(KBR) and the manufacture of plastic cells to be used in the system to Atlantis Corporation. Pty Ltd. The plastic cells
Judgment Summary Supreme Court New South Wales
Downer EDI Rail Pty Ltd v John Holland Pty Ltd; John Holland Pty Ltd v QBE Insurance (Australia) Ltd (No 5); Kellogg Brown & Root Pty Ltd v John Holland Pty Ltd (No 4) [2018] NSWSC 326 Stevenson J The Supreme Court has dismissed a claim for damages for the allegedly defective design of a water detention and drainage system installed beneath the Auburn Maintenance Centre. The Maintenance Centre, owned by RailCorp, was built to service RailCorp’s fleet of Waratah trains. It was a requirement of the local council that the design of the Maintenance Centre include a system for removing and channelling water from the site into a nearby river. Through a series of back-to-back contracts, Downer EDI Rail Pty Ltd (Downer) subcontracted the design and construction of the water detention system to John Holland Pty Ltd, which, in turn, subcontracted the design of the system to Kellogg Brown & Root Limited (KBR) and the manufacture of plastic cells to be used in the system to Atlantis Corporation Pty Ltd. The plastic cells were milk-crate like structures which were to be clipped together in a series of ‘tanks’, wrapped in geotextile fabric, and buried underground. It was intended that water would run through the fabric into the cells before being directed through a system of pipes to the river. However after their installation, some cells were exhumed due to concerns that they had failed. Subsequent excavations in the rail area revealed that a small number of cells had bowed, cracked or collapsed, and that some tanks had sand and/or water remaining in them after rainfall. The main issue at trial was whether the system of cells had failed, or would fail during the ‘design life’ of the detention system. If that were established, a number of other issues arose including whether and how the design of the detention system was deficient, whether John Holland was contractually obliged to indemnify Downer for the loss, whether there had been misleading or deceptive conduct, and whether Atlantis’ insurance policy covered the loss. However the Court held that Downer failed to prove the detention system was failing, or likely to fail by reason of any of the shortcomings in design for which Downer contended. On the basis of expert evidence the Court found that the cells were strong enough to bear the static load of the soil for at least the 50 year design life.
This summary has been prepared for general information only. It is not intended to be a substitute for the judgment of the Court or to be used in any later consideration of the Court’s judgment.
