Dunne & Co Building Group Pty Ltd v Lazarus
[2022] VCC 1935
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-21-03959
| Dunne & Co Building Group Pty Ltd | Plaintiff |
| v | |
| Matthew Lazarus | Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | Submissions dated 27 October and 4 November 2022 | |
DATE OF RULING: | 15 November 2022 | |
CASE MAY BE CITED AS: | Dunne & Co Building Group Pty Ltd v Lazarus | |
MEDIUM NEUTRAL CITATION: | [2022] VCC 1935 | |
RULING
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Subject:ADJOURNMENT OF TRIAL DATE
Catchwords: vacate trial date – adduce additional expert evidence – witness outlines
Legislation Cited: County Court Civil Procedure Rules 2018; Civil Procedure Act 2010 (Vic)
Cases Cited:Opeka Pty Ltd v Mackie Group Pty Ltd [2003] VSC 183; Smith v Gannawarra Shire Council and Anor [2002] VSCA 69; Northern Health v Robert Kuipers [2015] VSCA 172; Ultra Thoroughbred Racing Ltd v Those Certain Underwriters at Lloyd’s, London [2011] VSC 370; Thomas v Powercor Australia Ltd [Ruling 3] [2011] VSC 391; Matthews v SPI Electricity Pty Ltd [Ruling No 20] [2013] VSC 197; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Baptcare Ltd (ACN 069 130 463) v Ingpen Thomas Sharland Lane as executor of the estate of Colborne, Margaret Beatrix & Ingpen, Heather Margaret as executor of the estate of Colborne, Margaret Beatrix [2022] VSCA 250
Texts Cited:Williams NJ, Civil Procedure Victoria (3rd ed, Butterworths, 1987)
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr F Brimfield | Johnston Construction Lawyers |
| For the Defendant | SSmith & Associates |
HER HONOUR:
Introduction
1By summons filed on 28 October 2022, the plaintiff made an application to vacate the trial date of 29 November 2022, to adduce additional expert evidence and for the provision of witness outlines. The application was supported by the affidavit of Jillian Johnston affirmed on 27 October 2022. The defendant opposed the application.
2For the reasons below, the plaintiff is granted the relief sought in its application dated 28 October 2022. I also propose to order that the plaintiff pay the defendant’s costs thrown away by reason of the vacation of the trial date on a standard basis to be taxed in default of agreement, and the costs of the application are otherwise the parties’ costs in the proceeding, unless either party has a basis for seeking a different order as to costs. I invite the parties to prepare draft orders to give effect to these reasons. I will determine any issue concerning costs on the papers.
Background
3In this proceeding, the plaintiff builder sues the defendant roofing contractor for defective subcontracted works. The defendant carried out both roofing works and wall cladding works. The plaintiff compromised the “roofing” aspect of its claim with the defendant’s plumbing insurance in April 2022. All that remains is the wall cladding aspect of the claim.
Plaintiff’s Submissions
4On 27 October 2022, the plaintiff made the following submissions in support of its application.
5The refusal of the adjournment of the trial date in this case would have the real effect of preventing the plaintiff from presenting evidence that may both affect the outcome of the proceeding, and would significantly interfere with its ability to present its case effectively.
6The plaintiff’s expert evidence filed to date (a report of Hashem Eshlan of Melbourne Roofing Inspection dated 29 March 2022) is deficient and does not comply with the expert witness code of conduct insofar as the wall cladding defects are concerned. This is because:
(a) Mr Eshlan is a licensed plumber, not a builder, and is arguably unqualified to give evidence about defects in wall cladding as opposed to roofing; and
(b) Apart from making bold assertions that the wall cladding is defective because it does not comply with “AS/NZS 3500.3:2015 & VBA standards” and because parts of that cladding have “missing screws and have multiple holes across them”, Mr Eshlan does not explain the basis of those opinions.
7The plaintiff has since engaged a qualified expert (Ian Johnson of BSS Group) to compile a report which he says will be ready in mid-late November 2022. Without the admissible expert evidence that the plaintiff seeks through Mr Johnson of BSS Group, there is no independent and admissible expert evidence to comment on the defects. The court would also be well assisted by that evidence being provided.
8Rule 49.03 of the County Court Civil Procedures Rules 2018 provides that the court may adjourn a trial “on such terms as it thinks fit”. The court should have regard to matters such as the overarching obligations, the prejudice to the plaintiff if it were not granted, and the prejudice to the defendant if it was granted.[1]
[1] Williams NJ, Civil Procedure Victoria (3rd ed, Butterworths, 1987) at [49.03.0].
9If that expert evidence is provided in mid-November 2022, then the defendant needs time to examine it, and consider whether it wishes to file its own expert evidence in response.
10The prejudice to the defendant, if any, is minor. The defendant’s counterclaim is small ($20,000.00). The only real prejudice that might be suffered by the defendant (if it were to succeed in these proceedings) would be being out of pocket longer, for which an award of interest is sufficient compensation.
11This proceeding has not been on foot for a long time. The defendant only filed its defence and counterclaim in late February 2022.
12Ms Johnston deposed that:
(a) following the mediation held on 28 July 2022 and the brief being delivered to Mr Brimfield, of counsel, on 2 August 2022, it was identified that the expert report relied on by the plaintiff (the report of Hashem Eshlan of Melbourne Roofing Inspection dated 29 March 2022) was inadmissible in respect of the wall cladding defects;
(b) Mr Eshlan, the author of the Melbourne Roofing Inspection report, was not a qualified builder, and his CV only disclosed that he was a roofing plumber. Moreover, it was identified that Mr Eshlan had not disclosed the reasoning behind the parts of his report that concluded that the wall cladding was defective;
(c) Mr Eshlan's report does not identify what standard of work should be met and how it is said to have been breached, or what is required to be done in order to rectify the defect;
(d) Mr Eshlan was selected as an expert witness by the director of the plaintiff and Ms Johnston considers that the deficiencies in his report with respect to the wall cladding cannot be remedied because he is not a qualified builder;
(e) On 16 September 2022, the plaintiff wrote to the solicitor for the defendant, with a set of proposed orders that vacated the trial date, permitted the plaintiff to file and serve an amended statement of claim and further expert reports by late October 2022, and responsive materials from the defendant by late November 2022;
(f) On 28 September 2022, the defendant’s solicitor replied and said: “We are instructed that the defendant objects to and opposes the orders sought by the plaintiff in the email transmitted to the Court today”;
(g) On 28 September 2022, the plaintiff instructed Ian Johnson of BSS Group to compile a new expert report. The retainer was accepted on 7 October 2022 and Mr Johnson stated that he expected to complete his report in about four weeks’ time. The report would not be filed until about 21 or 22 November 2022, that is, one week before the scheduled trial;
(h) In relation to the question of prejudice, Ms Johnston was instructed by the director of the plaintiff that the requirement to engage a third party contractor to rectify the alleged defects has put them under significant financial strain. The director, Tyrell Dunne, and his wife, Samantha Dunne, who is a shareholder of the plaintiff and has carriage of administrative work for the plaintiff, are a young couple with young children. They instruct that their business took a significant financial hit on this project because of the alleged defects in the roofing and wall cladding, and the settlement with the defendant's insurer for the roofing works has only been able to partly satisfy their loss and damage due to liability caps on that insurance.
Defendant’s Submissions
13On 4 November 2022, the defendant made the following submissions in opposition to the plaintiff’s application.
14The affidavit affirmed by Jillian Johnston (the plaintiff’s solicitor) on 27 October 2022 does not give express explanation given as to why the plaintiff’s expert report in respect of wall cladding defects is not admissible. The affidavit states that Mr Eshlan is a qualified roofing plumber, not a qualified builder. There is no specific trade of “tin wall cladding” however, it is a task which is typically undertaken by a roofing plumber given it is a task akin to tin roofing. Accordingly, a roof plumber with appropriate experience is suitably qualified to give evidence on the top of tin wall cladding. It makes no sense whatsoever for the plaintiff to allege that their own expert is not suitably qualified to comment upon the wall cladding.
15The court should be loath to adjourn a trial date to enable a party to go expert witness shopping when they already have a witness that has reported upon the issue that they now seek a second expert witness to report upon.
16The mediation in this proceeding took place on 28 July 2022. The plaintiff’s solicitors have known since 28 July 2022 that the defendant considered the expert report to exhibit deficiencies only 1 photograph pertaining to the tin wall cladding, all other photographs in the expert report relate to the tin roof.
17No photographs were discovered as alleged in paragraph 19 of Ms Johnston’s affidavit. The plaintiff is seeking to now get new expert evidence based on photographs which have not been discovered. It is a serious breach of the plaintiff’s overarching obligations[2] to have failed to discover photographs which the plaintiff now appears to have submitted to a new proposed expert witness. As the tin wall cladding is said to have been replace by the plaintiff in early to mid-2022, there is no opportunity for the defendant to engage an expert to carry out an inspection and report on his work. This is a grave prejudice to the defendant in the conduct of the proceeding and arises from the failure of the plaintiff to act in accordance with its overarching obligations.
[2] Civil Procedure Act 2010 (Vic) s26.
18The defendant cannot get an expert witness now to inspect the subject premises when the evidence the subject of the plaintiff’s claim has been destroyed by the removal and replacement of all tin cladding.
19No explanation has been offered by the plaintiff as to why the expert report already filed in the proceeding only included 1 photograph of the tin wall cladding when he was full cognisant of the tin wall cladding as an issue in dispute.
20Sections 28 and 29 of the Civil Procedure Act 2010 (Vic) (“CPA”) empower the Court in exercising a discretion to refuse to exercise such a discretion where there has been a failure of the party seeking the indulgence to have breached their overarching obligations. The adjournment sought by the plaintiff would result in an unjust, more costly and inefficient resolution of the issues in dispute.
21The defendant is entitled to have the proceeding determined in a just and timely manner. The adjournment of the proceeding on the basis of parties submitting photographs to experts where relevant expert evidence has already been obtained is an improper and wasteful exercise.
22The plaintiff does not depose or make any submissions in support of its application for witness outlines. As the issue in dispute is confined principally to wall cladding, the defendant submits that witness outlines would not be a useful exercise.
Deficiency of the Plaintiff’s Existing Expert Report
23As stated in Appendix C of Mr Eshlan’s expert report dated 29 March 2022, he has over a decade of experience in domestic and commercial fields of plumbing only. Mr Eshlan is not a qualified builder who is able to give evidence about defects in wall cladding. Further, Mr Eshlan does not sufficiently explain the basis for his opinions in relation to these defects. The plaintiff’s existing expert evidence provided by Mr Eshlan is hence deficient.
24The defendant submits that the plaintiff’s assertion of Mr Eshlan being unqualified is a disingenuous, artificial and contrived excuse as the defendant himself, who the plaintiff engaged to carry out the tin wall cladding, is not a qualified builder but a roofing plumber. The tin wall cladding material used for the walls is the same as that used for the roof. Roofing plumbers typically undertake both tin roof and wall cladding.
25I do not accept the defendant’s submission – this is a generalisation of the work that roofing plumbers undertake and does not relate specifically to the work undertaken by Mr Eshlan and his area of expertise.
26Without the expert evidence that the plaintiff seeks through Mr Johnson of BSS Group, there is no independent and admissible expert evidence to comment on the defects before the Court to assist in the determination of the real issue in dispute.
Case Management Principles and Obligations under the CPA
27The plaintiff relies on Justice Nettle’s decision in Opeka Pty Ltd v Mackie Group Pty Ltd.[3] His Honour held that the refusal to adjourn may be an appealable error where the refusal has or is likely to “shut a party out of an opportunity to advance a sustainable proposition which may [affect] the outcome of the proceeding”.
[3] [2003] VSC 183 per Nettle J at [35].
28The plaintiff also relied on President Winneke’s decision in Smith v Gannawarra Shire Council and Anor,[4] where his Honour stated:
“In this day and age when the courts are under pressure to deal with cases before them in an expeditious fashion and where, accordingly, case management has become a significant aspect of the curial processes, the administration of justice still requires that the courts ensure, so far as practicable, that justice be administered evenhandedly so that each party to a dispute is in a position, within the bounds of reason, to present his or her case to the court in its best light and in an orderly fashion. As Dawson, Gaudron and McHugh, JJ. Pointed out in State of Queensland v. J.L. Holdings Pty. Ltd, in matters like this "Justice is the paramount consideration." In other words, courts should be astute to ensure that expediency is not permitted to usurp justice by refusing to grant an adjournment at the instance of a party in circumstances which will significantly interfere with the ability of that party to present his or her case effectively”.
[4] [2002] VSCA 69 at [35].
29For the following reasons, I agree that the refusal of the adjournment of the trial date in this case would prejudice the plaintiff.
30The Court of Appeal decision in Northern Health v Robert Kuipers (“Kuipers”)[5] provides guidance on principles of case management and the mandatory considerations in s9(1) of the CPA before making any order refusing leave to amend or prohibiting reliance on late filed material.
[5] [2015] VSCA 172.
31The case involved an application for leave to appeal a decision by a judge of the County Court. A trial of the proceeding was scheduled to commence on 1 July 2015. On 2 May 2015, the judge made directions (in standard form) that the parties were to exchange medical and expert reports by 3 October 2014, and by no later than 28 days before the trial, exchange any “further” medical and/or expert reports. The applicant served a substantial new expert report on the respondent on 20 May 2015, 6 weeks before trial. On 26 May 2015, the judge made an order prohibiting the applicant from relying on the expert report on the basis that the applicant had not complied with the timetabling order made on 2 May 2014. The applicant sought leave to appeal and claimed that it had construed the order to allow service of expert report up to 28 days before the date of the trial and that the prohibiting order was unreasonable due to the prejudice caused to the applicant’s defence against the respondent.
32Justice Kyrou and McLeish JJA allowed the appeal, finding that the judge had failed to:
(a) take into account material considerations pursuant to ss7–9 of the CPA;
(b) give effect to overarching purpose of facilitating just, efficient, timely and cost-effective resolution of issues in dispute under ss7–9 of the CPA.
33Their Honours emphasised that the CPA was “pivotal to the resolution of disputes about case management issues… it must be apparent from the reasons for the ruling… that the judge took into account the applicable provisions”.[6]
[6] Kuipers at [22].
34At [89], their Honours noted that the judge had an obligation under s8 of the CPA to give effect to the overarching purpose of facilitating “the just, efficient, timely and cost-effective resolution of the real issues in dispute”. Section 9(1) lists a number of matters which the Court was obliged to have regard to in furthering the overarching purpose (emphasis added):
(a) the just determination of the civil proceeding;
(b) the public interest in the early settlement of disputes by agreement between parties;
(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial and administrative resources;
(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for—
(i)the fair and just determination of the real issues in dispute; and
(ii)the preparation of the case for trial;
(f) the timely determination of the civil proceeding;
(g) dealing with a civil proceeding in a manner proportionate to—
(i)the complexity or importance of the issues in dispute; and
(ii)the amount in dispute.
35According to their Honours, the “main focus” of the considerations in s9 of the CPA is “forward looking and, in particular, in ensuring a fair and just determination of the real issues in dispute”.[7] The judge in this case had erred in focussing too greatly on historical events such as the mediation (which took place without the benefit of the new expert report).
[7] Kuipers at [89].
36Their Honours also held that the judge failed to adequately consider the circumstances of the particular case, including:
(a) prejudice to the parties (at [96]–[101]); and
(b) the applicant’s reasons for breach (at [102]–[107]).
37Their Honours referred with apparent approval to three decisions of J Forrest J, Ultra Thoroughbred Racing Ltd v Those Certain Underwriters at Lloyd’s, London [2011] VSC 370 (“Ultra”); Thomas v Powercor Australia Ltd [Ruling 3] [2011] VSC 391 (“Thomas”); and Matthews v SPI Electricity Pty Ltd [Ruling No 20] [2013] VSC 197 (“Matthews”).
38At [28], their Honours set out J Forrest J’s summary in Ultra at [8] of the factors that the High Court considered relevant in the context of an amendment to a pleading in Aon Risk Services Australia Ltd v Australian National University[8] as follows:
(a) whether there will be a substantial delay caused by the amendment;
(b) the extent of any wasted costs;
(c) whether there is an irreparable element of unfair prejudice caused by the amendment;
(d) concerns of case management arising from the stage in the proceeding when the amendment is sought;
(e) whether the grant of the amendment will lessen public confidence in the judicial system; and
(f) whether a satisfactory explanation has been given for seeking the amendment at the stage when it is sought.
[8] (2009) 239 CLR 175.
39At [13] of Thomas, J Forrest J stated that Aon Risk Services Australia Ltd v Australian National University[9] was applicable generally and was relevant to the late service of an expert report. His Honour took into account the following matters in refusing an application to rely on an expert report on day three of a trial:
(a) the plaintiff’s explanation for the late service of the report;
(b) the subject had been in the possession of the plaintiff for over a year prior to the trial and available for examination by an expert throughout that time;
(c) the introduction of the expert report raised the risk of derailing a conclave of experts which had been scheduled a month later and in which a joint report had already been prepared;
(d) it was not determinative that there was no demonstrable prejudice to the defendant.
[9] [2009] HCA 27.
40In Matthews, J Forrest J at [62] permitted a plaintiff to rely on a supplementary expert report filed on day one of a five week trial and many months after the expiry of the deadline on the basis that s9(1)(a) of the CPA required the “just determination of the civil proceeding” in accordance with the overarching purpose.
41Finally, their Honours relied at [33] on J Forrest J’s observation in Ultra at [9] that: “the primary question still remains: what do the interest of justice dictate?... the prism through which these interests are viewed is wider than just that of the moving party”.
42In this proceeding, the plaintiff seeks the adjournment of trial to allow it to file an additional expert report and has sought to do so some 10 weeks prior to the scheduled trial. It is unlike the facts of Thomas and Matthews where the plaintiff is seeking to rely on extra expert evidence once the trial has already commenced.
43In the recent decision of Baptcare Ltd (ACN 069 130 463) v Ingpen (“Baptcare”),[10] the Court of Appeal, citing Kuipers, made the following observations in relation to case management principles:
(a) regard should be had to the consequence of orders made in ensuring a fair trial of the claim and that reasons for refusing an application to amend pleadings should be made in light of the overarching purpose of ensuring a just resolution of the issues between the parties;[11]
(b) consideration should be given to how evidence might be artificially precluded and whether the trial would be beset by procedural objections;[12]
(c) whether it is unjust to shut out an applicant from relying on arguable defences and whether permitting the amendment to be relied on will contribute to the just resolution of the contestable issues;[13]
(d) whether there is delay in giving notice of the proposed amendments;[14]
(e) s20 of the CPA imposes an overarching obligation upon lawyers to cooperate in the conduct of a proceeding;[15]
(f) whether, in the context of the application, orders as to costs provide an adequate amelioration of the respondent’s position.[16]
[10] Baptcare Ltd (ACN 069 130 463) v Ingpen, Thomas Sharland Lane as executor of the estate of Colborne, Margaret Beatrix & Ingpen, Heather Margaret as executor of the estate of Colborne, Margaret Beatrix [2022] VSCA 250.
[11] Ibid [43].
[12] Baptcare [45].
[13] Ibid [51(a)].
[14] Ibid [51(b)].
[15] Ibid [51(d)].
[16] Ibid [51(f)].
44Applying the above in this proceeding:
(a) dismissing the plaintiff’s application because of procedural objections would artificially preclude the evidence adduced from the cladding expert, which is necessary in assessing the remaining defects in this case;
(b) it is unjust to shut out the plaintiff from leading expert evidence on wall cladding, which is the real issue in dispute between the remaining parties;
(c) the delay in the adducing the expert cladding report is significant, but this was foreshadowed following the mediation and the briefing of counsel in August 2022;
(d) in the context of this application, awarding the defendant’s their costs thrown away provides an adequate amelioration of the defendant's position;
(e) the interests of justice point to allowing the plaintiff’s application.
Conclusion
45The plaintiff is granted the relief sought in its application dated 28 October 2022. I propose to order that the plaintiff pay the defendant’s costs thrown away by reason of the adjournment on a standard basis to be taxed in default of agreement, and otherwise, the costs of the application are the parties' costs in the proceeding, unless either party has a basis for seeking a different order as to costs.
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Certificate
I certify that these 13 pages are a true copy of the ruling of her Honour Judge Burchell delivered on 15 November 2022.
Dated: 15 November 2022
Andrea Ko
Associate to Her Honour Judge Burchell
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