bear the onus of proving the alleged representations were misleading or deceptive, or likely to mislead or deceive. I accept as correct the proposition that in order for the Court to be satisfied that the cause of the water ingress was caused by some defect in the Product, the cross-claimant's evidence would need to establish the following matters: i) there was an identifiable defect with the Product; ii) that identifiable defect caused the ingress of water into the premises; iii) as part of proving b), the cross-claimants would be required to exclude all other possible explanations for the ingress of water. 171 I accept that the cross-claimants have failed to satisfy their evidentiary onus for the following reasons: (i) the lay evidence fails to demonstrate that the Product was defective; (ii) the lay evidence, rather than establish any identifiable defect in the Product, merely underscores the range of possibilities that could have caused the water ingress: a) the boards were not properly installed and no attempt was made by either the Builder or the Architect to consult with Timbeck to obtain any assistance in ascertaining the appropriate method of installation prior to installation; b) the boards had shrunk (observation by Mr Forbes); c) water penetrated at the location of cracks caused by the insertion of nails (which were larger than those mentioned in the Timbeck Brochure); d) the butt joints were not properly flashed, the Builder did not, contrary to the specification, use 'biscuit joints' and the Builder failed to use the specified sarking. (iii) the expert evidence of Mr Abbott fails to establish any defect in the weatherboards. Mr Abbott's report is superficial and simplistic. The Court will search in vain for any attempted analysis by Mr Abbott that establishes any discernable defect with the Product. Mr Abbott's syllogistic approach can be reduced to the following propositions: a) there were water leaks; b) the method of installation – by nailing the cladding directly to the timber framing without any cavity or flashing – was a common form of installation; c) there was nothing wrong with the installation, therefore, d) there must have been a defect in the cladding. This is a 'symptom' based opinion but not a diagnosis of the problem. It is salient to note that Mr Abbott states in his report dated 19 January 2010 that 'timber weatherboards are not completely impervious to water penetration' (paragraph 62). This necessarily brings the problem back to the installation which is accepted as a common and accepted form of installation which of itself cannot be defective. 172 The recommendations in the Brochure to contact the manufacturer, Timbeck, or the Western Red Cedar Centre prior to relying upon any information in the Brochure – and there are three prominent recommendations – under the heading 'Installation', 'Special Applications' and 'Specification Clause' were akin to a disclaimer. They made it clear that no reliance could be placed on the Brochure without more – they disclaimed the applicability of information in the Brochure for any particular application. Timbeck was effectively saying: 'This information may not be accurate as regards your installation – contact us to obtain such accurate information'. As stated by the High Court in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 (in reference to a disclaimer in small print on a brochure) at [49] (per Gleeson CJ, Hayne and Heydon JJ) 'the words were there to be read'. And it was Solomon's evidence that he did read those words when he received the Brochure. It was not possible to ignore them – they were repeated three times. The words qualified all of the information in the Brochure to the effect that such information could not be safely relied upon for any specific application. 173 I accept that the Architect's failure to contact Timbeck is curious in circumstances where he clearly contacted another western red cedar supplier, Tillings, prior to instructing the Builder to order the Timbeck Product (see T712.34-46). It was not as if the Architect had not made enquiries of a western red cedar supplier before. The Architect was also 'actively' involved in selecting the replacement cladding as well (see T734.25-39). Regardless of who was responsible for contacting Timbeck prior to the installation to obtain Timbeck's recommended installation information, no-one did. This breakdown in communication between the Architect and the Builder was not Timbeck's fault and it should not be held responsible for this fundamental (and obvious) oversight. Reliance 174 Nor have the cross-claimants proved reliance on the particular representations. 175 As the cross-defendants have contended the relevant tests governing a finding of reliance have been variously stated, such statements being variations on a common theme. The relevant principles are as follows: If a material representation is materially likely to induce a representee to enter into a contract and the person actually enters the contract, a fair inference arises that the representation operated as an inducement – Wilson J in Gould v Vaggelas (1984) 56 ALR 31 at 46. "Recovery under s 52 is founded by the applicant's factual reliance upon the misleading or deceptive conduct of the respondent, although that conduct was not the only factor in the applicant's decision… and also the applicant did not seek to verify the representations or did so inadequately and so failed to discover their falsity" Lockhart J in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 79 ALR 83 at 96. "Ultimately, the 'causative threshold' beyond which liability attaches to a misrepresentation which is one of a number of factors inducing a decision that produces loss, will be a question of judgment … But the mere possibility that a misrepresentation might have induced a cause of action by the representee can never of itself attach liability under s 82 to the making of it." Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd (1993) 113 ALR 30 at 36 per Lockhart, Gummow and French JJ. 176 The finding is that Mr Solomon, who was the decision-making party (as between himself and his wife Caroline Larcombe) placed no reliance at all upon the Brochure. The following matters support the absence of any material reliance: (i) The absence of any information in the Brochure which was new or novel to Mr Solomon – T940.50-T941,30; (ii) Mr Solomon's cavalier departure from the terms of the Brochure; (iii) Mr Solomon's failure to take heed of any of the qualifications or directions in the Brochure that he seek advice before relying upon the Brochure to specify or install the Timbeck Product. Architect relies on Builder not on Timbeck Brochure 177 As the Cross claimants have contended, the picture that Mr Solomon wishes to paint, in 2010 is very different, to what was occurring on the building site. Between February 2002 until 9 August 2002 there was considerable indecision on the part of the Architect in relation to the kind of timber cladding to be used despite the specification, in clause 7.11, specifying red gum weatherboards. This indecision is to be laid, squarely, at the feet of the Architect. 178 It was his decision as to the nature of the cladding to be used. This was not a design and construct contract where the Builder assumes both design and construction responsibility: the Builder here was only responsible for carrying out the work as directed by the Architect. 179 By August 2002, a decision was made to install jarrah weatherboards. Parenthetically, despite apparently receiving and reading the Brochure, Mr Solomon elected to use jarrah rather then the Timbeck product for reasons other than its price. The Brochure was not compelling enough to induce him to acquire the Timbeck Product then. 180 As it transpired, the quality of the jarrah boards was poor and the Builder refused to warrant them as being acceptable cladding. On 20 September 2002 Mr Solomon instructed the Builder to install Timbeck cladding. The incontrovertible facts, in relation to the use of the Timbeck products are as follows: (i) Mr Solomon, conceding that he had the Brochure since August 2002, chose jarrah instead of Timbeck W. R. C. (ii) Between 17 and 20 September 2002 Mr Solomon, in the absence of having any other option (and now in a time critical period) instructed the Builder to use the Timbeck product. Failure to pay heed to Brochure as evidence of lack of reliance 181 The Court's finding is an absence of reliance through Mr Solomon's conduct concerning statements in the Brochure, namely: (i) Under the heading "Installation" the Brochure stated "for specific recommendations in relation to your installation please contact the Western Red Cedar Information Centre on (02) 9707 1038." Mr Solomon did not do this (at T:933.44): Q. The situation just by way of summary is this, is it not, that this brochure did provide a mechanism for seeking instructions from Timbeck in relation to specific recommendations in relation to the use of their product? A. Yes. Q. But you did not take up that invitation? A. I didn't. Q. Secondly, it did say in terms of a pro forma specification that an Architect like yourself could use, that the installations should be strictly as per manufacturer's recommendations but contrary to that statement you departed from it? A. Yes. (ii) Under the heading "Laying Out" the Brochure said "the installation should allow for the natural seasonal movement of timber. A 6mm gap all around the installation will be sufficient for this purpose. This gap can be covered by a variety of cover stripes (see Timbeck mouldings brochure for the full range)." Mr Solomon did not make any provision for any such 6mm gap. He did not obtain the Timbeck Mouldings brochure until after the building was built although no evidence was given by him as to the purpose for doing so (nor has the Mouldings brochure as been discovered) (see T:932.12ff): Q. And it says there, you'll see in brackets, in the next sentence "See Timbeck mouldings brochure for the full range referring to cover strips". Do you see that? A. Yes, it says above that "This"-- Q. I can read that, I'm asking if just by reference looking at that. A. Yes. Q. Did you obtain that brochure? A. Not at the time. Q. By the answer you've just given do you mean to suggest that you did obtain it at some other time? A. Much later. Q. Much later being? A. After the building was completed. (iii) Under the heading " Fixing " the Brochure states " Battens - We recommend Batten Centres of 600mm to 900mm for all external cladding products. " Mr Solomon displayed ignorance in the witness box as to what this meant and made no inquiries of Timbeck to ascertain its meaning (see T:934.34): Q. Under the heading "Fixing", what did you understand when you read this brochure was meant by the statement at the bottom of the left hand column "Battens"? A. My understanding of that was that that was affixing the centres to the framework that the weatherboards were required to be fixed to. I realise it says "Battens" though. Q. When you've just said those words, just for my edification, I realise it says "Battens though", could you just explain to me what you meant by that, it sounded like a statement of qualification? A. It's my understanding it was just affixing centres to be placed into the framework, the substrate of the building. Q. Perhaps you could just address my question. Did you understand "Battens" to mean something else other than just the timber framing? A. No. Q. I want to understand, if I can revisit the statement you made, "I realise it says 'Battens' though." What did you mean by that? A. I was anticipating your next question which-- Q. Which was, what did you anticipate? A. I was expecting what do you understand to be a batten. Q. Can you answer the question you've just asked yourself? A. A batten is generally a section of timber of a certain size and the size varies. Q. A batten is something which is normally attached, is it not, to the timber framing to create a cavity? A. It can be. Q. Approaching the method of installation with the care, skill and diligence that you would bring to the exercise of preparing a specification or advising a Builder, faced with a statement in this brochure that may have raised a question in your mind as to what it meant or whether it would impact upon the installation process, I take it one thing you could've done is to contact Timbeck and say "What does that mean, battens-we recommend battens centres" et cetera? A. I could have. Q. But you didn't? A. No. Q. And as you sit in the witness box today, you would still have a question mark in your mind as to what that was intended to mean, wouldn't you? A. Yes. Q. One thing it could've meant by reference to your understanding of what a batten was, was that you were to attach the cladding to a batten, the battens would be attached to the timber framing and there would therefore have been a cavity created of the kind that I have identified in exhibit S2? A. It could mean that. (iv) Under the heading " Timber Cladding " the Brochure stated " for a customised specification please contact Timbeck on (02) 9709 …66. " No such entreaty was made by Mr Solomon for any such customised specification even despite the Brochure stating (under the heading " Installation ") that the Brochure contained " general information " only. 182 Bearing in mind the Architect's role in governing the choice of materials and design imperatives, the Architect's neglect of these fundamental matters, in a Brochure that made plain the installation should be "strictly as per manufacture's recommendations" can only suggest one of two things: (i) The Architect paid no heed to the Brochure; and/or (ii) The Architect was negligent. 183 The finding is that the Architect could not have paid any heed to the Brochure as, otherwise, he would have paid attention to the requirements clearly stated in it to make inquiries of Timbeck before specifying or installing the Timbeck Product. Damages – no causation 184 The cross-claimants' case also fails at the causation threshold. The cross-claimants did not did not buy the Product. They cannot say that they suffered loss in buying a Product which, misleadingly, was bereft of some represented quality. 185 The cross-claimants are not purchasers. Any loss they suffer is indirect. The issue is whether their loss is caused by the alleged misrepresentation. 186 The causation problems with the cross-claimants' case is as follows: (a) The Builder's claim is not for loss caused by any misleading conduct by the Timbeck. The alleged loss – being the amount awarded by this Court to the plaintiff – cannot constitute a loss caused by deception. The cross-claimants cannot be heard to suggest this Court's judgment is the product of misleading and deceptive conduct. It is a lawful contractual entitlement vindicated by the Court; (b) Any "loss" measured by the cost of removing and replacing the boards was not caused by any deceptive conduct. It was a self-inflicted loss caused by a direction to remove the boards – a 'novus actus interveniens', caused by the Project Architect; (c) If the cross-claimants wished to have a water-resistant external protective barrier, which could have been achieved by adopting a method of installation that incorporated sarking and flashing, the Architect's direction to remove and replace the W.R.C cladding was overkill. The only loss would have been the costs of installing those elements, as part of the external protection system, that would have ensured the system's water proof integrity. 187 There is in fact no evidence as to the cause of the water ingress into the building proffered by the plaintiff or the defendant or their respective experts. There could have been an array of causes: poor installation, the piercing of the membrane, the absence of any cavity and/or flashing, the use of inappropriate nail sizes, shrinkage. Of course, because of the nature of the evidence, the Court is in no position to speculate on the cause. I accept that it is sufficient for the Court to find that the cross-claimant has failed to (a) establish any inherent defect that caused the water to ingress and (b) failed to exclude a range of other possible causes particularly in light of the Architect's failure to specify the mode of installation of the Timbeck product and, indeed, sanctioned departures from the specification (or just ignored the specification). 188 Further the Court cannot dismiss design (or more accurately lack of design) issues as being responsible for the water ingress problems. Mr Iskowicz's evidence identifies the absence of a cavity (of the kind identified on the "green sticker" side of Exhibit S2) as the cause of water ingress. Mr Solomon attempted to suggest (at T919) that there was a gap that allowed the egress of water but it is plain that none was included in either the drawings (A04A) or the specification (see T844, T920, T1097). Mr Solomon specified a 50mm cavity for the 110mm thick brick walls on the ground floor despite the fact that such brickwork was to have a specific substrate and render. The evidence that brickwork sucks in moisture that cladding doesn't (see T915, also repeated by Mr Abbott) – and that no cavity or flashing is required for 17mm thick timber cladding, is not a view shared by Mr Iskowicz nor the literature that was attached to the reports of both Mr Abbott and Mr Iskowicz. The better evidence on this topic is that of Mr Iskowicz who, presented as a more impressive, and less partisan, witness than Mr Abbott. Understanding drawing A-04A 189 During the hearing this drawing was subjected to considerable analysis. Indeed a two-dimensional model described as a mockup was admitted into evidence. 190 The relevance was to ascertain whether or not the Architect had provided in the above described drawing for water/moisture to be able to egress. 191 It is convenient to describe a cross-section through the wall of the house from ground level to roof, an analysis which counsel for Mr De Grazia undertook. 192 The section describes a cross section through the wall of the house from ground level to roof: (i) The relevant part is the junction between the concrete floor and the timber framed wall. (ii) At the junction between the wall and the first floor level the drawing describes the following construction. (iii) The floor slab is supported off a cavity brick wall. (iv) Supported by the floor slab is a 100x50 timber frame wall. (v) Approximately 1/3 rd of the bottom plate of that wall over-sails the concrete slab (no dimension is given). (vi) Below the concrete slab and fixed to it is a nailing plate which supports a short frame below the slab which in turn provides fixing for both the timber soffit lining and the T&G wall sheeting. (vii) Vertical battens are fixed over the face of the concrete slab to provide fixing for the horizontal T&G cladding. (viii) Fixed to the frame on its external face is a vapour barrier (permeable sarking) which extends from the top plate to the bottom lip of the T&G weatherboard cladding. (ix) An external lining of T&G weatherboard cladding is fixed over the vapour barrier (permeable sarking) from the roof/wall junction to the timber soffit lining where that lining abuts the brick wall of the ground floor. (x) Insulation batts are shown behind the vapour barrier (permeable sarking) for about ½ the width of the stud frame (no dimension is given) . There is a gap between the insulation and the internal lining of the timber frame wall. (xi) The interior of the room is lined with plaster board. 193 The attached drawing is intended to describe the position also sought to explain the so-called mock up. 194 Paragraph 21(a) of the Cross Claim pleads that the alleged representations were misleading because water entered the building 'between the joints in the boards'. The drafting is opaque when it should be clear as regards what 'joints' means. Regardless, there is simply no evidence led to the appropriate standard (lay or expert) sufficient to make out this claim regarding any 'joints', and if even if there had been, there is no evidence that the alleged representations were the cause of the entry of water 'between the joints in the boards'... It is salient to note that there is no representation in the Brochure (nor is one pleaded in the Cross Claim) that water will not enter 'between the joints in the boards' in any event necessary to ground any relevant claim for relief. Manufacturer's Liability 195 The claims under both section 74B and 74D of the Trade Practices Act are brought well outside the 3 limitation period fixed by section 74J of the Act. 196 Pursuant to section 74J, the limitation period commences when the consumer first becomes aware or ought reasonably to have become aware that the goods were not reasonably fit for purpose, or were not of merchantable quality. This must have been around February 2003 when the leaking was first discovered, or shortly thereafter. The Cross Claim was filed in 2008. 197 Even if the claims were not statute barred, there simply is no evidence that the Timbeck Product was not fit for purpose. 198 The time at which the determination of whether or not goods are fit for purpose or of 'merchantable quality' (which by reference to section 74D(3) relevantly means whether they were fit for purpose having regard to the description given to the goods and their price, among other things) is when the goods are supplied to the consumer: Medtel Pty Ltd v Courtney [2003] FCAFC 151. The Timbeck Product as used on the project is no longer available and hence cannot be tested. This no doubt is one of the reasons why the limitation period is limited to 3 years to ensure relevant evidence regarding the products is not lost. 199 Significantly, as neither the Architect nor the Builder informed the cross-defendant as to the purpose to which the Timbeck Product would be used for (as had been specifically recommended in the Timbeck Brochure), it was not possible for Timbeck to consider such purpose and make any relevant representations to either the Architect or the Builder as to the appropriateness of the Product for that purpose, or to supply any particular product at all, and hence the claim must fail. Joinery The approach required for determining the joinery issue 200 In this part of the case Mr De Grazia was only claiming for delay costs. Such costs were alleged to arise from the joinery not being completed at the time it should have T:288.25-289.15. Mr De Grazia's successful tender bid to complete the joinery works represented his variation claim for the costs of performing that work. 201 Mr Roberts in his final address presented the joinery issue as turning on whether Mr De Grazia or Mr Solomon's version of events was accepted. Ms Olsson in her final address also treated with the joinery issue as turning on credit findings. Ultimately this accurately represents the correct position. 202 Nevertheless the determination of this issue requires an understanding of the relevant contractual regime. Examining parameters of the relevant contractual regime 203 The joinery work was the subject of a provisional sum. A provisional sum is defined in Contract clause 10.7.2: Contract clause 10.7 Provisional Sums A Provisional Sum (whether described as a Provisional Sum or Prime Cost Sum) means a sum included in the Contract Sum for: … 10.7.2 the supply and fixing of materials or goods or the execution of work or the fabrication or manufacture and supply or materials or goods particular to and exclusively for Works by persons to be identified by the Architect under clause 4.2.1. … 204 Under Contract clause 4.2.1 the Architect is given the opportunity to instruct the Builder to use a particular subcontractor in relation to work which is the subject of a provisional sum, however the Builder is not bound to accept the instruction: Contract clause 4.2 Identification of Supply and Sub-contract Work 4.2.1 The Architect shall issue instructions in respect of any materials or goods or work which are the subject of a Provisional Sum referred to in clause 10.7 and the Builder shall make arrangements for supply or enter into sub-contracts in accordance therewith and consistent with the Builder's obligations under this Agreement, provided that should the Builder have reasonable objection to any instruction, then the Builder shall not be bound to accept the instruction but shall as soon as practicable notify the Architect of this objection and seek the Architect's further instructions. … 205 In relation to the plaintiff's joinery delay claim, as with the plaintiff's case as a whole, it was pleaded that Mr De Grazia had sought extensions of time for the relevant delay under Clause 9.2 of the contract, and in breach of clause 9.2.3 the Architect had failed to properly assess this claim. The plaintiff contended that the Court should extend time and award delay costs. 206 Accordingly, it is necessary to determine whether Mr De Grazia is entitled to recover under the contract's regime for delay. Contract Clause 9.2.1 sets out the Builder's obligation regarding notification of delay: Delay shall be notified by the Builder as follows: 1. upon it becoming evident to the Builder that progress of the Works is likely to be delayed, the Builder shall notify the Architect stating the nature, cause and if known the extent of the delay; 2. if the Builder's notice given under 9.2.1.1 does not state the extent of the delay then the Builder, as soon as practicable after becoming aware of the extent of the delay, shall notify the Architect of the extent. Specification clause 1.26 further provides in regard to extensions of time: Requests for extension of time to the contract period must be submitted in writing to the Architect for consideration … Delay in activities which are not critical to the construction program shall not justify extension of the time for Practical Completion of the Works. 207 The following subclauses of the Contract govern the granting of extensions of time: 9.2.2 Should progress of the Works be delayed due to causes beyond the control of the Builder, then the Builder shall be entitled to a reasonable extension of time for Practical Completion. 9.2.3 The Architect shall determine whether an extension of time for Practical Completion shall be granted and the extent thereof and shall so notify the Builder in writing within 10 days of recept of the Builder's notice under subclause 9.2.1 or where applicable subclause 9.2.1.2 … 208 In relation to the costs of delays, Contract clause 10.9 provides: Where the time for Practical Completion has been extended on the grounds of delay caused by one or more of the following reasons: 10.9.1 By reason of Architect's Instructions, other than under clause 6.6 with respect to standard of materials or workmanship; 10.9.2 delay by the Architect in giving necessary instructions requested by the Builder in writing;… 10.9.9 delay caused by any sub-contractor or supplier identified under the provisions of clause 4.2 which the Builder in the opinion of the Architect has taken all practicable steps to avoid then the Builder within a reasonable time of such delay may notify the Architect of any loss or expense incurred or borne by the Builder as a result of such delay and the Architect thereupon shall make such addition to the Contract Sum as the Architect considers reasonable. 209 An initial question is whether the alleged delay with regard to joinery was properly notified by Mr De Grazia. Mr De Grazia's evidence was that he had made a delay claim on 16 May 2005. 210 Next the Court must consider whether the progress of the Works (with regard to joinery) was delayed due to causes beyond the control of the Builder. If so, the Builder was entitled under clause 9.2.2 to a reasonable extension of time. This issue turns on which parties' version of events is accepted, and as is outlined below Mr De Grazia's version of events is preferred. 211 The Court must determine whether the Builder is entitled to the costs of any such delays under clause 10.9. It is a precondition for the operation of clause 10.9 that the time for Practical Completion has been extended on the ground of delay for which costs are claimed. In this regard, an extension of time for delay caused by Woodfast was rejected. However, even where such an extension was not granted by the Architect, if the Court finds that on a proper construction of the contract the Builder was entitled to an extension it follows that the Court should retrospectively extend time. The consequence of this is that costs of delay would be available. In this regard, it is to be noted that it is a condition precedent for the award of delay costs under Contract Clause 10.9 that the Builder has notified the Architect of the relevant loss or expense within a reasonable time of the delay. Mr De Grazia appears to have failed to fulfill this condition precedent. However, as outlined earlier, the decision is that in all the circumstances Mr De Grazia's claims should not be defeated by failure to comply with the relevant contractual procedure. Returning to the facts 212 The Builder's claim as argued raises two purported grounds of delay beyond his control that may justify an extension of time and award of costs. Firstly, delay caused by the Architect's instructions or delay in giving such instructions (if such delay were established costs may be available under clauses 10.9.1 and 10.9.2). Secondly, delay caused by Woodfast (if established, costs may be available under clause 10.9.9). Mr Roberts submitted that even if there was a relevant delay for the purposes of sub-clause 10.9.9, it was reasonable within the meaning of the clause for Mr Solomon to conclude that Mr De Grazia had not taken all practicable steps to avoid the relevant delay, and therefore was not entitled to delay costs. This was said to be because of the state of the site when Mr De Grazia was demanding delivery of the joinery, and other matters. However, as is outlined below this proposition is rejected on the basis of credit findings. The plaintiff's essential submission 213 The plaintiff's submission was that there was abundant evidence to justify an extension of time for the completion of the joinery works (by ASBS) and the finishing trades that followed. 214 It was agreed that Woodfast Joinery – the initial subcontractor for the joinery – had been specified as a nominated subcontractor by Mr Solomon using the Architect's power under Contract clause 4.2.1 (outlined above). 215 Ms Olsson submitted and I accept that the appropriate inference from the evidence found to be reliable is that Mr Solomon had directed Mr De Grazia to accept the terms in Woodfast's quote for the subcontract and this was an unauthorised interference in the Builder's right to negotiate the terms of the subcontract. The Builder is given explicit power to subcontract under Contract clause 4.1 and it is apparent from section 4 of the Contract as a whole that it is for the Builder to negotiate subcontract terms. The plaintiff's submissions as to delay regarding joinery 216 Ms Olsson contended that the evidence established that Woodfast and Mr Solomon were responsible for the delay regarding joinery. In this regard, Ms Olsson contended that on the evidence, the Builder had expressed concerns about the joiner's capacity to perform the works at the outset, but the Architect had ignored this advice and instructed the Builder to proceed with the subcontract. Furthermore, the contention put on behalf of Mr De Grazia was that during the period of the subcontract Woodfast Joinery had caused him significant delays, however despite his repeatedly raising this issue and asking Mr Solomon to terminate the subcontract (under Contract clause 5.4 Mr De Grazia had to follow the Architect's instructions), Mr Solomon had delayed in giving instructions and decided to retain Woodfast. In this regard, Mr Solomon testified that in February 2003 he instructed the Builder to retain Woodfast notwithstanding the Builder's complaints). Ms Olsson submitted that: The Architect was entitled, under the contract, to issue instructions to retain a subcontractor although two observations should be made: firstly, an implied term might readily be inferred that he should act reasonably in issuing those instructions and secondly, that he or the proprietor (or both) thereby accept responsibility for the consequences of such instructions. Ms Olsson came back to the second proposition – which was that having instructed Mr De Grazia to use Woodfast, Mr Solomon had to take responsibility for delays caused by Woodfast – at various points. 217 Mr Roberts submitted that Mr De Grazia's complaints should not be taken as proof that Woodfast was in fact delaying the works. Ms Olsson made various submissions to establish that Woodfast's actions had delayed the building work. She drew on Mr De Grazia's evidence that he had sequenced the work to install the joinery upstairs first, and because the joiner did not cooperate with this sequence, and failed to complete its work, later trades were delayed. In this regard, Mr De Grazia gave evidence in chief that there was a period from January until maybe February 2003 where nothing happened on the building site because of delays in relation to the joinery T:287.5. Ms Olsson also contended and I accept that there was scant evidence that Mr De Grazia was responsible for the delay in relation to joinery, with Woodfast never attempting to rely on a contractual remedy or alleging that Mr De Grazia was in breach of the subcontract. 218 As part of establishing the delays caused by Woodfast, Mr De Grazia gave evidence in chief that by Christmas 2002 only part of the joinery had been completed –the carcasses, which were the less expensive and less important part T:281.30-282.30. Against this, Mr Roberts submitted that it was standard practice to build and install joinery in two parts: the carcasses first and finished tops much later. In cross-examination Mr De Grazia rejected this proposition: 460.40-461.10. Mr Solomon's evidence in chief was that in his experience joinery was always done in two parts (as contended by Mr Roberts): 740.10. Furthermore, Mr Solomon testified that there were significant defects in joinery due to damage from later trades. This appeared to implicitly suggest that the Builder had brought joinery onto site too early T:740.23-48. 219 Mr De Grazia gave evidence in chief of another aspect to delay in relation to joinery, however this was not expanded upon in later argument. His contention was that he did not have sufficient information regarding the joinery to engage a subcontractor until the time when the site was actually ready for part of the joinery to be installed T:273.46-274.0. However, in re-examination Mr Solomon testified (in relation to Ms Olsson's questions about the need for the Builder to have joinery details prior to ordering) that no claim or complaint was made by Mr De Grazia about a lack of coordination between joinery and electrical and plumbing details T:970.16. The defendants' submissions as to delay regarding joinery 220 The defendant disputed Mr De Grazia's delay claim regarding the joinery. Mr Roberts submitted that Mr De Grazia's complaints regarding Woodfast were unsubstantiated and therefore his objections as to it being the subcontractor were not reasonable, as required by Contract clause 4.2.1 (see below). Mr Roberts accused the Builder of intentionally shifting blame to the joinery contractor because it was an "Identified Contractor" under the Contract, and attributing blame to the joinery contractor for virtually every delay on site. In cross-examination, Mr Roberts suggested that Mr De Grazia had embarked on a campaign from the outset to undermine Woodfast because he wanted to perform the joinery work himself T:452.10-452.20. 221 To demonstrate the alleged falsity of Mr De Grazia's complaints regarding Woodfast, Mr Roberts highlighted that in February 2003, when Mr De Grazia was writing to Mr Solomon to complain about Woodfast, he was also writing to his plasterer to complain about six weeks of delay caused by the plasterer. The relevance of this was that Mr Roberts contended that plastering affects the installation of joinery – as joinery must fit between properly plastered walls - and thus it supported the inference that the site was not ready for the joinery when Mr De Grazia was asking for it. Mr Roberts also made various suggestions in cross-examination that the building was not ready for joinery at times when Mr De Grazia was demanding joinery. The culmination of this line of questioning was that Mr De Grazia conceded, subject to the photographs Mr Roberts relied on being correctly dated, that part of the building was not ready for joinery as late as 4 December 2002 T:463.20-30. Additionally, Mr Solomon gave evidence in chief that there were problems with the plasterboard work in the building that meant such work was only finished sometime in 2003, meaning joinery that touched a ceiling could not be measured until after such plastering was completed. 222 Ms Olsson submitted and I accept that Mr Roberts' contention that the site was not ready for joinery when Mr De Grazia was demanding it did not ring true for several reasons. Firstly, Ms Olsson said that since the joinery was defective, it could be inferred that the joiner on any view was not going to do a good job. Secondly, Ms Olsson submitted that Mr De Grazia's delays in finishing the site were entirely plausible within his chosen sequence of the works. Thirdly, in relation to the plastering issue Ms Olsson submitted that the documentation showed there was a genuine dispute as to whether the Builder's work was defective, and the issue had been dropped in March 2003 but the joinery delays continued. The trip to the joinery workshop and the site minutes 223 A central part of the joinery delay issue was a point in November 2002 where Mr De Grazia and Mr Solomon had attended Woodfast's workshop. Mr De Grazia gave evidence in chief that when they went to the workshop – at his insistence to see the progress of the joinery work – there was no joinery or even materials for it. Mr De Grazia recounted a conversation in the car trip returning form the workshop where he pressed Mr Solomon to get another subcontractor in light of Woodfast's lack of progress, and Mr Solomon said he would not sack Woodfast, and instead would speak to Tony the relevant person at Woodfast. 224 As Ms Olsson submitted, Mr Solomon did not deny the November meeting with Woodfast, and therefore must have been aware the works would be delayed by the joinery. Mr Roberts submitted in this regard that Mr Solomon had given evidence and the site minutes recorded that a certain amount of joinery work had been completed. 225 Mr De Grazia's version of the meeting is accepted on the balance of probabilities. It is to be recalled that Mr Forbes' gave evidence that he remembered the two going to the Woodfast workshop. Further the fact that site minutes continued to record that the kitchens and laundries as complete was inexplicable and contrary to the evidence. The evidence called in relation to the joinery delay issue 226 Ms Olsson invited the Court to make the following Jones v Dunkel inference in relation to the delay caused by the joinery: The defendant did not call any evidence from Tony Amyouni, the director of Woodfast with whom he and the Builder dealt: he undoubtedly could have given relevant and material evidence on these points and his absence was not explained. The Court is entitled to infer that his evidence would not have assisted the defendant's case. 227 I accept the submission as of substance. The period from when Mr Solomon began looking for an alternative subcontractor 228 There was a period from April 2003 until June 2003 when Mr Solomon was looking for a replacement subcontractor to complete the joinery. Mr Roberts contended that negotiations had been terminated because of Mr De Grazia's abusive behaviour in a meeting with Mr Solomon and a potential subcontractor. To rebut this, Ms Olsson submitted that the evidence of the potential subcontractor, Mr Versi, showed that he did not want the job. Ms Olsson emphasised that there were other factors which had discouraged Mr Versi from taking the job. 229 Mr Solomon testified that he had consented to termination of Woodfast's subcontract on 16 June 2003 after it became insolvent. Following this, Mr Solomon had accepted a tender by Mr De Grazia to complete the joinery work. In cross-examination of Mr De Grazia, Mr Roberts suggested that ASBS had taken six months to complete the joinery work – which was based on a six week program – however Mr De Grazia disagreed, contending that practical completion was achieved in about six to eight weeks T:470.22-34. Mr Solomon gave evidence in chief that Mr De Grazia said he would complete the joinery within eight weeks, but then only completed the joinery in six months, with practical completion on about 18 or 19 December 2003 T:749.15-749.37. Regarding Mr De Grazia's eventual completion of the joinery work, Ms Olsson submitted that the job was more complex because of the need to rectify Woodfast's defective work. 230 As earlier indicated the essential finding on the joinery issue is very dependent upon the Court's finding as to which of the two parties competing versions of the facts is accepted. In general terms Mr De Grazia's version is preferred to that of Mr Solomon. Further the issue requires a credit finding as to whether or not the state of the site has been proven to be such as to have been a principal cause of the inability to deliver the joinery. That in turn impacts upon Mr De Grazia's entitlement [or not] to the claim of day-to-day costs in under clause 10.9.9. On the evidence, which is accepted as reliable, it was not reasonable within the meaning of that clause for Mr Solomon to conclude that the Builder had not taken or practicable steps to avoid the relevant delay and therefore was not entitled to delay costs. The finding is that Mr De Grazia's delay claim with respect to joinery is made out. The sub-issue of a progress claim in regard to Woodfast's work 231 A sub-issue in relation to the joinery was a progress claim for $30,000 made by Mr De Grazia in January 2003 in relation to the joinery subcontract and accepted by the proprietors. In cross-examination, Mr De Grazia accepted that this amount was not paid to the subcontractor – Mr De Grazia had reduced the valuation of their work based on defects (285.10) – meaning he received this amount on top of the price that was agreed for ASBS to complete the building work T:470.17-20. Mr De Grazia also agreed that in completing the joinery ASBS was able to use carcasses made by Woodfast (the subcontractor) that had been accepted. 232 Regarding the $30,000 issue, Mr Solomon gave evidence in chief that he and Mr De Grazia had agreed that there was $30,000 of joinery attributable to Woodfast's work on site. Mr Solomon testified that despite this agreement Mr De Grazia insisted he was going to pay the subcontractor an amount that he determined was appropriate T:744.26. 233 In regard to the $30,000 issue Ms Olsson submitted that: It is of no contractual significance that the Architect allowed a certain amount in a progress certificate to the Builder for joinery and the Architect had no contractual or other authority to direct the Builder to make a payment of a particular amount to the subcontractor. Indeed, an instruction to do so would be perilous indeed for an Architect and may well make him personally liable for the joiner's work. Ultimately if the Builder had been paid for the joinery, it was a payment on account (of work to be done) and he continued to be liable to the subcontractor for that sum when the work was completed satisfactorily. 234 I accept Ms Olsson's admission as of substance. At a fundamental level, Mr Solomon was not in a contractual relationship with Woodfast. Therefore he would need to be able to point to a provision in the head contract that empowered him to order Mr De Grazia to pay the $30,000 to Woodfast. Mr Roberts did not put forward such an argument in his final written and oral submissions T:1259.37-1240.2, and his cross-examination of Mr De Grazia did not raise such a point T:464.20-467.35. Windows 235 Mr De Grazia's claim in relation to windows had two aspects: firstly, delay costs said to be occasioned to him as a result of Mr Solomon's delay in providing details for the windows; and secondly an instruction by Mr Solomon to use a particular window supplier and manufacturer, which Ms Olsson characterised as a variation that added to the cost of the project T: 225.38-1229.20. Were there sufficient details provided? 236 A significant part of the argument in relation to windows focused on the Architect's provision of details of the windows to the Builder. Primarily this was relevant for the purposes of determining the issue of delay and specifically when the Builder could obtain a quote and then order the windows. 237 In this part of the case Ms Olsson submitted that the contract drawings were not sufficient to enable the windows to be manufactured. Ms Olsson rejected the defendants' contention that there were only minor changes to the windows, submitting that the revisions of the relevant drawings showed that there were substantial changes. Ms Olsson further submitted that there had been changes by the Architect to the window details until mid-June 2002 (a point conceded by the defendants) meaning the Builder could not place a final order until this date. Furthermore, given Mr Solomon agreed there was a lead time of at least four to six weeks in the manufacture of windows (Ms Olsson has suggested four to eight weeks), the earliest the windows would arrive on site was mid-July. Ms Olsson contended that given that after the windows were installed, the cladding had to be fitted and the internal works done, it was foreseeable on this timetable that the original September 2002 deadline would not be met. It was therefore claimed that Mr De Grazia was entitled to costs for the delay caused by the Architect's conduct in providing window details. 238 Although the defendants and Ms Olsson agreed that the final change to the windows had occurred in June 2002, Mr De Grazia gave evidence in chief that he had only received sufficient detail to obtain a final quote for windows in August 2002 T:94.48. Ultimately, nothing turns on this difference, since for the reasons outlined below Mr De Grazia's window delay claim is rejected. 239 Mr Roberts' position was that the Builder had sufficient details from the contract drawings to obtain a quote for the windows and doors and to place an order (Mr Solomon's evidence in chief and under cross-examination supported this proposition T:883.41-885.33). Mr Roberts reasoned that all of the amendments to the window and door details related to internal changes. Mr Roberts contended that there was no change to the opening size of the windows. Mr De Grazia rejected this suggestion, but conceded he was unable to identify such a change T:381-386.45. Mr Roberts submitted that his contention that a quote could have been obtained form the contract documents was shown to be correct by the fact that the Builder obtained a quote from Broadview, another window supplier. 240 Mr Roberts made several more specific submissions intended to support his basic position. These included submissions that: i. Window details showed how surrounding finishes would meet the window frame. This work involved following trades such as plastering and carpentry and occurred after the window or door was installed. Mr Solomon's evidence supported this submission T:968.43-969.28. This was significant because – as was explained by Mr Solomon - it meant that such details were meant for the later trades, rather than the window manufacturer. Accordingly, this submission contradicted the Builder's contention that the delay in providing window details had delayed the order and manufacturing of the windows. ii. The changes that were made were minor and unlikely to affect the plaintiff's project. For example, one of the changes was simply a numbering change in the Lidco system (400 to 410 series). The actual window sections were unchanged. Another example was the final amendment to the window schedule which was a deletion of a transom from two windows. Mr Solomon's evidence in chief supported this submission T:702.26-704.49. However, in relation to the second example, Mr Solomon conceded under cross-examination that the change meant that the window concerned could not be fabricated until that date T:890.25. iii. The claim relating to the skylight above the bridge did not result in any delay. The change was simply a different type of glass and the issue was resolved the day after it was raised. 241 The parties also touched on the impact that the provision of window details would have on the building of the frame of the houses. The relevance of this was that the Builder needed to know the appropriate openings to leave for windows to be installed into. In this regard, Mr Roberts suggested that none of the changes to the window or door details affected their outside dimensions. What actually occurred at the site 242 The parties advanced various arguments about what had actually occurred during the life of the project with regard to windows in order to support their respective contentions regarding delay. The plaintiff's version of what occurred 243 Ms Olsson's contention was that site minutes were the most reliable account of the provision of the windows and doors. She highlighted that the minutes recorded that in April 2002, Mr De Grazia was asking "L and S" for details for the windows, and the same request was minuted on no fewer than 5 occasions, spanning some 3 months of the contract (bearing in mind that the contract period was originally 42 weeks). Ms Olsson further submitted that there could be no doubt of the inadequacy of the original drawings because none of the witnesses sought to resile from the requirement in the minutes that details were needed. However, this statement appears to put the matter too strongly. While it is true that the request existed in the minutes (Mr Roberts provided an alternative explanation for it – see below), Mr Solomon throughout his evidence insisted that the details that Mr De Grazia was waiting for him to provide did not prevent Mr De Grazia from obtaining a quote and having shop drawings completed. Accordingly, the records in the site minutes do not necessarily prove Mr De Grazia's delay claim. 244 In his examination in chief, Mr De Grazia testified that in a September 2002 conversation he had suggested that the project was held up because of delay regarding the windows and Mr Solmon had agreed T:112.0-5. The defendant's version of what occurred 245 Mr Roberts' essential argument as to this aspect of the windows issue was that Mr De Grazia's claim had been artificially constructed in retrospect. He put this to Mr De Grazia at various points during cross-examination and Mr De Grazia denied it T:392.50 – 393.3, 372.40-374.5. 379.45-381.27. In making this argument, Mr Roberts' points included the following: i. No claim for changes in the window schedule was made during the course of the works. Despite the complaints that are now made, there is not one letter or facsimile from the plaintiff to the Architect to the effect that it is still waiting on the window details and the changes are causing a major delay on site. That is consistent only with there being no such issue at the time. ii. What appears to have happened is that the plaintiff has gone back over the minutes and seen that they record an entry 'Finalise window sections' and latched on to that as indicating he was waiting for details. iii. The minutes of 23 August 2002 still have that note. But by then the plaintiff had had the window schedule for about two months and had even received the Arch Systems quote. iv. By 20 June 2003 all windows were complete and the cost of that trade ought to have been known. This item was not raised at all during the "Variation settlement meeting" on 20 June 2003. What was the impact of the purported delay? 246 In order to support the claim that Mr De Grazia was delayed by Mr Solomon's failure to provide relevant window details, Ms Olsson attempted to show that the progress of the works had in fact been delayed. Ms Olsson drew on the fact that in the two progress certificate paid for the six months up to mid July 2002 around $572, 000 was paid to the Builder in such certificates, whereas in the certificate from July to end of October around $45, 000 had been paid out. Ms Olsson said this was proof that very little was happening on site, and sought to link it to Mr De Grazia's allegation of delay caused by the Architect with regard to windows and cladding. 247 Ms Olsson made a similar point during cross-examination, with Mr Solomon agreeing with her suggestion that by 23 August 2002 the stud work on the second floor of the building was ready for the windows and then the cladding to be fitted, however neither was available (it was agreed that Mr De Grazia was planning to finish the second floor first). Ms Olsson suggested that this was because of Mr Solomon's delay in providing necessary details to Mr De Grazia, with the windows changed until June 2002 and only arriving in about September 2002, and the cladding ordered on about 17 September 2002 T:890.25-892.12 Ms Olsson contended that the cladding and windows were both critical to the progress of the works as they made the building watertight, and a delay in their installation in turn delayed the commencement and completion of internal finishes. 248 In evaluating this aspect of Ms Olsson's argument, it must be remembered that the fact that there was an apparent delay does not necessarily mean that it was caused by the Architect. The construction method required to be used to install the windows 249 Another significant part of the window delay issue concerned the process by which windows were to be installed into the house. Mr De Grazia's gave evidence that he wished to fit the windows into the brickwork as the brickwork was built up, rather than leaving openings in the brickwork and later fitting the windows in T:82.30-82.47, 366.27-366.50. Mr Solomon gave evidence that such a technique was essentially never used. 250 Ms Olsson conceded that a notation to the relevant contract drawing stated that the windows were to be fitted into openings that were to be left in the brickwork (by specifying that the windows should be measured on site prior to manufacture) T:1179.47-11.47.50, 1182.30-1182.32. This requirement also appeared in Specification clause 8.01 (extracted below). 251 Ms Olsson's first submission was that there was an inconsistency between the term of the contract which gave the Builder power to decide the sequence of the work and the part of the contract drawing which said that the windows should be measured on site before manufacture, and the former should take priority. Ms Olsson reasoned that the purported inconsistency activated the term of the contract that provided in the event of conflict, the general contractual conditions take priority over the contract drawings T:1182.11-1183.4. 252 Ms Olsson's second submission, which was made in the alternative, was that Mr De Grazia could have acted consistently with the part of the contractual drawing in question, and his power to decide the order of building, by measuring and ordering the windows for the bottom floor first – once the bottom floor frame was completed - however he was prevented from doing this because Mr Solomon was still changing the windows (meaning a final order could not be placed). In order to explain this alleged delay Ms Olsson emphasised Mr De Grazia's evidence in chief that he did not want to wait for everything to be finished before utilising later trades T:1183.12-1183.25, 1224.46-1225.40. 253 Mr Roberts submitted that there was no ambiguity, discrepancy or inconsistency in the contract documents, and therefore Ms Olsson's primary submission in this part of the case could be ignored. He contended that it was a contractual requirement to measure all window and door openings onsite prior to any window and door fabrication (he pointed out that the requirement appeared not only in the drawings, but also in the specification). 254 Under cross-examination in relation to the specification for window and door openings to be measured first, Mr De Grazia maintained that there was an instruction to deviate from the specification, although he was not sure whether it was writing, and if so, where it appeared. Mr Roberts suggested Mr De Grazia had only come up with this story recently T:366-373.33. Dealing with the construction method issue 255 The relevant contractual framework is as follows. Under Contract clause 6.1: 6.1 Construction Methods The Builder is and shall remain responsible for all construction means, methods, techniques, sequences and procedures employed and to be employed by him in and about the execution of the Works and for co-ordinating all portions of and the execution of all portions of the Works and the Architect shall not be entitled to issue any instructions as to these matters. 256 The relevant part of Specification clause 8.01 provides: "All window and door openings to be measured on site prior to fabrication". 257 Contract Clause 2.3 provides: 2.3 Precedence 2.3.1 Should any ambiguity, discrepancy or inconsistency exist in the Contract Documents then the order of precedence of Contract Documents set out in Item D of the Appendix shall apply to resolve the same [under which the Contract takes precedence over the Specification]. 258 This issue therefore turns upon therefore whether the instruction in Specification Clause 8.01 constitutes a construction method which under Contract Clause 6.1 the Builder is responsible for. If this is the case, there is an inconsistency between the provisions. 259 On the plain meaning of the clauses, I am satisfied that the instruction contained in Specification clause 8.01 is relevantly inconsistent with the scope of Contract Clause 6.1. The instruction in Specification clause 8.01 amounts to a direction as to the order in which the window installation process is to be undertaken. However, under Contract Clause 6.1 such matters were reserved for the Builder's judgement. In this regard, Ms Olsson was correct in submitting that under the contract as long as the Builder completed the works consistently with the design intent, it was for him to decide how he built the works. 260 I reject the alternative interpretation: namely that Contract Clause 6.1 confers on the Builder a general power as to construction methods, but the instruction in Specification clause 8.01 then removes from Contract clause 6.1's scope the specific issue that window doors and openings are to be measured on site prior to fabrication. 261 If the above analysis be incorrect and the correct interpretation is that Mr De Grazia was bound to measure window and door openings on site prior to fabrication, Ms Olsson's alternative submission that he could have measured the openings on the bottom floor first – and ordered those windows – would have becomes relevant. 262 In cross-examination Mr Roberts suggested that, apart from the contractual interpretation issue, Mr De Grazia's expressed intention to fit the windows into the building as the brickwork went up was not plausible as a matter of building practice. However, the defendants' expert, Mr Abbott, testified that this was a common practice (1003.30-1003.48) and Mr De Grazia's expressed intention therefore appears reasonable. 263 Accordingly, it was open to Mr De Grazia to maintain that he wished to install the windows as the brickwork went up. Dealing with the window delay issue 264 The defendants focused on the proposition that the changes to the windows were minor and unlikely to affect the plaintiff's progress, and did not affect the plaintiff's ability to obtain a quote or place an order. However, it is significant that under cross-examination Mr Solomon conceded that the last window change in June 2002 could not be manufactured until that change was made T:890.22-27. The Court accepts Ms Olsson's submission that until this final change was made, the Builder could not safely finalise the order and have the windows manufactured. The potential counter-argument – that Mr De Grazia could have other unchanged windows manufactured before this point – is rejected. 265 The acceptance of the above submission and the fact that Mr De Grazia was contractually entitled to insist that he wanted to install the windows as the brickwork went up (at an earlier stage of construction than when they were in fact installed) prima facie supports the window delay claim. However, the Builder must prove that the works were actually delayed by the Architect's conduct in altering the window details. 266 Mr Zakos, in his report which the plaintiff relied upon in substantiating its submissions, assessed that the Builder was entitled to an extension of time of thirty days because of the Architect's delay in providing the final window schedule. However, in relation to the window delay issue, he made an untested assumption that the project was delayed for the entire time that it took to install the windows. It may be this conclusion is correct, however it is necessary to arrive at it in a reasoned way by considering the relevant issues. These would appear to include whether later work was delayed while the windows were installed, and whether any other work was undertaken at this time. 267 In relation to Mr Abbott's evidence, these reasons have explained elsewhere that it is often not accepted. Regarding the window delay issue, Mr Abbott did not attempt to quantify Mr De Grazia's claimed delay (he had not been instructed to report on this), and his evidence could not assist the Court in this regard. Rather, his evidence focused on the methodology as to how delay should be calculated. 268 In the result the Court rejects the window delay claim. The Builder has simply failed to prove this part of his case. The plaintiff's variation argument in relation to Arch systems 269 Ms Olsson's second major submission on the subject of windows was that Mr Solomon had instructed Mr De Grazia to use Arch Systems as the subcontractor and this amounted to a variation since Mr De Grazia could have obtained the windows that were finally specified from another subcontractor, Broadview, for around $40, 000 less. 270 In order to make out her submission, Ms Olsson relied on Mr De Grazia's evidence that Mr Solomon had told him that he did not want to use either Broadview or Sassol, the two subcontractors who Mr De Grazia had approached. Furthermore, Mr De Grazia gave testimony of a conversation where Mr Solomon had said that he wished to use Arch Systems (the contractor that was used). In examination in chief on this issue, when pressed on the fact that it was his choice as Builder to chose subcontractors Mr De Grazia said that he decided, in light of Mr Solomon's preference not to use Broadview, not to push the issue in order to avoid later conflict. 271 Mr Roberts' final position was that there was never any instruction or direction from the Architect to the Builder to use Arch Systems as the window sub contractor (Mr Solomon's evidence, including under cross-examination, was consistent with this proposition T:889.40, 969.45). Mr Roberts contended that if there had been such an instruction it would have been documented in the way instructions on the project were generally (ie given or confirmed in writing, as required by the contract). Instead the minutes in item 15.2 read 'ASBS chose Arch Systems'. Decision 272 The plaintiff did not identify precisely how the alleged instruction to use Arch Systems constituted a variation. A variation is defined in Contract Clause 1.2.12 to include 'changes in the character or quality of any material or work'. In this regard, it is relevant that Mr De Grazia recounted a conversation where Mr Solmon said Arch systems produced better windows than the subcontractor Mr De Grazia was intending to use T:1228.15. Furthermore, Mr Roberts did not challenge the proposition that the instruction, if made, would constitute a variation. Ms Olsson's submission that the instruction in substance constituted a variation is accepted (assuming it was made). 273 The next question is whether the instruction - although not documented in the proper way - was in fact made. Under cross-examination by Mr Roberts, Mr De Grazia conceded that he did not complain about not being able to use Broadview rather than Arch as the window subcontractor and had never thought of this aspect of the case T:386.48-387.4. (Mr De Grazia did not make any objection that he did not understand this line of questioning). Mr Roberts did not submit that this concession fatally undermined the plaintiff's window variation claim. However, the concession contradicts and weakens Ms Olsson's fundamental submission that Mr De Grazia was forced to use Arch systems. In this regard, it should also be noted that Mr De Grazia's evidence was that he had decided not to insist on using Broadview after Mr Solomon had made it clear that he did not to use Broadview, and then proceeded on Mr Solomon's instruction to use Arch T:96.35. Accordingly, there is significant doubt as to whether an instruction - that although not made in the proper form can be considered to amount to a variation - was in fact made. Accordingly, the plaintiff's window variation argument is rejected. 274 If the above be incorrect, and the alleged instruction was in fact made and constituted a variation, it is necessary for the Court to be able to value the variation in order for Mr De Grazia's claim to succeed. The claim was based on the difference between the price of a Broadview quote received by Mr De Grazia and the price paid for the Arch Systems contract. However, in cross-examination, Mr Roberts made the point that the Broadview and Arch Systems contract prices could not be compared since the Arch contract was a supply and install contract, whereas the Broadview quote was for supply only. Mr De Grazia did not deny this distinction (he argued that the difference between the two contract prices was more than installation would cost). As Mr Roberts further highlighted, there was really no evidence that Mr De Grazia could point to that would assist the Court in determining whether the difference between the quotes was appropriate (Mr De Grazia sought to justify his opinion by having regard to his building experience). 275 A further perhaps less significant problem with the methodology behind the plaintiff's window variation claim is that the Broadview quote it draws on (dated 8 March 2002) is not based on the final window details (settled in mid 2002). In this regard, Ms Olsson conceded that Broadview never produced a second quote based on the final window details (she argued this was because Mr Solomon had instructed Mr De Grazia to use Arch Systems instead) T:1226.7-18. Although it is not clear how the later changes to the window details would have affected the price of the Broadview quote, this matter casts some further doubt over the appropriateness of the plaintiff's claim. 276 Ultimately, the above outlined shortcomings in the methodology behind the plaintiff's window variation –and particularly the first shortcoming- mean that the Court could not endorse it in the form it was put forward. Furthermore, there was very little evidence put forward that would enable the Court to value the claim without having reference to the Broadview quote. Therefore, there are additional reasons of substance for rejecting the plaintiff's window variation claim, beyond the above conclusion that there is significant doubt over whether a variation instruction was made. Examining the differences between the evidence of the plaintiffs expert witness Mr Zakos and the defendants expert witness Mr Abbott 277 Both Mr Zakos and Mr Abbott were called as experts. Each had extensive experience in the building industry. 278 Mr Abbott had inter alia been briefed to comment on the methodology used by Mr Zakos in his report. Mr Abbott's opinion in this regard may in overview be gleaned from the following sections of his second report: (a) In my opinion and based on my experience, none of the delay claim assessments completed by Mr Zakos can be classified as valid. Mr Zakos has completed no programming analysis in determining the length of criticality of his asserted delays. He provides no substantiation in relation to the length or critically of his asserted delays and simply agrees with the Builder's claim and/or makes broad ranging comments such as: (i) Section 6.11.6 – " I have assessed the period of the delay as occurring from 13 September 2002 until 25 October 2002, a period of 30 days". Mr Zakos provides no further substantiation as to how he has reached such a conclusion and provides no supporting programming analysis in determining the length or criticality of his asserted delays. (ii) 6.11.4 – "Based on my experience in construction programming it is fundamental to a project of this nature that windows will be on the critical path". It is not clear to me to what Mr Zakos refers when he says, " the nature of this project", nor in my experience have I encountered a standard rule that states windows must be on the critical path. In my experience, windows may or may not be on the critical path based on the duration and interrelationship of all of the other activities that make up the construction programme. (b) In my experience and in accordance with accepted industry practice, delays are assessed by obtaining or constructing a programme of the day and inserting into it alleged delays. When the delay is inserted, the affect on the critical (if any) is determined by observing any movement in the completion date. By programme of the day, I mean a programmed that closely reflects the programme status (status of past and forecast of future) as at a date just prior to when the alleged delay commenced. In my opinion, Mr Zakos has completed no programme analysis whatsoever. 279 These opinions throw up an in limini issue of considerable importance. The defendants case is that the report given by Mr Zakos has no probative value at all, in particular because: i. it is contended that his methodology was flawed in a fashion that Mr Abbott has indicated; ii. it is also contended that the reports of Mr Zakos [supplemented by the answers which he gave in cross examination] make clear that he did precious little otherwise than regurgitate the plaintiffs affidavits and / or where he may have consulted drawings and construction history, had done so in scattergun fashion without really exposing his methodology hence breaching fundamental principles laid down in Makita (Australia) v Sprowles (2001) 52 NSWLR 705. 280 During the hearing of the expert testimony the Court began with what may be described as a partial hot tub exercise in which both Mr Zakos and Mr Abbott sat at the bar table whilst certain questions were put to each of them by the Court which they were permitted to answer. Each expert was free to follow the other expert's relevant answer by adding to his earlier evidence. The exercise was free-flowing and towards the end of the exercise Ms Olsson particular questions to Mr Abbott. Thereafter each of these experts was cross-examined in the conventional way. 281 The initial questions which I put to the experts comprised 10 questions, the first dealing with parameters of delays and extensions of time and the second dealing with matters concerning variations. 282 Those questions were as follows: Delays and Extensions of Time 1. Is there a method or methods generally accepted in the construction industry for the assessment of whether a delay to an activity is critical to practical completion? 2. What is that method or those methods? 3. By reference to that or those methods, is it possible after the completion of a project such as the one in the present case, to determine whether an activity is critical to practical completion: (a) Without preparing an as-built constructive program? (b) Without any program-analysis? 4. If so, how is that determined? 5. Is there a method generally accepted in the construction industry to determine what losses or expense are attributed to delay where a Builder is entitled to the loss or expense incurred by the Builder as a result of the delay? 6. What is that method? Variations 7. Is there a method generally accepted in the construction industry to determine an entitlement to a variation? 8. What is that method? 9 Is there a method generally accepted in the construction industry to assess the value of a variation? 10. What is that method? 283 Mr Zakos answered question 1 in the affirmative as did Mr Abbott. 284 As to question 2, Mr Zakos gave the following answer: In my view there are various methods in which these assessment for delay to activities that are critical, do exist. They range in various methods. At one end of the scale you have a very detailed program analysis where a construction network program is devised, where activities are interlinked with each other, a critical path is developed and a program is totally uniform and flows, and the relationship of each activity directly bears on each other and it can be seen on the program. You have one level of analysis at that end and the other level of analysis is a very simple program for want of another word, where the works are so simple and uncomplex that a critical path, or whether the critical path for a project develops is quite obvious, and the case in point in my view here is in a house. The activities in the house construction here are actually sequential, essentially sequential, one after the other. There's not a lot a Builder can do from excavating, pouring footing, putting walls up, putting the ground slab down, putting the walls up, putting the first floor slab up. All these activities are sequential, and a delay to these activities is very evident. A delay to that activity is very obvious and that is a - would a critical delay to those activities. That's at the other end of the scale. 285 Mr Abbott gave the following answer in relation to question 2: I do agree with Mr Zakos in terms of one end of the spectrum he referred to and that is at one end there is a very very complex process for very complex projects which involves a lot of analysis and research and programming. I disagree with Mr Zakos, however, at the other end of the spectrum, or sorry I should say he goes a little bit further down that spectrum than I certainly would and that is the other end of the spectrum as I understand he is suggesting there is no program analysis required. I have not come across a programming process yet that does not require some level. It may be a very simple level of programming but there has to be some level of programming. Mr Zakos paints this particular project as a very simple project and I don't believe that is the case. He made the point that it is made up of sequential activities. It certainly is, as all projects have sequential activities but it is not all sequential activities to say that it is all sequential activities is just plainly incorrect. There are in any building projects, and particularly one even a cottage, or in this case effectively an attached - you have two houses basically attached together. You have various strings of activities that run concurrently particularly when you start to look at - if I could just hold there for a second; when I am referring to activities, I am talking about all of the activities necessary to construct a house or houses and that also includes procurement, so it is not physically bricklayers just necessarily putting one brick on top of another, it is also the Builder in his office ordering windows or ordering the bricks or ordering the sand, so there is a whole level of procurement that happens in the background which is very very separate from what happens on site. So, yes there are sequential activities but there are also many many concurrent activities and I have to say in my experience and particularly with a project of this nature it is physically not possible to walk into the middle of this project or look at it at the end of this project and simply conclude from, in this particular case say someone's affidavit that a delay has occurred, without some level of delay analysis. 286 It was apparent that Mr Abbott placed heavy emphasis on the proposition that if an activity did not occur when it was supposed to, that could certainly be something in the present case for which the owner was responsible or for which the Builder was responsible. His foundational proposition was that the real issue is whether the particular activity had had caused a delay to the project, or whether it was simply a non-critical concurrent delay. It was necessary to be able to posit of an activity which caused a delay, whether or not it was simply a non-critical concurrent delay and this could not be done in the ex-post-facto manner in which Mr Zakos had attempted. 287 Mr Zakos then qualified what he had said in relation to question 2 by making the following observation: [P]erhaps we may be at cross purposes, the level of programming that Mr Abbott may be referring to is construction plans that are put on to walls or run through computer software programs or so forth. There is always a level of programming that occurs on a site through the foreman, through the Builder, be it "whiteboard" programming as we call it, on the shed wall there is a whiteboard program where his diary and there is a list of activities and so forth made. In this instance, it is my view that that the house, the project we are looking at is of a simple elementary construction in nature such that a program of a complex nature is not required to assess delays, it is self-evident in my opinion. 288 In addressing questions 3 and 4 Mr Abbott described what an 'As-Built Construction program' meant. As he put it: Such a program is a program that is constructed after the event, so when a project starts, for example, a contractor for instance would do a program that forecast when activities are done, how long those activities are and the relevant of one activity to another, so it sets up a program of logic to effectively forecast the end date of the project, so it is very much in a forecasting sense. An As-Built program is after the event when a particular activity or string of activities are completed, in fact, the whole project in this case where you literally go back and typically with contemporaneous material and some of that may be programming material that has been used you effectively have reconstructed the project as it was actually built, hence as built. 289 Critically Mr Abbott then made the following points: i. The contemporaneous material that's typically created through the length of a project and is typically available at the end of the project is usually the source where you can go back through diary notes, you can go back through meeting notes and you can actually identify the start of an activity, the end of activity or something very, very close to it to be able to establish that, so I suppose I'm just dwelling on it - the question asked without the preparation of an As-Built construction program, and that means a specific thing. It's an actual program that shows activities that are graphically displayed, if you like. It could also mean an As-Built schedule where you go through and list the start dates and finish dates of particular activities so there's a - I suppose there's a range of things that you could do to record how a project was actually executed, and in my view I don't believe there is any way that you can establish whether any activity, regardless of how large or small it's perceived, without at first understanding what actually happened on the project. ii. That's really at the heart of this question, I think. It's not so much the preparation of the program, it's the understanding of what actually happened, and if you don't actually understand what happened, if you don't actually understand when activities started and finished, and there are a lot of activities, hundreds, probably many hundreds of activities on this project that are all interrelated and all connected through a project program logic. Without understanding when a particular activity started and finished and the reason why it started and finished at those times it's not possible to assess whether, one, a delay occurred, and two, very importantly, who caused it. iii. The example that Mr Zakos gave was, you know, a delay that was so obviously large and obvious that you didn't need to do those things. Even if you have got a delay that appears at first glance to be very large and very obvious, if that delay is happening concurrently, at the same time as a predominant - for example, using this context, if say the Architect or owner in this particular case caused such a large delay, if at the same time there is a predominant delay, there are many other, as Mr Zakos said, smaller delays happening at the same time, you can't assess the large delay without understanding what else is happening on the project. You can't - you cannot automatically allocate that responsibility, that risk, that issue to a particular party without understanding the full picture, so if you haven't gone to the trouble to go back and at least understand what happened on the project, and there's lots of information in the affidavits and the documents I've read in terms of how the project actually unfolded - without understanding that you can't just take a step back and say, "Well, that's a delay. It is therefore critical." iv. Can I just dwell on that for a second, that issue of criticality? Sorry, I've also - if required I've got some extracts of some publications talking about different types of delay analysis. It's just typical text, if that assists. The issue here is critical at the end of question 3, critical to practical completion, so the question's not talking about just establishing whether a delay occurred, and on every building project I've ever seen there's always delays of some sort or other, so you could for instance have a situation where, you know, the timber doors didn't turn up on the day they were supposed to, so that in itself, that activity is in delay, no question. The question is whether that delay is critical to the end date of the project, so whether that delay is in fact hitting upon affecting and making longer the critical path of the project, and by critical path I mean in every project there is a string of activities that, when joined by their logic, create the longest run of a project, so they'll be joined from start to finish and they will be the critical path of the project, so you can have many delays that happen that don't affect that critical path that are simply non-critical. They are still delays in their own right, but they have no effect on the end date of the project. v. So getting back to the question, to be able to assess whether a particular delay, regardless of its size, has impacted the critical path, you know, one must first understand what has happened on the project. Without that there's no starting point. 290 Breaking away from examining the answers to the other questions, it seems convenient to presently examine the defendant's contention which is quite simply that: i. The Builder simply eschewed the requirement of the contract that a level of programming be carried out. ii. In the absence of an appropriate level of programming it is simply not possible for an expert [who is only briefed after the event and who is not instructed to reconstruct the project from all of the appropriate records], to be in a position to assess whether a particular delay, regardless of its size, has impacted the critical path. iii. For those reasons the whole of the methodology adopted by Mr Zakos is clearly flawed, so much so that the whole of his reports should be rejected on more than one front : a) The methodology being flawed; b) The evidence falling short of the requirement that the expert make his reasoning processes explicit. 291 I reject the defendant's contention that the evidence given by Mr Zakos should be rejected. Whilst of course the evidence which he gave must be carefully scrutinised, he certainly had the training study and experience which had given him extensive specialised knowledge on the basis of which, wholly or partly, to be in a position to express relevant opinions. 292 Mr Zakos may not have recreated a construction program or created a critical path program but that was not critical. The thrust of his evidence was that building a house is a simple process in the sense that in terms of the sequential events that happen there is very little a Builder can do to change the order in which things happen. As Ms Olsson contended in this case there was not much else one could do. All that Mr Zakos was endeavouring to say was that one did not need to create a detailed construction program or critical path program in order for the task which he had been allotted to be carried out. 293 I was satisfied that he had he looked with sufficient detail at what actually happened on the site, always accepting that he had relied upon the evidence given by Mr De Grazia. He had he looked at the drawings and he looked at the instructions that passed between the parties and he looked at the site memoranda. The site minutes were critical documents because they actually recorded on a day-to-day basis what happened at the site. 294 Other than looking at every piece of documentation that passed between the parties, there was not much else he could do. The site minutes are critical documents because they are the documents that actually record on a day-to-day basis what happened on this site. The evidence given by Mr Zakos evidence fits into the category permitting the expert's evidence as admissible because it goes to the nature or the extent and the reasonableness of the claim if delayed. 295 In an interesting article by the Hon Mr Justice Byrne ['Total Costs and Global Claims', (1995) 11 Building and Construction Law Journal 397] the author referred to different possible approaches to how a claimant might present and tribunals determine a claim where it was not possible to prove the loss which flowed from a number of events which, individually, constituted a breach of contract or gave rise to what the author referred to as a contractual entitlement. Amongst the candidates put forward by his Honour was what he described as the method of determination of a global claim by resort to the 'jury approach'. In essence that amounted to the tribunals general assessment of the claims made on the evidence, but adjusting the amount to reflect the uncertainties and un-measurable components. Is there a way forward? 296 I part company with the defendants contention that in the absence of an appropriate level of programming being available as a tool to determine questions of delay and the like, a plaintiff in the position of the Builder in the current proceedings is unable to establish an entitlement to relief. 297 In other fields [as for example the assessment of contract damages] it is common ground that notwithstanding that damages cannot be assessed without difficulty and uncertainty, that does not relieve the Court from its undoubted responsibility of attempting to assess those damages as best it can cf the well-known passage from the judgment of Dixon and McKiernan JJ in Fink v Fink (1946) 74 CLR 127 at 143: "Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy provided for breach of contract, an award of damages." 298 In the present proceedings the parties have fairly exhaustively placed before the Court mountains of folders containing an extraordinary number of e-mails, facsimiles, actual records, site meeting notes and the like. Further the principal parties have given the closest of evidence as to their recollections of the events which occurred. 299 Critical to the plaintiff's case is the contention that at least on the three so-called 'big ticket items" there is sufficient evidence before the Court to establish that the Architect's conduct effectively caused massive delay in the Builder being able to complete the necessary works. As these reasons outlines elsewhere, that proposition is accepted as consonant with many of the materials before the Court. However as the reasons also disclose, the Builder fails on the window delay issue. 300 In answer to the proposition that notwithstanding the sundry problems, the Builder was still able to carry out sundry works at the site, so that the subject delays at least did not interfere with those works, the Court is in a position to carry out its best endeavours to ascertain to what extent, if at all such sundry works were indeed available. This exercise is possible by reference to general records, as well as site meeting records, as well as by reference to the testimony which came forward from the Builder. And in any event the Architect is hardly in a position to argue the matter - he stands in the position of a wrong doer who is not able to rely upon his wrongdoing to avoid an appropriate damages award going to the Builder. 301 I hasten to add that nothing in the above analysis is intended to cut across a caveat of significance laid down by Deane J in Amann [at 174 CLR 125-2 6]: "There are, however, extreme cases in which curial procedures are simply inadequate to determine whether there was any real or significant chance that an alleged benefit would actually have been obtained but for the repudiation or breach of contract or to assess the intrinsic worth of a particular suggested, "Benefit... The nature of what would have been obtained if the contract had been performed maybe so completely speculative that it is 'quite impossible to place any value' up on. Returning to briefly refer to the evidence given by Mr Abbott 302 Mr Abbott had a limited retainer which was to comment only upon methodology and not make an independent assessment of the material himself 303 He had not carried out any detailed analysis of the material which was put forward by Mr De Grazia in support of his claim and could not therefore make a meaningful comment on the content of Mr Zakos' report 304 In truth it has to be said that he gave the Court very limited assistance in undertaking the task before it, was no in fairness to him his retainer was extremely constrained. Mr De Grazia's claims regarding non-big ticket items that are still pressed Boral H Blocks 305 Mr De Grazia's claim in relation to this item was that he had purchased Boral 20.42 blocks, which were said to meet the contractual requirements, however he had been instructed by Mr Solomon in a letter of 15 February 2002 to use the Boral 20.91, so-called H blocks, for part of the project. Mr De Grazia claimed a variation in relation to the H blocks costing more and requiring more concrete to fill. Additionally, Mr De Grazia claimed in relation to the costs of employing two labourers for 16 hours in order to move the old blocks to the back of the building (they were reused) once the variation was made. Mr De Grazia further claimed for delay costs because the H-block was said to take longer to lay than the 20.42 blocks; and secondly, the cost of repairing H blocks where a corner had broken (carpenters were said to be employed). 306 Mr De Grazia's claim was made on the basis that Mr Solomon's instruction to use H blocks constituted a variation. This would only be the case if Mr De Grazia could establish that under the contract he was not required to use H blocks, which in my view, for the reasons which follow, he fails to do. 307 The central issue between the parties was whether the 20.42 block originally purchased by Mr De Grazia complied with the original contractual requirements (and Mr Solomon's direction was a variation, entitling Mr De Grazia to costs) or whether Mr De Grazia was always required to use H blocks. The contractual regime was that Specification Clause 5.05 called for 'standard grey blocks' manufactured by Boral and referred the Builder to the Engineering specification and drawings. A structural note to engineering drawing S1 said that the type of concrete block to be used was the 'double U or retaining wall block'. 308 Specifically, the major point of difference between the parties was whether the 20.42 block originally purchased by Mr De Grazia was a retaining wall block (as required by the structural note). Mr De Grazia testified that he had consulted Boral catalogues to provide the blocks specified. In his submissions, Mr Roberts drew on a Boral catalogue produced by the defendants and which Mr Solomon testified was available up until the period when the relevant work was undertaken, in which the 20.42 block did not appear as a retaining wall block. This meant, Mr De Grazia agreed, that the only block which appeared in that catalogue that complied with both the Architectural specification and the structural note was the 20.91 H block. If this were the correct factual basis, Mr Solomon's instruction could not be regarded as a variation. Mr Roberts established in cross-examination that two other catalogues which showed the 20.42 as suitable for retaining walls, and would therefore support Mr De Grazia's argument, post-dated the relevant work. A document tendered by the plaintiff, Exhibit P2, appeared to be a photocopy from one of these later catalogues. Ultimately, Mr De Grazia conceded under cross-examination that he could not point to a document in existence at the time of the work which supported his contention, although he maintained such documents existed. 309 Accordingly, Mr Roberts' final submission was that the block originally specified was the 20.91 H block, since this was the only block type from the Boral catalogue available at the time that met both the Architectural specification and the structural note. He contended that Mr De Grazia's use of the 20.42 was not in compliance with these requirements. Mr Solomon's instruction on 15 February 2002 was simply to correct that error. 310 Ms Olsson submitted that the 20.42 blocks purchased by Mr De Grazia satisfied the description of standard grey retaining wall blocks. She contended that the fact that they were standard and retaining wall blocks was obvious from the fact that they were used for the walls which supported the slabs. Decision 311 Mr De Grazia did not adequately prove that the 20.42 blocks originally purchased by him were retaining wall blocks and therefore complied with the structural note. He testified that this was the case and he is generally a witness of credit. Ms Olsson's submission stated that it was obviously a retaining wall block from the way it had been used (no further reasoning was provided). Mr Zakos' evidence did not assist Mr De Grazia's position (he testified a different block again, the 20.01, could be used). Ultimately, these points do not overcome the doubt raised by the combination of Mr Solomon's testimony and the Boral brochure produced by him which showed the 20.42 was not a retaining wall block. Admittedly, that brochure was itself not entirely satisfactory as a piece of evidence, since it was undated (but relevantly Ms Olsson did not object to its tender, or deal with the matter in re-examination). Mr De Grazia's submission has not been made out. Therefore, he cannot establish that Mr Solomon's instruction was a variation and claim costs that were said to result from it. Accordingly, it is unnecessary to deal with those issues. Storage of lights 312 Mr De Grazia's claim is for approximately $200 that he testified he was charged by Tangen lights for storage of the lights. On his version of events, this cost arose because Mr Solomon instructed him to purchase the lights in May 2002 or perhaps earlier and this was several months before they were expected to be required (he said the lights were actually installed in late 2003). Mr De Grazia said that an invoice had been issued but he had misplaced it. 313 The defendants' position was that the delivery and secure storage of all provisional sum work formed part of the contract works (which Mr De Grazia was obliged to provide) because Clause 17.01 of the specification instructed the Builder to 'allow to take delivery of all items and securely store until required'. Furthermore, the defendants contended that the Architect's instruction to order the lights was given in September 2002 not March 2002 as alleged. The minutes record that the plaintiff had not ordered the lights as at 2 September 2002. No invoice has ever been produced to substantiate the Builder's claim. This item was not raised at all during the "Variation settlement meeting" on 20 June 2003. Decision 314 Mr De Grazia's claim in relation to this item was not adequately proven, there being no documentary evidence to support his testimony. Notwithstanding the general findings regarding credit, this claim is rejected. Kinking the downpipes 315 This claim related to work which Mr De Grazia had undertaken after discussions with Mr Solomon in relation to the downpipe on both houses. Mr De Grazia said he had initially warned Mr Solomon that it was fiddly work, would cost money and delay the pouring of the concrete slab for several days. Mr De Grazia had, after considering the matter, told Mr Solomon that the desired work on the downpipes could be done. Mr De Grazia said Mr Solomon then told him to undertake the work if he could do it successfully. The work was then undertaken. 316 Mr De Grazia testified to a range of costs that were said to result from this work. This included a site diary entry of two plumbers working for eight hours to kink the down pipes, for both houses, $260 worth of extra material, and additionally a range of structural work that resulted from these changes (which created another two days work for a boilermaker) T:124.40-125.2. Mr De Grazia further testified that no other work could be carried out during this period (it was dependent on the concrete slab being pored). Accordingly, his claim included a charge for the hiring of scaffolding that was already on site. 317 Mr Roberts' final submission was that the work relied upon by Mr De Grazia formed part of the contract works. He pointed out that the complete supply and fix of all downpipes formed part of the contract works as per clause 13.10 of the contract specification. Mr Roberts contended that the kinking in question was concealed stormwater plumbing work which formed part of the contract works and is a common building practice. Mr Roberts further submitted that to the extent that the plaintiff relied on an instruction about changes to the rooflines, no such instruction had been identified. He emphasised that this item was not raised at all during the "Variation settlement meeting" on 20 June 2003. Even though the plumbing was not complete by that date, it was contended that the cost of that trade ought to have been known. Furthermore, Mr Roberts submitted that no invoice to the Builder from the plumbing sub contractor (or any other sub contractor) has ever been produced to substantiate the Builder's claim. Decision 318 Mr De Grazia's claim in relation to this item was not adequately proven, there being no documentary evidence besides the site diary – such as invoices - to support his testimony. Notwithstanding the general findings regarding credit, this claim is rejected. Roof pitch 319 This claim related to work that Mr De Grazia testified was undertaken to make the pitch to the roof higher on its low point. It was undertaken after a conversation Mr De Grazia recounted where Mr Forbes said the roof pitch had to be altered from the drawings to maintain the head height above the stairs. To undertake this work Mr Forbes had to re-mark out the roof pitch (essentially sketch it out) and reorder two or three pieces of timber. Mr De Grazia testified that there was other work being undertaken at this point (mainly carpentry) and the effect of the remedial work had been that a crane booking had to be rescheduled. He further testified that the overall delay caused to the whole project was three to four days. 320 Mr Roberts' submission was that the roof pitch set-out adjustment occurred prior to any actual building work in the subject area. It was of a very minor degree and was resolved on the same day that the Architect received the pitching angle query from Mr Forbes. Mr Roberts submitted that Photos 65, 66, 70, 71, 74, 75, 76, 77 & 78 showed the roof framing in place by Saturday 3 August 2002. Mr Roberts further submitted that no additional materials (timbers, nails etc) were required due to this adjustment as it was an adjustment of documented timber members. Mr Roberts pointed out that by 20 June 2003 all roof carpentry was complete and the cost of that trade ought to have been known. This item was not raised at all during the "Variation settlement meeting" on 20 June 2003. Decision 321 Under cross-examination, Mr Forbes, the site foreman who dealt directly with this issue, agreed with Mr Roberts proposition that an initial roof set-out was carried out, there was an issue that arose, Mr Forbes spoke to Mr Solomon and it was resolved on site, after which the building of the roof commenced T:591.1-8. Mr Forbes gave evidence in chief that the construction of the roof was delayed for at least a day and a half while this issue was dealt with T:510.50-511.2. This was broadly consistent with Mr Roberts' position that the issue was resolved on the same day that it arose. In contrast, Mr De Grazia gave evidence that this issue delayed the project for three to four days. Mr De Grazia testified that it was necessary to change a crane booking, but no other evidence was produced regarding this issue (Mr Forbes did not address it in his testimony). Having regard to all of the circumstances, the plaintiff is awarded delay costs of one day in relation to this issue. Splay the balconies 322 Mr De Grazia testified that he built the balconies according to the drawings but they were subsequently changed when the angle of the roof pitch was changed. He further testified that these changes were undertaken upon instructions from Mr Solomon. Mr De Grazia testified that his claim reflected the costs and delays associated with undertaking these changes. He recounted a conversation where he told Mr Solomon this work would result in extra costs and Mr Solomon had said it would be cleaned up in a 'wash up' at the end of the job. 323 Mr Roberts submitted that this claim turned on the contractual requirement in clause 7.11 of the specification, that the Builder was required to consult with the Architect prior to construction of the splayed balconies: "method of fixing boards to frame must not pierce membrane. Discuss with Architect prior to construction." Mr Roberts contended that the method of weatherproofing the splayed balconies was discussed between Mr De Grazia and Mr Solomon and a proposal by Mr De Grazia was accepted Mr by Solomon (who confirmed this with a drawing and a memorandum). 324 In cross-examination Mr De Grazia conceded that he had the relevant details for the construction of the balustrades (which related to the balconies) by June or at least 7 August 2002. 403.40. Mr Roberts submitted photos 74 to 78 show that - despite this issue being resolved in June –the relevant work only commenced around mid November 2002. In cross-examination Mr De Grazia rejected this suggestion, contending that the balcony was built three times for different reasons. 325 Mr Roberts further submitted that by 20 June 2003 balconies 3 and 3A were complete and the cost of that trade ought to have been known. This item was not raised at all during the "Variation settlement meeting" on 20 June 2003. Decision 326 Mr De Grazia's evidence of the balconies having to rebuilt – causing a variation and a delay cost – is broadly consistent with that of Mr Forbes' (who gave evidence of two carpenters having to work for one day to reframe the balcony T:513.10-27). Mr De Grazia testified that he had put this claim together by referring to timesheets and other work that was carried out. Mr Roberts' submissions in relation to this issue focused on the fact that Specification Clause 7.11 required the Builder to consult the Architect prior to construction of the splayed balconies and despite a discussion and alleged agreement between the parties in June 2002, photographs taken by Mr Solomon were said to show that the relevant work was only undertaken in around mid-November 2002 (and therefore was not critical). Due to the evidentiary problems with Mr Solomon's photographs, they cannot be accepted as evidence of the progress of the works at their purported dates (as Mr Roberts' attempted to use them). Without the photographs, this issue turns on findings of credit and accordingly Mr De Grazia's claim is accepted. Deletion of pantry stack 327 Mr De Grazia testified that this claim related to work involving the lifting of a drainage stack by 15mm and lifting up the whole ceiling by 15mm. He further testified that Mr Solomon instructed him to do this work, and when the work was undertaken the plumbing was in place and the ceiling frame was in place, although the actual plasterboard was not. The work was performed by the plasterboard contractor and the plumber, and Mr De Grazia had calculated his claim based on timesheets and notes made at the time. 328 Mr Roberts basic position was that this item represented a deletion from the contract works. Mr De Grazia rejected this suggestion in cross-examination. Under cross-examination, Mr De Grazia maintained that he had received an overall variation from his plumber in relation to the project and he knew it included this item from a discussion with the plumber. Mr De Grazia conceded he did not have a document from the plumber, and had instead made an estimate of 30 hours work from his diary records. Mr Roberts suggested this was a variation that Mr De Grazia had compiled in 2005 which did not reflect what had happened on site. Mr De Grazia rejected this suggestion. 329 Mr Roberts further submitted that Mr Solomon's instruction occurred prior to any overhead plumbing work. Mr Roberts contended that by 20 June 2003 all concealed plumbing work in the kitchen and living areas was complete and the cost of that trade ought to have been known. This item was not raised at all during the "Variation settlement meeting" on 20 June 2003. No invoice from the plumbing sub contractor to the Builder has ever been produced to substantiate the Builder's claim. The Architect was entitled to reject the claim. Decision 330 Mr De Grazia's claim in relation to this item was not adequately proven, with all of the documentary evidence relied upon generated by him or ASBS (he made his claim by referring to timesheets and notes made at the time). Notwithstanding the general findings regarding credit, this claim is rejected. Louvres 331 Mr De Grazia testified that this claim related to work that had been done to accommodate the louvres which Mr Solomon decided not to proceed with (due to the price in the quote that Mr Solomon received for that item). Mr De Grazia further testified that various work had been done, including drilling, fixing channels in place to take the louvres, and electrical wiring had been provided. Mr De Grazia testified that once the decision not to proceed with louvres was taken the wiring had to be terminated, and some weatherboards where the wiring was penetrating had to be replaced. 332 Mr Roberts submitted that under specification clause 14.16 electrical installation of Aerobrise louvres was included in contract sum (that is, the electrical service is not included in the provisional sum for the louvres). Mr Roberts submitted that the plaintiff had said that a junction box was needed and that weatherboards needed to be replaced, and this evidence was not consistent with that of Mr Forbes. Mr Forbes testified that there was not very much work involved, saying that the wiring was already installed and all that was required was to cap off the wiring to make it safe T:525.210-28. Mr Roberts contended that the weatherboards had not been installed by the date of the instruction (contrary to Mr De Grazia's testimony). Decision 333 There is a discrepancy between the evidence of Mr De Grazia regarding the significance of the work required to cap off the electrical wiring and that of Mr Forbes. Additionally, Mr De Grazia did not refer to any documentary evidence to substantiate this claim (the only documents relied upon were letters to Mr Solomon stating the claimed costs). Moreover, Mr De Grazia's 2005 claim in relation to this item was for three times the amount claimed in 2003, and there was no explanation of this difference (it may be that in 2005 Mr De Grazia had a better opportunity to calculate the claim). Mr De Grazia could have explained the actual costs of this claim by reference to timesheets or invoices for the trades and materials he stated in his 2005 letter were used. Mr De Grazia's claim in relation to this item is rejected. Sunhoods 334 Mr De Grazia's claim for this item was based on two factors: firstly that there had been insufficient detail provided which had caused delay in having the sunhoods fabricated (and caused consequent delays on the whole project) and secondly that the sunhood Mr Solomon specified was more expensive than Mr De Grazia had allowed for. Mr De Grazia testified that he had been instructed by Mr Solomon to attend the Teachers Federation College (Mr Solomon wanted the type of sunhoods appearing on that building) however Mr De Grazia maintained that even after attending, he still required specifications from Mr Solomon. 335 Mr Roberts drew on Mr De Grazia's concession that he had for some time the documents provided to Hi-Light to obtain the quote, submitting Mr De Grazia could have got a quote much earlier from Hi-Light. Mr De Grazia further conceded that he could have got a quote and presented this to the Architect to confirm whether this was what Mr Solomon was after. 336 Mr Roberts noted that the Architect's memo of 27 November 2002 provided that the sunhoods were to remain as specified. In cross-examination, Mr De Grazia contended that the actual sunhoods installed were different, although he conceded it was entirely normal for Mr Solomon to have approved the actual sunhoods on shop drawings. Mr Roberts emphasised that some minor information concerning fixing height and location was provided to the Builder and they were installation issues rather than fabrication issues. Furthermore, Mr Zakos conceded that the sunhoods were fully specified. Decision 337 Mr De Grazia's claim in examination in chief that he should be allowed a variation because the sunhood specified was more expensive than he had allowed for, is rejected because he did not provide any evidence of what this difference was (his letter to Mr Solomon claiming the sunhood variation did not mention this issue). Mr De Grazia's claim for the costs of having to attend the Teachers Federation College to understand the sunhood specification is allowed (it is relevant that Mr Roberts did not suggest this was unnecessary T:418.6-21). Mr De Grazia's claim for ten days delay costs to perform work related to the sunhoods is rejected since his concessions under cross-examination established that he could have acted differently and this may well have reduced any such delay T:415.42- 417.47. Fireplace Stone 338 Accordingly to Mr De Grazia evidence in chief, this claim had essentially two elements: firstly, delay with respect to the stones (which he blamed on Mr Solomon and the nominated subcontractor) which was said to have delayed the project as a whole; secondly, the costs of work associated with installation of these stones, which were said to be cleaning costs (necessary because of work by the subcontractor, on Mr Solomon's request, to rectify the stones). Mr De Grazia's evidence was essentially that he had requested specifications for the firestone to be installed and Mr Solomon had given him a quote from Arte Domus (the eventual subcontractor) asking him to organise it. Mr De Grazia had been unhappy that Mr Solomon had dealt directly with a subcontractor and as part of negotiations between the two parties Mr Solomon had agreed to pay the 50% deposit required by Arte Domus. 339 Mr De Grazia recalled a conversation where Mr Solomon had said the fireplace could not be installed as the tiles were not yet laid, and Mr De Grazia had responded that the fireplace had to be installed before the tiles. 340 Mr Roberts' final submission was twofold: firstly, since the Fireplace stone was a Provisional Sum item, under Contract clause 4.2 the Architect was entitled to nominate Arte Domus as a nominated subcontractor (as occurred), and Contract clause 4.1 provided that the Builder was not relieved of any responsibilities under the contract by subcontracting the work. Secondly, the Site was not ready for installation of the fireplace as at 12 November 2002 (a point at which Mr De Grazia testified he was waiting for Mr Solomon to provide details regarding the stone). Decision 341 Mr De Grazia's claim in so far as it relates to a purported delay in the installation of the fireplace stones is rejected. This part of the claim was only touched on at a high level of generality (Mr De Grazia testified there was a delay to the project, but did not quantify it). Moreover, in Mr De Grazia's letter of 2005 to Mr Solomon in relation to this claim, it is conceded that the delay in the supply and installation of the fireplace stone (as compared to the scheduled date) did not delay the works. Furthermore, Mr Forbes' evidence did not convey that there had been significant delays caused by this issue. 342 In relation to the plaintiff's variation claim for extra cleaning work, the finding is that Mr Solomon in addition to specifying which subcontractor would be used (as he was entitled to do), then unduly interfered in this aspect of the works, for example by arranging what work that the subcontractor would perform (Mr De Grazia appeared to have been excluded from these arrangements). This conduct constituted a breach of the Builder's right to sequence the works under Contract clause 6.1, which has been outlined above. Having interfered in this way, Mr Solomon could not reasonably expect Mr De Grazia to accept responsibility for cleaning work that was caused by the subcontractor. Therefore, Mr De Grazia's variation argument should be allowed. However, it should only be allowed to the extent that Mr Forbes corroborated it (his evidence was that cleaning work was created when the stone was first rectified, but the works were not impacted by the second rectification episode T:529.25-530.20. Accordingly, Mr Forbes' evidence was that there was a couple of hours clearing up work created, as opposed to Mr De Grazia's claim of three different occasions when cleaning was necessary). 343 Furthermore, I am satisfied that Mr Solomon's instruction for Mr De Grazia to accept the Arte Domus quote – which Mr Solomon had obtained and negotiated certain terms contained therein – went beyond Mr Solomon's power to nominate a subcontractor under Contract Clause 4.2.1 and breached the Builder's right to negotiate subcontract terms. The Builder is given explicit power to subcontract under Contract clause 4.1 and it is apparent from section 4 of the Contract as a whole that it is for the Builder to negotiate subcontract terms. Fabricate balustrade 344 This issue involves a disagreement over whether Mr De Grazia has been paid for the variation claimed. Mr De Grazia gave evidence in chief that this claim related to a specified section of steel which he could not source in Australia and accordingly had manufactured. Mr De Grazia testified that he had told Mr Solomon that this would cost more money and consequently result in a variation, and had provided Mr Solomon with some verbal costing but not an actual dollar amount. Mr De Grazia subsequently had the work done and made a claim in 2005 which he testified had not yet been paid. 345 In cross-examination Mr De Grazia testified that he had made a claim in writing on 15 November 2002 and conceded that the site minutes of 25 November 2002 recorded at item 31.5 that Mr Solomon had approved this variation. Mr De Grazia testified he was not sure whether the variation had been paid. Furthermore, he appeared to concede that he was not aware of anything to indicate the claim had not been paid under the ordinary progress claim system T:394.1-41. 346 Mr Solomon gave evidence in chief that he approved the amount claimed for the variation and this appeared in the contract sum adjustments he sent to the Builder (exhibit D6) at Item 18A. This covered the Builder's 2005 claim. 347 Mr Zakos testified that he was not aware of Mr Solomon's suggestion that this claim was the subject of an approved variation. 348 Given the matters which emerged from Mr De Grazia's evidence on this issue – and specifically the possibility that he may already have been paid for this variation – the claim is rejected. Bathroom wall tiles 349 Mr De Grazia made a variation claim for $2,402 for variation in respect of the bathroom wall tiles. Ms Olsson simply referred to the witness to the documents in the appendix to Mr De Grazia's affidavit that related to this claim. 350 Mr Roberts' position in relation to this item was that there was no evidence called. Therefore, the defendants assumed that it was not pressed or that it would be rejected because of the lack of evidence. Decision 351 The bathroom wall tiles were part of a provisional sum item for internal wall and floor tiles. Mr De Grazia provided an invoice showing that the tiles cost $64 per square metre. He claimed that the Architect had incorrectly assessed the cost at $48 per square metre. Mr De Grazia claimed for the difference between these two amounts. Under Contract Clause 10.8 the adjustment of provisional sums is to occur by reference to the total amount expended on all provisional sums. Mr De Grazia is seeking an adjustment for the amount expended on part of one provisional sum. This alone may be sufficient reason for rejecting the claim. However, it could be that the parties were acting in such a way that they were allowing adjustments in relation to parts of particular provisional items. Even if this were the case, the Court does not have sufficient information to assess Mr De Grazia's claim since there is no evidence of what amount was included in the contract sum for this part of the provisional item, and therefore what adjustment should occur. In all of the circumstances this claim is rejected. The way forward 352 During argument counsel indicated, as I understood it, that once the essential findings were made by the Court the high likelihood is that they would be in a position to agree on the proper working out of the relevant orders, including for example the dispute as to the adjusted date for practical completion. To the extent practicable in the circumstances, the parties are to endeavour to submit short minutes of order. The roadmap earlier referred to left something to be desired and did not cater for the particular decision reached in respect of the big ticket items, namely that the builder succeeds only on cladding and joinery. The parties are to endeavour to clarify the position. Following that clarification, the Court will be in a position to hand down the decisions on all outstanding remaining matters, which will include the appropriate deduction for exigencies. ********** 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.