March 2014

Territory company awarded extra damages

by Krystal Belcher, KT Journalism

A Darwin engineering company has been awarded an extra $38,000 for damages caused by a crane collapsing onto its business premises in 2006.

Consultant engineering company Acer Forester Pty Ltd was contracted to provide engineering services as a subcontractor to architects for residential developments for the Defence Housing Authority (DHA).

The DHA project was governed by a fixed-price contract and was Acer Forester’s major undertaking from July 11 to September 11, 2006.

On July 17, building contractor A&K Pty Ltd was working on a block behind Acer Forester’s premises, using a crane owned by Complete Crane Hire (NT) Pty Ltd. Crane operator Bart Sutherland tried to move a pallet of tiling glue but the load was too heavy and the crane collapsed onto the roof of Acer Forester’s premises.

The collapse caused significant damage to the building’s roof, ceilings and fascia, which was repaired by the building’s insurer.

The DHA project was due for completion on September 11, 2006, but was not finalised until November 15. Acer Forester’s final invoice was sent on November 23.

Acer initially took action in the Northern Territory Supreme Court. Liability was admitted and the matter proceeded for an assessment of damages. On July 30, 2013, judgement was granted in Acer Forester’s favour for some of its claims.

Acer had sued Complete Crane Hire, Sutherland and A&K, claiming damages in negligence caused, among other things, by the interruption to the business while the building was repaired from July 17 to the end of October 2006.

Trial judge Justice Judith Kelly said it had not been established the crane collapse was the sole, or even the major, cause of the delay for the whole of that period. She found the collapse was the effective and proximate cause of delay that lasted for eight days only.

Due to the state of Acer Forester’s records, there was no complete record of times worked by each employee during the relevant period. She said it was therefore not possible to accurately determine work time lost.

Acer Forester asserted it was a business interruption case. Its argument was it did not tender for or otherwise seek work during the period of interruption because it was contractually committed to complete the DHA project within a specified time.

In the NT Appeal Court, Chief Justice Trevor Riley and Justices Stephen Southwood and Jenny Blokland found Acer was entitled to damages for the loss of productive time, but agreed the time period was limited to only eight days.

They said Justice Kelly’s conclusion the collapse caused eight days loss of productive time to the business was not an error. “The evidence did not show the disruption caused a loss of revenue over four months, as claimed, or, indeed, any period beyond eight days.”

But Justice Kelly made no damages award for that loss, because Acer Forester expressed its claim in the lower court as being for damages for loss of opportunity to perform other work during the time work on the DHA project ran over time.

“Although expressed in that way, much of the evidence was directed to a claim for business interruption, for which a specific claim for damages was made in the fourth amended statement of claim. The formulation of [Acer’s] claim and its presentation in the lower court was confusing,” the Appeal Court judges said.

“However, an interruption claim was sufficiently identified, and contrary to [Complete Crane Hire, Sutherland and A&K’s] submissions, no truly new ground was argued on appeal.

“The only award arising out of the loss of time was for delay in [Acer Forester] receiving payment for the DHA project.

“The measure of this loss, which was eight productive days, should be measured by the averaging process,” their unanimous judgement said.

“It is perhaps not a very satisfying answer to say damages are not in every case a perfect compensation but, in many cases, no more than an approximation lacking in mathematical or economic accuracy or sufficiency. But, however unsatisfying, that answer must be accepted,” they said.

Acer Forester Pty Ltd v Complete Crane Hire & Ors, NTCA 11, November 19, 2013