Professional Indemnity

The Lane Cove Tunnel Collapse

In 2003 the NSW RTA awarded Lane Cove Tunnel Company (LCTC) the contract to plan, design, construct, operate and to maintain the Motorway for a period of 33 years with URS Australia in the role of Independent Verifier (IV). LCTC contracted with the Thiess John Holland Joint Venture (TJH) to plan, design, construct and commission the project works including the tunnels. TJH appointed Parsons Brinkerhoff (PB) to provide design consultancy and construction phase services for the civil infrastructure works and engaged Pells Sullivan Meynink (PSM) to overview construction in relation to geotechnical instrumentation, monitoring, tunnel mapping and support. PB, in turn, appointed Coffey Geosciences (Coffey) to carry out geotechnical investigations and to assist in the design of tunnels and retaining walls.

In July 2004 construction of the Lane Cove Tunnel commenced and in the early hours of Wednesday (about 1:40am) 2nd November 2005 a collapse occurred while the intersection of the Marden Street ventilation tunnel (MC5B) and the exit tunnel to the Pacific Highway (MCAA) was being excavated.

The paper on the lessons to be learned by the collapse of the tunnel and the ensuing Supreme Court litigation before McDougall J on the apportionment of responsibility between the contractor and the consultants by Burman, Kotze and Chan, LCT – a forensic review (2018) 53(4) Australian Geomechanics 21 may be downloaded here.

A Penumbral Duty of care – is a principled approach possible? (2013) 21 TLJ 106
By Laina Chan

‘that uncertainty that appears necessarily to affect this area of the law if entitlement to damages is to depend upon [a] case-by-case application of a general policy, itself inflexible and ill-defined and dependent upon a survey of a quite variable group of considerations, many of which will be susceptible of the production of differing, subjective judicial reactions.’ -Caltex Oil (Australia) Pty Ltd v The Dredge ‘Willemstad’ (1976) 136 CLR 529 at 567 per Stephen J.

It is trite law that in Australia, a solicitor engaged by a client is under concurrent obligations in both contract and tort to exercise care, diligence and skill in performing the scope of the retainer. In Hawkins v Clayton, the High Court held that in certain circumstances, the tortious duty owed to a client might extend beyond the parameters of the retainer and require a solicitor to take positive steps to avoid a client sustaining any real and foreseeable economic loss. Such an obligation has been termed the solicitor’s ‘penumbral duty of care’. This article considers the circumstances in which a court will extend the tortious duty of care of a solicitor beyond the four corners of the solicitor-client retainer to impose upon the solicitor a duty to avoid any real and foreseeable financial loss, requiring in some circumstances that the solicitor provide financial advice, and whether a principled approach to this issue can be distilled from the cases.

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Recent Developments in Pure Economic Loss (27/11/2013) By Laina Chan In The Owners – Strata Plan No 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317 (the Brookfield case), developers had contracted with the builder to design and construct a 22 storey building consisting of both residential apartments and serviced apartments in Chatswood. It emerged that there were latent defects in the building. The primary issue was whether the builder owed the Owners Corporation, a subsequent owner, ‘a duty to take reasonable care to avoid reasonably foreseeable economic loss to the appellant in having to make good the consequences of latent defects cause by the building’s defective design and or construction.’At first instance McDougall J held that the builder did not owe a duty of care to the Owners Corporation. In a surprising outcome, the NSW Court of Appeal unanimously overturned this judgment and upheld the appeal.

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