Bailey and 1 Ors v Redebi Pty Limited and 1 Ors [1999] NSWSC 918 (13 September 1999)

Last Updated: 15 September 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Bailey & 1 Ors v Redebi Pty Limited & 1 Ors [1999] NSWSC 918

CURRENT JURISDICTION: Common Law Division

Construction List

FILE NUMBER(S): 55022/98

HEARING DATE{S): 11/05/99, 12/05/99, 14/05/99, 19/05/99, 09/07/99, 12/08/99

JUDGMENT DATE: 13/09/1999

PARTIES:

STEPHEN FLOYD BAILEY (First Plaintiff)

BAILEY'S DIESEL SERVICES PTY LIMITED (ACN 003 170 769) (Second Plaintiff)

REDEBI PTY LIMITED trading as PR DESIGN CO (ACN 002 557 842) (First Defendant)

SHERSON & ASSOCIATES PTY LIMITED (ACN 001 022 993) (Second Defendant)

JUDGMENT OF: Santow J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

I Faulkner (Plaintiffs)

G P McNally (First Defendant)

R Hunt (Second Defendant)

SOLICITORS:

Henry Davis York (Plaintiffs)

Colin Biggers & Paisley (First Defendant)

Corrs Chambers Westgarth (Second Defendant)

CATCHWORDS:

TORTS -- Negligence -- Architect's duty of care and its scope -- Policy -- Building defectively designed with latent defect -- internal wall required to act as external wall which collapses in high wind because not sufficiently stabilised -- Liability of architect for design, supervision and communication with engineer in particular circumstances -- Liability of engineer -- Reasonableness of conduct of plaintiff as owner or lessee in relation to later reports by other experts prior to collapse -- Relevance of whether if acted upon collapse would have been averted -- Causation -- intervening cause or novus actus interveniens -- Aggravation of damage -- Contributory negligence -- Mitigation -- Relevance of defendant's duty to take care against the same risk as eventuates -- tortious recovery in negligence of damages for loss of a chance versus all or nothing LIMITATION OF ACTIONS -- Negligence -- Onus -- Pirelli rule in Australia -- Economic loss -- When defect discoverable -- Allowance for time taken to take reasonable steps --Nominal damage outside limitation period -- When is damage sustained if depends on a contingency.

ACTS CITED:

Limitation Act 1969 (NSW) s14(1)

DECISION:

Defendants Architect and Engineer liable in negligence.

JUDGMENT:

1

IN THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

CONSTRUCTION LIST

SANTOW J

No. 55022/98

STEPHEN FLOYD BAILEY

First Plaintiff

BAILEY'S DIESEL SERVICES PTY LIMITED (ACN 003 170 769)

Second Plaintiff

REDEBI PTY LIMITED trading as PR DESIGN CO (ACN 002 557 842)

First Defendant

SHERSON & ASSOCIATES PTY LIMITED (ACN 001 022 993)

Second Defendant

JUDGMENT

13 September 1999

Table of Contents

Page

THE CENTRAL ISSUE

OVERVIEW AND PRINCIPAL CONTENTIONS

Arrangements with Architect

LEGAL QUESTIONS

The Architect alone

Conclusion

Is the claim statute-barred against the Architect?

Conclusion

As to Architect and Engineer

Conclusion

Consequences of finding that Plaintiffs have not acted

unreasonably -- Summing Up.

CONCLUSION

COSTS AND ORDERS

THE CENTRAL ISSUES

1 The owner Mr Bailey and his related lessee company (First and Second Plaintiffs respectively) each claim damages solely in negligence against their architect and their engineer (First and Second Defendants respectively) for loss from the collapse under high winds of an industrial complex of three units at Unanderra. I shall refer to the First Defendant Redebi Pty Limited as "the Architect" and to the Second Defendant Sherson & Associates Pty Limited as "the Engineer". This collapse led to the complete demolition and rebuilding of the complex. Responsibility for the collapse can be attributed at least in a "but for" sense to a wall being erroneously treated by Engineer and Architect in its engineering design and construction as an internal wall. It had to serve structurally as an external wall, due to the construction being staged and the wall was insufficiently stabilised to do so. This staging was known to the Architect and was sufficiently made known to the Engineer. The amount of the damage for consequential economic loss is agreed at $662,680 (plus any further interest). The claim against the Engineer is for failure in design of the structural elements. That against the Architect focuses on the Architect's procurement and supervisory role in relation to engineering design, including an alleged communication failure on the Architect's part vis a vis the Engineer and in allowing the builder to leave the wall as an internal wall. The case throws up the issue of where an architect's responsibility ends and a structural engineer's begins, but in circumstances where it is said that the Architect's role and responsibility as a "design and building consultant" extended at least to the functions just described.

2 The claim is resisted firstly on the basis of the owner's alleged failure to respond reasonably to engineering reports from other sources received before the building collapsed. That alleged failure in turn is relied upon as a novus actus interveniens interrupting causation, or else as aggravating damage or failing to mitigate it, or as the basis for contributory negligence on the owner's part. The owner disputes the adequacy of any warning and the efficacy of the remedial action suggested or recommended in those reports. The Architect but not the Engineer denies any responsibility for that aspect of the design which led to the collapse. The Architect alone pleaded the statute of limitations. The Engineer belatedly sought to do so, but only after evidence had closed and at the conclusion of oral addresses over a month later. That application was refused, for reasons set out in my judgment of 12 August 1999.

OVERVIEW AND PRINCIPAL CONTENTIONS

3 Mr Stephen Floyd Bailey ("the First Plaintiff") has at all material times been the owner of a piece of land located at 36 Investigator Drive, Unanderra, New South Wales. The First Plaintiff is the managing director of Baileys Diesel Services Pty Limited ("the company"), which is the Second Plaintiff in these proceedings. The company has been the lessee of the premises for seven years and thus at the material time. It was not disputed that the First Plaintiff's actions or inactions could be attributed to the Second Plaintiff. Nor was it contended that the Second Plaintiff was not in contemplation so far as any tortious claim was concerned (including as regards any dealings with the First Plaintiff).

4 This dispute arises following the construction work carried out on the 36 Investigator Drive property commenced in late 1990. Each of the Defendants were earlier engaged for the purpose of designing and advising as consultants for the building of industrial warehouse units on the property. The First Defendant, Redebi Pty Limited, trading as PR Design Co ("the Architect") was a design and building consultant under contract to the First Plaintiff. The Second Defendant, Sherson & Associates Pty Limited, ("the Engineer") was a firm of chartered structural engineers, engaged through (to use a neutral term) the First Defendant.

5 On 6 November 1994 the western wall of the building works the subject of this dispute collapsed under the force of strong winds. As a result, a large part of the rest of the building, being of brick construction with a metal roof, also collapsed. The Plaintiffs bring an action, now solely in tort, against both Architect and Engineer, having abandoned an earlier action in contract against the Architect.

6 The Architect has subsequently brought a cross claim against the Engineer. The Engineer has, in turn, brought two further cross-claims, the first against the Architect and the second against Kenna & Brown Pty Limited (in liquidation), the builder of the subject constructions.

7 The cross-claims as between the Architect and the Engineer were settled. Nor am I concerned with any claim against the builder. Thus if the Architect (or Engineer) is found liable to the Plaintiffs there is no need for the Court to apportion liability between the Architect and the Engineer. The issues originally raised in these proceedings with respect to s92 of the Environmental Planning and Assessment Act 1979 (NSW) do not now need to be dealt with. Nor in the negligence claim is there any longer an issue based on whether the Plaintiffs voluntarily assumed the relevant risk of collapse. This issue has been subsumed in the issues of contributory negligence and mitigation.

8 The relevant action in tort was brought against the Architect on 21 May 1998. The limitation period of six years is measured from the date on which the cause of action first accrues to the Plaintiffs; s14(1) of the Limitation Act 1969 (NSW).

Factual Background

9 In May 1989 the First Defendant approached the Architect to retain it for the purposes of designing the building development on the 36 Investigator Drive property. It early became a two stage development for budgetary reasons. The total building development was to consist of seven industrial units. They were partly for use by the Plaintiffs for a diesel engine maintenance business and partly for outright rental. The Architect accepted the retainer. Further discussions took place in August, September and November 1989.

10 On 19 January 1990 the Architect, through Mr Rasa, a principal of the Architect lodged a development application with the Wollongong City Council. The development application, then to develop the property by building seven units, was signed by Mr Rasa and by the First Defendant. Earlier on 1 January 1990, based on the recommendation of the Architect (Mr Rasa to Mr Bailey) Sherson & Associates were instructed by the Architect to design the structural engineering component for the overall design of the project.

11 The Architect's plans (DX2) were provided to the Engineer by the Architect around mid-January. By then the development was to be staged, as the Architect would have appreciated. Thus that plan contains upon a dimension line the words "stage 1", for the first three units. Further drawing by the Architect (DX3) similarly identified "stage 1". I am satisfied that this in turn was enough to put the Engineer on notice of the staged construction, whether or not the engineers actually took that in at the time. But in any event later site inspection on 10 December 1990 would have left the Engineer in no doubt; see paras 16 and 17 below.

12 On 2 April 1990 the development application was granted. Between 19 January 1990 and 2 April 1990 there were various communications in respect of the development works between the Architect and the Engineer.

13 On 23 May 1990 the Architect applied for building approval. The approval was granted on 25 October 1990 as an approval for a seven unit development though some of the drawings submitted showed a stage 1, for units 1, 2 and 3.

14 The builder, Kenna & Brown Pty Limited entered into a written building agreement with the First Plaintiff. The agreement was executed on 6 November 1990 for work specifically on "stage 1" of the project and was for a twenty week building period. On 15 February 1991, Wollongong City Council sent a letter to the First Plaintiff confirming that the construction was to be for "stage 1" only, being three units. (The Plaintiffs for financial reasons did not want to proceed with both stages at that time but still wanted the necessary approvals.)

15 The construction works commenced in late 1990 and were completed after the expiry of the 20 week building period prescribed in the building agreement at a time towards the end of 1991. The western wall, being the wall that later collapsed, was designed and built as an internal wall notwithstanding the fact that it had to function as an external wall during such time as the second stage of the building project remained incomplete. The second stage was not embarked upon. It is not seriously disputed that had units 4 to 7 been erected at the same time, there would have been additional lateral stability provided for by the brick walls of those other units. In addition the roof bracing as a whole would have been far more adequate than the roof bracing as it was for just three units.

16 During the term of the construction the Engineer visited the site on at least two occasions. The purpose of the first visit, on or shortly after 10 December 1990, was to inspect the preparation of the footings and to certify the adequacy of preparation. The footings at that stage had only been prepared for the first three units. It was conceded by the Engineer's counsel (T, 9(5)) that the Engineer actually asked the concreter on site "where are the rest" -- meaning the other four units. The second visit, to inspect the sewer line, was completed and confirmed by letter from the Engineer to Kenna & Brown Pty Limited dated 1 July 1991.

17 The Engineer, if not earlier then as a result of the site visits, can, I am satisfied, be taken to have become aware that the planned construction was not to be completed to the seven unit stage but only to the three unit stage in the first instance. Thus on 22 August 1991 the Engineer composed a letter to Kenna & Brown Pty Limited. That letter outlines the building faults evident in the construction to that date. Relevantly, the letter refers to the existence of only three units. I conclude that the Engineer was aware certainly as of 22 August 1991 and I am satisfied earlier, during the engineering design phase, that only three of the seven units had been constructed.

18 Towards the end of 1991 the First Plaintiff became concerned as to the adequacy of the elements used to fix the roof supports in place. The Engineer assured the First Plaintiff of the adequacy of roof support in a letter of 27 September 1991 (PX1, 52). However, the First Plaintiff made further inquiries about the roof supports from Lysaght Building Industries, the firm that manufactured the metal components for the roof. Lysaghts reported that "[a]dditional bolts are required at the lap as detailed in [an accompanying drawing]. Attention drawn to lack of fly bracing" (PX1, 36). The results of that inquiry were communicated by the First Plaintiff to the Engineer. The Engineer assured the First Plaintiff that the roof was satisfactory.

19 Early in 1992 a dispute arose between the First Plaintiff and the builder Kenna & Brown Pty Limited with respect to certain aspects of the building work. In the course of that dispute the First Plaintiff engaged solicitors Peedon, Brodie. The matter went to the Campbelltown Local Court on 5 March 1992 but was ultimately resolved through mediation in accordance with s23(3) of the Community Justice Centres Act 1983 (NSW) on 6 April 1993.

20 During that dispute, the First Plaintiff obtained a building consultancy report from Stephen Maber of Building Consultancy Service. The report (PX1, 65) is dated 9 May 1992. It therefore came into existence twelve days earlier than 21 May 1992, the latter being six years from the date (21 May 1998) when the Plaintiffs' present actions were brought. It came to the attention of Mr Bailey "on about 9 May 1992" (T,41(57) to 42(5)). The evidence as to this needs to be more closely considered to determine at what point if at all his awareness centred on the fatal deficiency in the wall, or should have done, taking reasonable steps. This is because of the implications of the six year limitation period as it bears upon any claim in negligence; see paras 69 and following.

21 Thus while Mr Bailey became aware "on about" 9 May 1992 that the wall had been erected as a temporary wall: T, 41(38), at T, 52(1-6) he agreed in cross-examination, that it was in "May `92" that "After you read this report you became aware, didn't you, that there was something wrong with the western wall". [emphasis added] At T, 52(8-14) he agreed that "in 1992" he knew the western wall had been defectively designed in so far as it was an internal wall being used as an external wall. As to anything being defective, except for T, 52(8-14) the questioning did not go further than that after he read the BCS report he "became aware that there might be a problem with the brick wall": T, 41(32). Thus it can be seen that while he acknowledges he had the report on about 9 May 1992, imprecise cross-examination left the time of his awareness of what was in the report to be inferred. This is in circumstances where the onus must be on the defendant who invokes the limitation defence; see para 82 below.

22 Mr Bailey had in that report two statements upon which the Architect, in particular, relies. The first concerns the roof and the second the brickwork of the wall in question:

"II. ROOF: -- the roof purlins appear to have excessive amounts of deflection. The roof deflects 20mm under a minor impact load of 100kg. With this in consideration, the roof may not withstand the wind forces placed upon it in the future.

The roof requires extra bracing and stiffening. The fixing of snap-in purlin stiffeners, as specified by the manufacturers, should be installed. This may reduce the amount of deflection occurring.

It is recommended that a full report/investigation by a structural engineer be undertaken for the roof."

X. BRICKWORK: -- Brick wall at the end of the factory has been erected as a temporary wall until the 2nd stage of the factory complex has been completed.

The wall is only 230mm thick and should be checked for stability by a structural engineer."

23 It will be appreciated that Mr Bailey is warned to consult a structural engineer for the roof, as the roof "may" not withstand future wind forces and that a wall erected "as a temporary wall" should be checked for stability by a structural engineer" -- it is not stated that the wall is unstable at that point. His concessions in cross-examination as to what he knew in "May 1992" or "in 1992", quoted above, do not establish that he knew anything more, immediately before 21 May 1992, than was in the BCS Report of 9 May 1992. Nonetheless, I am satisfied that he did know at that date what was in the BCS report. The BCS report stops short of saying that the building suffered from defective design.

24 In any event, Mr Bailey did check the position with a structural engineer, doing so after 21 May 1992. The wall was checked by Mr Aplin a structural engineer on behalf of KF Williams & Associates Pty Limited and the findings of that inspection were contained in a report ("the first Aplin report") dated 9 July 1992 (PX1, 74). Quoting from that first Aplin report of 9 July 1992 of which para 2 is principally relevant:

"1. After design check calculations of the Dead and Wind loads on the roof, the Z20025 purlins are considered adequate for the spans in question provided the bridging is amended to ensure full lateral torsional restraint. (provision of Hook-Lok Bridging). It must be clarified, however that deflection is not dependent upon the provision of bridging. Bridging is to prevent buckling of the purlins due to wind load which causes suction (uplift loading) on the roof.

2. The 230mm thick temporary brick wall at the western end of the factory does not comply with the requirements of the brickwork code in terms of lateral stability and is also considered inadequate for the wind loads imposed on the wall.

Engaged brick piers 590 x 230 should be provided at 5 metre cts. to ensure stability of the wall. The tops of these piers are required to be tied laterally to the roof framework.

3. The angle bracing in the plane of the roof, buttressing the top of the engaged brick piers on the Southern wall have been attached to the cross walls in a dissatisfactory manner. Bolts have been placed through the brickwork only and not fixed to the raking angles as is common practice.

There is a possibility that with wind load on the bracing angles, the top courses of brickwork may be dislodged."

25 On 2 August 1992 a further building consultancy report (from "Building Consulting Service") was received by the Plaintiffs through their solicitors (PX1, 77-80) still for the purpose of the litigation with the builder. The report itemised and as requested priced the work recommended by the structural engineer in addition to pricing other remedial construction works. The cost of all of the works was $7,800. Under the itemisation of that amount, the reinforcement of the western wall was referred to specifically:

"Steel column to Western wall to reinforce the wall against strong winds and to conform to building codes as per Eng. [sic.] details." (PX1, 78)

26 KF Williams & Associates Pty Limited then sent a further report, received by the Plaintiffs' solicitors for the Local Court matter on 4 December 1992. The document, was prepared for the purposes of a Scott schedule of remedial work to be carried out by the builder and expanded upon the structural deficiencies of the building's roof and of the bracing to the southern wall (PX1, 96) from which I quote:

"7. There is a requirement to maintain stability regardless of whether a brick wall is constructed as an internal or external wall.

8. Galvanised steel rod can comply as bridging, however, the way in which the rod bridging was fitted to the purlins was a totally inadequate method of providing bridging to those purlins. For rods acting in tension to be effective in providing lateral/torsional restraint to purlins, the rods are to be continuous in the same plane, supporting the outer leg of the purlins.

9. The additional angle brackets are to provide stability to the wall as at Item No. 7.

10. The intersection of the angle bracing in the plane the roof does not coincide with the engaged brick piers on the southern wall of the building. The bracing is therefore considered inadequate in providing stability to the southern wall. With the provision of RHS columns fastened to the existing wall and restrained at the top by the existing angle bracing, the wall can be stabilised in a positive manner.

11. The 24mm dla tension rods may well be, adequate. The purlins, however, are incapable of providing sufficient compression strutting between the node points of the bracing rods. The roof sheeting is possibly relied upon therefore, to carry the bracing forces."

27 There was a further and final letter from the same structural engineers to the Plaintiffs still in regard to the Local Court proceedings dated 15 January 1993 (PX1, 97). It contained the following assessment, having first described the "rod bridging" to the purlins as a "totally inadequate method of providing bridging to those purlins":

"2. Brick Wall at Western End of Factory. This temporary brick wall does not comply with the requirements of the brickwork code in terms of lateral stability and is also considered inadequate for the wind loads imposed on the wall.

S & A P/L [sic] [the Engineer's] drawings are considered deficient in not specifying sufficient piers to ensure adequate lateral stability of this wall.

The onus was on the builder to ensure that this wall be redesigned as an external wall irrespective of the time frame for which this temporary wall was to be constructed. The builder was deficient in not providing ties from this wall to the Northern (front) wall of the building. It is common building practice to ensure that brick walls are tied at corners, albeit the ties be rigid or flexible."

[emphasis added]

28 I will return to the significance of these reports, including in particular the last letter, when dealing with the Architect's and Engineer's defences.

29 In June of 1993 preparation began on work for the second stage of the industrial units. On 25 June 1994, KF Williams & Associate Pty Limited invoiced the Company for work undertaken in designing the footings and floor slab for stage 2 of the project (D2X14).

30 On 6 November 1994 the western wall of the building, left unrectified for over two years since its construction, collapsed under the force of high winds. Evidence of wind speed indicates that the wind speed on that day at the University of Wollongong peaked at a westerly wind of 54 knots (PX1, 122).

Arrangements with Architect

31 It is not in dispute that there existed at the material times from late 1989, a contract for services between the First Plaintiff and the Architects. It is the Plaintiffs' contention that the Engineer was then contractually retained by the Architect pursuant to contractual duties earlier assumed by the Architect in agreement with the First Plaintiff for both design and engineering. That last proposition is disputed by the Architect who contends that there was a separate contract for engineering design between the First Plaintiff and the Engineer, merely effected via the Architect. But as the Plaintiffs now rely solely on tort, this has ceased to be a live issue, save as it may bear on the responsibilities assumed by the Architect for tort purposes.

32 Supporting the Architect's contention, the Engineer admits that, in or about January 1990, it entered into an agreement with the Architect for the provision of certain engineering services [Engineer 3rd Amended Defence para 5]. The letter of 19 January 1990 (PX1, 1) containing an approximate quote by the Engineer for engineering design services in regard to the construction was addressed and directed to the Architects and not to either Plaintiff. The letter did not refer to the Plaintiffs as the clients of the Engineer.

33 The Architect also relied upon the plaintiffs' expert engineer Mr Low agreeing in cross-examination that an engineer has certain expertise in relation to the design of structural elements of a building that an architect may not have (T, 127(15-25). The engineer's input is important because his design goes to ensuring that the building stays up, which is the most important part of the overall design process (T, 127(25-32). He agreed that architects reasonably rely on the experience of engineers in preparing a design that is structurally sound (T, 127(30-45). However while that goes to what an architect may do, by in effect sub-contracting or delegating the engineering design elements to the professional most competent in that area, it begs the question whether the architect still retains ultimate responsibility for an overall building design service which includes the engineering design elements of the structure, albeit co-opting the assistance of a qualified engineer in that task.

34 Relevantly the quoted amount was then contained in a letter from the Architects to the Company dated 31 January 1990 as part of a "Total fee" expressed in the singular (PX1, 3). This gives some support to the Plaintiffs' contention that this total fee was for the Architect inclusive of those engineering services. The letterhead printed on that document describes the Architect as "design & building consultants" (PX1, 3). That suggests that the Architect held itself out as having competence in building and not merely architectural design, thus impliedly embracing those engineering aspects inherent in a building consulting service.

35 Mr Rasa from the Architects furthermore conceded that its architectural business was one where the architect provided "a full service by way of complete design" (Rasa cross-examination T, 168(15)). Mr Rasa's later asserted that in this instance the Architect's retainer was to provide only partial service (T, 168(22)). That partial design service though was concededly only part of the overall service required by the Plaintiffs (Rasa cross-examination T, 168(22)). The Architects rely on having requested that the Company pay the Engineer's fee directly to the Engineer (Rasa cross-examination T, 168(30) and affidavit of Mr Bailey of 4 August 1998, para 11). That still leaves the question whether this was for convenience or rather reflected a direct contractual relationship between owner and engineer bespeaking responsibility directly to the owner.

36 The Architect likewise relied on the fact that the "Memorandum of Fees" of the Engineers dated 16 July 1990 was addressed to "Baileys Diesel Service" (PX1, 10). Further correspondence was also carried out directly between the Plaintiffs and the Engineer including, for example, a letter from the Engineer of 9 August 1991 (PX1, 44) outlining some of the construction faults present in the building.

37 The Architect seeks to emphasise that the First Plaintiff continually contacted the Engineer directly after the Architect's role in preparation of the drawings had concluded. The Architect also contends that the Engineer's visits on site were outside the scope of the architect's retainer, occurred well after that retainer had concluded, and were the subject of a separate contract between Bailey and the Engineer, without notification to the architect.

38 I weigh this evidence, with other relevant matters, in answering the first of the Legal Questions below.

LEGAL QUESTIONS

39 Against that factual background and broad statement of the contentions of the parties, I turn now to the relevant legal questions and the issues they pose. In answering these legal questions I will deal more closely with the evidence given by the parties including the expert evidence.

40 The legal questions can be distilled in the following formulation:

Question 1

Liability: Is either the Architect or the Engineer or both, liable to the Plaintiffs in negligence by failing, as particularised in the pleadings, to design the building so that it was, upon erection, structurally strong, stable and sound in all respects? In particular as to the Architect:

(a) Did the Architect undertake to the Plaintiffs services which included engineering design, or otherwise fail in its procurement and supervisory role so as to bear shared responsibility for the collapse with the Engineer, and

(b) Is the claim in negligence stature-barred?

Question 2

Defences and Damage: Depending on the answer to Question 1, as to Architect and Engineer:

(a) did the Plaintiffs in the circumstances fail to act reasonably in the protection of their interest in the property between May 1992 and the collapse of the building on 6 November 1994:

(i) by omitting to rectify the defects detected and reported first by Building Consulting Service and then subsequently by Mr Aplin of K F Williams and Associates Pty Limited by implementing Mr Aplin's recommendations or, if that would have been insufficient to avert collapse,

(ii) by omitting to commission a professional and complying re-design and associated upgrading of the building?

(b) if so, does such failure and omission give rise to:

(i) a defence based on novus actus interveniens interrupting causation or rendering the damage not a foreseeable consequence of any negligence,

(ii) a defence based on aggravation of damage, or

(iii) contributory negligence, and if so how apportioned, or

(iv) a failure to mitigate loss?

41 As earlier noted, there is no question to be decided of voluntary assumption of risk nor of contract. If I were to find liability, damage has been quantified and there is no question to be decided of the extent of the contribution as between Architect and Engineer; that last has also been agreed. However, in the latter event, there would remain a question of contribution as between Plaintiffs on the one hand and Architect and Engineer on the other were contributory negligence established.

42 Finally, although I have determined that the Engineer should not be permitted at this late stage to re-open its case by introducing a defence that any claim of negligence is statute-barred, I have also dealt with that defence so far as the Engineer is concerned in case I were wrong in denying that dispensation. The Engineer did not seek to rely on any additional evidence than was before me.

The Architect alone

43 I turn now to answering the questions earlier posed, starting with the issues applicable to the Architect alone.

44 While the contractual claim is no longer pressed against the Architect, a tortious claim in negligence against the Architect does pose an analogous question. Did the Architect owe a duty of care to the Plaintiffs to exercise reasonable care and skill

(a) in those elements of the design of the building that bore upon whether it would, "upon erection, be structurally strong, stable and sound in all respects", or

(b) as regards supervision of the building design and its construction overall including procurement of engineering services and relevant communication with the Engineer?

Given their particular expertise, architects do not undertake a duty of care to the client which extends to an assumed responsibility for specialised aspects of engineering design in the absence of an express undertaking to that effect or which can be properly implied from the circumstances, including the nature of the retainer and any holding out. An analogy can be found in a solicitor's duty of care which would not ordinarily extend to undertaking responsibility for commercial as distinct from legal advice. Thus in Teachers Health Investments Pty Limited v Wynne (1996) NSW Conv Rep 55-785 Beazley JA said: "It is well established that it is no part of a solicitor's function to give commercial or financial advice..." but added the important caveat, relevant here, "unless retained to do so".

45 Thus the scope of the Architect's duty of care here depends upon the responsibility assumed by the Architect for services undertaken to the Plaintiffs having regard to the nature of its retainer. However, just as, for example, an agent solicitor's duty is not confined to doing what it was retained to do as agent solicitor (or what it was specifically asked to do by the principal solicitor) so there is a duty owed to the client to exercise reasonable care and skill in course of its retainer to take all reasonable steps to avoid any real and foreseeable risk of economic loss to the client; Westward Clothing Co Pty Ltd v Freehill Hollingdale & Page [1999] VSC 266 (Smith J, 30 July 1999, unreported). The question is whether that proposition similarly applies here. The Plaintiffs have the onus of establishing that the Architect did in fact assume responsibility for procuring and for supervising engineering design as it affected structural adequacy, including relevant communication with the Engineer as well as overall supervision of the construction. In the present case the Plaintiffs contend that required the Architects at least to ensure, by a proper system of communication between Architect and Engineer, that the western wall be not built or left as an internal wall lacking sufficient structural stability. If indeed the Architect did undertake those functions, then insofar as the Architect failed in carrying them out, that must according to the Plaintiffs give rise to liability in negligence, subject to any defences, for what was a foreseeable risk of damage to the Plaintiffs; they were clients known by the Architect to be relying upon the Architect for the carrying out of that assumed responsibility and vulnerable in the event of failure to do so. Such a duty of care is capable of arising incrementally to the conventional advisory relationship of architect and client, as its salient features are not of themselves such as to preclude a duty of care of that scope; I here adopt the High Court's treatment of duty of care and its scope in Perre v Apand Pty Ltd ([1999] HCA 36, 12 August 1998, unreported) per Gleeson CJ, paras 8 to 14 concurring in the judgment of Gummow J especially at paras 297 to 302. It remains to determine whether the Plaintiffs have satisfied the onus of establishing a duty of care so extending not merely for ordinary architectural design, but embracing additional responsibility for procuring and supervising engineering design, including communication with the Engineer.

46 The Architect contended that the arrangements between it and the First Plaintiff, Mr Bailey, and in turn between it and the Engineers were such that no such duty of care was owed, certainly in this extended form. This was on the basis that the Architect, as was customary and as understood by the Plaintiffs, was in turn relying upon the expertise of the Engineer as regards design of the structural elements of the building and assumed no responsibility for that itself. That is disputed by the Plaintiffs. The Architect relied on Mr Low, the Plaintiff's expert engineer, who accepted that an engineer has certain expertise in relation to the design of structural elements of the building that an Architect may not have (T, 127(15-25)). Thus he acknowledged that the Engineer's input is important because his or her structural design goes to ensuring that the building stays up, which is a most important part of the overall design process (T, 127(25-32)).

47 Mr Low acknowledged that architects do reasonably rely on the experience of engineers in preparing a design that is structurally sound (T, 127(30-45)).

48 Mr Rasa from the Architect gave evidence that in a project of this nature (with no internal supporting columns), the brickwork was the load-bearing component of the building. As such the brickwork forms the structural component of the building and, as he saw it, it is up to the engineer to document it in the way that he sees fit (T, 170(25)).

49 The western wall was a structural wall. Being a structural wall, according to Mr Rasa's evidence, the architect "cannot demonstrate bracing or what needs to be done to keep that wall structurally sound". That he said was the engineer's job "because the load-bearing brickwork is the major structural component of the building" (T, 170(32-35)).

50 The Architect's case was that even though Mr Rasa admitted that it would have been very simple for an architect to have placed on his drawings a notation of "insufficient strength for this external wall", it was not proper to do that in this case because the walls were a structural element and therefore anything of this nature had to be done by the engineer. The Architect's case was that the architect could not comment on structural matters, nor could they make notes of an engineering or structural nature, because they are not structural engineers (T, 177(5-20)).

51 The uncontradicted evidence of Mr Rasa was that the Development Application drawings were sent to the Engineer, being the drawings contained in DX2. These drawings contained a notation of "stage 1". I am satisfied that should have sufficiently alerted the Engineer that this was a staged development. The Engineer was never called to refute Mr Rasa's evidence that those drawings were so sent. Indeed the Engineer gave no evidence, so that it was not in contest that I should infer that any such evidence would not have assisted the Engineer's case.

52 In response to any contention that the Architect had insufficiently advised the Engineer that the development was to be staged, the Architect noted that under cross-examination Mr Low confirmed that the most important thing that the Architect had to do was to advise the Engineer that there was to be a staged development (T, 126(50)). Mr Low agreed that one way to do this was to note it on a plan provided by the Architect to the Engineer (T, 127(1)). Upon being shown DX2, that is to say the plan represented by it, Mr Low acknowledged that the staged development was noted on the plan and that the Engineer should have been aware from that plan that the development was staged. If that were all there was to it, that could be accepted as being sufficient to alert the engineer to the need to do the engineering design accordingly.

53 However, the Plaintiffs put their case against the Architect on a different basis. Essentially it is that the Architect was, or ought to have been aware, that when the Engineer's designs were received back by the Architect from the Engineer, it should have been apparent to the Architect that the Engineer had not designed for a staged construction, though the Architect had referred to "stage 1" in the plans initially sent to the Engineer. The Plaintiffs contend that the Architect's failure to identify and communicate that error to the Engineer was critical and was due to a lack of a basic system of communication, in the absence of which the Architect could not safely proceed. That in turn breached the Architect's responsibility though it was not to be expected that he would carry out the structural design himself.

54 The Plaintiffs' case is that the Architect held himself out as offering a full design service which must at least extend to responsibility for failing to identify to the Engineer that the Engineer had in turn failed to do the necessary design for structural strengthening of the western wall. At that minimum level of responsibility, the Architect was not asked or required to specify the particular structural design steps that should be taken but simply to point out that none had been specified by the Engineer to whom the Architect had passed on the task.

55 Mr Rasa gave evidence that he received the engineering design drawings between April to July 1990. At T, 168(57)-169(6), Mr Rasa was not prepared to deny that, when he received the Engineer's drawing on the first occasion, he was "then aware .... that the Engineer was not designing for a staged construction". He said, it was "hard to recall" and that he was not aware what conversations there had been between others in his office and Mr Sherson, the Engineer (T, 171(14-40)). As to his recollection as to "what was being documented" he said, ".... in honesty I can't recall" (T, 169.42).

56 He agreed, as to the Engineer's drawings, "all drawings show that [western wall] as an internal wall" (T,170(1)), and "it was on our drawings as an internal wall" (T, 170(6)).

57 Finally at T, 170(16) he had to concede: "when you got his drawings in 1990 you knew that he had designed the wall ... as an internal wall? -- Yes".

58 The cross-examination proceeded as follows (T, 170(21-35)):

"Q. By that knowledge you knew that he had not designed that wall for a staged construction, that's correct, isn't it?

A. That is not quite correct because in a project of this nature the brickwork was the load bearing component of the building. As such when the brickwork forms the major structural component of the building, it's up to the engineer to document it in the way he sees fit. Now he documented it as stage 2 being carried on fairly shortly afterwards, I would have assumed then that something were to be done about that wall. He would have designed something with that wall to make sure it is okay before stage 2 went ahead because being a structural wall we can't designate bracing, or what needs to be done, to keep that wall structural sound. That is his job because the load bearing brickwork is the major structural component of the building."

59 Essentially, what Mr Rasa acknowledges about the drawings he received from the Engineer is this:

(a) he knew that a staged construction was to take place,

(b) that the western wall was nonetheless designed as an internal wall.

Yet he asserts:

(a) the Engineer could be relied upon to design something in time to make sure that the wall so shown as an internal wall "is OK before stage 2 went ahead", and

(b) this was never for the Architect to be concerned about because "being a structural wall we can't designate bracing, or what needs to be done to keep that wall structurally sound" and this was "his job because the load-bearing brickwork is the major structural component of the building".

60 Mr Rasa's evidence continued that he agreed that it was important that the engineer be aware that the construction was to be staged (T, 170(44)) and that the engineering drawings did not have "stage 1" on them (T, 170.21) and that he was not able to refer to any communication from the Engineer to show that the Engineer understood that this was to be a staged construction (T, 171(33-57)). At T, 170(33) Mr Rasa conceded that when he received the drawings back from the Engineer "there was nothing, not one thing on those drawings to indicate that the Engineer's understanding equated to your's?".

61 At T, 173(29-38) Mr Rasa agreed that for the wall to stand as an external wall for twenty weeks would be a "usual" construction period for the second stage, even if it had commenced straight away. He agreed that there was no indication on the architectural drawings which would alert the builder to the fact that the western wall was not designed as an external wall, asserting that it would be "obvious" to the builder (T, 173(55)-174(7)). By that logic, the Architect could not deny that this critical deficiency must have been at least as obvious to himself as architect.

62 Thus the Architect and the Plaintiffs join issue on Mr Rasa's view that what occurs in the normal course of a construction was that even if an engineer does not show the bracings necessary on the drawings, the normal state of affairs on the construction site is that the matter will be raised once the engineer is on site and the builder is on site. At the end of stage 1, so the Architect's evidence went, they (the engineer and builder) would decide whether the wall needed to be braced (T, 170(50)) without involving the architect in any way. Mr Rasa relies for support on documents relating to the Wollongong City Council which had the drawings showing "stage 1" and where the building inspector confirmed: "Council recognised that the building was only partially complete and assumed that any required modifications to the structure would have been made by the engineer and/or builder" (PX1, 117). However, Council's expectation is not relevant to determining the Plaintiffs' reasonable expectation of the Architect or the Architect's responsibility.

63 The First Defendant pointed out that there was no expert evidence from any architect to suggest that Mr Rasa's conduct as an architect was negligent, that evidence coming instead from the Engineer, Mr Low, at T, 128(5)-129(5). Mr Low initially conceded that it was reasonable for an architect to assume that if an engineer had been informed of the development was to be staged, then that engineer would have taken into account whether anything extra needed to be done to the western wall during stage 1 of the development. However, importantly, after initially assenting to the above proposition, Mr Low qualified that answer in the following passage (T, 128(6)-129(5)), in my judgment correctly:

"Q. It would be reasonable for an architect to assume that if the engineer had been informed that the development was to be staged then he would have taken into account whether or not anything extra needed to be done to the western wall during the stage 1 of the development? ....

A. conditional answer to that, the initial answer is yes, however, I think it would be incumbent upon the architect to perhaps satisfy himself that that had been done when he received the engineer's drawings."

64 Significantly, Mr Low also gave evidence to the effect that not many builders would be so experienced as to be in a position to have "a fairly good idea as to whether or not a wall might require bracing during a certain period" (T, 129(10-27)).

65 Summing up, the Architect knew that the construction was to be staged, knew that the western wall was nonetheless designed by the Engineer as an interior wall, can be taken to be aware that the builder was not informed of the latter being an interior wall or had taken no action to remedy matters, yet the Architect took no steps:

(i) to ensure that the Engineer properly understood the Architect's instructions when on notice, actual or at least constructive, that the Engineer had failed to understand the Architect's instructions as evidenced by the fact that the wall was shown as an interior wall and had no designated strengthening in the plans and,

(b) the builder was likewise not informed by the Architect that the western wall should not be left as an internal wall.

66 The Architect was not entitled to assume that adequate "temporary bracing" would occur without following that up with the Engineer. It is true that the Architect could not be expected to know whether the roof bracing sufficed or might lose some of its integrity if it stopped in the centre of the building (T, 176(46)-176a(7)). But that of itself does not exonerate the Architect from its responsibility when on notice to see to it that the Engineer did direct his mind to the consequence of the staged construction for the western wall. I am satisfied that was a shared responsibility with the Engineer. As I have already noted, I do not have to make any apportionment of their respective contributions between the two, as that has already been agreed by them. Lest it be thought that this is to impose an unreasonable burden on an architect lacking expertise in engineering matters, the answer is that an architect with supervisory functions put on notice of the engineer having misunderstood or overlooked a matter as obvious as the use of an internal wall where an external wall was required, cannot eschew responsibility. Indeed, if the matter were as the Architect said "obvious" to the builder it should have been at least as obvious to the Architect (see T, 173(55)-174(7)).

67 There is nothing unfair, unjust or unreasonable as a matter of policy in holding an architect liable for failure to discharge what I am satisfied was the responsibility it undertook. That responsibility extended to procuring the engineer's design and thus required a proper system of communication between architect and engineer. Discharge of that responsibility should have prompted the Architect not only to observe that the western wall was constructed merely as an internal wall without proper support as an external one, but to report that fact to the Engineer so the latter could devise steps to bring about structural stability. The Architect clearly failed to do so and nor did it take the matter up with the builder. Remember too this was an architect whose own letterhead held the First Defendant out as "design and building consultants" who, while claiming in this instance to provide only a partial service, acknowledged that the firm did provide "a full service by way of complete design". And in any event the shortcoming was in procurement and communication concerning an obvious error, not in engineering design itself. That conclusion does not depend upon whether the Architect was at the building in 1994, as Mr Bailey claims. Mr Rasa does not recall being there, but cannot guarantee he was not, relying on reconstruction in support; (T, 177(21)-178(5).

Conclusion

68 The Architect breached its duty of care to the Plaintiffs in its procurement and supervisory role in failing to take the necessary steps to ensure that the Engineer properly understood the Architect's instructions, when it should have been apparent to the Architect that they were not understood and thus the Architect failed in procuring adequate design of the structural elements. The Architect also failed to ensure that the builder did not leave the western wall as an insufficiently stabilised internal wall. The Architect is therefore liable in negligence to the Plaintiffs, subject to the defences and matters going to damages dealt with below.

Is the claim statute-barred against the Architect?

69 We are concerned with a tortious claim in negligence based on economic loss caused by latent defects in a building. That is to be distinguished from cases of physical injury to person or property and from present economic loss directly sustained. We are here considering consequential damages flowing from a latent defect; see Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 587-8 with Mason and Wilson JJ concurring on that aspect at 543, followed by the Appeal Division of the Victorian Supreme Court in Pullen & Anor v Gutteridge, Haskins & Davey Pty Ltd [1993] VicRp 4; [1993] 1 VR 27. The latter case affirmed that in cases of pure economic loss due to a latent defect, time begins to run when the latent defect first becomes known or manifest. That principle was clearly assumed in Bryan v Maloney (1995) 182 CLR 609 by Mason CJ, Deane and Gaudron JJ at 627.

70 This approach modifies the harshness of the so-called Pirelli Rule applicable in the UK; (Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1). Under that rule, where a building is built so defectively as to be doomed from the start, the cause of action is taken to have accrued as soon as it was built, notwithstanding that the defect may be a latent one not yet known or manifest or discoverable by reasonable diligence on the part of the owner.

71 The way in which that harshness has been alleviated is to be found in the analysis of when consequential economic loss first accrues. Where latent building defects later cause consequential damage to the structure, economic loss does not accrue until the defect is discovered or visible consequential damage occurs. Until then the owner can honestly sell the house for its market value and if the owner did, would suffer no loss; see Pullen & Anor (supra) at 68-9 followed by Handley JA in Sheldon v McBeath (1993) Aust Torts Reports 81-208 CA(NSW) at 62,081.

72 Finally, as was said by the Full Federal Court in Jobbins v Capel Court Corporation Ltd & Or [1989] FCA 538; (1989) 25 FCR 226 at 228 in a passage later approved in Magman International Pty Ltd & Ors v Westpac Banking Corporation [1991] FCA 41; (1991) 32 FCR 1 at 11:

"...where the incurring of damage is an essential element of a cause of action, the suffering of some damage (the other elements of the cause of action having already occurred) will, in general, start time running, even although the damage continues to grow. The running of time is not suspended until all the damage which will be suffered has ceased to flow, nor does further damage constitute a fresh cause of action."

73 However, there are two qualifications to be considered in the present context. First, damage so suffered must be real rather than nominal -- what has been described in the context of personal injury diseases of gradual onset as "beyond what can be regarded as negligible" or "not being insignificant"; see Cartledge v Jopling & Sons Ltd [1960] AC 758 in the context of personal injuries and more generally Professor Stapleton, "The Gist of Negligence: Part 1; Minimum Actionable Damage" (1988) 104 LQR 213. There is no reason for not importing that qualification on the stringency of the rule for when time starts to run in personal injury to economic loss as well.

74 Second, a plaintiff can recover compensation only for actual loss or damage, as distinct from potential or likely damage. Thus where, for example, a plaintiff enters into an agreement which proves to be disadvantageous, induced by misleading or deceptive conduct, although detriment, in a contingent sense, is suffered on entering into the agreement, no actionable damage is suffered until the loss becomes actual rather than prospective -- in the case in question through fulfilment of a contingency; see Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514.

75 The Architect in its limitation defence relies on the proposition that a cause of action for tortious negligence is complete and time starts to run as soon as some damage has occurred, and this even if the plaintiff is not aware of the damage; see Sheldon v McBeath (supra) per Handley JA at 62,081. However, that principle must be read in conjunction with the earlier principles to which I have made reference, insofar as they explain when, in the case of a latent defect giving rise to consequential economic loss, the action is taken to be complete and time starts to run.

76 Here, the Architect claims that the Plaintiffs suffered loss or damage more than six years before the commencement of the proceedings. That damage or loss was said to have been suffered by the Plaintiffs prior to 21 May 1992, being six years prior to the filing of the summons. It was said to arise from the receipt of a defective engineering design, requiring further payment for the retention of a new engineer to redo the work, which the Plaintiffs would have appreciated prior to 21 May 1992. The First Defendant refers to Mr Bailey's evidence in relation to his prior knowledge of the defective nature of the design work and the initial damage that both he and his company is said to have suffered, in these terms:

· "Bailey acknowledged that he received and read the BCS (Maber) report on about 9 May 1992 (T, 2.5)

· At the time that he received the BCS report, Bailey believed that the western wall had been defectively designed insofar as it was an internal wall that was being used as an external wall (T, 52.10).

· The damage that was suffered was, at the very least, the cost of having "...to retain a new engineer who is completely redoing all the engineer's work." (Ex.PX1-p92)"

77 The Architect then contends that although it may be argued that there were two separate types of damage, namely the initial damage caused by the defective design requiring the re-doing of the engineering work, and the later damage caused by the collapse, such a distinction is of no consequence. The Architect relies upon the principle that where subsequent injury (here the collapse) is consequential upon and governed by the same cause of action (here the negligence) as the earlier damage (the need to rectify the design of the wall), time starts to run from the time the earlier damage is inflicted as regards both the original injury and the consequential injury; Magman International (supra) per Beaumont J at 11, affirming Jobins v Capel Court Corporation Ltd (supra).

78 Thus the Architect contends that by mid-May 1992, the Plaintiffs were aware of the defective design. At that stage the cause of action in tort was said to be complete as some damage, the need to re-do the Engineer's work, had already occurred. The inadequacy of the design (the negligent act) was also known or manifest by mid-May 1992 so that, all of the facts which were material to be proved to entitle the Plaintiffs to succeed in an action against the Architect were known by mid-May 1992. I should at this point observe that there is no evidence as to the precise cost of new engineering drawings, but it can reasonably be inferred as likely to be relatively modest, certainly compared to the agreed figure for damage overall.

79 The Plaintiffs respond by disputing that it has been established by the Architect, who bears the onus of proof (see para 82), that Mr Bailey was relevantly aware of the latent defect concerning the western wall prior to 21 May 1992, there having been no precise cross examination of Mr Bailey to fix the date of his actual awareness.

80 It is convenient that I set out the relevant transcript references as fairly summarised by the Plaintiffs in their written submissions dated 12 July 1999:

"Mr Bailey said that he received the BCS document "on about" 9 May 1992: T, 41(57)-42(5).

"He became aware "on about" 9 May 1992 that the wall had been erected as a temporary wall: T, 41(38). At T, 52(1-6) he agreed that it was in "May `92" that "After you read this report you became aware, didn't you, that there was something wrong with the western wall".

At T, 52(8-14) he agreed that "in 1992" he knew the western wall had been defectively designed in so far as it was an internal wall being used as an external wall.

As to anything being defective, except for T, 52(8-14) the questioning did not go further than that after he read the BCS report he "became aware that there might be a problem with the brick wall": T, 41(32).

A re-reading of the Transcript page 41-50 reveals that the questioning as to receipt of the BCS report and knowledge of defects did not rise above the fact that it contained a recommendation to have a structural engineer check it for stability. The only evidence as to his appreciation, in May 1992, that there was a defective design was at T, 51(1-14), which was left by the cross-examiner as "in 1992" and "in May 1992". There was no attempt to clarify what was the date "After you read the report" nor when he "became" aware, beyond "May 1992", and "in 1992" "

81 I would conclude that it is more probable than not that Mr Bailey received the BCS document prior to 21 May 1992 and thus can be taken to have been aware of its contents prior to that date also. The real question is whether by virtue of that awareness of the contents of the BCS document, Mr Bailey thereby must be taken to have "discovered" the faults, such that the latent defect "first becomes known or manifest". Pullen & Anor v Gutteridge, Haskins & Davey Pty Ltd at 66-7 and Deane J in Hawkins v Clayton (supra) at 587-8. There Deane J speaks of when a defect is "actually discovered or became manifest, in the sense of being discoverable by reasonable diligence, with the consequence that the damage was then sustained by the then owner". Thus in the case where there is no actual discovery, but the defect could be discoverable by reasonable diligence, the moment when it becomes manifest needs to allow for the time reasonable diligence would take to ascertain the defect. In other words, if the defect has already occurred, but reasonable diligence would take three weeks, then that time should be allowed before the defect could have "became manifest". This is unless the first report was enough of itself for the defect to be actually discovered by Mr Bailey, a conclusion which I reject for reasons later elaborated.

82 It is clear that the onus of establishing a defence under the Statute of Limitations is upon the party invoking the statute, however pleaded; see Pullen & Anor at 71 to 77.

83 A fair reading of the critical passages of the BCS Report of 9 May 1992 is that the wall is described as a temporary wall and the report advises that it should be checked for stability by a structural engineer. There is a similar reference to the roof which it is said "may not withstand the wind forces placed upon it in the future" and the recommendation is for a full report/investigation by a structural engineer. I consider that the Report, by itself, does not put the Plaintiff in the position, without more, that the defect is actually discovered; the question is rather when it could have become manifest, in the sense of becoming discoverable by reasonable diligence.

84 That, I am satisfied, required further reasonable enquiry of a structural engineer to constitute what is necessary for the exercise of "reasonable diligence" in rendering the defect manifest. I am further satisfied on the evidence before me and recognising the onus is on the Defendant, that such an enquiry would reasonably take at least a month and thus would have delayed discovery till after 21 May 1992. In the events that happened, the further enquiry took place and did take around a month, as demonstrated by the fact that the first Aplin report is dated 9 July 1992 -- and led to the further report from BCS of 2 August 1992. But I should emphasise that in so concluding I am not at this point determining, either as of 9 July 1999 or as of 2 August 1992, or indeed until the wall did collapse, that:

(a) the defect was earlier discovered, or

(b) that the steps in fact taken by Mr Bailey rendered the defect manifest earlier.

Those questions are dealt with later. All I am determining is that the defect was not discovered prior to 21 May 1992 and reasonable steps would necessarily delay discovery till after 21 May 1992, on any view.

85 Accordingly, I conclude that the relevant defect did not become known or manifest till after 21 May 1992 and thus the six year limitation period had not expired, even if damage had been first sustained before the wall's collapse. It is to that latter proposition I now turn.

86 There is however a further basis for that conclusion turning on what is to be discovered. What is to be discovered is whether and when "damage has been sustained", in the economic sense. The word "defect" is clearly used by Deane J in Hawkins v Clayton in that sense. The fundamental point made by the Plaintiffs is that the design defect in the present context gave rise to no damage at the point of receipt of the BCS report or indeed later reports. Rather it gave rise to the potential for future damage as occurred when the wall eventually collapsed, this being a potential that depended upon the fulfilment of a contingency of the kind described in Wardley Australia Limited v Western Australia (supra). The contingency is the application of strong wind forces prior to completion of stage 2 causing the destruction of the building. The Defendant contends in response that there was damage that pre-dated the six year limitation period, being the cost of getting further engineering advice and drawings. The Architect relies upon the damage said to have already occurred by reasons of the need ".... to retain a new engineer who is completely re-doing all the Engineer's work". (PX1, 92 being a file note of a conference between the First Plaintiff and his solicitor). But that is refuted by the following circumstances:

(a) That cost was never a specified part of the Plaintiffs' claim (see the Plaintiffs' summons at C23 and the accompanying particulars), and not necessarily recoverable in any event for the reasons elaborated below,

(b) That cost even if recoverable was distinct, in causal if not obligation terms, from the actual claim resulting from collapse of the building,

(c) That cost even if recoverable would have been likely to be wholly insignificant in amount, compared to the actual claim of $662,680.

(d) The Defendant Architect, upon whom the onus rests, provided no evidence as to the quantum of any damage nor were the Plaintiffs cross-examined on that, and

(e) Any deficiency of design would not have been discovered just from the first BCS Report but only after the further design work was done by an engineer and that, as I have earlier determined, would necessarily have been after 21 May 1992.

87 The underpinning for these conclusions are fairly put in the Plaintiffs' written submissions of 12 July 1999, quoted below:

"(i) The design prepared for Mr Bailey was for construction in two stages;

(ii) Mr Bailey intended to build the second stage when he could afford it;

(iii) Had the whole project been erected, the subject western wall would have been of sufficient strength as an internal wall, and the roof bracing system as a whole would have been adequate. No one suggests that, upon completion of the whole, the wall would still have been at risk;

(iv) The design defect here was the omission of further works, i.e. temporary strengthening of the western wall and temporary stiffening of the roof bracing;

(v) Had such temporary bracing and stiffening been carried out by the builder (for example immediately at conclusion of the works under the building contract), the cost thereof would have been an additional cost to the owner -- but such additional cost was always necessary. It would have been incurred in a proper design for two stage construction. Such additional cost would not have been expenditure in the nature of damages;

(vi) The only possible additional cost in the nature of damages may have been a differential element, i.e. if the cost to do the temporary bracing and stiffening after conclusion of the building contract would have been greater than had such works been done as part of the works under the building contract. But there was no evidence about that;

(vii) In Sheldon v McBeath, the footings were faulty as a result of faulty workmanship and inadequate inspection by the architect. Here, the western wall, and roof bracing, were not in themselves faulty. Here, the design defect was failure to provide additional works in the nature of bracing and stiffening;

(viii) Here, monies paid away were not paid away for defective works; not enough money was spent."

88 Another way of putting the Plaintiffs' argument is derived from the following passage of Handley JA in Sheldon v McBeath at 62,081:

"These authorities establish that where latent building defects later cause consequential damage to the structure economic loss does not occur until the defect is so discovered or visible consequential damage occurs. Until then the owner can honestly sell the house for its market value, and if he did would suffer no loss. These cases also decide that the owners did not suffer economic loss when they acquired the houses without knowledge of the defective foundations."

89 In the present case the Defendants have not refuted that the Second Plaintiff could sell the property with full disclosure of the internal wall and its requirement for additional expenditure and be paid its market value, reflecting expenditure still to be made for the temporary strengthening of the western wall and temporary stiffening of the roof bracing, or leaving it to the purchaser to build stage 2 straight away taking the risk of any wind damage during the construction period.

Summing up

90 Any defect was not reasonably discoverable or discovered before 21 May 1992 as evinced by the date of the second report. The Architect has not refuted the proposition that this damage could have been avoided, as would any rectification work, if stage 2 had been built straight away -- or before the wall collapsed, such that the building could have been sold with loss on that basis. Certainly, the Architect has not satisfied the onus to demonstrate that the initial so-called damage was more than "what can be regarded as negligible". Finally, the relevant damage claimed here is, as the Plaintiffs contend, economic loss for the collapse of the building. That damage to be sustained depended upon the fulfilment of a contingency which only occurred during the limitation period.

Conclusion

91 The First Defendant fails to discharge the onus upon it in invoking the limitation period which therefore affords no defence. Although not necessary to decide this, I would have reached the same conclusion in relation to the Second Defendant, had the Second Defendant been permitted to invoke the limitation period, contrary to the conclusion I reached that it should not.

Negligence of Engineer

92 The Engineer concedes that it would be open to the Court on the evidence, to find that the Engineer was negligent. The Engineer likewise concedes that Court could properly draw an inference, from the fact that the Engineer did not lead evidence from Messrs Sherson and Lautier of the Second Defendant, that their evidence would not assist the Engineer's case; see Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 per Windeyer J at 320-21. I have already concluded that the Architect was negligent.

DEFENCES AND DAMAGES

Causation -- Intervening Cause

93 The starting point in considering causation are the findings so far reached as to how the collapse came about. I find that:

(a) the Plaintiffs relied on the Architect in the procurement of the necessary engineering design and in particular relied on the Architect as regards supervision and communication with the Engineer as required, including ensuring that the western wall was insufficiently stabilised as an internal wall given that it was required to perform as an external one,

(b) the Plaintiffs also relied on the Engineer to carry out the necessary engineering decision to ensure such stability, and

(c) the Architect failed properly to supervise and communicate to the Engineer concerning the inadequately stabilised western wall when he should have appreciated that it was constructed as an internal wall but required to function as an external one, while the engineer failed to provide proper engineering design to stabilise that wall in those circumstances.

94 Analysis of causation has been the subject of much judicial exegesis in recent times. The now accepted formulation is to be found in Bennett v Minister for Community Welfare [1992] HCA 27; (1992) 176 CLR 408 in the majority judgment of Mason CJ Deane and Toohey JJ at 412-3 emphasising that causation is essentially a question of fact, to be resolved as a matter of common sense. Once however what happened has been explained, what Lord Hoffman emphasises about the attribution of legal responsibility for those events becomes the principal question. Thus he said in Environmental Agency (formerly National River Authority) v Empress Car Co (Abertillery) Ltd [1998] UKHL 5; [1998] 2 WLR 350 (at 358): "one cannot give a common sense answer for the purpose of attributing responsibility under some rule without knowing the purpose and scope of the rule" and that this is itself a question of law not fact -- though it may be more accurate to describe it as mixed fact and law. He returns to that theme in a recent paper: "The reason why courts get the wrong answer on questions of causation is not usually because they have misunderstood the facts or lack common sense but because they have got the law wrong"; "Common Sense and Causing Loss", lecture to the Chancery Bar Association, 15 June 1999. Amplifying what the High Court said in Bennett on causation:

`In the realm of negligence, causation is essentially a question of fact, to be resolved as a matter of common sense. In resolving that question, the "but for" test, applied as a negative criterion of causation, has an important role to play but it is not a comprehensive and exclusive test of causation; value judgments and policy considerations necessarily intrude. The inadequacy of the "but for" test has emerged in cases in which a superseding cause, amounting to a novus actus interveniens, has been held to break the chain of causation which would have otherwise resulted from an earlier wrongful act or omission. In those cases, though the earlier wrongful act or omission may have amounted to an essential condition of the occurrence of the ultimate harm, it was not the true cause or a true cause of that harm.' [footnotes omitted]

95 The cases themselves illustrate two things. First that application of those principles is no mechanical process devoid of any policy overlay, and second, that the process of decision making actually followed is in practice a two stage process of enquiry. Professor Stapleton has recently argued in a paper "Causation Revisited" that most disputes about causation are ultimately not about fact at all -- for the trial judge has usually explained factually how the events occurred. Rather it is about competing perspectives on agreed or found facts, in answering the question which of such causal factors should "make a difference"; see "Perspectives on Causation", from Oxford Essays in Jurisprudence (4th series) (OUP 1999 in press) by Professor Stapleton.

96 Drawing on Professor Stapleton's analysis, I would describe the two stage process in these terms.

First, what were the factors, including those relating to the defendant, and other external factors, which led to the event, or transition, giving rise to the damage claimed, being the "but for" factors, or those that would have been, had not another set of factors intervened.

This involves identifying all factors of at least material contribution to the loss, then determining which if any were sufficient in themselves to cause it and which were at least concurrent causes of the "but for" kind or would have been, but for other factors present. In that context, their chronology, sequence, interaction in a chain of events and how far they were reasonably foreseeable are all part of that factual explanation. That stage is linked to the second stage of enquiry, concerning the attribution of legal responsibility.

The second stage of enquiry asks which factors should be treated as "making a difference". That entails assessing the defendant's conduct, whether act or omission, not only in its factual context but by reference to considerations such as:

(i) the scope of the duty of care earlier found in relation to the events giving rise to the damage,

(ii) the foreseeability of the damage so far as the defendant is concerned, itself a factual question and a function of the degree of likelihood of the risk coming home; for physical injury, still tilted as compared to economic loss in favour of the claimant, it suffices that injury of the same general kind is foreseeable, as distinct from the injury that in fact occurred,

(iii) in the case of negligence by omission, the hypothetical question of whether performance of the duty would have averted the damage or removed its risk and if by commission, more generally whether the claimed damage would have occurred without the defendant's conduct, and

(iv) the remoteness of the damage, which is not so much a matter of spatio-temporal concerns though they may be involved, but where in the chain of consequences and degree of foreseeability the particular item of damage is to be found and a line drawn; whether, as a matter of policy responsibility in a legal sense should fall on the defendant. Often the language of proximate cause has been used, concealing something much more rough and ready, where "because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point. That is not logic. It is practical politics"; Palsgraf v Long Island RR (1928) 248 NY 339 at 352 (Andrews J).

97 In the case of an omission to perform a positive duty, determining whether a novus actus interveniens is operative straddles both stages of the enquiry. It brings into play what Gaudron J described in Bennett v Minister for Community Welfare (supra) at 420-1:

"And although it is sometimes necessary for a plaintiff to lead evidence as to what would or would not have happened if a particular common law duty had been performed, generally speaking, if an injury occurs within an area of foreseeable risk, then, in the absence of evidence that the breach had no effect, or that the injury would have occurred even if the duty had been performed, it will be taken that the breach of the common law duty caused or materially contributed to the injury. However, the question whether some supervening event broke a chain of causation which began with or which relates back to an omission or a failure to perform a positive duty, is one that can only be answered by having regard to what would or would not have happened if the duty had been performed. It is only by undertaking that exercise that it is possible to say whether the breach was `still operating', or, continued to be casually significant when the harm was suffered." [footnotes omitted]

Her footnote 23, omitted from the above, suggests a shift in evidentiary onus upon the defendant once an injury occurs within an area of foreseeable risk.

98 Professor Glanville Williams in his Joint Torts and Contributory Negligence (1951) stated at para 2-24 that the novus actus interveniens "must constitute an event of such impact that it rightly obliterates the wrong-doing of the defendant", earlier stating:

"If a particular consequence of the defendant's wrongdoing is attributable to some independent act or event which supersedes the effect of the tortuous conduct, the defendant's responsibilities may not extend to the consequences of the supervening act or event."

99 It will generally speaking, not be possible to establish a novus actus interveniens unless:

(a) the breach is shown to have had no causative effect, even of the "but for" kind, because the injury would have occurred, or the same risk of it, even if the duty had been performed; compare Chappel v Hart (1998) 156 ALR 517; 72 ALJR 1344 (where the minority would have concluded that a surgeon's failure to warn did not materially contribute to the plaintiff's injury),

(b) the intervening act or decision was not a reasonably foreseeable consequence of the negligent act in the sense of being "in the ordinary course of things the very kind of thing likely to happen as a result of the defendant's negligence" (per Mason CJ in March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 at 517-8),

(c) there was no positive duty to take precautions against the happening of the intervening act or that class of act; contrast the finding of the House of Lords in Reeves v Commissioner or Police of the Metropolis [1999] UKHL 35; [1999] 3 WLR 363 that there was a positive duty of care to guard against that very act -- suicide by a prisoner -- so precluding any defence based on novus actus interveniens (or volenti) despite the autonomous nature of the prisoner's decision.

100 For the purpose of novus actus interveniens the Defendants allege that the Plaintiffs' conduct was so unreasonable as to displace any causative effect of the Defendants' own acts or omissions. Such conduct by the Plaintiffs must thus be shown to have been so unreasonable as to be a supervening cause of the loss; see McKew v Holland & Hannen & Cubitts (Scotland) Ltd [1969] UKHL 12; (1970) SC(HL) 20 at 25 per Lord Reid, approved in Mahoney v J Krusich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522 at 528. I would agree that such conduct can be unreasonable because of omission or failure to act in appropriate circumstances.

101 In the context of aggravation of damage, the Plaintiff's conduct is similarly assessed for unreasonableness by reference to whether, as in the refusal of potentially efficacious medical intervention, the Plaintiff's omission to act, judged by reference to the Defendants' duty of care and its extent, makes the plaintiff the effective cause of his or her own injury. Here an evidentiary onus to negate causation passes to the plaintiff, once the defendant has done enough to raise the issue. Thus Luntz "Assessment of Damages" 3rd edition (Butterworths, 1990) at 105:

"Cases where it is alleged that the plaintiff failed to exercise reasonable care may in some instances be more categorised as concerned with `aggravation' rather than `mitigation' of damage (cf Bell v Knight [1956] St R Qd 234 (FC), where it was held that the trial judge might properly have reduced the damages on account of evidence that the plaintiff's condition was worse than it would have been if he had not disregarded medical instructions after his discharge from hospital). The only consequence of such categorisation may be that the onus of proving the exercise of reasonable care would fall on the plaintiff."

102 In the case of mitigation of damage, the issue of the plaintiff's reasonableness must turn on whether the plaintiff has failed, after the loss, to take some precaution or step which was reasonable to take in light of the defendant's wrong. That cannot be made out here. This is because the failures relied upon all preceded that loss, which only occurred when the wall collapsed, even if it were "an accident waiting to happen".

103 Finally when it comes to contributory negligence, the issue of plaintiff unreasonableness does arise prior to the defendant's wrongful act, acts or omissions by the plaintiff. That unreasonableness must consist of a failure by the plaintiff to take proper care for its own protection, so that its fault is a legally contributory cause, together with the defendant's default, in bringing about the injury; Fleming, the Law of Torts (1992) at 242 citing the US Restatement. That leads to the factual question, did the Plaintiffs between May 1992 and the building collapse on 6 November 1994 act so unreasonably as to negate causation, or aggravate damage or constitute contributory negligence? I turn to that first.

Reasonableness of Plaintiffs' Conduct

104 The Defendants contend that the Plaintiffs did so fail to act reasonably, by failing to act upon the reports of Mr Aplin and BCS or, to the extent they were deficient or acting on them would have been inefficacious, by failing to commission a professional and complying re-design and associated upgrading of the building.

105 The starting point is the actions of Mr Bailey, who may be taken to represent both himself and, as the directing mind of the Second Plaintiff company, that company. I am satisfied that there is no basis for distinguishing the two.

106 It is clear enough that Mr Bailey, and thus the Plaintiff:

(i) did commission a building consultancy report from Building Consultancy Services dated 9 May 1992, doing so prompted by litigation with the builder,

(ii) did, as recommended by the BCS report consult a structural engineer, namely Mr Aplin of K F Williams & Associates Pty Limited and thus were not guilty of any failure in that regard.

(iii) the Plaintiffs received three reports and a set of calculations and drawings from K F Williams & Associates Pty Limited, namely a report of 9 July 1992 (PX1, 74), then a series of calculations and drawings of work to be carried out dated August 1992 (D2X12 and D2X13), a document entitled "Additional Comments to the Scott Schedule" dated 4 December 1992 (PX1, 95, 96) and finally, a structural report of 15 January 1993 (PX1, 97, 98).

(iv) on 8 August 1992, using the plans and a quotation information sheet, BCS costed the rectification work as proposed by Mr Aplin at $7,800.

(v) Mr Bailey did not implement the Aplin/BCS proposal and in particular stated that he did not recognise that the building might collapse, based on his understanding of the Aplin report of 9 July 1992, and

(vi) the Plaintiffs contend, based on the expert evidence analysed in more detail below, that had the steps recommended by Mr Aplin and costed by BCS been implemented, it was more probable than not that the building would still have collapsed under the wind conditions experienced, so that it was not unreasonable for the Plaintiffs to have failed to implement the BCS/Aplin proposal, whatever their reasons; the Defendants dispute that conclusion, but in any event contend that even if correct, it does not bear upon the reasonableness or otherwise of the Plaintiffs' conduct, in the circumstances.

107 Turning first to the Plaintiffs' reasons, Mr Bailey's evidence was that he did not recognise that the Aplin report of 9 July 1992 (PX1, 74) indicated that the condition of the building was dangerous, and that it could collapse. It will be recalled that that report did not say that the building would collapse though the Defendants contend that was clearly enough indicated by what was said. What was said was that "the 230mm thick temporary wall at the western end of the factory does not comply with the requirements of the brickwork code in terms of lateral stability and is also considered inadequate for the wind loads imposed on the wall". There follows a recommendation for engaged brick piers at intervals to ensure stability of the wall, to be tied laterally to the rear framework, a recommendation which the Plaintiffs' experts say would not have been effective.

108 Mr Aplin was cross-examined on his report and it is clear that Mr Aplin was of the opinion that the building was in dangerous condition and at risk of collapse, but deliberately chose not to state such opinion in those terms in his report. He was cross-examined about this (T, 190, 191) where the following revealing exchange occurred during cross-examination:

"Q. You did not use the word `collapse'?

A. No, I did not.

Q. Is that because you had not, at the time, formed the view that it was in danger of collapse?

A. No. What I write in the report, and what I actually think are actually two different things, because it is not for me to look at someone else's design and say that that is going to collapse. All I can do is, upon my structural thinking and structural analysis, in conjunction with the code and the requirements for stability, I can only use those but I can't -- it is not for me to make the judgment specifically as to whether that structure is going to collapse or not; I may have the thinking, and I probably certainly did have the thinking that the structure would collapse, but I was not going to say that in a report.

Q. Equally, you weren't going to say in the report on the same basis that it was in a dangerous condition?

A. That would be correct.

Q. For the reasons you have just explained?

A. Exactly."

[emphasis added]

109 Mr Bailey's evidence as to his understanding of the problem is fairly summarised by the Plaintiffs as follows:

"(a) He did not think the building might collapse. "There is no mention of that anywhere". T, 46(24).

He did not believe that there were any safety implications because "...I would have thought that he [Mr. Aplin] would have told me first off because it is very concerning"; T, 46(53).

(b) "If I was told that the wall would fall down or was in danger of falling down, I would have done something about it straight away. I would have called in another engineer to do an assessment on it and, with that, I would have fixed it.": T, 48(26).

(c) As to his understanding of lateral stability, he believed that the expression meant that the building could move, and that "maybe we would get cracks in the wall ... probably for one or two years."; T, 45.

"My interpretation of stability is the wall moving, not falling down or in danger of falling down ... that the wall would move, it would create cracks visible by me.": T, 49(26).

(d) He was aware that the building had been constructed to the design of Sherson, and he considered Mr Aplin's report as being the opinion of one engineer against another: "...this is an engineers report against another engineers report." T, 45(55); and see further cross-examination T, 75(18-32), 84(16-85(10)), and re-examination t, 89(16)."

110 The Second Defendant emphasises that Mr Bailey conceded that he was not a structural engineer and quotes Mr Bailey's further evidence at T, 60(35-51) as follows:

"Q. So you were relying on your own structural engineering expertise as to what the effects, if any, might be of the sorts of concerns expressed by Mr Aplin in his July 1992 report?

A. That is the only thing I understand, yes.

Q. But you never asked Mr Aplin whether the only thing that you needed to worry about was cracking?

A. I beg your pardon?

Q. You never asked Mr Aplin whether the only thing that you needed to worry about was cracking?

A. No, I didn't.

Q. That was because you took your own decision on that?

A. Yes."

111 The Second Defendant then contended that as Mr Bailey did not say in his evidence that he took that decision because no express warning was given by Mr Aplin in his report that there was any danger of the wall falling down, no such inference should now be drawn. This was said to be by reason of the evidence by Mr Bailey that he was relying on his own structural engineering expertise. That this was not clarified in re-examination should thus lead to an adverse inference based on that argument.

112 However, a fair reading of Mr Bailey's evidence is not that he professed expertise; rather that he eschewed any structural engineering expertise, not professing more than a lay understanding. His own business was not in that field of structural engineering. He interpreted the report's reference to lateral stability as simply a warning to check for stability to see whether there were cracks, rather than to expect any unforewarned collapse. Although with the wisdom of hindsight, that proved a wrong judgment, Mr Bailey was a layman, and the advice was opaque, guarded and given in the context of a dispute with the builder. There is no suggestion he disregarded the advice of the Defendants whom he had paid to avoid just this sort of risk, when none was forthcoming from them, save that advice which proved deficient. Thus the muddle brought about by Mr Bailey's inadequate appreciation of risk as a layman, coupled with the later engineer's inhibition in commenting on another's work adversely, could fairly be said to be, in the ordinary course of events, "the very kind of thing likely to happen" as a result of the Defendants' negligence.

113 The Plaintiffs engaged and paid for the Defendants precisely to obtain the protection of their advice, with each professing expertise in their respective roles. The point is made cogently be Professor Stapleton in her article "Duty of Care: Peripheral Parties and Alternative Opportunities for Deterrence" (1995) 111 LQR 301 at 308:

"In contrast, where a plaintiff who had taken the opportunity to protect himself or herself by paying for just this sort of professional advice sues this adviser, these countervailing reasons against liability fall away because the payment elevates the adviser from peripheral to a principal causal status. We see this in Smith v Eric S Bush where the defendant valuer and the intermediate contracting party had required a contractual structure which prevented the plaintiff securing privity with the defendant whom she had paid to be careful in relation to a house valuation. Despite this fact (or probably because of it) .... she was rightly held to be owed a duty of care by that party in relation to the valuation."

27 [1991] AC 831

114 One may contrast a local authority and what may be called its peripheral status in providing advice to the purchaser of a property and the engaged adviser who has principal causal status because principally relied upon, in circumstances where it is reasonable so to do.

Contributory Negligence

115 The contrasting position between contributory negligence and liability for negligence to another party is most clearly stated in Daniels v Anderson (1995) 37 NSWLR 438 where at 574 Clarke and Sheller JJ said:

"In our opinion this submission overlooks the difference between contributory negligence and liability in negligence to another party. As we have pointed out, in the latter case the court is concerned to determine whether B has breached a duty of care which it owes A, an exercise which involves the application of established principles of foreseeability and proximity. In the former case the court is concerned with an entirely different issue -- whether A, the plaintiff, has failed to take reasonable care for its own protection. Fleming, The Law of Torts 8th ed (1992) at 242 cites the Restatement in support of the proposition that `contributory negligence is a plaintiff's failure to meet the standard of care to which it is required to conform for its own protection and which is a legally contributing cause, together with the defendant's default, in bringing about its injury."

116 The Court of Appeal went on to conclude that the type of duty that the defendant owes to the plaintiff will affect the degree to which the plaintiff may be said to be contributorily negligent such that in some situations the nature of the defendant's duty may preclude liability at all or reduce it (at 568). However, as the High Court affirmed in Astley v Austrust Limited (1999) 161 ALR 155; 73 ALJR 403, reaffirming Davies v Adelaide Chemical & Fertiliser Company Ltd [1946] HCA 47; (1946) 74 CLR 541 a plaintiff can still be guilty of contributory negligence, even where the defendant has breached either a statutory or contractual duty of care to protect the plaintiff from the very loss which the plaintiff has suffered as a result of the defendant's breach of duty.

117 The Defendants contend that for the modest cost of under $10,000 and with a warning so sufficiently explicit, the Plaintiffs at the least failed to take proper care for their own or their property's protection, when they failed to carry out the remedial work recommended by BCS/Aplin.

118 This alleged failure of proper care for their own protection the Plaintiffs first deny, contending that it was expecting too much of the Plaintiffs to act to carry out remedial work on the muted warning given them and they did seek a further engineering opinion. The Defendants however emphasise that the Plaintiffs were then warned by the later report of 9 July 1992 with its reference to non-compliance with the brickwork code in terms of lateral stability and inadequacy for the wind loads imposed on the wall and which was against a background of the earlier warning in the BCS report of 9 May 1992. They contend that in the context of the series of reports received, it was not expecting too much of a laymen to have at least understood the need for taking remedial steps and taken them. To this the Plaintiffs respond in two ways. First, by asserting that the advice in the report was not so explicit as to make it unreasonable for Mr Bailey to act only as he did; see above. Second, they contend that proper care on the Plaintiffs' part for their own protection could not require them to implement the proposal that was put to them, given that it would not have prevented the failure of the building in the conditions that occurred. It is necessary now to turn to the conflict of the expert evidence on that matter.

119 The Plaintiffs' expert, Mr Low, in his final report of 28 April 1999 concludes in these terms.

"Although the building would have been considerably strengthened had the works priced by BCS been carried out, in my opinion it is more probable than not that collapse would still have occurred, despite these works. The reasons for this opinion are as follows --

1. Provision of only one column (Item 2A) to brace the western wall is inadequate. There would need to be at least two such columns to satisfy the Masonry Code AS3700 in respect of the brick wall panel strength.

2. In my opinion the proposals do not address the problem of transferring the wind forces from the roof plane into the walls and thence to the ground. For example, the forces in the new members numbered 2B, 4 and 6 cannot be transferred to the ground.

3. The roof tie downs were not installed in accordance with Sherson's drawings, as referred to in paragraph 3.4 of my report dated 3rd July 1998, and Aplin's design does not address this."

120 In so concluding, he differs from the Second Defendant's expert Mr Hans Jensen who, at para 4.3 of his report of 4 December 1998 states: "Had the owner acted on the findings it is, in my opinion more than likely that the partial collapse of the building would have been avoided." By "findings", he is referring to the "Engineer's details" appended to the quotation to which earlier reference has been made. This provided for a remedial cost of $7,800 based on the construction details provided by Mr Aplin and the costing provided by BCS. However, Mr Jensen, in cross-examination, acknowledged that, as to the BCS proposal at pages 77-80 of PX1, "these documents in my opinion are incomplete so acting on them would not necessarily solve the problems" (T, 197(5)). He agreed that any assumption that the BCS proposal of 8 August 1992 represented the details of the work necessary to make the building safe, would be incorrect; see T, 197(22). He also conceded that the prices contained in the BCS quotation totalling $7,800 "were premature because it could not, could not represent the totality of the necessary work to make the building safe"; T, 197(30).

121 Mr Jensen agreed that, as to the work proposed in the BCS report, it was not possible to protect the buildings' future behaviour should that work be done, T, 197(35-39).

122 Mr Jensen also agreed, from his observations of the drawings and the information provided to him, that the structure as built lacked a viable load path to transfer wind loads to the ground; T, 197(55).

123 Indeed Mr Jensen made a further report of 10 May 1999 in which he said:

"When the Jensen Report in 4.3 (last paragraph) refers to remedial work that should have been carried out by the owner to avoid a collapse, it refers to "...the findings of the reports it (the owner) received ...". In other words, reference is made to all reports received and not just to BCS's quotation. It is, of course, implicit in the Jensen Report that any redesign to be carried out to upgrade the building would be a design complying with ALL relevant Australian Standards and Codes.

Whilst the Low Report concedes that the building would have been "considerably strengthened" had the BCS proposed work been carried out, it still expresses a view that it is more probable than not that the collapse would still have occurred despite the BCS remedial work.

Bearing in mind that:

(a) the BCS proposed remedial work as set out on its "part plan" provides no sizes to the various structural elements to be added (such as columns, diagonal compression members and the like), and

(b) that associated engineering details are not available,

I do not believe that an engineer could reasonably express a conclusion as to the building's ability to withstand a design windload. I therefore do not agree with the Low Report's conclusion that one event is more likely to occur than another event."

124 Then, in para 3, he concludes:

"When the Jensen report in 4.3 (last paragraph) refers to remedial work that should have been carried out by the owner to avoid a collapse, it refers to "...the findings of the reports it (the owner) received ...". In other words, reference is made to all reports received and not just to BCS's quotation. It is, of course, implicit in the Jensen Report that any redesign to be carried out to upgrade the building would be a design complying with ALL relevant Australian Standards and Codes.

The issue to be addressed is not whether or not the BCS proposal is structurally adequate but whether or not the building would have survived the windstorm in November 1994 if the owner had acted on the various reports submitted to him and, as a consequence, commissioned a professional and complying redesign and associated upgrading of the building."

125 Thus Mr Jensen shifted his ground from a confident assertion that the BCS proposals would have more likely than not averted the partial collapse of the building to expressing disbelief that an engineer could reasonably express a conclusion as to the buildings' ability to withstand a design wind load. Yet he then put upon the lay owner the responsibility to commission "a professional and complying re-design and associated upgrading of the building". This he said was what acting on the various reports submitted to him entailed.

126 But it is apparent from a reading of the reports that there is no suggestion that the BCS/Aplin proposals were, so far as their authors were concerned, insufficient to carry out the necessary remedial work. Certainly there was no recommendation that proper remediation required a "professional and complying re-design and associated upgrading of the building".

127 The Plaintiffs correctly point out that the Defendants thus shifted their ground from saying that all the owner had to do to avoid the collapse was to carry out building works for about $7,800 to the assertion that Mr Bailey was obliged to "commission a professional and complying design and associated upgrading of the building".

128 The Plaintiffs correctly point out that the Defendants, who have the onus in such a contention, did not attempt to identify what works would be required to satisfy complying design or upgrading nor prepare a specification for such work, nor attempt a costing in order to see whether it would have been reasonable for Mr Bailey to have carried out the work.

129 In answering the question whether Mr Bailey acted reasonably, the issue of expenditure needs to be identified and any concession from Mr Bailey that $7,800 was affordable is rendered nugatory once the ground shifted to requiring a fresh commissioning of remedial work. Mr Bailey in fact was not able to proceed with the second stage of the building because he did not have the funds to do so (T, 38(36-54); T, 40(54)). Therefore the assumption of sufficient funds to carry out such work on a more expensive scale on either his part or his company's, is unwarranted.

130 There was no cross-examination of Mr Bailey as to whether he could afford to do whatever work it was that Mr Jensen had in mind though never specified and thus Mr Bailey had no opportunity to consider and give evidence about and to adduce if necessary expert evidence about this hypothetical and unspecified remedial work proposed by Mr Jensen. No question was put to him in cross-examination about his alleged failure to "commission a professional and complying re-design".

131 The absence of such cross-examination would make it quite unfair for the Defendants to seek to have the Court find that the Plaintiffs' "decision" was unreasonable, when the very matters going to reasonableness had never been put to Mr Bailey.

132 Turning to the evidence of the other experts, it is fair to say that no expert was prepared to say more than that the implementation of the Aplin/BCS proposals would have strengthened the western wall; see Low T, 146(35). The Plaintiffs' other expert, Mr Keighran, said no more than such result was "debatable"; T, 155(25).

133 Mr Aplin's evidence, when pressed, was that such works would have produced only a "lower probability of collapse"; T, 184(27). He could not "categorically say" that such works would be "adequate"; T, 187(23). At T, 186(27) he could not categorically say that "the wall would have been completely stable after that work was done because I mean it is difficult to add piers to a wall that is already constructed. He did not regard such re-design as a "normal situation" and he was plainly uncomfortable at accepting any responsibility for such work; T, 188(28-35).

134 Mr Aplin agreed that the construction of one column in the western wall was insufficient to overcome the problem and that the building would not then comply with the masonry code; T, 189(6-14). He added that it was necessary to have at least two columns; T, 189(41). Mr Jensen as expert for the Engineer, said "at least two" were required; T, 198(8); the BCS/Aplin proposals provided for only one such column.

135 Mr Low, whom I found impressive in his expertise and the fairness with which he gave his evidence, said that the Aplin remedy was not adequate and that other walls suffered the same problems as the western wall; T, 138(5-15). Further, he gave evidence that the large roller door in the northern wall meant that such wall could not be relied upon for support to the western wall; T, 149(46)-150(46) and the plan contained in DX2. He concluded that the Aplin method proposed "for stabilising the western wall would have been ineffective"; T, 140(31). He further concluded that the suggested engaged brick piers were "not in my opinion structurally viable to provide the necessary bracing to that western wall"; T, 140(40).

136 Mr Low pointed out that adequate roof bracing was not part of the Aplin design, and that they "have no means of resisting; they will get a compression force .... But there is no means of removing that force ... it can't be resisted"; T, 140(21-26); (30-36). Mr Low said that the roof bridging system was "structurally unviable", the system was "composed purely of tension rods" and no compression force carrying capacity; T, 148(26-40); (33-40). He said that the "bracing became quite useless" and caused the "rotation" in the opposite (eastern) wall; T, 149(16-44).

137 Mr Jensen conceded that, as to the BCS proposal in pages 77-80 of PX1 that "these documents in my opinion are incomplete so acting on them would not necessarily solve the problem". T, 197(5). He agreed that any assumption that the BCS report of 8 August 1992 represented the details of the work necessary to make the building safe, would be incorrect; T, 197(22). He agreed that, as regards PX1 page 80, "that prices in document 80 from the bundle were premature because it was not, could not represent the totality of the necessary work to make the building safe"; T, 197(30)

138 Mr Jensen agreed that, as to the work proposed in the BCS report, it was not possible to predict the building's future behaviour should that work be done; T, 197(35-39).

139 Mr Jensen agreed that, from his observations of the drawings and the information provided to him, the structure as built lacked a viable load path to transfer wind loads to the ground; T, 197(55).

140 Summing up:

(1) The Defendants have failed to establish that adopting the BCS/Aplin proposals would more probably than not have enabled the building to withstand the wind loads which led to its collapse, the onus being upon them to do so. Indeed I am satisfied that it is more likely than not that the additional strengthening would not have saved the building from collapse, based on Mr Low's evidence which I accept in preference to that of the other experts, where in conflict.

(2) The Defendants have failed to substantiate that it would have been reasonable, taking proper care for the Plaintiffs' own protection, for the Plaintiffs, and in particular Mr Bailey, to "commission a professional and complying design and associated upgrading of the building", having failed to articulate what such complying re-design and associated upgrading of the building would entail both as to specification and cost and in particular having failed to put any such matters to Mr Bailey in cross-examination.

141 The foregoing findings mean that cases such as Plenty v Argus [1975] WAR 155 (FC) are not really to the point. That case held that a defendant need not show on the balance of probabilities that particular remedial medical treatment would have been successful. The evidence need only show that, having regard to the chances of success, a reasonable person in the position of the plaintiff would have attempted this course. If the plaintiff unreasonably failed to undergo the treatment, the damages should be assessed on the basis of the actual condition, discounted by the chance that it would have been improved by the treatment; see Plenty v Argus (supra) at 158-9 per Burt J.

142 However, in determining the reasonableness or otherwise of the Plaintiffs' actions, in accordance with the dicta of Jenkins LJ in Mcauley v London Transport Executive [1957] Lloyd's LLR 500 at 505, the advice and the prospects of success of the proposed operation or treatment must be clearly put to the Plaintiffs so that, as a "reasonable man", he would appreciate that he was being advised that this treatment or operation would put him right.

143 Here, not even the Plaintiffs' expert Mr Jensen, was able or prepared to predict the future behaviour of the building, and this whether one is considering the BCS/Aplin proposals alone or the totality of the various reports; see his report of 10 May 1999, paras 2 and 3, as well as his other evidence to which I have earlier made reference. There is of course no suggestion that Mr Bailey had had explained to him what the prospects of success would likely be if the proposed BCS/Aplin proposals were implemented. Indeed on the Defendants' own expert evidence from Mr Jensen it was not possible to quantify such a chance at all.

144 As a factor not automatically in bar of contributory negligence but relevant to any apportionment of liability and in some circumstances capable of precluding it, is the fact that the Defendants were under a duty respectively to supervise and advise in relation to the very matter of the wall's stability. That factor, in the present circumstances would make it "just and equitable" in the language of Daniels v Anderson (supra) at 568, that the Defendants bear all the damages in the present case. This is so even were there, contrary to my conclusion, a degree of fault as distinct from understandable confusion on the Plaintiffs' part in reacting to the various reports.

Conclusion

145 The Defendants have failed to establish that the Plaintiffs acted unreasonably in failing either to implement the BCS/Aplin proposal or to commission a professional and complying design and associated upgrading of the building. That conclusion precludes any finding of contributory negligence on the Plaintiffs' part.

Consequences of finding that Plaintiffs have not acted unreasonably for Causation, Damage and Contributory Negligence.

146 I consider that the Defendants should have foreseen consequences of the same general character as that which followed, namely the lateral instability of the building giving rise to damage, whether by way of total collapse or something less; compare Mason P in Kavanagh v Akhtar [1998] NSWSC 779; (1998) 45 NSWLR 588 at 602 approving the principles set out in Commonwealth v McLean (1996) 41 NSWLR 389 cited with approval by Mason P at 600. Thus, the damage that occurred is not such as should be excluded under any principles of remoteness or of reasonable foreseeability.

147 Turning to causation, clearly enough the relevant acts and omissions of the Defendants in the deficient treatment of the western wall as an internal wall satisfies the test as formulated by McHugh J in Chappel v Hart (supra) where, at [27] he said:

"If a wrongful act or omission results in an increased risk of injury to the plaintiff and that risk eventuates, the defendant's conduct has materially contributed to the injury that the plaintiff suffers whether or not other factors also contributed to that injury occurring. If, however, the defendant's conduct does not increase the risk of injury to the plaintiff, the defendant cannot be said to have materially contributed to the injury suffered by the plaintiff."

148 Applying the two level enquiry described by Professor Stapleton, one reaches the same result. Thus the first stage factual explanation clearly establishes that both the Architect's and Engineer's failure was at least a "but for" factor materially contributing to the Plaintiffs' loss. This was not a loss which would have occurred even if the Defendants had fulfilled their respective duties; compare Gaudron J in Bennett at 420-1. Second, there was insufficient in the Plaintiffs' conduct or in the relevant circumstances as should prevent the Defendants failure from "making a difference", in terms of their ultimate legal responsibility in negligence; the scope of their respective duties of care covered their failures in relation to the events in question.

149 Clearly enough, the defective engineering design did as a matter of fact and common sense result in increased risk of economic injury to the Plaintiffs which did eventuate when the building collapsed under high winds. Thus the defective design materially contributed to that economic injury. Their respective duties of care was of sufficient scope, as a matter of law, to render both Defendants liable.

150 The Plaintiffs' conduct could not be said to be unreasonable for the reasons earlier stated. It thus could not constitute a novus actus interveniens such as to interrupt the causation otherwise made out.

151 Accepting as Gummow J emphasised in Chappel v Hart the need to temper the application of the "but for" test by the making of value judgments and the infusion of policy considerations (at [62]), here there is nothing in the Plaintiffs' conduct which would justify treating the Defendants as "peripheral actors" in comparison to any role played by the Plaintiffs as regards the injury they suffered. Just as, in Chappel v Hart, particular emphasis was placed by Gummow J upon the fact that the very risk of which the Plaintiffs should have been warned was the risk that materialised (at [67]), here, the very risk which the Plaintiffs sought to avoid by employing a design architect and structural engineer materialised. There is thus no evident basis in policy for denying the Plaintiffs' remedy.

152 As was said by Mason CJ in March v Stramare (supra) at 517-8:

"It has been said that the fact that the intervening action was foreseeable does not mean that the negligent defendant is liable for damage which results from the intervening action ... But it is otherwise if the intervening action was in the ordinary course of things the very kind of thing likely to happen as a result of the defendant's negligence."

153 He went on to say (at 518-9):

"As a matter of both logic and common sense, it makes no sense to regard the negligence of the plaintiff or a third party as a superseding cause or novus actus interveniens when the defendant's wrongful conduct has generated the very risk of injury resulting from the negligence of the plaintiff or a third party and that injury occurs in the ordinary course of things."

154 Here, the very kind of thing which was likely to happen as a result of the Defendants' failure to provide an adequate structural design was what did occur, namely that Mr Bailey would be faced with having to make a decision which as a layman he was ill-equipped to make, being a decision as to what remedial action if any to take when adventitiously confronted with the later muted and inefficacious advice which was received.

155 The Plaintiffs were confronted with having to decide on whether to carry out recommendations, in circumstances where, had they carried them out, there was no demonstrated prospect that the damage that occurred would have been averted. Failure to do so cannot in such circumstances make the Plaintiffs the true author of their own harm as a novus actus interveniens nor contributors to it for purposes of contributory negligence.

156 Finally, it may be observed in the context of tort damages, scepticism has been expressed by way of dicta as to whether a plaintiff should be able to recover damages for the loss of a chance as distinct from the all or nothing traditional approach based on the balance of probabilities; see Gaudron J in Naxakis v Western General Hospital & Anor (1999) 73 ALJR 782 at paras 28 to 36. The scepticism that Gaudron J there expresses may at some future date be visited upon the notion of discounting damages by reference to the loss of a chance where the plaintiff has failed to take particular remedial action that offers a chance of averting the damage that occurred. I say this, having earlier concluded that the Defendants have failed to establish even that threshold of an averted chance, simply to indicate that the line of the authority earlier referred to including Plenty v Argus may fall to be re-examined at some future date.

Damages

157 Turning from causation, it equally follows that the Plaintiffs could not be said to have aggravated their damages. Nor can they have failed to act reasonably in their mitigation. And in any event mitigation can only follow the loss not precede it.

158 Finally, there is no basis for reducing the Plaintiffs' damages under the principles of contributory negligence as the Plaintiffs did not fail to take proper care for the protection of their property.

CONCLUSION

159 The defences based upon causation, novus actus interveniens, and contributory negligence have not been made out nor is there any basis for reducing the Plaintiffs' damages.

COSTS AND ORDERS

160 The Plaintiffs have succeeded against both the First and Second Defendants and they are entitled to the damages that have been already quantified, subject to any interest thereon not yet taken into account. I do not need to consider any apportionment as between First and Second Defendants as that has already been agreed between them. Ordinarily, costs should follow the event though I give leave to the parties to address me on costs if they wish. I direct that the parties submit orders within twenty-one days of the date of this judgment.

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LAST UPDATED: 13/09/1999