Craike v Tilsley [2012] NZHC 2260 (3 September 2012)

Last Updated: 2 October 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-002846 [2012] NZHC 2260

BETWEEN DAVID JOHN CRAIKE AND JAYNE ANNETTE CRAIKE

First Plaintiffs

AND SHOWFIELDS EQUESTRIAN CENTRE LIMITED

Second Plaintiff

AND ROBERT TILSLEY First Defendant

AND S D WATSON LIMITED Second Defendant

AND STEWART DAVID WATSON Third Defendant

AND EARL SAMUEL WATSON Fourth Defendant

AND ROBERT WATSON Fifth Defendant

Hearing: 2 - 6 and 10 July 2012

Counsel: NW Woods for Plaintiffs

PJP Grace and SL Robertson for First Defendant

P Webb for Second to Fifth Defendants

Judgment: 3 September 2012

_{JUDGMENT OF ASHER J}

This judgment was delivered by me on Monday, 3 September 2012 at 5pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Rice Craig, DX EP 76506, Papakura, Auckland. Email: [e-mail]

PJP Grace, PO Box 1144, Pukekohe, Email: [e-mail]

P Webb, PO Box 76461, Manukau, Auckland. Email: [e-mail]

DAVID JOHN CRAIKE AND JAYNE ANNETTE CRAIKE V ROBERT TILSLEY HC AK CIV-2010-404-

002846 [3 September 2012]

Table of Contents

_{Para No}

Introduction [1] The claim [20] The role of Mr Tilsley [32] Mr Tilsley’s specific actions

The grass area [47]

The arena surface [70] The arena drains [80] Miscellaneous slips [86] Causation [91] The grass area [104] The arena surface [111] The arena drains [112] Miscellaneous slips [113] Actual costs to create working areas [114] Quantum of loss [118] Contributory negligence [120]

Other claims

The alleged $70,000 overpayment

(para 34(b) of the amended statement of claim) [121]

The alleged $10,486.13 overpayment

(para 24(c) of the amended statement of claim) [126] Further claims [129] The parties [131] Result [132] Costs [133]

Introduction

[1] Jayne Craike is a distinguished equestrian, with significant skill, experience and reputation in sports and dressage. In 2006 with her husband David she embarked on a project to develop a significant equestrian centre in a property they had acquired at Springhill Road, Te Kauwhata. Despite their great hopes the project ended up a disaster, and the Craikes were forced to sell at a heavy loss. In these proceedings they claim that a significant cause of the disaster was the failure of the first defendant Robert Tilsley, a consulting engineer they used for aspects of the project, to meet his contractual duties to oversee the project with reasonable care and skill. They claim from Mr Tilsley their full losses on the development which they assert are $1,326,847.10.

[2] Prior to 2006 the Craikes had owned and run an equestrian centre at Karaka known as “Showfields”. In 2006 they purchased 19.6565 hectares at 389 Springhill Road, Hampton Downs near Te Kauwhata. The land was hilly but there were flat sections on the top. The Craikes envisaged an equestrian centre and complex which would have a flat park-like setting with performance areas and tree islands and pathways to the centre facilities. They wanted the centre to attract international competition and to be a significant New Zealand equestrian centre.

[3] The Craikes took preliminary advice on a development from the engineering firm, Tonkin and Taylor Ltd, who provided initial drawings. The project envisaged the first stage would involve extensive earthworks including the construction of stables, moving a house onto the site and constructing sewage, roading and parking. The next stage was to include the construction of indoor and outdoor arenas, warm- up areas, access roads and associated works. The actual resource consent application was conducted on behalf of the Craikes by a firm recommended by Tonkin and Taylor, Lawrence, Cross and Chapman Ltd. The resource consent was granted on

5 October 2007.

[4] Although Tonkin and Taylor had done the initial drawings and a plan, which were used in obtaining the resource consent, Mrs Craike did not retain that firm for the earthworks stage. Earthworks commenced, with Mrs Craike contracting directly with local earthmovers. In November 2006 she had instructed T & T Drainage Ltd, a company directed and managed by Mr Ted Mitchell to carry out work. Mr Mitchell then introduced Mrs Craike to another local contractor, Mr Stewart Watson, to assist in carrying out the earthworks. Mr Watson’s son, Robert Watson, also worked in that business which traded as S D Watson Ltd.

[5] During November and December 2006 the earthworks began for the initial construction of stables, moving the house, sewage and some roading and parking. T & T Drainage Ltd carried out that work together with Mr Watson as T & T Drainage Ltd’s subcontractor. Ted and Robert Watson through their company S D Watson Ltd (“Watson”) and its employees did all the early stage one work.

[6] By mid-2007 Mr Mitchell was saying that he felt the job was too big for him. He had been technically in charge of the day to day work but the Watsons were doing most of the actual earthworks. Mrs Craike was having difficulty in getting Mr Mitchell to attend meetings. Mrs Craike felt the need for someone to help manage the project works, and who could deal with the Council.

[7] Mr Robert Tilsley, the first defendant, had been recommended by Mr Cross of Lawrence Cross and Chapman. He had emailed Mrs Craike on 29 August 2007 suggesting that she needed the services of a general purpose engineer to look at works and certify them, and design some of the works required in the resource consent conditions. He recommended two possible “general purpose engineers”. One was Mr Tilsley. The other a “step up from Bob”, and could do higher order work.

[8] Mrs Craike approached Mr Tilsley. He agreed to help her. I later go into the details of Mr Tilsley’s appointment and the actions taken by him.1 On 7 September

2007 he forwarded to her a letter headed “Engineering Advice for Equestrian Centre” where he set out a proposal as to his services. Mrs Craike did not formally respond but it appears that she accepted that proposal.

[9] On 20 October 2007 Mr Tilsley wrote to the Waikato District Council under the heading of “earthworks plan” setting out the scope of work to be done, and the method sequence. He forwarded a plan that he had prepared, on which he had put his own drawings of what was proposed in an earlier Tonkin and Taylor plan. In addition to the designated indoor and outdoor areas there was an area shown as “grass area” which was to have “non-engineered fill” on it. Contours show that the area is initially sloping gradually and then for a part sloping steeply into a gully. The grass area was generally referred to in the evidence as the “gig” area, it being an area that could be used for the showing of gigs and carriages. But for the purposes of this judgment I will refer to it as the grass area in accord with the plan.

[10] Prior to 13 November 2007 Mr Tilsley spoke to a Kate Wilkins of the

_{Council and advised her that filling in the grass area would involve filling part of the}

1 At [32]–[45].

gully. An internal Council email recorded that this area would therefore be classed as a high risk erosion area.

[11] Mr Tilsley was asked by Mrs Craike to sign off all the Watson invoices for payment, which he proceeded to do from November 2007.

[12] The stage two earthworks started on about 28 November 2007. At some stage in December 2007 it was agreed that Mr Mitchell’s involvement would be more limited and that the Watsons would take over the significant earthworks. Mr Mitchell would remain involved for specialist drainage work.

[13] At some stage, probably in January 2008, the grass area was made flat by filling. This fill was at its deepest six metres. The events surrounding this construction are one of the crucial areas of dispute at the hearing and will be referred to in detail later in this judgment.2

[14] Work had commenced on the indoor arena, which involved the construction of a significant arena building. The Craikes had without the involvement of professionals contracted with a building company, Prestige Engineering Ltd (“Prestige”), to do this work.

[15] Through 2008 the work on the indoor arena building proceeded very slowly. It turned out later that a senior employee of Prestige was misappropriating its funds. This meant that Prestige did not have the cash available that it should have had to meet the costs of building. This caused significant delays. It had been hoped that the equestrian centre could open for the winter of 2008, but the indoor arena could not be finished in time. Ultimately Prestige went into receivership and stopped work. The Craikes then entered into a contract with a second construction company, Mainland Construction Ltd, which completed the work through the winter of 2008.

[16] Mr Tilsley was asked by Mrs Craike to assist in payment issues that arose between her and Prestige Engineering Ltd and Mainland Construction Ltd, and

_{provided some assistance.}

2 See [46]–[68].

[17] In the meantime, most of the earthworks for the development were completed. Those earthworks included a road known as the “lower access road” which gave access to the lower paddocks. Mr Tilsley’s intensive involvement on the site ceased in about February 2007 with the completion of the stage two earthworks. However, he remained involved at the Craikes’ request in relation to various specific matters through 2008 and early 2009.

[18] By 31 March 2008 the Craikes’ accounts showed that they had incurred total costs on the land, building and property improvements of $1,688,000. There was a mortgage debt of $1,597,907 and an overdraft of $196,004. The second plaintiff, Showfields Equestrian Centre Ltd, had been incorporated by the Craikes to run the equestrian business.

[19] At 31 March 2010 the mortgage debt was unchanged but there was an overdraft of $230,544. For the 2010 year there was a total trading loss of $215,043. Through 2010 the ongoing conduct of the business and retention of the property became financially impossible for the Craikes. They were not able to meet their outgoings and the bank required them to sell the property. The property was placed on the market in early 2010 and ultimately sold on 22 November 2011. The sale price was $1,525,000. The Craikes were left owing in excess of $500,000 to the Bank of New Zealand, which the bank has written off.

The claim

[20] The amended statement of claim shows Mr Tilsley as the first defendant and then S D Watson Ltd and Stewart, Earl and Robert Watson as the second to fifth defendants. The action against the Watsons has been discontinued. A settlement with the Watsons was reached shortly before the start of the trial, with the Watsons paying $200,000 to the Craikes, leaving Mr Tilsley as the only active defendant.

[21] The claim against Mr Tilsley set out in the first cause of action is for breach of contract. The plaintiffs assert that Mr Tilsley entered into a partly written and partly verbal contract with the first and second plaintiffs whereby he would agree to act as project manager in relation to the works and as a consultant engineer. He

would provide earthworks and geotechnical expertise in relation to the works. He would oversee the works’ completion in a proper and workman-like manner and with reasonable care and skill. It is asserted that he did not do so and extensive particulars are set out as to both his duties and his failures.

[22] It is asserted that because of his failings both the Craikes and Showfields Equestrian Centre lost the value of the property measured as the difference between its value on completion of $2,700,000 less the value at the time of sale of $1,525,000 being $1,175,000. There is also a claim for $70,000 being a payment that Mr Tilsley allegedly approved that was made to S D Watson Ltd, a double payment in the sum of $10,486.13 to Mainland Construction Ltd, and a loss of profit in the period March

2008 to November 2009 for $41,361. General damages of $30,000 are claimed.

[23] There is a second cause of action against Mr Tilsley making essentially the same factual allegations based in negligence.

[24] In a statement of defence Mr Tilsley admits being engaged, but denies that his role or duties were as extensive as those asserted by the plaintiffs. He states that he warned Mrs Craike not to proceed to fill the grass area in the way that was done, but that she went ahead despite his advice. He denies that any of his actions were negligent.

[25] I received submissions as to the issues from the parties. It seems to me the critical issues in relation to the claim of $1,175,000 are:

(a) The role of Mr Tilsley in relation to the project works and specific works.

(b) What in fact did Mr Tilsley do and say in relation to certain specific works, in particular the grass area?

(c) Given the findings on these issues, what duties did Mr Tilsley have in relation to the areas of complaint and did he breach them?

(d) Have any proven breaches of duty by Mr Tilsley caused the plaintiffs loss?

(e) If breaches have caused the plaintiffs loss, what is the quantum of damages?

(f) Did the plaintiffs contribute to their loss under the Contributory

Negligence Act 1947?

[26] As it transpired in closing submissions, the plaintiffs argued that Mr Tilsley is liable for four types of damage.

[27] The first is subsidence to the grass area. The grass area started to slip severely in August 2008. It is common ground that it should never have been filled beyond that envisaged in the original plan, and that the actual filling was an error and led to the slip. The question is what responsibility Mr Tilsley has for that slip.

[28] The second area is the deterioration to what is known as the “base area” of the arenas. The surface of the arenas is meant to be packed sand. Unfortunately chips from the base course under the sand known as GAP7 have made their way into the sand and to the surface. This has made the surface less satisfactory for equestrian events as the larger chips get into the horses’ hooves. Again it is asserted that Mr Tilsley is responsible for this failing.

[29] The third is drainage problems in the outdoor arenas. It is common ground that they are inadequately drained. The plaintiffs hold Mr Tilsley responsible for this.

[30] Finally, there is some miscellaneous deterioration to roads, culverting and outlet pipes. This deterioration, which did not figure in any significant way in the evidence, is also said to be Mr Tilsley’s responsibility.

[31] It is the plaintiffs’ assertion that the failings of these areas, which are a consequence of Mr Tilsley’s failings as an engineer, have caused the collapse of the equestrian business and the sale of the centre at a significant loss.

The role of Mr Tilsley

[32] The role of Mr Tilsley is a critical issue. Mr Woods for the Craikes submitted that Mr Tilsley’s role was as project engineer for the entire project. Mr Grace and Ms Robertson for Mr Tilsley submit that his role was in fact far more limited.

[33] It is accepted for Mr Tilsley that he was appointed as project manager in relation to the earthworks, using that term loosely. But it is argued for Mr Tilsley that he had expertise and experience in earthworks but nothing else. He asserts that Mrs Craike was in overall charge of the development. Mr Grace urged on me the caution expressed by Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm): 3

... the court must beware of imposing on solicitors, or on professional men in other spheres, duties which go beyond the scope of what they are requested and undertake to do.

He submitted that the parameters of Mr Tilsley’s retention were set out very clearly

in his letter of engagement.

[34] I heard evidence from both Mrs Craike and Mr Tilsley about the circumstances of Mr Tilsley’s engagement. They met informally on site on at least two occasions. Mrs Craike saw Mr Tilsley as a “wise old owl” to whom she could turn. Mr Tilsley on the other hand saw his role as assisting Mrs Craike who was in overall charge, by regularly visiting the site and working with her using his expertise on the earthworks.

[35] Mr Tilsley has his own consultancy business of Tilsley Engineering. He specialises in earthworks and hydraulic engineering, wastewater disposal, irrigation, water supply and foundation design. He has had over 50 years of professional experience and has worked for the majority of his professional life in the Franklin/Waikato area. At the time of these events he was in his early 70s and only working part time. His central area of specialisation has been land drainage work

_{and he has done a great deal of that sort of work in the area, including designing a}

3 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] 1 Ch 384 at 403. See also

Clark Boyce v Mouat [1993] 3 NZLR 641 (PC) at 648.

number of large drainage schemes and advising a number of drainage boards. He has held a variety of community positions including being an elected member of the Auckland Regional Council, a director of WaterCare Ltd and a director of other boards and associations.

[36] When he was approached by Mr Cross about helping the Craikes he understood that he would be brought in to take the place of Tonkin and Taylor to save costs. On a development of this size and cost, Tonkin and Taylor’s fees would have been approximately $60,000.

[37] There are some differences in nuance of the account of Mr Tilsley and Mrs Craike of their first meetings, and a considerable difference as to what should be inferred as to his overall role. Mrs Craike was from the outset keen to limit Mr Tilsley’s costs. Mr Tilsley said that to assist in relation to the earthworks would require some 20 visits and that his charge would be $250 a visit. He would also assist her in preparing a traffic management plan.

[38] On 7 September 2007 Mr Tilsley forwarded to Mrs Craike a letter of engagement. Given the dispute as to Mr Tilsley’s role, this is an important document. It is headed “Engineering Advice for Equestrian Centre”. It began:

Further to our two site visits and discussions between yourself and Tilsley Engineering and Adams Civil Design, we wish to thank you for the opportunity to put a proposal before you for the necessary engineering advice to see your project through to completion.

[39] Mr Tilsley then went through the various conditions of the resource consent that had been earlier obtained by Lawrence, Cross and Chapman. I will return to the detail of aspects of this list later. However, in summary Mr Tilsley referred to being engaged in relation to 13 conditions of the stage two works. This was only a limited number of a much longer list of conditions. They related to the earthworks and not other resource consent issues. He stated towards the end of the letter:

Structural check

This issue is not listed as a condition, but we believe Chris Adams is able to assist in ensuring you are not being misinformed or misled with the structure and some simple checks will ensure there are no surprises down the track.

Chris would liase with the building supplier and also check during construction so that he could issue a Producer Statement to say all was done in accordance with council requirements for the structure.

Reason for Adams Civil Design involvement

Apart from the issue above on the building, we believe the above project will take at least three to four months. It is always possible that we as sole managers can get sick or otherwise employed on urgent projects (such as Court appearances). We would not be doubling up on work but it is wise to have someone who knows the job to be able to step in under such circumstances.

[40] Mr Tilsley then went on to discuss the basis of payment. He stated, referring to another engineer, Chris Adams, “Chris can give you a quote to [liaise] with the building designers, check calculations and supervise construction and erection of building.”

[41] Mrs Craike did not formally respond to this letter, but I am satisfied that she accepted its terms by her actions in indicating to Mr Tilsley that he should carry out work accordingly.

[42] Mrs Craike said in her evidence in relation to Mr Tilsley that she needed someone to “supervise the work as a whole”. This assertion is inconsistent with Mr Tilsley’s letter of 7 September 2007. That letter shows quite clearly under the heading “Structural check” that Mr Tilsley’s role in supervising work would be limited. It would be to project manage the matters in the resource consent to which he referred, and which dealt with earthworks and earthworks-related issues. He specifically said that another engineer Mr Adams could deal with building issues.

[43] Mr Tilsley wrote to the Council on 20 October 2007 in relation to consent requirements and earthworks that had been done. This is an important letter which will be referred to later in relation to the filling of the grass area. At the end of that letter Mr Tilsley stated that “All the above earthworks will be undertaken under the supervision of the writer”. There is no reference to works other than earthworks. This is consistent with the letter of engagement.

[44] There are other more general references to his role. In another written note which Mr Tilsley had prepared in relation to a meeting held at 10am on 11 January

2008 he referred to various earthworks matters. At the end of that note he recorded

“Bob [Mr Tilsley] to be responsible for job as project manager”. On 3 February

2008 Mr Tilsley wrote to the Waikato Council again in a letter headed “Geotechnical Assessment of Foundation Bearing Strengths Covered Arena”. In that letter he stated on the first page that he was the project manager “of the entire project and has supervised the major earthworks on the Springhill Road site”. However, what followed related largely to earthworks. When Mr Tilsley forwarded an interim invoice for work on 20 January 2008 it was headed “Re project management”. Mr Tilsley signed off all of the Watson invoices for payment. He then forwarded an undated invoice for $5,000 for his work between 23 October 2007 and 11 February

2008.

[45] I have considered Mr Tilsley’s work history and heard him give evidence and being questioned extensively. I have reached the conclusion that he is an intelligent and careful professional person of great experience, and who despite working part time is undiminished in his professional and commercial abilities. He was at the time well aware of his professional limits. He had no expertise to be the general project manager, and indeed in his letter of engagement specifically avoided such a role by referring to the engagement of a construction engineer. Despite his assertion to the contrary in the letter of 3 February 2008, he was not project manager for the entire project. He was to project manage the earthworks. The period was early September 2007 to mid February 2008.

[46] The documents and actions summarised show that Mr Tilsley was employed as a project manager or in a role akin to a project manager, but only in respect to the earthworks that were carried out from November 2007. His role as a project manager in a general sense went no further than that. He had no expertise in matters beyond earthworks and related matters and I am satisfied that he made this clear to Mrs Craike. While on occasion the words “project management” are used loosely, on an overview, the nature of his role can be clearly discerned. I therefore do not accept that Mrs Craike is correct when she attributes a wider role to him.

Mr Tilsley’s specific actions

The grass area

[47] The two most serious earthworks failures were the collapse of a part of the grass area, and also the significant deterioration of the lower access road, making it largely impassable. Although it was alleged in the original claim that Mr Tilsley was responsible with the other defendants for the failure of the lower access road, this allegation against Mr Tilsley was withdrawn following the settlement with the other defendants and prior to the start of trial. There was no allegation that the failings of that lower access road can be attributed to Mr Tilsley’s professional failings and Mr Woods stated that this part of the claim was not pursued, and did not need to be determined.

[48] The grass area slopes deeply down into a gully. In this steeply sloping area fill was placed at its deepest point to a depth of six metres without retaining walls or piles or other structural supports. There is no doubt that the placing of the fill in that grass area was a mistake and that such earthworks were likely to slip. There is no doubt that such earthworks fell within Mr Tilsley’s supervisory responsibilities as project manager for the earthworks. Mr Tilsley did not suggest otherwise.

[49] His answer in relation to the collapse of part of the grass area was that the extra fill was placed on the site at the insistence of Mrs Craike, and against his specific advice. Mrs Craike denies that this was so. She says that she never authorised the placement of the additional fill, and that this was Mr Tilsley’s responsibility. There is on this point a conflict of fact between the two, involving issues of credibility.

[50] The grass area was not specifically referred to in the letter of engagement of

7 September 2007, although as I have said it came within the ambit of Mr Tilsley’s

responsibilities as project manager for the earthworks. In his letter of 20 October

2007 to the Waikato District Council Mr Tilsley referred to the area specifically. He attached to his letter a plan which was the Tonkin and Taylor plan on which he had superimposed his own drawings of where the arenas and areas would be. The letter

and the plan both refer to the grass area. It is shown with the natural contours running through the grass area and Mr Tilsley has handwritten on this “non- engineered fill”.

[51] On a reading of the plan, there is no indication of significant filling in the area and it could be assumed that the non-engineered fill is for smoothing and levelling processes which do not interfere with the basic contour of the land. This is confirmed by the terms of Mr Tilsley’s letter of 20 October 2007. He stated at page two of the outdoor arena adjacent to the grass area:

There is a 2.5m cross fall on outdoor arena No2 and it is proposed to construct this arena with a constant grade to the west of one metre fall by means of cut to fill and the fill will be engineered in accordance with NZS 4431:1981.

[52] There is reference to the volume of cut to fill and the placing of extra cut material on the grassed area as non-engineered fill, which will be compacted with scraper tyres or truck tyres and will be shaped to an even grade sloping southwards. In relation to fill depths it is stated on page three of the letter:

The grassed area will slope southwards and will be at R.L.45 on average.

The non-engineered fill will slope gently to the west from R.L.47.5 to 45.0 depending on volumes available for filling. The western consolidated batter slope of this filled area will be left at a slope of 3 horizontal to 1 vertical.

[53] Mr Tilsley referred later in the letter to his experience of soils on cut and filled slopes being safely at an angle of three horizontal to one vertical, and concluded that all the earthworks would be undertaken under his supervision.

[54] It was not suggested that there was anything negligent about the proposal in this letter. It did not involve the significant filling that later took place. Mr Tilsley was acutely aware of erosion issues and was being open with the Council about them. This is indicated by an internal Council email of 13 November 2007 from a Ms Wilkins to a Ms Glassey where there was the reference to Mr Tilsley having advised that the gully area on the property was to be filled and had a slope of approximately 33 degrees. It recorded “This area would therefore be classed as a

‘high risk erosion area’.”

[55] The critical point of credibility between the parties is what happened after this exchange in relation to the grass area. Mrs Craike’s evidence was that she was told by some or all of the Watsons that there would be no problem filling the grass area. She said that “the choice to proceed in the manner that we did stemmed from Bob and Stewart’s reassurances”. She states that they did not identify any risks. She states that Mr Tilsley supervised those earthworks and was therefore responsible.

[56] Mr Tilsley stated that from an early point Mrs Craike had wanted to have the grass area completely level so she could use it as a warm-up area for horses before they entered the main arena for competitions. His evidence was that in the course of his initial walk-over of the property with her he stated that this was quite impossible unless she was prepared to spend a large amount of money on retaining walls and other geotechnical experts. This was because to level the existing slope would require fill of up to six metres from the bottom of the slope over an area covering

4,800 square metres. That fill would in due course fall away if not properly retained by other large and expensive retaining walls, or the fill had to be stepped. He understood that Mrs Craike accepted that advice and he prepared the plan that was forwarded to the Council on 20 October 2007 on that basis.

[57] Some time towards the end of January 2008, he thinks on 28 January, he was paying a regular visit to the site. He found that surplus soil from the cuttings made in the course of levelling the outdoor arenas had been placed on the gully part of the grass area to make it flat. In other words what he had specifically advised could not be done, had been done. He deposed that immediately upon seeing that this had been done, he spoke to Robert Watson and asked him who had undertaken the filling and why. Mr Watson was still in fact completing the work at that point. Mr Tilsley stated that Mr Watson told him that he filled the slope on Mrs Craike’s instructions. Mr Tilsley says that he told Mr Watson that this filling of the grass area was not authorised by the earthworks plan and would slip, and that he must remove the fill.

[58] Robert Watson was called to give evidence on behalf of Mr Tilsley. He said that he was given a specific instruction to fill the grass area by Mrs Craike in January

2008. Mr Watson in his evidence confirmed that Mr Tilsley was very concerned when he saw that the filling of up to six metres had been carried out, and that

Mr Tilsley told him to remove the fill. Mr Watson deposed that he responded to

Mr Tilsley that he would have to speak to Mrs Craike about the issue.

[59] Mr Watson deposed that he was able to speak to Mrs Craike in person on the site about 4.30pm that afternoon. He told her what Mr Tilsley had said about the fill not being approved in the plan and about the soil slipping. He stated that he had made similar comments to her when she had told him to fill the area. He gave evidence that he now repeated those comments and said that he agreed with Mr Tilsley that the filling was “borderline” and that the plan should be adhered to. He stated that Mrs Craike was “animated” in her response. She stated that “we need that 100 metre area” and later that “[t]his is what I want and this is what I am going to have”.

[60] Both Mr Watson and Mr Tilsley record that they then had a telephone conversation that evening where Mr Watson passed on to Mr Tilsley Mrs Craike’s position. Mr Tilsley said that the next day, or within the next two days, he personally met with Mrs Craike and repeated his earlier advice that the fill would slip and that it was unauthorised and should be removed. She declined to accept that advice and said that she would take the risk. He stated that his impression was that Mrs Craike understood the Council requirements very well and understood his warnings but that she elected to proceed regardless. She wanted the warm-up area “as level as possible”.

[61] Mrs Craike flatly denies that these discussions took place. She described these accounts of her insistence that the grass area be levelled as “rubbish”. It is her evidence that Mr Tilsley supervised the filling as project manager and he was responsible.

[62] There is doubt as to whether the fill work was completed by 28 January 2008 as suggested in the evidence by Messrs Tilsley and Watson. The contracting invoices do not indicate that extensive filling was done on the grass area at around that time. I do not see this doubt as a critical factor in the assessment of the evidence. Mr Tilsley accepted that he had arrived at that date by a process of reconstruction. There was a Council inspection on 25 January 2008 and it seems

likely that the work was done after that, as the Council representative was likely to have noted any extensive unauthorised filling. Mr Tilsley’s reasoning is sound and it is likely that the work was done after 25 January 2008. The evidence was very vague about the particulars and comprehensiveness of the invoices, and it may be that invoices were not issued for this contentious area of work, or are missing.

[63] The uncertainty as to the date does not in my view weaken Mr Tilsley’s evidence. Nor does his failure to refer immediately to the instructions by Mrs Craike, when he was accused of negligence in relation to the fill in the grass area on 15 February 2010, change my view. Mr Tilsley was presented with a litany of complaints and a failure to respond immediately on a particular point is understandable.

[64] On an overview, I have no hesitation in preferring the evidence of Mr Tilsley and Mr Watson to that of Mrs Craike. Mr Tilsley impressed me as a shrewd and sensible engineer who would not deliberately breach a resource consent and renege on what he had told the Council in his letter of 20 October 2007, and permit a work that was so clearly likely to slip. What he says is corroborated by the written material that is available. In particular, his letter of 20 October 2007 confirms specifically that the grass area would not be filled in the way it was ultimately filled.

[65] In general I found Mr Tilsley to be a believable witness and I do not think that he would deliberately lie. I also found Mr Robert Watson who exactly corroborated Mr Tilsley’s evidence to be a bluff but convincing witness.

[66] Mrs Craike took a very dogmatic line in her evidence. She is emotional and angry about the failure of the equestrian business, and possessed of the unshakeable belief that someone other than herself is to blame. In my view, this has made her recollection of events in many instances unreliable.

[67] Having considered the evidence as a whole and viewed Mr and Mrs Craike give their evidence, I have reached the firm view that while Mrs Craike realised that she needed technical help in certain areas and employed people when she had to, she was in charge of all work including the earthworks. She very much wanted the flat

area for gig displays. She took a “damn the torpedoes” attitude in directing Mr Watson to fill the grass area and in refusing to accept the advice given that this was likely to cause slips.

[68] I conclude that Mr Tilsley gave no negligent advice, and was not negligent in his supervision in respect of the failure of the grass area.

[69] I accept the evidence of Mr Mitchell, an expert engineer called by Mrs Craike, that it would have been good practice for Mr Tilsley to have recorded his opposition to the filling of the grass area in writing. Mr Tilsley eventually, after some pressure in cross-examination, accepted that this was so. However, his failure to do so does not make him liable for the failure of the area. It was a piece of poor practice on his part in the sense that it would have aided him in the present proceeding, but does not reflect on his overall professional judgment at the time. The plaintiffs fail on this aspect of the claim.

The arena surface

[70] It is asserted by the plaintiffs that the construction of the arena base and in particular the sand placed on the top involved a defective design. Mrs Craike asserts that there were long discussions between her and Mr Stewart Watson regarding the proposed base for the arenas. Mrs Craike claims that she was advised by Mr Stewart Watson that the use of a GAP7 base course for the arena would be adequate and would go “as hard as rock” once compacted. She asserts that it was through Mr Watson’s persistence, despite her reservations, that she accepted a GAP7 fill for the base. It is asserted that what has in fact happened is that the GAP7, which is a coarse base, has chaffed and moved up through the sand, coming to the surface. This coarser base material gets caught in horses’ hooves and causes difficulties. It lessens the value of the arena for equestrian purposes.

[71] The allegation against Mr Tilsley is that he was present during the final discussion with Mr Watson and that he was silent at the meeting. From this it can be reasonably inferred that he was affirming the truth of what Mr Watson had

represented. It is asserted that Mr Tilsley had a duty as project engineer to ensure that the fill in the base area would not move to the surface of the sand.

[72] In response both Mr Stewart Watson (who was called as a witness) and Mr Tilsley deny Mrs Craike’s account of events. Mr Stewart Watson said to Mrs Craike that he had no experience in assessing what surface or sand was suitable. He had been involved in relation to one surface at the Pukekohe Trotting Club track where he had prepared the base and covered the base with river sand. That surface worked well. He stated that Mrs Craike did not in the end choose the sand that he had used and referred to, and had instead used sea sand which was less suitable. He believes that this sand was less inclined to bind together.

[73] Mr Tilsley deposed that at the meeting he attended on 3 February 2008 where the type of surface was discussed, Mr Watson had stated that he was not an expert in the construction of equestrian surfaces. Mr Tilsley stated that he also indicated that he was not an expert in equestrian surfaces to Mrs Craike. He advised her that his only involvement with such surfaces was his involvement in the construction of a “lunging pen”, and that was only in relation to the preparation of earthworks and sub-drainage. He stated that he told Mrs Craike that the under surface drainage was the key to success, but that the choice of sand should be determined by the owner. He confirmed Mr Watson’s general evidence.

[74] Under cross-examination Mr Tilsley confirmed that he said a GAP7 would set like a road surface before sealing so that it could be rubbed by a foot and not scuff. However, he said that this was only a comment that he made from his experience (which it would appear he still believes to be true). He denied giving any advice on the choice of the base or top surface and did not resile from his assertion that he told Mrs Craike that he had no expertise in the surface levels of arenas.

[75] I accept Mr Tilsley and Mr Watson’s evidence of the exchanges and reject that of Mrs Craike. Mr Stewart Watson gave his evidence in a down to earth manner and appeared to me to have a firm understanding of his own limitations. I believe that he would not have made an assertion about an appropriate surface for the arena unless he believed he had the expertise to do so. Given the level of his experience I

have no doubt that he indicated to Mrs Craike that he could not give her final advice on the surface area.

[76] As to Mr Tilsley’s evidence, for the reasons I have already given I have found Mr Tilsley to be a reliable witness. It is entirely understandable that an earthworks engineer would not necessarily have expertise on how to lay the surface of an equestrian arena. Having seen Mr Tilsley I would expect that in the course of any discussion about such a surface he would have made his lack of expertise clear, as he asserts that he did.

[77] This is consistent with Mr Tilsley’s account of the work he would do in his letter of 7 September 2007. He did not state in that letter that he would have any responsibility for the surface area of the arena. His observation about how a GAP7 base course would set like a road surface before sealing may have been correct; certainly no expert evidence was adduced to have shown that opinion was wrong. More importantly, he made it clear he had no expertise in this type of surface. His evidence is corroborated by Ms S Watson.

[78] As against this, having heard Mrs Craike give her evidence, she strikes me as the sort of person who does impose her views when she thinks they are right and that she would have taken charge in this area and not relied on the views of others. I consider that she was not entitled to rely on Mr Tilsley as an expert on the issue of the arena surface and further that she chose to rely on her own judgment in deciding how it should be constructed.

[79] Thus I conclude that there was no negligence on Mr Tilsley’s part in relation

to the arena surface.

The arena drains

[80] The plaintiff claims that there were failings in the construction method of the eastern part of the main outdoor arena. Those failings were:

(a) insufficient form;

(b) scarring as a result of ponding; and

(c) inadequate amounts of subsoil drainage to deal with the accumulated water.

[81] I accept that Mr Tilsley was responsible for the day to day supervision of earthworks and stormwater works, and that this would have included the subsoil drainage to the outdoor arenas. I also accept that it has been shown that there was scarring and erosion on the surface in question.

[82] The plaintiffs’ expert engineer, Mr Mitchell, accepted that if there had been adequate drainage put in place under the arena then this was likely to have relieved the problem. However, no such drains were constructed.

[83] It was asserted for Mr Tilsley that Mr Mitchell of T & T Drainage Ltd was the expert on drainage and in charge of the drains. Mr Tilsley accepted in his evidence that there should have been drains put in place. However, he asserted Mrs Craike declined to accept his advice that drains should be put in place. Her reason was that she believed there was a risk that the horses’ hooves would penetrate down into the drains and that the horses would be hurt. She was not prepared to take this risk. She wanted the water to shed to the outside perimeters of the arena with the assistance of a one degree slope that had been built into the arena. Mr Tilsley deposed that he told Mrs Craike that this would not work, and that some drainage was necessary. He said in this evidence that no level of fall could have in itself provided adequate drainage. However, Mrs Craike was adamant that she did not want internal sub-surface drains.

[84] Mrs Craike did not accept that such advice was given by Mr Tilsley.

[85] I prefer Mr Tilsley’s evidence to that of Mrs Craike. For the reasons already given I have found him to be a credible witness. On the basis of his evidence, and indeed that of the plaintiffs’ expert Mr Mitchell, it was a basic requirement that there should be sub-surface drains. I would have expected Mr Tilsley to have recommended that they be put in place, and accept his evidence that he did so. As I have found, Mrs Craike had her own very firm views on what should happen and I

find that she was not prepared to follow Mr Tilsley’s advice placing faith on her own judgment. Mr Tilsley could do no more than offer his advice. It was rejected. Mrs Craike has no complaint. This ground of claim also fails.

Miscellaneous slips

[86] The general allegation of scouring to paddocks and drains was given little attention during the trial. However, I accept that this is an allegation in the statement of claim and that it was referred to, although only very briefly, in the course of opening.

[87] The evidence supporting this is a summary by Mrs Craike who says that the drains had failed and had to be repaired. The Craikes were not able to afford to repair them with quality materials and have found the scouring and overflowing debris and ugly appearance embarrassing. Mr Mitchell referred to erosion of access roads, paths and water table drains in his evidence, although that evidence does not appear to correlate exactly with that relied on by Mr Woods when he summarised Mrs Craike’s evidence. In Mr Mitchell’s summary he refers to erosion of access roads, paths and water table drains, and erosion of the main access path from the carpark to the outside arena.

[88] Mr Mitchell sets out in detail the observed defects and the cost to fix. He estimates a remedial cost of $8,000 for the access roads, paths and water table drains, and $20,000 for the main access path from the carpark area to outside the arena. His evidence has not been contested. The engineer called for Mr Tilsley, Dr Peter Goldsmith, did not deal specifically with various items of alleged failure.

[89] I am unable to conclude that the existence of these defects means that Mr Tilsley as the project manager of the earthworks should have to pay for them to be fixed. The onus is on a plaintiff to prove that a negligent defendant has caused the loss claimed. Mr Tilsley did not put in the drains, paths and roads to which I have referred. He was the project manager. He is not the guarantor of the quality of the works. There is no doubt that this was a difficult site and it seems likely that the Watsons did all the work that has subsequently failed. The Craikes have settled with

the Watsons. I am not clear as to what part of the settlement relates to these defective works. There is no evidence pointing to any particularly supervisory fault on Mr Tilsley’s part in relation to those works. It has not been shown that there were discernible errors by the Watsons that Mr Tilsley should have in some way prevented. There is no attempt to correlate what Mr Mitchell says about these works and what Mrs Craike says. I do not have evidence as to anything that Mr Tilsley could have done to have prevented those defects.

[90] I am not therefore satisfied on the balance of probabilities that Mr Tilsley was negligent in relation to these defects.

Causation

[91] While I have found that there was no liability on the part of Mr Tilsley for the acts which led to the alleged loss of $1,175,000, I nevertheless go on to consider the issues of causation and the quantum of damages. The ultimate question as to compensatory damages is whether the particular damage claimed is sufficiently linked to the breach of the particular duty to merit recovery in all the circumstances.4

Assuming liability on the part of Mr Tilsley as pleaded, it is still necessary to show

that his breach of contract or negligence has caused the loss or materially contributed to it. I now consider whether the various alleged negligent actions in breach of contract caused loss.

[92] In the absence of any specific evidence as to loss, I move on to consider whether the claimed loss on sale of $1,175,000 was caused in whole or in part by the alleged acts of negligence by Mr Tilsley.

[93] Mrs Craike in her evidence was not specific as to what particular factors forced the plaintiffs to sell. There is no suggestion that the loss of the grass area contributed to the delay in opening the equestrian centre to 9 November 2008, and the loss of revenue in the winter months. The primary cause of the delay was the

_{failure of Prestige to complete the indoor arena.}

4 McElroy Milne v Commercial Electronics Ltd [1993] 1 NZLR 39 (CA) at 41.

[94] In his evidence the plaintiffs’ accountant Mr Periam stated that the total expected costs for the improvements to the land and buildings were, prior to the commencement, self-assessed by Mrs Craike at approximately $1 million. The bank lending and borrowing which accumulated through the course of the construction was in fact $1,600,000. He inferred that the cost overruns in relation to the project and that its delayed start resulted in greater term loans than were budgeted. There is no evidence that Mr Tilsley contributed in any way to any cost overruns or the delayed start.

[95] Mr Periam went on to observe that the loss of income due to the inability to use facilities, the loss of profits due to the delayed opening and “grazing and livery deductions” and the magnitude in nature and size of the defects outweighed the cost overrun as the operative cause of the business failure. I find this observation difficult to reconcile with the evidence he puts forward in support of it. In fact he gives no hard evidence of income loss resulting from alleged defects.

[96] Mr Tilsley called an experienced accountant, Mr Goodall, who reviewed the evidence of Mr Periam. He found that there had been total losses incurred between

2007 and 2011 of $974,501. Interest on borrowings totalling $462,919 were a substantial component of those losses. He noted that the expenditure projections that had been prepared by Mrs Craike at the outset for the Craikes’ bank, the Bank of New Zealand, did not include either interest or director/owner remuneration. Mr Goodall adjusted Mrs Craike’s calculations in relation to the business and noted a projected annual surplus of $116,472 before borrowing costs and owner remuneration. The conclusion he drew was that the equestrian venture was never going to be a viable business given the extent of borrowing whether it was looked at from the perspective of either the Craikes personally or from the perspective of the company Showfields Equestrian Centre Ltd, or indeed both.

[97] Mr Goodall also considered whether the business would have had value selling it as an equestrian going concern at a value in excess of the underlying property. He noted that, given an accurate projected overall profitability for the business, at best it was only going to return a wage equivalent income for time spent working on the business. There was no prospect of an investment return beyond this.

Even if the realistic projected income and expenditures had been achieved, he did not believe that the business and property could have been sold at a price that would result in any value being attributed to goodwill.

[98] I accept Mr Goodall’s evidence, which I find to have been based on sound analysis of the accounting material available, and the realities of the relevant market. The evidence showed that the business was considerably under-capitalised from the outset. This is why Mrs Craike did not retain a firm of consulting engineers such as Tonkin and Taylor to be the overall project managers and engineers for the development. This led to her taking shortcuts involving the contracting of Mr Tilsley on a limited basis. This is a reason why she personally supervised aspects of the work, in particular the building of the arena.

[99] These economies in turn led to construction problems and ultimately cost overruns. They were false economies. Given the borrowings that the Craikes were forced to incur and the interest that had to be paid, the projected level of profitability in the equestrian centre was not sufficient to provide a market rate of income to Mr and Mrs Craike. There was simply never going to be a sufficient revenue stream to meet the costs of the development.

[100] I also accept that the income projections of Mrs Craike were optimistic. There was no detailed business plan put forward by her. The location was awkward, being away from the major population centres of Auckland and Hamilton. It would inevitably take some years to develop a reputation.

[101] Also, on an overview I consider that the site in itself was far from ideal for a significant equestrian centre. There was a shortage of flat land and this in turn led to Mrs Craike insisting on filling the grass area.

[102] It would seem that the land was not ultimately sold as an equestrian centre and is not being used as such a centre at present. This is some further corroboration of Mr Goodall’s evidence that the business was always doomed to fail as an equestrian centre.

[103] I conclude that the business was inevitably going to fail unless there was significant outside capital injection. None could have been rationally expected, or was forthcoming. I find that the failure of the business arose from an inevitable shortfall between income and expenses. This led to the bank placing the property on the market in January 2010 and ultimately selling it in November 2011.

The grass area

[104] Mrs Craike’s evidence was that the subsidence in the grass area meant that the plaintiffs were unable to even consider carriage dressage shows. This meant the loss of a revenue stream. She gave no evidence as to what income could have been expected from carriage dressage shows. Mr Craig Periam, the accountant called for the plaintiffs, did not endeavour to quantify the impact of the slips in the grass area on the business.

[105] Further, the failure of the grass area did not result in the property being less than it might otherwise have been worth. The valuer called by the plaintiffs, Mr Andrew Hopping, inspected the property on 24 April 2007 and provided a valuation of current market value of $1,050,000 and, if completed as an equestrian centre, $2,250,000. A further valuation certificate was provided to the Bank of New Zealand on 7 August 2008 valuing the property at $2,100,000 and the current market value, if complete (plus GST if any) at $2,575,000. He received further instructions from the bank and inspected the property on 27 January 2010. A further valuation was prepared as at January 2010 assessing the market value of improvements and land value (plus GST if any) to be $2,700,000. In the 7 August 2008 and 20 January

2010 calculation he made no mention of the slippage that had taken place in the grass area. He made no deduction for such slippage.

[106] It must be assumed, given Mr Hopping’s inspections of the property and the severe slipping after his first inspection, that he was aware when he did his valuations of the slip but did not consider it a relevant factor in valuing the property.

[107] In his valuation presented to the Court he carried out an assessment of the loss of value in relation to the warm-up area. He noted that the area involved was

approximately 7200 square metres and that it was not useable. He valued it on a per hectare basis, at a loss in value of $50,000. He also noted in Mr Mitchell’s report that he estimated the cost to rectify the loss of the grass area and replacing the land at

$300,000.

[108] Given Mr Hopping’s failure to mention any such loss in his valuations at the time, I can place little weight on his later evidence on the point. He has just recounted another expert’s figures.

[109] Mr Tilsley also called a valuer, Mr Peter Bennett. He valued the property on

18 June 2012 at $2,782,400. In his valuation he put forward no basis for any deduction for any slippage to the grass area. He was of the view that the price achieved on 22 November 2011 of $1,525,000 represented a fair market value at the time of the property. Mr Bennett considered the slip to the grass area to be insignificant in relation to the total property.

[110] It is my conclusion that the slip to the grass area did not in any material way effect the value of the property. The equestrian centre failed for reasons not connected to any of the defects that have been attributed to Mr Tilsley’s negligence. Moreover, even if Mr Tilsley had been negligent in relation to those defects, they did not devalue the land on the basis on which it was ultimately sold.

Arena surface

[111] There is no evidence that some base course material in the sand on the arenas might irritate horses’ hooves to the extent that it affected the value of the property as an equestrian centre. Indeed, Mr Hopping agreed that such a factor could be completely irrelevant.

The arena drains

[112] Again, there is no evidence that the occasional flooding in the arenas was a material cause of loss of income or any way devalued the property. I am not satisfied this defect was a cause of loss.

Miscellaneous slips

[113] Again, there is no evidence that the miscellaneous slips were a material cause of loss of income or any way devalued the property. I am not satisfied these defects were a cause of loss.

Actual costs to create working areas

[114] Mr Mitchell estimated $300,000 was a reasonable cost of creating a grass area with retaining walls and all necessary engineering features. In the absence of any evidence to the contrary I accept that this was so. There were also estimates of

$81,500, $17,500 and $58,000 for replacing the sand arena bases in the various arenas. There was an estimate of $8,000 to provide for drainage to stop pooling to the outdoor arenas.

[115] None of these figures were challenged in any specific way by Mr Tilsley and none of them appear to me to be unreasonable. However, to make findings that Mr Tilsley is liable for such losses it would be necessary to have found him first negligent, and second that that negligence was causative of loss. Given that Mrs Craike most definitely would not have proceeded with filling the grass area if she had to pay the cost of doing it properly, Mr Tilsley cannot be made effectively the guarantor of a working functioning gig area.

[116] In relation to the sand arena base and the pooling, I accept that if Mr Tilsley had negligently carried out his duties and should have ensured that the surface areas and drains were properly constructed, then the reinstatement costs in relation to those areas have been proven.

[117] Given my findings in relation to causation it is not necessary to go on to consider the further submissions made by the defendants that damages would be too remote. I do not necessarily accept, however, that financial vulnerability on the part of the Craikes would not be reasonably foreseeable.

Quantum of loss

[118] The valuers are not far apart on the value of the property as a going concern equestrian centre as at January 2010 at $2,700,000 (Mr Hopping), or $2,782,400 (Mr Bennett). However, both valuations assumed full development of the property as an equestrian centre and a full utilisation of it as such. Neither valuer made any attempt to assess whether in fact it was realistic to consider that the equestrian centre could have been viable even if properly capitalised, given its remote location half way between Auckland and Hamilton.

[119] I do not have to reach a final conclusion on this point, but I must record that I am not satisfied that the plaintiffs have proven that the $2,700,000 figures accurately recorded the value at January 2010, even if the equestrian centre had been fully functioning. In fact the centre never fully got going and there was no expert called from the horse industry to say that it might have done so. I am left unsatisfied in relation to this aspect of the claim and record that the plaintiffs have not proved their case on the point.

Contributory negligence

[120] In the circumstances and given my findings that there was no negligence by Mr Tilsley and that Mrs Craike was responsible for the failings that she seeks to place on Mr Tilsley, it is not necessary to consider contributory negligence.

Other claims

The alleged $70,000 overpayment (para 24(b) of the amended statement of claim)

[121] This claim is particularised by asserting in the statement of claim that the Watson defendants had overcharged the plaintiffs for their time and costs, and specifically charged the full cost of an employee who was in fact disabled, charged twice, and on occasion three times (for the same work), and charged for work that was incomplete or not completed with reasonable care and skill, or otherwise charged unreasonably.

[122] It is surprising that this claim was pursued at all, given that there is no evidence put forward to support these assertions, save for an odd general reference. It is not clear that there was any overcharging at all by the Watsons. Certainly this has not been proved to the requisite standard. But even if it had, it has not been shown that Mr Tilsley can be regarded as negligent in certifying those payments. There is simply no evidence on the point of what a competent supervising project manager of earthworks should have done, and Mr Tilsley cannot be regarded as a guarantor to the accuracy of all claims.

[123] Finally, it must be observed that the Craikes have settled with the Watsons. I was not given detail as to what the settlement was for in a specific way, save for a reference to the settlement agreement and the amount of the settlement. It can be assumed that any double claim by the Watsons was refunded in the settlement. This would mean that there was no loss to claim against Mr Tilsley.

[124] I note that Mrs Craike acknowledged in her evidence that she could not provide a full and complete reconciliation of the payments that she had made to the Watsons. In fact, she said that the overpayment was “estimated to be at least

$50,000 and more likely $70,000”. This uncertainty is an indication of the unsatisfactory nature of this claim. It has not been proven.

[125] In support of this head of claim, in a short supplementary submission, reference was made to various portions of the first parts of the evidence supporting the claim, without elaboration. I do not propose going through these references one by one. The task has been done by the defendants in their submissions who show that the references do not support the claim. There is nothing in the references that prove this head of claim.

The alleged $10,486.13 overpayment (para 24(c) of the amended statement of claim)

[126] The plaintiffs alleged that Mr Tilsley breached the project management contract in erroneously approving payment to Prestige Engineering Ltd for stage three, and “... specifically the supply and installation of girts and braces” when stage three was not completed. There is no doubt that Mr Tilsley was asked by Mrs Craike

to approve payments for the construction of the indoor arena and did approve this particular payment. The allegation appears to be that he should have checked that the girts and braces had in fact been installed prior to the approval of the payment.

[127] However, in relation to the alleged overpayment Mr Tilsley stated in evidence that he did not know that Mr and Mrs Craike had already advanced Prestige some

$90,000 on 3 June 2008. He therefore did not have the information available to him to ascertain whether there had been in fact a double payment.

[128] Mr Tilsley’s preferred option was that Mrs Craike made no payment at all. Under cross-examination Mrs Craike advised that she had no option but to pay Prestige because he would cease work if the payment was not made. Mr Tilsley was only involved as an engineer and not as an accountant, and the plaintiffs have not shown that he was negligent.

Other claims

[129] I record for the sake of completeness that there is also a claim in the statement of claim for $41,261 for a loss of profit measured during the period commencing March 2008 and ending November 2009. For all the reasons that I have already given, no such loss of profit arising from anything done by Mr Tilsley has been proven. Moreover, this figure of $41,261 has not been substantiated by any evidence.

[130] The claim for general damages of $30,000 also fails, although if the Craikes had proved their claim for significant losses, some award for general damages was a possibility.

The parties

[131] I received some submissions from the defendant about how the first plaintiff could not claim for the losses of the second plaintiff. It is not necessary to carry out an exercise of analysing what losses, if any, could be claimed by the first and second plaintiffs given the findings already made on liability, causation and quantum.

Result

[132] The plaintiffs fail on all their causes of action against the first defendant, and judgment is entered for the first defendant.

Costs

[133] The first defendant is entitled to costs which I fix at a 2B basis. In case a party wishes to seek some other award of costs, this order is conditional on there being no submission filed by any party in relation to costs within 14 days. If submissions are filed, then the issue of costs will be addressed on its merits.

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Asher J