FEDERAL COURT OF AUSTRALIA

 

Baulderstone Hornibrook Pty Ltd v Qantas Airways Ltd [2003] FCA 174

CONTRACT –offer – conditional acceptance – withdrawal of condition – objectively determined – building contract – right of access – access restricted to enable other works to be concluded – claims for extension of time – certificate granting limited extension – circumstances in which certificate is invalid – duty to act impartially – whether implied term

TRADE PRACTICES – misleading conduct – building contract – provision of works program – whether timetable in works program misleading – description of works in tender material – whether description misleading

Federal Airport Corporation Act 1988 (Cth)

Trade Practices Act 1974 (Cth) ss 52, 82

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 applied

Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 applied

Beaufort Developments (N.I.) Ltd v Gilbert-Ash N.I. Ltd [1999] 1 AC 266 cited

FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 cited

Freeman and Son v Hensler (1900) 64 JP 260 cited

Gaymark Investments Pty Ltd v Walter Construction Group Ltd (1999) 16 BCL 449 referred to

G R Securities Pty Ltd v Baulkman Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 applied

Hickman & Co v Roberts [1913] AC 229 cited

Hotchkiss v National City Bank 200 287, 293 (SDNY 1911) aff’d 201F 664 (2^nd Cir 1912), aff’d 231 US 50 (1913) applied

James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 cited

KBH Constructions Pty Ltd v PSD Development Corporation Pty Ltd (1990) 21 NSWLR 348 cited

Masters v Cameron (1954) 91 CLR 353 cited

Minster Trust Ld  v Traps Tractors Ld [1954] 1 WLR 963 cited

Morrison-Knudsen International Company Inc v Commonwealth of Australia (1972) 46 ALJR 265 cited

Perini Corporation v Commonwealth of Australia [1969] 2 NSWR 530 applied

Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 cited

Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 cited

Parkinson (Sir Lindsay) & Co Ltd v Commissioners of His Majesty’s Works and Public Buildings [1949] 2 KB 632 distinguished

Smith v Chadwick (1884) 9 App Cas 187 cited

Turner Corporation Limited (Receiver & Manager Appointed) v Austotel Pty Limited (1994) 13 BCL 378 cited

Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284 cited

Young v The Ballarat and Ballarat East Water Commissioners (1879) 5 VLR(L) 503 cited

17A Am Jur 2^nd “Contracts”

5 Corbin on Contracts (1998)

Pickavance, Delay and Disruption in Construction Contracts 2^nd (2000)

Uniform Commercial Code § 2-208

11 Williston on Contracts (1999)

BAULDERSTONE HORNIBROOK PTY LTD v QANTAS AIRWAYS LIMITED

 

V 643 of 1999

 

 

 

FINKELSTEIN J

11 MARCH 2003

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 643 of 1999

 

BETWEEN:	BAULDERSTONE HORNIBROOK PTY LTD Applicant
AND:	QANTAS AIRWAYS LIMITED Respondent

 

JUDGE:	FINKELSTEIN J
DATE:	11 MARCH 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1                     This dispute arises out of a building project known as the Domestic Infrastructure Terminal Development.  The parties to the dispute are the contractor, Baulderstone Hornibrook Pty Ltd (“BHPL”), which is the applicant, and the owner, Qantas Airways Limited (“Qantas”), the respondent.  In his opening Mr Hayes QC, who appeared for BHPL, described the dispute as “a simple case with difficult facts”.  It was only at the conclusion of the trial that I came to appreciate the correctness of this statement.  Before then I was of a contrary view.  The pleadings had been amended many times.  The trial occupied nineteen days, often with extended sitting hours.  BHPL tendered twenty affidavits (which took up three files) and sixteen files of exhibits.  Qantas was not outdone.  It tendered two lever arch folders of affidavits and eight files of exhibits, many of which were copies of BHPL’s exhibits and, to make matters worse, there was no mechanism to identify which were duplicates.  It turned out that much of the evidence put in by each side was irrelevant to any fact in issue and should never have been tendered.  Had the evidence been given orally, the length of the trial would have been substantially reduced.  The same comment can be made about the exhibits.  Hundreds of pages were never referred to by counsel.  The parties seem to have assumed that it was my task to read all the material and make such use of it as best I could.  At the outset of this judgment I wish to record that I have done no such thing.  Although I did read most exhibits (including records of meetings, diaries and albums of photographs) I could not understand all the terminology and abbreviations employed by the authors of the documents, and the relevance of others simply escaped me.  To a substantial extent, therefore, I have only considered those exhibits to which I was taken by counsel, although I have no intention of reviewing the voluminous evidence in detail.  At some later point it will be necessary to determine whether the parties’ solicitors are entitled to pass on the costs that should never have been incurred in trial preparation.  My present task is confined to deciding whether BHPL has a good claim in damages against Qantas.  If it has, then by previous order the assessment of those damages will be dealt with at a later hearing.

2                     The claim arises in this way.  Qantas holds a long term lease of premises at Melbourne Airport known as the Qantas Domestic Terminal.  Initially the lease was with the Commonwealth.  Later, the Federal Airport Corporation, a statutory corporation, became the lessor pursuant to the provisions of Federal Airport Corporation Act 1988 (Cth).  During the currency of the project Melbourne Airport was privatised and Australian Pacific Airports (Melbourne) Pty Ltd (“APA(M)”) took over the operation of the airport under a long term lease from the Commonwealth.  As a result the operator is sometimes referred to as FAC and at other times as APA(M).  I will usually refer to it as FAC.  At various times during the currency of the lease Qantas extended or carried out improvements to the terminal.  This dispute is concerned with extension work referred to as Domestic Terminal Development Stage 3.  The extensions involved the following work:  the construction of an extension to the existing terminal building; the construction of a new valet car park; and the construction of a new concourse (sometimes referred to as a finger) extending out onto the airport apron area for parking aircraft.

3                     To accommodate the new development the lease required FAC to build a new apron (tarmac) and taxiways in the area of the new finger and to carry out associated works.  It is necessary to mention two aspects of these works which are at the heart of this dispute.  There is a road, which is referred to as an airside road, running approximately east to west along the northern boundary of the Qantas lease area.  It was necessary to lower this road so that it would run under the new finger building where it joined the extension of the terminal building.  These works extended approximately 30 metres on either side of the new concourse.  The second aspect concerned the construction of a services tunnel.  There was an existing concrete services tunnel located below the airside road to the west of the new finger.  FAC needed to extend the services tunnel so that it would pass below the Qantas lease area, partly in a south easterly direction and then in a southward direction, until it passed beyond the Qantas lease area and then proceed to a new terminal services building which was also to be constructed by FAC.

4                     I should explain what is meant by an “airside road”.  Every domestic airport has an “airside” and a “landside”.  The airside portion of an airport is a secure area where access to the public is denied.  By way of illustration, the airport apron and taxiways are airside, whereas the terminal building is landside.  There are difficulties associated with works conducted airside that are not encountered with works that are on landside.  One difficulty is the need for all personnel (site staff and workmen) moving airside to hold a security pass and be cleared for entry.

5                     BHPL was engaged by Qantas to construct the extension to the terminal building and the new valet car park and concourse.  FAC engaged Abigroup Contractors Pty Ltd to carry out the works referred to as the TC 30 works package.  Those works included the construction of the services tunnel.  Negri Construction Pty Ltd was engaged to undertake the TC 20 works package which included lowering the airside road.  In due course I will outline the circumstances in which these contracts were let because that is an important issue in this proceeding. 

6                     In this case BHPL’s principal allegation against Qantas is that it engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) for which BHPL seeks compensation and other relief under s 82.  If this claim should fail then BHPL has alternative claims for extensions of time with compensation and damages for breach of contract for delay and disruption.  I propose to deal first with the statutory claim and then turn to the two claims in contract, as they give rise to less controversial issues.

7                     It is convenient to begin the discussion of the s 52 claim by identifying a few of the key participants in the project.  Qantas retained Clifton Project Management & Associates Pty Ltd (“Cliftons”) to provide it with project management services.  Cliftons were appointed on the recommendation of Mr Richards who held the position of Manager Strategic Planning Airports at Qantas, and had control of the project on its behalf.  Cliftons nominated Linton Bullen, one of its architects, to be the initial project manager.  Ian Crawford, who is a building services engineer, was appointed contract administrator to assist Mr Bullen.  Later he took over as project manager.  At BHPL, the key men were Robert Pollard, BHPL’s Chief Estimator, who was in charge of the tender process that led to the engagement of BHPL and Greg Di Blasi, a site engineer, who was in charge of the project.

8                     The project was particularly complex, and the parties had competing interests.  Qantas was anxious to have the first stage of the works completed by December 1998, in time for the increase in traffic which usually occurs over the Christmas period.  It was apparent, however, in view of the fact that works were to be undertaken by both Qantas contractors and FAC contractors, that there would be difficulties.  Qantas and Cliftons accepted that it was necessary to advise the Qantas contractor about the works to be undertaken by the FAC contractors and the need for the various contractors to co-ordinate their works or, as Mr Crawford put it, their need to “co-ordinate and co-operate”.  Because of the inter-relationship between the works to be undertaken by the various contractors, Qantas and FAC thought it preferable that FAC should engage the Qantas contractor to construct the services tunnel under the Qantas lease area.  There is a file note to this effect from Mr Crawford.  To overcome some of the difficulties it was agreed at an early stage that the Qantas works (the new terminal and the concourse) would be landside works.  This topic was discussed at FAC/Qantas Co-ordination meetings.  The proposal was that the Qantas lease area and a small portion of the adjacent airside area would be fenced off so that, according to Mr Crawford, the Qantas project would be a landside development which would then facilitate carrying out the works in that area.  But, as I will show, events did not turn out as planned.

9                     I now turn to the tender process.  Cliftons sent out invitations to tender to seven builders.  BHPL received its invitation on 20 May 1997.  The invitation advised that eleven volumes of documents, including General Provisions (which contained the conditions of tendering), Architectural and General Requirements, detailed specifications and a copy of the proposed Building Works Contract, were available for collection.  The invitation also stated that further documents would be issued during the tender period including “Staging/Sequencing drawings”.  BHPL collected its documents and, over the next few weeks, it was provided with additional information some of which revised or replaced earlier material.  On 29 May 1997 Cliftons sent the staging drawings to BHPL.  The staging drawings show the staging requirements for the works.  According to Mr Di Blasi these drawings indicated:  the location of the services tunnel; the location of the lowered airside road; the site hoardings to the east along grid 74; that access to the site was from the south east corner and this access was shared with Qantas for access to its new valet car park; the extent of the area of the existing valet car park that would remain unavailable until relocation of the valet car park; the location of the hoarding lines separating landside and airside and the position of the proposed route for baggage tugs.  All of the tender material went to Mr Di Blasi.

10                  The General Provisions, the Architectural and General Requirements and the proposed Building Works Contract contains terms which are relevant to the determination of BHPL’s statutory claim, as well as to its claims in contract.  This is a convenient point at which to mention them.  In the first instance I will go to the conditions of tendering set out in the General Provisions.  The following conditions are relevant: 

“1.5     Request for Information

All requests for information regarding the documentation and the arrangements for site inspections shall be referred to the Project Manager:

Clifton Project Management

Attention: Lynton Bu1len / Ian Crawford / Helen Robertson

ph:       (03) 94160995

fax:      (03) 94160897

1.9       Tenderer to Acquire Information

It is the responsibility of Tenderers to obtain the information necessary for the submission of a Tender conforming with the Tender Documents.

Tenderers should request in writing from the Project Manager any clarification of any matter or thing in the Tender Documents which they may find unclear or uncertain.  Should then the Project Manager consider it desirable to do so an Addendum shall be supplied by the Project Manager to all the Tenderers clarifying such matter or thing.

The Project Manager may, upon the request of any Tenderer, supply extra copies of any of the Tender Documents at the extra cost of reproduction and handling and any extra copies so supplied shall be returned by the Tenderer with the Tender Documents.

The Tenderer has been nominated to inspect the site on the time and date advised in the ‘Invitation to Tender’ letter.  The Tenderer must accompany all sub-Builders and suppliers on site inspections.”

1.15          Builder’s Tender

The Builder’s tender is to include the following:

            (a)        …

(b)               Indicative Construction Program.

(c)                …

 

1.17     Assessment of Tenders

(a)        Assessment

Assessment of tenders will be based on but not limited to the following:

(i)         Financial capacity to handle project.

(ii)               Past performance record.

(iii)       Experience in similar type of work.

(iv)       Proposed management, construction and quality.

(v)        [sic]

(vi)       Outline construction programme.

(vii)      Proposed working hours and days.

(viii)     Demonstrable understanding of the intention of the project delivery method.

(ix)       Trade costs breakdown.

            (b)        Generally

                        If the tenderer wishes to change the procedures outlined or inferred in this  document he should state so in his tender, together with any cost implications.

                        The Project Manager shall acknowledge receipt of the Builder’s tender.

                        The Client shall notify the successful Builder in writing of the acceptance of its tender in the form of a Letter of Acceptance as soon as possible after acceptance and despite any other communication or correspondence whatsoever the tender shall not be taken to be accepted until a Letter of Acceptance duly signed by the Principal has been given to the Builder.

                        The successful Builder shall execute the contract within fourteen (14) days of:

            (i)         the acceptance of the tender; or

            (ii)        if the Contract requires any amendment before it is signed, the date that the amended Contract is given to the successful Builder by the Project Manager.

                        Without affecting the Builder’s obligation until the Contract is signed by both parties, the tender lodged by the successful Builder and the Project Manager’s Letter of Acceptance shall constitute a binding contract between the parties for the carrying out of the work under the contract in accordance with the contract.

1.19    Acceptance of Tender

            Qantas Airways Limited shall not be bound to accept the lowest or any Tender, or designate or nominate any Tenderer.

 

            A Tender shall not be deemed to have been accepted unless and until notice in writing of such acceptance shall have been given by Qantas Airways Limited to the selected Tenderer and such acceptance may be expressed to be qualified or unqualified.”

11                  The Architectural and General Requirements contain a number of important provisions.  The scope of the works is described in cl 1.1 in some detail.  Clause 2.4 deals with “site access”.  It provides that “access, on to and around the Site, shall be as shown on the Drawings and/or as approved by the FAC, Qantas and Project Manager.”  An important provision is cl 6.2 which deals with the “Co-ordination of FAC works”.  It provides:

“The FAC will be constructing apron infrastructure works during the building works which includes apron regrading, drainage works, extending the services tunnel to connect with the existing tunnel, fuel hydrant system and apron repair.  The FAC will also be extending the existing elevated road and reconfiguring the ground level road network.  The FAC will also be building a new Terminal Services Building which will provide chilled water, high temperature hot water and stand-by power to the Qantas building through an underground services tunnel which will run under the existing and new road works and also under the new Qantas car valet area.  (This part of the work will be co-ordinated by the Builder).  The Builder is to co-ordinate his works with the FAC works both airside (inside the airport security fence) and landside (outside the airport security fence and the Qantas lease).

·        The FAC will be installing the services tunnel shown on the engineers’ Drawing for FAC Works and will be essentially each side of the Qantas lease both landside and airside.  These drawings will be made available for coordination and pricing during the Tender period.  The tunnel works inside the lease is to be co-ordinated by the Builder.

·        The FAC will be upgrading the apron generally in accordance with the engineers’ Drawings. These drawings will be made available for coordination during the Tender period.  The FAC works will extend to three sides of the new Qantas finger building, under the finger building/terminal building connection and to the north of the new finger.  The FAC will be lowering a section of the airside road below the new Qantas finger building.

·        The FAC will be extending the elevated road system generally in accordance with the engineers’ Drawings.  These drawings will be made available for coordination during the Tender period.

·        The FAC will be reconfiguring the existing ground level road network generally in accordance with the engineers’ Drawings.  These drawings will be made available for coordination during the Tender period.

·        The existing JUHI fuel line will be altered to include additional lines around the Qantas finger outside the lease line under the FAC apron works.  The location of the JUHI fuel lines is generally shown on Drawing No. 77862 - Development Layout, Domestic Terminal Aircraft parking.

Allow for co-ordination with the FAC, their contractors, JUHI and other airport contractors or personnel that may require reasonable access to and through the Qantas site.”

 

12                  Turning to the draft Building Works Contract, reference should be made to the following provisions.  First, there are the builder’s acknowledgements in cl 1 which includes the following:

“The Builder acknowledges and agrees that the design of the Works is incomplete [cl 1.02.04] and that ‘the work described in the tender documents maybe substantially different from the work described in the For Construction Remeasured Documents’ [cl 1.02.05].”

Clause 1.03 imposes certain obligations on Qantas with regard to access:

“1.03.01          Subject to the provisions of this Agreement including, Clause 3.04 and paragraph 1.03.02, Qantas shall give the Builder sufficient access to the Site on or before the Date for Access to enable the Builder to commence the Stages and thereafter to proceed with the Works and shall, in consideration of the Builder carrying out his obligations under this Agreement, pay to the Builder the Contract Sum in accordance with the provisions of this Agreement.

1.03.02            Should any delay take place in giving the Builder access to the Site, any such delay, whether substantial or otherwise, shall be deemed not to constitute a breach of contract but shall be an event entitling the Builder to claim an extension of time for Practical Completion of the particular or affected Stage or Stages.  The Builder’s entitlement to an extension of time shall be subject to compliance by the Builder with all of its obligations under Clauses 9.01, 9.02, 9.04 and 9.06 of this Agreement.  Access to the Site shall confer on the Builder a right only to such use as shall be necessary to enable the Builder to commence and proceed with the Works in accordance with this Agreement.”

Clause 3.04, which is referred to in cl 1.03.01, provides:

“The Builder acknowledges that it has limited and restricted access to the Site and that in the execution of the Works it must co-ordinate the Works and access to the Works with the FAC Civil Works, the FAC Other Works, the work of Separate Contractors and the requirements and operations of JUHI.”

This takes us to the following definitions:

“1.06.18          ‘FAC Obligations’ - means the obligations, responsibilities and requirements in connection with the FAC Civil Works which are described in Schedule 13.

1.06.19            ‘FAC Other Works’- means the works which, subject to clause 15.32, at the date of this Agreement do not form part of the Works and are described in Schedule 10.”

Schedule 10 is as follows:

“SCHEDULE 10

FAC OTHER WORKS

(Clause 1.06)

(1)   Apron infrastructure works including apron regrading, drainage works, extending the services tunnel to connect with the existing tunnel, fire hydrant system, apron repair and the reconfiguration of the JUHI fuel line including additional lines;

(2)   The extension of the existing elevated road and reconfiguring the ground level road network;

(3)   The construction of a Termina1 Services Building 2 complete with all plant and equipment necessary to provide chilled water, high temperature hot water and stand-by power to the Qantas Domestic Terminal Redevelopment Stage 3 project via an underground services tunnel which will run under the existing and new road works and also under the new Qantas car-valet area;

(4)   The supply, installation, and connection of all HV reticulation and equipment necessary to support the Qantas Domestic Terminal Redevelopment Stage 3 project;

(5)   The supply, installation and commissioning of a Building Management System to support the mechanical plant, including chillers and boilers, and relevant electrical services including standby generators;

as may be more fully described in the Contract Documents.”

“Site”, which is also referred to in cl 1.03.01, is defined in cl 1.06.45 as:

“The lands and other places to be made available by Qantas to the Builder for the purposes of this Agreement and as more specifically defined in the Schedule 1.”

13                  Turning to operative parts of the Buildings Works Contract the following provisions should be noted: 

“2A.O1The Builder agrees to assume all of the risk of or connected with having any part of the Works executed on the basis of anyone or more of the Tender Documents or the For Construction Drawings.  The Builder is not entitled to make any claim of any kind at all against Qantas as a consequence of any error or inaccuracy in or omission from or incomplete aspect of anyone or more of the Tender Documents or the For Construction Drawings.

3.02A  By entering into this Agreement, the Builder shall be deemed to have and further warrants that he has:

3.02A.O1         examined carefully and acquired actual knowledge of the Contract Documents together with the Tender Documents, any schedules, reports, information relating to contaminated soil, asbestos and geotechnical characteristics of the Site and conditions of tendering, the soil report and other documents, and any other information available to the Builder or made available to the Builder for the purpose of tendering whether by Qantas, the Project Manager or otherwise; and

3.02A.02          examined all information relevant to the risks, contingencies and other circumstances having an effect on his tender and which is obtainable by the making of reasonable enquiries; and”

Further “Builder’s Acknowledgments” are set out in cl 3.02B.  Here the builder acknowledges and agrees that:

“3.02B.01       Qantas and the Project Manager and their agents, employees, consultants and representatives shall not be liable whether in contract, tort (including negligence) or (to the extent legally possible) pursuant to any other principle of law or equity (including restitution or unjust enrichment) or under any statute or otherwise for any information provided to the Builder or for any errors or omissions contained therein or for any failure to provide any information to the Builder;

3.02B.02          the Builder did not in any way rely upon any information referred to in paragraphs 3.02A.O1 [the contract documents and the tender documents], 3.02A.O2 [information relevant to sites which is available on reasonable enquiry], 3.02B.O1 [the site and its surrounds] or 3.02D [information supplied by Qantas] or any other information which may have been provided to the Builder by Qantas or by any of the other parties referred to in paragraph 3.02B.O1 [relevantly the project manager] for the purposes of entering into this Agreement and that all such information is not guaranteed and was provided for the Builder’s convenience only;

3.02B.O3         the Builder enters into this Agreement based on his own investigations and determinations and has used its own endeavours and efforts to verify the accuracy of all information relied on by the Builder which does not form part of this Agreement.”

 

There is an obligation to provide access to FAC contractors in cl 3.07: 

“The Builder shall at all reasonable times allow adequate access to the Site and to the Works to Separate Contractors as defined in Clause 7.01 and to their assistants and workers.”

Clause 3.09 also relates to access.  It provides: 

“By entering into this Agreement, the Builder shall be deemed to have made arrangements for any access to or over or under or upon or for use of any adjoining site or property which he may require for any purpose other than the execution of protection work under the provisions of Clause 3.08 and hereby accepts liability for and indemnifies Qantas and holds it harmless in respect of any consequences thereof including, without limitation, any loss, expense or damage suffered or incurred by Qantas directly or indirectly, as a result of any such use of any adjoining site or property or of any failure on the part of the Builder to make such arrangements for access.”

More builder’s acknowledgments are found in cl 15.10.  They include these acknowledgments:

“15.10.01        The Builder acknowledges that during the execution of the Works and prior to Practical Completion of the Stages, work may be carried out by other contractors (“other contractors”) on or adjacent to the Site including the FAC Other Work, work to be carried out by or on behalf of JUHI, work carried out by or on behalf of Glidepath and work carried out by other Separate Contractors.  The Builder must fully co-operate with the other contractors and the Separate Contractors and must take all necessary steps and comply with all reasonable directions of the Project Manager where those steps or directions are necessary to avoid impeding the work of these other contractors and Separate Contractors and any other person performing work for Qantas on or adjacent to the Site and ensure that damage is not caused by the Builder to the work carried out by those other contractors and Separate Contractors.

15.10.02          The Builder shall also co-operate with the other contractors, Separate Contractors and any other persons engaged by Qantas in co-ordinating the provision of emergency services, security services and any other matter relating to the Works including the Works within any Stage and other works on the Site.  Without limiting the application of Clause 15.18, the Builder must avoid and minimise any industrial dispute or action, including any delay which may arise or be caused by the presence, participation or otherwise of Qantas and/or the other contractors, Separate Contractors and their servants and agents on or adjacent to the Site or in the execution of the Works.  The Project Manager shall at all times have the sole right to control, exclude, remove or otherwise deal with all persons upon the Site or persons seeking to enter the Site.”

14                  This brief survey demonstrates that a contract entered into by the contractor would be heavily weighted against it.  It contemplates that the contractor, rather than the owner, will assume most of the risk associated with the project.  This was of concern to BHPL.  It provided a copy of the proposed contract documents to its solicitors, Mallesons Stephen Jaques, with the request that the firm review BHPL’s risk should it enter into the contract.  Mallesons provided its advice on 7 July 1997.  The advice noted that “the Agreement has been drafted for Qantas and therefore weighs heavily in favour of Qantas and for this reason you will find most of the clauses assign risk to the Builder.  We have only highlighted issues where significant or unusual risk is placed on the Builder, rather than address the risk in every clause.”  That assessment was set out in a Risk Analysis Matrix, the relevant extracts of which are reproduced below: 

Risk	Clauses	Builder	Comments
The Builder assumes risk of executing work on basis of Tender Documents and “For Construction Drawings”	2A.01	Not entitled to make any claim for any error or omission or incomplete aspect of Tender Documents or the “For Construction Drawings”.	You need to be satisfied of the completeness and accuracy of all documents as you will not be able to claim damages for the consequences of any deficiencies discovered later.
Builder’s Acknowledgments     Risk of Site Conditions Information Supplied by Principal	3.02B     3.02C 3.02D	Acknowledges and agrees that Qantas is not liable in any way for errors or omissions in documents provided to the Builder. The Builder makes its own opinions of the materials. Information supplied by Qantas is for convenience only.	Basically, Qantas are saying “all care but no responsibility” in relation to documents it has given Builder.
Site Access	3.04	Builder acknowledges that there is limited and restricted access to the Site, and must co-ordinate with FAC Civil Works & others on Site.
Project Manager’s Authority	5.02		Project Manager’s authority is greatly increased in this clause (compared to standard JCC), with respect to instructions it may give to the Builder (such as in relation to depreciable items, Construction Program, industrial disputes and Remeasurement).
Builder’s Acknowledgment of Others on and Adjacent to the Site	15.10	Builder solely responsible for any and all industrial disputes or conditions that arise which delay the progress of the Works, and solely responsible for any damage to the Works which has been caused by any act, omission or default of the other contractors and Separate Contractors.
Builder’s Obligation in Relation to Time and to Avoid Delay	15.11	Where a delay results from acts, omissions, etc of the Builder or any of its subcontractors, suppliers, etc failing to adhere to the construction program for the Works, the Builder will be obliged at its own cost to take positive steps to reschedule, reprogram, etc its activities so as to reduce the effect of any delays.

 

15                  An additional piece of information sent to all prospective tenderers is what is referred to as FAC 10 or the FAC 10 program.  This program, along with four drawings relating to the lowering of the airside road, was sent by Cliftons under cover of a note dated 11 July 1997.  The note reads:

“Please be advised that a programme of FAC works and four (4) drawings related to the construction of the elevated roadworks are issued for you FOR INFORMATION ONLY.  This information may be useful for your tender preparations.”

16                  The FAC 10 program is a document of some significance.  It sets out the major sequencing and phasing of the work to be carried out by FAC’s contractors.  It indicates the sequencing and time of the works involved in lowering the airside road and the construction of the services tunnel in the area adjacent to the Qantas lease area.  According to the FAC 10 program, the contract for the TC 20 works package (which included lowering the airside road) was to be awarded on 29 August 1997, the lowered airside road works were to be completed by 7 November 1997 and the apron works were to be completed by 10 February 1998.  The program did not refer to the service tunnel to be constructed below the Qantas lease area.  In relation to the works outside the lease area, the program indicated that the manufacture of the pre-cast concrete tunnel units for the services tunnel beyond the lease area would be completed by 28 November 1997 and that the tunnel works below a car park on nearby land would take 30 days to construct.

17                  BHPL submitted its tender on 16 July 1997.  It offered to execute the works for $52,699,000 in accordance with its provisional bill of quantities.  BHPL’s offer also dealt with the proposed Building Works Contract.  It stated:

“Conditions of Contract

Prior to entering into a contract we would wish to discuss, understand and agree changes to certain contract clauses where necessary.  For example:

·        Time Bars.

·        Work by others including FAC Other Work.

·        Pricing Extra Works.

·        Responsibility for Separate Contractors and their work.

Additionally, Baulderstone Hornibrook need to review the following documents prior to accepting same:

·        Client Insurance Policies.

·        Qantas Lease Obligations Clause 15.20.

·        FAC Obligations Clause 15.31.

We wish to discuss and agree the status and timing of ‘For Construction Remeasured Documents’.”

BHPL’s tender included an indicative construction program as required by cl 1.15(b) of the conditions of tender.  The construction program provided for the project to be completed in two stages:  stage one by 31 August 1998 and stage two by 17 December 1998.  This was earlier (two months in the case of stage one, and three months for stage two) than Qantas’ desired completion dates.  The program had been prepared by Simon McGrath, a civil engineer and senior planner with BHPL.  Other builders, including Theiss Contractors, Concrete Constructions Group, John Holland Constructions and Leighton Contractors, also submitted tenders. 

18                  In late July 1997, Qantas and Cliftons held separate meetings with each tenderer for the purpose of discussing and evaluating their respective tenders.  The meeting with BHPL took place on 29 July 1997.  It was chaired by Mr Clifton.  Those in attendance included Mr Richards and others from Qantas; Messrs  Crawford and Bullen from Cliftons; and Messrs Wise (then a director), McIlvena (a construction manager with industrial relations experience), Di Blasi and Pollard (chief estimator) from BHPL.  According to Qantas’ minutes of the meeting four general topics were discussed: the project and BHPL’s proposed methodology, the tender price, the contract, and the building services.  In addition to the formal minutes of the meeting a number of attendees took notes.  They included Mr Clifton, Mr Crawford, Mr Di Blasi and Mr McIlvena. 

19                  There is a dispute as to whether a particular topic was discussed at the meeting.  FAC did not intend to let contracts for its works until Qantas had engaged a contractor.  Mr Clifton said that he mentioned this fact at the meeting.  He is supported by Mr Crawford and Mr Richards.  Indeed, Mr Richards said that it was at his insistence that Mr Clifton made the comment.  Mr Richards explained that he “had spoken to Jeff [Clifton] before the meeting, before the Thiess meeting, which preceded the BHPL, and emphasised to Jeff, Mr Clifton, make sure that the builders are under no misunderstanding that the FAC works would not be let contractually until after the Qantas works had been let.”  Mr Di Blasi has a different recollection of the meeting. He is adamant that the comment was not made. Messrs Pollard and McIlvena have no recollection of it.  Mr Crawford’s notes of the meeting are no longer in existence, but those made by Messrs Clifton, Richards and Di Blasi are available and none record the comment. 

20                  In order to determine what was said at the meeting (as well as for other purposes), it is necessary for me to assess the reliability of the evidence given by a number of witnesses.  Regrettably, I am of the view that some of them have been less than candid.  Mr Richards and Mr Clifton fall into this category, at least in relation to some of their evidence.  On occasion they left me with the clear impression that they were deliberately avoiding giving answers to difficult questions that were put to them in cross-examination.  Sometimes it appeared to me that both Mr Richards and Mr Clifton were prepared to tailor their evidence to present Qantas’ case in a good light.  I do not, however, believe that Mr Crawford falls into this category.  He was subjected to searching and, at times, aggressive questioning by Mr Hayes.  All in all, I think he held up quite well, though even he suffered the occasional lapse. 

21                  Having given the matter much thought I am, on balance, satisfied that Mr Clifton did say that FAC would not let its contracts until Qantas had engaged a contractor.  There is an element of logic to this.  Looked at from FAC’s perspective it made sense that it would not commit itself to carrying out any work until it was clear that Qantas was going ahead with the project.  It is likely then, as Mr Richards asserted, that this is what he was told by FAC.   In my opinion the reason why the statement appears not to have been recorded in any notes of the meeting, or in some cases not recalled by those present, is that it was not regarded as particularly significant. 

22                  Another topic discussed at the meeting was BHPL’s indicative construction program.  The program had been assessed by Cliftons.  At the meeting one of Cliftons’ representatives suggested, for reasons to do with the staging of the various works, including work to be carried out by Qantas’ consultants and other contractors, that BHPL’s program should be extended so that its works could be integrated with the work of others.  BHPL agreed to review its program. 

23                  Following the meeting BHPL reconsidered its program and responded to Cliftons in two stages.  First, by letter dated 1 August 1997, BHPL advised that it had revised its “milestone completion dates” and put forward new dates.  The letter also referred to the tender conditions contained in its letter of offer.  The reference is relevant to an aspect of the case with which I must deal with later.  It reads:

“Contract Conditions

Issues we wish to discuss further:

·        Time bars.              Our assessment of the time bars under the contract is that they are extremely onerous and will promote paperwork in excess of what otherwise would be required.  Additionally we note that the onus on the Client and the Project Manager to reply or act is to do so ‘as soon as possible’.

·        Work by Others Including FAC Other and Work.  Our concerns relate to the onus placed on BH to accept risks of delays and costs  etc associated with other works as well as not impeding separate contractors work.  We now understand that similar provisions are included in the separate contractor's contracts not to impede BH.  However, we need to understand how these issues will be policed as we are not afforded any contractual links to other contractors and therefore are unable to seek indemnities for their actions.

·        Separate Contractors.  Similarly to the above, BH are unable to control, influence or accept responsibility for the IR of contractors with whom we have no contractual link nor commercial relationship.

We accept that we should provide advice or control IR but this will be difficult without having any ability to instruct or direct.  Additionally, we cannot indemnify Qantas for all IR issues as some will be beyond our control.  We therefore need to discuss how this will operate. 

Protection of Separate Contractors Work should be the responsibility of the Separate Contractor.  BH do not accept carte blanche responsibility for any damage which may occur.

Additionally, BH do not accept sole responsibility for any damage to the works caused by others.”

24                  The second response occurred on 4 August 1997 when BHPL submitted a revised indicative construction program which had been prepared by Mr Di Blasi and Mr McGrath.  Mr McGrath described this program as “incorporating the specific methods raised by Qantas in the tender interview”. He said that the “revised programme included more detail and refinement in most areas.”  However, some dates did not change.  Mr McGrath explained that the date for the commencement of work on the temporary valet car park was still two weeks after commencement of work on the site, which was assumed to be 27 August 1997.  He also said that the program allowed the same time as had the 16 July program for the construction of the temporary valet car park.

25                  At this point Mr Pollard was confident that BHPL had put in the lowest tender (having heard the “jungle drums”) and had “a very good idea” that it would be awarded the contract.  His confidence was well placed because by letter dated 5 September 1997 BHPL was formally advised that it had been selected as the successful tenderer.  The letter from Qantas provides:

“LETTER OF ACCEPTANCE

QANTAS MELBOURNE DOMESTIC TERMINAL REDEVELOPMENT WORKS

I refer to your original tender dated 16th July 1997 and subsequent correspondence with Clifton Project Management Pty Ltd in relation to the building works associated with the Stage 3 development of the Qantas Melbourne Domestic Terminal.

I am now pleased to inform you that your Company has been selected as the successful tenderer to undertake this important project for the revised tender price of $53,842,886.00.

This acceptance is subject to the following conditions.

1)         The signing of a Contract between Qantas and Baulderstone Hornibrook Pty Ltd.  The Contract, based on the tender documents will be forwarded to you by Clifton Project Management Pty Ltd.

2)         Receipt by the Project Manager of currency certificates (or similar) for the relevant insurance policies as required by the tender/contract documentation and your Company’s PPS details.

To meet the project construction programme, please continue to liaise with Mr Lynton Bullen of Clifton Project Management Pty Ltd in the planning and execution of the works.

Thank you for your efforts to date and I look forward to your continued involvement in this project.”

26                  This brings me to the first legal dispute which I must resolve.  In issue is whether a contract was brought into existence between BHPL and Qantas upon the receipt of the letter of acceptance, (which is what BHPL alleges) or whether the contract was made on 15 September when signed counterparts were exchanged.  The point may be of some importance because BHPL contends that before any contract was made it ought to have been provided with information about the services tunnel.  That information was received on 9 September 1997.  To resolve the dispute it is necessary to have regard to some further background facts as well as to what occurred between 5 September and 15 September.

27                  It will be recalled that the tender documents issued by Cliftons (cl 1.17(b) of the General Provisions) provided that upon receipt of Clifton’s Letter of Acceptance a binding contract between Qantas and the builder could come into existence, and the builder would later execute a building works contract.  I have also previously noted that BHPL’s tender contained certain “Contract Conditions” which stated that prior to entering into a contract BHPL wished to discuss and agree to changes to certain clauses that were in the draft Building Works Contract. 

28                  Cliftons was not prepared to finalise its choice of preferred tenderer until BHPL attended to a number of matters, one of which concerned the “Contract Conditions”.  Accordingly, on 14 August 1997, Cliftons wrote to BHPL and sought its urgent response to a number of matters including “Baulderstone Hornibrook’s withdrawal of the ‘Contract Condition’ qualifications raised in the letter dated 1st August 1997.”  BHPL’s response was sent the following day.  In relation to item 4, BHPL stated that:

“In addition to our telephone conversation of 12th August 1997 (between our Ross Hayward yourself [a reference to Mr Crawford]) and our facsimile dated 12th August 1997, accepting the revised contract document, we therefore advise that the issues to do with the contract conditions have now been covered.”  

 

29                  To understand this response it is firstly necessary to refer to the exchange of correspondence that BHPL had referred to.  Early on 12 August Mr Crawford sent the following facsimile transmission to Mr Pollard:

“Please find attached proposed final amendments to the contract document. Amendments are underlined for your identification.

Could you please confirm your acceptance of these amendments and confirm that you are prepared to execute the Building Contract in that form.

 

Could you also please confirm that your services tender submissions conform with the tender specifications and drawings and include all specified items of plant and equipment and all costs associated with these items of plant and equipment.

We would appreciate your urgent response on the above.” 

 

Later on the same day Mr Pollard sent his reply:

“Further to your fax dated 12th August 1997 we hereby advise the following:

·        We have reviewed the amendments to the contract documents and confirm our acceptance to execute the building contract in that form.

·        Our services tender submission and associated technical data conforms with the tender specifications and drawings.

We trust that the above is satisfactory and await your further advice.”

30                  The reference to the telephone conversation between Mr Hayward and Mr Crawford is also of importance.  Mr Hayward was the Commercial Manager, Building at BHPL with responsibility for reviewing building contracts.  He was involved in the preparation of BHPL’s tender.  In particular he was involved in drafting the “Contract Conditions” and the comments dealing with those conditions in the letter of 4 August 1997.  Mr Hayward was shown a copy of Mr Crawford’s facsimile of 12 August 1997.  He was concerned with BHPL’s position under the proposed Building Works Contract, especially the effect of proposed clauses 15.18 and 15.32.  Clause 15.18 provided that subject to the builder’s right to an extension of time the builder would be responsible for all industrial issues, including all matters and disputes affecting the progress of the work.  The builder acknowledged that the contract sum included an allowance to fully compensate the builder for all risks and contingencies associated with industrial issues whether or not they were ascertained.  By cl 15.32 the builder was to accept the risk of any delays to the works or any additional cost, loss, expense or damage suffered or incurred by the builder arising out of or in any way connected with the FAC Other Works (as defined), that is the works described in Schedule 10.

31                  Mr Hayward spoke to Mr Crawford about these provisions.  This is Mr Hayward’s account of the conversation:

“[I] said in substance to Ian Crawford that BHPL were concerned about clauses 15.18 and 15.32 of the BWC. I stated in substance that clause 15.18 was too onerous as BHPL was not prepared to take responsibility for and provide an indemnity in respect of the conduct of other parties over whom BHPL had no control or contractual link.  I also commented to the same effect in respect of clause 15.32, that is BHPL could not accept the risk of delay caused by parties over whom BHPL had no control.  Crawford informed me that he would not use clause 15.32 against BHPL where matters were beyond BHPL’s control. Crawford also stated that he would make inquiries to see if clause 15.18 could be amended.”

In cross-examination on this topic Mr Hayward stuck to his guns.  He did, however, accept that from BHPL’s point of view the ideal position would have been to change cl 15.32, but Mr Crawford would not agree to this.

32                  Mr Crawford has a different recollection of the conversation.  He described it in the following language:

“Mr Hayward rang me. He said he had concerns about clauses 15.18 and 15.32 of the BWC.  I said that clause 15.18 had been amended and that I would forward him a copy of the amendment. I said that Baulderstone had to make a decision to accept the clause 15.32 as written or advise in writing that they did not accept the clause.  I said that the clause was included to cover the allocation of risk in this area to the builder and that it was specifically designed to protect the Client and that it was after all Qantas’ contract.  I also said that it would not be CPM's intention to apply this clause indiscriminately.”

A short time later, Mr Crawford made a handwritten note of the conversation.  His note reads:

“Spoke to Ross Hayward (he rang me) and confirmed that BHPL had to make a decision to accept the Clause 15.32 as written, or advise in writing that they did not accept the Clause.  I noted his concerns however my comment was that the Clause was included to cover the allocation of risk in this area, to the builder and that it was specifically designed to protect the Client – it was after all Qantas’s (sic) contract!  I also stated that it would not be CPM’s intention to apply this Clause in matters of trivial or minor everyday nature. (Word I used was ‘indiscriminately’)”

In the course of his cross-examination, Mr Crawford provided further content to the conversation.  He said that he told Mr Hayward that “[i]t wouldn’t be our intention to use that clause for every-day events on site, minor events, things that we could negotiate on site with probably Linton Bullen, who was the project manager, and I would make every attempt to help or assist in this process.”

33                  How do I resolve this conflict between the witnesses?  I have no hesitation in saying that each was doing his best to recollect what had been said in their conversation.  I also believe that each witness was of the view that his recollection was accurate and the other account was not.  This is not surprising for, on one view, there is little that separates the two versions.  Both Mr Crawford and Mr Hayward are in agreement that Mr Crawford said that cl 15.32 would not always be relied upon.  Their only disagreement is with the circumstances in which the clause would not be applied.  In the end the factor which sways me in favour of Mr Crawford’s account is his file note.  My preference in this case is to place reliance on a contemporaneous note of a conversation, especially a note that was prepared when the parties were not in dispute, rather than rely on a witnesses’ recollection of a discussion that took place more than three years ago.

34                  I am now in a position to deal with the question whether a binding building works contract came into existence on 5 September 1997.  The answer to this question depends on whether there was a manifestation of mutual assent (agreement) to an exchange of promises (as set out in the various documents that would constitute the contract).  It is now universally accepted that this issue is to be resolved by reference to the parties’ apparent, and not their actual, intention: that is to the external or objective appearance of the parties intention.  As Learned Hand J, a leading objectivist, put it in Hotchkiss v National City Bank 200 287, 293 (SDNY 1911) aff’d 201F 664 (2^nd Cir 1912), aff’d 231 US 50 (1913):

“A contract has, strictly speaking, nothing to do with the personal, or individual, intent of the parties.  A contract is an obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known intent.  If, however, it were proved by twenty bishops that either party when he used the words intended something else than the usual meaning which the law imposes on them, he would still be held, unless there were mutual mistake or something else of the sort.”

To a similar effect is the statement of McHugh JA, (with whom Kirby P and Glass JA concurred), in G R Securities Pty Ltd v Baulkman Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, 634:

“[T]he decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances.  If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction.” [citations omitted]

 

35                  The rule is not without its exceptions.  There are special situations where it is possible to have regard to the parties actual intention when deciding whether or not there was the necessary mutual assent.  Two situations come to mind: one is where it is alleged that a contract is a sham and the other is where the manifestation was mere gest or a joke:  see, for example, Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 where, after acknowledging that the actual intention of the parties may be relevant in some situations, Hope JA said at 319:

“If this be the law in relation to documents that are shams or are signed by both parties as a joke, it is difficult to understand why the same approach should not apply to any case where a party seeks to establish what the mutual actual intention of both parties was in relation to the issue of concluded contract.  If the mutual actual intention of the parties who have signed a document is that it should not have contractual operation, it would be fraudulent on the part of either of them to seek to enforce it as a contract.  Consistently, if the mutual actual intention was that there should be a concluded contract, it would be fraudulent to deny that intent, although no doubt it would be open to either party to submit that notwithstanding this actual intention, the terms of the document were inadequate to constitute a concluded contract.  For this purpose actual intention would not be relevant.”

36                  It is not only to the surrounding circumstances that a court may refer to discover the intention of the parties.  It is permissible in this area to also have regard to the parties conduct after the date of the putative contract, as that conduct may show what the parties intended at the earlier time:  Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, 548 and the cases there cited. The position is different from a case where it is sought to rely on post contractual conduct to shed light upon its construction.  The position in that regard is succinctly summarised in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583, 603, 606, 611, 615 and it is that such a course is illegitimate for a variety of reasons one of which is the rather curious reason that such an approach would produce different results on different days.  The leading Australian cases on this topic are discussed by Brooking JA in FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343.  The Anglo-Australian position stands in marked contrast to that which prevails in the United States, where the practical construction (words or conduct) which the parties place on a contract is of great significance in considering its meaning:  5 Corbin on Contracts § 24.16 (1998); 11 Williston on Contracts § 32.14 (1999); 17A Am Jur 2^nd “Contracts” (1991) 357; Uniform Commercial Code § 2-208.

37                  What are the facts to which these principles should be applied?  It is convenient to begin with the events that occurred up to and including 5 September 1997.  The invitation to tender (more formally, the request to submit an offer) despatched by Cliftons clearly enough explained Qantas’ position.  As far as Qantas was concerned a contract was to come into existence immediately upon its acceptance in writing of a tender, notwithstanding that formal contract documents would be exchanged at a later point in time.  In this connection it is worthwhile pointing out that, while the arrangement is of some magnitude, the tender documents which would constitute the contract contain complete and exhaustive conditions.  In short Qantas had manifested an intention that upon written acceptance of a tender, Qantas and the tenderer would be immediately bound in contract, but would be obliged to make a further contract in substitution for the first which might contain difference terms.  Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310, 317 provides an example of such a bargain.

38                  BHPL’s intention, on the other hand, was not the same as that of Qantas.  Its offer was incapable of immediate acceptance so as to bring about a contract.  This was because the offer required that certain conditions had to be satisfied before BHPL would conclude a contract.  In other words, the “contract conditions” were conditions precedent that had to be satisfied before there could be a binding contract:  see the discussion of conditions precedent and subsequent in Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537.

39                  The parties accept the analysis up to this point.  They differ, however, on whether BHPL withdrew the conditions before acceptance, as BHPL asserts.  This is how BHPL put its argument.  It will be recalled that on 14 August 1997 BHPL was asked by Cliftons to amend its offer by removing the “contract conditions”.  Properly understood, this was a request to remove any impediment to the formation of a contract on the acceptance of BHPL’s offer by Cliftons on Qantas’ behalf.  BHPL’s response that “the contract conditions have now been covered” in my view constituted a withdrawal of all contract conditions.  It was Qantas’ contention that by this statement only some of the contract conditions were removed, namely those which had been satisfied at that time.  In support of this argument Qantas pointed to the fact that a number of the conditions had not even been discussed by the parties.  For example, BHPL appears not to have conducted a “review” of “client insurance polices”, “Qantas lease obligations” and “FAC obligations”.  Whilst I accept that the meaning which Qantas seeks to attribute to the phrase “the contract conditions have now been covered” may be open, having regard to the terms of Cliftons’ request that BHPL withdrew the “contract conditions”, it is not the meaning which the phrase objectively bears in the context of the parties’ communications.  That is, it is impossible to treat the phrase as a reference to only some of the “contract conditions”.  If BHPL had intended to maintain any of the conditions precedent to contracting, I am sure it would have said so.

40                  The next matter which requires consideration is whether the letter of acceptance was an unconditional acceptance of BHPL’s by then unconditional offer .  It is to be noted that the acceptance was itself subject to two conditions viz (1) the signing of a contract between Qantas and BHPL and (2) the receipt by Cliftons of certificates of currency in relation to certain insurance policies.  The first condition was but a repetition of one of the tender terms, namely that BHPL is required to execute a written contract.  I think that as a matter of construction, this “condition” is merely a restatement of the obligation which the parties would assume when the contract was formed:  compare Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284.  The second condition (the receipt of currency certificates for certain insurance polices) was new but, like the first, was not one that had to be satisfied before a binding contract came about. 

41                  None of the events which occurred post 5 September 1997 cast any doubt on my conclusion that an agreement had been reached by that time.  The relevant facts are these:  First, Cliftons required confirmation of a number of matters “prior to the execution of a Building Contract”.  The matters which required attention were those set out in Cliftons’ letter of 9 September:

“1.       Volume 1         General Provisions Clause 1.28

Commitment by Baulderstone Hornibrook to submit a fully priced, correctly extended and totalled copy of the Provisional Bill of Quantities by Monday September 22, 1997 (this date being fourteen (14) days from receipt by yourselves of the Letter of Acceptance from Qantas) in accordance with the above Clause.

2.         Volume 2A      Architectural & General Requirements

Clause 1.2       Provision of a Dilapidation Report prior to any construction commencing.

Clause 1.15     Confirmation of the nominated ‘on site’ personnel for the Qantas project.

Clause 3.3       Provision of a finalised Project Quality Plan and representative by Monday September 22, 1997.

Clause 5.3       Provision of a detailed Construction Programme by Monday September 22, 1997 in accordance with the requirements of this Clause and Clause 15.17 of the Building Works Contract.

3.         Confirmation that the deletion costs to remove Travelators - Item 2A and 2B as listed in the Separate Schedule of Prices included in your tender submission are firm costs.

4.         Confirmation of your acceptance of the ‘DRAFT' copy of the Building Contract conditions issued to yourselves on Friday September 5, 1997.

5.         Confirmation of the impact, if any, on your construction programme should Baulderstone Hornibrook be requested to price and carry out construction of the section of ‘services tunnel works’ within the Qantas building site as per attached drawings.  ME6014-09-5-DK-381 Rev B/382 Rev B and ME60l4-09-C-DK-380 Rev C and copy of technical specification - Annexure D 15 Service Tunnel.”

42                  Qantas says that this letter, especially items 4 and 5, indicates that there was no contract on foot because “critical matters were yet to be the subject of agreement”.  Qantas also points to the fact that between 5 September and 15 September the parties negotiated, and reached agreement upon, many changes to the building works contract.  Some of the agreed changes were relatively minor, but others were of some consequence.  The fact that matters were still to be agreed and negotiations were taking place to resolve them does not, in my opinion, affect the conclusion that the parties had concluded a contract on 5 September.  For one thing, most of the terms that were the subject of negotiation, when examined in the context of the contract as a whole, were not critical to the parties’ obligations.  In any event, as I have said, the contract itself anticipated that there would be changes in the contract that would replace the one made on 5 September.  This case fits neatly within the first category of “subject to contract” cases mentioned in Masters v Cameron (1954) 91 CLR 353, 360.

43                  I now return to the facts.  This is a convenient point to explain the importance of the completion of the services tunnel to the performance of the Qantas works.  The works could only progress in stages.  The first stage was to be the construction of a temporary car valet building and a car park.  Once the temporary car valet was in service work could then begin on the next stage, which was the demolition of the existing car valet facility.  This had to be demolished to make way for the extension to the terminal building.  As the services tunnel was to run below various parts of the Qantas lease area, including an area below the temporary car park, the construction of the temporary valet car park could not be completed (and the next stage could not begin) until the completion of the tunnel through that area.

44                  The possibility that the services tunnel below the Qantas lease area would be constructed by Qantas’ contractor was still under consideration in September 1997.  By letter dated 9 September, Cliftons requested BHPL to advise of the impact on its construction program if it were retained to construct the services tunnel within its area.  Detailed drawings of the services tunnel were provided to BHPL for the first time, although those drawings had been in Cliftons’ possession for some months.  Mr Di Blasi referred the request to Mr McGrath, the programmer.  Mr McGrath looked into the matter and provided his written response within a day or so.  His advice was that if BHPL obtained possession of the site by 15 September the services tunnel works could be completed by 17 October 1997 and the temporary valet car park could be finished by 17 November 1997.  (In BHPL’s revised program of September 1997 both works were to be completed by 18 October 1997).  Mr McGrath told Mr Di Blasi that “the services tunnel will not effect (sic) our program.”

45                  Following the receipt of this advice Mr Di Blasi wrote to Cliftons on 12 September 1997 stating that: 

“Item 5:          The impact on the construction programme should Baulderstone Hornibrook Pty Ltd be requested to price the works are influenced by the procurement for pricing, approval and subsequent ordering of material summarised basically as follows.

Baulderstone Hornibrook tender                                15/9/97 to 19/9/97

Submit Tender                                                            22/9/97

Clifton Project Management review                          22/9/97 to 27/9/97

Tender Award                                                             29/9/97

Baulderstone Hornibrook Award/Mobilise

Subcontractor                                                             29/9/97 to 30/9/97

Procure Pipe (only for Valet Area)                            30/9/97 to 30/10/97

Installation Valet Area Only                                       30/10/97 to 21/11/97

Complete Temporary Valet work                               24/11/97 to 12/12/97

Opening of Temporary Valet                                      15/12/97

On the basis of Site Possession occurring on the 15^th September 1997 the revised Temporary Valet opening would be 17^th November 1997 compared to the 15^th December 1997.  The procurement process will constitute an estimated delay of 19 days and is essentially driven by the minimum 4 weeks procurement requirement of the pipework (note this 4 weeks is on the assumed use of standard rubber ring joints and the fabrication of only the initial 40m of pipework).” [It is agreed that the dates “17 November 1997” and “15 December 1997” were inadvertently transposed.]

 

For reasons which have not been explained, APA(M) decided not to engage BHPL to construct the services tunnel.  On 19 September it let the TC 30 works package to Abigroup.  The TC 20 package had been let to Negri a little earlier, shortly after APA(M) had been advised that BHPL was Qantas’ preferred tenderer.

46                  The revised building works contract was executed on 15 September 1997 and work commenced almost immediately.  According to Mr Di Blasi “from the time of commencement of work on site until September 1998 [BHPL] encountered a series of difficulties in obtaining sufficient access to carry out [its] Works.  These difficulties resulted in the project being delayed and [BHPL’s] work being seriously disrupted.”  Mr Di Blasi explained the difficulties in great detail.  Much of his evidence was uncontroversial, and I propose to recite some of it in order to convey a clear picture.  First, Mr Di Blasi summarised the problems:

“The planned construction of the Works depended on a sequence of work specified by Qantas in the staging documents and Qantas giving us access to the areas that were, for part of the time, to be areas in which APAM would be constructing the infrastructure works.

The areas can be summarised as follows:-

1.         Area occupied by services tunnel through the new temporary valet car park.

            This area was to have been made available on 24 September 1997 and was not available until 8 January 1998.

2.         Area occupied by services tunnel under main terminal building.

            This area was to have been made available on 15 October 1997, including the area around Chamber A.  These areas were not available until 16 March 1998.

3.         Area occupied by services tunnel north of main terminal building.

            This area was to have been made available no later than 7 November 1997, and was not available until September 1998.

4.         Area occupied by lowered airside road.

            This area was to have been made available to us by 7 November 1997 and although some access over the road was available by 22 May 1998, the area was not fully available until September 1998.

5.         Area occupied by relocated airside road at north end of finger.

            This area was never supposed to have been taken by Qantas.  Qantas appropriated this area from us, and both Qantas and APAM used it until 16 March 1998 for their access. The area taken was between grids PP and QQ.

6.         Area between grids 74 and 75.

            This area was never supposed to have been taken by Qantas.  The tender drawings indicated BHPL would have all of the area east of grid 74.  Qantas’ existing valet car park actually extended to grid 75 and they decided not to release the area between grids 74 and 75 until the new temporary valet car park was handed over on 31 March 1998.

7.         Landside/Airside barriers.

            The area inside the hoarding (the yellow area on drawing A1300E) was to have been a landside project.  This required the fence on grid AA to be removed as soon as the airside road was relocated.  This was supposed to occur on 5 September 1997.  This fence on grid AA was not moved until late January 1998.”

He then explained what went wrong in more detail.  Again I propose to reproduce selected portions of his evidence (as opposed to providing a summary) because this approach will better highlight the difficulties that were encountered:

“Footings

The construction of the concrete footings was fundamental to the Works.  This was the starting point for the structure.  They needed to be undertaken in an order to suit the ground slabs.

…

The programmed schedule for footings as outlined on Programme 319A is as follows:

·        Activity 284 – A1 footings 75-86 (60)                        20/11/97 to 13/12/97

            ie, 60 pad footings over 16 days    =              (approx) 4 pad footings

                                                                                    per day

·        Activity 283 – A1 lift and stair bases             12/11/97 to 5/12/97

The site diary records that footing excavation works commenced on 4 December 1997, that is 9 days behind the programme date and could only progress in the unrestricted and partially restricted areas of the site.

The footings works to various areas of the site could not be undertaken as programmed due to restrictions throughout the site.  These areas are identified as follows:

·        The footings between grids 80 to grid 83 (including the stair and lift shaft footing) and grids A to E could not be undertaken due to the area required for services tunnel activities …

·        The footings along grid 75, including the stair and lift shaft footing, could not be undertaken since Qantas did not make the area from grid 74 to 75 available. …

·        The footings along grid AA could not be constructed since:

            (i)         we could not relocate the airside fence although the tender

                        staging and hoardings plans A1300E, A1100B and BHPL site plan enclosed in the tender required us to do so;

            (ii)        the airside road works were not completed to this area in

                        accordance with the FAC programme which was provided …

…

Ground Slabs

[T]he ground floor slabs were to be constructed in the period from 18 December 1997 and 25 February 1998.  The work was to proceed from east to west, in advance of the mezzanine floors.

(a)       Construction of the ground slabs commenced on 27 February 1998 and was completed on 25 July 1997.  The delay in pouring these ground slabs were contributed to by the staggered handover of the existing valet car park, …

(b)       The footings and the pouring of ground slabs 4, 5, 6, 7 and 8 was stopped because there was no access to the site in the area of the service tunnel works. …

(c)        The bored piers in the new temporary valet car park were also delayed.  The bored piers … for the new temporary valet car park area was scheduled to commence on 31 October 1997 …  In fact, the pile rig had to be demobilised  … and then be remobilised on 7 January 1998 when the services tunnel area over the valet car park area was made available for the piling contractor to pour the board piers…

Mezzanine Floor

The mezzanine floor sequence required the northern section of the ground slabs to be poured.  It is this section of the ground slabs that was affected by both the services tunnel works, which cut through the northern section of ground slabs, and by the lowered airside road works, which deprived BHPL of access to the area and stopped some footings from proceeding.  This lack of access prevented work from being carried out by BHPL on grid AA, and meant that BHPL was unable to obtain access to the terminal area from the north, and therefore our work was delayed.  We also altered and re-sequenced the M1 and M2 mezzanine slabs because of the delay.

…

First Floor

The first floor slabs were originally planned to be poured from 17 March 1998 to 17 April 1998. …

The delays to the existing valet car park handover delayed access for the northern section of the first floor because of the inability to pour critical mezzanine slabs M4 and M5.  Slab F6 was the first slab poured at this level on 23 July 1998.  Slab F4 was the last slab poured on the first floor on 31 October 1998.

The first floor was re-sequenced because by May 1998 we had only poured our first suspended slab, which was M2 on the mezzanine floor. …

…

Second Floor

…

The second floor slabs were originally planned to be poured from 21 April 1998 to 22 May 1998 in a sequence from west to east, thereby allowing the structural steel …

The second floor slabs were actually constructed from east to west because the order of the first floor slabs changed to the reverse of that originally planned.  This was because the slabs at first floor level, over which the second floor slabs were built, were constructed in a different sequence. …”

47                  The construction of the new finger building was also delayed through no fault of BHPL. First, the relocation of the airside road to the north of the site where the new finger was to be located did not take place until 11 March 1988, that is much later than had originally been anticipated.  Before the road was moved access to the site was impeded.  The lowering of the airside road and other apron works also hindered access to the site of the new finger.  Later, the airside road had to be moved further northward to enable BHPL to construct pavements and walkways.  The second relocation was postponed because of delays in the completion of the apron works. 

48                  To be fair, not all the delay in the Qantas works can be attributed to the pace at which the FAC works were being undertaken and the resultant unavailability of proper access to the Qantas lease area.  There were other aggravating factors, some of which proved to be quite significant.  For example, one constant problem which caused many delays was the industrial action initiated by unions whose members worked on the project.  Mr McIlvena noted that industrial relations for construction projects at Melbourne Airport have always been a significant issue.  He observed that:  “The industrial relations situation during this project was the worst I have seen at BHPL since I joined BHPL.”  The following examples illustrate the problems caused by union activity:  Bans were imposed on Abigroup for various reasons, including,  in relation to the construction of the services tunnel because of alleged non-compliance with safety practices.  The work of subcontractors was also affected by industrial disputes.  One BHPL sub-contractor was Arvin Pty Ltd, a formwork supplier, which had been engaged to work on the concrete structure.  Industrial bans were imposed on Arvin, and this hindered the progress of its work. 

49                  There may have been other causes for Arvin’s delays.  On 20 February 1998 Arvin wrote to BHPL claiming additional costs “brought about by lack of access and proper sequencing of works attributable to Baulderstone Hornibrook Pty Ltd site management’s lack of planning, misinformation at time of tender and lack of clear understanding of construction sequence.”  Details of these problems were provided.  BHPL rejected the allegation that it was responsible for any delay.  It wrote to Arvin and “[s]uggest[ed] to [it] that the primary responsibility for [Arvin’s] inefficiencies rests with [Arvin’s] own site management since in 73 working days on site the site has seen no less than 6 supervisors from Arvin.  This is by far the main reason for your delays.”  I suppose that there is some fault on both sides:  on the one hand it is unlikely that BHPL was completely blameless in its dealings with Arvin;  on the other, the material suggests that Arvin was not performing under its contract.  For example, an examination of the minutes of BHPL’s Sub-contractor Co-ordination meetings held during February and March 1998 record the failure by Arvin to provide computations for the formwork, to develop systems of perimeter protection to the formwork decks and to provide details of formwork. 

50                  Further delay was caused when BHPL decided to terminate Arvin’s subcontract.  The termination took effect on 7 April 1998.  The next day BHPL appointed Noulikas Pty Ltd to complete the concrete structure works.  In accordance with industry practice Noulikas was required to employ all former Arvin employees that remained on site.  This caused difficulties.  Mr Di Blasi said that the former Arvin employees were difficult to manage and control and Noulikas was unable to achieve work efficiencies.  The Sub-contractor Co-ordination meeting minutes for April, May and June 1998 refer to other difficulties experienced as a result of the manner in which Noulikas carried out its contract, including its failure to provide a design for the suspended slabs, its failure to provide formwork support materials, and the need for Noulikas to increase the number of men on site.   

51                  To summarise, the delay in the construction of the services tunnel extension and the apron works, in particular the airside road works, as well as other factors beyond BHPL’s control, impeded BHPL’s ability to carry out its work on the terminal extension in accordance with its timetable.  There were also significant delays in the construction of the new finger.  A key factor which caused delay in that area was BHPL’s inability to obtain adequate access to the site of the new finger.  This was caused not only by the delay in lowering the airside road but also the various relocations of the road.  All in all, it proved to be impossible for BHPL to coordinate its works with the FAC works. 

52                  In its monthly builder’s reports BHPL notified Qantas of the problems that were being experienced.  For example in its second report, dated 23 January 1998, BHPL made the following observations about the temporary car valet, the new finger, the terminal works and the infrastructure works:

“BUILDERS REPORT

 

Temporary Car Valet

The temporary car valet area is nearing completion following the delayed completion of the services tunnel backfill and subsequent handover of the area to BHPL/Qantas by ABI/APAM on the 7th January 1998. The handover of this area on the 7th January 1998 compared dismally to our programmed requirement of the 10th November 1997 therefore identifying the delay to the handover of the temporary valet carpark to what is now scheduled for the 10th February 1998. This has subsequently effected the availability for construction to proceed in the existing valet area and ultimately impacted on the projects overall completion.

…

New East Finger

The overall progress has been delayed due to APAM infrastructure works associated with both lowering and relocating the airside road and their associated restrictions.

The lowering of the airside road was expected to be completed on the 7^th November 1997 and is now scheduled to be completed on the 17th March 1998.  This delay is creating problems with construction access to the area and the finger construction is unable to be linked to the terminal building.

The relocation of the airside road through grids PP and QQ was unknown at tender time and has delayed and disrupted our programmed continuity of work.  …

New Terminal Works

Construction work within the terminal site area is being seriously delayed by the ongoing construction associated with the APAM/ABI services tunnel works within the Qantas Site.  APAM are currently advising that the tunnel works will still not be clear of the Qantas Site. 

…

Infrastructure Works

The co-ordination and management of the infrastructure contractors is currently being controlled through Cliftons/Kinhill via weekly contractor co-ordination meetings. These meetings essentially enable all Contractors to understand certain critical aspects of the project and be directed by Cliftons/Kinhill to ensure specific requirements are actioned.  Despite these meetings now being controlled and managed through Cliftons/Kinhill particular important issues are still not being actioned to avoid unnecessary costs or delays to the Qantas Project.”

BHPL’s third report, dated 23 February 1998, identified several additional problems, including the industrial disputes, that were causing delays.  It also referred to the delay that was still being caused by the late construction of the services tunnel and the relocation of the airside road.  Later reports repeated these complaints.

53                  Cliftons recognised the difficulties that were confronting BHPL and made efforts to overcome them.  In December 1997, for example, it requested APA(M) to defer certain work to enable BHPL’s work to go ahead.  The request was denied.  In the same month it met with Kinhill Engineers Pty Ltd (the first firm which had been retained as consulting engineers by both Qantas and FAC) to work out a proposal “whereby both APA(M) and Qantas contractors would be able to continue working essentially in the same area”.  The proposal did not go ahead.  One difficulty was that APA(M) did not recognise that its contractors were interfering with BHPL’s work.  Thus on 5 January 1998  it wrote to Qantas claiming that delays due to inadequate co-ordination of its and Qantas respective programs could easily have been avoided and it did not accept that BHPL was “being compromised”.  APA(M) expressed concern “that CPM [a reference to Cliftons] appears unable to direct Baulderstone Hornibrook as to works sequence and program issues.”  It followed up this letter with another on 11 February 1998 in which it made the following comments:

“[I]t would appear that we have collectively now identified the major and significant interfaces between our respective works which will facilitate the completion of these works in the most expedient manner.  The comments in Baulderstone Hornibrook’s letter do not alter our current position that in our opinion we have undertaken our works generally in accordance with our program which was advised to you in July 1997 prior to the award of the contract to Baulderstone Hornibrook.  The very nature of the close interaction of our respective works has always necessitated ongoing rescheduling to accommodate each others requirements due to access, industrial delays, weather and the like.  It is on this basis that we believe we have undertaken our work generally within our program advised to you in July 1997 notwithstanding that Baulderstone Hornibrook has endeavoured in its letter to intimate that this is not the case.  We reiterate our view that Melbourne Airport’s infrastructure works have not, except for the industrial action experienced by both parties, impacted upon Baulderstone Hornibrook’s work program any more than that which should have been reasonably anticipated by Baulderstone Hornibrook in its program when it contracted with Qantas, recognising the close interaction of the respective projects.”

These letters elicited a firm response from Cliftons on 19 February 1998, a response which had been settled by Mr Richards.  Although the letter is lengthy I propose to set it out in full because it reflects, accurately in my opinion, the views of both Qantas and Cliftons although, as in other areas, both Mr Richards and, to a lesser extent, Mr Crawford sought to downplay the strong language in the letter.  It reads:

“We are writing in response to your letters dated 5 January, 1998 and 11 February, 1998 and include the following for your information.

You contend that ‘the construction of the tunnel connection will not delay Baulderstone in its building work in this area’ and our response is that Baulderstone have been delayed in completing building works in this area.  We accept that alternative construction methods, at Baulderstone’s instigation, were designed and documented by Kinhill APAM, so that Baulderstone could construct that part of the building.  It is fortunate that the new duct is sufficiently distanced from the part of the building which is on the critical path and that the construction joints could be repositioned to allow the building works to proceed adjacent to the APAM duct works.

Unfortunately the remaining part of the APAM duct runs directly through the new QANTAS Car Valet car park which is also on the critical path and is the first critical activity that has to be undertaken and commissioned so that the existing facility can be moved.  This will then allow Baulderstone access to the most critical part of the building and complex in terms of structure and services of our project.  This area runs from grid 65 (the end of the existing QANTAS Terminal) to grid 80 (beyond the end of the existing QANTAS Car Valet car park).  We have had numerous dates for the completion of this duct from chamber B to an area clear of the car park area.  One of the first being 22 November 1997 (refer Melbourne airport letter TS: 8.1.7080 signed by your Hamish Scott) and the handover of this critical are [sic] did not occur until 7 January 1998.  We cannot accept that Baulderstone could have ‘reasonably anticipated’ such a delay.  We also find it hard to accept that this work together with the additional documentation and re-scheduling that took place ‘was generally within our (APAM) program advised to you in July 1997’ (refer your letter dated 11 February, 1998).

In response to your letter of 5 January, 1998 it is not our understanding that Baulderstone ‘was satisfied with its sequencing of the works’, in fact it would be the opposite, that Baulderstone were dis-satisfied, but accepted reluctantly the altered sequence of work in most of the areas where interface problems have occurred.  This is confirmed in Baulderstone’s letter dated 8 January, 1998.  The writer of that letter Daryl McIlvena, who is Baulderstone’s Construction Manager, was also present at the January 5 meeting and was quite forceful in his protest that Baulderstone were often disadvantaged and always seemed to bear the brunt of decisions made during discussions and coordination meetings to resolve interface problems.  This has been the case for most of the work Baulderstone have had to carry out in the lowered airside road and with work associated with the location of the temporary airside road north of grid QQ.

Furthermore we cannot accept your assertion that Baulderstone have not been delayed.  We have issued a copy of Baulderstone’s construction programme to your office and a simple examination will show that the date for the opening of Car Valet was 29 November, 1997.  The work on the bored piers in this area was stopped on 13 November 1997 and was not restarted until January 7, 1998 which effectively meant Baulderstone’s work on the Car Valet car park was delayed during construction of the APAM duct through the area.  Consequently we have received Notices of Delay from which we are currently assessing.

However, we do believe there has been and still is a serious commitment from Baulderstone.  APAM contractors, APAM and QANTAS together with their respective Project Managers to discuss, coordinate and resolve issues as they arise and this has often led to some work being re-scheduled or re-documented.  We also accept that the ‘major and significant interfaces between our projects’ have now been identified.  However, during the last half of 1997 our concerns were raised many times with your Project Manager regarding the coordination of construction details in these areas and it would be fair to say that the results took many months to resolve, particularly the coordination in the lowered airside road.

Finally, Baulderstone’s concerns and our concerns are related to the fact that many dates provided by APAM, your Project Managers Kinhill and your Contractors have not been met.  Where possible Baulderstone have re-scheduled their work, but at times this has not been possible because there were not sufficient work areas that were free of interface problems.  We have raised our concerns with QANTAS regarding the difficulties experienced by Baulderstone particularly the delay to the relocation of Car Valet and the resulting impact on the building programme and we believe that QANTAS may wish to pursue this matter with APAM in the future.

Notwithstanding our views and understanding of discussions that you have referred to in your recent letters, we believe there is still a need to maintain the meetings at both the contractor level and between APAM and QANTAS and their Project Managers.  We will endeavour to provide positive assistance wherever possible and we look forward to your assistance in hopefully providing outcomes that are mutually agreeable and suitable to all parties.”

54                  This is a sufficient summary of the facts to enable me now to deal with BHPL’s claim under s 52 of the Trade Practices Act 1974.  BHPL alleges that Qantas (through its agent, Cliftons) made a number of misleading representations which induced it to enter into the building works contract.  The articulation of these representations changed from time to time, and this may say something about some of the difficulties associated with BHPL’s case, bearing in mind that representations are unlikely to be actionable unless they are clear and unambiguous:  Smith v Chadwick (1884) 9 App Cas 187, 191.  It is not necessary for me to trace through the many changes.  The point to be made will be evident if I confine myself to the final two versions of the alleged representations.  In its third amended statement of claim the representations were described in the following terms:

“(a)     the Respondent:

            (i)         was able and/or;

            (ii)        would be able;

            to provide the Applicant with such reasonable access as would be necessary for the Applicant to carry out its obligations pursuant to clause 3.03 and the other clauses set out in paragraph 9(b) above;

(b)       if the Applicant entered into the agreement the Applicant would have such reasonable access to the site to enable it to discharge its obligations as set out in the draft BWC, including Clause 15.10.03 thereof, and would be able to co-ordinate, control and manage the Applicant’s Works with the work to be undertaken by other contractors and would be able to program and integrate the Applicant’s Works at each stage with the execution of the works of other contractors and Separate Contractors and particularly the contractors responsible for the services tunnel works and the lowered airside road works each within the Applicant’s site;

(c)        drawing No. A1300/E and drawing No. MS6006-C-DK1003 Rev B read together:

            (i)         were; and

            (ii)        would remain,

            a substantially accurate depiction of the area to be utilised within the Applicant’s site for the purpose of the lowered airside road works;

(d)       The 20 May Services Tunnel Drawings, as defined in paragraph 9(e)(iv), read together and individually:

            (i)         gave; and

            (ii)        would continue to give,

            a reliable inference that the services tunnel works to be effected within the Applicant’s site would be effected at the approximate level of the existing services tunnel, namely at a constant approximate maximum depth of 2.5m below ground floor level and would not impact upon the footing pads close to the proposed services tunnel.

(e)        Drawing No. A1300/E and the 20 May Services Tunnel Drawings read together:

            (i)         gave; and

            (ii)        would continue to give,

            a substantially accurate inference of the area to be utilised within the Applicant’s site for the purposes of the services tunnel works within the Applicant’s site.

(f)        the lowered airside road works would be tendered with tenders to close on 21 July 1997, tender assessment by FAC to occur between 22 July and 8 August 1997, approval to award by FAC to occur by 22 August 1997, the contract to be awarded to another contractor by 29 August 1997, mobilisation to Site to occur on 1 September 1997, construction of the said lowered airside road works would commence before 22 September 1997 and completion of the lowered airside road works at the throat of the new finger building would occur before 7 November 1997.

(g)       that the Applicant could assume that the services tunnel works would be awarded to another contractor by 2 September 1997, construction of the said services tunnel works would commence by 2 September 1997, completion of the services tunnel works under the valet parking area within the Applicant’s site would occur by 24 September 1997 and the balance of the services tunnel works within the Applicant’s site would be completed by 15 October 1997.”

55                  The trial was conducted on the basis of this pleading.  Nevertheless, in his closing address Mr Hayes sought leave to further amend the statement of claim to substitute a new set of representations which he claimed were all within the then current pleading.  The new representations were that:

“(a)     the Respondent and Cliftons were of the opinion that the times for and the sequencing of the FAC works in the program known as the FAC10 Program (‘FAC10’) were achievable;

(b)       there was no reason known by the Respondent and Cliftons why the Applicant could not rely upon FAC10;

(c)        the Respondent and Cliftons knew of no matters not disclosed to the Applicant that showed, and had no reason to believe, that the times for and sequencing of the works in FAC10 were not achievable;

(d)       the Respondent and Cliftons continued to be of the opinion that the times for and sequencing of the works in FAC10 were achievable;

(e)        there continued to be no reason known by the Respondent and Cliftons why the Applicant could not rely upon FAC10;

(f)        the Respondent and Cliftons continued to know of no matters that showed, and had no reason to believe, that the times for and sequencing of the works in FAC10 were not achievable;

(g)       the tender communications (as defined in this Statement of Claim) supplied by the Respondent and Cliftons to the Applicant on about 20 May 1997 and prior to the close of tender, contained all relevant information in the Respondent’s and Cliftons’ possession relevant to the times for, and the sequencing of, the FAC works;

(h)       the tender communications fairly identified the area of the proposed Lowered Airside Roadside Works;

(i)        the Respondent and Cliftons were of the opinion that the staging drawings supplied by Cliftons to the Applicant in about late June 1997 substantially accurately showed the sequencing of the availability of the Site to the Applicant;

(j)        the services tunnel at its lowest point would be approximately 3 metres underground and have a maximum width of 5 metres;

(k)       the footings shown in the area adjacent to the proposed services tunnel would be constructed in like manner to other footings on drawings nos. MS6006-S-DK-1105 Rev C, MS6006-S-DK-1116 Rev C and MS6006-S-DK-1117 Rev A and at a depth of approximately 2.5 metres below ground level;

(l)        the services tunnel works would not substantially delay the completion of the Lowered Airside Roadworks and associated services as set out in FAC10;

(m)      the Respondent had the legal right to grant the Applicant access to and possession of the work site, including the area of the services tunnel and the Lowered Airside Roadworks;

(n)       the Respondent and Cliftons knew of no fact or reason why the Applicant would be unable legally or practically to manage and co-ordinate its works on the Site with the contractors carrying out the FAC works;

(o)       the contract works were predominantly a landside, not an airside project;

(p)       the Respondent and Cliftons were of the opinion that the Applicant’s 4 August 1997 Tender Construction Program substantially accurately stated the times for, and the sequencing of, the FAC works;

(q)       the Respondent and Cliftons knew of no fact or reason why the Applicant’s 4 August Tender Construction Program in dealing with the FAC works was not achievable as to times for carrying out the works and sequencing;

(r)        [not pressed]

(s)        [not pressed]

(t)        the Respondent and Cliftons knew of no fact or reason why stage one of the contract works could not reasonably be carried out in 15 months and the whole of the works at a price of $52.6 million;”

56                  When the proposed amendments were initially foreshadowed, Mr Vickery QC for Qantas said he would not oppose them.  He indicated that there was no need to lead further evidence to respond to them.  When the final version of the proposed amendments was delivered, however, Qantas’ solicitors withdrew this concession.  In correspondence, the solicitors contended that the proposed amendments raised new allegations, many of which were barred by s 82(2) of the Trade Practices Act.  Yet during the second stage of final submissions (the submissions were heard in two blocks) which took place after the draft pleading had been delivered, Mr Vickery appeared to concede that the amendments should be allowed following Mr Hayes’ withdrawal of paragraphs (r) and (s) which admittedly raised new allegations.  The outcome of this is that I am a little uncertain about Qantas’ final position.  I made the order allowing the amendments largely because at trial both parties had covered the issues in the newly formulated pleading and Qantas did not claim any prejudice.  In any event, this had been a hard fought contest and, in my opinion, it was in the interests of justice that it be resolved on the real issues between the parties, and not on potentially hypothetical points.  Nevertheless there should be a qualification to my earlier order.  I propose now to vacate to Qantas the right to apply to have the order recalled allowing the amendments if its effect is to enable BHPL to succeed on what would otherwise be a statute-barred claim. 

57                  The alleged representations can, to some extent, be grouped into categories.  Fundamentally, as Mr Hayes put it, BHPL’s complaint “broadly” is that it was entitled to rely upon the dates in FAC 10 as indicating when it would be able to have the access to the site, which was necessary to enable it to meet its own works timetable at its anticipated cost.  This complaint is directly articulated, in one form or another, in alleged representations (a) to (g) (inclusive) and (l).  I will, in the first instance, determine whether these representations were made.  It is this issue which is really the central point in the case.  It must be resolved having regard to all the surrounding circumstances.  I will then consider the remaining representations as well as the question whether BHPL relied upon any representation to enter into the building works contract, for this is another issue which is hotly in dispute.

58                  The background against which the questions under consideration must be determined is as follows.  The first point is trite.  It is that there is a significant risk of delay and disruption inherent in every major construction project.  Numerous things can go wrong at any one of the many stages between the planning and completion of construction.  Things may be overlooked; mistakes can be made; climatic and physical conditions may not be as expected; contractors, suppliers or agents may not meet their obligations, to name just a few.  It is inevitable that time will be taken up with these matters and costs will be incurred.  For this reason a works program, especially a program which is not contractually binding may, when prepared by a contractor, be little more than a statement of intention or a statement that the contractor will use his best endeavours to comply with it.  If prepared by an owner, a works program may be more than a statement of expectation; it may be said to contain a timetable which is regarded as feasible.  But, in each case, the program will always be regarded as subject to the ever present risk that the project may be delayed or disrupted for a myriad of reasons, including reasons that may be beyond the control of the parties. 

59                  The unreliability of the FAC 10 program (in the sense that it could not be regarded as setting out anything like a fixed timetable) was all the more evident because of the following matters.  The FAC works referred to in FAC 10 were not to be undertaken by Qantas but by APA(M).  It follows that neither Qantas nor Cliftons had the ability to control the manner in which FAC works could be performed.  Moreover FAC 10 was not a document that had been prepared by Qantas or Cliftons.  They could not freely attest to its reliability.  Further, when BHPL entered into the building works contract it knew that APA(M) had not yet engaged a builder to carry out the FAC works.  Two points follow from this.  First, it was inevitable that the timetable would be extended by some period because the FAC works would never begin on the appointed day.  So on the day the building works contract was entered into the timetable in FAC was well out of date.  Second, it was obvious that Qantas’ works and the FAC works were closely connected and any delay in carrying out the FAC works (works over which Qantas had no control) would have an immediate impact upon the ability of Qantas’ contractor to carry out its works. 

60                  BHPL recognised the difficulty with its assertion that the works program indicated intended firm dates. To overcome this BHPL sought to draw a distinction between, on the one hand, “acceptable” or “normal” causes of delay and, on the other hand, “unacceptable” or “abnormal” causes.  In this respect my attention was drawn to Parkinson (Sir Lindsay) & Co Ltd v Commissioners of His Majesty’s Works and Public Buildings [1949] 2 KB 632 which concerned the meaning of a delay clause in a building contract.  On the question of construction the Court of Appeal drew a distinction between “normal” and “abnormal” delays.  It said that “delay” should be read as limited to normal or moderate delay and did not extend to an interruption so differing in degree and magnitude from anything which could have been contemplated at the time of contract.  Whilst this analysis may be apposite to the construction of a contract, I fear it has little to do with implications that can be drawn from a works program.  Putting to one side the difficulty with defining what is meant by “normal” and “abnormal” in this contract, if I am right in my view that the FAC 10 program was unreliable, it was unreliable not only because the timetable was subject to “normal” events of delay, but also because it was subject to delays caused by “abnormal” circumstances.  Indeed, on one view, a works program is likely to have made some allowance for what might be thought of as “normal” delays, and is unlikely to take into account “abnormal” delays which, I suppose, are delays that have not been anticipated. 

61                  Another important matter concerns the allocation of risk.  Sir Michael Latham said “No construction project is free of risk.  Risk can be managed, minimised, shared, transferred or accepted.  It cannot be ignored.”:  Final Report of the Government/Industry Review Procurement and Contractual Arrangements in the Construction Industry (1994) HMSO para 3.7 quoted in K Pickavance Delay and Disruption in Construction Contracts 2^nd ed 2000 at 19.  It may reasonably be said that there are three categories of risk in construction:  cost; time; and quality:  the latter two also involving a risk as to cost.  It is the function of a works contract to allocate these risks.  The allocation of risk was one of the key matters which concerned the building works contract in this case.  And, as I have shown, the risk  generally fell on BHPL. 

62                  Then there is the letter under cover of which FAC 10 was sent.  It will be recalled that the letter stated that FAC 10 was being sent to the tenderer “For Information Only”.  Some time was taken up during the trial attempting to decipher the meaning of this phrase.  In my opinion it was a warning.  By making the statement Cliftons was, by inference, saying a number of things.  One is that FAC 10 did not contain contractually fixed dates for the sequencing and phasing of the works.  Another is that the tender program submitted by, or the works program of, the contractor who would carry out the FAC works might contain a different timetable and sequence.  So, in the context of this case the statement indicated that the FAC 10 program was even more unreliable than might otherwise have been the case:  compare Morrison-Knudsen International Company Inc v Commonwealth of Australia (1972) 46 ALJR 265.

63                  In light of the foregoing it seems to me to be an inescapable conclusion that the FAC 10 program was an unreliable tool for BHPL to use in (1) the preparation of its tender and (2) deciding whether to enter into the building works contract.  This would have been obvious to an experienced builder like BHPL.  I think that this would even be so if one paid no regard whatsoever to the contract provisions which placed squarely on BHPL’s shoulders the risk of delay resulting from the FAC works and the difficulty in obtaining proper access to the site.  The true position, in my opinion, is that (subject to one qualification with which I will mention in a moment) Qantas did not make any of the representations alleged.

64                  I am confirmed in this view by the evidence of Mr McGrath, who was responsible for preparing BHPL’s tender program and contract program.  If anyone had thought that FAC 10 contained the representations articulated in the pleading, it would have been Mr McGrath who had FAC 10 for the purpose of performing his duties.  Plainly Mr McGrath did not rely upon FAC 10 to inform him when the services tunnel running below the Qantas lease area would be completed, for the simple reason that FAC 10 did not provide that information.  When he was asked how he had calculated the time it would take to construct the tunnel for BHPL’s purposes Mr McGrath said:  “From my experience at the airport and walking through the tunnels I had a fair idea of what the tunnel would look like, because I’ve walked through them for many years, and I made a professional assessment based on my experience.”  On the basis of his own judgment, therefore, Mr McGrath assessed that the tunnel works would take about six and a half weeks.  Barring the unforseen, there is nothing to suggest that his assessment was wrong.  Indeed, from the slight, but not altogether unhelpful, evidence I have on the topic it seems that Abigroup, which undertook these works, had available to it the information necessary to properly assess the likely duration of the work, and had also formed the view that the work could be carried out within the time frame.

65                  The position is slightly different as regards the date for the completion of the airside road works.  For the purpose of the tender program Mr McGrath adopted the dates in FAC 10.  The reason is that Mr McGrath had no other information upon which to make an assessment of the time required to carry out those works.  I acknowledge that BHPL had been advised that the information in FAC 10 “may be useful for [its] tender preparations”.  Yet, useful or not, Mr McGrath knew that the dates in the program might not be adhered to for any number of reasons, some of which might be surprising and some not.  This is not to suggest that the dates in FAC 10 could not be met if all things went according to plan.  When it was prepared the FAC 10 timetable may have contained a reasonable estimate of the timing of the various works, subject to the ever present possibility that things may not turn out as planned.  Indeed Mr Denson, the project manager from Negri, gave evidence to the effect that his company had made a similar estimate of the likely duration of those airside road works.  Mr McGrath’s response to the suggestion that FAC 10 may have been unreliable was to suggest that it was reliable because Cliftons had made its own assessment of the program.  Mr McGrath was mistaken in this view.  Cliftons had not assessed the accuracy of the FAC 10 program, nor did it do or say anything which could have implied that it had undertaken that task.  In particular, advising BHPL that FAC 10 could be relied upon for the purposes of its tender did not in the circumstances carry that implication.

66                  I said that there is one qualification to my finding that the representations had not been made.  The qualification is that, in my view, the circumstances suggest that when Cliftons provided the FAC 10 program to BHPL it implicitly represented that it and Qantas were not aware of any fact, not otherwise known to BHPL, which, in its view (or Qantas’), made the timetable in FAC 10 any less reliable than it otherwise would be.  I think this was a continuing representation which remained in effect until 5 September when the building works contract was made.  I will deal with its effect later.

67                  Another representation which concerns the services tunnel is representation (j) which is concerned with the tunnel’s dimensions; three metres below ground and five metres wide. If made, the representation was false because the services tunnel was constructed to a depth of approximately six metres.  However, I do not accept that the representation was made.  BHPL says that the information concerning the size and depth of the tunnel is apparent from the services tunnel drawings which were provided in the tender package.  This was an issue about which there was a good deal of debate between the witnesses.  Mr Di Blasi said that the drawings showed that the services tunnel was to be constructed to a depth of approximately three metres.  He said this could be inferred from certain information contained in the drawings:  a rough drawing of stairs showing approximately seventeen steps with each step having a riser height of about 170mm; the absence of any special design for footings in the area of the services tunnel; the actual design of the particular footings that were drawn; and the depth of the existing services tunnel adjacent to the Qantas lease area.

68                  Mr Di Blasi’s evidence was subjected to severe criticism.  One of Qantas’ experts, Mr Phillips, an engineer, said, in substance, that Mr Di Blasi’s assessment was “irrational”.  I think the true position is this.  A thorough, if not painstaking, examination of the tender documents, such as was undertaken by Mr Phillips, would have shown that the services tunnel could not be built at the depth suggested by Mr Di Blasi, but at the depth at which the tunnel was actually constructed.  More importantly, however, I do not accept that even a cursory examination of the tender information would indicate that which Mr Di Blasi says he took from the drawings.  I have looked closely at the relevant drawings (aided by much evidence about them) and while I do not accept all that Mr Phillips’ said on this topic, I simply cannot agree that the drawings suggested that the services tunnel would be constructed at the depth alleged.  Indeed Mr Spurgeon, the expert consulting engineer called by BHPL, does not support this reading.  Mr Spurgeon was of the opinion that six possible conclusions could be derived from the drawings:  (1) that the services tunnel would be at different depths (an unlikely proposition so it seems to me); (2) the services tunnel would be located at the same level as the airside road; (3) the services tunnel would be lowered below the major services (drain pipes and the like) (this is what in fact happened); (4) the services tunnel would be reduced in height; (5) that the services in conflict with the services tunnel could pass through the tunnel rather than over it (another unlikely conclusion); and (6) a combination of some or all of the above.  For my own part, I think that the existence of services ducts, underground pipes and other underground services in the area of the proposed tunnel made it more likely than not that the tunnel would be constructed below these services, and thus not at the depth suggested by Mr Di Blasi.  In any event, I am inclined to believe that Mr Di Blasi did not form any view about the dimensions of the services tunnel before 5 September 1997.  For this view I base myself largely on his evidence.  Moreover, I have not overlooked the fact that the tender documents make it clear that the tunnel design had not been finalised, so any view that Mr Di Blasi held about the tunnel depth could only have been provisional.  If it was not provisional, his view was not reasonably based on the tender information and, accordingly, is of no legal consequence. 

69                  A representation which is somewhat connected to those concerned with the timing of the FAC works is an alleged representation (i) (that the staging drawings “substantially accurately” show the sequencing of the availability of the site to BHPL).  Qantas accepts that the staging drawings depict the sequence of the development, that is the order in which it was proposed that the works should proceed.  But it says that it did not represent that this sequence would not change.  I agree.  First, the drawings were not final.  For one thing they were marked “not for construction”.  For another, the draft building works contract required BHPL to acknowledge that the design was incomplete and may be substantially different from the works as described.  So it was obvious to BHPL that there might be changes.  In Gaymark Investments Pty Ltd v Walter Construction Group Ltd (1999) 16 BCL 449, in relation to a case where the plaintiff claimed reliance on construction drawings, Bailey J cited with apparent approval the comment of the arbitrator that he “cannot accept that [the defendant], even so, had expected to perform the work based solely on the tender drawings, with no amendments and no variations.  To accept that requires a suspension of belief.”  Secondly, as the information in BHPL’s possession makes clear, access to the site was heavily dependent upon the completion of works to be undertaken by the FAC contractors.  If BHPL knew, as it plainly did, that there might be a delay in those works, that knowledge is inconsistent with the proposition the staging drawings accurately showed sequencing.  Put differently, the staging as shown in the drawings was itself subject to the progress of the FAC works.  Thirdly, and this is an important point which Qantas makes, the staging drawings only show the sequence in which possession is to be given, not the dates on which that is to occur.  In this case BHPL’s real complaint is about the “substantial inaccuracy” of information relating to the timing of the FAC works.  In reality it is not at all concerned with the “substantial accuracy” of the staging drawings unrelated to the timing at which it was to be given possession of the site. 

70                  Two alleged representations concern the description of certain works.  Representation (h) asserts that the tender documents “fairly identified” the extent of the proposed lowering of the airside road.  Representation (k) is that the footings adjacent to the services tunnel were to be constructed as described in a series of drawings.  The reason BHPL seeks to establish the existence of these representations is to assert that the true position was different from that represented, and if the true position was known before the contract that would have indicated to BHPL that the FAC works would have taken much longer to complete than what was programmed in FAC 10.

71                  The evidence is to the effect that the work involved in lowering the airside road extended approximately thirty metres to either side of the finger.  The drawings supplied to BHPL did not show the works as extending that far.  Although the drawings were not to scale they seem to suggest that the lowering works would extend about twenty metres on either side of the finger, perhaps even less to the east of the finger.  But, importantly, the drawings do indicate that part of the services tunnel, as well as other services, were to go beneath the airside road to the west of the finger; that is, further west than the lowering works.  To carry out this work it was necessary to dig up and then resurface that portion of the airside road.  According to Mr Spurgeon, an examination of the tender drawings indicated that some 100 metres of the length of the airside road would be the subject of extensive excavation.  Mr Degenhardt, a project planner called by Qantas, also said that the civil engineering drawings supplied with the tender documents indicated that there would be major works to a number of services beneath the pavement to the east of the new finger.  Indeed, there was going to be considerable work to the whole of the apron area.  In my view it follows that if the representation was made and was false, it would not be at all material because it was apparent that other work would be carried out in the general area of the airside road.  Perhaps this is just another way of saying that the representation, if made, was not influential.  I come back to Mr McGrath’s evidence on this aspect.  Finally, and this is, in any event, a complete answer to both alleged representations, they proceed on the implicit assumption that the FAC works would be carried out according to the specifications or description of the works given to BHPL during the tender period.  This assumption is entirely misplaced.  No-one could reasonably expect that the specifications would not change.  And no-one within BHPL laboured under that belief.  Accordingly I do not accept that representations were made and, even if they were, they certainly were not relied upon.

72                  The remaining alleged representations can be disposed of more easily.  The first of them is representation (m) which asserts that Qantas represented that it had “the legal right” to grant BHPL access to the work site.  The background to this representation is that under its lease Qantas did not have exclusive possession of the whole of the area where the Qantas works were to be performed.  Nor did it have the right to unrestricted access over the adjacent area such as might be necessary for the works to be undertaken.  BHPL submits that there was no point in it entering into the agreement, or commencing the work, if Qantas had no legal right to grant it access.  It also says that the tender documents necessarily conveyed to BHPL that Qantas had that right. 

73                  This submission really ignores the circumstance in which the building works contract was entered into.  As I have sought to make plain, and as was plain to BHPL at the time, it was always going to be confronted with restricted access to the work site whether or not Qantas had the ability in law to grant it access.  The restrictions were imposed to enable the FAC works to be carried out.  Put another way, unless BHPL’s access to the site was restricted, the FAC works could not be carried out and the Qantas works would not proceed.  For that reason there could be no representation as alleged.  Moreover, none of the BHPL witnesses who gave evidence relevant to this issue, including Mr Di Blasi and Mr McGrath, asserted that such a representation had by inference been made.

74                  The same is true of representation (n), namely that Qantas and Cliftons knew of no reason why BHPL could not coordinate its work with the FAC contractors.  This representation is said to be implied by the failure of Qantas or Cliftons to inform BHPL that there was any restriction on its legal right to grant access.  Putting to one side the question whether such a representation can arise from mere silence without also establishing that the asserted facts were deliberately withheld from BHPL (a finding which I am not prepared to make), I think the plea is another overstatement of the true position.  First, the alleged representation assumes that BHPL would have the right to direct FAC contractors how to carry out their work.  The building works contract confers no such right on BHPL.  To the contrary, the contract (eg cl 15.10 and 15.32) required BHPL to co-ordinate its works with the works of the FAC contractors; that is, BHPL was required to ensure that its work did not unduly interfere with the work of the FAC contractors. In any event, and this is the second point, Mr McGrath said that on 3 September 1997 (two days before BHPL entered into the building works contract) he was told that there were no contractual term in place which would enable BHPL to control FAC contractors. 

75                  The next representation ((o)) is that the contract works were predominantly landside and not airside.  The importance of this alleged representation should be apparent from what I have already said.  If the works were landside they could more easily be carried out than airside works, which would result in the works being completed more quickly and probably at a lower cost.  There is an issue whether any such representation was made.  Mr Hayes says that it was common ground that the works would be predominantly landside.  Mr Bullen was of this view and so was Mr Crawford.  Indeed Mr Bullen said that this topic was mentioned at the meeting on 29 July, although no details were given as to what was said.  This representation is relied upon because the works may not have been “predominantly” landside as regards the construction of the finger.  That fact did not prevent access to the area of the finger, but it made it more difficult to carry out those works.

76                  In order to determine whether the alleged representation was made it is necessary to have regard to the tender documents.  Those documents indicate that the Qantas work would be both airside and landside.  For example, BHPL was advised that a security officer would be appointed by Qantas to supervise any construction work that was airside.  The role of the security officer was defined.  Moreover, BHPL was clearly aware that there would be considerable airside work.  Its tender noted that:

“Construction access to the site will be via a gate incorporated in the Southern Hoarding.  This gate will cater for most of the construction traffic, deliveries and rubbish removal while the Airside Gate Number 39 will be utilised if and when required for access across tarmac outside of fenced area.”

Other pre-contract correspondence from BHPL also made reference to access to the work that was to be carried out airside. In addition, I note that there was no definition in the tender documents of which works would be airside and which would be landside.  It is also necessary to have regard to the fact that the work was to progress in stages, and that its progress could be affected by FAC works.  Taking all of these factors into account, it is difficult to arrive at the conclusion that the representation was made.  I rather think that APA(M)’s comments in its letter of 8 July 1998 when answering a complaint about lack of access, correctly characterised the situation BHPL was in.  APA(M) said:

“It may be true that BHPL had assumed that their entire work site could be fenced off and they would have un-fettered access for their works.  The reality of a major airport project using multiple contractors, as BHPL is very well aware from their recent involvement in the International Terminal Development project, is that close co-operation and co-ordination between the respective parties is required and that additional efforts are required to mange these interfaces.  In this sense, the assumption that BHPL would have direct construction access across the airside road (for which grant of access has been given to Negri Contractors) needed to be made recognising the construction works that had to occur in this area by others.”

77                  Even if there had been an express statement by Qantas that the works would be “predominantly” landside, it is by no means clear what that statement might mean.  Would it mean that more than 50 per cent of the work would be carried out landside?  How is one to measure that quantity?  Would it be by the value of the work undertaken, the number of employees engaged, the physical dimension of the work or by some other measure?  The statement, if made, would be too vague to impose liability on Qantas.

78                  Representations (p) and (q) relate to BHPL’s August tender.  Here it is alleged that Qantas took responsibility for BHPL’s program by representing that it was of the opinion that the program was accurate and that it knew of no reason why the times in the program were not achievable.  I think that it is inherently improbable that anyone within BHPL was of opinion that Qantas or, for that matter, Cliftons was making any such statement about its program.  In their evidence in chief none of the BHPL witnesses suggested that they were acting under such a belief.  I think these allegations are without substance. 

79                  The final representation ((t)) is that Qantas represented that it knew of no reason why BHPL could not carry out its works within 15 months at the price of $52.6 million.  In its submissions BHPL says that this representation flows from all the others.  It follows that if none of the other representations are made out (as I have found) then neither is representation (t).  Accordingly, it falls by the wayside.  It could not, on any view, have an independent life. 

80                  It is convenient now to consider whether the only representation which was made was either false or misleading.  According to BHPL the representation was false because Qantas (or Cliftons) had in its possession information which informed it that the FAC 10 program could not be met.  The information which is said to fall into this category (omitting information already known to BHPL) is:  the tunnel drawings which were received by Cliftons in July 1997; the lowered airside road work drawings which were received by Cliftons in June and July 1997; information relating to the actual footings which were to be located adjacent to the services tunnel; the terms of the Qantas lease; information about the relocation of the lowered airside road through the finger being information which Cliftons had acquired on 4 September 1997; revised dates for the completion of the apron works and lowered airside road received on the same day; details about the extent of the lowered airside road works; that detailed drawings for the FAC works had not been finalised (according to the evidence they were 80 per cent complete); and that the FAC contracts did not contain provisions enabling BHPL to manage and control the FAC works. 

81                  The allegation of breach to a large measure proceeds on the supposition that the information necessarily indicates that the FAC 10 works program could not be met.  It seems to me that this assumption lies behind much of BHPL’s complaints.  I am not, however, prepared to make that assumption.  As should be by now apparent there is little evidence to support it.  In the early stages of the works the FAC contractors, Abigroup and Negri, who had available to them most of the information said to be denied to BHPL, had calculated that the time it would have to implement the works (in particular, the construction of the services tunnel and the airside road works) was much the same as had been assessed by BHPL, although the commencement date for those works was, of course, different.  That is to say, there is nothing inherent in the nature and design of those works which contributed to the delay in their completion.  The same is true in relation to the fact that the drawings for the FAC works had not been finalised and that the FAC contracts did not contain provisions enabling BHPL to control the FAC works, being a right which was not given to BHPL under the building works contract in any event.  The evidence suggests that the real causes for delay in the progression of the works were largely as a result of events which occurred as the works progressed.  I mean by this that according to the evidence the nature of the tunnel, the extent of the airside road works, changes to the footings and so on did not of themselves cause any delay.  In any event, the evidence establishes to my satisfaction that neither Qantas nor Cliftons were of the opinion that the matters referred to by BHPL rendered the timetable in FAC 10 any more unreliable than would normally be expected.

82                  There is one final matter I wish to discuss concerning the s 52 claim before moving to the other causes of action.  It goes without saying that in order to succeed in a claim under the section it is necessary for the complainant to show that he has been induced to alter his position as a result of the alleged false or misleading conduct.  In this case Qantas says that even if any of the representations were made, those representations did not influence BHPL, or alternatively the organisation would have entered into the building works contract even if it had known the true facts.  In virtue of the findings I have made I need not canvass these contentions in any detail.  Nevertheless, I do wish to record my view that, at least as regards the first assertion, there is some substance to it.  Let me explain what I mean.  BHPL called a number of witnesses on the question of inducement.  In their evidence in chief none of these witnesses said, as one might have expected, that he understood that a particular representation had been made, and that he had been induced by that representation to act in a particular way.  These witnesses (there were six in all) gave evidence of a rather different character.  I will illustrate from the evidence of Mr Pollard, whose evidence was typical on this score.  What follows are excerpts from his evidence on inducement:

“If the true position had been known by BHPL prior to 5 September 1997

78.       If, in late August or early September 1997 I had knowledge of or access to the following information, I would have drawn conclusions from it.  The information is:

·        that the contract for the services tunnel within the Qantas lease area would not be let until late September 1997;

·        drawings [for the services tunnel]

·        the extend [sic] and nature of the lowered airside roadworks,

·        that the contract for the lowered airside roadworks would not be let until late September 1997.

            …

79.       If the foregoing had been available to BHPL and me, I would have referred it to McGrath and Di Blasi.  I am informed that they would have come to the following conclusions:

·        the then proposed services tunnel at its deepest point would be approximately 6 metres.

·        the tunnel was to be constructed out of precast sections.

·        as a result of the bore logs provided, any excavation below 3 metres through the services tunnel area would encounter rock.

·        the adjacent footings, would need to be redesigned.

·        the western end of the lowered airside roadworks would extend over the north western end of the services tunnel.

·        the contract conditions and specification for the services tunnel works and other information indicated that the services tunnel contractor was not obliged to take any special steps in order to permit the Qantas builder to proceed with construction or to avoid impeding the Qantas builder.

            …

80.       If these matters had become known to me shortly prior to 5 September 1997 it would have been obvious to me that the proposed construction program was compromised and required adjustment.

83.       … [T]he additional knowledge would have resulted in a substantial impact on the program and a consequent effect on price, which BHPL would not have been prepared to absorb.  I personally would have recommended against maintaining the existing tender price.

            …

85.       BHPL would have worked hard with Ian Crawford and Qantas to try and negotiate a sensible resolution to the issue.

            …

86.       Had I known of the matters which I am asked to assume prior to 16 July 1997 and/or 4 August 1997 I would have taken steps to amend the program and price in the tender and revised the tender accordingly.”

83                  Leaving aside the correctness of Mr Pollard’s assumptions about what he would have been told by Messrs McGrath and Di Blasi (their views have been discussed elsewhere), and also leaving aside the conclusions which he claims would have been obvious (a topic which has also been discussed elsewhere), this evidence is not very convincing on the issue of inducement, especially having regard to the form of the alleged representations.  I rather suspect that the evidence has been structured in this fashion because of the difficulty in formulating the representations as well as the consequential difficulty in establishing inducement.

84                  Having disposed of the statutory claim, I can now deal with the two claims in contract.  The first, although not according to the sequence in the fourth amended statement of claim, is a claim for extensions of time for practical completion coupled with a claim for compensation.  BHPL submitted two claims for extensions.  The first related to the delay in the works caused by the delay in the completion of the services tunnel.  Initially BHPL claimed an extension of 57 days.  It later reduced the claim to 37 days but then increased it to 95 days.  BHPL was granted a 26 day extension, with some compensation.  The second claim relates to the delays caused by the insolvency of Arvin, and delay resulting from lack of adequate access to the site due to the delay in the completion of the lower airside roadworks and the services tunnel.  This claim is for the 50 days, of which 14 were allowed.

85                  Claims for extensions of time and compensation arising from delay are covered by the contract.  The relevant provisions as regards extensions of time are:

“Notification and Events of Delay

9.01.01            the progress of any one or more Stages is delayed by the occurrence of any of the following events:

                        (a)        …

(b)               by reason of delay in the obtaining of any consent or

            permission required to be obtained by Qantas from any owner of adjoining property or land in connection with paragraph 3.08.01;

                        (c)        by reason of any breach of this Agreement by Qantas;

                        (d)        …

                        (e)        …

(f)                 by reason of any act, default or omission on the part of

            a Separate Contractor except Glidepath;

                        (g)        subject to Clause 9.03A by reason of Glidepath Events;

…

9.01A  Concurrent Delays

            Where more than one event causes concurrent delays and the cause of at least one of those events but not all of them is not a cause referred to in paragraph 9.01.01 then to the extent that those delays are concurrent, the Builder shall not be entitled to an extension of time for Practical Completion of the particular or identified Stage or any other Stages.

…

9.04          Builder’s Notices Concerning Time

The Builder shall comply with the requirements of Clauses 9.01 and 9.02 in all respects failing which the Builder shall have no entitlement to claim or be granted any extension of time for Practical Completion of the identified Stage or Stages and further shall be deemed to have forever abandoned any entitlement he might otherwise have had to claim or be granted any extension of time for Practical Completion of the identified Stage or Stages, as a consequence of the occurrence of the events which resulted in the delay to the progress of the Works or the affected Stage or Stages.

9.05          Project Manager May Extend

Notwithstanding that the Builder has not given either of or both notices pursuant to Clause 9.01 and/or 9.02, the Project Manager may, in the Project Manger’s absolute discretion, at any time and from time to time by notice in writing addressed to the Builder extend the time for Practical Completion of any one or more Stages for any reason or due to the occurrence of any event whatsoever (whether due to the occurrence of an event referred to under Clause 9.01.01 or otherwise) including any act of prevention or breach of contract on the part of Qantas, the Project Manager, any Separate Contractor, employee or agent of Qantas.  The Project Manager may apportion between delays caused by breaches of the Agreement or an act of default or omission on the part of Qantas, the Project Manager, any Separate Contractor, employee or agent of Qantas and other causes or events in making any determination pursuant to this Clause 9.05 on the basis of their respective contributions to such delay.”

86                  The relevant provisions for the recovery of damages for delay are:

“10.09Recovery of Damages for Delays

            Subject to compliance with all of the provisions of Clause 10.12 the Builder shall only be entitled to recover from Qantas losses, expenses, costs and/or damages (including damages for breach of contract at law) sustained or incurred by him as a result of delay in the progress of the Works (other than in respect of delay caused by any instruction by the Project Manager as to a Variation), by reason of the occurrence of any of the events contained in paragraph 9.01.01(c) or 9.01.01(d) calculated in accordance with Clause 15.02.

…

10.12   Conditions Precedent

            The entitlement under Clause 10.09 of the Builder to recovery of damages including damages for breach of contract at law or reimbursement of any costs, losses and/or expenses sustained or incurred by him as a result of delay in the progress of any one or more Stages or of the Works within any Stage or Stages shall be subject to compliance by the Builder with all of the following conditions precedent:

10.12.01                    An extension of time has been made or should properly

have been allowed pursuant to Clause 9.03;

10.12.02                    the Builder has taken all practicable steps to keep any

such damages, costs, losses and expenses to a minimum;

10.12.03                    any such damages, costs, losses and expenses have not

                        been and should not be included in the value of any

                        Variation;

10.12.04                    the Builder has given to the Project Manager details in

                                                writing of the nature of the claim under Clause 10.09 as

                                                soon as practicable after commencement of the delay

                                                giving rise to the claim and at a time when those details

                                                are capable of being adequately checked by the Project

                                                Manager and in any event no later than fourteen (14)

                                                calendar days after the cessation of the delay, such

                                                details being given progressively where necessary; and

10.12.05                    the Builder has within a reasonable time of an

                        extension being granted under Clause 9.03 and in any

                        event no later than twenty (20) calendar days after the

                        date when the extension is granted, given to the Project

                        Manager written details substantiating any such

                        damages, costs, losses and expenses or written details

                        of the best estimates of the damages, costs and expenses

                        then available to the Builder.

10.13   Ascertainment and Payment

            Subject to compliance with Clause 10.12 any such damages, costs, losses and expenses shall be calculated by the Project Manager in accordance with Clause 15.02 and notified in writing by him to the Builder and to Qantas and the amount so calculated shall be added to the Contract Sum.

…

15.08   Limitation on Builder’s Entitlement to Costs etc. Due to Delays

            The Builder shall have no entitlement whatsoever to any adjustment to the Contract Sum or to otherwise claim or be paid any costs, losses, expenses or damages (including damages for breach of contract at law) suffered or incurred by the Builder, its subcontractors or suppliers (whether nominated or otherwise) or to any other monetary compensation arising out of or in any way connected with any delay in the progress of the Works or any one or more Stages, other than its entitlement expressly provided for under this Agreement.

87                  Cliftons’ power to grant extensions and award compensation is conferred by cl 5.02.02 which relevantly provides:

“That the Project Manager is hereby authorised to act as the assessor, valuer or certifier (in consultation with the Quantity Surveyor where the Project Manager decides to do so) in respect of the following matters:

(a-e)    …

(f)        extensions of time (Clauses 9.03 and 9.05);

(g-i)     …

(j)        damages, costs and expenses resulting from delay in the progress of the Works (Clause 10.13 and Clause 15.02);”

88                  BHPL says that Cliftons’ refusal to grant the extensions and compensation sought was wrong, and in the circumstances the court has jurisdiction, which it should exercise, to decide those issues for itself.  BHPL’s argument proceeds in this way.  It accepts that in the first instance the building works contract requires the claim for extensions and compensation to be determined by Cliftons, and that its decision would usually be final and binding.  However, BHPL says that in this case Cliftons’ decisions (through Mr Crawford) are of no force and for that reason it falls upon the court to decide the matter.  This approach which, as I say, was adopted by both parties is justified by the terms of the contract:  Clause 9.01 limits entitlements to extensions to the procedures in the contract.  Clause 15.08 does the same in relation to compensation for delays:  see also Turner Corporation Limited (Receiver & Manager Appointed) v Austotel Pty Limited (1994) 13 BCL 378 for a “contract as a code” analysis.  Decisions such as KBH Constructions Pty Ltd v PSD Development Corporation Pty Ltd (1990) 21 NSWLR 348 and Beaufort Developments (N.I.) Ltd v Gilbert-Ash N.I. Ltd [1999] 1 AC 266 concern the court’s jurisdiction to determine entitlements to extensions of time when there is no provision in the building contract which provides that the extension must be granted by a nominated person.

89                  The route by which BHPL seeks to attack Cliftons’ decision is indirect.  I mean by this that BHPL does not, as it might have done, plead that the decisions in question should be disregarded on account of some vitiating factor.  The cases establish that a person in the position of Cliftons (or Mr Crawford) exercising power under a contract to decide extensions of time and determine compensation claims must act honestly and fairly and if he does not his certificate can be ignored.  Hickman & Co v Roberts [1913] AC 229 is a leading example of this type of case.  The circumstances in which a certificate will be vitiated cannot be exhaustively stated.  The most recent edition of Hudson’s Building and Engineering Contracts, 11^th ed 1995 by I N Duncan Wallace, suggests the following broad categories:  (1) where the decision-maker has a special interest in the result; (2) fraud or collusive conduct; (3) improper pressure, influence or interference by the owner; (4) conduct which falls short of the proper standard of fairness, independence and impartiality; (5) breach of contract or other act or omission of the owner having the effect of preventing the builder obtaining a decision; (6) unreasonable refusal by the decision-maker to consider the matter; and (7) taking improper considerations into account.

90                  What BHPL pleads in this case is that in breach of the building works contract Qantas has improperly interfered with Cliftons’ duty to act impartially.  It seeks damages and other relief being that which Cliftons should have awarded in its certificate if properly granted:  Young v The Ballarat and Ballarat East Water Commissioners (1879) 5 VLR(L) 503.  The basis for this claim is the allegation that Qantas breached two implied terms of the building works contract.  Those terms are:  (1) Qantas would not interfere in the decision-making of Cliftons pursuant to the matters referred to in cl 5.02.02; and (2) Qantas would ensure that the project manager acted independently in the exercise of its powers under cl 5.02.02.  For its part Qantas accepts the existence of the first implied term but not the second.  It says that, in any event, neither term has been breached.

91                  To establish the existence of the second implied term BHPL relies on Perini Corporation v Commonwealth of Australia [1969] 2 NSWR 530.  The case concerned a building works contract for the construction of the Redfern Mail Exchange under which the Director of Works, a public servant who was charged with the general supervision of the activities of the Department of Works, could grant extensions of time.  The plaintiff made many applications for extensions of time, but mostly they were refused.  It brought proceedings to resolved the Director’s objections.  The plaintiff alleged that there were two implied terms in the building works contract.  The first was that in relation to the exercise by the Director of his powers under cl 35 (the extension of time clause), the Commonwealth “in relation to the exercise by the Director of Works of the Defendant of the powers, duties, obligations and discretions cast upon the said Director of Works of the Defendant …, would not:  (a) restrict, inhibit or fetter him in; (b) seek to influence him in; or (c) interfere with his decisions in relation to the exercise by the Director of Works of the Defendant of the powers, duties, obligations and discretions aforesaid.”  The second implied term was that “the Defendant would, in its capacity as the employer of the Director of Works, do all things necessary to ensure that (a) the said Director of Works would exercise the powers, duties, obligations and discretions cast upon by clause 35 of the General Conditions of Contract of the Agreement; and (b) the said Director of Works would exercise the powers, duties, obligations and discretions cast upon him by clause 35 of the General Conditions of Contract of the Agreement independently and free from interference or restrictions; and (c) the said Director would consider and deal with each application for an extension of time made by the plaintiff pursuant to clause 35 as aforesaid promptly after the making of such application and thereafter promptly notify the Plaintiff of his decision.”

92                  Following a review of the authorities concerned with the ad hoc implication of terms, and after considering the obiter opinion of Devlin J (as he then was) in Minster Trust Ld v Traps Tractors Ld [1954] 1 WLR 963 to the effect that, apart from fraud, a duty not to interfere with a supervisor can only be imposed by an implication arising from the contract, MacFarlan J said (at 542) that the contracting parties “have impliedly bound themselves one to the other that they would not do anything that would prevent [the director] from a proper discharge of the mandate which contractually they had granted to him” which was to act independently and in the exercise of his own volition according to the exigencies of the particular application.

93                  Applying this case, as I am disposed to do, the first implied term should be understood as inhibiting Qantas from interfering with the independence of Cliftons (Mr Crawford) when dealing with the claimed extensions, that is from improperly attempting to influence him.  As far as the second implied term is concerned I would accept it, provided that it is confined in its operation to require Qantas to see to it that Cliftons acted independently and in accordance with its obligations, if it noticed that Cliftons was acting, or was about to act, outside its duty.

94                  BHPL puts its case for breach on the following basis.  It says that when Qantas became aware of the claims for extensions and compensation it made vigorous attempts to ensure that they were not granted.  It says that Qantas’ object was to undermine the independence of Cliftons by, in effect, procuring it to act otherwise than independently in dealing with the claims and it succeeded in that endeavour.

95                  The principal evidentiary basis for this contention is a letter written by Qantas on 24 March 1998 in the following terms:

“Thank you for your letter dated 15^th March 1998 re Baulderstone Hornibrook Pty Limited’s Claimed Extension Time Notice (CEN) No 12.

Qantas has reviewed the claim and in its view, Baulderstone Hornibrook, in accordance with its conditions of contact with Qantas, is entitled to only 4 days extension of time and without costs.  This represents time lost due to State and Federal bans being placed on the site on the dates advised by Clifton Project Management (14/15^th October 1997 and 25/26^th November 1997) which were not concurrent with local bans.

This view is supported by Qantas’ legal advice, which is to the effect that Baulderstone Hornibrook is not entitled to an extension of time in relation to CEN 12 pursuant to Clauses 9.01, 9.02 and 9.03 of the Contract, other than for State and Federal bans.  Qantas has provided Baulderstone Hornibrook sufficient access to the site from 15^th September 1997 (i.e. Stage 1 Date of Access) and has not been in breach of contract nor prevented site access.

It is also Qantas’ view that risk of delays caused by APAM and its contractors was allocated to Baulderstone Hornibrook for which it assumed responsibility.

Qantas appreciates that the determination of this claim is solely a matter for Clifton Project Management, in its capacity as independent assessor, valuer or certifier.  Accordingly, this letter does not amount to a direction by Qantas to determine the claim in a particular way.  Similarly, the contents of this letter are not something that Clifton Project Management is bound to take into account or have regard to in making its determination.

Nevertheless it is suggested that Clifton Project Management seeks independent legal advice on the claim and the contents of this letter, prior to issuing its determination.”

In effect, BHPL says that this letter was written to procure, and that it did procure, Mr Crawford to act unfairly when he assessed the claims. 

96                  As with all things in this case, Qantas’ letter must be considered in its context.  The context is that on 15 March 1998 (a Sunday), Cliftons, which had some difficulty in considering an aspect of BHPL’s claim and had sought additional information from BHPL, advised Qantas that it was assessing the claim and requested Qantas to comment on the unresolved issue. Cliftons also advised Qantas that it would be seeking the advice of the quantity surveyor.  Qantas was asked to respond urgently. 

97                  When viewed in this light the letter of 24 March cannot have attributed to it the character of an improper communication between the owner and the independent certifier.  Put differently, there was nothing improper in Cliftons seeking information from Qantas about matters raised in BHPL’s claim which Cliftons believed required clarification.  Nor was there anything improper for Qantas to respond to that invitation.  Moreover, when considered in this context, Qantas’ response cannot be construed as an impermissible attempt to undermine the independence of Cliftons.  The letter itself acknowledged the existence of that independence.

98                  BHPL also relies on conversations between Mr Richards and Mr Bullen during the course of which Mr Richards made clear his strong view that BHPL was not entitled to any delay claims and was certainly not entitled to any compensation.  Mr Richard put his views so strongly that Mr Bullen believed that he was taking an excessively hard line and told him so.  I know very little about what was said during these conversations.  I suspect that Mr Richards went much further than he was entitled in pressing his view.  The letter of 24 March was a carefully crafted document, probably settled by solicitors.  In his discussions, Mr Richards is unlikely to have felt any inhibitions.  It is possible that Mr Richards also spoke to Mr Crawford and made his strongly held views known. 

99                  However, having listened very carefully to Mr Crawford’s evidence, I am satisfied that he did in fact carefully consider the extension of time claims and resolved them on what he regarded to be their merits, without being influenced by Qantas’ or Mr Richards’ urgings that the claims be rejected.  Indeed, Mr Crawford was sufficiently sympathetic to BHPL’s plight that, notwithstanding his view that BHPL was not entitled to all the extensions sought, he exercised his discretion under cl 9.05 to grant an additional 26 days extension in excess of what he believed to be its only entitlement.  In these circumstances I am not able to ignore Cliftons’ certificate and will not myself undertake an assessment of the extension claims.

100               The second contract claim is founded upon the assertion that BHPL’s performance of the works had been disrupted.  I should explain what BHPL means by “disruption” in this context.  There is a distinction between, on the one hand, events which cause delay in the time fixed by the contract for the completion of works and, on the other hand, events which affect the progress of those works but not the date for completion.  The reason for mounting a disruption case is to avoid the restrictions and limitations imposed on delay claims by the building works contract.

101               The event giving rise to the disruption claim is the alleged breach by Qantas of cl 3.03 of the building works contract.  It will be recalled that cl 3.03 is one of the provisions which deals with access.  BHPL seeks compensation being the costs which would not have been incurred but for the breach of contract.  The costs comprise the additional expense incurred by BHPL due to the rescheduling of the works and the expense incurred in providing additional resources.

102               Two issues must be resolved:  (1) What is the proper interpretation of cl 3.03? and (2) In the events which have occurred, has Qantas breached the clause?  The parties differ on both issues.

103               In relation to the first issue, this is the approach that I will take.  The object to be achieved in construing any contract is to discover what the parties intended their legal obligations to be.  The inquiry is not to discover their actual intention but what they must have agreed to in light of the language they used, having regard to the surrounding circumstances and the object of their contract.  This task usually begins with an examination of the language of the contract, not considered in isolation but in the context of the document as a whole.

104               Building works cannot be undertaken unless the contractor is given access to the site of those works.  In the case of a new project the contractor will usually be given undisturbed possession or access to the whole site.  If there be no express provision in the building contract to that effect, this will be an implied promise given by the owner:  Freeman and Son v Hensler (1900) 64 JP 260.  But undisturbed access cannot be granted if, for instance, the works being performed related to existing premises which are still occupied or where other works are being performed by another contractor.

105               In the case of this building works contract, for reasons which I have already gone into in some detail, Qantas could not, and did not, agree to give BHPL undisturbed access to the site.  It could not do so for the reason that other contractors were going to be engaged to carry out work which would necessarily interfere with BHPL’s access.  There are a number of clauses which make this clear.  The first is cl 1.03 pursuant to which Qantas covenanted to give BHPL “sufficient access to the Site on or before the date for access to enable [BHPL] to commence the Stages and thereafter to proceed with the Works”.  (The “Site” to which reference is made is identified in Schedule 1 by reference to a sketch plan and seems to be confined to the Qantas lease area.)  The obligation imposed by cl 1.03.01 has two aspects:  Qantas must give “sufficient access” to the site (1) to enable the works to commence and (2) to enable the works to continue.  Both limbs of are subject to BHPL’s acknowledgement that its access will be “limited” and “restricted”.  It is evident that Qantas’ obligations have been limited in this way because other contractors will carry out work on or near to the site.  See in this regard the reference to “FAC other works” which, according to the definition in Sch 10, include infrastructure works and the services tunnel.  Further, the obligation in cl 1.03.01 is “subject to the provisions of this agreement including cl 3.04 and para 1.03.02”.  Clause 1.03.02 provides that any delay in giving BHPL access will not be a breach of contract, but will only entitle BHPL to an extension of time.  Clause 3.04 is a more important, albeit indirect, qualification on Qantas’ obligation to give access.  By that clause BHPL acknowledges that it has “limited and restricted access to the Site”.  The reason for the acknowledgement is, as cl 3.04 makes plain, that other contractors, including contractors who are not engaged by Qantas, will carry out work in and around the site.

106               On one view cl 3.03 adds little to Qantas’ obligations to give access as required by the second limb of cl 1.03.01.  However, the draftsman of the contract must have been of the view that cl 1.03.01 was principally (or perhaps exclusively) concerned with initial access to enable the works to begin and so cl 3.03 was included to cover access for the duration of the contract.  Be that as it may, the right of access accorded by cl 3.03 is also subject to cl 3.04.  That is, the access is both “limited” and “restricted”.  It is “limited” and “restricted” to accommodate the work of other contractors to the extent that those works preclude BHPL having unrestricted access to the site. 

107               There seems to be little doubt that BHPL was denied adequate access to the site to enable it to carry out its works in a timely fashion.  On the other hand, the “limitation” and “restrictions” to its access were solely the result of the execution of work by other contractors, in particular the contractors who carried out the FAC other works.  It follows that, although BHPL was not given sufficient possession of the site for it to carry out its works properly, Qantas’ failure fell within the qualifications to its obligations in that regard.  It cannot be said, therefore, that Qantas was in breach of cl 3.03.

108               I will hear the parties on the orders (if any) that should be made to give effect to these reasons and the further directions that should be given to deal with the remaining claims.

 

I certify that the preceding one hundred and sixteen (108) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

 

 

Associate:

 

Dated:              11 March 2003

 

 

Counsel for the Applicant:	Mr P Hayes QC Mr C Harrison
Solicitor for the Applicant:	Gadens Lawyers
Counsel for the Respondent:	Mr P Vickery QC Dr D Kinder
Solicitor for the Respondent:	Blake Dawson Waldron
Date of Hearing:	4, 5, 6, 7, 8, 12, 13, 14, 18, 19, 20, 21, 22, 25 & 26 June 2001
	26 & 27 July 2001 28 & 29 August 2001
Date of Judgment:	11 March 2003