Robt Jones (363 Adelaide Street) Pty Ltd v First Abbott Co Pty Ltd
[1999] QCA 49
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- Robt Jones (363 Adelaide Street) Pty Ltd v First Abbott Co Pty Ltd[1999] QCA 49
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Robt Jones (363 Adelaide Street) Pty Ltd v First Abbott Co Pty Ltd[1999] QCA 49
Robt Jones (363 Adelaide Street) Pty Ltd v First Abbott Co Pty Ltd[1999] QCA 49
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No.10616 of 1997
Brisbane
| Before | de Jersey CJ Pincus JA Davies JA |
BETWEEN:
ROBT JONES (363 ADELAIDE STREET) PTY LTD
ACN 010 612 889
(First Plaintiff) First Appellant
AND:
ROBT JONES INVESTMENTS LTD
ARBN 010 457 511
(Second Plaintiff) Second Appellant
AND:
FIRST ABBOTT CORPORATION PTY LTD
ACN 007 655 423
(First Defendant) First Respondent
AND:
BLIGH JESSUP BRETNALL ARCHITECTS PTY LTD
ACN 010 430 878
(Seventh Defendant) Second Respondent
AND:
BLIGH VOLLER ARCHITECTS PTY LTD
ACN 010 724 339
(Ninth Defendant) Third Respondent
REASONS FOR JUDGMENT - THE COURT
Judgment delivered 5 March 1999
- White Industries (Queensland) Pty Ltd (“White”) constructed a building at 363 Adelaide Street, Brisbane for the first defendant, First Abbott Corporation Pty Ltd (“Abbott”), under a contract executed on 17 December 1986. The developer, Abbott, was the parent company of the registered proprietor of the land, the first appellant Robt Jones (363 Adelaide Street) Pty Ltd (“RJ363").
- This litigation arises from the decision of the glass subcontractor, Hennessey Glass and Aluminium Systems Pty Ltd (“Hennessey”) to use toughened glass in the curtain wall of the building. Hennessey obtained that glass from a glass broker, McDowall Pacific Pty Ltd.
- Glass is “toughened” by the application of extremely high heat. The risk of failure of glass because of nickel sulphide inclusions increases with the application of heat of that intensity. The risk can be reduced by using heat “strengthened” rather than heat “toughened” glass. For heat strengthened glass, less intense heat is applied.
- The toughened glass was delivered to the site in March 1987 and installed. On the morning of 16 November 1988 an outer glass panel on the 7th floor Wharf Street frontage of the building fell onto a second floor balcony. Between 17th April 1989 and 12th June 1990, another eight panels failed. On 2nd July 1990 the Brisbane City Council called on RJ363 to show cause why the whole external glass walling system should not be removed and replaced.
- In December 1986 the second appellant, Robt Jones Investments Ltd (“Robt Jones”) had acquired control of RJ363. Robt Jones incurred considerable expense engaging experts, constructing protective awnings and replacing glass panels. Of forty-six breakages to the time of trial, the “failure initiation point” could be recovered and tested in eight cases. Six of them showed the presence of nickel sulphide inclusions, one displayed a crater consistent with such inclusions, and the cause of failure in the eighth case was equivocal. The learned trial judge found that it was more likely than not that the reason for the failure of the majority of the failed panels was nickel sulphide inclusions.
- Robt Jones retained the second respondent, Bligh Jessup Bretnall Architects Pty Ltd (“Bligh Jessup”), on 17th November 1986, to “undertake an architectural/engineering assessment and advise on the overall quality in respect of our proposed purchase” of the building at 363 Adelaide Street. Robt Jones was interested in buying good quality commercial office buildings in Brisbane, and Bligh Jessup had previously given Robt Jones advice in that respect about other buildings. Bligh Jessup did give advice to Robt Jones in respect of 363 Adelaide Street. By the end of July 1987, Bligh Jessup’s retainer had been assumed by the third respondent, Bligh Voller Architects Pty Ltd (“Bligh Voller”).
- The appellants, RJ363 and Robt Jones, brought proceedings against nine defendants including, among others, the developer Abbott, the builder White, the glass subcontractor Hennessey, and Bligh Jessup, Bligh Voller and Mr Voller (a director and the principal architect employed by both companies). The appellants recovered judgment against Abbott for $861,927.52, representing eighty percent of past losses incurred by the appellants and interest, together with $280,825.52 for future losses. The learned judge imposed the eighty percent limitation because of the prospect that causes other than nickel sulphide inclusions had led to breakages. Abbott obtained judgment in turn against White, and White against Hennessey. Her Honour dismissed the appellants’ claim against Bligh Jessup, Bligh Voller and Mr Voller.
- The appellants contend that they ought to have obtained judgment against Bligh Jessup and Bligh Voller, in the case of Robt Jones as damages for breach of contract and negligence, and in the case of RJ363, as damages for negligence. They also contend that the Judge erred in reducing the amount to be allowed in respect of past losses by twenty percent, so far as the cost of taking protective measures was concerned, in that there was no finding that those protective measures would have been required in any event, that is, even had the glass not contained panels at risk of failure because of nickel sulphide inclusions.
- The appellants’ pleaded case was that it retained Bligh Jessup on 17th November 1986 “to act on its behalf to undertake an architectural/engineering assessment and to advise on the overall quality in respect of the proposed purchase of the building”, and that Bligh Jessup and Bligh Voller were at all material times retained as “representative architects during the construction” of the building. The appellants allege that the respondents breached the retainer, or were negligent, in these particular respects:
“(a)In failing to warn the plaintiffs of the risk of the incidence of nickel sulphide stones in the manufacture of such glass as aforesaid;
- Failing to take any or any adequate steps to ensure that the said curtain wall did not contain panels of glass with nickel sulphide impurities;
- Failing to carry out any or any adequate tests on the glass comprising such curtain wall prior to the supply and installation of the same in the said building;
- Failing to give to the Plaintiffs any or any adequate advice as to the glass that ought be included in such curtain wall.
- Failing to advise the Plaintiffs that the glass specified in the said building was at risk of spontaneous failure due to:
- The presence of nickel sulphide impurities;
- Scratching and pitting caused by cleaning and/or installation;
- Provision of insufficient edge support or the omission of necessary gaskets during the construction process;
- A combination of two or more of the matters particularised above where such glass was required to meet the wind load requirements specified in Appendix A to Section 8A of the Specification.
- Failing to advise the Plaintiffs that the glazed aluminium awning was structurally unsound;
- Failing to ensure that a warranty or guarantee was obtained for the benefit of the Plaintiffs as referred to in paragraphs 27 and 28 hereof;
- Failing to supervise and/or inspect and/or adequately supervise and/or inspect the works comprising the glass curtain wall so as to ensure that it was constructed in accordance with the said building contract and specifications;
- Failing to supervise and/or inspect and/or to adequately supervise and inspect the works comprising the said glazed aluminium awning to ensure that it was constructed in accordance with the building contract and specifications.”
- Her Honour found that the scope of the architect’s retainer did not extend to investigating the strength of the glass, and that the duty of care being co-extensive with the contractual duty, there was no negligence either. Her conclusions follow:
“There was no detailed contractual arrangement worked out between the plaintiffs and Bligh Jessup and Bligh Voller so as to exclude a general duty of care from their relationship. I have however concluded that the ambit of the duty did not include investigation of the strength of the glass or the detailed investigation of the glass awning. They did not in any event fall below the standard of a competent architect. The duty of care owed by virtue of the relationship in tort is co-extensive with the obligations under the contract of retainer and there was no breach of that contract.”
- It will have been seen that the appellants allege a retainer of 17th November 1986. The relevant letter of that date reads:
“Re: 363 Adelaide Street, Brisbane
This letter will serve to confirm our appointment of your firm to act on our behalf to undertake an Architectural/Engineering assessment and advise on the overall quality in respect to our proposed purchase of the building in respect to our intended acquisition.
We also confirm that part of your instruction is to provide us with your recommendations relating to minor, but nevertheless important cosmetic improvements to the facade design.
We would also propose to appoint you as our representative Architects during the total construction period, and this would be covered by a separate letter.”
- Having recounted the surrounding circumstances, her Honour said that a literal meaning ought not to be given to that expression, “architectural/engineering assessment”, such as to encompass, “on its widest view ... for example, investigations of the foundations and geotechnical engineering design assessment, none of which was ever attempted or contemplated”. The Judge continued:
“The presence of project architects further suggests the limited role contended for by the consultant architects and would not have involved a consideration of the strength of the glass to be installed in the building or of an engineering analysis of the design and structure of the awning.”
- Her Honour’s analysis of those “surrounding circumstances” may be gathered from these following passages in the judgment:
“By oral conversations and a letter dated 17 November 1986 Robt Jones retained Bligh Jessup. The relevant terms of the letter were
`To act on our behalf to undertake an Architectural/Engineering assessment and advise on the overall quality in respect of our proposed purchase of the building.
We also confirm that part of your instruction is to provide us with your recommendations relating to minor, but nevertheless important cosmetic improvements to the facade design.’
The plaintiffs contend that the retainer required the consultant architects to investigate, inter alia, the type of glass selected for the glass curtain wall and to do a structural analysis of the glass awning. The consultant architects contend for something much less. Mr Jon Voller had been approached by Mr E Kann, Robt Jones’ Brisbane solicitor to ascertain if his company was interested in providing reports to Robt Jones in respect of buildings it was proposing to purchase in Brisbane. At a subsequent meeting held at Brisbane, possibly in August 1986, Sir Robert Jones, then chief executive of Robt Jones, explained to Mr Voller the kinds of things that he was particularly interested in knowing about when purchasing a building. These were the adequacy of services particularly air conditioning, lifts and electrical services as well as the aesthetic quality of the building and its position in the marketplace. Robt Jones was to be a long term owner with a fully tenanted building and in Sir Robert Jones’ opinion these services were vital to keep tenants. In his evidence Sir Robert Jones did not contend that anything more than the reports which were prepared by Bligh Jessup were required by the retainer. Bligh Jessup was to engage consultants to carry out the necessary engineering assessments in respect of the services in which Sir Robert Jones was interested and to review the available documents when buildings were not complete. The reports were to be done quickly because, according to Sir Robert, quick commercial decisions had to be made. Bligh Jessup was to be paid at an hourly rate. There were other meetings involving Sir Robert Jones and Mr Voller and Mr Martin Butterworth, an employed architect with Bligh Jessup, in which Sir Robert’s interest in the aesthetics of the Building was canvassed. By the time proceedings were issued Sir Robert Jones was no longer associated with the plaintiffs.
Bligh Jessup produced several reports for Robt Jones in respect of other Brisbane buildings prior to being retained in respect of the Building and that retainer needs to be construed in the light of the general relationship between them as to the preparation of reports, see Mutual Community Limited v. Lorden Holdings Pty Ltd (unreported decision of Byrne J of Supreme Court of Victoria No 10561 of 1990, judgment of 29 March 1993). Sir Robert Jones said that the Building retainer was no different from the others and he did not require any wide ranging analysis. The brief reports which were submitted to Robt Jones in December in respect of the Building are consistent with other reports and were not the subject of complaint.
There was a subsequent agreement that Bligh Jessup was to advise Robt Jones with respect to certain “cosmetic” improvements designed by Robt Jones to the facade of the Building - a crown at the top and a waistband above the awning and to liaise with respect to those amendments with Lynch & Blow. These are not matters the subject of any negligence claim or breach of contract (the awning allegations do not relate to these changes).
The third paragraph of the letter of 17 November stated:
`We would also propose to appoint you as our representative Architects during the total construction period, and this would be covered by a separate letter.’
The plaintiffs have pleaded this role for the consultant architects and the particulars allege a further retainer reached between Mr Rushworth for Robt Jones and either Mr Voller or Mr Butterworth for the consultant architects in late December 1996. This fresh retainer is alleged to include responsibility for inspecting and reporting on documentation and work in progress and advising Robt Jones on the performance of the construction of the building in terms of the contract. Neither Mr Rushworth, Mr Voller or Mr Butterworth gave evidence as to the making of any fresh retainer. I accept that the building contract was not seen by Mr Voller and that it was not provided to the consultant architects. Neither was there any evidence that any of the consultant architects were aware of the terms of the development agreement and in particular the provisions of cl.12 which contemplated a role for Robt Jones’ architects in respect of the building until Robt Jones wanted Bligh Voller to report on practical completion which it was reluctant to do.
On 1 December 1986 Bligh Jessup provided a report to Robt Jones. The consultant architects referred to a preferred colour for the anodised aluminium for the curtain wall, the top of the Building (the provision of a “crown”) and some concerns with the awning. The tenor of the report was as to visual appearance. A further report dated 19 December 1986 gave an overall evaluation of the Building. The changed curtain wall system was described as straightforward using tried and proven techniques but suggested that Robt Jones seek confirmation from the developer with respect to the shade co-efficient and the connection of the curtain wall system to the built-up columns on the facade. The other comments concerning the external cladding related to the colour selection of the anodised aluminium framing and glass.
None of the circumstances surrounding the retainer of Bligh Jessup suggested that a literal meaning ought to be given to the expression “architectural/engineering assessment” which would have on its widest view involved, for example, investigations of the foundations and geotechnical engineering design assessment, none of which was ever attempted or contemplated.”
- The grounds of appeal which relate to these findings were that her Honour erred in finding that the retainer was limited in that way, and in viewing the general duty of care as being correspondingly limited. As to the approach this Court should take in reviewing the learned Judge’s conclusions, we were referred to the High Court’s decision in State Rail Authority of New South Wales v. Earthline Constructions Pty Ltd [1999] HCA 3.
- Having reviewed the evidence, with particular attention to the passages to which we were referred by counsel, we are satisfied not only that her Honour’s conclusion was reasonably open on the evidence, but that it was the correct conclusion. The vast bulk of the evidence led strongly to that conclusion. This was certainly not a case where a contrary view was warranted by, for example, “apparently reliable and incontrovertible documentary evidence”, or “a significant amount of uncontested oral testimony”, adopting the terminology of Kirby J in Earthline Constructions. That is not to suggest that those are necessarily the only indicators towards an appellate court’s obligation to differ from the approach of a trial judge with relation to “wrong” factual findings. It suffices for the disposition of this case to note, as we have, that the vast bulk of the evidence led strongly to the conclusions to which her Honour came.
- The retainer was said to have been concluded both orally and in writing. Determining its true scope necessarily involved interpreting the apparently unlimited ambit of the obligations specified in the letter of 17 November 1986 by reference to the surrounding circumstances. Importantly, one might usefully start with the precedent discussions between Mr Voller and Sir Robert Jones of the appellants.
- In August 1986, Sir Robert Jones informed Mr Voller that his company wished to purchase significant buildings and, in essence, that he needed brief overview reports for his directors prior to their committing to purchases. These were to be provided by the architects. Sir Robert made it clear that his major concern was the apparent or perceived quality of the building, from the point of view of the marketplace. Mr Voller specifically mentioned the desirability of noting lift facilities, air conditioning, electrical fire and lighting services, with the possible need to retain engineers for an assessment in areas beyond the architects’ expertise. All this sufficiently emerges from the following parts of the evidence of Mr Voller:
“What did he say, if anything, about what he wanted by way of service or work from your firm as architects?-- He was a proud man and proud of the purchases they were going to make. He made it quite clear that they were here to make a number of purchases of significant buildings and that in order to keep the directors or those responsible for the management of this trust happy back in New Zealand he would require some brief overview report on each project or each building, rather, prior to committing to purchase. He was - he outlined he was only interested in buildings that were fully tenanted.
Yes?-- He outlined that because of the - them only being interested in buildings, that had no risk as far as income was concerned, that the major concern that he wished me to address in my report was the apparent quality or perceived quality of the building, if you like, from the marketplace point of view, because it was of great concern to him and his investment trust that if something should happen to mean that the building had to be relet, he wanted to be comforted by the fact that it would be perceived well by the marketplace and be easily relet. He also made it very clear that the investment trust was to be a long term owner.
Was any mention made of the question of the location or position in the city for buildings which were under consideration?-- Yes, his - the conversation was prompted by me in some ways and his concern for its perception by the marketplace we tried to qualify and he said, `Well, I am interested in knowing about its exact location, how prominent that is, what your opinion of the ‘ - that’s Jon Voller’s opinion - `is of the design of the building’, those sort of things and I prompted him a little further to say that as a long term owner he should be interested in some of the hidden things that might cause him to have to spend money that he hadn’t expected in the foreseeable future.
Did you mention anything in particular in that regard?-- I did. I had regard - sufficient experience in a variety of high-rise buildings for - both as a designer and in reporting on them for other owners and tenants in Brisbane to realise that lifts systems, air conditioning system and electrical services and even fire services and lighting services in all buildings might - they may not all equal and so I recommended to him that we make an engineering assessment of those services, particularly the air conditioning, particularly the lift, particularly the electrical and fire services.”
- The first retainer relating to a specific building came by letter of 7th August 1986 from the appellant’s solicitors, inviting the architects’ views on these aspects of plans and specifications enclosed with the letter:
“1.Building finishes particularly in the external and public areas;
- The ceiling heights, we note from the plans that the ceiling heights are 2,500mm;
- The aesthetics of the building;
- The mechanical services provided to the building and their suitability;
- A general report on your impressions of the building.”
- The letter concluded with this authorisation, referable back to the earlier discussions covered by the evidence set out above:
“We have been instructed by our client to authorise you to retain such other professionals as may be necessary to provide us with the report we have sought.”
- We read this as not inconsistent with the limitation found by her Honour to apply to the retainer mentioned in the letter of 17th November.
- The second specific retainer came by the appellants’ solicitor’s letter of 21st August 1986. It requested a report from the architects, implicitly within fourteen days, with relation to the possible purchase of a CSR building at 60 Edward Street. The report was to cover “the quality of the building”, with particular reference to “ceiling heights and the adequacy of the mechanical services and the carparking”. The letter added: “If there is any additional information which you need would you please advise us urgently so that we might obtain same and get them to you as quickly as possible.” The architects responded on 10th September.
- The appellants referred particularly to this part of the architects’ report - otherwise clearly prepared consistently with the limitation which her Honour found. Under the heading, “Exterior cladding”, the architects reported:
“The exterior cladding of this project is largely GRC glass reinforced concrete (panels). As well, there are a number of precast concrete panels ... the technology ... has been developed in other parts of the world, particularly Europe. It is a new product as far as Brisbane is concerned and, therefore, untested in this environment. Bligh Jessup ... have no experience with GRC cladding and, therefore, are unable to comment on this particular installation from a technical point of view. ”
The appellants submitted that the architect’s having expressed this disclaimer was consistent with its acknowledging an obligation otherwise to investigate and report on aspects transcending the merely aesthetic. The more reasonable interpretation is that having noted an aspect of possible significance which was beyond its expertise, the architect responsibly adverted to that matter. The difference with relation to this glass was that no potential difficulty was apparent, as Mr Voller indicated in this piece of evidence:
“You simply didn’t know whether the glass was of reasonable quality or not, is that your point?-- I relied on the fact that there was a competent builder, architect and a performance specification carrying warranties for that aspect of the job to deliver a quality curtain wall.”
- In our view the evidence to which we have referred amply supports her Honour’s findings as to the scope of the retainer. We have specifically referred only to a very small part of the evidence in what was a case of substantial proportion. But that is sufficient for the purpose of disposing of this appeal, noting, as we have already done, that there was simply no compelling evidence tending in the other direction.
- The breadth of the appellants’ construction of the retainer was well illustrated during the argument on the hearing of the appeal. It would extend to obliging the architect even to investigate, as an example, the structural adequacy of the concrete construction in the building. Such an extensive obligation would be totally inconsistent with the scope of the inquiry described in August by Sir Robert Jones and then undertaken, with the appellants’ apparent satisfaction, with respect to the buildings concerned in the first two specific retainers.
- It is also of some significance that the architects were paid on the basis of an hourly rate - $50 per hour for, as it turned out with respect to this assignment, 50 hours. On the face of things, one would regard that basis as more consistent with the sort of limited investigation required by Sir Robert Jones, than with the extraordinarily far reaching and potentially very expensive commitment urged for the appellants before us.
- It remains to mention her Honour’s viewing the duty owed in tort as being co-extensive with the duty owed under the retainer. In these circumstances, that approach was clearly right: see Voli v. Inglewood Shire Council (1963) 110 C.L.R. 74, 85, Bryan v. Maloney (1995) 182 C.L.R. 609, 621 and Henderson v. Amadio Pty Ltd (1995) 62 F.C.R. 1, 143.
- Counsel for the appellants sought leave to amend para 2(g)(ii) and (iii) and (i) of the amended notice of appeal. At the hearing the court reserved the question whether leave should be granted. The proposed amendments concern the issue of breach, not the scope of the retainer, so that it is unnecessary to determine now whether leave should be granted.
- We would dismiss the appeal against the second and third respondents, Bligh Jessup Bretnall Architects Pty Ltd and Bligh Voller Architects Pty Ltd.
- We would order the appellants to pay the costs of the second and third respondents of and incidental to the appeal to be taxed.
- We note that the notice of appeal sought increase in the amount of damages to $984,953.23, against all respondents - including First Abbott Corporation Pty Ltd. No argument was addressed, orally or in writing, to the extent of that respondent’s liability, and there was no appearance for it. We would take that aspect of the appeal to have been implicitly abandoned, but the Court should be notified if this is wrong.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No.10616 of 1997
Brisbane
BETWEEN:
ROBT JONES (363 ADELAIDE STREET) PTY LTD
ACN 010 612 889
(First Plaintiff) First Appellant
AND:
ROBT JONES INVESTMENTS LTD
ARBN 010 457 511
(Second Plaintiff) Second Appellant
AND:
FIRST ABBOTT CORPORATION PTY LTD
ACN 007 655 423
(First Defendant) First Respondent
AND:
BLIGH JESSUP BRETNALL ARCHITECTS PTY LTD
ACN 010 430 878
(Seventh Defendant) Second Respondent
AND:
BLIGH VOLLER ARCHITECTS PTY LTD
ACN 010 724 339
(Ninth Defendant) Third Respondent
de Jersey CJ
Pincus JA
Davies JA
Judgment delivered 5 March 1999
Judgment of the Court.
APPEAL AGAINST SECOND AND THIRD RESPONDENTS, BLIGH JESSUP BRETNALL ARCHITECTS PTY LTD AND BLIGH VOLLER ARCHITECTS PTY LTD, DISMISSED. APPELLANTS TO PAY THE COSTS OF THE SECOND AND THIRD RESPONDENTS OF AND INCIDENTAL TO THE APPEAL TO BE TAXED.
| CATCHWORDS: | NEGLIGENCE - architects - whether duty of care and retainer extended to investigating aspects transcending the aesthetic - whether treating duty of care and retainer as co-extensive was correct - whether findings of trial judge inconsistent with evidence State Rail Authority of NSW v. Earthline Constructions Pty Ltd [1999] HCA 3 |
| Counsel: | Mr D. Fraser QC, with him Mr P. Thorp for the appellants. Mr R. Wensley QC, with him Ms J. Dalton for the respondents. |
| Solicitors: | Nicol Robinson Halletts for the appellants. Gadens Lawyers for the respondents. |
| Hearing Dates: | 15 - 16 February 1999 |