Supreme Court New South Wales

• Medium Neutral Citation: Sydney Water v Asset Geotechnical Engineering & Ors [2013] NSWSC 1274
• Hearing dates: 30, 31 July 2012; 1, 2, 3, 6, 7, 8, 9,10 August 2012
• Decision date: 06 September 2013
• Jurisdiction: Common Law
• Before: Campbell J

Decision

(1) Judgment for the plaintiff against the first defendant in the sum of $643,517.55;

(2) Judgment for the plaintiff against the second and third defendants jointly in the sum of $99,002.70;

(3) Judgment for the plaintiff against the fourth defendant in the sum of $247,506.75;

(4) Judgment in favour of the fourth cross-defendant to the third cross claim;

(5) Cross claims otherwise dismissed with no order as to costs;

(6) The first defendant to pay the costs of the fourth cross defendant to the third cross claim on the ordinary basis forthwith after they have been agreed or assessed;

(7) The defendants to pay the plaintiff's costs of the proceedings pro rata on the ordinary basis forthwith after they have been agreed or assessed;

(8) Liberty to apply in respect of my assessment of interest and for any special order as to costs to be exercised by notice of motion filed within 14 days of today;

(9) Any motion filed pursuant to Order 8 may be listed before me for directions at 9:30am on Friday, 11th October 2013.

• Catchwords: TORTS - negligence - landslip at building site - damage caused to sewer main owned by the plaintiff - whether geotechnical engineer, occupiers, principal contractor or excavator liable - apportionable claim covered by Part 4 Civil Liability Act 2002 (NSW) - whether local council is a concurrent wrongdoer under s35(3) Civil Liability Act 2002 (NSW); REAL PROPERTY - statutory covenant - whether second and third defendants liable for breach of statutory covenant created by s44 Sydney Water Act 1994 (NSW) - whether claim is an apportionable claim
• Legislation Cited: -Civil Procedure Act 2005 (NSW); -Civil Liability Act 2002 (NSW); -Environmental Planning and Assessment Regulation 2000 (NSW); -Home Building Act 1989 (NSW); -Law Reform Miscellaneous Provisions Act 1946 (NSW); -Sydney Water Act 1994 (NSW); -Uniform Civil Procedure Rules 2005 (NSW)
• Cases Cited: -Baden Cranes Pty Ltd v Smith [2013] NSWCA 136; -Bennett v Minister of Community Welfare (1992) 176 CLR 408; -Bryan v Maloney [1995] HCA 17; 182 CLR 609; -Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649; -De Pasquale Bros Pty Ltd v Cavanagh Biggs & Partners Pty Ltd [1999] QSC 171; Aust Torts Reports 81-521; -Donoghue v Stevenson (1932) AC 562; -Dymocks Book Arcade Pty Ltd v Capral Ltd [2010] NSWSC 195; -Environment Protection Authority v N (1992) 26 NSWLR 352; -George v Webb [2011] NSWSC 1608; -Hunt & Hunt v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; 87 ALJR 505; -Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638; -March v E & MH Stramare Pty Ltd [1991] HCA 12; 171 CLR 506; -MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 7) [2012] NSWCA 417; -Pantalone v Alaouie (1989) 18 NSWLR 119; -Reinhold v New South Wales Lotteries Corporation (No. 2) [2008] NSWSC 187; 82 NSWLR 762; -Strong v Woolworths Limited [2012] HCA 5; 246 CLR 182; -TNT Australia Pty Ltd v Christie [2003] NSWSC 47; 65 NSWLR 1; -Voli v Inglewood Shire Council (1963) 110 CLR 74; -Wallace v Kam [2013] HCA 19; 87 ALJR 648; -Warren Shire Council v Kuehne [2012] NSWCA 81; -Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515; -Wyong Shire Council v Shirt (1980) 146 CLR 40
• Category: Principal judgment
• Parties: Sydney Water Corporation (plaintiff); Asset Geotechnical Engineering Pty Ltd (first defendant); Peter Anthony John Liddy (second defendant); Michelle Ann Liddy (third defendant); Lindsay Hyde Page (fourth defendant); Flexible Excavations Pty Limited (cross-defendant)
• Representation: Counsel: GM Watson SC with MC Sheller (plaintiff); L Reid (first defendant); D Toomey (second and third defendant); MB Evans (fourth defendant); S Donaldson SC with Mr M Gollan (cross-defendant); Solicitors: DLA Piper Australia (plaintiff); Kennedys (Australasia) Pty Ltd (first defendant); Walkom Lawyers (second and third defendant); O'Brien Lawyers (fourth defendant); Hicksons (cross-defendant)
• File Number(s): 2010/00066127

Judgment

1 The plaintiff, Sydney Water Corporation ("Sydney Water") claims damages from four defendants in respect of damage to a section of a sewer main known as the 'Burraneer Carrier', which failed and ruptured in a landslip occurring over the Queen's Birthday long weekend, from 8th to 10th June 2007.

2 The landslip occurred on private residential property owned and occupied by the second and third defendants, Mr. and Mrs. Liddy ("the Liddys"), on the waterfront of the eastern side of Gannons Bay in the Sutherland Shire.

3 The landslip was precipitated by very heavy rainfall in the days leading up to, and during, the long weekend. There is no question in my mind but that the underlying cause was unshored excavation work carried out on behalf of Mr. and Mrs. Liddy in mid April of the same year to create a building-pad for the construction of a boatshed at the waters edge. The fourth defendant, Mr. Lindsay Hyde-Page ("Mr. Hyde-Page"), is the boatshed builder with whom the Liddys contracted for the construction of the boatshed. The first defendant, Asset Geotechnical Engineering Pty Ltd ("Asset Geotechnical"), is a company through which Mr. Mark Bartel conducts his practice as a professional geotechnical engineer. Mr. Bartel undertook a "walkover" geotechnical assessment of the site for use in support of the development application for building the boatshed. Mr. Bartel's report is dated 8th January 2007.

4 The cross-defendant, Flexible Excavations Pty Ltd ("Flexible Excavations" or "Flexible") performed the excavation work between 16th and 19th April 2007.

The nature of the claim

5 Sydney Water sues each of the four defendants in negligence. All parties agree that if more than one defendant is liable in negligence for the damage caused to the sewer main, Sydney Water's claim is an apportionable claim covered by Part 4 Civil Liability Act 2002 (NSW) ("CLA").

6 Sydney Water, during final addresses (762.21T), abandoned a statutory claim made under s.45 Sydney Water Act 1994 (NSW) against each defendant. It maintains a claim against Mr. and Mrs. Liddy for breach of the statutory covenant created by s.44 of that Act. Sydney Water and the Liddys are at issue about whether that claim, if made good, is an apportionable claim.

The issues

7 Asset Geotechnical disputes that it owed Sydney Water a duty of care. If it did, it denies breach and otherwise says that any breach it may have committed did not cause Sydney Water's loss. It disputes the quantum of the claim.

8 Mr. and Mrs. Liddy raise similar issues and raise the defence provided by ss.(4) of s.44 of the Sydney Water Act.

9 Mr. Hyde-Page denies that he undertook to perform any work in relation to the excavation that may make him legally responsible for the consequence of it having gone unshored. He submits that his presence at the site when the work was done was in the capacity as a mere agent for the Liddys. Accordingly, he says he owes Sydney Water no duty and, in any event, there was no negligence on his part; if there was, it was not a legal cause of Sydney Water's loss. He too, disputes the quantum of the claim.

10 All defendants have pleaded that the Sutherland Shire Council is a concurrent wrongdoer for the purpose of s.35(3) CLA. Mr. Hyde-Page is the defendant who most vigorously pursued that argument.

11 Flexible Excavations are joined to the proceedings at the suit of Asset Geotechnical, as the fourth cross-defendant to the third cross-claim. A previous cross-claim by Mr. Hyde-Page was resolved by entry of judgment in favour of Flexible. Asset Geotechnical say the work undertaken by Flexible extended to shoring the excavation it created, and this it failed to do. Asset Geotechnical says this was negligent. Flexible denies it undertook to perform any shoring or that it was negligent otherwise. It says further that on their true construction, the provisions of Part 4 exclude the liability of concurrent wrongdoers to contribute one to another under s.5 Law Reform Miscellaneous Provisions Act 1946 (NSW).

The quantum of the claim

12 Thirty-three metres of sewer main crossed the Liddys property falling generally from the north to the south. The main was located uphill from the proposed boatshed pad. The landslide ruptured and carried away about ten metres of pipe at the northern end of the site. Of the remaining 23 metres, the two most northerly lengths of vitreous clay pipe rotated down hill to the west somewhat in the landslide collapse. The others stayed where they had been before the landslide. The initial restoration plan was to replace the ten lost metres after the site had been stabilised by the Liddys constructing a retaining wall. But, finally, it was decided to rebuild the whole of the sewer main crossing the Liddys property, on an entirely different line, of different materials, and to a different design with entirely different structural specifications. The original plan is at exhibit F, volume 5, page 2452. The final plan is at exhibit F, volume 5, pages 2716 and 2727-8. (The reproduction of each plan is much multiplied throughout the evidence.)

13 Sydney Water expended the sum of $3,340,715 in restoring and replacing the whole line, including construction costs, consultant's fees, and the set up and maintenance of a temporary sewer by-pass. This last item cost $731,043. The project took 78 weeks.

The Burraneer Carrier

14 The Burraneer Carrier is the sewer main providing sewerage services to the residents of the Burraneer area in the Sutherland Shire. Its construction, or installation, was completed according to exhibit 2D5, a work as executed plan, on 25th July 1969. It provides an essential service to well over 1,000 homes.

15 By reference to exhibit 2D5, the Liddy property is the second block north of the point where the carrier emerges from below ground and continues south over a number of properties above ground on an aqueduct. On the plan it lies between manhole H to the north and manhole J to the south. It is my understanding that the linear markings on both the plan and the cross section are referred to as chainage. On this understanding, from the plan, the Liddy property is between 1639.1 to the north and 1715.8 to the south. By reference to the cross-section we can say that this length of the sewer main was not encased in concrete as some other sections were, but consisted of "a 24 inch circular vitrified clay pipe, which had been laid on a mortar bed over bedrock". This quote is from exhibit N, the report of Mr. Agi Zenon, one of the geotechnical engineers who gave concurrent evidence. The plan simply contains the notations, for the Liddy property, of "Rock" and "Mortar Bedding". Mr Zenon's initial report commences at volume 1, page 1999. The quote is on page 204. He makes the following observation at page 206 [4.1.11]:

(a) The SWC (work as executed) drawings do not provide the true representation of conditions at the site in that the sewer main was not laid on a mortar bed over rock.

This observation is made with the benefit of hindsight, because from the circumstances of the collapse and rupture of the sewer main it is now known that where it crossed the Liddy property the sewer main was laid in a trench excavated across an unstable slope, consisting of what the geotechnical engineers refer to as talus (114.5-30T). Ms. Roberta Lindbeck, a geotechnical engineer, provides a technical definition of talus in her report of 14th April 2008 (volume 1, page 174) as comprising "course colluvium that has been deposited below a cliff line by the action of gravity, as a result of weathering and retreat of the cliff line".

16 Mr. Zenon was not the only witness who offered an interpretation of exhibit 2D5. Mr. Preston, a geologist who worked for Sydney Water between 1977 and 2012, did not agree that "the pipe was supposed to be resting on bedrock". His evidence was that from the reference to 'mortar bedding', he "would infer that it's not on bedrock, but it's in a material that required some sought of stabilising" (138.10 - .20T). It was not explained how, even by the standards of 1969, a mere mortar bed in a trench dug across talus could provide stability, given the emphasis upon the inherent instability of that material. Mr. Preston did not detect mortar on any of his inspections of the remnant of this section of the main. But he said, "the fact that I didn't see the mortar doesn't indicate that it wasn't there" (145.30T). One thing that is clear is that had the sewer main been constructed on bedrock supported by mortar bedding it would have been reasonably impervious to the effects of instability of the slope. Mr. Zenon may have interpreted the drawing as showing the sewer sitting on bedrock (567.35T). Mr. Waddell questioned what above bedrock should be taken to mean. He said, "even if it's in residual soil then that is above bedrock in my opinion" (568.5T). Mr. Shirley considered, even on bedrock, a mortar bed would provide "minimal or no resistance to it's lateral pressures" (568.5T).

17 Mr. Colenbrander said if the sewer was on bedrock "it would be quite a safe structure... because if you're on natural bedrock then I wouldn't expect that that bedrock would move as a result of an excavation in soil down slope of it ... it would in my mind be less sensitive if it was on rock where it crossed the site" (569.25 - .45T). Mr. Zenon and Mr. Waddell agreed. Mr. Shirely clarified his opinion that although a mortar bed would not restrain lateral movement, the support of the bedrock meant it is impossible "to move downwards as well as laterally" (570.10T).

The condition of the site

18 As I have said earlier at [15], the sewer main ran across the site between two manholes. What I have referred to as the northern manhole (the sewer main does not run due north to south) was supported by a turret like concrete structure which is depicted in several photographs taken before the landslip by various persons having an interest, or part to play, in the process relating to the development of the boatshed, including the Asset Geotechnical. Exhibit L is a photograph taken by it which clearly depicts the turret protruding from the subsoil and surrounding vegetation in its top left hand corner. Mr. Bartel, the first defendant's guiding mind, did not notice the manhole either when he carried out his inspection, walking all over the site (332.25 - 333.10T), or when he was reviewing the photographs for the purpose of the preparation of his geotechnical report, dated 8th January 2007, which is reproduced in various places throughout the materials including as an annexure to his affidavit of 17th August 2011, admitted as exhibit 1D1 (volume 7, page 3240). He first noticed it when reviewing the papers for the purpose of giving evidence (332.50T) (see also volume 6, page 3064, and exhibit K). I interpolate that I am satisfied that the northern manhole ought to have been apparent to anyone surveying the site in relation to the proposed development of the boatshed and especially to one with the trained eye of a geotechnical engineer. Unfortunately there are other omissions or mistakes affecting Mr. Bartel's assessment to which it will be necessary to return.

19 Mr Tony Colenbrander is a senior geotechnical engineer who, like Ms Lindbeck, was employed by GHD Pty Ltd and was closely involved in the development of the plans for restoration and replacement of the sewer main. He first inspected the site on 12th June 2007, two days after the major landslip, and described it in his report of 24th September 2008 in the following terms (exhibit O, volume 1, page 273):

The site is located on a steep, south-west facing slope that falls to the shoreline of Gannons Bay. The slope of the land varies from 45 degrees to the north west of the landslip (measured between the patio of No 41 and the sewer line) to slopes ranging from 33-38 degrees on the south east side of the slip zone.

The slope is underlain by talus, comprising a mixture of sandstone cobbles and boulders within a generally loose/firm clayey sand/sandy clay matrix, becoming more dense/stiffer with depth. Some of the buried sandstone boulders are very large, with maximum dimensions of several metres. Several of these large boulders are visible in the side of the boatshed excavation.

Talus is formed by the gravitational deposition of rock and soil debris below very steep slopes and cliff faces. It is typically loose, permeable and only marginally stable. Consequently, any disturbance of a talus slope is likely to result in upslope instability, unless adequate slope support and drainage are provided. Further, talus slopes are often subject to soil creep (very slow movement of soil over time).

The talus is underlain by a steeply sloping sandstone bedrock profile... Such slopes tend to be stepped, mirroring the orthogonal bedrock joint structure and forming variable cliff faces interspersed with relatively flat terraces. For example, a substantial and persistent cliff face occurs along the east side of Boomerang Avenue, immediately south of the site.

Bedrock outcrops on the site are limited to the inferred cliff line in front of the residence on No 41, a section of cliff line on No 30 XXXX XXXX and other outcrops observed at the toe of the slope, close to the water line. .... Bedrock was also observed in the back of the boatshed excavation.

20 No. 41 is the adjoining residence north of the site, and no. 30 is to the south. Mr. Colenbrander was of the view that the part of the sewer line that failed ran "in the shadow of the buried cliff line". The more or less intact remnant of the line to the south of the site "appears to cross a buried gully". I accept this evidence from Mr. Colenbrander, who was a most impressive witness and who had the advantage, as I have said, of close involvement with the site in the immediate aftermath of the landslide and during the reconstruction phase. Moreover, I did not understand his assessment of the actual nature of the site to have been disputed by any of the other geotechnical engineers.

The physical cause of the landslip

21 I think it convenient to deal with this issue now somewhat out of chronological order. Flexible Excavations carried out the excavation work between 16th and 19th April 2007. A series of photographs forming exhibit K show that work in progress (270.45T).

22 There was what Mr. Colenbrander described as a relatively small landslip or "cave-in" on 29th April 2007 (25th April may be the correct date, but not much turns on this (exhibit 2D1 [91], volume 7, p 3311)) due to heavy rainfall at that time. The extent of it is depicted in photographs at volume 6, pages 3066-7 (see exhibit B, volume 6, page 3033 [24] per Daniel Smith). Flexible Excavations removed the spoil material from the slippage on or about 16th May 2007. The condition of the excavation after this cave-in was cleared is depicted in photographs at volume 6, pages 3091-2; volume 6, page 3085 [11] per Kerry Lowe; and also volume 6, pages 3069-7 (exhibit B, volume 6, page 3033 [25] per Daniel Smith).

23 Mr. Smith had the impression that the faces of the excavation were almost vertical (24.45T). But Mr. Donaldson SC, appearing with Mr Gollan on behalf of Flexible Excavations, challenged him about this in cross-examination (40.45-41.5T). The witness is a town planner by profession, living at an adjoining property. He did not make a close inspection of the face of the excavations. His observations were made from the end of the jetty on the adjoining property. Mr. Flexman said the excavation on each face was almost vertical with a batter towards the top (251.15 -.25T; 253.25-.35T). If this difference matters - and it probably does not - I prefer the evidence of Mr Flexman. Both witnesses appeared reliable but Mr Flexman as the excavator was in a better position to say.

24 After the cave-in was cleared construction commenced. As at 10th June 2007 the slab had been laid and the construction of the lightly reinforced Besser-block walls had commenced. It is not in issue that somewhat heavy rain fell between the 7th and 10th of June 2007. On 9th June alone, 112.2mm fell (according to Mr Colenbrander's report). On the morning of the 9th, Mr. Lowe, who is a neighbour of the Liddys, noticed a landslip into the excavation and contacted Mr. Liddy. Mr. Liddy contacted his brother, who happens to be a builder, and that afternoon they covered the top of the excavation site with plastic in an attempt to stop further rainwater penetrating the ground. But the following morning (10th June), Mr. Lowe contacted Mr. Liddy again advising him that there had been a further landslide, the sewer had ruptured, and untreated sewage was spilling into Gannons Bay. Mr Liddy contacted Sydney Water immediately.

25 The joint report of the geotechnical experts (the fourth defendant's expert, Mr. Shirley, through a misunderstanding did not participate) agreed that the factors materially contributing to the landslip were as follows (exhibit P, volume 2, page 844):

(1) Oversteep excavation at the base of the steep colluvial/talus slope was the primary cause of the landslip;

(2) The trigger was the prior rainfall;

(3) Leakage from the sewer line itself did not occur and therefore was unlikely to be a cause;

(4) The sewer trench may have impacted on the soil moisture conditions. That at the most would have been a minor effect with respect to natural infiltration due to rainfall.

26 In his report of 24th September 2008, Mr. Colenbrander (exhibit O, volume 1 at p275) said:

A five - six high unsupported near vertical excavated face was created in a steep, talus slope to facilitate the boatshed construction... such an excavation removed toe support from an already marginally stable slope, thus making it vulnerable to landslip failure. It is possible that the slope could have stood unsupported for some time, provided that water did not enter the slope and weaken it. However, once the soil slope became wet a landslip was almost inevitable.

27 I did not understand Mr. Shirley to disagree with any of this in substance, although he offered certain refinements.

28 It is important to record that Mr. Peter Crozier, a senior engineering geologist, had opined that the landslip in June was probably coincidental with the failure of the sewer line for other reasons related to the rainfall event. There was doubtless evidence demonstrating that the sewer line was in a poor condition. This evidence includes a routine, maintenance internal CCTV inspection carried out in March 2007 which was unable to penetrate more than 1.33 metres from the south of the property due to what seemed at that time to be a "collapsed" pipe. Subsequent events established that there was no pipe that had literally collapsed, but rather the unsupported sewer main in colluvial material had moved out and down due to ground creep, a point to which I will return when dealing with the quantum of the claim. Mr. Crozier's hypothesis extended to suggesting there were already leaks in the old pipe, and that the heavy rainfall may have generated a "water head" in the line due to water backing up in the manhole chamber on account of the "collapse", causing failure at a "weak point". He also suggested boulder movement in ground creep damaged the line. However, every other expert entirely discounts these theories and I prefer the agreed opinion expressed in the joint report.

29 Mr. Latchford, a civil engineer employed by Sydney Water, gave evidence (exhibit E, volume 6, page 2981) about the attempt to inspect the sewer main crossing the Liddy property by CCTV occurring on 28th March 2007. The DVD was received by his section around 17th May 2007. Although the subcontractors reported a "collapse", Mr. Latchford has viewed the DVD and saw no collapse. Based on his viewing of the DVD he accepts that the pipe had multiple fractures, but maintained that it was intact. He said there were multiple fractures at the point where the inspection ceased. However, his interpretation is that the survey was abandoned due to high flow at that point at that time of day. I infer that in high flow no useful inspection can be made.

30 Mr. Latchford also viewed a DVD of CCTV taken of the southern remnant of the sewer line on 13th March 2008. This inspection commenced at the northern end of the remnant and therefore proceeded in the opposite direction to the 2007 inspection. At a chainage of 8.4m, Mr. Latchford interpreted a broken displaced pipe with some deformation. There were similar findings in a pipe at a chainage of 9.72m. His evidence is that this is different from what was reported in March 2007. I find this a little difficult to understand because 8.4 metres from the northern end of the remnant is about 1.32 metres from its southern end. It may well be that the obstruction of the camera in March 2007 was due to the dip in the line created by ground creep.

31 Mr Latchford said that cracking of the pipes could have been addressed by relining the pipe by "spirally winding in" PVC liner. His evidence is that the work was not urgent, but may have been undertaken within one year "depending on other identified jobs and priority". I accept Mr. Latchford's evidence that there was no collapsed pipe. But his evidence was based purely on his inspection of the CCTV DVDs and he was unaware of the decision made on the basis of the 2008 CCTV inspection that it would be inappropriate to simply reconnect the remnant to a replacement of the length of the main that failed because of the movement of the remnant out and down due to ground creep. This "deformation", on balance, is the factor which lead to a decision to replace and restore the whole of the section of line crossing the Liddy property. Mr. Latchford defined "collapse" as including 25 per cent deformation, and where there is collapse urgent replacement of the affected segment is undertaken. It can be seen that at the chainage of 8.40m from the northern end of the remnant the deformation was ten to twenty per cent (exhibit E, page 2984). In anyone's language this is close to, but not quite, a "collapse", and to my mind this helps explain why the decision was made to replace the whole line crossing the Liddy property following the second landslip.

32 It is also clear from this evidence that the March 2007 inspection called into question the integrity of the southern end of the main as it crossed the Liddy property, not the northern end that collapsed in the landslide. I interpolate the northern end could not be inspected. If the southern end crept out and down, the northern end also must have been somewhat out of alignment. But had there been a leak in the main downstream, it seems unlikely it would have caused the upstream landslip and rupture. There is simply no evidence to support the "water head" hypothesis.

33 I find that the landslip was caused by the factors identified by the joint experts.

Building a boatshed - the relationship between the Liddys and Mr Hyde-Page

34 The Liddys acquired the property in 2005. They hoped to knock it down and build a new house, differently sited, on the land. The yards were then overgrown and in need of work. A solicitor acted for them on the purchase and had obtained a sewerage diagram which Mr. Liddy said he saw, and from it knew the location of the sewer. He did not know the size of it. As the block was overgrown he did not, on pre-purchase inspections, notice the manholes between which the sewer crossed the property. However he undertook some clearing work after they moved in and became aware of their location.

35 When they purchased the property the Liddys already had a boat, and the property had a jetty. They decided they would like to build a boatshed and slipway to house their boat. These structures were very common in the vicinity of Gannons Bay and around Port Hacking. They had heard of the fourth defendant, Mr Hyde Page, as someone in the business of waterfront construction.

36 Mr. Hyde-Page was an experienced builder of boatsheds and slipways. He occasionally built a seawall. Mr. Hyde-Page is not licensed to perform residential building work under the Home Building Act 1989 (NSW). Obviously the skills necessary to build a boatshed could be deployed to build residential structures. However "jetties, slipways, pontoons or boat ramps and any structures ancillary to these exceptions" are excluded from the definition of a dwelling under that Act, and therefore a licence is not required for construction of this type. Mr. Hyde-Page, through Mr M Evans of counsel, points out that building retaining walls may be residential building work because, for the purpose of the definition of dwelling under s.3 of the Act, retaining walls are included when they are constructed for use in conjunction with a dwelling: Regulation 5(K). In any event, as I have said, Mr. Hyde-Page, as he was clearly entitled to do, structured his business to avoid the necessity to operate within the regulatory framework of the home building legislation. I repeat, it was not necessary for him to comply with it in respect of the waterfront work he restricted himself to performing.

37 As I remarked at [9] when analysing the issues, Mr. Hyde-Page argues that he was not responsible for the landslip in any way. In particular, his case is that it was no part of his role to build the retaining walls that were undoubtedly required, nor was it his job to provide any temporary support for the excavation during the construction. His sole role was to perform the contract to build the boatshed. Mr. Hyde-Page says that the contract was entered into on 25th April 2007 by the oral acceptance by Mr. Liddy on behalf of himself and his wife of a written quote dated 24th April 2007 (see for example volume 7, pages 3632-3; exhibit 4D[3], volume 7, pages 3537-8). Mr. Liddy says it occurred on 24th April 2007 (exhibit 2D1 [89], volume 7, page 3311).

38 I have concluded that there are three relevant phases of the relationship between the Liddys and Mr. Hyde-Page. They are:

(a) The initial phase from their first meeting until council approval was obtained for the development;

(b) The excavation work;

(c) The building contract.

39 It is Mr. Liddy's case that throughout all phases, Mr. Hyde-Page was an active participant who undertook relevant work. During the first phase he not only drew the plans, and facilitated the preparation of the statement of environmental effects by his son, to which he contributed and co-signed, but he also gave detailed advice on an ongoing basis, talking Mr. Liddy through the development process and offering opinions about the resolution of issues as they arose. During this phase, Mr. Hyde-Page was paid only a relatively small amount for the preparation of the plans. His son was paid a more substantial amount in the preparation of the statement of environmental effects. However, the Liddys say that to the extent to which Mr. Hyde-Page went unremunerated, he acted in the expectation that he would obtain the construction contract.

40 In regard to the second phase, Mr. Liddy says it was always in the contemplation of the Liddys and Mr. Hyde-Page, from the commencement of the process, that excavation would be required. Mr. Hyde-Page had discussed that with them at their first meeting and had over the months mentioned Mr. Flexman's name as an excavator able to perform waterfront work. Flexible is Mr Flexman's company. Although the arrangement with Mr. Flexman was for payment in cash direct by the Liddys, and so too, the barge operator, Mr. Hyde-Page had made all arrangements in his capacity as "expectant principal contractor", as I would summarise it.

41 There is no question, of course, in relation to the third phase that Mr. Hyde-Page was involved as the principal contractor. The Liddys accept that Mr. Hyde-Page had not quoted for and was not intending to build the retaining walls required as a condition of the building approval. The Liddys say that Mr. Hyde-Page, in any event, doubted they were necessary. The Liddys accept that they eventually concluded that it was going to be necessary for retaining walls to be built (ultimately by a different contractor, as to which see below) after they had obtained engineering details from a structural engineer, not Mr. Bartel. However, they say that as Mr. Hyde-Page was responsible for organising the excavation; co-ordinating the barge and the excavator's trucks and equipment; the excavation was necessary to accommodate the boatshed he intended to build for them; and temporary support for the excavation was necessary to protect the works, and any workers; and to provide support for the land beyond the excavation, Mr. Hyde-Page had assumed responsibility for those matters and they had relied upon him to take any appropriate step to support the excavation work.

42 Essentially Mr. Hyde-Page's position is that he was only responsible for work he was paid for, and that was restricted to preparing the plans and constructing the boatshed. The contract for the boatshed did not include the cost of excavation, indeed that was performed before the contract was entered into. He was not responsible for the second phase and his involvement in contacting Flexible Excavations, arranging the barge and directing the excavators and the barge to the site was performed as a mere gratuitous agent for the Liddys, who were at that time unable to look after these details themselves because they were on holiday in Queensland. His contract did not provide for any shoring, or retaining walls. And supporting the excavation was no part of his responsibility. I understood the argument to be that, to the extent to which he may have offered a friendly word of advice along the way, this was entirely gratuitous. He just passed suggestions on to be helpful and for what they were worth, whether or not the Liddys thought them useful.

43 I have taken some time to set out these issues because the parties, that is say, the Liddys and Mr Hyde-Page, presented a great deal of detail in affidavit or statement with numerous attachments about matters which, in truth, were not entirely germane to the resolution of the issues in the case, but which rather went to the provision of incidental matters which might assist in the establishment of the probabilities.

44 In the end I have come to the conclusion that the Liddys version of events is to be preferred. In relation to the second phase it is, in my judgment, entirely supported by the independent evidence provided by Mr. Roger Flexman and Mr. Ryan Harrison.

45 In exhibit 4D4, Mr. Hyde-Page said that at the first meeting with the Liddys, at their home, he told them that he could not help with, inter alia, excavation. He said, "I do not do this work. You will need to employ an excavation contractor and hire a motor barge to do the cartage". From what is written at volume 7 pages 3523-4, one could readily form the impression that he was unfamiliar with these matters because when asked about the cost he said:

I have been told that it is expensive and it can cost as much as the boatshed and slipway combined.

This sounds very much like Mr. Hyde-Page had no direct knowledge of such matters. I interpolate in this conversation he referred to the plans drawn by him which became the approved plans, after amendment, as "concept plans".

46 At exhibit 4D4 [18], after payment for the statement of environmental effects and the "concept plans", Mr. Hyde-Page said he said to Mr. Liddy:

This is the end of my involvement for now. It's up to you to get on with the application process. After you have approved construction plans and the site work is done I will be happy to quote you on the boatshed [emphasis added].

The effect of his further evidence is that he only gave some guidance because of Mr. Liddys importuning.

47 Notwithstanding this, his evidence is that in late March 2007 Mr. Hyde-Page said that he contacted Mr. Liddy to let him know that 'Blue Water Barge', which "was the only vessel suitable for doing excavation cartage" (exhibit 4D4 [30], volume 7, page 3532), was available. The flavour of Mr. Hyde-Page's account is that Mr. Liddy asked him for advice about any local excavation contractors that Mr. Liddy could use to do the work. Mr. Hyde-Page says that he responded:

I don't know of any locals, but through a colleague of mine on the Georges River, I met an excavation contractor who works with him.

Once again, this creates the impression that Mr. Hyde-Page really does not know these things but just happened to have information available that might help. Notwithstanding this, Mr. Hyde-Page had Mr. Flexman's name, business name, landline, and mobile telephone number. And he agreed to contact the barge operator and the excavator to negotiate a price on behalf of Mr. Liddy.

48 Mr. Hyde-Page says that he reported back to Mr. Liddy providing rates and giving an estimated start date. However, Mr. Liddy was going to be in Queensland on holidays when the contractors were available. Mr. Hyde- Page says he responded as following:

I will let them know it's off, and that you will be contacting them when you get back.

Mr. Liddy is said to have asked for time to think and then rang back and asked Mr. Hyde-Page to "look after the excavation for me as a favour". Mr. Hyde-Page initially refused, saying "that's not what I do". He agreed to "show them the site and hand over the plans" as long as it didn't take too long. Moreover, Mr. Hyde-Page said that, again as a favour, he agreed to setup the "silt boom" at the water's edge for the excavation.

49 On this basis, Mr. Hyde-Page said he asked Mr. Flexman to coordinate with the barge operator to arrange a time so Mr. Hyde-Page could show them the site. He says this occurred on 16th April 2007. He met the barge on Gannons Bay, pointed out the land, passed on a message from Mr. Liddy that the invoices should be put in his letterbox, and provided Mr. Liddys contact details, the approved plans and the geotechnical report. He says that Mr. Flexman looked at the plans and the report and enquired of him, "do you know where the survey mark is?" He did, and he pointed it out. Again one has the impression this was simply a friendly act. He said saw Mr. Flexman mark out the excavation and the boundary using a yellow spray can. Mr. Flexman apparently then said, "We'll be right now". Notwithstanding that he was apparently acting as a mere conduit, Mr Hyde-Page gave some gratuitous advice about the need for a 300mm rise at the back of the boatshed to facilitate launching the boat, to which Mr. Flexman agreed (exhibit 4D4, volume 7, page 3537 [38]). Mr. Hyde-Page helped set out the silt boom, and as a friendly act towed Mr. Liddys pontoon to a mooring so it would not be damaged.

50 I regret to say that Mr. Hyde-Page was in many respects an unimpressive witness. I formed the view that this was mainly because he went out of his way to minimise his involvement in the excavation. I will give a couple of examples of this. At [41] of his statement, exhibit 4D4, volume 7, page 3537, Mr. Hyde-Page said the following:

Roger Flexman took about four days to complete the excavation. The only contact I had with the site in this time was to observe from a distance what work had occurred as I travelled past in my boat in Gannons Bay in the morning or in the evenings after work.

I will not detail Mr. Flexman's evidence at this stage. The ordinary meaning of this, I would have thought, is that, consistently with his case that he was a mere agent in organising the contract with Flexible Excavations, having shown Mr. Flexman the site, the work was no further business of his and he simply happened to see the work going on as he travelled in his boat from his home on the opposite side of Gannons Bay to other work sites. Quite early on in his cross-examination by Mr. Watson SC, who appeared with Mr. Sheller for Sydney Water, the following exchange occurred:

Q. And did you visit while the excavation was going on?

A. Yes.

Q. And did you go there really on a daily basis and see how the excavation was going?

A. No, I did not.

Q. Not every day?

A. Not every day.

Q. How many days did you go?

A. To the site to supervise the excavation, was that the question?

Q. How many days did you do?

A. Excuse me, could you repeat the question please.

Q. How many days did you go?

A. How many days did I go to the site?

Q. Yes?

A. Probably two or three.

Q. Why?

A. The site is Mr Liddys property.

Q. That's not a good reason?

A. Sorry, I went to the site and the site consisted of a barge moored alongside Mr Liddys property, is that right? Sorry is the site the barge or is the site the property?

Q. I suppose the site has to include the property?

A. Well, I went to speak to the barge master and I did not go to the site, if the site is the Liddys property, to supervise the excavation.

Similar evidence was elicited at 418.27 - 419T:

Q. So you used the drawings or plans to check whether or not the excavation was in the right place?

A. You asked me was it

Q. No, I'm asking you did you use the drawings or the plans to check that the excavation was in the right place?

A. The survey diagram, I did, yes.

Q. And you went back to the site, you say, three times. Why did you go on the other days?

A. Basically, to see Tony Appleyard, the barge master.

Q. He doesn't have a phone?

A. He has a phone, but I do not have a mobile phone. I have never owned a mobile phone, and I have never used a mobile phone, apart from somebody giving it to me.

Q. So you are saying you went to the site by coincidence on the three days the excavation was going on, but just to speak to the barge man?

A. I went there not for just coincidence, I went there to speak to him. Also to speak to Roger Flexman who was a friend.

Q. About the excavation?

A. No, not anything about the excavation.

At 417.20 Mr. Hyde-Page described his role as "orientating" the excavating contractor.

51 He was cross-examined about the same topic by Mr. Donaldson. I set the evidence out:

Q. You've said during the course of your oral evidence, have you not, that well, I put that more have you indicated to his Honour in the course of your oral evidence that during the four days or so it took to complete this excavation you came to the site from time to time and spoke to the barge operator?

A. That's true.

Q. So paragraph 41 of your affidavit was a lie, was it?

A. Could you give me the page number, please?

Q. Page 3537.

A. 3537?

Q. Yes.

A. Which

Q. Paragraph 41.

A. No, it's not a lie.

Q. Well, you did come to the site on numerous occasions during the course of the excavation works, didn't you?

A. Well, I think as his Honour explained this to me, there's a barge and there's where the digging was going on, and I was of the opinion that the site wasn't I was there on the barge, yes, I was. Now, whether that's the site or not. It wasn't an intentional lie, but.

Q. It's very explicit, isn't it, Mr Page, "The only contact I had with the site in this time was to observe from a distance what work had occurred as I travelled past in my boat in Gannons Bay in the morning or in the evenings after work". You are putting past on your boat and saw the excavation from a distance on your way to and from work, that's what you said in your affidavit, isn't it?

A. Putting past in my boat I stopped at the barge to speak to my colleague, Mr Appleyard.

HIS HONOUR

Q. Was that barge more directly adjacent to the land?

A. Yes, your Honour, there were a set of ramps, and then the site was there at the end of the ramps.

DONALDSON

Q. So it was this isn't a very good nautical term but it was parked at the site and the trucks were rolling, or the excavator was rolling on and off it in order to fill up the trucks?

A. No, they had two, two excavators there. The truck would be right on the barge ramps, and one excavator would be putting stuff into the truck, and the other one would be digging, so it was all happening at the one end of the barge.

Q. You didn't need his Honour to point out to you that there was no sensible I withdraw that. There is no sensible distinction between visiting the site during the four days of that excavation and visiting the barge, is there?

A. I think there's a clear distinction.

52 A further example of what I would regard as Mr. Hyde-Page's attempts to minimise his involvement in the excavation is that initially in cross-examination he answered questions which created the impression that he was in doubt whether he would be awarded the contract. When cross-examining him about his involvement in clearing up the cave-in, Mr. Reid of counsel, appearing for Asset Geotechnical, at 430.20T asked the following question and elicited the following answer:

Q. Well, you were going to build a boatshed, were you not, on the site?

A. No, that wasn't confirmed at that stage.

...

Q. Mr Liddy contacted you about building a boat shed on site?

A. There was a proposal. It was not a contractual agreement. There was a proposal, I agree. Yes, there was.

53 Mr. Toomey of counsel who appeared for the Liddys cross-examined Mr. Hyde-Page about the contents of the environmental statement, which he contributed to and co-signed with his son. It contains a detailed description of the proposed boathouse including dimensions and the statement "the work is to be completed by a contractor" (volume 7, page 3566). Mr. Toomey suggested to Mr. Hyde-Page that when he signed the report, it was anticipated that he would be the contractor (437.5T). His answer was:

I was preparing the report for Mr Liddy to progress his development. But there was no binding contract, or anything, that I was to be the contractor.

In answer to a question of mine, he said he expected to be the contractor. He had "about a 75 per cent expectation" (437.15T). In a long passage of cross-examination by Mr Toomey about Mr. Hyde-Page's terminology, and in particular referring to Mr. Liddy as an "owner builder", Mr. Hyde-Page denied that he was attempting to minimise his own role (447.10 - .25T), although he agreed that employing the epithet "owner builder" had no possible relevance to any role that Mr. Liddy could have played at the excavation site (448.10 - .20T). Indeed, it seems that someone in that position would have done no more than Mr. Hyde-Page did (444.10 - .445.25T).

54 Mr. Flexman had given evidence in the plaintiff's case, that is, prior to Mr. Hyde-Page giving evidence, during the course of which it transpired, contrary to the impression created by exhibit 4D4, that Mr. Flexman and Mr. Hyde-Page knew each other quite well. Mr. Toomey cross-examined Mr. Hyde-Page about this, and he agreed that he had "used Mr. Flexman on numerous occasions [t]o perform excavation work before this particular project" (438.15T). He agreed with Mr. Flexman's estimate that they had worked together on seven occasions (439.35T). In fact, Mr. Flexman's nephew was working part time for Mr. Hyde-Page at that stage (440.25T). Mr. Toomey put the following question to Mr. Hyde-Page.

Q. I'm suggesting to you that the language you have used in your affidavit, and particularly the point I'm taking you to now, is deliberately used by you with the intention of conveying that you had had little or nothing to do with that particular excavator before?

A. That is not my intention.

It was put by different counsel in a number of different ways that Mr. Hyde-Page was deliberately seeking to distance himself "from what went on" (453.15T), or that he was attempting to tailor his evidence by minimising his involvement (488.15T).

55 Mr. Toomey elicited the following evidence in cross-examination at 482.5 - .45T:

...and you told him that you would organise the barge and the excavators because you knew it was necessary for those things before you could even start to build the shed?

A. That's the area of my expertise. I know people who can do that sort of thing and yeah and I gave that service to him.

Q. And you never told him he'd have to organise that. You anticipated right from the word go that it would be you who would be organising that because these were all precursors to you even being able to build the shed?

A. I was happy to do that. I wasn't being paid for it. I was just happy to do that. It's a specialised area and I know the people involved and contacts. I was the contact man.

Q. You never suggested to him, did you, that he would have to organise those things?

A. He could.

Q. You never suggested to him that

A. No, I had suggested I had offered to him that I would do it and I didn't say well you do it.

...

Q. Whether or not the organisation of the barge and the organisation of the excavators and I'm putting to you the supervision of the excavators appeared in your ultimate quotation, you knew that in order for the boat shed ultimately to be built and for you to make the money from that it was necessary to these things to be done?

A. Yes, it was necessary.

Q. And you freely proceeded to organise those things for Mr Liddy for that very reason?

A. Yes.

56 In cross-examination by Mr. Donaldson, Mr. Hyde-Page accepted that rather than an owner builder being in charge of this job, the construction certificate (volume 7, page 3619) issued on 20th March 2007 contemplated the appointment of a principal contractor. Mr Hyde-Page said that he anticipated that it would be him (491.35 - 492.35T). It is difficult for me to understand then why he denied that when he "embarked on the work of constructing the slab and boatshed, [he] did so in the understanding that [he was] the principal contractor for carrying out all the work that was the subject of the approval". Eventually Mr. Hyde-Page said he was the principal contractor for the boatshed (493.50 - 494.5T).

57 Mr. Flexman's evidence was that he was a plumber by trade, but had a long-term interest in excavation work and started his own business through Flexible Excavations to further that interest in 1996. The business does not undertake shoring work. His evidence was (exhibit J, volume 7, page 3649 [8]):

In the period from 2000 to 2007, Flexible performed approximately seven jobs for Hyde-Page. Every job that Flexible has performed for Hyde-Page has involved Hyde-Page building a boatshed on residential property. (Emphasis added)

There was a pattern to the manner of engagement for each of those jobs, which Mr. Flexman describes at [9]. The pattern was as follows: Mr. Hyde-Page contacted him; he would inspect the site with Mr. Hyde-Page and provide a quote; Mr. Hyde-Page would either engage Flexible at that time or later, and if the latter usually by phone call. Flexible always specified that Hyde-Page mark out the proposed excavation. Flexible would carry out the excavation in accordance with those directions. Mr. Hyde-Page would give directions about who to address the invoice to. In his experience, the builder or head contractor arranges shoring contractors if an excavation is to be shored.

58 Contrary to the evidence of Mr. Hyde-Page (483.50 - 484.15T; 486.30 - .45T), Mr. Flexman says there was a site inspection during which Mr. Hyde-Page showed him drawings, pointed out the site to be dug out and gave him the excavation dimensions specifying, "I want it mainly vertical with a batter towards the top". He said (exhibit J [14], volume 7, page 3651):

Hyde-Page did not provide me with a copy of any drawings. Hyde-Page may also have had a geotechnical report but I was not given it and did not examine it.

Mr. Flexman provided Mr. Hyde-Page with a rate on a 'do and charge basis' and estimated the total cost at $25,000. Mr. Flexman specified, "you'll need to mark out the site for us" (exhibit J, volume 7, page 3652 [16]).

59 Mr. Flexman also said, contrary to what Mr. Hyde-Page said in his statement, that Mr. Hyde-Page arranged for Blue Water Barges to meet him and transport his equipment to the site. Mr. Hyde-Page was at the site when they arrived and Mr. Flexman asked him to mark out the site and "[show] me where to dig". His evidence was that this was done by Mr. Hyde-Page and that his employees - his son Clancy and Mr. Harrison - assisted in this task by holding the ends of the stringline for Mr. Hyde-Page to spray out the lines. He annexed the copies of the photographs showing this work in progress to his affidavit. (Colour copies were admitted as exhibit K.) He said Mr. Hyde-Page took those photographs. On a number of occasions Mr. Hyde-Page would come across the Bay, tie up his boat and look at the work. At the completion of the work he had the following conversation with Mr. Hyde-Page (exhibit J [29], volume 7, page 3654):

Roger Flexman: (pointing at the back wall of the excavation) "Are you going to shotcrete that?"

Hyde-Page: "No, I am going to build the block wall against it. I'll have the blocks here tomorrow."

Roger Flexman: "Fair enough"

I interpolate that Mr. Hyde-Page denied this conversation and denied that he was reinforcing the block walls of the boatshed to serve as a retaining wall for the excavation (492.45 - .50T; 496.35 - .40T).

60 Mr. Flexman also gave evidence that Mr. Hyde-Page contacted him to clean up the first cave-in. Once again, Mr. Hyde-Page organised the barge. Mr. Flexman's invoices dated 16th April 2007 and 16th May 2007 are both directed to "Waterfront" and not Mr. Liddy (volume 7, pages 3668-9), as is the invoice of 'Blue Water Barge Hire' (exhibit 4D4, volume 7, page 3634). The Blue Water invoice relating to the cave-in is addressed to Mr Liddy: exhibit 4D1.

61 Mr. Flexman said that Mr. Hyde-Page contacted him between the 9th and 12th of June to advise him of the second landslip and said words to the following effect:

There has been a cave-in at Peter Liddys place, the sewer is broke. I'll probably have to pay for it (exhibit J [41], volume 7, page 3656).

I interpolate that Mr. Liddy swears to a similar conversation with Mr. Hyde-Page on 23rd June 2007 (exhibit 2D1 [122], volume 7, page 3315) during the course of which Mr. Hyde-Page said, "I suppose I will have to put my hand in my pocket to pay for this". I accept this evidence and I regard these statements as evidential admissions relevant to Mr. Hyde-Page's role in relation to the excavation.

62 On or about 12th June 2008, Mr. Flexman received a letter from the solicitors acting for Sydney Water, which was in substance a letter of demand. He contacted Mr. Hyde-Page immediately who suggested they "meet and talk about it". Mr. Flexman attended Mr. Hyde-Page's home on 14th June 2008. Mr Hyde-Page confirmed that he had received a similar letter and remarked (exhibit J [45], volume 7, page 3657):

This is all Peter Liddys fault. The report he got from the engineer was all wrong.

Mr. Hyde-Page helped Mr. Flexman draft an exculpatory response which Mr. Flexman's wife re-engrossed on Flexible Excavations' letterhead with some formating changes, and posted to the solicitors (volume 7, pages 3666 -7).

63 Given Mr. Hyde-Page's hand in drafting the letter, it seems to me to contain significant admissions as follows:

(a) Mr. Hyde-Page showed Flexible employees where to peg out the excavation using detailed plans;

(b) These plans were the plans stamped by the Sutherland Shire Council superimposed upon the survey of Paul A. Lawson, surveyor (exhibit 4D4, volume 7, page 3628);

(c) The excavation was carried out in accordance with the geotechnical report prepared by Asset Geotechnical on 8th January 2007.

64 Mr. Hyde-Page repeatedly denied assisting pegging out the excavation, or ever considering the geotechnical report before commencing the work. Mr. Toomey cross-examined Mr. Hyde-Page about these matters from 499.25 to 453.15T. Regrettably, I formed the impression that Mr. Hyde-Page did not give straight answers to the questions and on occasions when he did, he sought to give long-winded explanations to avoid the ordinary meaning of the answer he had already given. At 450.45T he agreed with the cross-examiner that if the letter sent to the solicitors had not accorded with the draft, he would have drawn that to Mr. Flexman's attention, and he did not. At 451.10T he agreed that he had shown Flexible employees where to peg out the excavation by reference to Mr. Lawson's survey. This, of course, is completely different from his original account that he simply indicated where the boundary was. When the cross-examiner sought to have him reaffirm the straightforward answer he gave at 451.30T he said, "it's a matter of interpretation". Over the whole of page 452 of the transcript he gave unresponsive, discursive, and, I thought, somewhat evasive answers. When the cross-examiner came back to the proposition which had been plainly accepted at 451.10T, at 453.10T the witness said:

... it's ambiguous, it can be read either way as far as I can see it. I would say that if I orientated them on the block you could say that they did it.

Orientating was a concept he referred to a number of times from 451.30T to 453.15T.

65 The letter was a recurrent theme during the cross-examination of Mr. Flexman by Mr. Evans. But apart from the challenge, made in various ways, that the pegging out was actually done by Flexible employees and that Mr. Hyde-Page did no more than point out the boundary, which challenge Mr. Flexman refuted, it was not put to Mr. Flexman that the letter as sent to the solicitors was not as drafted between him and Mr. Hyde-Page and written out by Mr. Hyde-Page in his own hand. I prefer the evidence of Mr. Flexman where it conflicts with that of Mr. Hyde-Page.

66 I am fortified in this regard by the evidence of Mr. Harrison (exhibit 2D2, volume 7, pages 3641 to 3647; 401 - 409T), which corroborates Mr. Flexman's evidence, especially in relation to the important detail about Mr. Mr. Hyde-Page "pegging out" the area to be excavated. He also corroborates Mr. Flexman in saying that Mr. Hyde-Page was on the site on each of the days on which the work was carried out, from time to time. On those occasions he appeared to be inspecting the excavation.

67 As I have indicated above, there is a recurrent theme in the cross-examinations of Mr. Hyde-Page that he was attempting to minimise his role or downplay his involvement especially in relation to the critical excavation work, at the same time seeking to place the Liddys, especially Mr. Liddy, in the controlling role. I accept that this cross-examination was well directed. Although there were subtleties and mere variations of emphasis in his evidence, to my mind these were significant, and where there is a conflict, I prefer the evidence of the other witnesses.

68 I infer from Mr. Liddys evidence (exhibit 2D2 [18], volume 7, pages 3296 - 7), that Mr. Hyde-Page took on the following roles:

(a) Advising the Liddys about all the necessary approvals;

(b) Preparing plans to go to the Department of Lands for the necessary license and to the council;

(c) Preparation, in conjunction with his son, of the statement of environmental effects;

(d) Organisation and co-ordination of the excavation with Flexible Excavations, and the necessary barge. Mr. Hyde-Page provided an estimate in relation to the cost of site preparation, including the excavation, and for the construction of the boatshed and sliprails.

69 I also accept that at the time of the original meeting, there was discussion about any necessity for retaining walls. I accept that Mr. Hyde-Page said to Mr. Liddy (exhibit 2D1, volume 7, page 3297):

You are not going to need a retaining wall because the boatshed will just sit in the excavated area. I have done it in a similar way previously. There's a boatshed off Willarong Road near Yowie Bay with a similar design. It's the blue and white one. Go and have a look at it.

70 I am satisfied that Mr. Hyde-Page had an ongoing role as a consultant when Mr. Liddy submitted his application to both the Department of Lands and the Sutherland Shire Council. I accept what Mr. Liddy says about Mr. Hyde-Page providing advice in answering requisitions, and dealing directly with Mr. Ferguson from the Department of Lands.

71 I accept Mr. Liddys evidence that when the Department of Lands suggested a realignment of the boatshed and the jetty, Mr. Hyde-Page revised the plan. The revised plan is at volume 7, page 3385. I accept that revised plan was drawn by Mr. Hyde-Page, superimposed upon the survey prepared by Mr. Lawson at his suggestion.

72 I accept Mr. Liddys evidence that Mr. Hyde-Page provided the simple instructions for the completion of the development application at volume 7, page 3387 (exhibit 2D1 [34] - [36]). I accept Mr. Liddy prepared the application in accordance with the advice he had received from Mr. Hyde-Page.

73 When a neighbour raised some concerns in relation to the application, supported by Mr. Smith to whom I have made previous reference, and the council wrote to Mr. Liddy about it, I accept that Mr. Liddy raised the matter with Mr. Hyde-Page who agreed to consider the council's letter and advise him (volume 7, pages 3301 - 3302 [39] - [43]). I accept that Mr. Hyde-Page provided the notes and the information at volume 7, pages 3411 - 4, to assist Mr. Liddy in responding to the council's requisitions.

74 An ongoing issue with the council was the question of retaining walls. I accept that Mr. Hyde-Page reiterated a number of times that they were not required because of the method of construction he was proposing (exhibit 2D1 [46] and [49]). Mr. Liddy, however, formed the view that he would not obtain approval "unless there are retaining walls". Mr. Hyde-Page advised him to draw retaining walls on the plan parallel to the boatshed walls and indicate that they were to be concrete blocks reinforced with steel in concrete. Mr. Liddy also consulted Mr. Hyde-Page about council's requirement for a geotechnical report and Mr. Hyde-Page advised him to obtain a walkover assessment and to provide him with a copy when it was obtained. I accept that Mr. Hyde-Page suggested contacting a Mr. Simon Winter, a geotechnical engineer and that Mr. Winter referred Mr. Liddy on to Mr. Mark Bartel. I accept Mr. Liddy had the conversation he deposes to at exhibit 2D1 [51] with Mr. Bartel when Mr. Bartel pointed out that a walkover assessment "normally canvasses any issues relevant to the excavation, and the design of footings and retaining walls for the building". As has been stated already, Mr. Bartel provided the report on 8th January 2007, which Mr. Liddy forwarded to the council, also providing a copy to Mr. Hyde-Page together with a copy of the plans Mr. Liddy had amended following their discussion. Council had further requirements in relation to the location of the boatshed and sliprails and the position of the retaining walls. I accept that Mr. Liddy discussed all these matters with Mr. Hyde-Page and acted in accordance with his recommendations, including further amending the plans. I reject Mr. Hyde-Page's evidence that he was unaware of the changes made to the plans and that his original drawings were no more than concept plans.

75 The development consent was granted conditionally on 21st February 2007 (exhibit 2D1 [63], volume 7, page 3456). I will return to the conditions of consent below.

76 Mr. Liddy provided a copy to Mr. Hyde-Page, who advised him that he needed a construction certificate before work could commence, and pointed out that he would not need home warranty insurance for a boatshed. The Liddys appointed an arm of the council, Sutherland Shire Certification Services, as the principal certifying authority ("PCA") for the project. For a time there was an issue about whether home building insurance was required. Mr. Hyde-Page insisted that this was not the case and eventually council accepted this. A construction certificate was issued on 20th March 2007. It noted that the name of the principal contractor was to be advised, but there is no serious question that that was to be Waterfront Constructions, and Mr. Liddy and Mr. Hyde-Page discussed this on 23rd March 2007 (exhibit 2D1 [71], volume 7, page 3307), even though their contract had not yet been formalised.

77 Indeed, when Mr. Liddy lodged the notice of commencement of building work with the PCA on 3rd April 2007, he nominated Waterfront Constructions as the principal contractor and recorded that boatsheds are expressly excluded from Home Building Act insurance, as Mr Hyde-Page had advised him to.

78 I accept from the evidence elicited by Mr. Evans in cross-examination that from the time he wrote to the council on 7th December 2009 (volume 7, page 3416), Mr. Liddy had concluded that he would separately engage the services of an engineer for the purpose of, inter alia, designing retaining walls. I do not accept, however, that because of this Mr. Liddy did not have the conversations he has given evidence of with Mr. Hyde-Page concerning the necessity for retaining walls. The two propositions are not inconsistent. There is nothing inconsistent with the proposition that Mr. Hyde-Page held the view that retaining walls were unnecessary because the reinforced walls he was proposing to build would do the job, on the one hand, and Mr. Liddy concluding that he would have an engineer consider that question separately and independently of Mr. Hyde-Page - who after all, professed no engineering expertise, but was a very experienced boatshed builder in this area - on the other.

79 Moreover, I accept Mr. Hyde-Page expressed the views attributed to him by Mr. Liddy. Doubtless the expression of those opinions by a man with his experience in the field may partly explain why Mr. Liddy was slow off the mark in obtaining a structural engineers advice.

80 However, it is quite clear from Mr. Liddys evidence that the council in its capacity as PCA was continuing to press him with the necessity to comply with the council condition contained in the development approval and the PCA agreement relating to the provision of engineering drawings relating to the use of reinforced concrete/masonry (volume 7, pages 3488 and 3503). A fax of 25th May 2007 from Sutherland Shire Certification Services inquiring about the required engineering details was followed up by a phone call from the responsible officer, a Mr Steve Kelly, to Mr. Liddy. Mr. Liddy undertook to provide the details as soon as possible (exhibit 4D3). He met on site with a Mr. Robert McKeen requesting an engineer's report of the slab (which had already been poured by Mr. Hyde-Page) and the retaining wall. But the second landslip intervened before Mr Mckeen could oblige.

81 The development of Mr. Liddys understanding and intention in relation to retaining walls was elucidated by Mr. Donaldson's cross-examination of him at 393.20 - 397.15T. Mr. Liddy accepted the view of his experienced boatshed builder that retaining walls were not strictly necessary, but thought he would need to comply with council's requirements in relation to them, including obtaining engineering drawings. As I have said, he knew Mr. Hyde-Page was not an engineer. He accepted Mr. Hyde-Page's advice that the retaining walls could be constructed from concrete blocks reinforced with steel and concrete as Mr. Hyde-Page had advised. Initially he was of the view that Mr. Hyde-Page could construct whatever retaining walls were necessary which had been included in the plans which council approved. Council's requirement in February 2007 that the retaining walls be flush with the east and north faces of the boatshed supports Flexible Excavation's submission that Mr. Hyde-Page, although not intending to build separate retaining walls, was of the view the reinforced walls he proposed to build would do the job.

82 It wasn't until Mr. Liddy received Mr. Kelly's fax on the 25th of May 2007 and discussed it with Mr. Hyde-Page (exhibit 2D1 [106], volume 7, page 3313) that he began to fully appreciate that Mr. Hyde-Page was firm in his view that the council's requirement for retaining walls was unnecessary and that he would not be doing anything about them. This seems to me to be confirmed by the contents of Mr. Liddys fax in reply of the 25th of May 2007 requesting a site meeting with his "contractor" and the PCA to discuss matters (exhibit 2D1 [107], volume 7, pages 3313 and 3505).

83 In that fax, Mr. Liddy pointed out that he did not understand that engineering plans had previously been requested, and that he had thought the geotechnical report would suffice.

84 Mr. Kelly was on leave until 4th June 2007 (exhibit 2D1 [113], volume 7, page 3314). However, Mr. Liddy had already decided the previous day that he would arrange for the construction of the retaining walls through a different contractor, and, as I have said, after making enquires with Mr. Lawson arranged to meet Mr. McKeen on the site for the purpose of discussing compliance with council's requirements. This option may have been in the back of his mind since he first corresponded with council about retaining walls.

85 I find that Mr. Hyde-Page was acting at all times as Mr. Liddys consultant. Specifically he actively organised and co-ordinated the excavation work carried out by Flexible Excavations in April 2007 as part of the preparation of the site. To do this Mr. Hyde-Page relied upon the geotechnical report and the approved plans, although he sought to have Flexible Excavations take responsibility for following them. However, I accept that Mr. Flexman insisted upon working in accordance with the previous practice between him and Mr. Hyde-Page and he required Mr. Hyde-Page to specify what was to be done by pegging out the excavation site and stipulating what was required by reference to more or less vertical walls with a small batter at the top. The excavation was carried out in this way under Mr. Hyde-Page's supervision and to his satisfaction. I accept he had no formal contractual arrangement at that time with Mr. Liddy, but I find that he acted in the full expectation of being appointed principal contractor, as had been previously discussed; effectively, he was the person who undertook and embarked upon the excavation work. Given the geotechnical report and his previous experience, I find that Mr. Hyde-Page saw no need for temporary support by way of shoring in relation to the excavation. Moreover, he was of the view that the lightly reinforced walls he proposed for the boatshed would suffice for retaining walls and saw no need to separately address that matter.

86 At the time the excavation was undertaken and up until 3rd June, Mr. Liddy considered that what Mr. Hyde-Page had in mind would ultimately satisfy the council's requirements. He kept in the back of his mind that he would organise a separate application in relation to retaining walls, if necessary, but this did not crystalise into a definite plan of action until 3rd June 2007.

87 So far as the division of roles between the Liddys on the one hand and Mr. Hyde-Page on the other is concerned, I accept that the Liddys were effectively in the role of homeowners only at the time the excavation works were carried out. To make things clear, Mr. Hyde-Page was acting as principal contractor and was the person in control of the excavation work in preparation for the commencement of the building work.

The role of Asset Geotechnical

88 Mr. Bartel accepted that Asset Geotechnical were retained to undertake a walkover site assessment to provide a report for the purpose of the development application. However, he maintains that there was no instruction to provide a landslip risk management assessment as part of that report. On the evidence I have accepted from Mr. Liddy, none was requested, and I would infer, as a layman, he did not know to ask for one. Mr. Bartel, however, said it was his usual practice to perform such an assessment where "there are obvious site features present which suggest that landslip may be an issue" (exhibit 1D1[15] - [16], volume 7, page 3212). On the evidence I accept this was such a site.

89 Mr. Bartel's report of 8th January 2007 is reproduced in various places in the materials including as an attachment to his affidavit commencing at volume 7, page 3240. A copy is also attached to Mr. Liddys affidavit commencing at volume 7, page 3423. There is no doubt that Mr. Bartel well understood that his report was required in support of the proposed development of the boatshed at the Liddy property. I infer he then fully appreciated it would be provided to third parties to be acted upon and used by them for the purpose of assessing geotechnical issues related to the proposal, and in the execution of any development consent.

90 There are essentially three fundamental flaws in Mr. Bartel's report. They are accepted by the independent geotechnical experts, and as I understand his evidence in cross-examination, by Mr. Bartel himself. They are:

(1) He completely misconceived the subsurface condition. In particular, he inferred a continuous cliff line trending across the property from north to south (volume 7, page 3241 [3], figure 1, volume 7, page 3248, and figure 2, volume 7, page 3249).

(2) Secondly, he failed to observe the presence of the sewer main. I have already found that the "turret" at the northern end of the line where it crosses the property should have been obvious to a trained eye surveying the site from the waterfront.

(3) Thirdly, his recommendations of the maximum slopes for permanent and temporary batters contained in table of 2 of his report were erroneous (page 3243 [4.2]). In particular, they recommended a vertical slope in talus greater than one metre in height. This doubtless would have been an obvious error to a person trained in geotechnics. But it is not obvious to a layman such as a householder, or a Council Development Officer. It was not obvious to a boat shed builder.

A more contentious fourth failing is the failure to undertake a land risk management assessment. In his report of 24th September 2008, forming part of exhibit "O" (volume 1, page 277), Mr. Colenbrander says that such assessments "are routinely carried out on steep development sites in Australia to assess the landslide risk and thus allow informed engineering decisions to be made regarding risk remediation measures".

91 Mr. Shirely agreed (exhibit 4D6 [35], volume 2, pages 571, 577, 613). I infer from [16] of his affidavit (volume 7, page 3212) that had he not erred in his appreciation of the subsurface conditions, Mr. Bartel would have carried out such an assessment on this unstable site.

92 Mr. Liddy said in his affidavit that if he had been aware of the sewer main on the site, he would have reviewed and revised his recommendations. He did not say how. He acknowledged the typographical error in table 2 and offered the opinion that unsupported excavations greater than 1.5 metres deep should be supported both in the short and long term by shoring. He expected an experienced excavation contractor to have recognised the recommendations in table 2 to be in error. He referred to the important information attached to his report, which in general terms recommended, that he be notified of any variations in the sub-surface conditions. Mr. Bartel said that this extended to reviewing site conditions at the time of excavation, but as I read the important notes they do not in terms say that. Had he been present I do not doubt that he would have directed immediate stabilisation works to ensure the excavation did not collapse.

93 Naturally, one accepts that had Mr. Bartel been asked to inspect the excavation at the time or soon after it was completed he would have changed his assessment of the site conditions, corrected the error in table 2, and recommended that appropriate shoring be put in place. I will deal with this last aspect below.

94 In cross-examination by Mr. Watson, Mr. Bartel acknowledged that he appreciated that the property owner, the approving authority, the builder, neighbours and other users of the property might rely upon the accuracy and clarity of his report (310.45 - 311.20T). He accepted that the concern of geotechnical engineers is the safety of an excavation "in terms of the potential for it to collapse undermining structures including important services" (312.5 - .15T).

95 He repeatedly made it clear in cross-examination that critical to his reasoning was what he referred to as the inferred sandstone cliff line (314.20T, 314.50T, 315.10T, 315.30T). He also accepted he was wrong in his inference (315.7T). He agreed he had underestimated the overall degree of slope, which led to him underestimating the risk of collapse (317.25T).

96 Mr. Bartel maintained that he wasn't required to do a landslip risk assessment. However, he acknowledged that there were factors indicating that landslip was a danger at the site, including "the distinctive downward tilt on the trees on the slope". He agreed that the failure to qualify the inference of the cliff line was a serious omission and a fundamental failure in his report: (322.25 - .30T). At the conclusion of the cross-examination by Mr. Watson he was asked the following questions at 325.45 - 326.5T:

Q. The accumulation of all of this is that if you were able to correct it, this is assuming for the moment that I am right about the 45 degrees and assuming I am right about the land creep, and adding to that the actual conditions of the subsurface and the existence of the manhole and the mistake in the suggested batters slope, when you add all of that up, and if that had gone into your report, your report would have been quite different?

A. Yes.

Q. And the effect of your report would have been had these things been accounted for that there was a genuine risk of an undermining and collapse of the sewer service?

A. Yes.

97 Mr. Bartel agreed with Mr. Evans in cross-examination (331.25T) that absent his inferred sandstone cliff line, temporary shoring or other support for the excavation should have been addressed in his report. He also agreed with Mr. Evans that rather than providing a report, had he noticed the things that had been raised with him by Mr. Watson he should have advised Mr. Liddy that other investigations were required.

98 Mr. Bartel expressed the opinion that prompt construction of the retaining walls, complying with the specifications contained in his report, prior to the landslip, would have provided the necessary support. I interpolate the difficulty with this is that there was nothing in his report which warned of the risk of a landslip. Indeed, on the contrary, nothing in his report presents the picture of significant instability arising out of, say, Mr. Collenbrander's description of the site in his report of September 2008, always accepting he had the benefit of hindsight.

Mr. Liddys knowledge of the risk of collapse of the excavation

99 As may be clear from what I have written so far, only Mr. Liddy gave evidence on behalf of him and his wife. The evidence establishes that, as between them, he was the one who had an active part to play in the development of the boatshed. There was no evidence that Mrs. Liddy played any part whatsoever and there was no evidence that she had any knowledge in relation to the existence of the sewer main, whether obtained through the solicitor at the time of purchase or otherwise. There was no evidence that she had any actual involvement in dealing with the council as the approving authority. It is simply not possible to equate her with her husband for the purpose of the law of negligence. Different questions arise in relation to the statutory covenant.

100 There was significant cross-examination of Mr. Liddy by Mr. Watson about his understanding of the need for retaining walls arising out of his correspondence with the council. He understood that without support the excavation might potentially collapse (336.40 - .45T). I might say again the real issue was not retaining walls, but rather appropriate temporary support for the excavation until they could be constructed. Some questions were asked about that in the context of the first landslip or cave-in (343.30 - 344.5T). He was aware that it was a condition of the council's development consent that the plans be submitted to Sydney Water to determine whether the development would affect its assets (volume 7, page 3462; 340.45 - 341.5T). He accepted that with hindsight "in substance it was an effort to make sure that Sydney Waters' assets were not damaged".

101 Mr. Liddy agreed with Mr. Watson that he disobeyed that condition, and although, it must be said, he offered some excuses for that omission, he agreed that it was the result of carelessness. At 343.20T the following appears:

Q. I'm going to suggest to you that the failure to show the drawings the plans to Sydney Water could only be a product of either carelessness or it was deliberate. Do you agree with that?

A. Yes.

Q. What was it, was it careless or was it a deliberate act by you?

A. Careless.

Q. You'd agree that what that development consent condition was proposing was a check to make sure that the sewer that [you] knew was there was protected during the building process, you knew that?

A. Yes.

102 Mr. Liddy agreed that the fist cave-in was the type of event that he was aware could possibly occur in the absence of retaining walls (343.45T). Although he contacted his builder, Mr Liddy was aware Mr Hyde-Page had done nothing except to arrange for the spoil to be removed. Nothing was done to shore up the excavation. When cross-examined by Mr. Reid about why he did not contact Mr Bartel, Mr. Liddy said he did not understand the contents of the geotechnical report and he did not read the important information section (347.25T). After the first cave-in it had not occurred to him to call Mr. Bartel, rather he called Mr. Hyde-Page as the builder. Calling the builder is a reasonable response by a householder.

Was the landslide preventable?

103 With some variations of emphasis, the geotechnical engineers agreed that the landslide was preventable by the adoption of an appropriate means of temporary support until structurally sound retaining walls could be built.

104 Except initially for Mr. Waddell, all accepted that the excavation could not be managed by battering, the only option suggested by Mr. Bartel. Mr. Waddell did not agree with Mr. Bartel's prescription (none of the experts did) because of the obvious error. However, he considered that a batter system would have worked had it been cut as a series of benches. He considered that was an option "that could be considered in excavations of this type" (538.30T).

105 Mr. Zenon was of the view that if you seek to control or support an excavation on a steeply sloping site of unstable material by battering:

...you are chasing the slope up the hill. You end up with excavations which are extremely large with extremely long batters. That is one in one, it comes I think a bit too steep for very high batters (527.35T).

I understand 1 in 1 to equate to 45 degrees. He repeated this at 541.45T, and added:

You're going to have a slope length of the order of 5 metres plus and in these situations are one in one is even too steep under temporary conditions for such a high slope (sic).

106 Mr. Collenbrander, for this site, "would never have suggested... unsupported one in one batter under any circumstances" (543.30T).

107 Mr. Waddell proffered that a one in one batter "may well have performed quite differently and may have not resulted in the failure that occurred", provided the excavation was closely monitored (543.40 - 544.5T). However, he said this at 544.15T:

...If there was no sewer on the site, if there was no sensitive structure, then a one to one batter may well have been satisfactory from the perspective of constructability, in that it would have reduced the risk if a failure occurred of it injuring site workers. That may well have been an acceptable risk profile. But in the circumstance where there was a sensitive structure such as the sewer upslope of it, I would be more hesitant in recommending a one to one batter. (Emphasis added)

At 561.50T he agreed battering was not practical having regard to the sewer.

108 As I have pointed out more than once, Mr. Bartel failed to notice the sewer. Given the various factors relevant to a sensible geotechnical decision, in my judgment battering was not an appropriate means of temporary support for the excavation on the Liddys' property.

109 Mr. Zenon (at 559.45 - 560.10T) said the starting point was obtaining a correct geotechnical investigation, which would have revealed the deep talus and bedrock at the base. On that basis, he suggested:

...probably a soldierpile wall which is anchored as you go down. Another option could have been, although not my preferred option, progressive excavation and nailing, in other words, you excavate say a metre. You support it with rock bolts or rock dowels as anchors. You do the second metre; you support that as you go down.

110 Mr. Collenbrander agreed that professional advice was needed, and that involves conducting "some sort of landslide risk assessment and to assess the factors that are at risk there. That may include the house above and the sewer line running through" (560.45T). Both he and Mr. Zenon agreed that battering would be ruled out "because battering would probably take the sewer line out". He too argued in favour of a steel soldier-pile solution.

111 Mr. Waddell agreed, but said that "a soil nail solution" may be practical.

112 Mr. Shirley agreed generally. Like Mr. Waddell he thought a soil nail solution - he gave shotcrete as an example - "would be the right way go in steps and stages" (562.30T). All agreed that the cost would match the cost of the boathouse and would be in the order of about $25,000 to $30,000 (562.40 - 536.5T).

113 The experts also agreed that geotechnical advice was essential, that a landslip risk assessment should form part of that, and that the experts should be on hand to advise during the excavation. The geotechnical report, in the body of it, should state this clearly and without ambiguity in terms that will be obvious to the lay reader. It was not good practice to bury such advice in general notes.

114 I should point out that all agreed that the proposed lightly reinforced walls of the boatshed would not suffice as retaining walls (580.30 - 581.10T).

115 All agreed that a permanent retaining system of some kind could be installed after the shed was built. But not a cantilever wall of the type Mr. Bartel suggested at 587.30T - 589.10T, because there would be insufficient space to comply with the specifications for such a wall.

The liability of Asset Geotechnical

116 Mr. Reid argued that Asset Geotechnical owed no duty of care to the plaintiff, Sydney Water. Learned counsel's argument proceeded on the basis that the loss suffered by Sydney Water was economic loss, being the cost of repairing and replacing the sewer line. He pointed out that particular considerations attend the question of whether a duty will arise in respect of such harm, having regard to the multifactorial or "salient features" approach distilled from the High Court cases by Allsop P (as his Honour then was) and Basten JA, in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649 at 676 [102] - 677 [106], and 688 [165] - 693 [181] respectively. In particular, Mr. Reid argued the aspects of assumption of responsibility and known reliance were relevant: Bryan v Maloney [1995] HCA 17; 182 CLR 609 at 624; and there was no evidence of any reliance by Sydney Water, let alone any known to Mr. Bartel, in the present case. It may be that in a case of pure economic loss, vulnerability in the sense discussed in Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515 at 530 [22] - 531 [24] might have been more significant. I bear in mind that vulnerability "is to be understood as a reference to the plaintiff's inability to protect itself from the consequences of a defendant's want of reasonable care, either entirely or at least in a way which would cast the consequences of loss on the defendant" (Woolcock 530 [23]). I acknowledge that the Justices forming the plurality did not find it "necessary to attempt to identify or articulate the breadth of any general proposition about the importance of vulnerability" (at 530 [24]). But in this sense Sydney Water was vulnerable because it was ignorant of the development application.

117 However, I accept Mr. Toomey's argument that the harm alleged in the case is not properly characterised as pure economic loss, but rather as damage to property.

118 Here, the sewer was damaged by the loss of support caused by the weakening of the structure of the slope by the excavation, which proceeded in accordance with Mr. Bartel's advice. This being so, the case falls into a settled category of duty "concerned with ordinary physical injury to property": Bryan v Maloney at 617. Speaking generally, reasonable foreseeability of the relevant harm "will commonly suffice to establish that the facts fall into a category which has already been recognised as involving a relationship of proximity between the parties with respect to such an act and such damage and as attracting a duty of care, the scope of which is settled" Bryan at 617 - 8. In my judgment the demise of the concept of proximity as an underlying principle unifying the law of negligence makes no difference to the binding nature of this statement.

119 Furthermore, the liability of an engineer advising a client for property damage suffered by adjoining owners is itself recognised by the common law in Australia: De Pasquale Bros Pty Ltd v Cavanagh Biggs & Partners Pty Ltd [1999] QSC 171; Aust Torts Reports 81-521; Pantalone v Alaouie (1989) 18 NSWLR 119 at 132 - 136 per Giles J; Voli v Inglewood Shire Council (1963) 110 CLR 74 at [85] per Windeyer J. Asset Geotechnical owed Sydney Water a duty of care the content of which was to exercise reasonable care in its inspection and the preparation of its report to avoid damage to property by an excavation carried out in accordance with its advice.

120 I turn to questions of breach to be determined in accordance with the provisions of s.5B CLA. The risk of harm in this case was the risk of damage to property on, in, or adjoining the land caused by works undertaken in reliance on Mr. Bartel's geotechnical assessment.

121 The precaution that Mr. Bartel failed to take was not carrying out a land risk management assessment. I accept Mr. Colenbrander's evidence that such assessments are routine in these circumstances and may be carried out in the context of a walkover assessment, even if the results lead to a recommendation that more invasive tests need to be carried out before reliable advice may be given. Mr. Bartel himself, I think, effectively admits that such an assessment was called for on this site (see [91] above).

122 The risk was foreseeable because Mr. Bartel knew that the works in respect of which he was providing his geotechnical assessment involved cutting an excavation at the toe of the slope on a site of uncertain composition. Indeed, from the evidence of the geotechnical experts, which I have accepted, that risk would have been obvious to a geotechnical engineer. And the risk extended to Sydney Water's sewer main. I have already found that the presence of it in the subsoil should have been obvious to a person carrying out a survey for technical purposes. Its presence greatly enhanced the risk because it was a sensitive structure, possibly being vulnerable (that may not have been obvious), and providing a critical service to a large number of people. The factors elicited by Mr. Watson in cross-examination, summarised at [94] - [96], made it foreseeable that landslip was a danger on this site. The risk was clearly not insignificant. It involved a threat to the integrity not only of the sewer, but also the Liddys' home and the Lowes' home on the adjoining property. It extended to severe personal injury or death in respect of persons working under the face of an unsupported excavation having batters of the type he recommended in table 2.

123 I have no doubt that the reasonable person in Mr. Bartel's position would have undertaken the precaution of carrying out a landslip risk management assessment. This would have led him to avoid the three fundamental errors I have identified above at [90]. I have dealt with the s.5B(2) considerations as I have gone, but the probability that the harm would occur if reasonable care were not taken was high, the harm was very likely to be serious and the burden of Mr. Bartel taking precautions of providing a careful advice which avoided the mistakes he made was slight. Indeed, in all likelihood it would have involved him in no more time and expense than his thoroughly erroneous assessment. All professional activity is socially useful, but its social utility depends upon it being done with due care and skill.

124 In my judgment, Asset Geotechnical was negligent.

125 I will deal with aspects of causation separately. Then it will be apt to consider the question of reliance by Sydney Water upon Mr. Bartel's report, because it wasn't given the opportunity of considering by the omission of others. However, it is clear to me that Mr. Liddy relied upon Mr. Bartel's report. He obtained it in answer to a requisition by the council as approving authority and supplied it to the council for its purposes. He provided a copy to Mr. Hyde-Page in the latter's capacity as his consultant, and intended principal contractor for the works. Despite the reservations I have about Mr. Hyde-Page's evidence, I accept that Mr. Hyde-Page took it with him to the site on the day the excavations were carried out. Once there, he attempted to get Mr. Flexman to look at it and consider it. In any event, the instructions he gave Mr. Flexman of a vertical cut with a small batter at the top, on the evidence of the geotechnical engineers, accorded with table 2 in Mr. Bartel's report.

The liability of the Liddys

Negligence

126 Notwithstanding what I have said at [99], learned counsel for the Liddys submitted that I should treat them "effectively as one and the same" for the purpose of my judgment (694.35T). I will act on this basis.

127 I accept that the Liddys owed Sydney Water a duty of care based upon Donoghue v Stevenson (1932) AC 562. At page 580 Lord Atkin said:

You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.

In this case the relevant matter was an omission, i.e. the omission to comply with pre-commencement General Condition 1 in the development consent in the following terms (exhibit 2D1; volume 7, p3462):

The plans approved as part of the Construction Certificate shall be submitted to the appropriate Sydney Water office to determine as to whether the development will affect Sydney Water's sewer and water mains, storm waters, drains and/or easements. If the development complies with Sydney Water's requirements, the approved plans will be stamped appropriately.

128 Mr Liddy was aware of the presence of a sewer main in the subsoil of his property. I accept that he knew that the subsoil provided some support to the sewer, but I also accept that he did not know how it was constructed (339.45T). Nor is it obvious given what I have already said about the work as executed plans, that had he made direct inquiry he would have received any useful additional information, other than confirmation of what he knew, i.e. that a sewer main ran between manholes H and J. He may also have learned it was a large valuable asset.

129 Importantly, however, he knew the purpose of the condition was to provide Sydney Water with the opportunity to ascertain whether the proposed development may affect its diverse assets. I do not understand from its content that the condition referred in particular to the sewer main that crossed the Liddys' property; rather it imposed a general requirement. It was not drawing his attention to a specific definable risk.

130 Those circumstances, it seems to me, engage Lord Atkin's famous dictum, and he owed a duty to exercise reasonable care, which duty he did not delegate to anyone else because he was undertaking the development application himself in consultation with Mr Hyde-Page.

131 In terms of s.5B, the risk was foreseeable. He knew a sewer main was there. He knew he was proposing work involving a deep excavation, and in general terms he was aware that, at least as a possibility, there was a risk of the excavation collapsing. Indeed, he definitely knew it was the kind of thing that could happen after the first cave-in.

132 The risk was not insignificant. Even if the full magnitude of what eventually occurred could not reasonably have been in prospect, damage to the sewer main obviously involved appreciable damage to Sydney Water's property.

133 The precaution required was compliance with council's conditions of consent. A reasonable person in his position would have taken that precaution. From the point of view of a layman, including one who had obtained Mr. Bartel's opinion, which failed to mention the risk, the probability of the risk materialising was small. It may have been difficult for a layman armed with Mr. Bartel's report to have any real appreciation of the likely seriousness of the harm. But given that the burden of taking precautions to avoid the risk of harm was slight, involving only the inconvenience of additional delay, a reasonable person in the position of the Liddys would have taken the precaution of submitting the plans to Sydney Water for its approval. No relevant question of social utility arises militating against that conclusion.

134 I find the Liddys negligent in failing to submit the plans to Sydney Water. I would not attribute any other ground of negligence to them.

135 I should add that the critical factor founding my decision about breach as opposed to duty, is the existence of the Condition in the development consent. I would not wish to be taken as suggesting that absent such a consideration, the ordinary reasonable householder who engages professional advice from an apparently competent and reputable geotechnical engineer, who engages a principal contractor skilled in the work, who in turn organises an experienced excavator to carry out the excavation work, would himself or herself be taken to have been negligent in the circumstances and liable for damage caused by the collapse of the excavation. The difference here is that the content of Condition 1, non specific as it was, drew to the attention of the householders the need to bring the proposed development to the attention of Sydney Water.

136 I leave side questions of causation for the time being.

Statutory liability

137 Section 44 of Sydney Water Act provides so far as is material as follows:

44 Protection of works

(1) Land in or on which a work of the Corporation is installed is taken to be the subject of a covenant in favour of the Corporation pursuant to which the owner from time to time of land in or on which the work is installed must ensure that:

(a) the work or any structure owned by, or under the control or management of, the Corporation is not wilfully or negligently destroyed, damaged or interfered with, and

...

(3) A covenant to which subsection (1) relates is enforceable as a duly created covenant.

(4) It is a defence to proceedings by the Corporation under this section that the owner or, in a case to which subsection (2) applies, the lessee could not reasonably have prevented action taken by any person that would, if capable of prevention by the owner or lessee, have resulted in a breach of this section by the owner or lessee...

138 Mr. and Mrs. Liddy as joint owners are bound by this statutory covenant. It is not disputed that ss. (3) extends to a liability for damages for breach of the covenant.

139 The sewer main crossing the Liddy property is relevantly a work to which the covenant applies (see s.3, where works is defined in terms expressly extending to sewer mains). The relevant content of the covenant is to ensure that the sewer main "is not wilfully or negligently destroyed, damaged or interfered with".

140 To tort lawyers, a duty to "ensure" is the hallmark of a non delegable duty for breach of which liability may arise in the absence of personal fault on the part of the person owing the duty (TNT Australia Pty Ltd v Christie [2003] NSWSC 47; 65 NSWLR 1 at [47] - [48]), provided that the damage was caused by fault within the scope of the relevant duty of care on the part of someone.

141 The phrase "wilfully or negligently" in s.44(1)(a) is generally treated as disjunctive: Environment Protection Authority v. N (1992) 26 NSWLR 352. It is not contended here that the relevant actions were done "wilfully". Rather the case is that the duty was to ensure that the sewer main was not negligently damaged. According Hunt CJ at CL in EPA v. N at 358 [9], in this context whether something has been done negligently is to be decided objectively, importing the concepts from Wyong Shire Council v Shirt (1980) 146 CLR 40 at [44], [47] - [48]. The test is applied by reference to the standard of the reasonable person. It does not matter whether in this case the person who damaged the sewer main subjectively foresaw the risk.

142 In approaching the construction of s.44, one needs to consider it in context. Part of that context is s.45, imposing liability on persons carrying out an activity that causes destruction of, damage to, or interference with any work owned by Sydney Water. That provision, as I have said, has been abandoned in this case.

143 The word "negligently" qualifies "destroyed, damaged or interfered with". These words are transitive past participles. A transitive verb is one that takes a direct object. Here the direct object is the work. By reference to subsection (4), these words describe forms of "action" which the owner may, or may not, be capable of preventing. This distinguishes the sciope of the section from s.45, dealing with activity that causes destruction of, damage to, or interference with any work. The activity in that section produces a consequence, destruction, damage or interference. When the conditions established by s.45 are satisfied, Sydney Water recovers compensation - compensation from the person who actually produced the result.

144 Section 44 creates a liability without personal fault or indeed personal action. The liability of the owner is effectively vicarious. Section 45 requires no fault; it simply revolves around the question determined objectively of whether an activity caused damage to a work when the person acted with requisite knowledge.

145 Section 44 is more limited in the sense that the actions the owner may have been capable of preventing must be wilfully or negligently done, elements not required for s.45.

146 For s.44 to be engaged, I am of the view that the action of someone, relevantly, must consist of negligently destroying the work, negligently damaging the work, or negligently interfering with the work. The context, in my view, suggests a direct relationship between the transitive past participle and its object, grammatically the work. For a breach of the s.44(1)(a) covenant to arise, there must be either wilful or negligent action, not omission, aptly falling within the expression he or she destroyed the work, damaged the work or interfered with the work. This imports a close and direct connection between action and destruction of, damage to or interference with the work.

147 The action in question in the present case is the excavation of the toe of the slope supporting the sewer main. The sewer main was not destroyed, damaged or interfered with by this action. It was eventually damaged by an omission, which was the failure to shore up the excavation. The damage occurred weeks later because the excavation collapsed. In my view there was not a sufficiently close and direct connection between the excavation and the damage to the sewer to engage s.44.

148 Moreover, the actions resulting in the sewer being damaged were the actions of Flexible Excavations in excavating the site. For reasons which I will address below, I am not satisfied that Flexible Excavations was negligent. And it cannot be said therefore, that the company negligently damaged the work.

149 Looked at from the standpoint of Mr. Hyde-Page's involvement, no different result enures. He was responsible for undertaking the site preparation by organising the barge and the excavators and directing the work. That involvement may have satisfied the requirements of s.45 in the extended operation of the phrase "carries out any activity", but to my mind it does not satisfy action of the type that satisfies, "destroyed, damaged or interfered with" the works.

150 For these reasons, Mr. and Mrs. Liddy are not liable for breach of the statutory covenant.

151 Had I decided otherwise I would have concluded that the Liddys had made good a defence under s.44(4). In my view they "could not reasonably have prevented action" by either Flexible Excavations or Mr. Hyde-Page. They were in Queensland when the work was carried out. It was reasonable for them to rely upon Mr. Hyde-Page and Flexible Excavations to carry out the excavation work without negligence. Their failure to obtain Sydney Water's approval for the development was too remote to satisfy a breach of s.44 as I have interpreted it. Doubtless, they were capable of preventing the excavation work going ahead by countermanding it. They could not reasonably be expected to know in the light of the assessment from Mr. Bartel that the work would not be done properly.

The liability of Mr. Hyde-Page

152 As I have found, Mr. Hyde-Page, in my judgment was acting as the principal contractor; that is to say, he assumed that responsibility in relation to the excavation work, although he had yet to formally enter into a contract for the construction with the Liddys. He knew that the Liddys relied upon him to discharge that responsibility with care. There can be no question that he was subject to a delictual duty of care of the kind described by Windeyer J in Voli at [85] in the following terms:

First, neither the terms of the architect's engagement, nor the terms of the building contract, can operate to discharge the architect from a duty of care to persons who are strangers to those contracts. Nor can they directly determine what he must do to satisfy his duty to such persons. That duty is cast upon him by law, not because he made a contract, but because he entered upon the work. Nevertheless his contract with the building owner is not an irrelevant circumstance. It determines what was the task upon which he entered. If, for example, it was to design a stage to bear only some specified weight, he would not be liable for the consequences of someone thereafter negligently permitting a greater weight to be put upon it. (Emphasis added)

153 It is clear from the statement of principle that the duty may be owed to third parties. By reference to the passage from Bryan I have quoted above, the third parties to whom the duty may be owed are those who may foreseeably suffer harm to their person or property if the work is not executed with reasonable care. As Chesterman J said in De Pasquale Bros at [55], by reference to Bryan at 617:

This being a case which falls in the "settled area of the law of negligence concerned with ordinary physical injury to ... property", reasonable foreseeability of the injury is normally sufficient to establish a duty to take reasonable care to avoid foreseeable loss.

154 Mr. Hyde-Page ought to have known that excavation work is risky, especially in talus. He knew that unsupported excavations might collapse (exhibit 2D1 [92] - [95]; volume 7, page 3311). Although he avoided home building work, he had built retaining walls, even if only as sea walls, and knew the purpose of retaining walls. The turret like manholes should have been obvious to his trained eye surveying the site for the purpose of undertaking a building project involving extensive excavation.

155 He had received a copy of the development consent from Mr. Liddy (exhibit 2D1 [64]; volume 7, page 3306) and as the proposed principal contractor ought to have read it, including Condition 1. By reference to the stamped plans he had received he would have observed from the absence of Sydney Water's stamp that it had not passed the plans. He was also, as I have said before, in receipt of Mr. Bartel's report. But for the purpose of considering foreseeability of harm in the context of deciding whether a duty is owed, that report would have confirmed what he ought to have already known; that is that precautions needed to be observed in the performance of excavation work.

156 I am satisfied that Mr. Hyde-Page owed a duty of care to Sydney Water.

157 I turn to the question of breach. The risk of harm is the risk of physical damage to property which may be affected by excavation works. This includes property in the ground, like the sewer main, and property above the ground, like the Liddys' house and the houses on the adjoining blocks. From his experience as a builder, he ought to have known that to avert that risk of harm, precautions need to be observed, including providing temporary support for vertical excavations through colluvial material. The risk of property damage was not insignificant in the sense that there was a real risk it could occur if reasonable care were not taken.

158 The relevant question here is, would a reasonable person in Mr. Hyde-page's position have taken the precaution of shoring the excavation actually carried out on the Liddys' property? In answering that question, I take into account the considerations in s.5B(2).

159 In considering whether a reasonable man in Mr. Hyde-Page's position would have taken the precaution against the risk of harm eventuating, there are three relevant matters that bear consideration. First, knowing that Sydney Water had not passed the plan, he may have insisted on Mr. Liddy taking that step before he proceeded. After all, Mr. Liddy followed all of his previous advice and took all steps necessary to answer all requisitions raised by the Sutherland Shire Council during the development process, even if he was sceptical of their necessity. Work could have been held in abeyance until that was done. Secondly, he had the benefit of Mr. Bartel's report recommending vertical battering. If his knowledge was insufficient to appreciate the mistake in table 2 - and it probably was - then the experience of a reasonable person in his position ought to have alerted him to the fact that Mr. Bartel's assessment was wrong whilst the work was in progress. The cliff which Mr. Bartel inferred did not exist and it would have been obvious that the excavators were cutting through talus where cliff should have been. The work could have been halted and further advice taken. Thirdly, even if a reasonable person in Mr. Hyde-Page's position would not have realised Mr. Bartel's mistake as soon as work commenced, once the excavation was fully dug it should have been obvious that there was an unsupported face of colluvial material. Having regard to his previous experience he should have appreciated that support was called for. This again may have entailed seeking further advice. But it should be borne in mind that Mr. Flexman passed on, for what it was worth, the implicit suggestion that shotcrete should be applied. It was Mr. Hyde-Page who said it wasn't necessary because he was going to build a block wall.

160 Having regard to the considerations contained in s.5B(2), I am of the view that a reasonable person in Mr. Hyde-Page's position would have been aware of the existence of the sewer main and would have noticed the absence of Sydney Water's stamp. In these circumstances, the reasonable person would have declined to proceed until Sydney Water's approval was forthcoming, either unconditionally or conditionally. From Mr. Hyde-Page's point of view, the probability of the risk materialising was real enough, damage could have been substantial, and the burden of taking precautions to avoid the risk of harm was slight. This is sufficient to constitute negligence in my opinion.

161 The second and third precautions are different aspects of the same thing. They really simply vary according to when one might expect a reasonable person in the position of Mr. Hyde-Page to realise he is cutting a vertical excavation into relatively loose and unstable material, fraught with the risk of collapse. Proper planning for the task by careful reference to Mr. Bartel's report might have led to an earlier realisation that the site conditions were not as he described them. A reasonable person in Mr. Hyde-Page's position as principal contractor ought to have appreciated that, at the latest when the excavation was complete and the excavator operator asked him whether he was going to "shotcrete that". At that time further advice ought to have been sought. The occurrence of the first cave-in ought to have engendered a sense of urgency about obtaining that advice.

162 I find Mr. Hyde-Page negligent in failing to seek geotechnical advice once the complete excavation revealed the true site conditions.

Was Flexible Excavations negligent?

163 Flexible Excavations was an experienced excavator. It would have been well aware of the risks associated with excavation works collapsing through the long experience of its guiding mind, Mr. Flexman. Those risks would have extended to the risk of physical harm to property in, on, or near the excavation's zone of influence. The duty arose for the reasons explained by Windeyer J in Voli. He had a contract to perform work and he embarked upon the performance of that work. In his case, however, his contract with Mr. Hyde-Page is not an irrelevant circumstance. As Windeyer J said, it determines what was the task upon which he entered.

164 Probably, sensibly given his experience, Mr. Flexman was not going to take responsibility for the geotechnical risk involved in the excavation he was asked to perform. As he said in his evidence, even in contracts which he took on in his own right, he would engage the services of shoring contractors to perform that aspect of the work. He was entitled to say, as he colourfully put it more than once, "all care and no responsibility". No responsibility, that is, for the temporary support of the excavation. He recognised that responsibility on the part of someone may have been called for, given his question about shotcrete. However, his task was to perform the physical excavation according to directions and specifications provided by Mr. Hyde-Page. It is not irrelevant that this is how they worked the contracts they had performed in the past. Mr. Hyde-Page in fact pegged out the area to be cut and specified that he required a vertical cut with a batter at the top. Mr. Flexman complied with what he had been asked to do and his instructions came from a man he knew to be an experienced waterfront builder. I can see no basis on which it can be said that Flexible Excavations was negligent. That is to say, in its case, I am not satisfied that the parties who contend Flexible Excavations was negligent have established on the balance of probabilities that the conditions imposed by s.5B have been satisfied.

Was Sutherland Shire Council negligent?

165 This question arises for the purpose of Part 4 CLA, but it is convenient to deal with it now before I turn to the question of causation. It is said by the defendants, especially the fourth defendant, that Sutherland Shire Council is a concurrent wrongdoer in relation to Sydney Water's claim, being one of two or more persons whose acts or omissions either independently or jointly caused the damage the subject of the claim. For the purpose of s.35, the Court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings. Sutherland Shire Council is not a party to the proceedings. The council acted in the circumstances of this case in two capacities. First, it was the approving authority. Secondly, it was the principal certifying authority. In his written submission, Mr. Hyde-Page (page 3[18]) concedes:

In the circumstances, it cannot be said that the council failed in any way to fulfil its statutory obligations relating to the development consent.

Whether a statutory authority owes a duty of care is a complex question (see for example MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 7) [2012] NSWCA 417 at [98] - [99] and at [213]), the answer to which is informed by the provisions of Part 5 CLA. Rather than dwelling on this question, it may be worthwhile considering what the case in negligence against the council, in its capacity as the principle certifying authority, is founded upon. I accept it is difficult to consider a question of breach in some circumstances without clearly formulating the nature and content of the duty owed. However, bearing this in mind, it may assist the analysis to consider the act or omission relied upon as constituting negligence. When approaching this task, the provisions of s.43A CLA must be brought to mind. For s.43A "imposes an additional requirement, beyond those of the common law before liability can be established": Warren Shire Council v Kuehne [2012] NSWCA 81 at [117] per Whealy JA. Section 43A(3) provides that for the purpose of proceedings for civil liability in tort against the public or other authority:

...any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

166 The written submissions from Mr. Hyde-Page formulate the case in this way (page 4[29]):

The crucial question is whether the council should have issued the [construction certificate] without ensuring that the conditions of consent, relevant requiring details, were satisfied in accordance with the requirements of clause 146 of the Regulations. This turns upon the proper construction of the terms of the consent.

Express reference is made to conditions 1, 7 and 20 (volume 7, pages 3457, 3459 and 3464). The argument emphasises that these conditions emphasise compliance with the recommendations made by Mr. Bartel in his report of 8th January 2007. The clearest provision is clause 20 which provides:

If the soil conditions require it, retaining walls associated with the erection or demolition of a building or approved methods of preventing movement of the soil shall be provided, and adequate provision must be made for drainage.

The case made against the council in this capacity is that it should not have issued the construction certificate on 20th March 2007. Obviously no retaining walls could be built until a construction certificate was issued. The case seems to be that the certificate should have been withheld until the engineering detail was provided in exercise of the powers under clause 146 of the Environmental Planning and Assessment Regulation 2000 (NSW).

167 I will set out the regulation in full:

A certifying authority must not issue a construction certificate for building work or subdivision work under a development consent unless each of the following have been complied with:

(a) each condition or agreement requiring the provision of security before work is carried out in accordance with the consent (as referred to in section 80A (6) of the Act),

(b) each condition requiring the payment of a monetary contribution or levy before work is carried out in accordance with the consent (as referred to in section 94 or 94A of the Act),

(c) each other condition of the development consent that must be complied with before a construction certificate may be issued in relation to the building work or subdivision work.

As can be seen, subclauses (a) and (b) are irrelevant. The question is whether conditions 1, 7 and 20 are conditions of the development consent that must be complied with before a construction certificate may be issued in relation to the building works or subdivision work. In my opinion they are not. A consideration of the conditions of consent demonstrates that they are divided into four categories. These are: general conditions, general pre-commencement conditions, construction conditions and post construction conditions. None of conditions 1, 7 or 20 are pre-commencement conditions.

168 Construing the consent in a common sense way in context and from a practical viewpoint, it cannot be said that the specific conditions relied upon are caught by clause 146 of the Regulation. In my judgment, the conditions that must be complied with before a construction certificate may be issued are those that the consent authority designates pre-commencement conditions. Even if one postulates a duty owed to third parties enforceable by an action for damages to ensure compliance with the pre-commencement conditions before issuing a construction certificate, it could not be said that failing to require engineering details of the footings and drainage system for the retaining wall to be built in due course before issuing the certificate constitutes unreasonableness at the high level necessary to engage s.43A.

169 Other matters relied upon in the written submissions include the failure to notify the council of the appointment of Waterfront Constructions as a principal contractor prior to the issue of the certificate. This is not pleaded and in truth goes nowhere. It was clear that a principal contractor was to be appointed and in fact one was. Had the PCA refused to issue the certificate until that detail was provided, doubtless it would have been provided promptly and would have had no effect upon the events as they unfolded. It is also argued that Mr. Liddy must have been an owner builder and should have obtained a permit before commencement, including, as I understand it, the necessary insurances. This is a form of approbation and reprobation. Mr. Liddy was not an owner builder, he was appointing a principal contractor - Mr. Hyde-Page. Moreover, he did not require insurance, presumably under the home building legislation, because, as Mr. Hyde-Page pointed out on a number of occasions, the project was excluded from the reach of that legislative scheme.

170 I note that submitting the plans to Sydney Water is referred to as general pre-commencement condition 1 in the development consent. But no party has pleaded nor argued a case that the principal certifying authority should not have issued a construction certificate until it received plans stamped by Sydney Water, and I will put that consideration to one side.

171 Moreover, it is clear that the council, in its capacity as the principal certifying authority, was continuing to press Mr. Liddy to provide engineering details in relation to the slab and the retaining wall, and was accepting his assurances that he was attending to it, which belatedly he commenced to do. It must be said that the provision of those details would not have prevented the collapse over the 9th and 10th of June 2007. Retaining walls would have taken some time to build. What was absent was adequate shoring, the subject of construction condition 19. Again, no one complains that the council failed to observe any obligation in respect of that matter, and I will put it to one side.

172 I consider it unnecessary to go through a detailed analysis of whether the council owed a duty to exercise its statutory powers for the benefit of Sydney Water. In my judgment no case in negligence has been made out, assuming duty. I find that the council in its capacity as a principal certifying authority is not a concurrent wrongdoer.

Causation

173 Sydney Water "always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation": s.5E CLA.

174 Ascertainment of legal causation in a given case requires an affirmative answer to two distinct questions posed by s.5D CLA. The first is whether the negligence of the defendant was a necessary condition of the occurrence of the harm suffered by the plaintiff. This is an entirely factual inquiry "turning on proof by the plaintiff of the relevant facts on the balance of probabilities": Wallace v Kam [2013] HCA 19; 87 ALJR 648 at 651 [14]. The determination of factual causation involves nothing more or less than the application of a 'but for' test of causation: Wallace at 652 [16].

175 The second distinct question may be referred to as the "normative question" posed by s.5D(1)(b): " is it appropriate for the scope of the negligent [defendant's] liability to extend to the [harm] in fact suffered by the [plaintiff]?" (Wallace at 653 [21]).

176 It is also important to bear in mind the following (Wallace at 653 [22]):

In a case falling within an established class, the normative question posed by s 5D(1)(b) is properly answered by a court through the application of precedent. Section 5D guides but does not displace common law methodology. The common law method is that a policy choice once made is maintained unless confronted and overruled.

177 In the present case, at least for some purposes, it is also well to bear in mind the provisions of s.5D(3) which provides:

If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:

(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and

(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.

178 There are two particular factual issues which in my judgment are central to the causation questions which arise in the present case. The first is that implied by subsection (3). It is relevant to determination of factual causation in relation to each defendant to determine what Sydney Water would have done if a negligent person had not been negligent. The second question is whether Sydney Water has established legal causation in respect of damage to the southern remnant of the sewer main justifying its replacement. This is not simply a quantum issue, but is a separate question raising issues of factual causation and relating to the scope of the defendant's liability.

179 I turn to the first question. The answer may possibly differ according to which defendant's negligence is examined through the prism of s.5D. With some irony Asset Geotechnical says that whether or not Mr. Liddy and Mr. Hyde-Page relied upon the report, had it been submitted to Sydney Water by either Mr. Liddy or Mr. Hyde-Page, as pre-commencement condition 1 of the development consent required, the obvious error in table 2 would have been picked up, and Sydney Water would not have passed the plans on the basis of it. Moreover, Sydney Water would not have accepted Asset Geotechnical's assessment of the site conditions. Had it not, the work would not have been undertaken until a proper geotechnical assessment and plan of work had been devised.

180 To consider this argument it is necessary to have further regard to some the evidence of Mr. Preston. In particular exhibit 2D5, which describes the sewer main crossing the Liddy property as constructed above bedrock in a mortar bed. Mr. Preston considered this indicated a need for stability whilst at least one of the geotechnical engineers took another view, interpreting the endorsement as suggesting the sewer main actually sat on bedrock. The point of this is that if Sydney Water took the view that the sewer line securely sat on bedrock it would have considered the structure safe, and it may be more likely Sydney Water would have accepted Mr. Bartel's assessment.

181 Bearing in mind the provisions of s.5D(3), I allowed Mr. Preston to give evidence in relation to the practice of Sydney Water when a proposal was submitted for its approval, rather than in relation to what Sydney Water would have done had this particular proposal been so submitted. His evidence is at 93.45 - 96.5T. He described how there were various groups in Sydney Water that would be involved in the assessment process. For a development involving a large carrier like the Burraneer carrier, all groups would be involved, including Mr. Preston's geotechnical group. From geotechnical information collated by Sydney Water in relation to the Sydney basin, the area where the Burraneer carrier lay would be defined as being part of a potentially unstable area. At [83] of exhibit F (volume 5, page 2165) Mr. Preston makes criticisms of Mr Bartel's report, consistent with the opinions of the independent experts. He picks up table 2 as an obvious error, and describes it as "wrong". However, his comments about "ground instability due to thick talus and steep slopes" is probably infected by hindsight. He was intimately involved in the aftermath of the second landslip.

182 At [87.5] of exhibit F (volume 5, page 2166) Mr. Preston refers to a "building plan approval application" through "Quick Check". A Quick Check printout is annexure WWW (volume 5, page 2939). The annotation made by Mr. Preston on the annexure is that a building plan approval application would have been listed in Quick Check if the process had applied.

183 He gave further relevant evidence at 140.20T - 144.10T in cross-examination. Mr. Toomey asked a question on the hypothesis that "a development such as the Liddys was brought to Sydney Water's attention". Mr. Preseton said that if the application was accompanied by a geotechnical advice, Sydney Water would assess it for itself based on its own experience to make a judgment about whether it was adequate and whether all issues had been taken into account. Questions might be asked of the consultant. Quite apart from the erroneous table, Mr. Preston said the following:

...the findings of that report indicated that what would be expected in the excavation is a cliff that is going to protect the excavation with maybe a small amount of talus above it, and that is not what I would have envisaged at all. And if I had received that report as part of the normal development application process I would have questioned that at the time.

When questioned about whether he would be satisfied that a geotechnical engineer had assessed that a cliff line protected the sewer main, Mr. Preston said:

I certainly don't rely on a particular report and take it as gospel. If a report is being done, you have to assess it on what evidence is available. If there's more evidence available that hasn't been taken into account by the report, then you would question the report. And I certainly would have had queries about the conclusions of the report.

184 Mr. Preston made no mention of the idea that the work as executed plan, exhibit 2D5, would be consulted, and it is difficult for me to suppose that such a basic document would not have been referred to. Much depends upon what is meant by the plan showing the sewer - as it crosses the Liddys' property - as being on "Rock", coupled with the endorsement, "Mortar Bedding". It is also apparent that north of the Liddys' property the sewer is tunnelled through rock, and south of it, for a short distance, it is elevated on an aqueduct. Some length of pipe, not on the Liddy property, is shown as encased in concrete. All of this suggests that a level of sophistication was brought to the laying the original sewer main, albeit in accordance with the standards of 1969.

185 Sydney Water is a large organisation with diverse obligations and important responsibilities. I accept Mr. Preston's evidence that had the application been forwarded to Sydney Water for its consideration in accordance with the pre-commencement General Condition 1, in the first instance Sydney Water would have identified that a major asset crossed the property. On that basis, it probably would have been referred to Mr. Preston's geotechnical group, although I acknowledge the evidence about how the internal procedures work is somewhat sparse. As it would have been obvious from the development consent that a geotechnical report had been obtained, I find that Mr. Preston's group would have called for it and would have picked up the error in relation to battering straightaway. This error would have lead to further questions being asked of Mr. Bartel about his assessment. Moreover, the fact that Mr. Bartel did not mention the sewer main would have been an irregularity which no doubt would have excited Mr. Preston's concern as an issue not taken into account. Furthermore, from his knowledge of the general ground conditions in the Gannons Bay area, he would have been concerned about Mr. Bartel's description of the site conditions because "that is not what [he] would have envisaged at all". As he said at 143.40T, "if there is more evidence available that hasn't been taken into account by the report, then you would question the report".

186 Notwithstanding what Mr Zenon has said about his interpretation of exhibit 2D5, the interpretation of Mr. Preston, a very experienced geotechnical officer, with 30 years at Sydney Water, would have been, had he consulted the plan, that there was something at the Liddy property which required extra stability for the pipe as laid, even if only rudimentarily laying it on a mortar bed.

187 In my judgment, Sydney Water would not have accepted Mr. Bartel's report at face value; rather Sydney Water would have questioned it and either carried out their own inspection or required further information from Mr. Bartel. In either event, probably the errors in his report would have been picked up and the plans would not have been passed without the development of a better geotechnical plan.

188 This finding does not mean that Mr. Bartel's negligence is not a necessary condition of the harm actually suffered by Sydney Water, nor that the subsequent negligence of Mr. Liddy and Mr. Hyde-Page operates as a novus actus interveniens. The but for test may yet be satisfied in cases of concurrent wrong doing, as Part 4 of the CLA itself legislatively recognises. And the question of whether the chain of causation has become so attenuated as to break by the intervention of another's conduct is not strictly a question of factual causation, but rather an example of the type of normative consideration always relevant at common law but now encapsulated in s.5B(1)(b).

189 In Strong v Woolworths Limited [2012] HCA 5; 246 CLR 182, four Justices of the High Court said at 191[20]:

Under the statute, factual causation requires proof that the defendant's negligence was a necessary condition of the occurrence of the particular harm. A necessary condition is a condition that must be present for the occurrence of the harm. However, there may be more than one set of conditions necessary for the occurrence of particular harm and it follows that a defendant's negligent act or omission which is necessary to complete a set of conditions that are jointly sufficient to account for the occurrence of the harm will meet the test of factual causation within s 5D(1)(a).

And at 194 [28] their Honours said:

As earlier noted, the limitations of the "but for" analysis of factual causation include cases in which there is more than one sufficient condition for the occurrence of the plaintiff's injury. At common law, each sufficient condition may be treated as an independent cause of the plaintiff's injury.

190 In Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 429 McHugh J referred to:

...well settled principle that when separate and independent acts of negligence on the part of two or more persons have directly contributed to cause injury and damage to another, the person injured may recover damages from any one of the wrongdoers, or from all of them (Grant v. Sun Shipping Co. Ltd [1948] AC 549 at p. 563).

McHugh J gave the example of two doctors each of whom negligently in succession omitted to diagnose a condition which leads to a patient's death. His Honour said:

...it is no answer to a claim of actionable negligence that subsequently another doctor negligently failed to diagnose the condition at a time when its ultimate consequence could have been avoided. Each negligent omission was a separate and independent cause of the patient's death.

His Honour went on to hold that the negligence of the Minister in failing to obtain independent competent legal advice as to whether the plaintiff had a right of action "was, therefore, as much a cause of the [plaintiff's] loss as the subsequent advice of the barrister that he had no cause of action".

191 These principles form part of the common law principles in which s.5D operates.

192 As Basten JA pointed out in Baden Cranes Pty Ltd v Smith [2013] NSWCA 136 at [72], as at common law so too in cases to which s.5D applies, where there are a series of negligent acts (or omissions) contributing to the one harm "each subsequent actor in the chain should not, in principle, escape liability for the sole reason that others before or after it were negligent. Subsequent negligent acts of the same kind... will readily be foreseeable consequences of the first negligent act".

193 I understand "readily... foreseeable consequences" as a reference to the normative considerations informing the scope of the liability question.

194 These authorities establish the continued relevance of common law principles to the operation of s.5D(1)(a) and (b). As McHugh J pointed out in March v E & MH Stramare Pty Ltd [1991] HCA 12; 171 CLR 506 at 531 "an overwhelming supervening event" is required. In my judgment, the subsequent negligence of Mr. Liddy and Mr. Hyde-Page, so far as the latter consists of failing to submit the plans to Sydney Water for its approval before the commencement of the work, are not such as to justify treating the harm suffered by Sydney Water as the result of their negligence alone to the exclusion of Mr. Bartel's negligence. After all, on the findings I have made, Mr. Liddy and Mr. Hyde-Page relied upon Mr. Bartel's report. Had it not expressed erroneous opinions as a result of his negligence, I find Sutherland Shire Council would not have approved the development on the basis of it without more, and even if it had, Sydney Water would not have. Implicit in this is my finding that one or other of Mr. Liddy or Mr. Hyde-Page would have submitted the plans for approval by Sydney Water.

195 I am satisfied on the balance of probabilities that Asset Geotechnical's negligence is a necessary condition of the particular harm suffered by Sydney Water, namely the collapse of the northern end of the sewer main crossing the Liddy property. I further find that it is appropriate for the scope of Asset Geotechnical's liability to extend to the harm so caused by the application of established common law principles. The relevant policy choice is that the principles of concurrent liability in established categories are of continued vitality. They have not been confronted before me and I am certainly in no position to overrule them.

196 I am satisfied that Mr. Liddy's negligence in not submitting the plans to Sydney Water is a necessary condition of the plaintiff suffering the particular harm involved in this case. Had he done so, on the analysis of the evidence I have undertaken above, the errors in Mr. Bartel's report would have been noticed and Sydney Water would have questioned the validity of Mr. Bartel's views, especially as he failed to mention the sewer main. Sydney water would not have approved the plans without satisfying themselves as to the true position in relation to the risk posed to their major asset. A proper investigation either by Asset Geotechnical or on behalf of Sydney Water would have uncovered the truth about the instability of the site and the job would not have commenced until an appropriate plan, including that proposed by the joint experts in oral evidence, was put in place and acted upon. It may have been the case that Mr. and Mrs. Liddy would have given consideration to abandoning the project, given the mounting expense. Either way, the harm would not have been suffered. By application of the principles I have identified above, it is appropriate that the Liddys liability extend to the harm so caused.

197 As I have said, there are a number of bases on which Mr. Hyde-Page is negligent. One of them includes his obligation as principal contractor to advise that the plans be submitted to Sydney Water, or to do so himself. Had he taken that precaution the same result would have pertained as I have described above, and but for that negligence the particular harm would not have been suffered by Sydney Water. Moreover, a reasonable person in Mr. Hyde-Page's position would have realised, either when the excavation work was being undertaken or when it was completed, that it involved a vertical cut through unstable talus. But for his failure to obtain further geotechnical advice from Mr. Bartel or otherwise through Mr. Liddy, temporary shoring could have been undertaken after the event in the two months leading up to the Queens' Birthday weekend. Unlike questions of breach, questions of causation are determined with the advantage of hindsight. The purpose of the inquiry is to determine what happened and why for the purpose of attributing legal responsibility. Had Mr. Hyde-Page sought additional advice from a geotechnical expert, there was sufficient time, nearly two months, for appropriate shoring to be put in place, even if retaining walls could not be put in place in that time by the Liddys.

198 I find the negligence of Mr. Hyde-Page was a necessary condition of the particular harm suffered by Sydney Water and it is appropriate that the scope of his liability extend to the harm so caused.

The second causation question

199 The second causation question, as I have said, is whether the particular harm caused by the negligence of the defendants extends to the replacement of the remnant of the sewer main at the southern end of the block. To put it another way, the question is, was the negligence of the defendants (I will deal with them compendiously for this purpose) a necessary condition of that harm? I have concluded that it was not. Rather, the collapse at the northern end of the line provided the occasion for inspection and assessment of the condition of the southern remnant which disclosed that over the years, either by gradual process or due to the effects of the construction of a boat house on the adjoining southern property many years earlier, the sewer moved out of alignment and dipped. All of this was significant. The dip was significant (119.5T) as was the fact that it had moved out of alignment (129.5T).

200 Mr. Preston said in evidence that the pipes near the southern manhole "were in a poorer condition and had suffered some movement prior to the June 2007 slip" (114.45T). His evidence was that the pipe had moved horizontally and also vertically, that "it had dropped" (125.45T), and the gravitational effect was lost (122.1T). The drop was quite considerable (122.35T). Of the pipes in the remnant, two had rotated due to the drag of the failing northern part of the sewer line, the balance "were outside the 2007 influence". Because of the loss of gravitational effect and the loss of alignment, it was impossible to simply re-lay the northern end.

201 There was a delay in commencing the restoration work, caused by a number of factors including the need to build a large retaining wall, which was the responsibility of the Liddys. Work did not get underway until March 2008. And soon after it commenced, there was a minor trench collapse at the northern end "that was very localised" (139.5T).

202 In his oral testimony, Mr. Colenbrander gave evidence that the minor slip occasioned him being brought back onto the job. He regarded it as a minor incident (570.40T). But during the course of that work it became apparent that the sewer pipe had moved laterally and vertically over the years since it had been laid. Mr. Colenbrander said, "in my opinion the sewer line had moved down the slope as it had crept over time" (571.20T). He did not seem to embrace the hypothesis that the movement was particularly related to the construction of the boatshed at the adjoining southern property. It was his opinion that the major design change was made necessary because of the inherent nature of the site (572.5T). Mr. Zenon and Mr. Waddell agreed (572.15T).

203 In his report of 24th September 2008 (volume 1, page 275) Mr Colenbrander pointed out "the remainder of the intact line has settled, up to 230mm vertically and has been displaced downslope by up to 200mm. The resultant vector movement has thus been downhill parallel to the slope". He also said the most significant movement was outside the landslip affected zone. He agreed there was no "collapse" prior to the landslip; that the settlement had resulted in ponding in the pipe; and the line appeared "to have moved in sympathy with soil creep in the talus slope over the past 40 years". It was possible that the creep had been initiated by the construction of the boatshed in the adjoining property. I gathered Mr Colenbrander thought this latter prospect unlikely, and on his evidence so do I.

204 On 26th March 2008, Mr Preston wrote to his colleagues and concluded:

Based on the available evidence that about half of the remaining pipes have been influenced by the 2007 slip and also that the remaining pipes closer to [the downstream manhole] have suffered from a longer term ground creep movement which predates and is not associated with the June 2007 slip. The original concept for reinstatement was a straight line admittedly bolstered horizontally and vertically reconnecting the collapsed line with it's southern remnant.

This is shown at volume 5, pages 2527 - 2528. The new plan is shown at volume 5, p 2716, pages 2727 - 2728. It is much more complex in a dogleg configuration shadowing the buried cliff line. The extent of the non-alignment of the remnant with the line of the original sewer is illustrated in various places, including at volume 5, page 2719. One can readily detect the sinusoidal configuration of the southern remnant. The northern two pipes have rotated somewhat due to the collapse, but the rest are out of position due to ground creep. One bears in mind the evidence that a 25 per cent deformation requires urgent repair. The March 2008 CCTV inspection showed deformation in the remnant up to 20 per cent.

205 I am not satisfied, on the balance of probabilities, that the need to replace the southern remnant was caused by the negligence of any of the defendants. Nothing can be ascertained about that part of the line that was lost in the landslide. However, had investigations into the southern end of the line been carried out before the second landslip, I am satisfied that the degree of vertical and horizontal movement shadowing the slope where the talus is deepest would have caused it to be identified as an asset in need of replacement; if not urgently, certainly within 12 months.

206 The negligence of the defendants is not a necessary condition of the need to replace the southern portion of the sewer main. Obviously this finding will have ramifications in respect of quantum.

Proportionate liability

207 All the parties accepted that if I found more than one party liable, the plaintiff's claim was an apportionable claim within Part 4 CLA. Given this commonality of approach, no difficult question of principle concerning the application of Part 4 arises (cf Hunt & Hunt v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; 87 ALJR 505). Each of the four defendants is a concurrent wrongdoer and by s.35(1) the liability of each of them is limited to an amount reflecting that proportion of the damage or loss claimed that the Court considers just, having regard to extent of the defendant's responsibility for the damage or loss. And the Court is not empowered to give judgment against the defendant for more than that amount. Barrett J (as his Honour then was), gave close consideration to the effect of s.35(1) in Reinhold v New South Wales Lotteries Corporation (No. 2) [2008] NSWSC 187; 82 NSWLR 762. His Honour summarised his conclusions at [60] in the following terms:

Because the legislature has seen fit to adopt in s 35(1)(a) of the Civil Liability Act a form of words concerning apportionment which is almost indistinguishable from that which has long been used in statutes concerning contributory negligence and contribution among tortfeasors, I consider it appropriate to follow approaches to the meaning of those words developed andsanctioned by appellate courts. I therefore approach the matter before me on the basis that my principal task is to make findings about:

(a) the degree of departure from the standard of care of the reasonable man, as regards the causative conduct of Lotteries and the News agents; and

(b) the relative importance of the acts of Lotteries and the Newsagents in causing the economic loss suffered by Mr Reinhold,

making a comparative examination of the whole conduct of each of Lotteries and the Newsagents in relation to the circumstances in which the loss was sustained.

(See also Ward J (as her Honour then was) in George v Webb [2011] NSWSC 1608 [323] - [324].)

208 The approach then is the familiar approach in relation to contribution among tort feasors - or for contributory negligence - of apportionment by reference to the degree of the departure from the standard of the reasonable person, and the causal potency of the relevant negligence bringing about the harm.

209 I have concluded that Mr. Bartel's negligence is of greater significance for this purpose than that of the others. He was a professional, whose expertise was relied upon by the other defendants as well as the council to determine how the work should be done. He was in a position to safely see the process through, and he made fundamental, even basic errors, as I have set out above. As I have found, the other defendants relied upon him. They were laymen with regard to geotechnical engineering. Mr. Hyde-Page was an experienced builder, but apart from the intuition that experience brings he could not be expected to second-guess the geotechnical engineer. That was not the purpose of obtaining an assessment. Although an accountant by profession, Mr. Liddy is in the position of any ordinary householder. He was a complete layman in regard to both boatshed building and geotechnical engineering.

210 Mr. Hyde-Page's negligence operates on a number of different levels. Like Mr. Liddy, he omitted to have the plans passed by Sydney Water. But he was also in charge of the excavation and in the exercise of reasonable care ought to have realised by reference to Mr. Bartel's report that the site conditions were not as Mr. Bartel apprehended. As I have said, he should have realised this not later than the completion of the excavation, when there was still time to enlist additional expert help. There was no doubt in my mind that had he raised it, Mr. Liddy would have complied. As I have remarked already, Mr. Liddy complied with all requisitions raised by the council, and with all advice provided by Mr. Hyde-Page over the long months during which the development application was processed. Indeed, after the June 2007 landslip Mr. Liddy re-engaged Mr. Bartel to provide advice and to design and supervise the construction of the retaining walls that were constructed. I repeat, had Mr. Hyde-Page advised Mr. Liddy that he needed expert advice for the excavation, Mr. Liddy would have complied.

211 The negligence of Mr. Liddy, or perhaps I should say the Liddys, is in the nature of casual negligence. Through carelessness, Mr. Liddy omitted to do as he should have done and submit the application to Sydney Water for its appraisal; had he done so, the flaws in Mr. Bartel's report, on the findings I have made, would have been detected. At the same time, I balance against that consideration that as a layman, Mr. Liddy was entitled to rely upon the advice of his engineer and builder. His moral culpability and the causative potency of his negligence are of a lower order than the others. In my judgment, Mr. Bartel bears the largest share of responsibility for the damage caused, Mr. Hyde-Page somewhat less, and Mr. Liddy less again.

212 In my judgment the apportionment that is just, having regard to the respective degrees of responsibility for the plaintiff's loss, is 65 per cent to Asset Geotechnical Engineering Pty Ltd, 25 per cent to Mr. Hyde-Page, and 10 per cent to Mr. and Mrs. Liddy jointly.

Quantum

213 As I have said at the outset, the total cost of the replacement of the whole line, as redesigned after March 2008, is $3,340,715. This includes replacement of the southern remnant, unaffected by the 2007 landslip, but in need of replacement for other reasons. I have found that this part of the claim is not caused by the negligence of the defendants. Included in the cost is the cost of operating a sewer by-pass, which itself amounted to $723,739. And after a period of operation, it was necessary to relocate the by-pass, costing $72,614.78. The original plan, which was the subject of a contract between Sydney Water and a consortium of companies known as Networks Alliance, is dated 12th March 2008. That document is at volume 2, pages 708 and 715. Page 715 is another copy of the original design for replacing the collapsed portion of sewer main and reconnecting it with the southern remnant. This was to be done in what I would refer to as a straight-line configuration. The contract provided for the concrete encasement of the new pipe (see volume 2, page 713).

214 Three quantity surveyors, on behalf of Sydney Water, Asset Geotechnical and Mr. Hyde-Page, met in conference on 17th July 2012 and produced a joint report admitted as exhibit "S". There is an acceptance by those experts, at least as expressed in oral testimony, that Sydney Water actually expended the amount claimed. However, the following evidence was significant (at [25.2], volume 2, page 856):

What was the total amount reasonable in the circumstances?

13. The Qs agreed that the amount which Sydney Water claims to have expended can not be considered to be a reasonable cost for replacing 25 metres of sewer line.

14. The Qs note that the original budget was $68,626 excluding GST ... plus costs of establishing and maintaining a temporary diversion.

215 The quantity surveyors agreed that the total cost of operating the by-pass was $731,043. There was some quibbling about certain details including hiring, rather than buying, pumps, pipes and other components for the by-pass.

216 I do not accept these criticisms as justified. The Burraneer carrier was a critical asset servicing over 1,000 homes in the Sutherland Shire. It is obviously necessary the service be restored as soon as possible and be maintained throughout the period necessary to restore the permanent sewer main. That period, in part, depended upon the Liddys restabilising the site by building a retaining wall. This was difficult, expensive and time consuming and was not complete until around the end of 2007 (volume 7, page 3281). Mr. Bartel "signed off on it" on 10th December 2007. There were difficulties with access. The only viable access was by barge to the waterfront. And then, of course, the difficulty with the remnant was incidentally picked up, at which point it was literally back to the drawing board. The work was not finished until December 2008. The joint report expressed the view, based on the opinions of Mr. Makin in particular, that the appropriate cost of replacing the sewer in the form existing before the landslides was $143,667 plus the reasonable cost of the temporary diversion.

217 I aknowledge that Mr Watson accepted that it was likely that there had been some duplication, waste or other inefficiencies in a job as complex as this proved to be, especially as there had been the need to go "back to the drawing board" after some months. He suggested however that I could approach this broadly in a manner analogous to Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638. Given my findings about causation I do not consider that such an approach is open to me. Malec goes to quantum, not causation.

218 The difficult question that I have to decide is what is the reasonable cost of restoring the original line. And the approach that I think is appropriate is similar to that contained in the joint report of the quantity surveyors, but I have not necessarily adopted their figures. From the evidence given at 637.20 - 638.35T, I infer that the approach propounded by the quantity surveyors was market based and determined by what competent contractors would be prepared to quote on the basis of a fixed-sum contract. There may be different approaches, but the experts agreed that the medium works subcontract agreement of 12th March 2008 (volume 2, page 708) is reasonable to perform the work based on the original drawings found at volume 6, pages 3019 to 3022, which is the same concept as that shown at volume 2, page 715, and which provides for the reinstatement of the sewer in its original alignment: 638.20 - .40T. As I have said, that sum is $170,142 and I allow it. As I have said, the total cost of the sewer diversion was $731,043, which included the sum of $72,614 as the cost of the relocation. The total project took 78 weeks to complete. That cost of running the diversion is therefore $658,429 or $8,441 per week. The work the subject of the subcontract agreement was expected to be complete within one month. Doing the best I can, I consider it reasonable to allow a period of 50 weeks from June 2007 for the completion of all works, allowing a healthy margin for various delays due the difficulties I have outlined. At $8,441 per week, the total cost of the diversion, not including the cost of the relocation, for which I have made a separate allowance, is $422,050.

Contract price $170,142

Cost of relocation of Diversion 72,614

Cost of maintaining Diversion for 50 weeks 422,050 ________ $664,806

Allow 20 per cent of construction costs for

project management fees (vol. 2, page 661) $34,028

Design and consulting fees (estimate) $21,440.

________

TOTAL $720,334

Interest

219 At the conclusion of the hearing, counsel suggested that if the plaintiff was successful in obtaining judgment I should direct that the parties confer in an attempt to reach agreement on the plaintiff's entitlement to interest, if any, under s.100 Civil Procedure Act 2005 (NSW). Mainly because of my long delay in deciding the case, as the plaintiff has been successful, I think it more appropriate that I make provision for pre-judgment interest and reserve liberty to the parties to apply in respect of it, in case any variation is necessary, and also in respect to any special order as to costs.

220 I have assessed damages on the basis that the work reasonably necessary to make good the damage caused by the negligence of the defendants should have been finished by about the end of May 2008. But the reality is that a different plan was developed and carried out, which was not completed until December 2008. By then all the expenditure had been fully incurred. One might take the view that as Sydney Water was doubtless incurring expenditure as it went, an allowance should be made on an accruing basis from June 2007. However, in my view it is appropriate to take a broad-brush approach and I propose to run interest at the rate fixed pursuant to rule 6.12(8) Uniform Civil Procedure Rules 2005 (NSW) from 1st January 2009 to the date of judgment.

221 As the table published at page 8219 of Ritchie's Uniform Civil Procedure NSW makes clear, the Reserve Bank cash rate has varied frequently over the period. The rate last published before 1st July 2013 is 2.75 per cent, bringing the current rate to 6.75 per cent.

222 Applying the broad brush, I record that the rate at the commencement of the period was 8.25 per cent and the highest rate during it was 8.75 per cent. Taking a rough average of the three rates I have mentioned, a figure of 8 per cent is produced, which is the figure I propose to adopt for the whole period. I have calculated 4.68 years from 1 January 2009 to date. Interest at 8 per cent per annum on damages assessed at $720,334 is in the sum of $269,693, a total of $990,027.

A final note

223 I have found that Flexible Excavations was not negligent and accordingly, it is not a concurrent wrongdoer for the purpose of Part 4 CLA.

224 Flexible Excavations was joined by Asset Geotechnical as the fourth cross defendant to the third cross claim. It is not otherwise a party to the proceedings. Mr. Donaldson argued that even had I found Flexible Excavations negligent, the cross-claim against it was not maintainable by Asset Geotechnical because the claim was an apportionable claim under Part 4 CLA. Senior counsel relied upon the judgment of McDougall J in Dymocks Book Arcade Pty Ltd v Capral Ltd [2010] NSWSC 195 at [9]. Section 5 Law Reform (Miscellaneous Provisions) Act provided the sole basis of Asset Geotechnical's claim against Flexible Excavations. McDougall J held it follows from the provisions of Part 4 CLA:

...that when a judgment is given against a concurrent wrongdoer in respect of an apportionable claim, that judgment is not one in respect of which the concurrent wrongdoer is entitled to contribution or indemnity (under s.5) from any other concurrent wrongdoer. That is because, on the hypothesis that Pt 4 requires to be considered, no other concurrent wrongdoer has contributed to the particular loss which is the particular or apportioned responsibility of the concurrent wrongdoer who is sued and against whom a judgment is given.

With respect I agree, and this dictum applies to the position of Asset Geotechnical in this case (see also Reinhold at [84] - [85]).

Orders

225 For these reasons my orders are:

(1) Judgment for the plaintiff against the first defendant in the sum of $643,517.55;

(2) Judgment for the plaintiff against the second and third defendants jointly in the sum of $99,002.70;

(3) Judgment for the plaintiff against the fourth defendant in the sum of $247,506.75;

(4) Judgment in favour of the fourth cross-defendant to the third cross claim;

(5) Cross claims otherwise dismissed with no order as to costs;

(6) The first defendant to pay the costs of the fourth cross defendant to the third cross claim on the ordinary basis forthwith after they have been agreed or assessed;

(7) The defendants to pay the plaintiff's costs of the proceedings pro rata on the ordinary basis forthwith after they have been agreed or assessed;

(8) Liberty to apply in respect of my assessment of interest and for any special order as to costs to be exercised by notice of motion filed within 14 days of today;

(9) Any motion filed pursuant to Order 8 may be listed before me for directions at 9:30 a.m. on Friday, 11th October 2013.

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Decision last updated: 06 September 2013