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Supreme Court of the ACT Decisions |
COURT
IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ
CATCHWORDS
Negligence - damages - contribution among tortfeasors.
Negligence - damages - contribution among tortfeasors - two tortfeasors agree to separate consent judgments in favour of plaintiff and claim contribution from third tortfeasor - third tortfeasor agrees that cumulative damages of $5 million in favour of plaintiff appropriate.
Negligence - personal injuries - plaintiff falls from balcony of house when timber railing gives way - recovers consent judgments against owner/occupiers and against Commonwealth as building control authority - plaintiff discontinues against builder of house and against building permit holder - occupiers and Commonwealth (now ACT) claim contribution from building permit holder.
Negligence - personal injuries - duty of care to plaintiff - clear duty of care owed by builder, building inspector and building control authority - building control authority guilty of breach of "personal" duty and vicariously liable for building inspector's breach of his duty to ensure rectification of faulty work - whether duty of care owed by building permit holder - builder a company actively controlled and managed by building permit holder - held duty of care owed and breached by failure to ensure compliance with building inspector's requirement of rectification of faulty work - damages - contribution among tortfeasors - all liable to plaintiff - extent to which just and equitable for each to contribute to agreed damage - no onus - occupiers' breach minor element in causation and of much less culpability resulting in 10 per cent contribution - no distinction between building control authority and building permit holder on causation and culpability - each liable to contribute 45 per cent.
Building Ordinance 1972 (ACT)
Law Reform (Miscellaneous Provisions) Act 1955 (ACT), s.5
Evidence Act 1995, (Cth) s.63
Thompson v. Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 71 ALJR 131
The Council of the Shire of Sutherland v. Heyman and Another [1985] HCA 41; (1985) 157 CLR 424
Australian Safeway Stores Proprietary Limited v. Zaluzna [1987] HCA 7; (1987) 162 CLR 479
Bryan v. Maloney [1995] HCA 17; (1994-1995) 182 CLR 609
Donoghue v. Stevenson [1931] UKHL 3; [1932] AC 562
Hawkins v. Clayton and Others [1988] HCA 15; (1988) 164 CLR 539
Voli v. Inglewood Shire Council and Another [1963] HCA 15; (1963) 110 CLR 74
Anns and Others v. Merton London Borough Council [1977] UKHL 4; [1978] AC 728
Murphy v. Brentwood District Council [1991] UKHL 2; [1991] 1 AC 398
Caltex Oil (Australia) Pty Limited v. The Dredge "Willemstad" [1976] HCA 65; (1976) 136 CLR 529.
Torts in the Nineties, N.J. Mullany, 1997
Kondis v. State Transport Authority [1984] HCA 61; (1984) 154 CLR 672
HEARING
CANBERRA, 2-3 December 1996 (hearing), 19 June 1997 (decision)
19:6:1997
Counsel for the 1st and 3rd defendants: Mr. R. Williams, QC with Mr. Walker
Solicitors for the 1st defendants: Abbott Tout Harper & Blain
Solicitors for the 3rd defendant: ACT Government Solicitor
Counsel for the 4th defendant: Mr. J. Purnell, SC
Solicitors for the 4th defendant: Mallesons Stephen Jacques
ORDER
THE COURT ORDERS THAT:
1. There be judgment for the first defendants against the fourth defendant for $2 million.2. There be judgment for the third defendant against the fourth defendant for $250,000.
DECISION
MILES CJ
Nature of case: contribution among tortfeasors: owner, building authority, building permit holder
1. This has become a claim for contribution among defendant tortfeasors.
2. The plaintiff was injured on 9 October 1991 when he fell from the balcony of a house owned and occupied by the first defendants, Mr. & Mrs. Brzozowski (the Brzozowskis) and built by the second defendant, John J. O'Brien Homes Pty Limited (O'Brien Homes). The construction took place pursuant to a building permit granted by the third defendant (the Commonwealth) to the fourth defendant (Mr. O'Brien) under the provisions of the Building Ordinance 1972 (ACT) (the Ordinance), as it then was. The plaintiff sued all those defendants for negligence. However, he filed notices of discontinuance against O'Brien Homes and Mr. O'Brien. The plaintiff settled his claim against the Brzozowskis by way of consent judgment for $2.5m and also settled his claim against the Commonwealth by way of a separate consent judgment also for the sum of $2.5m. In consequence of s.5 of the Law Reform (Miscellaneous Provisions) Act 1955 (ACT), it was open to the plaintiff to obtain separate and consecutive judgments against each tortfeasor so long as he did not and does not receive in his hands a sum more than the amount of damages to which he is entitled: Thompson v. Australian Capital Television Pty Ltd [1996] HCA 38; (1996) 71 ALJR 131.
3. The Brzozowskis and the Commonwealth now seek contribution from Mr. O'Brien who was a director of and the controlling force behind O'Brien Homes. It is conceded on Mr. O'Brien's behalf that the sum of $5m, the cumulative sum of the amounts for which the plaintiff has recovered judgment against the Brzozowskis and the Commonwealth, would have been a reasonable award of damages having regard to the plaintiff's injuries.
Pleadings: owner and building authority claim against the building permit holder
4. The notices of contribution relied upon by the Brzozowskis dated 2 May 1995 and by the Commonwealth dated 22 September 1994, repeat the grounds of negligence pleaded by the plaintiff against Mr. O'Brien. They are as follows:
"(a) The plaintiff repeats and relies on the allegations of negligence (a) to (i) recited against the second defendant in paragraph 19, [that is: (a) Securing the top railing of the balustrade at the western end of the balcony to the outside instead of the inside of the baluster. (b) Using an unsuitable timber, namely untreated dressed radiata pine board for railings being a timber prone to deterioration by cupping, splitting and shrinking when exposed to the elements. (c) Using an inappropriate and inadequate means of fastening the rails, namely nailing rather than using bolts with nuts and washers. (d) Failing to take any action to better secure the railing upon receipt of Inspection Record 135593 dated 10 July 1979. (e) Obtaining a final inspection record expressed to be satisfactory knowing that the nailing of the handrails was not satisfactory and that a more secure method attaching them as required. (f) Failing to warn or advise the first defendants that the railing to the balcony was either improperly secured and/or consisted of a timber which might deteriorate rapidly when exposed to the elements affecting the security of the railing. (g) Failing to attach the railings at a height of not less than 865 mm from the floor deck as required by the Regulations. (h) Failing to comply with the Building Manual. (i) Failing to comply with the Approved Plans.](b) Breaching the conditions of the Building Permit under Section 40 of the Building Ordinance 1972 as Amended, in particular: (i) Using materials in the building work which did not conform to the standards for those materials as set out in the Building Manual; (ii) Using materials in the building work which did not conform to the acceptable methods of use as set out in the Building Manual; (iii) Failing to carry out the building work in a proper and workmanlike manner; (iv) Failing to carry out the building work in accordance with the Approved Plans and specifications."
5. The Brzozowskis also claimed contribution from the Commonwealth relying on the plaintiff's allegations against the Commonwealth, namely:
(a) Issuing final Inspection Record No. 135625 declaring the building work satisfactory without inspecting that work after issuing an unsatisfactory Inspection Record No. 135593.(b) Issuing a satisfactory final Inspection Record No. 135625 notwithstanding that the building work the subject of the certificate contained unsatisfactory work namely the nailing of handrails to a balcony which meant that the handrail was insufficiently secure.
(c) Allowing or maintaining a system that allowed approval to be given to unsatisfactory building work without adequate and proper inspection.
(d) Granting satisfactory approval to the railings of a verandah when their height was less than 865 mm above the deck as required by the Regulations.
(e) In breach of Section 53(1) and (4)(b) of the Building Ordinance 1972 as Amended, issuing a Certificate of Occupancy and Use, when the building as erected was not erected substantially in accordance with the prescribed requirements and not structurally sufficient, sound and stable.
(f) Breaching Section 53(5) of the Building Ordinance 1972 as Amended, in failing to refuse to issue a Certificate of Occupancy and Use, before being satisfied that such work to secure compliance with the requirements of Inspection Record No. 135593 had been carried out by the fourth defendant.
(g) Failing to ensure that the fourth defendant, as the Building Permit holder for the house: (i) Constructed the house in accordance with the Approved Plans; (ii) Constructed the house in accordance with the requirements of the Building Manual; (iii) In accordance with the conditions of the issue of the Building Permit pursuant to Section 40 of the Building Ordinance 1972 as Amended, complied with the requirements of Inspection Record No. 135593."
6. The Commonwealth does not appear to have filed a defence to the Brzozowskis' claim for contribution but filed its own claim against them relying on the following particulars of negligence:
(a) Failing to properly inspect the railing of the said balcony to ensure it was safe and secure.(b) Failing to adequately maintain the railing of the said balcony.
(c) Failing to warn guests of the unsafe state of the railing of the balcony.
(d) Allowing guests to use a balcony with an unsafe rail.
(e) Failing to take any steps to safely secure the railing of the balcony."
7. Mr. O'Brien's defence to the claims for contribution is simply a denial of negligence and a denial of liability to contribute or indemnify.
8. As the same counsel, Mr. Williams QC, appeared for both the Brzozowskis and the Commonwealth in their claims for contribution against Mr. O'Brien, I presume that the claims by the Brzozowskis and by the Commonwealth against each other were abandoned. However, the extent to which Mr. O'Brien should have to contribute to the plaintiff's damages if at all depends partly on the relative culpability of all three defendants still before the Court and the Court is bound to have regard to the allegations made by the Brzozowskis and the Commonwealth against each other.
Facts: timber rails on balcony give way causing plaintiff to fall
9. The facts either not in dispute or established without need to refer to the evidence are as follows.
10. The Brzozowskis acquired vacant land at 19 Bingley Crescent, Fraser by lease for residential purpose from the Commonwealth dated 3 November 1978. They engaged O'Brien Homes to build a house on the land in accordance with plans furnished by O'Brien Homes. The plans were approved by the Commonwealth Department of the Capital Territory Building Section (the Department).
11. There was a cantilever balcony at the back of the house about 8.3 metres long. The balcony is described by an expert witness, Mr. Jerome Argue, a consulting engineer, in a report dated 15 November 1991. The report relates to the condition of the balcony as it was when inspected on 17 October 1991 shortly after the plaintiff's injury.
"At the time of the inspection of the balcony, the following details were noted. The balcony extends approximately 1500 mm from the house line and is constructed from cantilevering oregon joists. Oregon posts, 90 mm square are fixed to the joists and rise to support beams and rafters forming the roof of the verandah. Access to the verandah is via sliding doors from the lounge room. Door and window frames are predominantly of timber construction.Two 250 x 35 mm oregon horizontal rail members are fixed between the vertical members to form the balustrade. The top of the balustrade is approximately 1 m above the timber deck level. The rails are fixed to the house with a hardwood batten nailed to the timber window frame at the western end of the veranda, and to another batten screw fixed to the masonry outer skin at the eastern end, as shown in the sketch below.
At the western end of the verandah, the rails were fixed to the inside of the post and to the outside of the batten. Elsewhere, fixings are to the outside of the posts and the batten at the eastern end of the verandah.
Pneumatic gun driven nails were used to fix the rail members into both the timber posts and the battens."
12. The description may be accepted as accurate at the time of the plaintiff's injury and accurate at the time of inspection except for a dispute over two matters. There is a question whether the rails, at the time of the plaintiff's injury or at the time of construction, were of oregon or pinus radiata timber. There is also a question whether the nails were driven by gun or hammered in. I shall return to those questions. The important point is that the rails at the western end were fixed to the outside of the batten, and were fixed by nails.
13. From time to time during construction the building was inspected and the work passed as satisfactory by one or more officers of the Department. On 12 July 1979 a Departmental building inspector, Mr. Stanley Streatfield, signed a final inspection record stating that the building work was fit for occupation and use pursuant to Part V of the Ordinance. On 13 July 1979 the Deputy Building Controller signed a certificate of fitness stating that the building "for which plans or specifications were approved and a Building Permit issued, under the provisions of the Building Ordinance 1972 is fit for use and/or occupation". The Brzozowskis took possession on 20 July 1979.
14. In September 1991 the Brzozowskis went on holidays leaving their teenage children in charge of the house. On 9 October 1991 the plaintiff attended a party at the house as a guest. At some stage of the evening the plaintiff leant on the rails at the western end of the deck. The two rails gave way, causing him to fall more than three metres to the ground and to suffer the injuries in respect of which he obtained judgment against the first and third defendants.
Facts in dispute
15. I turn now to the evidence in respect of some of the matters in question.
16. At the time of construction the rails once fixed into position were painted or stained dark brown. Mr. Brzozowski gave evidence, which I accept, that the "verandah" (which I take to include the rails) was painted with a water-based acrylic paint at least twice between 1979 and 1991. From time to time during those years he noticed that the nails securing the handrails to the posts and batten were "coming out a bit" and he hammered them back, adding two or three extra nails, without being concerned about the method of securing or about the fact that the rails were secured to the outside rather than the inside of the posts (except the post at the western end) and to the outside of the battens.
17. In cross-examination Mr. Brzozowski maintained that the rails were made of pinus radiata timber and were never replaced at any time between the construction and the time of the plaintiff's injury. He did not state how he came by the knowledge that the timber was pinus radiata rather than some other sort of timber. According to his evidence, the nails added by Mr. Brzozowski were steel bullet-head nails. On one occasion only Mr. Brzozowski noticed splitting of the timber when the nails were hammered back, but he did not identify the rail or otherwise where this occurred. When he returned home after the plaintiff's injury, his son had nailed the rails back into place. Mr. Brzozowski thought that they had been re-fixed in their original configuration. About four years before the hearing and after the plaintiff's injury, the nails were replaced by coach bolts on all rails. That work was done by a friend of Mr. Brzozowski at his request.
18. Mr. John Joseph O'Brien gave evidence-in-chief that at all material times he was the managing director of O'Brien Homes, a company which constructed about 400 homes in the Canberra area over a period of 15 years prior to about 1984. Mr. O'Brien was a carpenter and joiner by trade with many years experience. He was the holder of a builder's licence under s.17 of the Ordinance. O'Brien Homes offered its services through "package deals" marketed by a real estate agent. An initial application for approval of plans and specifications under s.33 of the Ordinance was completed by Mr. O'Brien and lodged on behalf of O'Brien Homes on 27 September 1978. An application for a building permit for the construction of the house was lodged also by Mr. O'Brien on behalf of O'Brien Homes on the same date. A further or repeat application for approval of the plans and specifications was lodged on 6 October 1978. However, the building permit was issued not to O'Brien Homes but to Mr. O'Brien himself. I was told by counsel that this is or was the practice. Apparently it was considered that the practice accorded with s.35(2) of the Ordinance which provides that an application for a building permit shall be made by a person who holds a builder's licence of the relevant kind.
19. The work on the construction of the house proceeded in accordance with the contract between the Brzozowskis and O'Brien Homes, and, subject to what follows, in accordance with the plans and specifications.
20. Mr. O'Brien said that the plans were derived from a basic design for a model home called "The Hamilton". The design had been prepared by a local architect. The design allowed for minor variations to suit the particular customer or owner. The plans, where they depict the upper floors as on a ground plan, show the rails fixed to the outside of the posts but do not indicate how the ends of the eastern and western rails were to be fixed to the house itself. The plans, where they depict the southern side of the house in elevation, show rails on the southern side on the inside of the posts, presumably obscuring the eastern and western rails, also on the inside of the posts. Clearly the house could not be built in accordance with both depictions. However, negligence in relation to the drawing of the plans, or their official approval, was not relied upon.
21. Mr. O'Brien was not able to remember the events surrounding the construction of the house. He was able to speak only as to his practice and the practice of O'Brien Homes at the time. He said that the timber used for the rails was oregon timber and was ordered by O'Brien Homes and milled especially for the company by sawmillers at Fyshwick to the specification of O'Brien Homes to a dressed finish of 240 mm by 35 mm. The timber was of unusual length in order to allow for a single run of timber for each rail on each side of the balcony. Sub-contractors in the carpentry trade were engaged to make the rails and fix them to the posts and to the building in accordance with the plans. The practice of the carpenters was to nail the rails into position to the outside of the posts and then secure them by means of galvanised coach screws through holes drilled through the rails and into the posts. So far as fixing the ends of the rails to the building was concerned, that was left to the carpenter's discretion, according to the final details of design to suit the requirements of the owner. After construction, the rails were stained with an oil based stain which was expected to give satisfactory performance for some three years, after which the rails would need painting or further staining.
22. Mr. O'Brien denied that pinus radiata was ever used for the rails of balconies constructed by or on behalf of O'Brien Homes. He was of the opinion that if pinus radiata had been used for the rails on the first defendants' house, then such rails would have required replacing within three years. He said (and it is common ground) that pinus radiata, unless treated with a copper compound (not common in 1979 for timber of the size in question), was well known for its tendency to rot, and, if not coated with a pigmented stain or paint, for its tendency to buckle and split. He expected that oregon, if not properly maintained, would have needed replacing for similar reasons after a period of more than 10 years.
23. Mr. O'Brien inspected the premises some three years after the plaintiff's injury, that is in about 1994. He thought that at that time all rails had the appearance of having been repainted recently with heavy acrylic paint, making it impossible to tell whether they were of oregon or pinus radiata. The rails on the western end in particular appeared "reasonable" and were observed to be fixed to the batten by means of nails and a screw like a roofing screw. He also said that it was possible that the timber had split and that, having split, it could have been filled with a filler and then re-painted, making it impossible to estimate the age and type of the timber.
24. Mr. O'Brien left most of the supervision of the work carried out by O'Brien Homes to a supervisor, Mr. Chris Harvey, also an experienced carpenter and joiner. From time to time, as appropriate, the Department was notified for the purpose of a building inspector attending in accordance with s.9 of the Ordinance in order to approve work done to date. Usually the notification was made by telephone. Either Mr. O'Brien or Mr. Harvey would make the call. Mr. O'Brien could not remember which of them made the relevant telephone calls in relation to the Brzozowskis' home.
25. Mr. Harvey gave evidence that largely supported that of Mr. O'Brien and it is not necessary to set it out in detail. He was the only foreman employed by O'Brien Homes at the time. He was not able to remember any particular event relating to the construction of the house or the balcony. According to Mr. Harvey, oregon timber was always used for the rails, fixed by nails to get it into place, and then screwed with coach screws. He spoke as to the system of arranging the attendance of a Departmental building inspector and carrying out any further work or rectification required by the inspector. He tried to be present on the job when the building inspector was going about the inspection. The building inspector would have with him a proforma "Inspection Record" in triplicate in which the stage inspected would be identified and then noted as satisfactory or unsatisfactory by means of a tick in the appropriate box. If any of the work at that stage was unsatisfactory, any rectification or further work required would be noted on the form in a space reserved for such details. In either case, a copy of the record would be left either with Mr. Harvey if he were on the site or under a brick or something similar if he were absent. If rectification or further work was noted as required by the building inspector, Mr. Harvey would cause it to be carried out in accordance with the record left by the building inspector and he would then arrange a new appointment for a further inspection.
26. Whether it is of significance or not, I make the findings by inference and on the probabilities that the practice was that rectification or further work required was noted by the inspector on the top white original of the forms in triplicate. The inspector gave the builder the original with the rectification or new work noted on it, and the inspector retained two copies (one pink and one green). One of those copies (more likely the green copy), was then used by the inspector on the subsequent inspection in order to check whether the unsatisfactory items had been satisfactorily attended to and, if so, that item received a tick. If all items by then were so ticked, another tick would go into the box marked "satisfactory". The pink copy meanwhile remained as a more or less pristine Departmental record of what the situation had been at the previous stage of inspection. The evidence leading to these findings is not very clear, but that is the best I can make of it.
27. Mr. Gary Thomas Chipperfield was, with a partner, a sub-contracting carpenter. He carried out the fixing of rails and other carpentry work on the Hamilton design homes. He confirmed the evidence of Mr. O'Brien and Mr. Harvey that the timber used for handrails was always oregon, never pinus radiata, temporarily nailed into place by hammering and then fixed with coach screws.
28. On the face of it, I saw no reason to doubt the above evidence of these three witnesses. They appeared to me to be truthful and, as far as circumstances permitted, reasonably accurate on matters where accuracy might be expected. However, their evidence has to be measured against the other evidence in the case.
29. Mr. Stanley Streatfield was a building inspector with the Department during the years 1973 to 1984. He died on 13 March 1993. A statement taken from him on 12 October 1992 was admitted into evidence. I assume that it became evidence of the representations made in it under the Evidence Act 1995 (Cth), s.63 (no point being taken that the requirement of notice under s.67 had not been met). According to the statement, Mr. Streatfield had no memory of any inspection of the premises. A visit to the premises on 8 October 1992 did not refresh his memory. He accepted the accuracy of the Inspection Records dated 10 and 12 July 1979. He remembered Mr. O'Brien as a reputable builder. He said that there was in 1979 among building inspectors at the Department a practice "where at times [they] would rely on the word of the builder or his foreman that the building work in [respect of] which they had been refused the issue of a certificate had been satisfactorily complied with or would be shortly satisfactorily complied with."
30. On the visit to the premises on 8 October 1992 Mr. Streatfield noticed that the railing at the western end of the balcony was affixed by some coach screws to the outside of a cleat affixed to the wall of the house and at the other end affixed with coach screws to the inside of the post. (I take the term "cleat" to refer to the "batten" referred to by Mr. Argue already mentioned above.) Mr. Streatfield's statement continues.
"There is no way that I would have approved that balcony in that design and structure and issued a final certificate for that building if I had re-inspected the property after 10 July 1979 and if I had re-inspected the property at the time that I appeared to decide to issue the final inspection record noting no instructions and agreed to issue the final certificate.I make that comment on the assumption that, if at the time that I inspected it, the railings were affixed on the western end on the outside of the cleat by nails and on the inside of the upright by nails and with all the beams on the long front of the balcony affixed to the outside of the uprights by nails. ..... I particularly noted that the nailing of the handrails was not a satisfactory or secure method of affixing the railings. When I stated that I required a more secure method, I would have meant that it was not adequate to merely put more nails in it but that a method other than nailing was necessary to properly and adequately secure the railings. I simply believe that I must have accepted somebody's word that the manner of affixing the balcony railings had been satisfactorily attended to in compliance with my requisition .....
The best method would have been by a galvanised bolt with a nut and washer. The next best method would have been with coach screws which is the manner of affixing that I observed when I re-inspected the property on 8 October 1992. The third method of affixing would have been simply by nails which would not have been satisfactory, particularly in this situation where the balcony railings on both ends or on one end appeared to have been nailed to the outside of the uprights or to the outside of the cleat in relation to the particular railing that collapsed here. .....
From my inspection of the balcony railing on 8 October 1992, assuming that they are the same timber railings and structure that had been in place in all the periods since the initial inspection in 1979, I observed that the timber that appeared to have been used in those balcony railings is radiata pine, it is not oregon pine. ..... From my inspection of the radiata pine railings on 8 October 1992, on my checking on the ends of them, I do not believe that they ever had been treated with copper oxide. It is, however, difficult to determine this especially when, as in this case, the railings appeared to have been painted with a brown stain at some stage."
31. Mr. Streatfield said that in 1979 there was a building boom and that the building inspectors were over-worked from time to time. He went on to say:
"..... at boom times, we clearly were unable to personally inspect every required stage of the building and we had to at times rely on the assurances of well respected and trusted builders with a good reputation with the Department that instructions and building works at various stages had been properly attended to."
32. He added that it was difficult for the Department to recruit properly qualified persons as building inspectors and that he had been told in the course of his departmental duties that "the ultimate responsibility for the proper construction of the properties rested with the builders."
33. I note that Mr. Streatfield's previous trade was that of bricklayer. In relation to his view that the best method of fixing the rails would have been by nuts and bolts, I reject that view in favour of the view of Messrs O'Brien, Harvey and Chipperfield, all carpenters, that the preferred method was by the use of galvanised coach screw.
Expert evidence: were the rails oregon or pinus radiata?
34. As already indicated, Messrs. O'Brien, Harvey and Chipperfield gave evidence that oregon timber was always used on the rails of Hamilton design homes. Mr. Brzozowski gave evidence that soon after the plaintiff's injury the failed timber was observed to be pinus radiata and had never been replaced between construction and the time of observation. None of them made any observation at the time of construction of the type of timber actually used at the Brzozowskis' residence.
35. Mr. Streatfield also had no memory of the type of timber observed by him at the time of his inspections in 1979. However, according to his statement, when he carried out a further investigation on 8 October 1992, he observed that the timber was untreated radiata pine. He further stated that the identification of the timber was made difficult by the fact that the ends of the rails had been painted dark brown. Mr. Streatfield did not say what it was about the timber which caused him to identify it as radiata pine rather than oregon. Nor did he state what visual or other observable differences are typical of the two timbers.
36. There were in evidence a number of photographs taken of the rails by Mr. Argue. These were marked as if they were taken on 10 October 1996. I find them of little or no assistance with regard to the identification of the timber. It might be recorded that some of the photographs confirm that some of the nails in the rails at the western end are galvanised (not rusty, as would be the case if they had been steel). Those particular photographs (and other photographs showing the rails painted brown not white) would appear to have been taken earlier than on 10 October 1996. Nothing seems to turn on this and I refrain from drawing any positive conclusions from it.
37. I have referred briefly to an extract from the report of Mr. Argue made on 15 November 1991, following an inspection on 17 October 1991. In the report Mr. Argue states that the balcony sits on oregon joists, with oregon posts to which are fixed oregon rails. He identifies the batten which secures the ends of the eastern and western rails to the house to be of hardwood timber. According to a curriculum vitae, Mr. Argue has particular interest and expertise in waste and stormwater management systems. It is not clear whether he has any special expertise in the use or identification of timbers. However, the report indicates that he did turn his mind to a differentiation between the timbers used for the rails and the timber used for the batten. In cross-examination he stated that he had inspected untreated radiata pine in Canberra over a period of eight years for the purpose of pre-purchase reports and had designed numerous structures in timber. He further stated that at the time of the inspection the western handrails measured 250 by 35 mm and that they were of oregon and not pinus radiata. He also denied a suggestion that they were 240 by 30 mm in dimension. He denied a further and different suggestion that they were 18 mm wide or thick. Those suggestions are not, in my view, borne out by the evidence.
38. In cross-examination Mr. Argue was asked whether he had changed his mind about whether the timber was oregon and he replied that the rails were "clearly a soft wood timber and my belief is that it is oregon". He was not cross-examined further on that issue, although he was asked about the tendency of radiata pine to cup and split.
39. Mr. Peter Enders, a building consultant with general experience in construction work, provided a report dated 12 March 1996 in which he set out his findings on inspection of the deck and rails on 8 October 1992. He said that the inspection was conducted "with particular reference to the construction of the timber balustrades". He did not say that it was carried out with particular reference to the type of timber used. He did not explain why it took him so long to write his report. He reported as follows:
"The weathering which has occurred in the posts and boards is consistent with the materials used, namely 240 x 30 mm untreated, dressed radiata pine boards, nailed to 90 x 90 mm sawn oregon posts supporting the Deck and 45 x 30 mm dressed ash balusters, the one at the western end nailed four times to 145 x 18 mm maple window boxing and the one at the eastern end fixed to brickwork with two anchor screws."
He continued as follows:
"At the time of my inspection it was noted that, not only did the original boards remain in place, but the two end balusters also appeared to be as originally provided."
40. Mr. Enders used the terms "balustrade" and "balusters". I assume that he was talking about the rails and posts on the one hand and the cleats or battens on the other hand. These terms of Mr. Enders were not used by any other witness and if the usual dictionaries are any guide, they are not entirely accurate.
41. Like all the other witnesses on the subject, Mr. Enders did not say what it was about the timber that led him to believe that it was radiata pine rather than oregon. I note that the inspection was carried out in the company of Mr. Streatfield. Whether one man was expressing the opinion of the other is something I have to consider. I conclude that it is unlikely that Mr. Enders was expressing the opinion of Mr. Streatfield, but I do think it is possible that Mr. Streatfield adopted and was expressing the opinion of Mr. Enders.
42. In cross-examination Mr. Enders said that he saw no galvanised nails and that the rails on the western end were in position. His criticism of the attachment of the ends of the rails nearest to the house was that the cleat ("baluster") was insecurely fixed to the house by nails only. He was not so much concerned about the way in which the rails (particularly those which failed) were fixed to the cleat. He said that he knew the difference between pinus radiata and oregon, but, as in the case of the other witnesses, he was not asked to describe that difference. He said that he was aware at the time of his inspection that Mr. Argue had described the timber as oregon but that was not his own observation. He said that the mission brown finish on the rails was opaque. He expected that untreated radiata pine would split and cup within a year under Canberra conditions, making it totally unsuitable but that the process would slow down so that the timber could remain in a similar state for several years thereafter without significant further deterioration.
Duty of care: owner, building authority, building inspector, building permit holder
43. Each claimant is liable to pay to the plaintiff the amount of the respective consent judgments, and each claims contribution from Mr. O'Brien relying on breach of a duty of care owed to the plaintiff by Mr. O'Brien. There was no question raised on behalf of the claimants or on behalf of Mr. O'Brien as to the existence of a duty of care owed by the Brzozowskis and by the Department (or the building inspector) to the plaintiff.
44. In line with decisions such as The Council of the Shire of Sutherland v. Heyman and Another [1985] HCA 41; (1985) 157 CLR 424, etc. I find without discussion that the Department had a statutory power to require that a building under construction complied with the requirements of the Ordinance and with the requirements of building permits granted by the Department and a corresponding duty to ensure that that power was exercised with reasonable care with regard to the safety of persons likely to suffer damage as a result of defects in the building. Whether the liability of the Department in the circumstances of the present case was a vicarious liability for the negligent acts or omissions of its officers, or whether the Department was liable for breach of a direct "personal" duty of care such as that owed by an employer to an employee, was not the subject of attention by counsel and I do not propose to say much about it. The plaintiff's statement of claim seems to rely on both vicarious liability for breach of duty owed by Mr. Streatfield as building inspector and direct liability for breach of a duty owed by the Department as the responsible building approval and supervising authority and the case proceeded without distinguishing between those kinds of liability.
45. If foreseeability on the part of the building inspector of damage is in question, then there can be little doubt that he owed a duty of care to the plaintiff.
46. As to a duty of care owed by the Brzozowskis to the plaintiff, it is clear that persons in control of premises are obliged to take reasonable care to ensure that persons likely to come upon those premises are not likely to be injured by reason of the state of the premises, and there can be no doubt that the Brzozowskis, as occupiers, owed that duty: Australian Safeway Stores Proprietary Limited v. Zaluzna [1987] HCA 7; (1987) 162 CLR 479.
47. I turn now to the question of whether Mr. O'Brien owed a duty of care to the plaintiff.
48. Mr. Williams QC for both claimants submitted that Mr. O'Brien owed a duty of care to the plaintiff because the Act makes it clear that building work can be carried out only by the holder of a building permit and only a licensed builder can be a permit holder. Mr. O'Brien not O'Brien Homes was both the licensed builder and the building permit holder. It was submitted that it is established on the evidence that Mr. O'Brien was in fact carrying out the building work, and that it is irrelevant that the building work he was carrying out was the subject of a contract between the Brzozowskis and O'Brien Homes which provided that O'Brien Homes would carry out the building work. Reliance was placed on Bryan v. Maloney [1995] HCA 17; (1994-1995) 182 CLR 609 to which I will refer. Before that, the terms of the legislation and the building permit need to be considered.
49. An Application for a Building Permit was made in writing on a pro forma application. The applicant's name is shown as John J. O'Brien Homes Pty Limited. The document appears to have been signed by Mr. O'Brien and is dated 27 September 1978.
50. A Permit to Carry Out Building Work dated 18 October 1978 purports to be issued to J.J. O'Brien. It carries the following endorsement:
"Endorsements Under section 36 Inspections - Each stage specified overleaf which applies to the building work must be inspected before proceeding beyond that stage. Stages may be grouped as indicated overleaf.The building work shall be carried out in accordance with the approved plans, the Building Manual ACT, the notations made on the plans and subject to the provisions of the Building Ordinance 1972. The approval of plans or the grant of a building permit does not affect the operation of any other law in the Territory nor does it authorise the use of the land contrary to a provision, covenant or condition of the Crown Lease."
On the back of the Building Permit, there appears, inter alia: "INSTRUCTIONS issued by the Building Inspector must be complied with, WORK MUST NOT PROCEED beyond each stage until it has been passed, satisfactory, by the Inspector."
51. The various inspection stages are notified and described. The only one that appears relevant is:
"13. FINAL when building is completed in accordance with all the requirements."
52. The Building Manual (ACT) (referred to in the building permit) was in evidence. I have looked at it. Counsel did not draw my attention to any of its provisions. There is no particular provision in it of which I am aware which is of any assistance in the case, and I will make no further reference to it.
53. Section 36 of the Ordinance provides in part as follows:
"Stages of building work for inspection purposes 36(1). The Building Controller shall, in a building permit for building work involving the erection or alteration of a building, specify each stage in the building work in respect of which the holder of the building permit is required to give to the Building Controller notice in accordance with subsection (5), each being a stage included in the stages of building work specified in the Schedule. ..... (5). The holder of a building permit for building work involving the erection or alteration of a building shall not proceed beyond a stage in the building work specified in that permit under subsection (1) unless: (a) the holder has given the Building Controller notice of the fact that the stage has been reached and 2 working days have elapsed since that notice was given: or (b) the holder has given the Building Controller notice of the period during which the holder expected that the stage would be reached (being a period that commenced at the expiration of 2 working days after the notice was given and ending at the expiration of 4 working days after the notice was given) and the stage was reached at any time during that period.Penalty: (a) in the case of a natural person - 10 penalty units; or (b) in the case of a body corporate - 50 penalty units."
Section 40 of the Act provides in part as follows:
"Conditions of building permits 40. The grant of a building permit for building work is subject to the conditions that - .... (c) the building work will be carried out in a proper and workmanlike manner. .... (e) the building work will be carried out by a person who is the holder of a builder's licence, or a building permit issued for that work endorsed under section 39, or by a person employed by or under contract to him or her. (ea) a notice in accordance with subsection 36(5) will be given by the holder of the building permit to the Building Controller in respect of each stage in the building work specified in the permit."
(These provisions were amended by Act No. 28 of 1995 and in para.40(c) the word "workmanlike" was replaced by the word "skilful". In para.40(e) the words "employed by or under contract to him or her" were replaced by "under his or her direction and supervision".)
54. I make the comment here that there appears to be a hiatus in the provisions of s.36 insofar as they relate to the final stage of building work. As those provisions have the effect of requiring notice to be given before proceeding to a further stage in the building work, they would not appear to apply directly to the final stage of building work, since there is no further stage to which to proceed. I am not aware of any provision which expressly requires building work at the final stage to be carried out or completed in accordance with the Inspection Record or the directions of a building inspector.
55. Moreover, s.36 does not appear directly to prohibit unauthorised work. The prohibition in sub-s.36(5) is against proceeding to a further stage unless notice is duly given. On the face of it, once notice is given and two days have elapsed, the work may progress to a further stage.
56. It is curious also that s.40 does not directly cast any obligation upon the building licence holder to ensure that the building work is carried out to a particular standard. However, it appears to put the building licence holder on notice that if the conditions are not met by whoever is capable of meeting them, certain consequences may follow, presumably in the nature of a revocation of the grant of the licence. But the provision in para.40(c) that the building work will be carried out in a proper and workmanlike manner does not, in my view, cast a duty on the building licence holder as such to carry out the work to that standard unless the building licence holder happens to actually carry out the building work subject to the licence. There is nothing in s.40 which deems the building licence holder to be carrying out the building work, and nothing which requires the building licence holder to carry out the building work personally or through agents.
57. I do not think that the decision in Bryan v. Maloney is directly in point, for that case was concerned with the liability of a builder not a building permit holder, and not for personal injuries but for the diminished value of the building to a subsequent purchaser by reason of defects in construction. The following instructive passage appears at p.617:
"The cases in this Court establish that a duty of care arises under the common law of negligence of this country only where there exists a relationship of proximity between the parties with respect to both the relevant class of act or omission and the relevant kind of damage. In more settled areas of the law of negligence concerned with ordinary physical injury to the person or property of a plaintiff caused by some act of the defendant, reasonable foreseeability of such injury will commonly suffice to establish that the facts fall into a category which has already been recognized as involving a relationship of proximity between the parties with respect to such an act and such damage and as 'attracting a duty of care, the scope of which is settled'."
58. A statement of general principle is to be found in the judgment of Brennan J (as he then was) at 632:
"The cases dealing with an architects or builder's liability in negligence for carelessly designing or constructing a building have been concerned to distinguish between two general categories of damage. The first category consists of physical damage to person or property for which a defendant is, and always has been, liable under the paradigm application of Donoghue v. Stevenson [1931] UKHL 3; [1932] AC 562; the second category consists of pure economic loss for which a defendant may be liable in negligence under principles that have been developed from Lord Atkin's original conception in that case, especially since Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] UKHL 4; [1964] AC 465."
59. On p.633 his Honour makes what might be regarded as a succinct statement of principle for the present case:
"Personal injury is the primary example of damage which a defendant is under a duty to take reasonable care to avoid where it is reasonably foreseeable that the defendant might cause damage of that kind if reasonable care be not exercised."
60. In Hawkins v. Clayton and Others [1988] HCA 15; (1988) 164 CLR 539(a case involving liability of a solicitor regarding advice to an executor of an estate) Deane J said at p.578:
"If, by reason of the negligence of architect or builder, the building subsequently collapsed and a particular baby was injured, that baby would have a cause of action for the damage sustained by reason of the breach of the duty of care which may have been owed to him, and broken, by a person who has died before he was born."
61. I take his Honour to have chosen this example of a claim for personal injury in order to distinguish the well recognized duty of care owed by an architect or builder to persons with whom there is a contractual relationship from the duty of care that might arise from the relationship between a solicitor and persons who might be expected to rely on the advice of the solicitor but who are not the clients of the solicitor.
62. If foreseeability on the part of Mr. O'Brien simply as building permit holder is in question, a duty of care does not emerge as clearly as in the case of architect, engineer or builder. In contrast with say an architect whose "skilled calling" raises a duty of care to any person injured as a result of negligent professional work, e.g. Voli v. Inglewood Shire Council and Another [1963] HCA 15; (1963) 110 CLR 74, the functions of a building permit holder cannot be assumed or be taken for granted.
63. The present case being a claim for personal injuries and not for economic loss alone does not need an examination of "proximity" or policy considerations and community standards as have been generated in England particularly by Anns and Others v. Merton London Borough Council [1977] UKHL 4; [1978] AC 728 and Murphy v. Brentwood District Council [1991] UKHL 2; (1991) 1 AC 398 and considered by the High Court in The Council of the Shire of Sutherland v. Heyman and Caltex Oil (Australia) Pty Limited v. The Dredge "Willemstad" [1976] HCA 65; (1976) 136 CLR 529.
64. In the light of the above the question of whether a duty of care was owed by Mr. O'Brien can be put in terms borrowed from the "apodictic" test of Lord Atkin in Donoghue v. Stevenson (see K.M. Stanton, "Incremental Approaches to the Duty of Care" in Torts in the Nineties, N.J. Mullany, 1997. Although the same sort of test can be and has been put in many ways in many cases, the remarks from the judgments of the High Court in Bryan v. Maloney make it clear that Lord Atkin's approach in Donoghue v. Stevenson is still appropriate for determining whether a duty of care exists where a claim is made in negligence for damages for personal injury. The test is: was the plaintiff a person whom Mr. O'Brien ought to have had in contemplation as a person so closely and directly affected by his conduct as building licence holder that reasonable care was required to be taken by Mr. O'Brien in order to avoid acts or omissions which could be reasonably foreseen as likely to injure a person such as the plaintiff?
65. I think that, although it was not relied upon in the pleadings or particulars, Mr. O'Brien's role in the management of O'Brien Homes is as important as the fact that he held the building permit. Although O'Brien Homes had many projects of a like nature in progress at the same time as the construction of the house for the Brzozowskis, responsibility for the day to day management of the company's operations was reserved to Mr. O'Brien. Mr. O'Brien was answerable to no one else in the company's structure. Although he relied necessarily and largely on the advice of his supervising foreman, he was not like the chairperson of the board of a large corporation, the activities of which are so numerous and diverse that day to day decisions as to management and operations cannot be expected to come under the control or be within the knowledge of the chairperson and must necessarily be delegated to other persons.
66. A reasonable person in the position of Mr. O'Brien would have foreseen that unless he took reasonable care to ensure that the construction of houses was carried out so as to minimise the risk of defects such as a balcony rail failing under the pressure that persons might be expected to place upon it, persons coming onto the premises might suffer injury from such defect. Hence there was, in my view, a duty of care owed by Mr. O'Brien to the plaintiff and other persons likely to be injured in the event of such failure.
67. The extent or the scope of the duty (or more accurately, in my own view, the standard of care required in order to discharge the duty) is a matter separate and distinct from the existence of the duty. I will now examine that question.
Who was negligent: the owner, the building authority, the building inspector, the building permit holder?
68. As I understand it, there was never any argument on behalf of Mr. O'Brien to resist the allegations that the Brzozowskis and the building inspector (or the Department) failed to discharge their duty of care to the plaintiff. The case presented for Mr. O'Brien by Mr. Purnell SC was that on the evidence there was no negligence on the part of Mr. O'Brien and that fault lay with the Brzozowskis for their failure to maintain the rails which they ought to have known (and Mr. Brzozowski actually knew) to be faulty, and with the building inspector for his failure to carry out a final inspection and check that the rails were securely fixed. In particular, it was submitted that, as against the Brzozowskis, the cause of the failure of the rails was the removal, by Mr. Brzozowski or on his behalf, of the oregon rails which had been installed by O'Brien Homes, and their subsequent replacement, before the plaintiff's injury, with rails of pinus radiata. The argument requires a finding that the timber used for the rails at the time of construction was oregon. The hypothesis that the oregon timber had been replaced by pinus radiata appears to assume in favour of Mr. O'Brien that the oregon itself failed and needed replacing not because of any failure on the part of Mr. O'Brien but because of the failure of the building inspector to ensure that the rails were fixed satisfactorily.
69. With respect to these arguments, I find that the rails that gave way under the plaintiff were the oregon rails that were originally installed on behalf of O'Brien Homes. I do not accept the hypothesis that Mr. Brzozowski had replaced the oregon with pinus radiata.
70. Although Mr. Brzozowski denied that the timber had been replaced at any time, it is notable that Mr. Enders said that the rails seen on 8 October 1992 were of a dimension slightly different from that measured by Mr. Argue some two weeks after the plaintiff's injury and different from the measurements of the timber which the witnesses with carpentry expertise said was invariably used.
71. I prefer the opinion of Mr. Argue to that of Mr. Enders. I do not regard the evidence of Mr. Brzozowski nor the statement of Mr. Streatfield as of great probative weight on this issue. I am satisfied on the probabilities that the timber used for the rails at the time of construction was oregon and not pinus radiata.
72. The next matter argued was that Mr. O'Brien cannot be vicariously liable for any negligence on the part of Mr. Harvey because Mr. Harvey was not his employee but the employee of O'Brien Homes. Nor, so it is argued, can Mr. O'Brien be vicariously liable for the negligence of the carpenters because they were not the employees of anybody. I accept that Mr. O'Brien cannot bear vicarious responsibility for the negligence of these other persons.
73. The remaining argument was that Mr. O'Brien had taken every reasonable precaution in the circumstances, on the basis that he was the building licence holder and not the actual builder. Mr. Purnell submitted, correctly that the building contract was between the Brzozowskis on the one hand and O'Brien Homes on the other, that the application for approval of plans and specifications was made on behalf of O'Brien Homes, that Mr. O'Brien, Mr. Harvey and the sub-contractors were all paid by O'Brien Homes and that the timber and other supplies were ordered on behalf of and paid for by O'Brien Homes. Hence, according to the submission, it is artificial to regard Mr. O'Brien as carrying out the building work or to be under any obligation to comply with the requisites of the building inspector. I note that Mr. O'Brien in his evidence-in-chief denied that he had received the inspection report, although in cross-examination he said that he might have seen it but could not remember it. However, as I have already indicated, it is not necessary for the plaintiff's case to establish that Mr. O'Brien was the party carrying out building work.
74. Both Mr. O'Brien and Mr. Harvey denied that they had ever had a conversation with Mr. Streatfield or any other departmental inspector in which the inspector indicated that he or the Department would be satisfied with an assurance that unsatisfactory work disclosed on inspection had been or would be rectified. I saw those witnesses under cross-examination. I accept those denials. However, on the other hand, it is difficult to see any reason why Mr. Streatfield would have certified on the final inspection report of 12 July 1979 that the work had been satisfactorily carried out unless he had received, or thought that he had received, such an assurance. I do not accept that he would have certified the work as satisfactory if he had in fact gone back and inspected it between 10 and 12 July 1979. Perhaps he thought he had inspected it when he gave the final certificate. Perhaps he thought that O'Brien Homes and Mr. O'Brien were so trustworthy that they would have carried out the unfinished work and there was no need for him to inspect it. After all, as he said, he was very busy and he had been led to believe by the Department that "ultimate responsibility lay with the builders". There was no evidence from the Department to contradict that he lacked cause for that belief. Whatever the reason, I am quite satisfied that Mr. Streatfield in his capacity as building inspector, failed to inspect the building after 10 July 1979 and before certifying that the house was constructed in a workmanlike manner in accordance with the Ordinance. The Department is liable for that failure.
75. I am satisfied that Mr. O'Brien failed as holder of the building licence to take the steps that were available to him to ensure that the house was built in a workmanlike manner in accordance with the Ordinance. In particular, it was within his capacity to take steps to comply with the requirements of the building inspector and to take steps to ensure that those requirements were met.
Summary: building permit holder/managing director of builder in breach of duty of care
76. In summary then, it is sufficient in order to establish the duty of care, to show that Mr. O'Brien was the holder of a building permit and that he had the day-to-day conduct and management of the company that had contracted to carry out the building work. The duty of care being established, the question is whether he failed to discharge that duty. I think that his responsibility was in the circumstances like that of the defendant in Kondis v. State Transport Authority [1984] HCA 61; (1984) 154 CLR 672, not to take reasonable care so much as to ensure that reasonable care was taken by those actually engaged in the building work, and that included a duty to ensure that reasonable care was taken by O'Brien Homes, by its employees like Mr. Harvey and by its sub-contractors. It was a duty of care that was owed to persons like the plaintiff who were within foreseeability of injury if the building work was carried out negligently. In this respect Mr. O'Brien failed in the exercise of his duty of care to the plaintiff in that he failed to take steps reasonably open to him to ensure that the rails were securely fixed.
Apportionment
77. First I find that the Brzozowskis as householders, owners and occupiers were guilty only to a very low degree of culpability and that their failure either to notice that the rails were loose at a time prior to the plaintiff's injury or their failure to secure the rails once Mr. Brzozowski became aware that they were becoming loose, was not a major factor in the chain of causation.
78. A major cause was, in my view, the failure of the carpenters to fix the boards with coach screws. They should not have needed a reminder by Mr. O'Brien or the building inspector. There is no explanation of their failure to finish the job properly. Another major cause was the failure of Mr. Harvey, as the actual supervisor, to notice that the rails had not been fixed with coach screws. Although neither Mr. Harvey nor the carpenters have been sued, that is of no consequence either on the question of liability to the plaintiff or the defendants now before the Court or on the question of apportionment among them.
79. A further major cause was the failure of Mr. O'Brien as licence holder to take steps available to him to ensure as far as practicable that the work was carried out in a workmanlike manner. Mr. O'Brien's responsibility in that regard could not be deputed to the company's supervisor nor to the sub-contractors. Mr. O'Brien's failure as building permit holder should be seen in the light of his capacity to direct the building operations being carried out by O'Brien Homes and his capacity to direct the activities of Mr. Harvey as employed supervisor for O'Brien Homes and, to a lesser extent, to direct the activities of the carpenters who were sub-contractors to O'Brien Homes. However, on the evidence, the failure to observe the requirement of the inspection record that the rails be fixed satisfactorily cannot be sheeted home to Mr. O'Brien, the building permit holder, any more than it can to Mr. Streatfield, the building inspector. Ultimately, I am not able to distinguish between the culpability or the relative degree of causative contribution on the respective parts of Mr. O'Brien and Mr. Streatfield. Mr. O'Brien and the Commonwealth should bear equal responsibility for the plaintiff's injuries.
80. I think that it is just and equitable, having regard to the extent of Mr. O'Brien's responsibility for the plaintiff's damages, that those damages should be apportioned as to 10 per cent against the Brzozowskis, and as to 45 per cent against both the Commonwealth and Mr. O'Brien. This means that of the total of $5 million for which the plaintiff has received judgment, the Brzozowskis should contribute $500,000 and the other two defendants $2.25 million each. In the absence of any information as to whether the plaintiff has received payment, I think that this should result in judgment for the first defendants against the fourth defendant for $2 million and judgment for the third defendant against the fourth defendant for $250,000. I propose to order that the fourth defendant pay the first and third defendants' costs of the contribution proceedings. However, I will hear counsel on the matter of costs if they wish and also on the forms of the orders if they so wish.
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