Classic Constructions (Aust) Pty Ltd v Shearman (No 2)

[2024] ACTSC 374

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Classic Constructions (Aust) Pty Ltd v Shearman (No 2)
Citation:	[2024] ACTSC 374
Hearing Date:	6, 10, 30 May, 12, 14 June 2024
Decision Date:	14 June 2024
Publication of Reasons:	22 November 2024
Decision:	(1)  As to the application in proceeding dated 3 May 2024 filed by the second defendant seeking leave to file a counterclaim against CBS Residential Certifiers, order the

second defendant to pay the plaintiff’s costs.

(2)	As to the application in proceeding dated 3 May 2024 filed by the second defendant seeking leave to file a counterclaim against CBS Residential Certifiers, order the second defendant to pay the costs of CBS Residential Certifiers.
(3)	Grant leave to the second defendant to apply to vary that order in the event that the counterclaim is served on CBS Residential Certifiers.
(4)	As to the plaintiff’s further amended application in
proceeding filed in court on 6 May 2024 concerning non- party production notices, each party is to bear its or her costs.
(5)	As to the amended application in proceeding filed by the second defendant on 10 May 2024 seeking access to her
property, order the second defendant to pay the plaintiff’s
costs.

Catchwords:	CIVIL LAW – JURISDICTION, PRACTICE AND PROCEDURE – building dispute – where owner seeks leave to file
counterclaim against new party – extensive delay in bringing counterclaim – whether previous orders contemplated that course – proper approach to interpretation of orders CIVIL LAW – JURISDICTION, PRACTICE AND PROCEDURE – building dispute – where self-represented owner serves
numerous notices for non-party production – application by
builder to set aside notices
CIVIL LAW – JURISDICTION, PRACTICE AND PROCEDURE – building dispute – where builder claims works are complete –
where owner claims numerous defects require rectification –
where owner contends builder must remain in possession
pending rectification of defects – whether owner can compel
builder to remain in possession
Legislation Cited:	Building Act 2004 (ACT), s 17A Court Procedures Act 2004 (ACT), s 5A Court Procedures Rules 2006 (ACT), rr 217, 464, 471
Cases Cited:	Aon Risk Services Australia Ltd v Australian National University
[2009] HCA 27; 239 CLR 175
Parties:	Classic Constructions (Aust) Pty Ltd (Plaintiff)
Debra Shearman (Second Defendant)
Representation:	Counsel
B Buckland (Plaintiff) Self-represented (Second Defendant)
Solicitors
MV Law (Plaintiff) Self-represented (Second Defendant)
File Number:	SC 417 of 2022
McCALLUM CJ:
1․	Classic Constructions (Aust) Pty Ltd entered into a building contract with Mr Leigh
Shearman and Mrs Debra Shearman for the construction of a residential building on land
owned by them. The contract relied upon by Classic Constructions is dated 1 September
2020. By at least the beginning of November 2022, the parties had fallen into dispute as
to the progress of the works and had commenced legal proceedings against each other.
In the proceedings commenced by Mr and Mrs Shearman, they sought orders for access
to the property (the contract having conferred a right of exclusive possession on Classic
Constructions while the building works were being carried out) and certain injunctive
relief. The proceeding commenced by Classic Constructions was a claim in debt for
unpaid progress payments alleged to be due under the contract.
2․	Classic Constructions contends that it subsequently achieved practical completion of the
works, on about 2 June 2023. It has since returned possession of the property to the
Shearmans, or at least taken all steps within its control to do so. In an amended pleading
filed shortly after it claims to have achieved practical completion, Classic Constructions
now sues for the whole of the balance of the contract price. Mr and Mrs Shearman by
counterclaim contend that Classic Constructions failed to complete the works in
accordance with the contract, that the works are incomplete or defective, that Classic
Constructions has failed to reimburse them for various items not needed or not supplied
and that Classic Constructions has engaged in conduct that is misleading or deceptive.
The remedies sought by Mr and Mrs Shearman are specific performance of the contract
and damages in the alternative.
3․	Mr and Mrs Shearman were initially legally represented in the proceedings. They
terminated the retainer of their solicitors no later than 10 November 2023. Since that
time, Mrs Shearman has represented herself, while Mr Shearman has stopped
participating in the proceedings. When the present applications first came before me, in
response to my inquiry as to whether Mr Shearman would be appearing, Mrs Shearman
informed me that he was “seriously unwell” and that she is “acting on his behalf”. I
indicated that I would need to see an affidavit or power of attorney from Mr Shearman to
confirm that he has authorised Mrs Shearman to speak for him in the proceedings. So
far as I am aware, no such evidence has been provided. As I indicated at a subsequent
hearing, I have accordingly proceeded on the basis that Mrs Shearman is the only active
defendant.
4․	This judgment sets out my reserved reasons for orders made by me on 14 June 2024 in
respect of the following applications:

(a) Mrs Shearman’s application in proceeding dated 3 May 2024 seeking leave to

join CBS Residential Certifiers Pty Ltd as a defendant to her counterclaim;

(b) Classic Constructions’ further amended application dated 6 May 2024 seeking

to have notices for non-party production set aside;

(c) Mrs Shearman’s application in proceeding dated 10 May 2024 seeking access

to the property.

Circumstances in which the applications were brought

5․	The principal contest in the proceedings is Mrs Shearman’s counterclaim. If it is found
that the works have been completed in accordance with the requirements of the contract,
the counterclaim will fail and the matter will fall to be determined as a straightforward
claim in debt. For that reason, every timetable fixed in the matter has contemplated that
the first evidence that should be served in the proceedings is the defendants’ expert
report regarding alleged incomplete or defective building works. The first order requiring
service of such a report was made on 28 August 2023. Unfortunately, that order did not
set a hard deadline for the service of the report. It was framed to require service “within
7 days of receipt of the report”. An order in the same terms was made on 26 September
2023. No report was served pursuant to either of those orders.
6․	As already noted, Mr and Mrs Shearman terminated their solicitor’s retainer no later than
10 November 2023. Mrs Shearman first appeared for herself at a directions hearing on
20 November 2023. On that date, the matter was stood over to 13 December 2023 to
allow Mrs Shearman to bring in a timetable for the service of her expert reports.
7․	On 13 December 2023, the Deputy Registrar ordered the defendants to file and serve
their evidence, including any expert evidence, on or before 12 April 2024. That was a
generous timetable, no doubt reflecting the complexities of the issues and the fact that
Mrs Shearman was carrying the burden of the proceedings alone.
8․	On 12 February 2024, Ainslie-Wallace AJ consolidated the two proceedings and fixed a
revised timetable for their future conduct. The timetable included a direction extending
the time for the defendants to file and serve their evidence, including expert evidence, to
10 May 2024.
9․	For the purpose of preparing her evidence, Mrs Shearman served many notices for non-
party production. Classic Constructions considered that the notices lacked any
legitimate forensic purpose or else were overly broad and applied to have them set aside.
That application first came before me on 22 March 2024.
10․	The hearing of that application was complicated by the sheer volume of material relied
upon by Mrs Shearman, the state in which that material was presented to the Court and
Mrs Shearman’s inability to articulate in a clear way the forensic purpose of each of the
non-party notices issued by her. On 26 March 2024, Mr Buckland, who appears for
Classic Constructions, moved on part of the application and I made rulings accordingly:
Classic Constructions v Shearman [2024] ACTSC 77. The balance of the application
was stood over to early May 2024.
11․	In the meantime, on 8 April 2024, the proceedings came before the Deputy Registrar.
On that occasion, Mrs Shearman foreshadowed filing an application to obtain access to
the premises so that her expert could inspect the works.
12․	On 2 May 2024, Classic Constructions served a further amended application concerning
further notices for non-party production issued by Mrs Shearman. That application was
filed in Court on 6 May 2024.
13․	On 3 May 2024, Mrs Shearman filed an application seeking leave to counterclaim against
a new party, CBS. That application was given a return date of 24 May 2024.
14․	The proceedings came back before me on 6 May 2024 for the further hearing of Classic
Constructions’ application concerning the notices for non-party production issued by Mrs
Shearman. On that date, confusion reigned. It was not clear whether further notices
that had been issued by Mrs Shearman were intended to replace or amend notices
previously issued by her or whether some notices had been abandoned. I made a
direction requiring Mrs Shearman to clarify those matters and stood the proceedings over
to 10 May 2024 for hearing. I listed Mrs Shearman’s application for access to the
property for hearing at the same time.
15․	When the matter came back before me on 10 May 2024, I took the view that the priority
was to determine the application for access to the property, as Mrs Shearman’s refusal
to access the property without a court order was holding up the preparation of her expert
evidence, due that day. For reasons explained below, that application was ultimately
stood over to 30 May 2024, prompting the need for yet another extension to the timetable
for service of the defendants’ evidence. I listed the balance of the hearing concerning
the notices for non-party production and Mrs Shearman’s application seeking leave to
file a counterclaim against CBS for hearing on the same date.

Application to join CBS Residential Certifiers Pty Ltd

16․	It is convenient to address the applications in chronological order by reference to the
dates of version of each application on which the parties ultimately moved. The first is
Mrs Shearman’s application dated 3 May 2024 seeking the following orders:

1.       CBS Residential Certifiers Pty Ltd [ABN provided] are added to the proceedings

SC 417 of 2022 as a cross-defendant.

2.       The defendants have leave to file the document titled “further draft amended

counterclaim” that is annexed to the affidavit of 3 May 2024.

17․	Similar prayers for relief were included in a separate application in proceeding filed by
Mrs Shearman dated 10 May 2024. The determination of this issue should be taken to
dispose of both iterations of the application.
18․	As already noted, the application was listed for hearing on 30 May 2024. On that date,
there was an amended application on the court file that had been lodged by Mrs
Shearman on 28 May 2024. The further relief sought in the amended application was
not relief the Court could properly grant. For example, one of the orders sought was
“that CBS Residential Certifiers be compelled to resign”. For that reason, I declined to
entertain the amended application and proceeded to hear the original application, which
was what had been listed for hearing that day.
19․	Both Classic Constructions and the proposed cross-defendant, CBS, opposed leave to
file the counterclaim on “Aon grounds”, a reference to the decision of the High Court in
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR
175 where the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) said at [99]
(citations omitted):

In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all. Such a view may largely explain the decision of this Court in Shannon v Lee Chun, which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh.

20․	Classic Constructions and CBS relied principally on the delay that would be occasioned
by permitting a new party to be joined at this stage and the expense that would be
associated with that. Mr Buckland submitted that Classic Constructions was entitled to
have its cause and any counterclaim against it heard and determined more efficiently
and that the filing of a counterclaim introducing a new party at that late stage would
essentially restart the matter.
21․	Mr Onitiri, who appears for CBS, accepted that Mrs Shearman is not precluded from
bringing a claim against CBS but submitted that, if leave were granted to file the
counterclaim in these proceedings, an order should be made pursuant to r 217 of the Court Procedures Rules 2006 (ACT) that it be tried separately (I considered r 471 to be
the more appropriate rule and that is the rule I ultimately applied). Mr Onitiri accepted
that new parties are often “dragged” into existing proceedings. However, he submitted
that the addition of a new party at the present stage of the proceedings would unfairly
prejudice not only CBS but also Classic Constructions and even Mrs Shearman. Mr
Onitiri noted that the proceedings have a protracted history and that the allegations
against his client are wide-ranging, involving allegations of fraud, breaches of various
industry codes with no particulars as to what damage could have flowed from any such
breach and breach of contract apparently on the basis that Mrs Shearman had a direct
contract with CBS (which elsewhere she appears to deny).
22․	As to the explanation for the delay, Mrs Shearman made four points. First, she asserted
that she repeatedly instructed her previous lawyers to file a counterclaim against the
certifier but “they refused to do it”. Mrs Shearman tendered some of her correspondence
with her former solicitor but that evidence did not support a finding in the bald terms of
the assertion made. Even assuming the assertion to be correct, there has been
significant further delay since the solicitors went off the record.
23․	Secondly, Mrs Shearman stated that she has put CBS on notice of her intention to join
them as a party, both by a specific email and by the fact that they were copied in on all
correspondence with Classic Constructions. While that ameliorates the prejudice to
some extent, the central consideration is the timing of the application. CBS cannot be
expected to have prepared as if it was a party before that was the fact. Significant
interlocutory steps have occurred in its absence from the proceedings.
24․	Thirdly, Mrs Shearman pointed to the complexity of the litigation and stated she has been
doing her best running the litigation on her own and in circumstances where she suffers
from certain disabilities. That is an important consideration and I have given it anxious
consideration. It is of course to be weighed with other factors.
25․	Fourthly, Mrs Shearman contends that the proposed counterclaim is not a new claim, it
is only the addition of the certifier to the existing claim. That does not address the
prejudice to all of adding a new party at this stage of the litigation.
26․	At the conclusion of the hearing on 30 May 2024, I listed the matter for judgment on 6
June 2024. However, on that date, Mrs Shearman made an oral application to re-open
her case, which I granted. I then stood the proceedings over to 12 June 2024 to deliver
the reserved decision. On 11 June 2024, Mrs Shearman lodged a further application in
proceeding seeking leave to re-open her case again. When the matter was called on 12
June 2024, I granted leave to Mrs Shearman to file that application in Court and she read her further affidavit in support of the application, also dated 11 June 2024. She also
tendered further correspondence directed to the circumstances in which previous
directions were made (at the time when Mr and Mrs Shearman were legally represented).
Mrs Shearman contends that, in accordance with those directions, she has not missed
any deadline and that she is accordingly permitted to file the counterclaim. That
contention is addressed below.
27․	On 14 June 2024, after considering Mrs Shearman’s additional evidence, I granted her
leave to file her counterclaim against CBS. However, over her objection, I made the
order sought by her opponents that the counterclaim be tried separately. My reasons for
making those orders were the matters relied upon by CBS and Classic Constructions,
namely, delay, expense and unfair prejudice. I did not consider the previous directions
to confer open-ended leave to file a counterclaim against a new party at any point and
no matter what the prevailing circumstances.
Delay
28․	A counterclaim must be included in the same document as the defence: r 464 of the
Court Procedures Rules. As already noted, these proceedings were commenced in
November 2022. The defendants filed a defence and counterclaim (against the plaintiff
only) on 20 March 2023. In accordance with r 464, from that date, the defendants
required leave to file a counterclaim against any party other than Classic Constructions.
29․	Classic Constructions amended its pleadings on 7 July 2023 to reflect its contention that
it had achieved practical completion of the works. The defendants filed a defence and
amended counterclaim in response to those amended pleadings on 28 August 2023.
30․	The amended counterclaim was filed in accordance with orders made in chambers by
McWilliam J on 28 August 2023. Those orders relevantly included the following:

1.       The defendants are to file any defence and/or counter-claim in response to the

Amended Originating Claim and Amended Statement of Claim on or before 28

August 2023.

2.       The defendants are to file and serve any expert report as to alleged incomplete

or defective building works, if any, within 7 days of receipt of the report.

3.       Within 14 days of service of the expert report on the plaintiff, the defendants are

to file their crossclaim(s) and/or seek to join additional parties to these

proceedings.

31․	Mrs Shearman contends by reference to those orders that she did not miss any deadline
for the filing of a counterclaim joining a new party. She explained that she always intended to join CBS and was given to believe by her former solicitors that she was
entitled to do so. However, she did not want to join the certifier until she had “everything”.
32․	The Court file reveals the following:

(a) On 6 July 2023, McWilliam J made orders in chambers by consent granting

Classic Constructions leave to file the further amended originating claim and

further amended statement of claim. The defendants were ordered to file any

defence or counterclaim in response on or before 14 August 2023.

(b) On 10 August 2023, orders were made in chambers by consent extending the

date by which the defendants were to file any defence or counterclaim to 28

August 2023.

(c) The defendants filed their amended defence and counterclaim on 28 August

2023 as directed. On that date, a further order was made in chambers by

consent ordering them to file and serve any expert report “within 7 days of

receipt of the report”. The orders included the following direction: “within 14

days of service of the expert report on the plaintiff, the defendants are to file

their cross-claim(s) and/or seek to join additional parties to these proceedings”.

The matter was listed before the Registrar on 30 October 2023.

(d) However, on 26 September 2023, the listing for 30 October 2023 was vacated.

Orders were made in chambers by consent directing the parties to request

discovery. An order was again made directing the defendants to file and serve

any expert report “within 7 days of receipt of the report”. However, the direction

to file any application to join additional parties within 14 days of service of the

expert report was not repeated. The matter was listed before the Registrar on

4 December 2023.

(e) The listing for 4 December 2023 was subsequently vacated and the

proceedings were instead relisted on 20 November 2023, perhaps because Mrs

Shearman had terminated the retainer of her solicitors. On 20 November 2023

Mrs Shearman appeared for herself for the first time. The matter was stood

over to 11 December 2023 for Mrs Shearman to propose a timetable for the

service of expert reports.

(f) The orders proposed by Mrs Shearman included order 9: “on or before 12 April

2024, the defendant will confirm the additional parties that will be added as

parties to the claim”.

(g) On 11 December 2023, the Deputy Registrar made orders for discovery, a reply

to the defence to the counterclaim and an order requiring the defendants to file and serve their evidence, including any expert evidence, on or before 12 April

2024. The Deputy Registrar noted “Did not make order 9 (defendant to confirm

additional parties). Court explained joinder of parties requires an application”.

33․	As noted above, on 12 June 2024, after I had reserved my decision, I granted Mrs
Shearman leave to reopen her case to adduce further evidence directed to establishing
Mrs Shearman’s contention that she had not missed any deadlines for the filing of a
counterclaim.
34․	In her further affidavit, Mrs Shearman notes that evidence relied upon by Classic
Constructions in opposition to the joinder of CBS stated that she was required to file any
counterclaim by 14 August 2023, later extended to 28 August 2023. Mrs Shearman
contends that this evidence was “incorrect, incomplete, and is missing vital information”.
35․	Based on a careful review of the file and Mrs Shearman’s further affidavit and exhibits, I
do not accept that contention. The defendants were initially directed to file any
counterclaim by 14 and then 28 August 2023. As already noted, r 464 requires a
counterclaim to be included in the same document as the defence. That rule applied to
the orders concerning the defence and counterclaim to be filed in response to the
plaintiff’s amended pleadings.
36․	That is the assumption underlying the correspondence annexed to an affidavit sworn on
29 May 2024 by Ms Paige Hall, solicitor for Classic Constructions. The correspondence
indicates that the first two orders (requiring filing of counterclaims by 14 and then 28
August 2023) were made by consent. On 23 August 2023, five days before the second
deadline, Mrs Shearman’s solicitor wrote as follows:

We refer to order 1 of the orders made by Justice McWilliam on 10 August 2023 which requires Mr and Mrs Shearman to file any cross-claims, joining additional parties, by 28 August 2023.

We write to advise that Mr and Mrs Shearman will not be in a position to file any cross- claim(s) by 28 August 2023 due to ongoing investigations into whether or not the certifier(s) being either Certified Building Solutions Pty Ltd ACN 110 342 482 or CBS Residential Certifiers Pty Ltd ACN 635 944 044 and/or AK Palmer Group Pty Ltd t/as Palmers ABN 836 387 285 97, in particular, should be joined as a party to these Proceedings as well as other relevant parties, if appropriate.

37․	It was in those circumstances that, for the first time, a separate order was made
concerning the filing of any counterclaim joining a new party. However, the order that
was made (order 3 of 28 August 2023) did not determine Mrs Shearman’s entitlement to
join a new party; it only contained the time within which any such application should be
made. Order 3 provided:

Within 14 days of service of the expert report of the plaintiff, the defendants are to file their crossclaim(s) and/or seek to join additional parties to these proceedings.

38․	The wording of the order is curious. Any counterclaim against Classic Constructions was
caught by order 1, meaning order 3 was concerned exclusively with counterclaims
against new parties. By the inclusion of the words “seek to join”, the order acknowledged
the requirement for leave. The words “are to file their cross-claims” are confusing in that
context, suggesting ambivalence as to whether Mr and Mrs Shearman were entitled to
file any counterclaim joining a new party or only to seek to do so. Furthermore, the order
left the whole timetable in the hands of the defendants’ expert. It would, with respect,
have been preferable to fix each step by reference to a calendar date rather than an
event outside the control of the court or any of the parties.
39․	In any event, order 3 was not repeated in the next set of orders made in chambers by
consent. Mrs Shearman’s further affidavit sworn 11 June 2024 explains why. In short,
on 18 September 2023, the solicitor then acting for Mr and Mrs Shearman wrote to the
Associate to McWilliam J seeking amendments to the timetable. In that letter, the
solicitor proposed a repetition of order 3. However, McWilliam J was not prepared to
make such an order for a second time without relisting the proceedings. In response to
correspondence to that effect from her Honour’s Associate, both parties indicated that
the order was not pressed. The orders were accordingly made in chambers by consent,
omitting order 3.
40․	Mrs Shearman’s further evidence put before the Court on 12 June 2024 (the affidavit
sworn 11 June 2024 and correspondence tendered on 12 June 2024, being exhibits 1
and 2) included advice she received from her lawyer as to the effect of the lawyer’s
agreement to remove order 3 from the proposed consent orders made on 26 September
2024. Mrs Shearman relied in particular on an email dated 10 November 2023 in which
her lawyer wrote that the amendment to the orders “permits (and does not prevent or
limit by time in any way) your ability to make application to join third parties”. It was
correct that the omission of order 3 did not prevent Mrs Shearman from applying to join
third parties. That is because, as already explained, the inclusion of order 3 did not
obviate the need to apply for leave to join third parties in the first place. The order was
ineffective, except insofar as it indicated the Court’s expectation in the circumstances as
they stood when the order was made. Its later exclusion was at best inconsequential.
At worst (for Mrs Shearman), it could be understood to indicate the Court’s view that the
delay in filing a counterclaim against a new party was such that the timetable should no
longer contemplate the filing of such an application. For that reason, to the extent that
the solicitor’s advice implied that Mrs Shearman could apply to join third parties at any
time of her choosing, it did not convey the expectations of the Court.
41․	In any event, from the time of Mrs Shearman’s appearance before the Deputy Registrar
on 11 December 2023, she was on notice of the importance of moving expeditiously on
any application to join a new party. That was Mrs Shearman’s first substantive
appearance after her solicitor went off the record (on 20 November 2023, she was only
asked to bring in a proposed timetable). The transcript of the hearing on 11 December
2023 records that the Deputy Registrar informed Mrs Shearman that the joinder of any
new party required an application and that any such application should be attended to
“as a priority”.
42․	Mrs Shearman relied on the solicitor’s email of 10 November 2023 as “vital evidence”
showing her understanding of the effect of the orders. However, as I endeavoured to
explain to Mrs Shearman at the time, any advice given by the solicitor does not bind me.
43․	The additional evidence does not adequately explain the delay. I consider that the delay
is a strong factor against granting leave to file the counterclaim.

Wasted expenditure

44․	Classic Constructions has incurred over $400,000 in legal fees in the proceedings in
circumstances where the unpaid balance claimed by it is in the order of $750,000. If
CBS is joined in the proceedings now, there will undoubtedly be considerable wastage
and duplication of costs. A significant part of the expenditure to date relates to the
process of discovery. If the counterclaim is allowed into these proceedings, that process
will in all likelihood have to be revisited. That is a strong factor against granting leave to
file the counterclaim.

Other prejudice

45․	Mrs Shearman noted that the two pleadings (that is, the respective counterclaims against
CBS and Classic Constructions) are almost identical. However, the critical question is
the extent to which they raise common issues. CBS and Classic Constructions each
accepted that there is some overlap in the issues in the two claims. They accepted that
is a factor favouring the grant of leave to prosecute the counterclaim against CBS in the
same hearing. However, they submitted that there is not complete overlap and that each
claim includes allegations that are irrelevant to the claim against the other.
46․	In that context, Mr Buckland noted that a certifier is not a clerk of works and is under no
obligation to ensure the works comply with the contract; the functions of the certifier are
those specified in s 17A of the Building Act 2004 (ACT), relevantly including inspecting
the building work at prescribed stages to determine compliance with the Act. For that
reason, many of the allegations against Classic Constructions will be of no concern to
CBS. Conversely, many of the allegations against CBS are of no concern to Classic Constructions. For example, the proposed counterclaim includes allegations of fraud
(for example at [37A(c)] and [37A(t)] of the counterclaim) and what Mr Buckland termed
“an investigation into historical documentation” which can have no impact on the quality
of the building works, for example allegations appearing at [33B] of Mrs Shearman’s
affidavit affirmed on 3 May 2024. Mrs Shearman denies having pleaded fraud but that
is the substance of some of her allegations.
47․	At the hearing, I raised a concern as to whether there was some potential prejudice to
Mrs Shearman in not allowing the two counterclaims to be heard together, if the result is
that it will be necessary for her to conduct two sets of proceedings. I suggested that, to
the extent that there are common issues, it would be in Mrs Shearman’s interests to have
the certifier bound by any findings against Classic Constructions. In response to those
concerns, Mr Onitiri submitted, in effect, that Mrs Shearman would have a complete
remedy against Classic Constructions because, if there are findings of defective work,
the damage that would flow from that fact would be the same, regardless of the
participation of the certifier in the proceedings. He submitted that the more likely
scenario is that Classic Constructions would seek contribution from the certifier at some
later point but that it should not be necessary for Mrs Shearman to have a discrete finding
against the certifier in order to obtain a remedy, if indeed she is successful in establishing
defective works.

48․ Separately, as already noted, Mr Onitiri pointed to the potential prejudice to Mrs

Shearman. There is some force in that point. The costs of the present proceedings

appear to be at risk of being vastly disproportionate to the interest at stake. In part, that

is due to Mrs Shearman’s approach to the litigation, which is to explore every issue that

concerns her as if the proceeding was a broad-ranging inquiry rather than private

litigation. I accept that she faces difficulties as a self-represented litigant labouring under

the disabilities she has explained to the Court. That is no warrant for permitting the

proceedings to be conducted in a way that overlooks the main purpose of the civil

procedure provisions stated in s 5A of the Court Procedures Act 2004 (ACT), which is to

facilitate the just resolution of disputes according to law; and as quickly, inexpensively

and efficiently as possible. The prosecution of the counterclaim against CBS in the same

hearing as the counterclaim against Classic Constructions would impose an immense

burden on Mrs Shearman and incur very substantial expense, including duplication of

tasks already undertaken and costs already incurred.

49․	Having regard to those considerations, I concluded that the counterclaim should be
heard separately.

Classic Constructions’ application to have non-party production notices set aside

50․	Classic Constructions’ attempts to bring order to the process of non-party production
were defeated by a process of attrition. As already noted, its application first came before
the Court on 22 March 2024. Rulings on part of that application were made on 26 March
2024. Thereafter, the hearing of the application struggled to keep pace with further steps
taken by Mrs Shearman. The final iteration of the application was the further amended
application filed in court on 6 May 2024. On 14 June 2024, Mr Buckland informed the
Court that Classic Constructions did not press what remained of that application apart
from the application for the defendants to provide unredacted copies of documents
produced by the National Australia Bank in response to a notice issued by Classic
Constructions. Accordingly, the application was dismissed by consent.

Mrs Shearman’s application for access to her property

51․	In an amended application in proceeding filed in court on 10 May 2024, Mrs Shearman
sought the following relief concerning her property:

1.       That the plaintiff provide the defendants access to the Site in accordance with

the Contract conditions.

2.       Until the final determination of the proceedings or further order of this Court, the

plaintiff has possession of the Site.

52․	The application was brought in the context that, so far as Classic Constructions was
concerned, it was no longer in possession of the premises. Classic Constructions
encountered some resistance from Mrs Shearman in its attempts to return possession
of the property to her, ultimately leaving the key in a locked box and giving Mrs Shearman
confidential access to the code for that locked box. Classic Constructions endeavoured
to persuade Mrs Shearman that there was no reason her expert could not access her
own property to inspect it for the purposes of preparing a report. On 23 April 2024, its
lawyer wrote to Mrs Shearman clearly setting out what I accept to be the true position.
The letter concluded in the following terms:

Out of an abundance of caution, my client unilaterally undertakes not to raise any noncompliance with clause 14 of the contract that grants Classic exclusive possession during the course of the works. In simple terms, my client promises not to allege that you have breached the contract if you use the keys at the property to access the property.

53․	At the hearing on 10 May 2024, I endeavoured to persuade Mrs Shearman that her
expert could access the property without prejudice to her claim in the proceedings and
that the relief sought by her was misconceived. After a lengthy exchange on that issue,
Mrs Shearman raised a separate point about insurance. She stated that she had received legal advice to the effect that, if Classic Constructions were to go into
administration at a time when it was no longer in possession of the property, she would
not be able to make a claim on the Fidelity Fund. She insisted for that reason that the
Court should make an order compelling the builder to remain in possession of the
property, coupled with an order permitting her access to the property for the purpose of
obtaining her expert report. The application was stood over to 30 May 2024 to enable
Mr Buckland to respond to the insurance issue.

54․ At the adjourned hearing, Mr Buckland produced further evidence including

correspondence from the insurer confirming that Mrs Shearman’s apprehension was

misplaced. At that point, Mrs Shearman indicated that she no longer pressed the

application because I had explained that it was misconceived. However, the explanation

had previously been set out in the clearest terms by Classic Constructions’ solicitor.

55․	In any event, as the application was no longer pressed, it was dismissed.
Costs
56․	It remains to deal with the costs of those applications. I heard the parties on that issue
on 14 June 2024.
57․	As to the application to join the certifier, Mrs Shearman having been unsuccessful in
joining CBS in the same hearing as Classic Constructions, she should pay Classic
Constructions’ costs of that application. A solicitor appearing for CBS on 14 June 2024
did not oppose a suggestion that the costs of the application insofar as it concerned CBS
be costs in the cause. However, Mrs Shearman has not yet served the counterclaim. If
the counterclaim is not to be served, the application was a waste of time and Mrs
Shearman should pay CBS’s costs. If the counterclaim is served, an order that costs be
costs in the cause would be appropriate. I propose to order Mrs Shearman to pay those
costs on the understanding that, if the counterclaim is served, that order can be revisited.
58․	As to Classic Constructions’ application concerning the notices for non-party production,
Mr Buckland submitted that, each party having enjoyed a measure of success, each
party should bear its own costs of that application. I agree. Furthermore, during the
process of hearing that application, it was clear to me that the notices were drawn too
broadly and in some instances were directed to parties who can have had no connection
with the events giving rise to the proceedings.
59․	As to Mrs Shearman’s application for access to her property, that application was always
misconceived. Mrs Shearman should pay Classic Constructions’ costs of that
application.
60․	For those reasons, I make the following orders:
(1) As to the application in proceeding dated 3 May 2024 filed by the second

defendant seeking leave to file a counterclaim against CBS Residential Certifiers,

order the second defendant to pay the plaintiff’s costs.

(2)	As to the application in proceeding dated 3 May 2024 filed by the second
defendant seeking leave to file a counterclaim against CBS Residential Certifiers,
order the second defendant to pay the costs of CBS Residential Certifiers.
(3)	Grant leave to the second defendant to apply to vary that order in the event that
the counterclaim is served on CBS Residential Certifiers.
(4)	As to the plaintiff’s further amended application in proceeding filed in court on 6
May 2024 concerning non-party production notices, each party is to bear its or
her costs.
(5)	As to the amended application in proceeding filed by the second defendant on 10
May 2024 seeking access to her property, order the second defendant to pay the
plaintiff’s costs.

I certify that the preceding sixty [60] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice McCallum

Associate:

Date: 22 November 2024